2022 Annual Report of DR Corporation Limited
2022 Annual Report
DR Corporation Limited
April 2023
1
2022 Annual Report of DR Corporation Limited
Message to Shareholders
To the respectable shareholders of DRCO:
Insisting on the corporate value of customer orientation since foundation, DR Corporation Limited
(DRCO) has reaped some achievements through continuous product innovation and service
improvement. By the end of 2022, we totally served over 1.5 million couples,
which is an achievement. But we all understand that behind success lies countless challenges an
d obstacles.
In the stuttering year of 2022, much fiercer market competitiveness and changing industrial
landscape posed new challenges to DRCO. Although of performance decline for the first time
just after our initial listing, we believe growth space and opportunities are bred from weakness
and changes.
Nowadays, DRCO has ushered in a new development stage, presenting a fresh new start. As
the traffic-driven era comes to an end, we’ll pursue sustainability and devote to products and
services that deliver compounding effects over time during this favorable window period of
resources integration. Consequently with deep root in the market and stronger core
competitiveness, DRCO will create significant values to our shareholders and customers.
Original aspiration
With enhancing joy and beauty of true love as our aspiration, we constantly strive to discover,
witness and spread love and romance.
Instead of some business logic or model, DRCO roots in a dream for everlasting and happy
emotional relationship. It’s this dream that drives us to be a century brand and witness of more
true love.
A brand represents consumers’ trust and their awareness and appraisal of a company’s products,
services and cultural values.
Established based on consumers’ recognition and confidence, DRCO benefits them from our
long-term development. A really classic brand must be time-proven and become durable through
impact of trends. Upholding people orientation, our aspiration and vision aim to please and
connect customers, and accompany their growth and affection.
Jewelry is generally preferred as the best carrier for expressing and testifying love. Especially as
the saying goes, “A Diamond is Forever”.
Focus on long-term values
Due to agriculture civilization, the peaceful family & national spirits and inheritance of Chinese
culture, Chinese people traditionally prefer to precious gold and low-key jade. Nowadays,
diamonds that are introduced from the west with deep connotation of true love have gained high
popularity among the youth.
DRCO enjoys sustainable brand values by dominating the most memorable moments for people
and representing the sole love cherished by each female.
Although of various challenges, we believe our persistency toward the right direction is bound to
create long-term values for our shareholders. Moreover, our brand power stems from the
expression of love with pure, strong and unshakable promise, reflecting the most lasting and
underlying demand of human beings.
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2022 Annual Report of DR Corporation Limited
We always center our decisions around customers, and identify market recognition of our brand
in line with key indicators like word of mouth and customer growth. We’ve been investing
considerable resources to expand our customer base, raise brand image and bolster
technologies, so as to build sustainable competitiveness in the market.
Our pursuit of long-term brand values and decision-making may differ from other companies.
Therefore, we’d like to share key ideas on our strategies with shareholders to guarantee the
same goal:
We spare no efforts to meet customer demands and improve their online & offline
experiences;
Powered by brand building, we pay greater attention to offline operating efficiency and
product design and processing;
We continue to make decisions based on long-term development, which sometimes may
affect short-term results;
We will endeavor to reduce cost and increase efficiency as we recognize the importance
of cost control in the highly competitive industry;
We will further attract and retain excellent talents who are essential to build up a
vigorous team with common goals and achieve success;
We attach great importance to ESG and insist on sustainability strategy for our long-
term development while advocating our core values to help maintain stable marriage
and contribute to social harmony.
Powerful coordination like Diamonds
Like many other top enterprises, we work to recruit and retain the talents with the sense of
responsibility and ownership, whom we depend on to advance in the right direction instead of
just data analysis. Excellent employees and are crucial to address difficulties in business
operation, forge a great brand and build up a remarkable organization. We call for powerful
coordination and thinking collision among excellent talents to inject inexhaustible power to
corporate development.
The first curve & the second curve of DRCO growth
For the past decade and beyond, we have been committed to forging DR brand into worldwide
No.1 brand of engagement rings, which is definitely the first curve of our development. By
communicating the true-love culture, DR products, no matter of one ring or a series, will be
deemed as customers’ sole and prime choice for proposal and expression of love in the lifetime.
Undoubtedly brand and cultural confidence will create huge opportunities for Chinese brands,
while increasingly differentiated and segmented consumer demands are pushing various new
consumptions like DTC (Direct-to-Consumer).
Our second curve highlights expression of love, multi-brand and global footprints. The
corresponding strategy is created in two aspects: further development of our strength by fully
leveraging our resources, and meaningful efforts in boosting customer happiness, creating a
wonderful scenario, etc.
Four priorities for 2023
We’d take this chance to inform our shareholders of the four priorities for 2023 identified in the
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2022 Annual Report of DR Corporation Limited
annual employee meeting.
Brand-driven innovation: in order to advocate true love and witness move love, DRCO has
made comprehensive plans and preparation around our brand, including evolution of brand
contents and communication, high brand-awareness products and implementation of impressive
activities. All of these efforts will gradually take effects.
Love-oriented service system: DRCO products are designed to go through from the once-in-a-
life promise to lifetime happiness, which requires a considerate business and service system to
interconnect our customers. Since the latter half of 2022, we have embarked on the
infrastructure construction of an omnichannel operating and marketing system, and will propel
integrated online & offline business throughout the customers lifecycle.
Talent cultivation and reform of management mechanism: attracting more talents are
valuable to our development goals and one of major reasons behind our listing. In 2023, DRCO
will start at organizational upgrading, for which more and more talents with the same ideology
are needed to realize our strategies.
Result-driven delivery with higher standards and efficiency: great efforts should be made to
create a high-performance culture, leading to lots of benefits such as better products and
services for customers.
Proactive development for a bright future
Each of our new goals and decisions is made in practical and feasible manner and we always
can find out new insights into the company, brands and customers by deeply communicating with
regional managers and sales champions.
The recipe for success is simple, but requires deliberate planning and actions.
Last but not least, we on behalf of the Board of Directors, sincerely appreciate every shareholder
for your understanding and expectations that hopefully come true.
Mr. Zhang Guotao and Mrs. Lu Yiwen, founders of DRCO
April 26, 2023
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2022 Annual Report of DR Corporation Limited
Part I. Important Notes, Contents and Terminology
The Board of Directors, the Supervisory Committee and the Directors, Supervisors and senior
management of DRCO warrant that the information of this annual report is true, accurate and
complete without any false statements, misleading statements or material omissions, and they
shall assume individual and joint legal responsibility.
Both Zhang Guotao, the legal representative of DRCO and Huang Shuirong, the head of the
financial department in charge of the corporate accounting confirm the financial statements
contained in the annual report are true, accurate and complete.
All directors have attended the board meeting at which this report was deliberated.
Any forward-looking statements in this report that address future plans and objectives do not
constitute material commitments by DRCO to investors and investors and related parties should
be aware of the risks involved and should understand the differences between plans, projections
and commitments.
DRCO is required to comply with the disclosure requirements for jewelry-related business
specified in the Self-disciplinary Supervision Guidelines No.3 for Companies Listed on Shenzhen
Stock Exchange - Industry Information Disclosure.
DRCO has disclosed in details the risks and countermeasures that DRCO may face in the "11.
Future Development Outlook" under the " III. Management Discussion and Analysis" of this
report. Investors are recommended to pay attention to investment risks.
According to the profit distribution plan approved by the Board of Directors, a cash dividend of
RMB10.00 (including tax) for every 10 shares and zero bonus share (including tax) to all
shareholders, as well as zero share to be transferred to all shareholders from capital reserve for
every 10 shares.
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2022 Annual Report of DR Corporation Limited
Table of Contents
Part I. Important Notes, Contents and Terminology ......................................................................................5
Part II. Company Profile and Key Financial Indicators ...............................................................................12
Part III. Management discussion and analysis ............................................................................................. 17
Part IV Corporate Governance ...........................................................................................................................63
Part V. Environmental Protection and Social Responsibility ................................................................... 88
Part VI. Important Matters ................................................................................................................................... 89
Part VII. Changes in Shares and Information of Shareholders .............................................................. 138
Part VIII. Information about Preferred Shares ............................................................................................. 149
Part IX. Information about Bonds ................................................................................................................... 150
Part X. Financial Statement .............................................................................................................................. 151
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2022 Annual Report of DR Corporation Limited
Documents Available for Inspection
I Financial statements signed and sealed by DRCO's legal representative, and the head of the
financial department in charge of the corporate accounting;
II Original copy of the auditors’ report sealed by the accounting firm, and signed and sealed by
the certified public accountants;
III All original copies of DRCO’s announcements and documents publicly disclosed on the
websites designated by China Securities Regulatory Commission (CSRC) in the reporting
period;
IV Original copy of the 2022 annual report, which has been signed by DRCO’s legal
representative;
V Other documents available for inspection.
The above documents are available for inspection at DRCO’s Investment and Securities Affairs
Department.
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2022 Annual Report of DR Corporation Limited
Terminology
Terms Definition
Company, DRCO and DR
DR Corporation Limited
Corporation
Shenzhen Darry Jewelry Co., Ltd., the predecessor of DR
Darry Corporation
Corporation Limited
DR Investment (Zhuhai) Co., Ltd., formerly known as Shenzhen
DR Investment DR Investment Co., Ltd., is the controlling shareholder of
DRCO.
Gongqingcheng Wendi No.1 Investment Management
Wendi No.1
Partnership (LP), a shareholder of DRCO
Gongqingcheng Wendi No.2 Investment Management
Wendi No.2
Partnership (LP), a shareholder of DRCO
Gongqingcheng Wendi No.3 Investment Management
Wendi No.3
Partnership (LP), a shareholder of DRCO
Shenzhen Darry Commercial Management Services Co., Ltd.,
Darry Qianhai
a wholly-owned subsidiary of DRCO
Shenzhen Love Only AI Cloud Technology Co., Ltd., a wholly-
Love Only AI
owned subsidiary of DRCO.
Haoduo Diamond (Shenzhen) Co., Ltd., a wholly-owned
Haoduo Diamond
subsidiary of DRCO
Shanghai Darry Diamond Co., Ltd., a wholly-owned subsidiary
Shanghai Darry
of DRCO.
Chongqing Darry Jewelry Co., Ltd., a wholly-owned subsidiary
Chongqing Darry
of DRCO
Couple Only (Shenzhen) Jewelry Co., Ltd., a wholly-owned
Couple Shenzhen
subsidiary of DRCO
He’er Culture (Shenzhen) Co., Ltd., formerly known as
He’er Culture Shenzhen Shechushe Jewelry Co., Ltd., is a wholly-owned
subsidiary of DRCO.
Xiamen DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Xiamen DR Jewelry
DRCO
Shenyang DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Shenyang DR Jewelry
DRCO
Tianjin DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Tianjin DR Jewelry
DRCO
Chengdu DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Chengdu DR Jewelry
DRCO.
Kunming DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Kunming DR Jewelry
DRCO.
Shanghai DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Shanghai DR Jewelry
DRCO
Suzhou Zhongzuan DR Jewelry Co., Ltd., a wholly-owned
Suzhou Zhongzuan DR Jewelry
subsidiary of DRCO
Jinan DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Jinan DR Jewelry
DRCO
Shenzhen DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Shenzhen DR Jewelry
DRCO
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2022 Annual Report of DR Corporation Limited
Beijing Zhongzuan DR Jewelry Co., Ltd., a wholly-owned
Beijing Zhongzuan DR Jewelry
subsidiary of DRCO
Suzhou DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Suzhou DR Jewelry
DRCO.
Shenyang DR Jewelry Accessories Co., Ltd., a wholly-owned
Shenyang DR Jewelry Accessories
subsidiary of DRCO.
Hangzhou DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Hangzhou DR Jewelry
DRCO
Beijing DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Beijing DR Jewelry
DRCO
Wuhan DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Wuhan DR Jewelry
DRCO
Wuhan Zhongzuan DR Jewelry Co., Ltd., a wholly-owned
Wuhan Zhongzuan DR Jewelry
subsidiary of DRCO
Xi'an DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Xi’an DR Jewelry
DRCO
Chengdu DR True Love Jewelry Co., Ltd., a wholly-owned
Chengdu DR True Love Jewelry
subsidiary of DRCO
Ningbo DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Ningbo DR Jewelry
DRCO
Beijing Huazuan DR Jewelry Co., Ltd., a wholly-owned
Beijing Huazuan DR Jewelry
subsidiary of DRCO
Chongqing DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Chongqing DR Jewelry
DRCO
Hangzhou Darry True Love Jewelry Co., Ltd., a wholly-owned
Hangzhou Darry True Love Jewelry
subsidiary of DRCO
Henan DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Henan DR Jewelry
DRCO
Xi'an DR Jewelry Accessories Co., Ltd., a wholly-owned
Xi'an DR Jewelry Accessories
subsidiary of DRCO
Zhengzhou DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Zhengzhou DR Jewelry
DRCO
Shenzhen DR Jewelry Accessories Co., Ltd., a wholly-owned
Shenzhen DR Jewelry Accessories
subsidiary of DRCO
Shenzhen DR Jewelry Ornament Co., Ltd., a wholly-owned
Shenzhen DR Jewelry Ornament
subsidiary of DRCO
Changsha DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Changsha DR Jewelry
DRCO
Shanghai DR Jewelry Accessories Co., Ltd., a wholly-owned
Shanghai DR Jewelry Accessories
subsidiary of DRCO
Shanghai DR Jewelry Sales Co., Ltd., a wholly-owned
Shanghai DR Jewelry Sales
subsidiary of DRCO
Zhoukou DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Zhoukou DR Jewelry
DRCO
Yiwu DR Jewelry Yiwu DR Jewelry Co., Ltd., a wholly-owned subsidiary of DRCO
Heze DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Heze DR Jewelry
DRCO
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2022 Annual Report of DR Corporation Limited
Dongguan DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Dongguan DR Jewelry
DRCO
Xining DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Xining DR Jewelry
DRCO
Linyi DR Jewelry Linyi DR Jewelry Co., Ltd., a wholly-owned subsidiary of DRCO
Yinchuan DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Yinchuan DR Jewelry
DRCO
Weifang DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Weifang DR Jewelry
DRCO
Nanchang DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Nanchang DR Jewelry
DRCO
Jining DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Jining DR Jewelry
DRCO
Mianyang DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Mianyang DR Jewelry
DRCO
Fuyang DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Fuyang DR Jewelry
DRCO
Shangqiu DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Shangqiu DR Jewelry
DRCO
Urumqi DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Urumqi DR Jewelry
DRCO
Handan DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Handan DR Jewelry
DRCO
Baoding DR Jewelry Sales Co., Ltd., a wholly-owned subsidiary
Baoding DR Jewelry Sales
of DRCO
Guangzhou DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Guangzhou DR Jewelry
DRCO
Guiyang DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Guiyang DR Jewelry
DRCO
Langfang DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Langfang DR Jewelry
DRCO
Foshan DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Foshan DR Jewelry
DRCO
Jiaxing DR Jewelry Co., Ltd., a wholly-owned subsidiary of
Jiaxing DR Jewelry
DRCO
Haoduo Diamond Zhizao (Shenzhen) Co., Ltd., a wholly-owned
Haoduo Diamond Zhizao
subsidiary of Haoduo Diamond (Shenzhen) Co., Ltd.
DR GROUP COMPANY LIMITED, a wholly-owned subsidiary
Hong Kong DR GROUP
of Shenzhen Love Only AI Cloud Technology Co., Ltd.
DARRY JEWELRY (HK) LIMITED, a wholly owned subsidiary
Hong Kong DR
of DR GROUP COMPANY LIMITED
Couple Only Jewelry HongKong Company Limited , a wholly
Couple Hong Kong
owned subsidiary of DR GROUP COMPANY LIMITED
DR JEWELRY, a wholly owned subsidiary of DR GROUP
French DR JEWELRY
COMPANY LIMITED
Qianhai Wendi Shenzhen Qianhai Wendi Management Consulting Co., Ltd.
EveryYear Travel Photography Shenzhen EveryYear Travel Photography Culture Co., Ltd.
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2022 Annual Report of DR Corporation Limited
Wendi Design Zhuhai Wendi Design Consulting Co., Ltd.
Wendi Technology Zhuhai Wendi Technology Co., Ltd.
Zhuhai Wendi No.1 Zhuhai Wendi No.1 Investment Partnership (LP)
DR A jewelry brand owned by DR Corporation Limited
Reporting Period January 1, 2022 – December 31, 2022
Articles of Association Articles of Association of DR Corporation Limited
Listing and trading of DRCO’s shares on the Shenzhen Stock
Listing
Exchange
Yuan or RMB Renminbi, the lawful currency of the PRC
CSRC China Securities Regulatory Commission
SZSE Shenzhen Stock Exchange
SDE Shanghai Diamond Exchange
Shenzhen Administration for Market
Shenzhen Administration for Market Regulation
Regulation
Company Law Company Law of the People's Republic of China
Securities Law Securities Law of the People's Republic of China
A unit of mass (weight) of gems. The weight of a carat of
diamonds is equal to 200 milligrams or 0.2 grams of diamonds.
Carat (in Ct)
One carat can be subdivided into 100 points for calculation of
smaller diamonds; therefore, a 50-point diamond is 0.5 carat.
The diamond after cutting, polishing and other processing that
Finished Diamond
can be used to make jewelries
Gold jewelry Jewelry with gold as the main raw material
㎡ Square meter, a unit to measure the area
DTC Direct to Customer, a direct-to-consumer business model
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2022 Annual Report of DR Corporation Limited
Part II. Company Profile and Key Financial Indicators
I. Basic Information
Stock abbreviation 迪阿股份 Stock Code 301177
Chinese name 迪阿股份有限公司
Chinese abbreviation 迪阿股份
English name (if any) DR Corporation Limited
English abbreviation (if any) DRCO
Legal representative of Zhang Guotao
DRCO
Room 306, Wing Building of Luohu Investment Holding Building, No. 112 Qingshuihe
Registered Address 1st Road, Qingshuihe Community, Qingshuihe Street, Luohu District, Shenzhen
Postal code 518023
On February 18, 2022, the registered address of DRCO was changed from "Room
1108-1115 (Room 8~15, 11th floor), Fu Ga Park Building at Intersection of Cuishan
History of changes in Road and Wenjin North Road, Dongxiao Street, Luohu District, Shenzhen" to "Room
registered address 306, Wing Building Luohu Investment Holding Building, No. 112 Qingshuihe 1st Road,
Qingshuihe Community, Qingshuihe Street, Luohu District, Shenzhen”
12th and 13th Floor, Tower C, China Resources Land Building, Nanshan District,
Office address Shenzhen
Postal code 518057
Company’s global website http://www.darryringgroup.com
E-mail IR@darryring.com
II. Contact Information
Board secretary Securities affairs representative
Name Huang Shuirong Wang Tong
13th Floor, Tower C, China Resources Land 13th Floor, Tower C, China Resources
Address Building, Nanshan District, Shenzhen Land Building, Nanshan District, Shenzhen
Telephone 0755-86664586 0755-86664586
Fax 0755-86725390 0755-86725390
E-mail IR@darryring.com IR@darryring.com
III. Information Disclosure and Place for Inspection
Website of the stock exchange for publishing Shenzhen Stock Exchange (SZSE): www.szse.cn
DRCO’s annual report
Name and website of media designated for Securities Times, Securities Daily, China Securities Journal,
publishing the annual report Shanghai Securities News, www.cninfo.com.cn
Place for inspection of DRCO’s annual report Investment and Securities Affairs Department of DRCO
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2022 Annual Report of DR Corporation Limited
IV. Other Relevant Information
Accounting firm engaged by DRCO
Name of accounting firm Ernst & Young Hua Ming LLP (Special General Partnership)
Room 01-12, 17th Floor, EY Tower, Oriental Plaza, No.1 East Chang'an Street,
Office address Dongcheng District, Beijing
Names of signing accountants Liao Wenjia and Chen Huijin
Sponsor engaged by DRCO to perform continuing supervision during the reporting period
Applicable □ Not Applicable
Name of sponsor Continuous supervision
Name of Sponsor Office address
representative period
35th Floor, Shenzhen Media
Group Tower, Pengcheng Hu Fangxing and Fang December 15, 2021 -
China Securities Co., Ltd.
1st Road, Futian District, Yifeng December 31, 2024
Shenzhen
Financial advisers engaged by DRCO to perform continuing supervision during the reporting
period
□ Applicable Not Applicable
V. Key Accounting Data and Financial Indicators
Whether DRCO needs to retroactively adjust or restate the accounting data of the previous years
□Yes No
2022 2021 YoY Changes 2020
Revenue (RMB) 3,681,574,412.68 4,622,729,780.48 -20.36% 2,464,497,974.60
Net profit attributable to
shareholders of the 729,241,946.67 1,301,768,398.86 -43.98% 563,304,918.84
parent company (RMB)
Net profit attributable to
shareholders of the
parent company after 613,246,940.64 1,248,508,013.88 -50.88% 540,418,472.80
deducting non-recurring
gains and losses (RMB)
Net cash flow from
operating activities 818,011,112.24 1,544,212,850.71 -47.03% 893,551,134.53
(RMB)
Basic earnings per share 1.82 3.62 -49.72% 1.56
(RMB/share)
Diluted earnings per 1.82 3.62 -49.72% 1.56
share (RMB/share)
Weighted average return 10.68% 32.61% -21.93% 63.02%
on net assets
YoY Changes
At the end of 2022 At the end of 2021 At the end of 2020
preceding year
Total assets (RMB) 8,815,748,380.27 8,269,184,150.24 6.61% 1,931,631,364.56
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2022 Annual Report of DR Corporation Limited
Total equity attributable
to shareholders of the 6,803,046,203.96 6,866,575,701.17 -0.93% 1,118,352,286.90
parent company (RMB)
The lower of DRCO's net profit before or after deduction of non-recurring profit or loss for the last three
financial years is negative and the audit report for the latest year indicates that there is uncertainty about
DRCO's ability to continue as a going concern.
□Yes No
The lower of DRCO's net profit before or after deduction of non-recurring profit or loss is negative.
□Yes No
VI. Key Financial Indicators on Quarterly Basis
Unit: RMB
Q1 Q2 Q3 Q4
Revenue 1,221,199,779.32 864,133,585.54 957,699,618.41 638,541,429.41
Net profit attributable to 375,842,072.65 202,683,468.47 193,992,549.30 -43,276,143.751
shareholders of the parent company
Net profit attributable to
shareholders of the parent company 342,352,186.63 147,753,013.94 143,385,918.79 -20,244,178.722
after deducting non-recurring gains
and losses
Net cash flows from operating 428,576,836.89 39,667,794.16 245,669,005.45 104,097,475.74
activities
Notes:
1. The negative net profit attributable to shareholders of parent companies in the fourth quarter is mainly
due to the following reasons: ① a significant decline in revenue due to external environmental influences;
② it was a result of the fair value change of the financial assets because of some factors including
adjustments of financial policies and the changes in the market expectations for economic development; ③
the provision for impairment loss in some stores was also an important reason.
2. The net profit attributable to shareholders of the parent company after deducting non-recurring gains
and losses was negative.mainly due to a significant decline in revenue due to external environmental
factors;On the other hand,mainly due to the provision for impairment losses in some stores.
Whether the above financial indicators or their combined total are materially different from corresponding
financial indicators disclosed in DRCO’s quarterly and interim reports
□Yes No
VII. Accounting Data Differences Under Domestic and Foreign Accounting
Standards
1) Difference in net profit and net assets in the financial statements disclosed
simultaneously pursuant to the International Accounting Standards and the PRC
Accounting Standards for Business Enterprises
□ Applicable Not Applicable
There is no difference in net profit and net assets in the financial statements disclosed
simultaneously pursuant to the International Accounting Standards and the PRC Accounting
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2022 Annual Report of DR Corporation Limited
Standards for Business Enterprises during the reporting period.
2) Difference in net profit and net assets in the financial statements disclosed
simultaneously pursuant to the Foreign Accounting Standards and the PRC
Accounting Standards for Business Enterprises
□ Applicable Not Applicable
There is no difference in net profit and net assets in the financial statements disclosed
simultaneously pursuant to the Foreign Accounting Standards and the PRC Accounting
Standards for Business Enterprises during the reporting period.
VIII. Non-recurring Profit/Loss Items and Amounts
Applicable □ Not Applicable
Unit: RMB
Amount in Amount in
Item Amount in 2022 Description
2021 2020
Gains/(Loss) on disposal of non-current
assets (including the write-off portion of 1,244,949.25 -732,715.39 -416,861.00
the provision for impairment of assets)
Tax refunds or reductions with ultra vires
approval or without official approval 162,770.75 150,631.39 599,131.38
documents or occurred contingently
Government grants (except for
government grants which are closely
related to normal business operations of
DRCO, in compliance with national 23,433,558.47 11,022,474.28 7,961,026.39
policies and regulations, and conform with
the amount or quantities at certain
standards on an ongoing basis) charged
to gains or losses for the period
Gains and losses on
Gains from fair-value change arising from changes in fair value
trading financial assets and trading of financial assets
financial liabilities held and investment held for trading, and
gain from disposal of trading financial 128,297,407.98 59,197,417.83 22,249,157.37 investment income
assets and trading financial liabilities, from wealth
other than effective value protection management
hedges relating to DRCO’s ordinary products during the
course of business reporting period.
Other non-operating income or expenses 468,656.88 -898,421.18 -713,574.51
other than the above items
Less: Income tax effect 37,612,337.30 15,479,001.95 6,792,391.96
Effect of minority interest (after tax) 41.63
Total 115,995,006.03 53,260,384.98 22,886,446.04 --
Details of other gain/loss items that meet the definition of non-recurring gains/losses:
□ Applicable Not Applicable
DRCO has no other items in line with the definition of non-recurring gains/losses.
Explanation on defining the non-recurring items in the No.1 Explanatory Announcement for Information
Disclosure by Companies that Issue Securities to the Public - Non-recurring Gains and Losses as recurring
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2022 Annual Report of DR Corporation Limited
items
Applicable □Not Applicable
Item Amount involved (RMB) Explanation
Government grants that comply with
VAT refund upon collection for the
national policies and continue to
actual tax burden on diamond imports 15,833,085.31
enjoy in accordance with certain
exceeding 4%
standard quotas or quantities
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2022 Annual Report of DR Corporation Limited
Part III. Management discussion and analysis
I Industrial situation during the reporting period
DRCO is required to comply with the disclosure requirements for "jewelry-related business" and
"retail industry" specified in the Self-disciplinary Supervision Guidelines No.3-Industry Information
Disclosure of companies listed on the Shenzhen Stock Exchange.
(I) Overview of macroeconomic environment and market conditions
In 2022, many factors such as geopolitical conflicts, global supply chain disruptions, energy
crises and tightening inflation posed significant downside risks to the global economy. The
domestic economy also faced challenges due to the turbulent international environment and
various uncertainties. In 2022, China's GDP grew by 3.0% year-on-year. Among the three major
industries, the service industry was the most seriously impacted. The per capita disposable
income of residents nationwide was RMB36,883, growing by 2.9% after deducting price factors,
which is basically synchronized with economic growth. Per capita consumption expenditure was
RMB 24,538, down 0.2% in real terms (compared with growth of 12.6% a year earlier),
accounting for 66.5% of disposable income (compared with 68.6% a year earlier). Despite the
slowdown in economic development and the impact on consumer confidence, the Chinese
economy continued to show great resilience. Under the Chinese government's working guideline
of "striving for progress while maintaining stability," the national economy withstood the pressure
and continued to develop, and various offline economic activities were under the recovery at the
end of the year. In the World Economic Outlook report released by the International Monetary
Fund (IMF) in Singapore, the expected growth rate of the global economy in 2023 was raised to
2.9% from 2.7% in October 2022, and the expected growth rate for China in 2023 was levelled
up significantly to 5.2%. This clearly shows that the adjustment of China's domestic policies has
greatly improved market sentiment for economic recovery.
In 2022, the General Office of the State Council successively issued the Opinions on
Accelerating the Development of New Types of Consumption with New Business Forms and
Models and the Opinions on Further Unleashing Consumption Potential and Promoting the
Sustainable Recovery of Consumption to promote the orderly recovery and development of
consumption. The report of the 20th National Congress of the Communist Party of China also
emphasized efforts to boost domestic demands, strengthen the fundamental role of consumption
in economic development and promote high-quality development. In December, the Central
Committee of the Communist Party of China and the State Council issued the Draft Strategic
Plan for Expanding Domestic Demand (2022-2035), and the National Development and Reform
Commission issued the Implementation Plan of the "14th Five-Year Plan" for Expanding
Domestic Demand, which clearly states that "comprehensively promoting consumption and
accelerating the upgrading of consumption quality" is an important task for expanding domestic
demand, and sets out the relevant requirements and tasks. This means that China's consumer
market has bid farewell to the era of arbitrary growth, and that consumer demand is constantly
increasing, requiring high-quality products and services to meet both material and spiritual
consumption needs.
(II) Overview of the development of the jewelry industry
According to the National Bureau of Statistics, the total retail sales of consumer goods in 2022
amounted to 43.97 trillion yuan, down 0.2% year on year. Among them, the total retail sales of
gold, silver and jewelry above a certain size amounted to 301.4 billion yuan, down 1.1% year-on-
year,,combined with last year’s high base, it refelects the strong resilience of China’s Jewelry
industry. According to the "2022 Development Report of China's Jewelry Industry" published by
the Gems & Jewelry Trade Association of China (GAC), the total market volume of China's
jewelry industry in 2022 was about 719 billion yuan, basically the same as that in 2021. The gold
17
2022 Annual Report of DR Corporation Limited
products market was 410 billion yuan, down 2.4% year-on-year, the jade market was 147 billion
yuan, up 14.8% year-on-year, and the diamond products market was 82 billion yuan, down 18%
year-on-year.
Albeit a full recovery in 2021, the diamond jewelry market faced difficulties in 2022. Compared
with other categories, the consumption scenarios of diamond products are relatively limited with
relatively higher unit price, leading to bigger challenges in the context of declining wedding
activities and increasing online sales of other categories. The Rapaport Diamond Price Index
shows the price of 0.3 carat and 0.5 carat diamonds which used to rise steadily in the past years
due to strong demands in the Chinese market fell by 7.7% and 10.8% respectively this year. This
also indicates the weakness of domestic demand.
Generally speaking, China's jewelry industry repeatedly achieves breakthroughs and
demonstrates tremendous vitality through active transformation under multiple challenges. With
the recovery of offline consumption, many consumer goods including jewelry that meet people's
desire for a better life will experience a revival. In the past three years, all categories of jewelry
have been continuously innovated and improved in several dimensions from culture to
technologies, achieving quantitative accumulation and qualitative transformation, such as more
precise brand culture building, more efficient supply chains, more customized and diverse
product design, and more comprehensive end-customer experience.
At present, China is already the largest gold consumer and the second largest diamond
consumer in the world, and will usher in a new development pattern as the most promising
jewelry consumer market in the world.
1. Market fluctuations accelerate industry restructuring, and industry
concentration continuously shifts toward the top companies
Under the pressure of economic downturn, the growing gap between enterprises in terms of perf
ormance, market share and competitiveness in the jewelry industry is becoming even more appa
rent, and market resources are continuously flowing into the top enterprises in the industry. This i
s conducive for jewelry brands with brand appeal and influence to integrate upstream and downs
tream resources more efficiently and expand market share. In the future, the degree of concentra
tion in the industry will continue to increase. According to Euromonitor, from 2016 to 2022, the co
ncentration ratio of China's jewelry industry constantly inclined toward the head companies, with t
he CR10 jumping from 17.2% to nearly 30%. The head companies still have potentials to further i
ncrease their market share in a relatively fragmented competitive landscape compared to 56% a
nd 49% in Hong Kong, China and Japan respectively. As it is difficult for ordinary consumers to d
istinguish the quality and value of diamond jewelry, they rely more on brand trust when selecting
jewelry. Jewelry companies with a high brand reputation will be preferred.
Considering stable growth of Chinese economy in the future and the steady rise in residents'
income due to economic growth, it is expected that the Chinese jewelry industry will achieve
stable growth under the dual promotion of industry concentration and expanded market share of
the head companies. According to the statistics and forecasts of Statista, an international data
institute, the compound annual growth rate of the market is expected to be 4.45% from 2023 to
2026 (according to the historical data published by GAC, the compound growth rate of major
jewelry categories from 2013 to 2022 was5.8% for diamonds,3.3% for gold and 3.3% for jade). In
addition to the demand side, the supply side gradually shifts from the traditional strategy focusing
on sales and price competition to brand building and deep insight into consumers’ behaviors and
demands. These changes in response to the era of personalized consumption will also drive
expansion of industrial scale.
2. The middle class continues to grow and it’s possible for higher penetration
rate of the industry
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2022 Annual Report of DR Corporation Limited
As diamond is a kind of consumer goods with strong optional attributes, the continuous
improvement in the disposable income of residents and the steady growth of the middle class
have laid the foundation for a continuous improvement in the penetration rate of the domestic
diamond and jewelry industry. According to De Beers and the World Bank, the per capita
demand for diamond jewelry in 2021 was $142 in the United States, $40 in Japan and only $7 in
China. Compared with developed countries, China's consumption of diamond jewelry still has
much room for improvement. On the other hand, according to the absolute income standard of
the National Bureau of Statistics, there is a middle-income group of more than 400 million people
in China, which is the largest and most promising middle-income group in the world. According to
MGI data from the "2023 McKinsey China Consumer Report", the compound annual growth rate
(CAGR) of the number of urban Chinese households with an annual income of more than
160,000 yuan ($21,800) reached 18% from 2019 to 2021, from 99 million to 138 million; it is
predicted that another 71 million households will enter this range by 2025, showing the huge
potential of the Chinese consumer market.
From a product structure perspective, the current demand for jewelry in China has both
investment and consumption attributes, and the emotional and cultural appeal and design
esthetics required for jewelry are continuously increasing as generations change. In 2020, the
United States accounted for 48% of global diamond consumption, while China, ranked second,
accounted for only 13% of the global market and less than one-third of the United States,
indicating significant growth potential. In terms of consumption scenarios, the proliferation of
diamond jewelry for weddings in China is expected to continue to increase. According to the
"2018 Diamond Industry Insights Report" published by De Beers, the proportion of Chinese
newlyweds who purchased diamond rings was only 47% in 2017. However, according to
HUNLIJI's "2023 Wedding All-Category Consumption Trend Insights Report", diamond rings
account for 81.3% of the preferred types of wedding jewelry, and 67.3% of couples opt for
customized diamond rings. With the continuous increase in the number of middle-income and
high-income families, and the continued increase in per capita consumption and market
penetration, this is expected to further drive the rapid expansion of the jewelry industry.
3. Attention on changes in consumer demands is essential to the industrial
long-term development
From a consumer perspective, Chinese consumers' purchasing desires gradually turns to
emotional values and personal taste instead of functions or basic living demands. The
consumption behavior changes from buying mass products to personalized products and from
offerings to goods and services, reflecting the customers higher interests in better quality and
pleasure and satisfaction during the consumption journey. The diversification of material and
spiritual consumption needs and focus on quality fuels the development of jewelry consumption.
On the supply side, jewelry retailers used to center on practical value. However, as emotional
element is increasingly important to the consumers, they prefer to brands that match their values
and emotional needs. Therefore, emotional benefits and practical benefits are equally crucial for
jewelry brands.
The changes in consumer behavior indeed owe to different consumption concepts brought about
by generational change, which is underpinned by changed population structure with far-reaching
impact on the consumer market. On May 11, 2021, the results of the seventh census were
released by the National Bureau of Statistics, according to which the total population of China is
currently 1.41178 billion. Among them, 494.38 million people are aged 18-35, accounting for
35.35% of the total population. According to a research report by BCG and Ali Research Institute,
the consumption of China's younger generation (18-35 years old) will surpass that of the older
generation (over 35 years old) in 2021, reaching US$2.6 trillion. It is obvious that the younger
generation will become the main force of China's consumer market. The changes in consumption
concepts and behaviors resulting from the generational shift will further accelerate the
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2022 Annual Report of DR Corporation Limited
penetration of jewelry consumption terminals and bring new growth opportunities to the
consumer market.
4. The market demand in non-marital relationships is growing as expression of
love is consumers’ invisible and rigid need.
In the contemporary new romantic relationship, Chinese people seek to explore and break
traditional norms and embrace real self, boosting public pursuit of eternal love and emotional
expression. Under consumption upgrading, consumers' demands are becoming more
personalized and individualized, and scenario-based consumption gains popularity. The new
generation of young consumers in particular stress on spiritual satisfaction. Gifts are presented
not only in festivals and commemorative days such as Valentine's Day, May 20 and Chinese
Valentine's Day, but also for the consumers to express their love. According to CSM's "Short
Video Customer Value Research Report 2022" and QuestMobile's survey data, the pursuit of a
sense of ceremony in the life philosophy of short video customers is 66.9%. When it comes to
"Valentine's Day" content on short video platforms, "a sense of ceremony is essential,"
"customized gifts for loved ones," and "gifts are precious because they are made with heart"
have become hot topics for customers to discuss. Therefore, creating a stronger emotional bond
through highly interactive and ceremonial expressions has become an inevitable trend in the
demand for jewelry. It is expected that jewelry brands that have a strong emotional connection,
convey sustainable value propositions, and represent a brand tonality will reap increasing
demands in non-marriage and non-romantic scenarios.
According to AIMedia data center's survey on the demand for jewelry/accessories in China's
wedding market, 89.5% of consumers will buy wedding jewelry in 2021, of which 77.7% will buy
rings and 75.5% will buy necklaces. At the same time, more than 67.5% of wedding jewelry
consumers have a budget of over 30,000 yuan, more than 42.5% have a budget of over 50,000
yuan, and nearly 15% of wedding jewelry consumers have a budget of over 100,000 yuan.
Therefore, the demand for wedding jewelry, which is mainly made of gold and diamonds, will
continue to have a high budget.
5. External environment accelerates the pace of digital transformation in the
industry
With the rapid development of digital technology, the cognition and interconnection of the
consumers have unprecedentedly expanded, and the jewelry industry has entered a new normal
of comprehensive digital transformation. In particular, the popularity of Internet and widespread
mobile payments are new drivers of jewelry demands. People's consumption habits, contents,
patterns and concepts are constantly adjusted by the development of digital technology.
According to Tmall online data from MKTINDEX, the cumulative sales of the jewelry market from
January to December 2022 reached 25.34 billion yuan, up 25.7% year on year. In 2022, the
economic outlook was weak, and various industries experienced different degrees of decline.
However, the jewelry market maintained a high degree of consumer elasticity.
New consumption patterns turn two-dimensional consumption experience into the three-
dimensional level. Meanwhile Internet has bridged the gap between offline and online purchase,
accelerating the development of the "Internet plus" jewelry economy. Jewelry retailers are
exploring multiple channels to fully utilize private domain traffic and forge a new development
trend combining online growth, offline experience and full channels. The development of online
and offline integration will enable jewelry retailers to understand and better reach customers and
achieve continuous innovation through digital transformation.
II The main business of DRCO during the reporting period
DRCO is required to comply with the disclosure requirements for "jewelry-related business" and
20
2022 Annual Report of DR Corporation Limited
"retail industry" specified in the Self-disciplinary Supervision Guidelines No.3-Industry Information
Disclosure of companies listed on the Shenzhen Stock Exchange.
(I) Main business of DRCO
With the corporate mission of enhancing joy and beauty of true love and the vision of the
global leader in the true love culture, DRCO is a globalized public company engaging in high-
end diamonds and jewelry, true love culture and related services. By tailoring engagement
rings for our customers, we focus on business sceneries of proposal, wedding and
anniversaries, so as to witness and propagate the true love culture, and deliver worldwide
consumers with high-quality jewelry products and unique love culture-related experience and
services to meet their desires for eternal love.
Through a global online and offline DTC (Direct to consumer) retail network, DR engagement
diamonds are available in over 200 cities across Paris of France, Hong Kong of China and
Chinese mainland. Empowered by its differentiated positioning, professional product design
and unique service experience, DR has quickly grown into a leading brand in the world’s
engagement ring market, and received many authoritative international awards, such as
"Asia's Top 500 Brands" by World Brand Lab, “Brand of the Year” by JNA Awards, and “Best
International Engagement Ring Brand of the Year” by HKCT. As of the end of the reporting
period, it had 688 direct-sales stores worldwide, highly recognized and favored by young
consumers.
(II) Main products of DRCO
At present, the main products of DRCO include engagement rings, wedding rings and love
gifts. Going forward, based on the strategy of supporting customers’ lifetime love, DRCO will
seize market opportunities, and work continuously to improve the power of product
development and service innovation, in an effort to provide consumers with more diversified
love solutions and ultimately become a leader in the love culture ecosystem.
(III) Business conditions of DRCO
1. Customized self-directed sales model
With a fully integrated omnichannel marketing, DRCO provides customers with a seamless
online and offline shopping experience. Channels such as the official website, mini program,
Tmall and JD flagship stores offer our consumers online platforms to browse and store at
any time, while offline stores act as physical experience channels, taking full advantage of
the convenience and efficiency of online platforms and the physical experience of offline
channels. For reasons of brand promotion, image building, and unified management and
21
2022 Annual Report of DR Corporation Limited
operations, DRCO is choosing a fully self-managed model for the DR brand. All stores are
managed and operated by DRCO itself. The prices of online and offline products are uniform
and mainly offered to customers through retail sales. Under the customized model,
consumers place orders and make down payments or full payments to confirm the purchase
through DRCO's online and offline stores. After DRCO orders production and receives final
payment, it arranges for direct delivery to consumers or delivery to the store for consumer
pickup. To help consumers better communicate the beautiful love, DRCO also offers them a
series of value-added services, such as a love contract, a love affirmation book and a
proposal ceremony supported by the store.
(1) Revenue by business model during the reporting period
During the period under review, economic growth slowed and consumer purchasing power
declined, leading to a drop in demand for some consumer goods. As a result, DRCO's short-
term performance was under pressure. The unfavorable business environment caused by
the economic downturn intensified competition in the industry, which negatively impacted
DRCO's sales. During the period under review, DRCO generated total revenue of 3.68 billion
yuan, down 20.36% year-on-year. Of which, the Online Self-Operated, Offline Direct-
Operated, Offline Joint-Operated and Other Businesses accounted for revenues of 0.40
billion yuan, 2.98 billion yuan, 0.28 billion yuan and 0.03 billion yuan, respectively,
accounting for 10.72%, 80.95%, 7.48% and 0.85% of DRCO's annual revenues. The
revenue of the self-operated online business decreased by 34.07% year-on-year during the
reporting period, mainly due to the optimization of DRCO's product structure and the removal
of some diamond ring products with low carat weight at the beginning of the reporting period.
The decrease in offline sales is mainly due to the decrease in the number of visitors to
shopping malls and the suspension or reduction of store hours due to cooperation with
shopping malls. According to statistics, the total number of days on which store hours were
suspended or shortened was 9,940 for all stores during the year. The increase in other
business revenue was mainly due to the increase in sales of products to be processed, with
a year-on-year growth of 11.85%.
Revenue by business model during the reporting period
Unit: RMB0'000
2022 2021 YoY YoY
Business change change
model Operating Gross Operating Gross in in gross
Revenue Revenue
cost margin cost margin revenue margin
Online Self-
39,459.33 12,847.89 67.44% 59,852.71 19,951.58 66.67% -34.07% 0.77%
Operated
Offline Direct-
298,037.34 86,718.60 70.90% 367,365.88 105,348.32 71.32% -18.87% -0.42%
Operated
Offline Joint-
27,521.47 8,713.53 68.34% 32,169.08 9,753.50 69.68% -14.45% -1.34%
Operated
Offline
0.00 0.00 - 78.50 62.55 20.32% -100.00% -
Distribution
Other
3,139.31 2,947.23 6.12% 2,806.81 2,939.18 -4.72% 11.85% 10.84%
Businesses
Total 368,157.45 111,227.25 69.79% 462,272.98 138,055.13 70.14% -20.36% -0.35%
(2) Stores in the reporting period
22
2022 Annual Report of DR Corporation Limited
① Changes in number of stores
During the reporting period, DRCO accelerated the penetration in major cities with the focus
on tier-1 and tier-2 cities, and actively established presence in cities not having been
covered and further stepped up coverage in key regional markets including East China,
North China and Southwest China. During the reporting period, DRCO opened 254 new
stores (18 in Q1, 86 in Q2, 85 in Q3 and 65 in Q4), including 51 ones, or 20.07%, in cities
without our footprints; 27 stores were closed (4 in Q1, 9 in Q2, 4 in Q3 and 10 in Q4).
Therefore, the net increase was 227. As of end of the reporting period, DRCO had 688
stores, up 49.24% from 461 at the beginning of the period.
All offline stores are self-operated. As of the end of the reporting period, 686 stores were
located in 221 cities in 30 provinces/autonomous regions/municipalities directly under the
central government, and 2 overseas stores were located in Paris and Hong Kong
respectively. Domestic stores are mainly located in cities at the third tier and above,
including 449, or approximate 65.45% in tier-1 and tier-2 cities, and 237, or approximate
34.55% in tier-3 cities and below.
Changes in number of stores during the reporting period
Increase Decrease
Opening Change in Change in Net Closing
Tier of city Classification
number New business Closed business change number
mode mode
Direct-operated 275 151 2 16 1 136 411
Tier-1 and
Joint-operated 29 11 1 1 2 9 38
tier-2
Subtotal 304 162 3 17 3 145 449
Direct-operated 143 87 1 10 3 75 218
Tier-3, 4
Joint-operated 12 5 3 0 1 7 19
and below
Subtotal 155 92 4 10 4 82 237
Direct-operated 2 - - - - - 2
Overseas Joint-operated - - - - - - -
Subtotal 2 - - - - - 2
Direct-operated 420 238 3 26 4 211 631
Total Joint-operated 41 16 4 1 3 16 57
Total 461 254 7 27 7 227 688
23
2022 Annual Report of DR Corporation Limited
② Newly opened stores
During the reporting period, DRCO opened 254 new self-operated stores, an increase of 124 over the
previous year. During the reporting period, the newly opened stores realized revenue of RMB326.87
million, accounting for 8.88% of the total revenue; their gross profits reached RMB231.42 million.
Newly opened stores
Unit: RMB0'000
2022 2021
Nu-
Nu-
mber As % As %
Mode Region mber
of of total Gross of total Gross
Area (m) Revenue of Area (m) Revenue
stor- revenu profit reve- profit
stor-
es e nue
es
Northeast - - - - - 1 108.00 130.95 0.03% 95.58
North
6 413.00 1,409.48 0.38% 986.49 1 68.00 160.26 0.03% 114.01
China
East
8 436.28 822.41 0.22% 538.26 9 656.80 1,425.24 0.31% 1,023.17
China
Joint-
operat South
1 65.00 378.43 0.10% 265.26 - - - - -
ed China
Central
1 31.00 398.99 0.11% 255.46 1 64.00 61.57 0.01% 46.01
China
Northwest - - - - - 1 83.00 780.11 0.17% 575.46
Southwest - - - - - 1 140.00 44.76 0.01% 33.06
Subtotal of joint-
16 945.28 3,009.31 0.82% 2,045.47 14 1,119.80 2,602.89 0.56% 1,887.29
operated stores
Northeast 17 1,443.78 2,269.53 0.62% 1,590.26 7 632.81 933.20 0.20% 680.96
North
27 2,639.87 5,281.82 1.43% 3,783.43 9 620.90 2,653.21 0.57% 1,976.36
China
East
84 7,630.04 9,425.75 2.56% 6,703.03 42 4,029.76 8,950.71 1.94% 6,572.57
China
Direct-
operat South
25 2,561.07 3,133.24 0.85% 2,229.32 24 2,418.56 5,203.62 1.13% 3,847.05
ed China
Central
26 2,629.97 3,324.86 0.90% 2,372.48 12 1,016.67 2,806.66 0.61% 2,082.15
China
Northwest 18 1,535.64 3,107.10 0.84% 2,186.87 8 895.08 1,582.36 0.34% 1,196.57
Southwest 41 4,692.06 3,135.16 0.85% 2,231.48 14 1,268.49 3,003.76 0.65% 2,198.78
Subtotal of direct-
238 23,132.43 29,677.45 8.06% 21,096.87 116 10,882.27 25,133.52 5.44% 18,554.44
operated stores
Total 254 24,077.71 32,686.77 8.88% 23,142.34 130 12,002.07 27,736.42 6.00% 20,441.73
Note: The above figures are rounded to two decimal places. Some of the figures are slightly different in the endings due to
rounding and are not calculation errors.
③ Impact of closed stores during the reporting period
During the reporting period, DRCO optimized the layout of the stores while steadily expanding the
market. During the reporting period, DRCO closed 27 stores (including 26 self-operated and 1 joint-
operated ones), accounting for 3.92% of the total as at the end of the reporting period. These closed
stores eared revenue of RMB70.22 million during the reporting period. Based on the revenue of
RMB161.35 million in the same period of the preceding year, the impact of the closed stores on
DRCO’s revenue during the reporting period was RMB-91.12 million, representing -2.47% of the
revenue in the reporting period.
Analysis of the impact of closed stores on revenue during the reporting period
24
2022 Annual Report of DR Corporation Limited
Unit: RMB0'000
Revenue in the same
Impact of closed Impact of closed
Revenue during period of the preceding
stores on DRCO stores as a % of
Mode Region Closed the reporting year created by stores
during the revenue during the
period closed during the reporting
reporting period reporting period
period
Joint-
Southwest 1 139.42 443.17 -303.75 -0.08%
operated
Subtotal of joint-operated
1 139.42 443.17 -303.75 -0.08%
stores
Northeast 1 72.75 746.82 -674.07 -0.18%
North China 2 1,207.30 2,117.11 -909.81 -0.25%
East China 10 2,267.85 6,570.68 -4,302.83 -1.17%
Direct- South China 2 192.19 946.02 -753.83 -0.20%
operated
Central
8 2,098.90 3,816.52 -1,717.61 -0.47%
China
Northwest 2 912.49 1,106.31 -193.82 -0.05%
Southwest 1 131.47 387.90 -256.43 -0.07%
Subtotal of direct-
26 6,882.95 15,691.36 -8,808.41 -2.39%
operated stores
Total 27 7,022.37 16,134.53 -9,112.16 -2.47%
Note: Impact of closed stores on DRCO during the reporting period = Revenue of closed stores during the reporting
period - revenue of closed stores in the same period of preceding year
④ Performance analysis for stores during the reporting period
Since March 2022, some offline stores have closed or shortened their business hours, and the foot
traffic of shopping malls traffic plummeted. During the reporting period, for direct-operated stores, the
revenue of a single store was RMB5.74 million, down 43.75% from the same period of last year; the
gross profit of a single store was RMB4.07 million, down 43.90% from the same period of last year, and
the area efficiency of a single stores was RMB63.3 thousand, down 45.27% from the same period of
last year; for joint-operated stores, the revenue of a single store was RMB5.62 million, down 42.38%
from the same period of last year; the gross profit of a single store was RMB3.84 million, down 43.49%
from the same period of last year, and the area efficiency of a single stores was RMB82 thousand,
down 42.63% from the same period of last year.
Single-store revenue and gross profit
Unit: RMB0'000
2022 2021 YoY change, %
Sing- Sin- Sing-
Aver- Sing- Aver- Sin- Sing-
Classific Single- Single le - Single- gle - Single le -
age le - age gle - Single- le-
ation store -store store store store -store store
num- store num- store store store
area revenu gross area area gross area Reve- area
ber of ber of revenue gross
e profit effici- profit effici- nue effici-
stores ㎡ stores ㎡ profit
ency ency ency
- - -
Direct-
519 91 574.25 407.17 6.33 361 88 1,017.63 725.81 11.56 43.57 43.90 45.27
operated
% % %
- - -
Joint-
49 69 561.66 383.84 8.20 33 68 974.82 679.26 14.29 42.38 43.49 42.63
operated
% % %
25
2022 Annual Report of DR Corporation Limited
Note: The average number of stores refers to the average of the number of stores at the end of each month of the reporting
period (∑ number of shops at the end of the month / number of months)
⑤ Top 10 stores in terms of revenue
Unit: RMB0'000
Business Operating Operating
No. Store Name Opening time Mode Revenue
area (㎡) cost profit
DR Store in Xi'an SAGA International Direct-
1 July 28, 2018 168.00 2,527.44 782.34 1,107.05
Shopping Mall operated
DR Store in Guangzhou Tianhe November 11, Direct-
2 266.00 2,332.90 725.78 731.78
Zhengjia Plaza 2017 operated
DR Store in Fuyang Yingzhou Wanda November 9, Direct-
3 96.60 2,254.85 628.35 1,404.17
Plaza 2020 operated
January 17, Direct-
4 DR Store in Chengdu IFS 93.00 2,136.94 675.16 927.43
2018 operated
DR Guojin Store in Changsha Wuyi October 2, Direct-
5 74.00 1,929.80 589.02 970.04
Square 2017 operated
October 20, Direct-
6 DR Store in Shenzhen Yifangcheng 89.00 1,854.89 599.97 792.63
2017 operated
Direct-
7 DR Store in Beijing IKEA Livat July 5, 2018 60.00 1,702.40 544.04 886.10
operated
Joint-
8 DR A Store in Lanzhou Center June 22, 2021 83.00 1,672.20 472.96 748.03
operated
DR Store in Foshan Wangfujing December 30, Direct-
9 110.00 1,608.19 502.95 864.58
Ziweigang 2020 operated
DR Store in Shenzhen Longhua October 10, Direct-
10 50.00 1,575.73 458.90 828.02
Yifangcheng 2021 operated
Note: Operating profit = revenue - operating costs - store expenses, excluding expenses shared with the headquarters.
(3) Online sales during the reporting period
DRCO mainly carries out online sales business through its own sales platform (i.e. DRCO's official
website) and third-party sales platforms. In 2022, online revenue accounted for 10.72% of DRCO’s total
revenue during the reporting period, 2.23 percentage points lower than the same period of the preceding
year. During the reporting period, DRCO's revenue from online sales was RMB394.59 million, down
34.07% from the same period last year. Specifically, the revenue from self-owned sales platform was
RMB73.28 million, down 27.30% from the same period last year; the revenue from third-party sales
platforms was RMB321.32 million, down 35.44% from the same period last year. The revenue decline of
the online business was mainly due to the optimization of DRCO's product structure and the removal of
some engagement diamond ring products with low carat weight at the beginning of the reporting period.
The revenue of diamond ring products with low carat weight dropped by 92%.
According to DRCO's rules for purchase, all customers purchasing the products via the third-party sales
platforms have to register on DRCO's self-owned sales platform, i.e., DRCO's official website. As of the
end of the reporting period, the total number of registered customers on DRCO's official website was
about 10.66 million, with about 2.27 million new registered customers during the reporting period. In 2022,
the per customer transaction on DRCO’s official website was about RMB6,300, up 75% from the same
period last year.
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2022 Annual Report of DR Corporation Limited
Online Sales
Unit: RMB0'000
2022 2021 YoY change
Channel Sales As % of Sales As % of Sales
order Revenue online order Revenue online order Revenue
amount revenue amount revenue amount
Self-owned sales
7,983.61 7,327.52 18.57% 11,036.78 10,078.43 16.84% -27.66% -27.30%
platform
Third-party sales
34,988.44 32,131.81 81.43% 54,669.47 49,774.28 83.16% -36.00% -35.44%
platforms
Total 42,972.05 39,459.33 100.00% 65,706.25 59,852.71 100.00% -34.60% -34.07%
Note 1: The self-owned sales platform is DRCO's official website, and the third-party sales platforms include the flagship stores
on Tmall.com and Jd.com;
Note 2: The sales order amount is the tax-inclusive amount placed by the customers during the reporting period, and the orders
whose products have been returned are excluded.
2. Consigned production model
Thanks to the rich industrial chain resources and the refined division of labor, DRCO adopts the asset-
light management strategy, in which all commodities are manufactured on a consignment basis. On the
one hand, DRCO makes full use of external production resources to help improve operating efficiency.
On the other hand, DRCO focuses on brand building, channel expansion, product development and
supply chain integration, which helps to increase operating profits. DRCO dynamically adjusts the orders
allocated to suppliers based on a number of assessment factors including capacities, qualification rate
and overdue delivery rate, thus ensuring the quality and the delivery of the products. DRCO has always
attached great importance to product quality through constantly improving the product quality control
system, arranging dedicated positions or supportive professional equipment for quality inspection across
such links as raw material purchase, consigned production and product circulation. Moreover, all products
for terminal sales are subject to the inspection of national third-party testing institutions, and are equipped
with relevant professional certificates.
3. Procurement mode
In order to ensure the standardization of raw material procurement and raw material quality, DRCO's
supply chain department is fully responsible for the raw material procurement. The raw materials
purchased by DRCO are mainly diamonds above 0.03 carat, accounting for more than 96% of all raw
materials. DRCO formulates and implements procurement plans based on business needs, inventory,
and short-term market price trends. DRCO's finished diamonds are mainly sourced from overseas and
domestic markets, and all of them will be checked by the supply chain department before being stored.
(1) Major procurements during the reporting period
Affected by factors such as the global economic slowdown and the decline in the purchasing power of
consumers, DRCO's procurement needs were adjusted as the sales dropped on a year-on-year basis.
During the reporting period, DRCO's total purchases of diamonds and consigned processing services fell.
The total amount of the purchases in 2022 was RMB1.29 billion, down 13.21% from a year ago; to
specific, the amount of diamond purchases was RMB509.03mm, a YoY decrease of 13.87%; the amount
of the purchases of consigned processing services was RMB777.97mm, down 12.77% compared with the
same period a year ago. DRCO's major procurements of diamonds and consigned processing services
are as follows:
Major procurements during the reporting period
Unit: RMB0'000
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2022 Annual Report of DR Corporation Limited
2022 2021
Item YoY change
Purchase amount As % of total purchases Purchase amount As % of total purchases
Diamond 50,902.86 39.55% 59,101.69 39.86% -13.87%
Consigned processing 77,796.66 60.45% 89,185.11 60.14% -12.77%
Total 128,699.52 100.00% 148,286.80 100.00% -13.21%
Note: The purchase amount in the table is based on the price excluding tax.
(2) Purchase channels and quantities of diamonds as the main raw material during the
reporting period
During the reporting period, DRCO's finished diamonds are mainly sourced from overseas and domestic
markets, and all of them were checked by the supply chain department before being stored. For overseas
purchases, Hong Kong DR GROUP is responsible for purchases from overseas suppliers, and then
Shanghai Darry, a member of Shanghai Diamond Exchange, is in charge of the custom clearance. DRCO
also purchases finished diamonds directly from domestic diamond suppliers or their affiliates, which are
members of the Shanghai Diamond Exchange. During the reporting period, DRCO purchased 67,162.47
carat of diamonds as the raw materials, down by 13.83% from a year ago because of the decline of
DRCO’s business results.
Purchase channels and quantities of diamonds as the main raw material during the reporting period
Purchase 2022 2021
YoY
Item Unit Purchase As % of total Purchase As % of total
Channel change
quantity purchase quantity purchase
Domestic market 52,812.15 78.63% 60,722.92 77.91% -13.03%
Diamond Carat Overseas
14,350.32 21.37% 17,218.93 22.09% -16.66%
markets
Total 67,162.47 100.00% 77,941.85 100.00% -13.83%
(3) Purchase quantity for consigned processing during the reporting period.
During the reporting period, the purchase quantity of DRCO's consigned processing business dropped
because of the decline of DRCO’s sales performance.
2022 2021
Item Unit YoY change
Purchase quantity Purchase quantity
Consigned processing Pieces 616,308.00 773,698.00 -20.34%
Note: The above purchase quantity does not include product accessories (e.g., earring nuts, chain tail tags).
4. Inventories during the reporting period
During the reporting period, DRCO's inventories consisted of raw materials, work in process， finished
goods, outsourced processing materials, shipping goods,turnover materials, and were mainly raw
materials and finished goods. As of the end of 2022, the balance of DRCO's inventories was RMB676.42
million, the provision for inventory write-down was RMB6.53 million, and the net book value of the
inventories was RMB669.89mm. The closing balance of the inventories during the reporting period
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2022 Annual Report of DR Corporation Limited
increased by 51.45% compared with the beginning balance. To be specific, the balance of the raw
material inventories was RMB134.67mm, up 31.72% from the beginning; the balance of the finished
goods was RMB516.04mm, an increase of 65.12% from the beginning, which was mainly driven by the
expansion of the stores and the increasing demands for on-shelf goods and new products; the balance of
the turnover materials was RMB5.18mm, up 10.42% from the beginning; the balance of shipping goods
fell by 68.23% from the beginning because of the decline of DRCO ’ s sales performance. Inventory
breakdown as of the end of the reporting period
Unit: RMB0'000
December 31, 2022 December 31, 2021
Item YoY change
Amount % Amount %
Raw materials 13,467.14 19.91% 10,224.33 22.89% 31.72%
Work in process 282.43 0.42% 623.03 1.39% -54.67%
Finished goods 51,604.41 76.29% 31,252.31 69.97% 65.12%
Outsourced processing materials 1,648.25 2.44% 1,713.67 3.84% -3.82%
Shipping goods 120.93 0.18% 380.64 0.85% -68.23%
Turnover materials 518.34 0.77% 469.43 1.05% 10.42%
Total 67,641.50 100.00% 44,663.41 100.00% 51.45%
Note: The above figures are rounded to two decimal places. Some of the figures are slightly different in the endings
due to rounding and are not calculation errors.
III. Analysis of Core Competitiveness
With original aspiration of expression of true love, DRCO has built up the competitiveness on the strategic
positioning of integrating brand, channels and products. The "DR" brand represents the concept of "the
sole true love in one life" and purchase intention for eternal lover, infusing unique emotional associations
and value proposition into engagement rings and hence enjoying special brand advantage in the industry.
In the era of new retailing, DRCO seizes the opportunity of consumption and technology upgrading to
create a modern, efficient and consumer-oriented DTC (direct-to-consumer) operation model through
mobile Internet. We also fully leverage various new media such as social platforms, video media, e-
commerce platforms and search engines to convey brand connotations to consumers. In addition, DRCO
attaches great importance to product design, craftsmanship and high quality. By cooperating with
internationally renowned designers, we constantly improve products to realize our philosophy of gifting
the best jewelry to the true lover.
1. Advantage of the emotional connotation of the brand
DRCO's brand philosophy fits perfectly with the pursuit of love and fidelity in the marriage and affection,
reflecting a unique emotional connotation. DR engagement rings can be exclusively bounded with the
couples by uploading their ID information to blockchain instead of just engraving names. Such diamond
rings are kind of testament to the one and only true love and satisfy consumers’ emotional need for
fidelity and lifelong love rather than simple esthetic preferences for jewelry. In this way, the unique DR
engagement rings evoke special emotional connotation among customers and have differentiation
compared to similar products.
2. Advantages of brand communication
Thanks to strong brand marketing capacities, including content creation, production, filming, serving and
account management, DRCO’s professional brand communications team has successfully taken
advantage of new media and traffic to rapidly enhance the influence of DR brand and systematically and
continuously optimize brand communication. Moreover DR brand boasts a host of active fan base totaling
over 30 million followers from well-known social platforms like Weibo, WeChat, TikTok and Kuaishou by
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2022 Annual Report of DR Corporation Limited
the end of 2022. By targeting in emotional expression, vertical segments and differentiated brand
philosophy, our products attract many "DR fans" in the mass consumer market, who highly recognize our
brand values and concept of love, and are characteristic in youthfulness, high brand identification and
strong self-expression. A great number of fans and consumers spontaneously spread our brand
philosophy by posting their love story and highlight moments on Weibo, WeChat Moments and short
videos, resulting in a viral effect on DR brand promotion.
3. Operational Advantage of Omnichannel DTC
As to the offline sales, DRCO adheres to proprietary operation to ensure consistently excellent consumer
experience. With significant investment and devotion into offline channels over years, 688 self-owned
stores have been built up worldwide by the end of 2022, which show high performance in management
efficiency, profit margins and inventory turnover rate. On the other hand, DRCO seizes the opportunity of
consumption and technology upgrading in the era of new retailing to establish online modern and efficient
brand operation model based on customers demands. By integrating social platforms, video media, e-
commerce platforms and search engines, we constantly push brand promotion and online business, and
communicating brand connotation.
In addition, DRCO True Love ecosystem has been established through DTC model, composing of the
core customer base, the mass customers, suppliers and other partners. It’s aimed to demonstrate ideal
journey of true love and lay solid foundation for offering products and services in a long run to the core
customer base.
4. Advantage of customized marketing
Unlike traditional sales of spot goods, the customized marketing is adopted by DRCO, enabling our
customers to select favored jewelry and define 4Cs of diamond quality (e.g. cut, color, clarity, and carat),
ring setting material, finger size, personalized engraving, etc. this customized marketing can not only
meet the couples’ psychological need for sole love, but also facilitate us to control inventory level, keep
lower costs and sound cash flow, and finally improve business operating efficiency. As jewelry products
are more sensitive to fashion trend, the customized marketing allows DRCO to rapidly respond to market
changes and keep up with new fashion.
5. Advantage in information system
Attaching great importance to IT systems, DRCO delves into the integrated online and offline platform of
jewelry customization. Years of efforts in uniformization construction has result in convenient front-end
system empowering stores, an efficient mid-end system for information collection and analysis to improve
communication efficiency, and a robust back-end system to support digitalization and operational
transparency. The whole IT systems help us to improve financial and operational efficiency, enhance
interconnection with customers and gain unique competitive advantage in refined operations, digital
promotion and digital organizational transformation.
6. Advantage in product design and research and development
With the spirit of innovation and craftmanship, DRCO is committed to creating high-quality products and
based on unique brand differentiation, positioning and philosophy, and delivering multi-dimensional
offerings that merge and expand with emotional, fashion and brand elements. In DR Paris Design Center,
a lot of worldwide famous jewelry masters work together at precious true-love jewels with their skillful
technique and exceptional inspiration. Additionally, we continuous to evolve product quality and
processing by developing and optimizing our patent technologies and designs.
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2022 Annual Report of DR Corporation Limited
IV. Analysis of Main Business
1. Overview
(I) Overview of operating performance in the reporting period
In 2022, with increasing market fluctuations and uncertainties in the domestic and international economic
environment, the pessimistic expectations of residents on the economic outlook was spread to the
consumer goods market, resulting in a more intense competition in the retail market. Consequently, the
jewelry industry experienced accelerated fragmentation, and the market was increasingly dominated by
top brands. In the face of the ever-changing business contexts, DRCO adheres to the corporate mission
of "empowering a more beautiful love", actively optimizes market layouts and expands channels by
focusing on strategic goals and business plans. DRCO comprehensively promotes digital transformation,
continues to optimize product mix, and takes active measures to address headwinds including the global
economic downturn and consumption degradation.
During the reporting period, DRCO achieved revenue of RMB3.68 billion, down 20.36% from the same
period last year; net profit attributable to shareholders of the parent company was RMB0.73 billion, down
43.98% from a year ago. On the one hand, the revenue fell due to the sluggish consumer demands; on
the other hand, the net increase of new stores reached 227 given DRCO’s long-term development and
brand construction. The number of terminal stores grew 49.24% from the beginning of the reporting
period, leading to soaring growth of the selling expenses to RMB1,422 million, a YoY increase of 16.76%.
(II) Overview of business operation management during the reporting period
(1) Enhance brand reputation and spread the true love culture with original aspiration
① Deeply cultivate brand concept and positively impact the society with true love culture
During the reporting period, the brand concept of true love won the recognition of many champion
athletes. The striving spirit of athletes is highly consistent with the philosophy of DR brand. For example,
Xu Mengtao, Wang Xindi, Xu Jingtao, Wang Hao, Xie Zhenye, Deng Linlin and other champion athletes
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2022 Annual Report of DR Corporation Limited
have all chosen DR-branded diamond rings as DRCO’s culture of “only and one” highly resembles their
pursuit for championship. Therefore, champion athletes as public figures can better understand the value
of the promise to true love. Their expression of "one and only true love in a lifetime" via the DR diamond
rings and their courage to give their loved a romantic commitment also moved countless netizens and
went viral on the internet, encouraging more people to believe in and pursue the only true love in a
lifetime. These campaigns further cement DR's brand image of "diamond ring of champions, champion of
diamond rings", significantly improving the brand awareness and reputation.
DRCO takes “true love actions” to promote the reconstruction of positive emotional orders in the society.
In order to build a new interactive platform for close communication with young people, the "Global True
Love Class" initiative was launched, which invited Professor Liang Yongan from the Department of
Chinese Language and Literature of Fudan University, to give six lectures on “What Young People Need
to Know About Love”. This initiative transmitted the values of “one and only true love in a lifetime” to more
youths, exchanged with them the “true love” concept of the DR and demonstrated the temperature and
the responsibility of the DR brand. The hashtag #What Young People Need to Know About Love# was
played for 15 million times on the internet, garnering the attraction of many media outlets including CCTV
that spoke highly of the courses. Focusing on spreading right emotional values and providing emotional
value, DRCO establishes deep insights into the needs for love. The blockbuster "Two-Way Love”
launched on May 20 conveyed DR’s brand concept of commitment to love, enabling customers to believe
in the power of true love again and deeply touching consumers. The related Weibo hashtag was read for
more than 500 million times, improving both the brand influence and reputation among customers.
In line with the current situation of marriage and dating in society, as well as social topics such as the
difficulty of young people to fall in love, DRCO and CCTV jointly produced a warm blockbuster "Love is
Simple", which explains the concept of “one and only true love in a lifetime” through four old couples. It
helped arouse more people's longing for love, sparking the resonance with netizens. In an era of
impatience and confusion, DRCO continues to spread positive love values, conveying the brand's mission
and original intention of "empowering a more beautiful love", reflecting the warmth of the brand,
publicizing the temperature and the beauty of the love and strengthening young people's confidence in
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2022 Annual Report of DR Corporation Limited
love and marriage. During the time when the Love Is Simple was played, relevant hashtags were read for
over 400 million. With its social media matrix, CCTV empowered the brand, and the in-depth reports of
other media outlets convey the positive energy of the brand, making the philosophy of the DR brand
known by more people.
② Cultivate the core of the brand, innovate the content of short videos and expand the matrix accounts of
the brand
During the reporting period, DRCO innovated the production of short videos, creatively adopting the first-
view, and two-episode mode. With the brand's concept as the core of the promotion, DRCO figured out a
new solution to the short videos with the unique DR style, attracting more potential customers, exploring
the core of the brand, extending from brand power to product power, and expanding from in-store scenes
to everyday life scenes. At present, the DR brand has more than 30 million fans. Specifically, the main
video matrix account attracted new fans of 2.6 million in the full year, up 160% from a year ago. The
brand was exposed to customers for over 1 billion times, a YoY increase of 47%. In the second half of
2022, DRCO's set up a new team for live streaming on Douyin, leading to rapid performance growth. In
the second half of the year, the sales via the Douyin platform went up by 275% compared from those in
the first half of the year.
(2) Create international brand image with better customer experience and stronger brand
impression
In order to create a more differentiated brand image and visually convey the brand’s values of "one and
only true love in a lifetime", DRCO is inspired by the flamingo with only one partner in its life, taking the
romantic flamingo orange as the brand color to totally upgrades the brand’s LOGO and reflect the purity
and uniqueness of true love. In a bid to promote the new brand image and enhance customer perception,
DRCO has established sound brand management standards, covering plane vision, spatial image,
employee image, publicity content, among others. For the purpose of conveying the unique mission of
“empowering a more beautiful love”, DRCO introduced the services of customized true love codes.
Customers can choose their unique commemorative numbers to be engraved on their diamond rings as
their true love codes, strengthening the concept of “one and only true love”. The true love code creates an
emotional bond between the brand and its customers, fulfilling consumers’ needs for a special ritual for
their true love. This service has been well received by customers.
(3) Vigorously expand offline sales channels with sound layouts and upgrade wedding
atmosphere
Based on its plans for long-term development and brand building, DRCO continues to deepen the
channel layouts. Besides reaching cities and business districts without its footprints, DRCO increases the
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2022 Annual Report of DR Corporation Limited
density of stores in cities and business districts through quality channels. It further develops popular
business districts and core projects in cities, refines the channel network and improves the quality of
channels. As at the end of the reporting period, DRCO had 688 terminal stores, up 49.24% from the
beginning of the reporting period. In addition, the net increase of stores reached 227 during the reporting
period. DRCO extended its footprints to 120 business districts in tier-1, new tier-1 and tier-2 cities it has
not covered previously; opened new stores in 60 TOP1 projects, i.e., leading shopping malls, increasing
the coverage of TOP1 projects in cities from 58% to 74% and the coverage of national TOP100 projects
from 48% to 65%. DRCO continued optimizing the location of the brands in shopping malls. In addition to
the jewelry area, DRCO also sought to cover other areas including boutique area, high-end cosmetics
area and women's clothing area. Stores in these areas accounted for over 25%.
During the reporting period, DRCO proposed a "Dream Wedding" scenario to provide customers with
exclusive emotional expressions through the DR portfolio. As of the end of the reporting period, the
number of customers who purchased engagement and wedding product portfolios accounted for more
than 30%, significantly increasing the value of customers. Meanwhile, DRCO deeply explored the needs
of customers for romantic and proposal scenarios by innovating and upgrading the images of stores,
creating romantic atmosphere. Breaking the traditional layout of jewelry stores, DRCO takes into account
regional culture, wedding culture and fashionable pop culture, using floral and clear glass elements to
provide the ultimate French romance and innovate different types of proposal kiosks featuring modern
aesthetic and premium quality. In this way, DRCO can bring out an all-round immersive customer
experience. During the reporting period, the image design and services of DR True Love Experience
Stores were recognized by authorities, and won the Muse Creative Awards - Silver Award for Immersive
Experience and Retail Space Design from the International Awards Association (IAA).
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2022 Annual Report of DR Corporation Limited
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2022 Annual Report of DR Corporation Limited
(4) Comprehensively promote digital transformation and strengthen information security for
privacy protection
During the reporting period, DRCO focused on the construction of information security to ensure the
brand commitment and protect customer privacy through technological innovation. Joining hands with the
Chinese Academy of Sciences for technical cooperation, DRCO integrates the information of the true love
agreements with the blockchain technology to prevent the customers’ purchase information from being
deleted or revised. Customers can visit the corresponding records by the linkage on the true love
agreement certificate. Based on this system, DRCO can check the data in the main business system to
protect the customer information. The immutable nature of blockchain data is highly compatible with
DRCO's brand philosophy, giving customers a brand experience with cutting-edge technology.
DRCO actively gets involved into digital transformation. After years of digital construction, we have
established a data warehouse with extensive coverage and rich scenes. We have also developed
corresponding business intelligence tools for major business scenes to improve the operation efficiency of
offline and online segments, identify business opportunities for product innovation and promotional
campaigns, and obtain near-real-time data feedback through multiple channels. This information can be
quickly used to guide the R&D and supply of new products, and reduce management and decision-
making costs. The gradual improvement of the data warehouse enables the precision of private domain
operation. By matching the feedbacks of offline shopping guides with the online customer data, DRCO
establishes accurate and effective models for content dissemination, activity planning and information
push, further improving the operation efficiency. During the reporting period, DRCO developed a
shopping guide tool for front-line employees of stores to improve task allocation and result tracking,
optimize customer interaction experience and refine services.
(5) Enhancing R&D and innovation to create differentiated products
Keeping up with new consumer trends and habits, DRCO continues to optimize the product mix,
accurately anchor target customer base, develop differentiated products that meet the needs of different
customers, and focus on strengthening the iterative renewal and design extension of its iconic and best-
selling products, thereby deepening its multi-dimensional product portfolios. DRCO attaches great
importance to and increases input in product design and R&D and technological innovation. It has
established a design center in Paris, France, to gather world-renowned masters of jewelry design, create
exquisite craftsmanship and wonderful inspirations for True Love's treasures. DRCO's design team
actively participated in international design competitions, and its works were on a par with international
standards and were recognized by authoritative international design organizations. DRCO’s products won
the 2022 IDA International Bronze Award and Honor Award, the MUSE Design Gold Award, the ELTE
Platinum Award and Gold Award, and the first prize of the Global Auspicious Zodiac Design Competition
(Year of the Rabbit).
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2022 Annual Report of DR Corporation Limited
In 2022, DRCO's products obtained 52 appearance patents, 3 domestic utility model patents and 2
German utility model patents. It introduced 260 new models, and the innovative D-shaped button with the
brand LOGO as the core main element has received the certificate of the national utility model patent and
has been applied to the D collection. As an iconic series of the DR brand’s elements,The D series absorb
identifiable elements from DR brand and are inspiringly designed into letter combination of I and U,
meaning “ You and I ” . In this unique form, U and I closely intertwine to embody the most romantic
engagement and intimacy between the lovers. Inheriting DRCO's wedding positioning and key visual, the
D series reflect wonderful emotional relationship and our blessings, which cover the whole consumption
chain from emotional resonance, visual experience to final sale.
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2022 Annual Report of DR Corporation Limited
(6) Promote organizational transformation and shape multiculturalism
Talents are the first driving force for corporation innovation and development. DRCO focuses on the
continuous introduction and training of high-level talents, and the construction of organizational capacity
is vital to drive DRCO’s sustainable development. DRCO continuously improves the talent evaluation
system, innovates the selection and employment standards, and establishes a mechanism to attract,
develop and retain a diversified and dedicated workforce. In terms of improving the operation and service
experience of stores, DRCO starts with corporate culture to incentive talents to pursue innovation and
drive the sustainable corporate development. DRCO further upgrades the talent training program and the
survival of the fittest mechanism, gradually establishing a diversified, fair and inclusive corporate culture
that guides employees to grow together with DRCO.
2. Revenue and cost
(1) Composition of revenue
Overall revenue
Unit: RMB
2022 2021
YoY
change
Amount As % of revenue Amount As % of revenue
Total revenue 3,681,574,412.68 100% 4,622,729,780.48 100% -20.36%
By industry
Jewelry 3,650,181,354.03 99.15% 4,594,661,728.12 99.39% -20.56%
Other businesses 31,393,058.65 0.85% 28,068,052.36 0.61% 11.85%
By product
Engagement diamond rings 2,902,464,272.49 78.84% 3,660,710,737.20 79.19% -20.71%
Wedding diamond rings 713,611,440.73 19.38% 866,423,450.66 18.74% -17.64%
Other accessories 34,105,640.81 0.93% 67,527,540.26 1.46% -49.49%
Other businesses 31,393,058.65 0.85% 28,068,052.36 0.61% 11.85%
By region
East China 1,330,407,724.72 36.14% 1,658,186,858.08 35.87% -19.77%
North China 494,723,176.92 13.44% 626,975,836.41 13.56% -21.09%
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2022 Annual Report of DR Corporation Limited
South China 569,475,102.89 15.47% 708,009,269.57 15.32% -19.57%
Southwest China 403,596,567.80 10.96% 506,501,705.18 10.96% -20.32%
Central China 385,624,889.68 10.47% 510,015,932.56 11.03% -24.39%
Northwest China 254,084,920.53 6.90% 309,632,557.38 6.70% -17.94%
Northeast China 236,390,244.31 6.42% 297,742,253.58 6.44% -20.61%
Hong Kong, Macao and
5,045,201.05 0.14% 4,995,984.88 0.11% 0.99%
Taiwan
Overseas 2,226,584.78 0.06% 669,382.84 0.01% 232.63%
By sales model
Online Self-Operated 394,593,297.77 10.72% 598,527,076.93 12.95% -34.07%
Offline Direct-Operated 2,980,373,391.95 80.95% 3,673,658,793.84 79.47% -18.87%
Offline Joint-Operated 275,214,664.31 7.48% 321,690,821.72 6.96% -14.45%
Offline distribution 0.00 0.00% 785,035.63 0.02% -100.00%
Other businesses 31,393,058.65 0.85% 28,068,052.36 0.61% 11.85%
(2) Industries, products, regions, and sales models that account for more than 10% of DRCO's
revenue or operating profit
Applicable □ Not Applicable
Unit: RMB
Gross YoY change of YoY change of YoY change of
Revenue Operating costs
margin revenue operating cost gross margin
By industry
Jewelry 3,650,181,354.03 1,082,800,171.20 70.34% -20.56% -19.86% -0.25%
By product
Engagement
2,902,464,272.49 818,862,367.00 71.79% -20.71% -21.95% 0.45%
diamond rings
Wedding
713,611,440.73 250,339,820.40 64.92% -17.64% -9.71% -3.08%
diamond rings
By region
East China 1,330,407,724.72 409,772,540.83 69.20% -19.77% -16.68% -1.14%
North China 494,723,176.92 152,053,331.24 69.26% -21.09% -18.99% -0.80%
South China 569,475,102.89 164,034,248.28 71.20% -19.57% -25.18% 2.16%
Southwest
403,596,567.80 119,776,460.61 70.32% -20.32% -20.60% 0.10%
China
Central China 385,624,889.68 114,423,536.59 70.33% -24.39% -22.84% -0.59%
By sales model
Online Self-
394,593,297.77 128,478,886.35 67.44% -34.07% -35.60% 0.77%
Operated
Offline Direct-
2,980,373,391.95 867,185,969.73 70.90% -18.87% -17.68% -0.42%
Operated
In the event that the statistical caliber of DRCO's main business data is adjusted during the reporting
period, DRCO's main business data for the most recent year has been adjusted according to the caliber
at the end of the reporting period
39
2022 Annual Report of DR Corporation Limited
□ Applicable Not Applicable
(3) Whether DRCO's sales revenue from physical goods is more than that from services
Yes □ No
Industry classification Item Unit 2022 2021 YoY change
Sales Pieces 517,656 730,038 -29.09%
Jewelry Inventory Pieces 284,930 186,278 52.96%
Procurement volume Pieces 616,308 773,698 -20.34%
Explanation of the reasons for the YoY change of over 30% in relevant data
Applicable □ Not Applicable
Note 1: The above statistics do not include product accessories (e.g., earring nuts, chain tail tags), and
sales statistics include after-sales and molten gold services.
Note 2: The YoY inventory increase of 52.96% in 2022 is mainly due to the expansion of the stores and
the demands for on-shelf goods and new products.
(4) Performance of material sales contracts and purchase contracts signed by DRCO as of the
reporting period
□ Applicable Not Applicable
(5) Composition of operating cost
Industry and product classification
Unit: RMB
2022 2021
Industry YoY
Item
classification As % of As % of change
Amount Amount
operating cost operating cost
Jewelry Operating cost 1,082,800,171.20 97.35% 1,351,159,384.29 97.87% -19.86%
Other businesses Operating cost 29,472,295.09 2.65% 29,391,773.38 2.13% 0.27%
Unit: RMB
2022 2021
Product YoY
Item
classification As % of As % of operating change
Amount Amount
operating cost cost
Engagement
Operating cost 818,862,367.00 73.62% 1,049,105,109.23 75.99% -21.95%
diamond ring
Wedding diamond
Operating cost 250,339,820.40 22.51% 277,267,709.67 20.08% -9.71%
ring
Other accessories Operating cost 13,597,983.80 1.22% 24,786,565.38 1.80% -45.14%
Other businesses Operating cost 29,472,295.09 2.65% 29,391,773.38 2.13% 0.27%
Note:
40
2022 Annual Report of DR Corporation Limited
The total operating cost in the reporting period was RMB1.11 billion, a decrease of 19.43% compared
with the same period last year, mainly due to the decrease of 20.36% in DRCO's revenue in the reporting
period.
(6) Whether there was a change in the scope of consolidation during the reporting period
Yes □ No
During the reporting period, DRCO established 51 new subsidiaries, which were included in the
consolidation from the date of their establishment. Details are as follows:
Whether consolidated
Company name Date of establishment Shareholding ratio
during this reporting period
Xiamen DR Jewelry April 25, 2022 100% Yes
Shenyang DR Jewelry April 26, 2022 100% Yes
Tianjin DR Jewelry April 27, 2022 100% Yes
Chengdu DR Jewelry May 6, 2022 100% Yes
Kunming DR Jewelry May 9, 2022 100% Yes
Shanghai DR Jewelry May 11, 2022 100% Yes
Suzhou Zhongzuan DR Jewelry May 13, 2022 100% Yes
Jinan DR Jewelry May 13, 2022 100% Yes
Shenzhen DR Jewelry May 17, 2022 100% Yes
Beijing Zhongzuan DR Jewelry May 17, 2022 100% Yes
Suzhou DR Jewelry May 18, 2022 100% Yes
Shenyang DR Jewelry Accessories May 18, 2022 100% Yes
Hangzhou DR Jewelry May 24, 2022 100% Yes
Beijing DR Jewelry May 24, 2022 100% Yes
Wuhan DR Jewelry May 25, 2022 100% Yes
Wuhan Zhongzuan DR Jewelry May 25, 2022 100% Yes
Xi'an DR Jewelry May 26, 2022 100% Yes
Chengdu DR True Love Jewelry May 27, 2022 100% Yes
Ningbo DR Jewelry May 27, 2022 100% Yes
Beijing Huazuan DR Jewelry May 31, 2022 100% Yes
Chongqing DR Jewelry June 7, 2022 100% Yes
Hangzhou DR True Love Jewelry June 7, 2022 100% Yes
Henan DR Jewelry June 14, 2022 100% Yes
Xi'an DR Jewelry Accessories June 15, 2022 100% Yes
Zhengzhou DR Jewelry June 16, 2022 100% Yes
Shenzhen DR Jewelry Accessories June 17, 2022 100% Yes
Shenzhen DR Jewelry Ornament June 22, 2022 100% Yes
Changsha DR Jewelry June 24, 2022 100% Yes
Shanghai DR Jewelry Accessories July 1, 2022 100% Yes
41
2022 Annual Report of DR Corporation Limited
Shanghai DR Jewelry Sales July 26, 2022 100% Yes
Zhoukou DR Jewelry September 29, 2022 100% Yes
Yiwu DR Jewelry September 29, 2022 100% Yes
Heze DR Jewelry September 30, 2022 100% Yes
Dongguan DR Jewelry October 9, 2022 100% Yes
Xining DR Jewelry October 11, 2022 100% Yes
Linyi DR Jewelry October 11, 2022 100% Yes
Yinchuan DR Jewelry October 13, 2022 100% Yes
Weifang DR Jewelry October 13, 2022 100% Yes
Nanchang DR Jewelry October 13, 2022 100% Yes
Jining DR Jewelry October 15, 2022 100% Yes
Mianyang DR Jewelry October 17, 2022 100% Yes
Fuyang DR Jewelry October 19, 2022 100% Yes
Shangqiu DR Jewelry October 19, 2022 100% Yes
Urumqi DR Jewelry October 26, 2022 100% Yes
Handan DR Jewelry October 26, 2022 100% Yes
Baoding DR Jewelry October 26, 2022 100% Yes
Guangzhou DR Jewelry October 27, 2022 100% Yes
Guiyang DR Jewelry October 31, 2022 100% Yes
Langfang DR Jewelry October 31, 2022 100% Yes
Foshan DR Jewelry November 18, 2022 100% Yes
Jiaxing DR Jewelry November 30, 2022 100% Yes
During the reporting period, DRCO established a new Sub-subsidiary company, which was consolidated
since its establishment. Details are as follows:
Whether consolidated
Company name Date of establishment Shareholding ratio
during this reporting period
Haoduo Diamond Zhizao (Shenzhen) November 16, 2022 100% Yes
(7) Significant changes or adjustments in DRCO's business, products or services during the
reporting period
□ Applicable Not Applicable
(8) Key sales customers and suppliers
Major sales customers of DRCO
Total sales amount of the top five customers (RMB) 3,109,663.82
Sales to top five customers as % of total annual sales 0.09%
Related-party sales in the sales to top five customers as % of total annual sales 0.00%
Information about Top 5 Customers
42
2022 Annual Report of DR Corporation Limited
No. Customer name Sales (RMB) As % of total annual sales
1 Customer 1 688,798.17 0.02%
2 Customer 2 659,245.23 0.02%
3 Customer 3 629,349.59 0.02%
4 Customer 4 584,306.23 0.02%
5 Customer 5 547,964.60 0.01%
Total -- 3,109,663.82 0.09%
Other notes about key customers
□ Applicable Not Applicable
Key suppliers of DRCO
Total purchase amount of top five suppliers (RMB) 545,474,400.56
Total purchases from top five suppliers as % of total annual purchase amount 42.38%
Related-party purchases in the purchases from top five suppliers as % of total annual purchases 0.00%
Information about Top 5 Suppliers
No. Supplier name Purchase amount (RMB) As % of total annual purchase
1 Supplier 1 176,854,641.37 13.74%
2 Supplier 2 130,235,231.36 10.12%
3 Supplier 3 92,336,258.34 7.17%
4 Supplier 4 83,516,273.09 6.49%
5 Supplier 5 62,531,996.40 4.86%
Total -- 545,474,400.56 42.38%
Other notes about key suppliers
□ Applicable Not Applicable
3. Expenses
Unit: RMB
YoY
2022 2021 Explanation of significant changes
change
This was mainly due to the increase in the number of stores
Selling and sales staff during the reporting period, as well as the
1,422,037,537.50 1,217,911,552.07 16.76%
expenses resulting year-on-year growth in wages and salaries,
marketing fees and expenses related to store leasing.
Administrative 164,205,877.87 172,830,287.87 -4.99%
expenses
Financial - This was mainly due to the year-on-year increase in interest
21,536,754.47 25,914,966.43
expenses 16.89% income during the reporting period.
R&D 17,944,132.37 16,822,042.92 6.67%
expenditure
43
2022 Annual Report of DR Corporation Limited
4. R&D expenditure
Applicable □ Not Applicable
Implications on
Name of key Project
Project purpose Intended goals DRCO's future
R&D project progress
development
Optimize and enrich the mid-end Further optimize CRM, warehouse
Elove mid- functions, and adapt to the changing management, sales management, Further improve
Under
end system business developments and improve commodity management, operation operational
R&D
V4.0 operational efficiency through management, supply chain efficiency.
constant updates. management and other modules.
Develop a series of mini-program Improve customer
Improve the appointment, community,
DR mini- functions to enable such functionalities interaction and
exclusive space, gaming and
program Under as campaign promotion, topic release, customer
campaign functions to provide
sales system R&D interactive discussion and client experience to
customers with better experience and
V3.3 referral so as to improve customer increase customer
service.
experience and stickiness. stickiness.
Enable shop guides to better
Add the customer
Add the customer tag management communicate with customers,
DR True Love tag management
function to the original true love understand their needs and provide
Ambassador Under function to enable
ambassador management system to timely service, while helping the
Management R&D precise customer
enable precise customer marketing operations department of the head
System V3.0 marketing
management. office to more effectively monitor the
management.
operation of stores.
Further improve the functions of SAP
Improve the flexible combination of system, including automatic
Further improve
main stone and auxiliary stones of the distribution, quality management,
Under automation of
SAPV4.0 diamond rings, refine the process reconciliation and coordination with
R&D business
management and align with the suppliers, systematization of common
operations.
systems of the suppliers. reports, so as to improve work
efficiency.
Quick configuration
Visualize the data in a large database
to enable the
or data warehouse to read data and
Data Ensure the accuracy of data display, display of
their structural relationships in a more Under
dashboard the timeliness of the data dashboard; dashboard and
intuitive way, and display the analysis R&D
system V3.0 provide a wealth of chart tools. display data from
data of the system in multiple
multiple
dimensions.
perspectives.
Realize comprehensive digital Improve the
Meet the current personnel management from employee efficiency of human
EHR (Beisen) management needs, and enable the Under recruitment, on-boarding, resource
System human resource management in the R&D management to resignation, so as to management and
system. quickly improve talent management realize smart
capabilities. decision-making.
Enable data
Deploy SCRM system, build data Complete data reporting and analysis and
SRM Project Under
platform, and membership mid-end collection, event management, automatically
Development R&D
system, enable automated marketing. member processing and data analysis. generate marketing
strategies
Improve product development and
Construction
design capabilities to address market Increase investment in R&D and
of the Satisfy the needs of
competition; make more efforts to design, expand its in-house full-time
Diamond Under end consumers and
design classic style products to R&D and design team, and improve
Jewelry R&D R&D enhance DRCO's
enhance the product uniqueness; DRCO's independent R&D and design
Design brand influence.
introduce scarce IPs to enhance the capabilities.
Center
brand value.
R&D Staff of DRCO
2022 2021 Change
Number of R&D staff 47 53 -11.32%
44
2022 Annual Report of DR Corporation Limited
R&D staff as % of labor force 1.05% 1.49% -0.44%
Education background of R&D staff
Bachelor’s degree 34 35 -5.71%
Master’s degree 4 3 33.33%
Junior college 9 15 -40.00%
Age distribution of R&D staff
<30ys 22 19 15.79%
30-40ys 24 32 -25.00%
>40ys 1 2 -50.00%
R&D expenditure and Percentage in Revenue in Last Three Years
2022 2021 2020
R&D expenditures (RMB) 17,944,132.37 16,822,042.92 16,795,857.15
R&D expenditures as % of revenue 0.49% 0.36% 0.68%
Capitalized R&D expenditures (RMB) 0.00 0.00 0.00
Percentage of capitalized R&D expenditure 0.00% 0.00% 0.00%
Capitalized R&D expenditure as % of net profit in the current period 0.00% 0.00% 0.00%
Reasons and effect of material changes in the composition of R&D staff
□ Applicable Not Applicable
Reasons for the significant YoY change in the proportion of R&D expenditure in revenue
□ Applicable Not Applicable
Reasons and rationality for significant change in capitalization ratio of R&D expenditures
□ Applicable Not Applicable
5. Cash flow
Unit: RMB
Item 2022 2021 YoY change
Subtotal of cash inflows from operating activities 4,047,355,144.09 4,956,712,277.33 -18.35%
Subtotal of cash outflows from operating activities 3,229,344,031.85 3,412,499,426.62 -5.37%
Net cash flows from operating activities 818,011,112.24 1,544,212,850.71 -47.03%
Subtotal of cash inflows from investing activities 5,412,132,131.53 2,361,950,371.99 129.14%
Subtotal of cash outflows from investing activities 9,725,178,220.62 3,532,568,089.52 175.30%
Net cash flows from investing activities -4,313,046,089.09 -1,170,617,717.53 -268.44%
Subtotal of cash inflow from financing activities 536,119,714.66 4,466,209,006.62 -88.00%
Subtotal of cash outflows from financing activities 1,266,121,911.18 277,845,213.25 355.69%
Net cash flows from financing activities -730,002,196.52 4,188,363,793.37 -117.43%
Net increase in cash and cash equivalents -4,219,885,422.83 4,560,014,610.26 -192.54%
45
2022 Annual Report of DR Corporation Limited
Explanation of key factors for significant YoY change of relevant data
Applicable □ Not Applicable
(1) The decrease in cash inflows from operating activities was mainly due to the decrease in sales
revenue during the reporting period.
(2) The decrease in cash outflows from operating activities was mainly due to the decrease in both the
sale revenue and the purchase volume of DRCO as well as the decline of corresponding taxes.
(3) The increase in cash inflows from investing activities was mainly due to the recovery of the principal
from wealth management products due and the increase in income from wealth management products
during the reporting period.
(4) The increase in cash outflows from investing activities was mainly due to the increase in the principal
paid to wealth management products during the reporting period.
(5) The decrease in the amount of cash inflows from financing activities was mainly due to DRCO's
borrowings for bill discounting during the reporting period and the proceeds raised from the public offering
of shares in the same period of the previous year.
(6) The increase in cash outflows from financing activities was mainly due to the distribution of cash
dividends and the repayment of borrowings for bill discounting during the reporting period.
Explanation of reasons for the significant difference between the net cash flow from operating activities
during the reporting period and the net profit for the current year
□ Applicable Not Applicable
V. Non-main Business
Applicable □ Not Applicable
Unit: RMB
As % of total Whether
Amount Reasons
profit sustainable
It is mainly the investment income from
Investment income 89,003,045.62 10.05% redeeming the mature wealth management No
products from banks.
Mainly gains on changes in fair value of
Gains/losses from changes in 39,294,362.36 4.44% financial assets recognized during the No
fair value reporting period.
Mainly include the provision for inventory
Asset impairment -28,420,774.69 -3.21% impairment loss and impairment of long-term No
assets.
Mainly include compensations received by
Non-operating income 1,237,090.46 0.14% No
DRCO.
Mainly include breach penalties and overdue
Non-operating expenses 768,433.58 0.09% No
fines.
VI. Analysis of Assets and Liabilities
1. Significant changes in the composition of assets
Unit: RMB
At the end of 2022 At the beginning of 2022 Change Explanation of significant
46
2022 Annual Report of DR Corporation Limited
As % of As % of in changes
Amount total Amount total proportion
assets assets
Mainly due to using the
Cash and cash proceeds for wealth
521,904,818.30 5.92% 4,741,510,453.45 57.34% -51.42%
equivalents management during the
reporting period.
Accounts receivable 84,478,911.52 0.96% 174,880,676.50 2.11% -1.15%
Mainly due to more samples
distributed as more stores
Inventories 669,886,638.00 7.60% 439,973,154.82 5.32% 2.28%
were opened during the
reporting period.
Fixed assets 14,068,805.09 0.16% 6,325,614.51 0.08% 0.08%
Right-of-use assets 590,506,167.36 6.70% 429,297,028.76 5.19% 1.51%
Mainly due to borrowings for
Short-term borrowings 433,993,449.44 4.92% 4.92% bill discounting during the
reporting period.
Contract liabilities 126,705,661.82 1.44% 210,146,744.15 2.54% -1.10%
Lease liabilities 276,542,164.23 3.14% 215,671,484.31 2.61% 0.53%
Foreign assets account for a relatively high proportion.
□ Applicable Not Applicable
2. Assets and liabilities measured at fair value
Applicable □ Not Applicable
Unit: RMB
Cumulati Impairme
Gains and
ve fair nt
losses on
value accrued Amount of Amount of Other
Opening changes in Closing
Item change during purchase in disposal in change
amount fair value for amount
recognize the current period current period s
the current
d in reporting
period
equity period
Financial assets
1. Held-
for-
trading
financial
assets 1,824,097,569. 39,294,362. 8,921,859,195. 5,175,359,195. 5,609,891,931.
(excludi 32 36 09 09 68
ng
derivativ
e
financial
assets)
Subtotal
of 1,824,097,569. 39,294,362. 8,921,859,195. 5,175,359,195. 5,609,891,931.
financial 32 36 09 09 68
assets
1,824,097,569. 39,294,362. 8,921,859,195. 5,175,359,195. 5,609,891,931.
Total 32 36 09 09 68
47
2022 Annual Report of DR Corporation Limited
Financia
l 0.00 0.00
liabilities
Contents of other changes
Whether there were significant changes in the major measurement attributes of DRCO's assets during the
reporting period.
□Yes No
3. Restricted rights to assets as of the end of the reporting period
As at the end of the reporting period, the Group's cash and cash equivalents whose use is restricted
totaled RMB279,787.68 (31 December 31, 2021: nil), which was due to the freezing of funds as a result of
the delay of bank-enterprise reconciliation, the misjudgment of banks or other reasons.
VII. Investment Status Analysis
1. Overall situation
Applicable □ Not Applicable
Investment in the reporting period (RMB) Investment in the same period of last year (RMB) Change
9,725,178,220.62 3,532,568,089.52 175.30%
2. Significant equity investments acquired during the reporting period
□ Applicable Not Applicable
3. Significant non-equity investments pending during the reporting period
□ Applicable Not Applicable
4. Investment in financial assets
(1) Investment in securities
Applicable □ Not Applicable
Unit: RMB
Gains
and Gains
Cumula
losses Amount Amount and Clo
Account Ope tive fair
Securit Initial on of of losses sing
Secu Secu ing ning value Accou Sour
ies investm change purcha disposa during boo
rities rities measur book change nting ce of
abbrev ent s in fair se in l in the k
type code ement valu recogni item funds
iation cost value current current reportin valu
model e zed in
for the period period g e
equity
current period
period
The
Dom Held- debto
estic for- r
Fair settle
and - - - tradin
0005 ST 2,359,1 value 2,359,1 1,184,1 s
foreig 0.00 1,175,0 1,175,0 1,175,0 0.00 g
64 Daji 95.09 measur 95.09 68.26 previ
n 26.83 26.83 26.83 financi
ement ous
stock al
s assets paym
ents
owed
48
2022 Annual Report of DR Corporation Limited
to
Com
pany
with
its
share
s
- - -
2,359,1 2,359,1 1,184,1
Total -- 0.00 1,175,0 1,175,0 1,175,0 0.00 -- --
95.09 95.09 68.26
26.83 26.83 26.83
(2) Investments in derivatives
□ Applicable Not Applicable
There were no derivative investments during the reporting period.
5. Use of raised funds
Applicable □ Not Applicable
(1) Overall use of proceeds
Applicable □ Not Applicable
Unit: RMB0'000
Total
amount
of
procee
Percentag Amount
Total ds
Accumulat e of of
amount whose Use and
Accumulat ed amount accumulat Total procee
Method of intende destinati
Year of ed amount proceeds ed amount amount ds idle
of Total proceeds d use on of
fundraisi of whose proceeds of for
fundraisi proceeds used in was unused
ng proceeds intended whose unused more
ng the change proceed
used use was intended proceeds than
current d s
changed use was two
period during
changed years
the
reportin
g
period
Invest in
intended
projects
Public 444,380. 149,580. 149,580.2 294,799. and
2021 0 0 0.00% 0
offering 28 29 9 99 replenis
h
working
capital
444,380. 149,580. 149,580.2 294,799.
Total -- 0 0 0.00% -- 0
28 29 9 99
Explanation of the overall use of the proceeds
1. Actual amount and arrival date of proceeds
In accordance with the CSRC's "Approval on Agreeing the Registration of DR Corporation Limited for Initial Public Offering of
Shares (Zheng Jian Xu Ke No. [2021] 3043)" and the SZSE's approval, DRCO conducted an initial public offering of 40,001,000
ordinary shares (A shares) with a nominal value of RMB1.00 and an issue price of RMB116.88 per share, raising proceeds of
RMB4676,368,800. The sponsorship and underwriting fees (excluding VAT) for the IPO were RMB217,341,600. On December 10,
2021, the total proceeds of RMB4,460,725,300 after deducting the underwriting fees (excluding VAT) of RMB215,643,500 were
remitted by the underwriter China Securities to DRCO's special account for proceeds.
The total proceeds raised by DRCO via the IPO were RMB4676,368,800, and the net proceeds were RMB4,443,802,800 after
deducting sponsorship and underwriting fees (excluding VAT) of RMB217,341,600, and other issuance fees (excluding VAT) of
49
2022 Annual Report of DR Corporation Limited
RMB15,224,300 (including: audit and capital verification fees of RMB4,471,300, legal counsel fees of RMB5,422,100, information
disclosure fees of RMB4,018,900, issuance fees and other fees of RMB1,312,100). The additional registered capital replenished by
the IPO has been verified by Ernst & Young Hua Ming LLP (Special General Partnership) that issued a "Capital Verification Report"
(Ernst & Young Hua Ming (2021) Yan Zi No. 61403707_H01).
2. Amount used in the current year and year-end balance
As of December 31, 2022, the accumulated amount of the proceeds used by DRCO was RMB1,495,802,900, of which
RMB1,035,802,900 was used to invest in committed items and RMB460,000,000 was used to permanently supplement the working
capital.
As of December 31, 2022, the balance of idle funds (including surplus proceeds) for cash management was RMB2,895,000,000.
As of December 31, 2022, the balance of DRCO's special account for the proceeds was RMB96,893,700 (including interest income
and investment income after deducting service charges).
(2) The situation of the project of fund-raising commitment.
Applicable □ Not Applicable
Unit: RMB0'000
Wheth
er the
Committe Cumulat Investm Date Benefit Cumulat Whether
project Wheth
d Total Amoun ive ent when s ive the
has er the
investmen committ t amount progres the realize benefits feasibilit
been Adjuste expect
t projects ed investe invested s as of project d realized y of the
chang d total ed
and investm d in the as of the end reaches during as of project
ed investm benefit
investmen ent of reporti the end of the its the the end has
(includi ent (1) s are
t areas of proceed ng of the period intended reporti of the changed
ng realize
surplus s period period (3)=(2)/( servicea ng reportin significa
partly d
proceeds (2) 1) ble state period g period ntly
chang
ed)
Committed investment projects
Constructi
Decemb
on of 73,921. 73,921. 59,694. 59,694. 14,115. 33,332.
No 80.75% er 31, Yes No
channel 4 4 68 68 14 74
2023
network
Constructi
Decemb Not
on of 11,047. 11,047. 4,548.6 4,548.6
No 41.17% er 31, applica No
informatio 45 45 9 9
2024 ble
n system
Constructi
on of
R&D,
Creativity Decemb Not
5,389.9 5,389.9 1,289.4 1,289.4
and No 23.92% er 31, applica No
3 3 8 8
Design 2025 ble
Center for
Diamond
Jewelries
Replenishi
Decemb Not
ng 38,047. 38,047. 100.12
No 38,000 38,000 er 31, applica No
working 45 45 %
2023 ble
capital
Subtotal
of 128,358 128,358 103,58 103,580 14,115. 33,332.
committed -- .78 .78 0.3 .3 -- -- 14 74 -- --
investmen
t projects
Investment areas of surplus proceeds
Undetermi No Not No
222,021 222,021
ned use of applica
50
2022 Annual Report of DR Corporation Limited
surplus .5 .5 ble
proceeds
Replenishi
ng
working -- 94,000 94,000 46,000 46,000 48.94% -- -- -- -- --
capital (if
any)
Subtotal
of
investmen 316,021 316,021
-- 46,000 46,000 -- -- -- --
ts of .5 .5
surplus
proceeds
444,380 444,380 149,58 149,580 14,115. 33,332.
Total -- .28 .28 0.3 .3 -- -- 14 74 -- --
On April 26, 2023, DRCO convened the fifth meeting of the second session of the Board of Directors and
the fifth meeting of the second session of the Board of Supervisors to review the Proposal on Postponing
Certain Proceeds-funded Projects. Accordingly DRCO is approved to extend the completion date of the
Describe the “Information System Project” and the “R&D, Creativity and Design Center for Diamond Jewelries”,
circumstances and two proceeds-funded projects, without changing the implementation entity, the implementation method, the
reasons why the use of proceeds and the intended investment amount. Details are as follows:
planned progress
1. It is Shenzhen Love Only AI Cloud Technology Co., Ltd. that is responsible for the "Information System
and expected
Project", which is designed to take three years. In view of the impacts of such factors as the global macro-
benefits have not
economic environment, the market context and the technological update during the implementation, the
been realized by
company needs to optimize digitalized management of the system construction and further explore the
project (including the
potentials of digitalization in order to ensure a leading system. Therefore, its construction period is beyond
reason for "not
the schedule. Due to the actual situation of the project, the company has prudently determined to extend its
applicable"
completion date from December 31, 2023 to December 31, 2024.
concerning "whether
the expected 2. It is Shenzhen Darry Commercial Management Services that is responsible for constructing the R&D,
benefits are Creativity and Design Center for Diamond Jewelries, which is designed to take three years. As the market
realized") demands have been changing, the company needs to optimize this non-profit project to better align with the
actual requirements and the corporate development strategy, leading to delayed construction process. Due
to the actual situation of the project, the company has prudently determined to extend its completion date
from December 31, 2023 to December 31, 2025.
Explanation of
significant changes Not applicable
in project feasibility
Applicable
1. On December 30, 2021, DRCO held the 14th meeting of the first session of the Board of Directors and
the sixth meeting of the first session of the Board of Supervisors; on January 18, 2022, DRCO held the first
Extraordinary General Meeting in 2022, reviewing and approving the "Proposal on Cash Management for
Part of Idle Proceeds and Self-owned Funds. The meeting authorized DRCO to use not more than
RMBRMB3,500,000,000 of idle proceeds (including surplus proceeds) and not more than
RMB4,000,000,000 of its own funds for cash management for a period of 12 months from the date of
Amount, use and review and approval. Such funds can be used on a revolving basis within the aforesaid amount and term.
progress of use of As of December 31, 2022, the balance of surplus proceeds for cash management was RMB2,700,000,000.
surplus proceeds
2. On April 20, 2022, DRCO held the 15th meeting of the first session of the Board of Directors and the 7th
meeting of the first session of the Board of Supervisors, which considered and approved the "Proposal on
Using Part of the Surplus Proceeds to Permanently Replenish Working Capital", and agreed that DRCO
may use RMB940,000,000 of surplus proceeds to permanently replenish the working capital, representing
29.74% of the total surplus proceeds. This proposal was deliberated and approved at the shareholders'
meeting on May 20, 2022. As of December 31, 2022, DRCO had transferred RMB460,000,000 from its
special account for the proceeds to permanently supplement the working capital.
Changes in the
implementation
location of projects Not applicable
funded by the
proceeds
Adjustment of the
Not applicable
implementation
method of projects
51
2022 Annual Report of DR Corporation Limited
funded by the
proceeds
Applicable
On April 20, 2022, DRCO held the 15th meeting of the first session of the Board of Directors and the 7th
meeting of the first session of the Board of Supervisors, which considered and approved the "Proposal on
the Replacement of Self-raised Funds Invested in Advance and Paid for Issuance Expenses with
Early investment Proceeds", and agreed that DRCO may use the proceeds to replace the self-raised funds of
and replacement of RMB370,182,800 invested in advance and funds of RMB5,455,000 paid for issuance expenses, which
projects funded by totaled RMB375,637,800. Ernst & Young Hua Ming (Special General Partnership) issued the "Capital
the proceeds Verification Report on DR Corporation Limited’s Investments in Intended Projects with Self-owned Funds
(Ernst & Young Hua Ming (2022) Zhuan Zi No. 61403707_H01). Before May 10, 2022, DRCO successively
transferred a total of RMB366,804,400 from its special account for proceeds for the replacement purpose,
including RMB361,349,400 for the investments in advance and RMB5,455,000 for issuance expenses. The
remaining RMB8,833,400 was retained in the special account.
Use idle proceeds to
temporarily replenish Not applicable
working capital
The amount and
reasons for the
balance of proceeds Not applicable
after project
implementation
DRCO's unused proceeds are used to purchase approved cash management products and deposited in a
special account. As of December 31, 2022, the balance of idle proceeds (including surplus proceeds) for
cash management was RMB2,895,000,000, consisting of RMB2,700,000,000 as the balance of the wealth
management products bought by surplus proceeds and RMB195,000,000 as the balance of the wealth
management products bought by the capital of the committed investment projects. On December 29, 2022,
Use and destination DRCO held the fourth meeting of the second session of the Board of Directors and the fourth meeting of the
of unused proceeds second session of the Board of Supervisors; on January 17, 2023, DRCO held the first Extraordinary
General Meeting in 2023, reviewing and approving the "Proposal on Cash Management for Part of Idle
Proceeds and Self-owned Funds. The meeting authorized DRCO to use not more than
RMBRMB3,000,000,000 of idle proceeds (including surplus proceeds) and not more than
RMB6,000,000,000 of its own funds for cash management for a period of 12 months from the date of
review and approval. Such funds can be used on a revolving basis within the aforesaid amount and term.
Problems or other
circumstances in the Not applicable
use and disclosure
of proceeds
(3) Changes in projects funded by proceeds
□ Applicable Not Applicable
There is no change in the projects funded by proceeds during DRCO’s reporting period.
VIII. Disposal of material assets and equity interests
1. Disposal of material assets
□ Applicable Not Applicable
DRCO did not dispose of any material assets during the reporting period.
2. Disposal of material equity interests
□ Applicable Not Applicable
IX. Analysis of major subsidiaries and associates
Applicable □ Not Applicable
Information about major subsidiaries and associates that may influence DRCO’s net profit by 10% or
52
2022 Annual Report of DR Corporation Limited
more
Unit: RMB
Company Compan Main Registered Operating
Total assets Net assets Revenue Net profit
name y type business capital profit
Information
Shenzhen
technology
Love Only
Subsidia services, 25,000,000. 466,343,456. 392,238,972. 487,783,783. 282,865,653. 241,981,878.
AI Cloud
ry overseas 00 87 48 08 50 92
Technolog
sales
y Co., Ltd.
business
Supply
chain
Shenzhen manageme
Darry nt, R&D
Commerci and
al Subsidia design, 10,000,000. 298,898,059. 82,920,736.5 323,798,344. 258,078,451. 219,594,770.
Managem ry customized 00 13 8 09 18 93
ent product
Service services
Co., Ltd. and related
supporting
services
Member of
Shanghai
Diamond
Exchange,
Shanghai purchase
Darry Subsidia of and 5,000,000.0 53,019,620.0 32,805,003.3 172,182,163.
9,832,659.50 7,374,494.62
Diamond ry custom 0 5 9 84
Co., Ltd. clearance
for rough
diamonds
in overseas
markets
Brand
He’er
marketing
Culture Subsidia 10,000,000. 91,414,506.8 48,129,839.1 163,150,592. 127,860,358. 108,765,840.
and
(Shenzhen ry 00 8 2 94 04 41
promotion
) Co., Ltd.
services
The acquisition and disposal of subsidiaries during the reporting period
Applicable □ Not Applicable
Method of acquiring and disposing of
Impact on overall operation
Company name subsidiaries during the reporting
and performance
period
Xiamen DR Jewelry Fund the establishment No significant impact
Shenyang DR Jewelry Fund the establishment No significant impact
Tianjin DR Jewelry Fund the establishment No significant impact
Chengdu DR Jewelry Fund the establishment No significant impact
Kunming DR Jewelry Fund the establishment No significant impact
Shanghai DR Jewelry Fund the establishment No significant impact
Jinan DR Jewelry Fund the establishment No significant impact
Suzhou Zhongzuan DR Jewelry Fund the establishment No significant impact
Beijing Zhongzuan DR Jewelry Fund the establishment No significant impact
Shenzhen DR Jewelry Fund the establishment No significant impact
53
2022 Annual Report of DR Corporation Limited
Suzhou DR Jewelry Fund the establishment No significant impact
Shenyang DR Jewelry Accessories Fund the establishment No significant impact
Hangzhou DR Jewelry Fund the establishment No significant impact
Beijing DR Jewelry Fund the establishment No significant impact
Wuhan Zhongzuan DR Jewelry Fund the establishment No significant impact
Wuhan DR Jewelry Fund the establishment No significant impact
Xi'an DR Jewelry Fund the establishment No significant impact
Chengdu DR True Love Jewelry Fund the establishment No significant impact
Ningbo DR Jewelry Fund the establishment No significant impact
Beijing Huazuan DR Jewelry Fund the establishment No significant impact
Chongqing DR Jewelry Fund the establishment No significant impact
Hangzhou DR True Love Jewelry Fund the establishment No significant impact
Henan DR Jewelry Fund the establishment No significant impact
Xi'an DR Jewelry Accessories Fund the establishment No significant impact
Zhengzhou DR Jewelry Fund the establishment No significant impact
Shenzhen DR Jewelry Accessories Fund the establishment No significant impact
Shenzhen DR Jewelry Ornament Fund the establishment No significant impact
Changsha DR Jewelry Fund the establishment No significant impact
Shanghai DR Jewelry Accessories Fund the establishment No significant impact
Shanghai DR Jewelry Sales Fund the establishment No significant impact
Yiwu DR Jewelry Fund the establishment No significant impact
Zhoukou DR Jewelry Fund the establishment No significant impact
Heze DR Jewelry Fund the establishment No significant impact
Dongguan DR Jewelry Fund the establishment No significant impact
Xining DR Jewelry Fund the establishment No significant impact
Linyi DR Jewelry Fund the establishment No significant impact
Nanchang DR Jewelry Fund the establishment No significant impact
Weifang DR Jewelry Fund the establishment No significant impact
Yinchuan DR Jewelry Fund the establishment No significant impact
Jining DR Jewelry Fund the establishment No significant impact
Mianyang DR Jewelry Fund the establishment No significant impact
Shangqiu DR Jewelry Fund the establishment No significant impact
Fuyang DR Jewelry Fund the establishment No significant impact
Urumqi DR Jewelry Fund the establishment No significant impact
Handan DR Jewelry Fund the establishment No significant impact
Baoding DR Jewelry Sales Fund the establishment No significant impact
Guangzhou DR Jewelry Fund the establishment No significant impact
Guiyang DR Jewelry Fund the establishment No significant impact
Langfang DR Jewelry Fund the establishment No significant impact
Haoduo Diamond Zhizao (Shenzhen) Fund the establishment No significant impact
54
2022 Annual Report of DR Corporation Limited
Foshan DR Jewelry Fund the establishment No significant impact
Jiaxing DR Jewelry Fund the establishment No significant impact
Information about major subsidiaries and associates
1. The subsidiary Love Only AI is mainly engaged in information technology services and overseas sales
business for DRCO. During the reporting period, it achieved a net profit of RMB241,981,878.92, down
30.89% from the same period last year.
2. The subsidiary Darry Qianhai is mainly engaged in supply chain management, R&D and design,
customized product services and related supporting services. During the reporting period, it achieved a
net profit of RMB219,594,770.93, down 32.00% from the same period last year.
3. The subsidiary Shanghai Darry is mainly engaged in the purchase and custom clearance of rough
diamonds for DRCO. During the reporting period, it achieved a net profit of RMB7,374,494.62, down
38.36% from the same period last year.
4. The subsidiary He’er Culture is mainly engaged in brand marketing and promotion services. Starting
business from 2022, it achieved a net profit of RMB108,765,840.41 during the reporting period, up
73,237.68% over the same period last year.
X. Structured entities under the control of DRCO
□ Applicable Not Applicable
XI. Prospect for DRCO’s future development
(I) Development strategy
With a mission of enhancing joy and beauty of true love, DRCO upholds the philosophy of “one and only
true love in a lifetime” and focuses on the development strategy of “expression of love, multi-brand and
globalization”. Based on well-established online and offline channel networks, DRCO leverages its strong
capabilities of integrating industrial chain resources, attracts domestic and international high-quality
suppliers, R&D and design teams, testing institutions and other partners to set up a leading jewelry
customization model and sharpen its competitive advantages. DRCO strives to spread the true love
culture as the development cornerstone throughout the country and even the world, providing high-quality
wedding rings and jewelry products as well as unique true love cultural experience and services for global
consumers to meet their lasting needs for true love lifestyle.
(II) Development goals
Focusing on the overall development strategy, DRCO will seize the important opportunities arising from
the rapid development of Chinese and even the global jewelry industries. It will further increase its market
shares through improving the image and influence of the brand, enhancing R&D and design capabilities
and strengthening its influence in high-end and international markets. Meanwhile, DRCO will deepen its
leadership advantages in the diamond ring segment through expanding channel networks and building
information systems and e-commerce platforms, and will further expand its business scale and finally
build DR into the world’s No.1 brand of engagement diamond rings through further increasing business
scale.
(III) Business development plan for 2023
Based on its development strategy, DRCO has formulated detailed promotion plans for 2023 in areas
such as brand communication, product research and development, retail operations and organizational
construction:
55
2022 Annual Report of DR Corporation Limited
1. Brand communication
In 2023, DRCO will continue focusing on the brand guidelines and the concept of true love to promote
and upgrade brand image. We will propagate the stories of our brand and products, value proposition and
lifestyles among core target customers with high-quality contents to maintain our relationships with
customers. Our positive brand image will attract participation of social forces, communicating our brand
concept with customers and demonstrating our socially responsibilities. DRCO keeps eyes on amazing
moments of the brand and customers, enrich brand language, and convey a warm and wonderful
atmosphere of true love to the society through creating romantic scenes such as proposals and weddings;
gain customers’ supports, spread the real love stories of golden models and continuously convey a
positive view of love; cooperate with professional institutions, media, organizations and cultural scholars
to hold heartwarming true love campaigns in the world to build up brand confidence and assets.
In 2023, DRCO will continue to improve brand communication contents and the co-creation culture:
(1) Upgrade content dissemination and enhance the brand power:
① From fragmentation to continuity, e.g., from one episode to several episodes posted on the account,
from a single account to an account IP matrix, thus establishing the “DR True Love Universe” of short
videos;
② From print media to a media matrix, i.e., expanding the media coverage from only new media to “print
media + stereo media”;
③ From single dimension to multiple dimensions, that is, from advertising only the brand concept to
displaying the brand from various perspectives;
④ Both “short, adaptable and fast” contents targeting new media and high-quality contents that can be
memorized for longer time;
(2) Foster the fan culture through engagement with fans:
① Co-create contents and co-design products or stores with fans;
② Invite fans to share their important moments and participate in brand events;
③ Cultivate fans’ ownership and build an interaction platform for them;
(3) Differentiate the operations and optimize types of contents:
① Establish a live streaming matrix for mutual complement between creative live streaming and normal
live streaming;
② Diversify the ads channels by extending to commercial advertising, comprehensive search, webpages
of shopping malls, etc.;
③ Refine and optimize the contents for better and precise promotion .
2. Product research and development
As the consumer groups in the jewelry industry are dominated by the youth, the consumers tend to drive
upgrading and revolution of product design and sales models. DRCO always responds to market changes
with the products featuring strong affection, unique emotional experience and a comprehensive service
system. DRCO continues to innovate and develop products with brand identity to express love, spread
56
2022 Annual Report of DR Corporation Limited
the brand concept of true love with quality products, empower the brand, and make the products a bridge
linking the brand and customers, thereby further enhancing the brand image.
In 2023, DRCO will focus on differentiation of the product mix and complementarity of product structures,
and further deepen the strong emotional attributes of products and brand differentiation by strengthening
design and R&D capabilities and technical innovation capabilities. In terms of product mix, DRCO will
develop series of portfolios from multiple perspectives based on insights into different needs of target
clients, and constantly expand product categories and create the product series structure matching the
brand positioning in accordance with different purchase scenarios. Product R&D will concentrate on the
core concept of brand and product structures. DR Paris Design Center extensively leverages world-
famous design resources to enhance product design, gradually forming unique DR brand characteristics
and competitive differentiation. For product marketing, DRCO will strive to create an improved promotion
ecosystem for single product and product series by taking into account the brand and the market features.
We will also enhance the emotional implications and the core advantages of products, and promote the
design concept to imperceptibly boost our brand.
3. Retail operations
Offline stores are the window of front-end customer experience. In 2022, DRCO set up 254 new stores,
reaching the 2022 expanding goal of setting up over 200 stores in that year. In 2023, DRCO will continue
to optimize store operations and management, improve the customers’ onsite experience, and provide
them with better solutions for expressing love:
(1) The business direction: while continuing to cultivate the diamond ring category, we will continue to
improve our products and customer experience according to the customers’ needs in various affection
scenarios, such as engagement, wedding and the memorial day, so as to allow them to express true love;
(2) Channel layouts: relying on the existing channel network, DRCO will continue to refine the channel
structure, improve the level and positioning of the channels, optimize the visual effect of the stores,
strengthen the customer's perception of DRCO's brand power, and build the offline stores as brand
assets, thus enhancing the development momentums of the brand;
(3) Operations of the stores: DRCO will put customers first to improve the in-store experience of
customers, refine the service standard of front-line sales staff, and create a more heartwarming DR-style
experience and services;
(4) Terminal organization management: DRCO will strengthen the coordinated management over regional
presence. The internal competition mechanism helps DRCO rapidly of the region, quickly identify the
operational weakness of the regional companies and stores. DRCO has in-house coaching groups for
timely professional diagnosis and improvement, helping the management of the regional companies and
stores to improve their capabilities.
4. Organizational construction
DRCO is committed to creating a corporate culture that is "people-oriented" and "customer-centric":
(1) Organizational upgrading: DRCO establishes the omnichannel consumer operations and delivery
teams to enable the growth of the customer base;
(2) Organizational empowerment: on the one hand, DRCO helps existing retail organizations and the front
ends to establish the "customer-centric" operation concept; on the other hand, DRCO designs culture
activities better aligning with the DR style on the basis of the business scenarios;
(3) Talent management: DRCO will continue to establish and improve the internal incentive mechanism
and adhere to the strategy of determining jobs and salaries based on ability, so that outstanding talents
can receive competitive compensation in the market.
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2022 Annual Report of DR Corporation Limited
In 2023, DRCO will continue to improve various mechanisms of human resources, focusing on the
reserve of outstanding talents, performance-based incentive, and the career development path of
managers. Based on the strategic development and employee development needs, DRCO will promote
the establishment of a mechanism-driven operation model, which will formulate a training plan aiming at
developing the organizational capabilities to support business development, so as to continuously
activate the organizational vitality.
(IV) Risks in corporate operation and countermeasures
1. Economic and market volatility risks
DRCO's main products are diamond Jewelry, which are mid-to-high-end consumer goods and are subject
to consumption levels and purchasing intentions of the population. Such products are therefore exposed
to business risks arising from fluctuations in the economic and market environment. In addition,
geopolitical crises in recent years have led to increased international trade conflicts, which can lead to
uncertainty in the purchase of rough diamonds in overseas markets. To address these risks, DRCO will
take effective measures such as enhancing brand communication, adjusting business strategies in a
timely manner, and improving operational efficiency to continue to maintain core competitive advantages
and expand market share. At the same time, DRCO will keep paying attention to the overseas rough
diamond markets and timely make structural procurement adjustments, so as to actively respond to the
impacts of fluctuations in the upstream supply chain.
2. Risk of consigned production
As DRCO adopts the consigned production model, any delay in delivery or substandard quality of the
outsourced products will adversely affect DRCO's inventory management, brand reputation and even
operating results. Since its establishment, DRCO has always placed great importance on the quality of its
products. In the course of its daily operations, DRCO will continue to exercise strict quality control over
the procurement of raw materials, consignment processing and acceptance into the warehouse, and
ensure that the full quality control system is effectively implemented in all aspects.
3. Risk of declining brand influence
As domestic consumers' demands for personalized Jewelry products keep growing, the market
competition is becoming increasingly fierce, and new brands and new business concepts continue to
emerge. As a result, DRCO faces the risk of the decline in brand influence, which may have a negative
impact on market share expansion, earnings growth and the ability to continue as a going concern. In
response, DRCO has taken the following measures:
(1) Increase investment in brand marketing and building to enhance and expand brand value and
influence;
(2) Continue to expand and improve channel coverage;
(3) Keep improving operations, product quality and customer services of stores;
(4) Protect intellectual property rights such as trademarks involved in the course of business;
(5) strengthening the digitalization of business operations, etc.
4. Risk of new stores with low performance
Due to domestic economic stagnation and consumption downgrade in recent years, DRCO’s fast
expansion of new stores may suffer from poor performance. To this end, DRCO will take the following
measures:
(1) Slow down expansion of new store and focus on improving operation and covering high-quality
business circles;
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2022 Annual Report of DR Corporation Limited
(2) Enhance the sustainable development of products, break the barriers to the increments and create
more scenarios for repeat purchase;
(3) Reduce cost and increase efficiency, and pursue overall optimization by closing or relocating
inefficient and loss-making stores.
5. Operational and organizational management risks
As DRCO's business scale and the number of proprietary stores continue to increase, DRCO's
management mechanism, talent pool, market development and compliance operations will be subject to
higher requirements. If DRCO fails to address the challenges in management capability, talent pool and
market exploration during the development process, and the organizational model and management
system are not adjusted and improved in a timely manner in line with the expansion of business scale,
DRCO may face risks in sales scale and business development in the future. Hence, DRCO will continue
to actively recruit excellent talents and strengthen the training of internal management and employees;
optimize and integrate its business structure in strict accordance with the standard governance
requirements of listed companies; strengthen the construction of the internal control system, optimize
internal processes and management efficiency to improve DRCO's operational management and risk
mitigation capabilities.
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2022 Annual Report of DR Corporation Limited
XII. Registration form for surveys, communication, interviews and other activities during the reporting period
Applicable □ Not Applicable
Type of Main discussion contents and
Date Place Method Interviewer Index of basic survey information
interviewer material provided
For details, please refer to the
Personnel from 88 institutions Industry prospect, market
record of investor relations
Telephone including Essence Fund landscape, current situation
March 2, 2022 Online meeting Institution activities disclosed by DRCO on
conversation Management, Bosera Asset and prospect of DRCO’s
March 3, 2022 on
Management, Wells Fargo Fund business operation
www.cninfo.com.cn
Personnel from 139 institutions For details, please refer to the
including E Fund, Hwabao WP Fund record of investor relations
Telephone 2021 Annual Report and
April 25, 2022 Online Meetings Institution Management, Bank of activities disclosed by DRCO on
conversation 2022Q1 Report presentations
Communications Schroder Fund April 27, 2022 on
Management www.cninfo.com.cn
Investors who participated in the
Presentations on 2021 Annual For details, please refer to the
online presentation of DRCO's
Report and 2022Q1 Report, record of investor relations
May 6, 2022 Online meeting Other Other FY2021 and 2022Q1 results via
industry prospect, market activities disclosed by DRCO on
http://ir.p5w.net, an interaction
landscape, and outlook May 6, 2022 on www.cninfo.com.cn
platform for investor relations
For details, please refer to the
Personnel from 112 institutions
record of investor relations
Telephone including Southern Asset 2022 Interim Report
August 29, 2022 Online meeting Institution activities disclosed by DRCO on
conversation Management, Springs Capital, presentation
August 31, 2022 on
Sequoia Capital
www.cninfo.com.cn
CITIC Securities, Loyal Valley
September 6, Telephone
Online meeting Institution Capital,China Securities, Bank of
2022 conversation For details, please refer to the
Communications Schroder Industry prospect, market
September 7, Telephone Lombarda China Fund Management, record of investor relations
Online meeting Institution landscape, current situation
2022 conversation Huachuang Securities activities disclosed by DRCO on
and prospect of DRCO’s
September 13, 2022 on
business operation
September 9, Company’s www.cninfo.com.cn
Field survey Institution West Securities
2022 meeting room
Oak Ridge Private Equity Fund
September 20, Telephone
Online meeting Institution Management ,Changjiang Pension,
2022 conversation
West Securities
September22, Telephone Centennial Insurance Asset For details, please refer to the
Online meeting Institution Industry prospect, market
2022 conversation Management, GF Securities record of investor relations
landscape, current situation
activities disclosed by DRCO on
September 27, Telephone and prospect of DRCO’s
Online meeting Institution China AMC September 29, 2022 on
2022 conversation business operation
www.cninfo.com.cn
September 28, Company’s Personnel from 8 institutions including
Field survey Institution
2022 meeting room CITIC Securities, Lion Fund
60
2022 Annual Report of DR Corporation Limited
Management, E Fund Management
For details, please refer to the
Personnel from 92 institutions
record of investor relations
Telephone including Centennial Insurance,
October 28, 2022 Online meeting Institution 2022Q3 Report presentation activities disclosed by DRCO on
conversation Changjiang Pension, and Pacific
November 1, 2022 on
Insurance
www.cninfo.com.cn
November 2, Company’s
Field survey Institution Guolian Securities
2022 meeting room
Personnel from 45 institutions
November 3, Telephone including Zhonggeng Fund
Online meeting Institution
2022 conversation Management and Changjiang
Securities
China Post Securities, Jinxin Fund
November 4, Company’s
Field survey Institution Management, Lingzhan Investment,
2022 meeting room
Wangji Investment
November 9, Telephone First State Cinda Fund Management,
Online meeting Institution
2022 conversation Kaiyuan Securities
For details, please refer to the
Industry prospect, market
November 10, Telephone record of investor relations
Online meeting Institution Ningquan Assets landscape, current situation
2022 conversation activities disclosed by DRCO on
and prospect of DRCO’s
November 21, 2022 on
Personnel from 22 institutions business operation
November 15, Telephone www.cninfo.com.cn
Online meeting Institution including Hwabao WP Fund
2022 conversation
Management and Guolian Securities
Personnel from 68 institutions
November 16, Telephone including Lombarda China Fund,
Online meeting Institution
2022 conversation China Universal Asset Management,
and CIB Fund
GF Securities, Purekind Fund
November 16, Company’s
Field survey Institution Management, Huaixin Investment,
2022 meeting room
Lianhua Huashang
November 17, Telephone China Industrial Securities, Quanguo
Online meeting Institution
2022 conversation Fund Management
December 7, Telephone Industry prospect, market
Online meeting Institution Guolian Securities, Harvest Fund For details, please refer to the
2022 conversation landscape, current situation record of investor relations
December 8, Telephone and prospect of DRCO’s activities disclosed by DRCO on
Online meeting Institution GF Securities, China Life Pension business operation
2022 conversation Company Limited,Greenwoods Asset December 20, 2022 on
61
2022 Annual Report of DR Corporation Limited
Management www.cninfo.com.cn
December 9, Telephone Tianfeng Securities, Perseverance
Online meeting Institution
2022 conversation Asset Management
December 12, Telephone Haitong Securities, CIB Fund
Online meeting Institution
2022 conversation Management
Zhongtai Securities, Huatai Asset
December 12, Company’s
Field survey Institution Management, China Post Securities,
2022 meeting room
Qianhai Kaiyuan
Guolian Securities, China Merchants
December 13, Telephone Fund Management,Guotai Asset
Online meeting Institution
2022 conversation Management ,JPMorgan Asset
Management
Haitong Securities, Chang'an Asset
December 16, Telephone Management,Yitong Investment,
Online meeting Institution
2022 conversation Guangda Jinghua, Yuanhe Asset
Management
December 29, Telephone For details, please refer to the
Online meeting Institution WT capital Industry prospect, market
2022 conversation record of investor relations
landscape, current situation
activities disclosed by DRCO on
December 30, Telephone and prospect of DRCO’s
Online meeting Institution AIA Investment January 10, 2023 on
2022 conversation business operation
www.cninfo.com.cn
62
2022 Annual Report of DR Corporation Limited
Part IV Corporate Governance
I. Basic Information of Corporate Governance
In accordance with relevant laws, regulations and normative documents including the company Law of
PRC, the Securities Law of PRC, the Code of Corporate Governance for Listed Companies, the Rules
Governing the Listing of Shares on the ChiNext Market of the Shenzhen Stock Exchange, the No.2
Guidelines for Self-disciplined Regulation of Listed Companies - Standardized Operation of Listed
Companies on ChiNext Market, as well as the requirements of the CSRC, DRCO constantly improves our
corporate governance structure through establishing and refining internal management and control
systems, promoting standardized operation and enhancing corporate governance. During the Reporting
Period, the general meeting, the board of directors and its special committees, the board of supervisors,
the senior management and the independent directors of DRCO well defined power and responsibilities;
the general meeting, the board of directors and its special committees, and the board of supervisors
implemented standardized operation, and the independent directors and the secretary of the board of
directors were diligent in their duties. The actual situation of DRCO’s governance complied with the
requirements of rules, regulations and normative documents released by the regulators including CSRC
and SZSE.
(I) Corporate governance system
During the reporting period, DRCO completed the "Articles of Association", "Rules of Procedure of the
Board of Directors", "Rules of Procedure of the Board of Supervisors", "Rules of Procedure of the General
Meeting of Shareholders", "Information Disclosure System", and "Investor Relations Management
System" in accordance with the requirements of relevant laws and regulations and the actual situation of
DRCO. DRCO also formulated the Registration and Management Systems for Persons Possessing
Insider Information and the Management System for Subsidiaries, further improving the corporate
management system.
(II) Shareholders and general meetings
During the reporting period, DRCO held one annual general meeting and two extraordinary general
meetings, both of which were convened by DRCO's board of directors. The general meetings of
shareholders were held in accordance with relevant laws and regulations to perform duties and ensure
that all shareholders enjoy equal rights, facilitate shareholders' participation in the general meeting as far
as possible, and enable them to fully exercise their rights as shareholders. The convening method,
procedure, voting method and resolution content of DRCO's general meeting of shareholders are in line
with the requirements of relevant laws and regulations, normative documents, articles of association,
rules of shareholders' meeting of listed companies and rules of procedure of shareholders' meeting, and
shall be witnessed by lawyers on the spot and issue legal opinions. The convening and resolution of the
general meeting of shareholders are legal and effective. There is no violation of relevant laws and
regulations to exercise functions and powers.
(III) Directors and the Board of Directors
DRCO's board of directors has 9 directors, including 3 independent directors. The number and
composition of the board of directors satisfy the requirements of relevant laws, regulations and the
Articles of Association. During the reporting period, DRCO held a total of six board meetings, all of which
were convened and held in accordance with the procedures stipulated in the Articles of Association, the
Rules of Procedure of the Board of Directors and other relevant laws and regulations, voted and formed
resolutions in strict accordance with the relevant provisions, submitted matters requiring consideration at
general meetings for consideration and decision at general meetings, effectively performed the duties
authorized by the general meetings, strictly implemented the resolutions passed by general meetings,
diligently and conscientiously carried out various tasks and actively safeguarded the interests of DRCO
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2022 Annual Report of DR Corporation Limited
and its shareholders. The independent directors independently, objectively and prudently expressed their
independent views on relevant matters occurring during the reporting period, and played an active role in
improving the corporate governance mechanism and safeguarding the legitimate rights and interests of
DRCO and all shareholders. The Board meetings were convened and resolutions were passed in a lawful
and valid manner, without any breach of relevant laws and regulations.
(IV) Supervisors and the Board of Supervisors
DRCO's Board of Supervisors has 3 supervisors including 1 employee representative. The number and
composition of the Board of Supervisors meet the requirements of relevant laws, regulations and the
Articles of Association. During the reporting period, DRCO's Board of Supervisors held six meetings in
accordance with the requirements of relevant laws and regulations. By attending the general meetings
and the Board meetings, supervisors exercised strict supervision over DRCO's standardized operation,
business activities, material matters, financial position and the performance of duties by directors and
senior management, effectively safeguarding the interests of shareholders. The meetings of the Board of
Supervisors were convened in a lawful and valid manner, and there was no violation of relevant laws and
regulations by the supervisors in exercising their powers.
(V) Investor relations management
DRCO attaches great importance to investor relations management and has established the Investor
Relations Management System. During the reporting period, DRCO carried out investor relations
management work through multiple channels, platforms and means, fully listened to investors'
suggestions, enhanced investors' understanding and recognition of DRCO, and promoted positive
interaction between DRCO and investors. DRCO disclosed relevant information in a true, accurate, timely,
fair and complete manner to ensure that all shareholders have fair access to information about DRCO.
(VI) Stakeholders
DRCO fully respects and safeguards the legitimate rights and interests of relevant stakeholders, strives to
achieve a harmonious balance among the interests of shareholders, employees and society, and
continues to promote the sustainable and healthy development of DRCO. In accordance with relevant
laws, regulations and regulatory documents such as the "The No.2 Guidelines of the Shenzhen Stock
Exchange for Self-Discipline and Regulation of Listed Companies - Standardized Operation of
Companies Listed on ChiNext Market", DRCO has issued the 2022 Annual Sustainable Development
Report, as detailed in the "2022 Sustainable Development Report" disclosed by DRCO on
www.cninfo.com.cn on 28 April 2023.
Whether there is any significant difference between the actual situation of corporate governance and the
laws, administrative regulations and the provisions on the governance of listed companies issued by the
CSRC
□Yes No
There is no significant difference between the actual situation of corporate governance and the laws,
administrative regulations and the provisions on the governance of listed companies issued by the CSRC.
II. Independence of DRCO from Controlling Shareholders and Actual Controllers in Asset,
Personnel, Finance, Institution and Business
DRCO operates in accordance with the requirements of The company Law of PRC, the Securities Law
and other relevant laws and regulations, and the Articles of Association; and has established and
improved the corporate governance structure. Therefore, DRCO is independent of the controlling
shareholders, the actual controllers and other enterprises controlled by them in terms of assets,
personnel, finance, institutions and business, and enjoys asset integrity and independence of business
and the ability to operate independently in the market.
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2022 Annual Report of DR Corporation Limited
(I) Asset integrity
DRCO has the business system and related assets related to the operation, legally owns the ownership
of or right to use the trademarks, patents and non-patented technologies related to the operation, and has
its own raw material procurement system and product sales system. DRCO has clear and complete
ownership of its assets, and enjoys independent control and domination over all assets. DRCO has not
provided guarantees for the debts of shareholders with its assets, interests or creditworthiness, and does
not have assets or funds being illegally occupied by controlling shareholders to the detriment of DRCO's
interests and reliance on shareholders and other institutions.
(III) Personnel independence
The directors, supervisors and senior managers of DRCO are elected in strict accordance with the
relevant provisions of DRCO Law and the Articles of Association; the general manager, the deputy
general manager, the person in charge of finance, the Board secretary and other senior managers of
DRCO neither hold positions other than director and supervisor in DRCO’s controlling shareholders,
actual controllers and other enterprises controlled by them, nor receive remuneration from DRCO’s
controlling shareholders, actual controllers and other enterprises controlled by them; the financial
personnel of DRCO do not work part-time in the organizations of controlling shareholders or the actual
controllers and other enterprises controlled by them.
(III) Financial independence
DRCO has set up an independent financial department with full-time accounting personnel, and
established an independent financial accounting system and financial management policies to make
financial decisions independently in strict accordance with accounting laws and regulations including the
Accounting Law of the People's Republic of China. DRCO has a standardized financial accounting
system and financial management policies for branches and subsidiaries; DRCO doesn’t share bank
accounts with controlling shareholders, actual controllers and other enterprises controlled by them.
(IV) Institutional independence
DRCO has set up and defined the responsibilities and rights of the general meeting of shareholders, the
Board of Directors, the Board of Supervisors and other bodies for decision-making, operation
management and supervision. and supervision. Therefore, DRCO has established a standardized and
effective corporate governance structure. Based on the development needs, DRCO has established a
series of internal operation and management institutions that independently exercise the right of operation
and management, and there is no institutional mixing with the controlling shareholders, the actual
controller and other enterprises under their control.
(V) Business independence
DRCO has an independent and complete research and development, design, procurement and sales
business system, with the ability to directly conduct business operation by itself on the market. DRCO's
business is independent of the controlling shareholders, the actual controllers and other enterprises under
their control. Between DRCO and its controlling shareholders, the actual controllers and other enterprises
under their control, there is neither horizontal competition that has a material adverse effect on the issuer,
nor any connected transaction that materially impacted the independence and was obviously unfair.
III. Horizontal Competition
□ Applicable Not Applicable
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2022 Annual Report of DR Corporation Limited
IV. Annual General Meetings and Extraordinary General Meetings Held during Reporting Period
1. General meetings of shareholders during the reporting period
Percentage
Date of Date of
Session Type of meeting of attending Resolution of meeting
convening disclosure
investors
For details, please refer to the Announcement on the
The First Extraordinary Extraordinary
January January Resolution of the First Extraordinary General Meeting of
General Meeting of General Meeting of 90.24%
18, 2022 18, 2022 Shareholders in 2022 published on www.cninfo.com.cn (No.
Shareholders in 2022 Shareholders
2022-001)
Annual general For details, please refer to the Announcement for the First
2021 Annual General May 20, May 20,
meeting of 90.94% General Meeting of Shareholders in 2022 published on
Meeting of Shareholders 2022 2022
shareholders www.cninfo.com.cn (No. 2022-029)
The Second Extraordinary Extraordinary general For details, please refer to the Announcement for the
July 08, July 08,
General Meeting of meeting of 87.54% Resolution of the Second Extraordinary General Meeting of
2022 2022
Shareholders in 2022 shareholders Year 2022 posted on www.cninfo.com.cn (No. 2022-041)
2. Preferred shareholders whose voting rights have been restored request to convene an extraordinary general meeting of shareholders
□ Applicable Not Applicable
V. Weighted Voting Right Arrangement
□ Applicable Not Applicable
VI. Corporate Governance of Red-chip Company
□ Applicable Not Applicable
VII. Directors, Supervisors and Senior Management
1. Basic information
Name Position Employment Gender Age Start date End Number of Number of Number Other Number Reasons
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2022 Annual Report of DR Corporation Limited
status of tenure date shares shares of shares increases of shares for
of held at the increased reduced or held at changes
tenure beginning during the during decreases end of in shares
of the current the (shares) current
period period current period
(shares) (shares) period (shares)
(shares)
Chairman,
Zhang General July 11, July 7,
Incumbent Male 37 0 0 0 0 0
Guotao Manager 2019 2025
(President)
Director, Deputy
General July 11, July 7,
Lu Yiwen Incumbent Female 36 0 0 0 0 0
Manager (Vice 2019 2025
President)
Director, Deputy
March
Wei General July 11,
Resigned Male 40 31, 0 0 0 0 0
Qingxing Manager (Vice 2019
2023
President)
Director, Deputy
General
Manager (Vice
Huang July 11, July 7,
President), Incumbent Male 48 0 0 0 0 0
Shuirong 2019 2025
Secretary of the
Board and Chief
Financial Officer
Hu July 11, July 7,
Director Incumbent Male 42 0 0 0 0 0
Xiaoming 2019 2025
Chen March 08, July 7,
Director Incumbent Male 37 0 0 0 0 0
Qisheng 2021 2025
Independent January July 7,
Li Yang Incumbent Male 40 0 0 0 0 0
Director 15, 2020 2025
Liang Jun Independent Incumbent Male 45 January July 7, 0 0 0 0 0
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2022 Annual Report of DR Corporation Limited
Director 15, 2020 2025
Zhong Independent November July 7,
Incumbent Male 50 0 0 0 0 0
Min Director 24, 2020 2025
Chairman of the
Huang July 08, July 7,
Board of Incumbent Female 34 0 0 0 0 0
Yingfeng 2022 2025
Supervisors
July 08, July 7,
Shen Ai Supervisor Incumbent Female 33 0 0 0 0 0
2022 2025
Employee April
Yin July 11,
Representative Resigned Male 43 10, 0 0 0 0 0
Luwen 2019
Supervisor 2023
Employee
Wu April 10, July 7,
Representative Incumbent Female 29 0 0 0 0 0
Wanhong 2023 2025
Supervisor
Chairman of the
Zhao July 11, July 8
Board of Resigned Female 33 0 0 0 0 0
Ranran 2019 2022
Supervisors
Wang July 11, July 8
Supervisor Resigned Female 36 0 0 0 0 0
Tong 2019 2022
Lin Chief Financial July 11, July 8,
Resigned Male 41 0 0 0 0 0
Zhenghai Officer 2019 2022
Total -- -- -- -- -- -- 0 0 0 0 0 --
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2022 Annual Report of DR Corporation Limited
Whether any directors, supervisors and senior officers were dismissed during the reporting period
□Yes No
Changes in directors, supervisors and senior management of DRCO
Applicable □ Not Applicable
Name Position Type Date Reason
Chairman of the Departed at the
Zhao Departed at the end of the
Board of end of the term of July 8, 2022
Ranran term of office
Supervisors office
Departed at the
Departed at the end of the
Wang Tong Supervisor end of the term of July 8, 2022
term of office
office
Departed at the
Lin Chief Financial Departed at the end of the
end of the term of July 8, 2022
Zhenghai Officer term of office
office
Chairman of the
Huang
Board of Elected July 8, 2022 Election of new session
Yingfeng
Supervisors
Shen Ai Supervisor Elected July 8, 2022 Election of new session
Director, Deputy
Wei
General Manager Resigned March 31, 2023 Resign for personal reasons
Qingxing
(Vice President)
Employee
Yin Luwen Representative Resigned April 10, 2023 Work Adjustment
Supervisor
Employee
Wu Elected by the employee
representative Elected April 10, 2023
Wanhong representative meeting
supervisor
2. Positions
Professional background and career experience of DRCO's incumbent directors, supervisors and senior
management and their current major responsibilities in DRCO.
(1) Profiles of the Board members
① Mr. Zhang Guotao
Mr. Zhang Guotao, Chairman of the Board, is a Chinese citizen without permanent residence permit
outside China. Born in 1985, he holds an EMBA degree from Cheung Kong Graduate School of Business
and is the founder of DRCO. Mr. Zhang has received awards including the "Outstanding Young
Entrepreneur Award (40 years and below)" and the "Top 10 Leaders of Asian Brands". He was the
executive director and general manager of Darry Corporation ( 戴 瑞 有 限 )and now acts as DRCO’s
chairman, general manager (president), as well as the executive director & general manager of DR
Investment, Qianhai Wendi, Wendi Design, Wendi Technology and EveryYear Travel Photography.
② Ms. Lu Yiwen
Ms. Lu Yiwen is the director of DRCO. She is a Chinese citizen without permanent residence permit
outside China. Born in 1987, she holds an EMBA degree from China Europe International Business
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2022 Annual Report of DR Corporation Limited
School (CEIBS). As the founder of DRCO, she has received awards such as "Forbes 30 Under 30 China",
"Hurun China Under 30s To Watch" and "Top 10 Leaders of Asian Brands". Ms. Lu was ever the vice
president and supervisor of Darry Corporation (戴瑞有限) and now acts as the director and deputy vice
general manager (vice president) of DRCO, the supervisor of DR Investment, the supervisor of EveryYear
Travel Photography, the supervisor of Wendi Design and Wendi Technology.
③ Mr. Huang Shuirong
Mr. Huang Shuirong, the director of DRCO, is a Chinese citizen without permanent residence permit
outside China. Born in 1974, Mr. Huang received his master’s degree from Zhongnan University of
Economics and Law, and he is a senior accountant. Mr. Huang once served as the financial manager of
Guangdong-based Jianlibao Group, the chief financial officer of Xilong Chemical Co., Ltd., the general
manager of the financial center at Xilong Chemical Co., Ltd.,, and the financial manager of Tiandi No.1
Beverage Inc.; since joining DRCO in 2018, he has held such positions as the vice president and financial
manager of Darry Corporation ( 戴 瑞 有 限 ) and now is the director, deputy general manager (vice
president), Board secretary and financial manager of DRCO.
④ Mr. Hu Xiaoming
Mr. Hu Xiaoming, the director of DRCO, is a Chinese citizen without permanent residence permit outside
China. Born in 1980, he received his bachelor’s degree from Shenzhen University. Mr. Hu used to be the
planning manager of Guangzhou Himalayan Advertising Co., Ltd., the senior brand planning manager of
Jiaduobao (China) Beverage Co., Ltd., the brand director of Shenzhen Shengzi Technology Co., Ltd., and
the deputy brand director of Yulong Computer Communication Technology (Shenzhen) Co., Ltd. Since
joining DRCO in 2016, he has held such positions as the brand director and strategy director at the
market center of Darry Corporation ( 戴 瑞 有 限 ), and now he acts as the director and strategy head at
DRCO.
⑤ Mr. Chen Qisheng
Mr. Chen Qisheng, the director of DRCO, is a Chinese citizen without permanent residence permit
outside China. Born in 1986, he received his bachelor’s degree and holds the CMA certificate. He once
worked in Chow Tai Fook Jewelry (Shenzhen) Co., Ltd., Kingdee Software (China) Co., Ltd. and
Shenzhen Jianjiaqin Jewelry Co., Ltd. Since joining DRCO in 2015, he has ever held the position of a
senior financial manager and now acts as the director and the responsible head for business and finance.
⑥ Mr. Li Yang
Mr. Li Yang, the independent director of DRCO, is a Chinese citizen without permanent residence permit
outside China. Born in 1983, he received his PhD degree from Columbia University and is an Associate
Professor of Cheung Kong Graduate School of Business. Since 2020, he has been an independent
director of DRCO, as well as an independent director of 360 Ludashi Holdings Co., Ltd., Westingarea
Supply Chain (Shanghai) Co., Ltd. and New Tianli Technology Co., Ltd.
⑦ Mr. Liang Jun
Mr. Liang Jun, the independent director of DRCO, is a Chinese citizen without permanent residence
permit outside China. born in 1977, he received his master's degree from Renmin University of China,
and the EMBA degree from China Europe International Business School. Mr. Liang used to be the
marketing manager of consumer goods subsidiary under Humanwell Healthcare, the board secretary of
Shenzhen Sinobioway Xinpeng Biomedicine Co., Ltd., the senior partner and fund manager of Shenzhen-
based Rabbit Fund; he has been serving as the independent director of DRCO since 2020.
⑧ Mr. Zhong Min
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2022 Annual Report of DR Corporation Limited
Mr. Zhong Min, the independent director of DRCO, is a Chinese citizen without permanent residence
permit outside China. Born in 1973, he received his bachelor’s degree from Hangzhou Dianzi University
and holds the CPA certificate. Mr. Zhong ever served as a senior manager of Shenzhen Tongren
Accounting Firm, a salaried partner of Shenzhen Pengcheng Enterprise Management Consulting Co.,
Ltd., the chief financial officer of Shenzhen Yuezhong Investment Holdings Co., Ltd., the independent
director of Guangzhou Fangbang Electronics Co., Ltd.. He has been acting as the independent director of
DRCO since 2020, and also a director of Shenzhen Yuezhong Investment Holdings Co., Ltd. and an
independent director of Shenzhen Xunfang Technology Co., Ltd.
(2) Profiles of the members of the Board of Supervisors
① Ms. Huang Yingfeng
Ms. Huang Yingfeng, Chairman of the Board of Supervisors, is a Chinese citizen without permanent
residence permit outside China. Born in 1989, she received her master's degree from Shenzhen
University. She used to be the screenwriter of Shenzhen All Things Growth Media Co., Ltd., the content
director of Beijing October 5th Film Media Co., Ltd, and the general manager of Shenzhen Weiwan Daixu
Technology Co., Ltd.; She joined DRCO in 2020 and now acts as the Chairman of the Board of
Supervisors and the head of the Official Account Operation Department.
② Ms. Shen Ai
Ms. Shen Ai, the supervisor of DRCO, is a Chinese citizen without permanent residence permit outside
China. Born in 1989, she received her bachelor’s degree from Shenzhen University. Since joining DRCO
in 2012, she has held the positions including the copywriter, copywriter manager and copywriter expert at
Darry Corporation (戴瑞有限). Now she acts as the supervisor and UCC operation manager at DRCO.
③ Ms.Wu Wanhong
Ms. Wu Wanhong, the employee representative supervisor, is a Chinese citizen without permanent
residence permit outside China. Born in 1993, she received her bachelor’s degree from Guangzhou
University. She ever worked as an accountant in Minhua Furniture Manufacturing (Shenzhen) Co., Ltd.
Since joining DRCO in 2017, Ms. Wu has held such positions as the retail accounting manager and the
senior accounting manager. Now she serves as the business and finance manager in DRCO.
(3) Profiles of senior management
① Mr. Zhang Guotao
Mr. Zhang Guotao currently serves as Chairman and General Manager (President). For his biographies,
please refer to the section “Profiles of Board Members”.
② Ms. Lu Yiwen
Ms. Lu Yiwen currently serves as the director and deputy general manager (vice president). For her
biographies, please refer to the section “Profiles of Board Members”.
③ Mr. Huang Shuirong
Mr. Huang Shuirong currently serves as the director and deputy general manager (vice president). For his
biographies, please refer to the section “Profiles of Board Members”.
Positions in shareholder entity
Applicable □ Not Applicable
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2022 Annual Report of DR Corporation Limited
Whether receive
Name of Position held in End Date
Name of shareholder entity Start date of tenure remunerations in
employee shareholder entity of tenure
shareholder entity
Executive Director,
Zhang Guotao DR Investment (Zhuhai) Co., Ltd. November 24, 2015 No
General Manager
Gongqingcheng Wendi No.1 Investment Executive Partner (with
Zhang Guotao December 1, 2017 No
Management Partnership (LP) a proxy appointed)
Gongqingcheng Wendi No.2 Investment Executive Partner (with
Zhang Guotao December 1, 2017 No
Management Partnership (LP) a proxy appointed)
Gongqingcheng Wendi No.3 Investment Managing partner (with
Zhang Guotao December 4, 2017 No
Management Partnership (LP) a proxy appointed)
Lu Yiwen DR Investment (Zhuhai) Co., Ltd. Supervisor November 24, 2015 No
Description of the position in the shareholder entity Not applicable
Position in other entity
Applicable □ Not Applicable
Position held in other Start date of End Date of Whether receive
Name of person Name of other entity
entity tenure tenure remunerations in other entity
Shenzhen Qianhai Wendi Executive Director, September 5,
Zhang Guotao No
Management Consulting Co., Ltd. General Manager 2017
Zhuhai Wendi Design Consulting Co., Executive Director,
Zhang Guotao July 26, 2021 No
Ltd. Manager
Executive Director,
Zhang Guotao Zhuhai Wendi Technology Co., Ltd. July 27, 2021 No
Manager
Shenzhen EveryYear Travel Executive Director, August 10,
Zhang Guotao No
Photography Culture Co., Ltd. General Manager 2021
Shenzhen EveryYear Travel December 13,
Lu Yiwen Supervisor No
Photography Culture Co., Ltd. 2019
Lu Yiwen Zhuhai Wendi Technology Co., Ltd. Supervisor July 27, 2021 No
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2022 Annual Report of DR Corporation Limited
Zhuhai Wendi Design Consulting Co.,
Lu Yiwen Supervisor July 26, 2021 No
Ltd.
Shenzhen Rongzhi Lianchuang March 30,
Huang Shuirong Managing partner No
Investment Enterprise (LP) 2015
Independent Non-
Li Yang 360 Ludashi Holdings Limited June 5, 2019 Yes
Executive Director
Cheung Kong Graduate School of
Li Yang Associate Professor July 1, 2017 Yes
Business
Westingarea Supply Chain February 09,
Li Yang Independent Director Yes
(Shanghai) Co., Ltd. 2022
Li Yang Xintianli Technology Co., Ltd. Independent Director July 11, 2022 Yes
Beijing Zhierxing Culture Media Co., November 14,
Zhong Min Director No
Ltd. 2013
Shenzhen Yuezhong Culture Group January 16,
Zhong Min Director No
Co., Ltd 2019
Shenzhen Yuezhong Tianze Real January 5,
Zhong Min Director No
Estate Development Co., Ltd. 2013
Shenzhen Yuezhong Investment December 26,
Zhong Min Director Yes
Holding Co., Ltd. 2006
Shenzhen Binhai Penghui Fund November 15,
Zhong Min Chairman No
Management Co., Ltd. 2018
Guangzhou Fangbang Electronics December 12,
Zhong Min Independent Director August 1, 2022 Yes
Co., Ltd. 2016
Shenzhen Xunfang Technology Co.,
Zhong Min Independent Director June 1, 2020 Yes
Ltd.
Shenzhen Qianhai Wendi September 5,
Wang Tong Supervisor No
Management Consulting Co., Ltd. 2017
Description of position None
in other entity
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2022 Annual Report of DR Corporation Limited
Whether DRCO's current and resigned directors, supervisors and senior management were penalized by securities regulators in the past three years
□ Applicable Not Applicable
3. Remunerations of directors, supervisors and senior management
Decision-making process, basis for determination and actual payment of remunerations for directors, supervisors and senior management
The remuneration of DRCO's directors and supervisors is determined in accordance with the following principles: non-independent directors do not receive
remuneration or allowances for directors but are compensated according to the specific position they hold in DRCO; independent directors receive
allowances; supervisors do not receive remuneration or allowances but are compensated according to the specific position they hold in DRCO. The
remuneration of DRCO's directors, supervisors, senior management and other core personnel consists mainly of basic salary, position benefits and
performance-based incentives.
The remuneration plan for directors are to be considered and approved by the Board and reported to the general meeting through the Board for consideration
and approval. The remuneration plan for supervisors are considered and approved by the general meetings; the remuneration plan for senior management is
considered and approved by the board meetings; the remuneration plan for other core personnel who do not concurrently serve as directors, supervisors or
senior management is determined according to the remuneration plan formulated by DRCO’s management.
During the reporting period, the remuneration of DRCO's directors, supervisors and senior management has been paid in full.
Actual payment for the remuneration of directors, supervisors and senior management
Unit: RMB0'000
Total pre-tax Whether receive
Employment compensation compensation from
Name Position Gender Age
status received from any connected party
DRCO of DRCO
Zhang Guotao Chairman, General Manager (President) Male 37 Incumbent 407.71 No
Lu Yiwen Director, Deputy General Manager (Vice President) Female 36 Incumbent 190.45 No
Wei Qingxing Director, Deputy General Manager (Vice President) Male 40 Resigned 123.41 No
Director, Deputy General Manager (Vice President),
Huang Shuirong Male 48 Incumbent 194.42 No
Secretary of the Board and Financial Manager
Hu Xiaoming Director Male 42 Incumbent 75.12 No
Chen Qisheng Director Male 37 Incumbent 88.62 No
Li Yang Independent Director Male 40 Incumbent 8 No
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2022 Annual Report of DR Corporation Limited
Liang Jun Independent Director Male 45 Incumbent 8 No
Zhong Min Independent Director Male 50 Incumbent 8 No
Huang Yingfeng Chairman of the Board of Supervisors Female 34 Incumbent 36.2 No
Shen Ai Supervisor Female 33 Incumbent 23.84 No
Yin Luwen Supervisor Male 43 Incumbent 35.34 No
Zhao Ranran Chairman of the Board of Supervisors Female 33 Resigned 56.65 No
Wang Tong Supervisor Female 36 Resigned 33.17 No
Lin Zhenghai Chief Financial Officer Male 41 Resigned 36.05 No
Total -- -- -- -- 1,324.98 --
VIII. Performance of Duties by DRCO Directors during Reporting Period
1. Board of Directors in the reporting period
Date of
Meeting Date of disclosure Resolution of meeting
convening
For details, please refer to the Announcement for the Resolution of the 15th
15th Meeting of the First Session of
April 20, 2022 April 22, 2022 Meeting of the First Session of Board of Directors published on
Board of Directors
www.cninfo.com.cn (No. 2022-023)
For details, please refer to the Announcement for the Resolution of the 16th
16th Meeting of the First Session of
June 21, 2022 June 23, 2022 Meeting of the First Session of Board of Directors published on
Board of Directors
www.cninfo.com.cn (No. 2022-034)
For details, please refer to the Announcement for the Resolution of the First
First Meeting of the Second
July 8, 2022 July 8, 2022 Meeting of the Second Session of Board of Directors published on
Session of Board of Directors
www.cninfo.com.cn (No. 2022-042)
For details, please refer to the Announcement for the Resolution of the
Second Meeting of the Second
August 25, 2022 August 29, 2022 Second Meeting of the Second Session of Board of Directors published on
Session of Board of Directors
www.cninfo.com.cn (No. 2022-051)
October 26, 2022 October 28, 2022 For details, please refer to the Announcement for the Resolution of the Third
Third Meeting of the Second
Meeting of the Second Session of Board of Directors published on
75
2022 Annual Report of DR Corporation Limited
Session of Board of Directors www.cninfo.com.cn (No. 2022-060)
Fourth Meeting of the Second December 29, December 31, For details, please refer to the Announcement for the Resolutions of the
Session of Board of Directors 2022 2022 Fourth Meeting of the Second Session of Board of Directors (No. 2022-069)
2. Attendance of directors at the Board meetings and the general meetings
Attendance of directors at the Board meetings and the general meetings
Required Attendance in Board
Attendance in Number of Absence from two Attendance at
Name of attendance in meetings via Attendance
Board meetings absences from consecutive general
director(s) Board meetings communication by proxy
in person Board meetings meetings or not meetings
during the year equipment
Zhang Guotao 6 6 0 0 0 No 2
Lu Yiwen 6 5 1 0 0 No 3
Wei Qingxing 6 4 2 0 0 No 3
Huang
6 5 1 0 0 No 3
Shuirong
Hu Xiaoming 6 6 0 0 0 No 3
Chen Qisheng 6 6 0 0 0 No 3
Li Yang 6 0 6 0 0 No 2
Liang Jun 6 3 3 0 0 No 3
Zhong Min 6 1 5 0 0 No 3
Description of absence from two consecutive Board meetings in person
Not applicable.
3. Dissent of directors to corporate issues
Dissent of directors to relevant issues of DRCO
□Yes No
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2022 Annual Report of DR Corporation Limited
During the reporting period, the directors did not raise any objection to the relevant matters of DRCO.
4. Other information on duty performance of directors
Whether the suggestions of the directors are adopted or not.
Yes □ No
Descriptions on whether the suggestions of the directors are adopted or not
During the reporting period, all directors of DRCO performed their duties faithfully and diligently, actively attended the Board meetings and general meetings,
and deliberated all proposals in accordance with relevant laws, regulations and normative documents including DRCO Law, the Securities Law, the Rules
Governing the Listing of Stocks on Shenzhen Stock Exchange, the No.2 Guidelines of the Shenzhen Stock Exchange for Self-Discipline and Regulation of
Listed Companies - Standardized Operation of Companies Listed on ChiNext Market, the Articles of Association, the Rules of Procedure of the Board of
Directors, and the Work System for Independent Directors. Based on the actual situation of DRCO, all directors have made in-depth discussions on DRCO's
business activities, financial status, major issues and other matters to make suggestions for DRCO's business development, fully consider the interests and
demands of minority shareholders, enhance the scientific decision-making of the board of directors in a timely manner, and promote the sustainable and
healthy development of DRCO/s operations.
IX. Special Committees under the Board of Directors during Reporting Period
Number of Details of
Name of Date of Important opinions and Other descriptions on
Members meetings Contents of the meetings objections
committee convening suggestions duty performance
held (if any)
1. Review the “Resolution on the The Audit Committee
2021 Annual Report and Its 1. Communicate with
reviewed the matters
Summary”; the external auditors to
under consideration in
ensure that the financial
2. Review the "Resolution on the strict accordance with
statements give a true,
2022Q1 Quarterly Results” the Articles of
fair and complete view
Association, the Rules
Zhong Min, of the overall financial
3. Review the “Resolution on the of Work of the Audit
Audit Liang Jun, April 19, position of DRCO;
3 2021 Financial Results; Committee and relevant
Committee Huang 2022
laws and regulations, 2. Guide the internal
Shuirong 4. Review the "Resolution on the fully communicated with audit work and play the
2021 Internal Control Self- DRCO and the auditors role of the Audit
assessment and unanimously Department in
approved relevant "improving corporate
Report"; resolutions after governance, adding
discussion. value and achieving
5. Review the “Resolution on
77
2022 Annual Report of DR Corporation Limited
2011 Annual Report on Deposit objectives”.
and Use of Proceeds”
6. Review the “Resolution on
Renewing Engagement of Audit
Institution in 2022”
7. Review the “Resolution on
Revising Internal Audit
Management Policies”
8. Review the “Resolution on the
2022Q1 Work Review and 2022
Work Plan of DRCO’s Audit
Department”
The Audit Committee
reviewed the matters
1. Review the “Resolution on the under consideration in
2022 Interim Report and Its strict accordance with
Summary”; Guide the internal audit
the Articles of
work and play the role
Association, the Rules
2. Review the “Resolution on of the Audit Department
August 19, of Work of the Audit
2022 Interim Report on Deposit in "improving corporate
2022 Committee and relevant
and Use of Proceeds” governance, adding
laws and regulations,
value and achieving
3. Review the “Resolution on the and unanimously
objectives”.
2022Q2 Work of DRCO’s Audit approved relevant
Department” resolutions after
discussion with related
parties.
1. Review the "Resolution on the The Audit Committee
2022Q3 Quarterly Results” reviewed the matters Guide the internal audit
under consideration in work and play the role
2. Resolution on reviewing the strict accordance with of the Audit Department
October “2022Q3 Special Report on the Articles of in "improving corporate
24, 2022 Deposit and Use of Proceeds” Association, the Rules governance, adding
3. Review the “Resolution on the of Work of the Audit value and achieving
2022Q3 Work of DRCO’s Audit Committee and relevant objectives”.
Department” laws and regulations,
and unanimously
78
2022 Annual Report of DR Corporation Limited
approved relevant
resolutions after
discussion with related
parties.
The Remuneration and
Appraisal Committee, in
strict accordance with
1. Review the “Resolution on the the Articles of
Plan for Remuneration and Association, the
Liang Jun,
Remuneration Allowance of Directors in 2022”; Working Rules of the
Wei April 19,
and Appraisal 1 Remuneration and
Qingxing, 2022 2. Review the “Resolution on the
Committee Appraisal Committee
Zhong Min Plan for Remunerations of Senior and relevant laws and
Management in 2022”; regulations,
unanimously approved
relevant resolutions after
in-depth discussion.
The Nomination
1. Review the "Resolution on the Committee considered
General Election of DRCO's the matters under
Board of Directors and the consideration in strict
Nomination of Candidates for accordance with the
Non-Independent Directors of the Articles of Association,
Second Session of Board of the Working Rules of the
Directors"; Nomination Committee
June 21,
and relevant laws and
Li Yang, Lu 2022 2. Review the "Resolution on the
Nomination regulations, and
Yiwen, 2 General Election of DRCO's
Committee conducted a serious
Zhong Min Board of Directors and the review of the
Nomination of Candidates for qualifications of director
Independent Directors of the candidates. After
Second Session of Board of discussion, relevant
Directors"; nominations were
unanimously approved.
July 8, The Nomination
Review the Resolution on the
2022 Committee considered
Appointment of Senior
the matters under
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2022 Annual Report of DR Corporation Limited
Management of DRCO consideration in strict
accordance with the
Articles of Association,
the Working Rules of the
Nomination Committee
and relevant laws and
regulations, and
conducted a serious
review of the
qualifications of senior
management
candidates. After
discussion, relevant
nominations were
unanimously approved.
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2022 Annual Report of DR Corporation Limited
X. Work of Board of Supervisors
Whether the Board for Supervisors identified any risk to DRCO through supervisory activities during the
reporting period.
□Yes No
The Board of Supervisors had no objection to the matters under its supervision during the reporting
period.
XI. Employees of DRCO
1. Number, functional classification and education background of employees
Number of current employees of the parent Company as of the end of the reporting 3,951
period (persons)
Number of current employees of major subsidiaries as of the end of the reporting period 487
(persons)
Total number of current employees as of the end of the reporting period (persons) 4,438
Total number of paid employees in the current period (persons) 4,438
Number of retired employees for whom the parent company and its major subsidiaries
are
0
responsible for the retirement benefits (persons)
Functional classification
Number of
Category
persons
Sales personnel 4,056
Technical personnel 82
Financial personnel 68
Administrative personnel 232
Total 4,438
Education background
Quantity
Category
(person)
Master's degree and above 43
Bachelor’s degree 813
Junior college below 3,582
Total 4,438
2. Remuneration policy
DRCO continues to improve the remuneration-driven incentive mechanism to ensure the compliance of
various remuneration management activities, as well as external competitiveness and internal fairness
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2022 Annual Report of DR Corporation Limited
and effective incentives. DRCO has a perfect salary system with the compensation structure and range
matching the ranks and positions by taking into account the internal and external remuneration contexts.
Sticking to the strategy of setting positions and salaries based on skills, DRCO offers competitive
compensation to top talents. Performance-based incentives for employees align with DRCO’s business
results, enabling all staff to share the benefits of the corporate growth. The working environment with
equal emphasis on efficiency and fairness,Enable employees to work in a loving environment and lays a
foundation for the enthusiasm and stability for employees to achieve self-fulfillment.
3. Training program
Considering strategic business growth and staff development, DRCO has arranged comprehensive
training programs to build business-supporting organizational capabilities, which are designed to enhance
managerial leadership, professionalism of functional departments, professional skills for management
trainees recruited from campuses and cultural integration for new comers.
(1) VE Program for Leadership of Executives: online and offline courses are offered improve the
leadership of the management team, with the focus on strengthening the management team’s ability
to lead the transformation and in-depth learning for brand building and digital marketing, so as to
sharpen the overall leadership of the executives.
(2) TRUE Program for Professionalism: the marketing department is required to learn the marketing
methods for mainstream self-media platforms, in a move to improve the brand influence and
encourage more actions for true love.
(3) Training program for management trainees from campuses: they can develop professional skills by
taking the courses on effective communication, goal management and structural thinking to quickly
adapt to workplace.
(4) Training program for new comers: online and offline courses are provided for new employees in the
functional departments, enabling them to better understand corporate culture, brands, products and
processes, and finally fit in work in DRCO.
Training programs are conducive to improve the overall quality and professional skills of employees, meet
their needs for improving self-capabilities and in turn drive DRCO’s sustainable development.
4. Labor outsourcing
Applicable □ Not Applicable
Total working hours for labour outsourcing 53,924.00
Total remuneration paid for labour outsourcing (RMB) 3,213,978.80
XII. Profit Distribution Plan and Plan to Convert Reserves into Share Capital
Formulation, implementation or adjustment of profit distribution policy, particularly cash dividend policy,
during the reporting period
Applicable □ Not Applicable
DRCO implements the profit distribution policy in strict accordance with the relevant provisions of the
Articles of Association of DRCO. The profit distribution plan during the reporting period complied with the
provisions of the Articles of Association and the review procedures, fully protecting the legitimate rights
and interests of all shareholders of DRCO. On May 20, 2022, DRCO held the 2021 annual general
meeting of shareholders to consider and approve the Resolution on the Profit Distribution Plan for 2021.
Based on the total share capital of 400,010,000 shares as of December 31, 2021, DRCO distributed
RMB20.00 in cash (tax inclusive) for every 10 shares to all shareholders, amounting to a total cash
dividend of RMB800,020,000.00 (tax inclusive), No bonus shares were offered and no capital reserve
was converted into share capital. This profit distribution plan was completed on June 30, 2022.
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2022 Annual Report of DR Corporation Limited
Special notes on cash dividend policy
Whether complies with the provisions of the Articles of Association or the requirements Yes
of the resolution of the general meeting of shareholders:
Whether the criteria and proportion of dividend distribution are clear and unambiguous Yes
Whether relevant decision-making procedures and mechanisms are sound: Yes
Whether independent directors have performed their duties and played their due roles: Yes
Whether minority shareholders have the opportunity to fully express their opinions and Yes
requirements, and whether their legitimate rights and interests are fully protected:
If the cash dividend policy is adjusted or changed, whether the conditions and Not applicable
procedures are compliant and transparent:
DRCO's profit distribution plan and plan to convert reserves into share capital during the reporting period
are in compliance with DRCO's Articles of Association and administrative measures for dividends
Yes □ No □ Not applicable
DRCO's profit distribution plan and plan to convert reserves into share capital during the reporting period
are in compliance with DRCO's Articles of Association
Profit distribution and capitalization of capital reserve for the year
Number of bonus shares to be distributed for every ten shares (share) 0
Amount to be distributed for every ten shares (RMB) (tax inclusive) 10.00
Number of shares to be converted into share 0
capital for every ten shares (share)
Share capital base in distribution proposal (shares) 400,010,000
Amount of cash dividend (RMB) (including tax) 400,010,000.00
Amount of cash dividend in other forms (e.g. share repurchase) (RMB) 0.00
Total cash dividends (including other methods) (RMB) 400,010,000.00
Distributive profit (RMB) 1,246,057,866.12
Proportion of total cash dividends (including other methods) in total profit distribution 100.00%
Proposed Cash Dividend Distribution
If DRCO is at its growth stage of the development with significant capital expenditure planned, the minimum
cash dividend should be at least 20% of the profit distribution.
Details of the profit distribution plan or the plan to convert reserves into share capital
As audited by Ernst & Young Hua Ming LLP (Special General Partner), DRCO's consolidated statement of
income for the year 2022 recorded a net profit attributable to shareholders of the parent company of
RMB729,241,946.67, including net profit of RMB634,154,146.80 realized by the parent company.
According to the company Law of PRC, the Articles of Association and other relevant provisions, when a
company distributes its after-tax profit tax for the year, 10% of the profit shall be withdrawn as DRCO's
statutory surplus reserve, and if the accumulated amount of DRCO's statutory surplus reserve is more than
50% of DRCO's registered capital, no further withdrawal may be made. Based on the above provisions,
DRCO withdraws the statutory surplus reserve fund of RMB20,794,967.94 in 2022,As of December 31, 202
2,the accumulated undistributed profit in DRCO's consolidated financial statement was RMB1,739,260,233.
15, and the accumulated undistributed profit of the parent company was RMB1,246,057,866.12.
Based on DRCO's operating results and profitability in 2022, and in line with the principle of continuously
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2022 Annual Report of DR Corporation Limited
rewarding shareholders and sharing the operating results of DRCO operation with all shareholders, and on
the premise of ensuring DRCO's normal operation and long-term development, DRCO's profit distribution
plan for 2022 is as follows: based on DRCO's total share capital of 400,010,000 shares as at December 21,
2022, a cash dividend of RMB10.00 per 10 shares (including tax) will be distributed to all shareholders, with
the total dividend being RMB400,010,000.00 (including tax); no bonus share will be offered and the capital
reserve will not be converted into share capital.
If the total share capital of DRCO changes prior to the implementation of the distribution plan, DRCO will
adjust the payout ratio in accordance with the principle that the total amount of the cash dividends remains
unchanged.
DRCO records profits and the parent company records a positive undistributed profit during the reporting
period but there is no resolution for cash dividend
□ Applicable Not Applicable
XIII. Implementation of Share Incentive Scheme, Employee Stock Ownership Scheme or
Other Incentive Measures for Employees
□ Applicable Not Applicable
There are no share incentive schemes, employee stock ownership schemes or other incentive measures
for employees during the reporting period.
XIV. Construction and Implementation of Internal Control System during Reporting Period
1. Construction and implementation of internal control system
During the reporting period, in accordance with the provisions of the Basic Standard for Enterprise
Internal Control and its supporting guidance as well as the other laws, regulations and normative
documents, in combination with the external environment, DRCO's own operating conditions and
corporate governance requirements, DRCO comprehensively sorted out various business modules and
processes, further improved its internal control system and established a scientific, standardized, concise
and effective internal control system.
(1) With regard to the corporate governance structure, the Board of Directors of DRCO has established
the Audit Committee which is responsible for the communicating, reviewing and supervising DRCO's
internal and external audits, and for monitoring and assessing DRCO's internal controls; DRCO has set
up the Board of Supervisors to monitor the Board of Directors to develop and implement the internal
control system. DRCO has set up an audit department as a routine office, which exercises its functions
and powers independently under the guidance of the Audit Committee. The audit department reviews and
monitors the establishment and implementation of DRCO's internal control system and the authenticity
and integrity of DRCO's financial information.
(2) As for the internal control system, DRCO has formulated a sound internal control system, which
covers the key business modules in DRCO's business activities, including: capital activities, procurement
business, asset management, supply chain management, sales management, engineering projects,
financial reports, comprehensive budget, contract and seal management, human resources management,
information systems, significant investments.
(3) In terms of the implementation and supervision of internal control, DRCO strengthens the compliance
training of employees and enhances the risk prevention awareness of business departments. In order to
ensure the effective operation of internal control, DRCO has formed an end-to-end supervision mode
involving the Risk Department, Legal Affairs Department and Audit Department.
2. Details of significant deficiencies in internal control identified during the reporting period
□Yes No
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2022 Annual Report of DR Corporation Limited
XV. Management and Control over Subsidiaries During Reporting Period
Progress of
Company name Integration plan Problems Countermeasures Working progress Follow-up resolution
integration
Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable
XVI. Internal Control Self-Assessment Report or Internal Control Audit Report
1. Internal control self-assessment report
Disclosure date of the full text of the Internal Control Self-assessment Report April 28, 2023
Please refer to the 2022 Internal
Disclosure index of the full text of the Internal Control Self-assessment Report Control Self-assessment Report"
published on www.cninfo.com.cn
Total assets of entities included in the scope of assessment as a percentage of total assets in DRCO's consolidated 100.00%
financial statements
Revenue of entities included in the scope of assessment as a percentage of revenue in DRCO's consolidated financial 100.00%
statements
Criteria to evaluate deficiencies
Category Financial report Non-financial report
(1) Material weakness: correction of material errors in published (1) Material weakness: Violation of the State’s laws,
financial reports; failure of the audit committee and the audit regulations or regulatory documents; lack of decision-
department to oversee the internal control; findings of fraud making procedures or unscientific decision-making
involving directors, supervisors and senior management of process that results in material errors; lack of systems
DRCO; material misstatements in current financial reports or systemic failures of the system for important
Qualitative criteria identified by the CPA but not by DRCO's internal control businesses; failure to rectify material weakness
department. identified by the internal control assessment.
(2) Significant deficiency: failure to select and apply accounting (2) Significant errors resulting from deviations of
policies in accordance with GAAP; failure to establish anti-fraud DRCO's decision-making process from the objectives;
procedures and control measures; and one or more deficiencies deficiencies in significant business policies or systems;
of the financial reporting, for which the truthfulness and accuracy failure to correct significant deficiencies identified in the
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2022 Annual Report of DR Corporation Limited
of the financial statements cannot be reasonably assured. internal control assessment.
(3) General deficiency: Other control deficiencies related to (3) General deficiency: Inefficiency of DRCO's decision-
financial reporting that do not constitute material weakness or making process; deficiencies in general business
significant deficiency. policies or systems; failure to correct general
deficiencies identified in the internal control
assessment.
1. Losses resulting or likely to result from deficiencies in internal
control are measured against consolidated revenue if they have
impacts on the income statement.
(1) Material weakness: Misstatement ≥ 2% of consolidated
revenue.
Direct property losses resulting from direct or potential
(2) Significant deficiency: 1% ≤ misstatement <2% of
negative impacts of the deficiencies in internal control
consolidated revenue.
are measured against the total consolidated assets.
(3) General deficiency: Misstatement <1% of consolidated
(1) Material weakness: direct property losses ≥ 1% of
revenue.
Quantitative criteria the total consolidated assets.
2. Losses resulting or likely to result from deficiencies in internal
(2) Significant deficiency: 0.5% ≤ direct property losses
controls are measured against total consolidated assets if they
<1% of total consolidated assets.
have impacts on the asset management.
(3) General deficiency: direct property losses <0.5% of
(1) Material weakness: Misstatement ≥ 1% of the total
total consolidated assets.
consolidated assets.
(2) Significant deficiency: 0.5%≤ misstatement <1% of the total
consolidated assets.
(3) General deficiency: misstatement < 0.5% of the total
consolidated assets.
Number of material weaknesses in financial reporting (#) 0
Number of material weaknesses in non-financial reporting (#) 0
Number of significant deficiencies in financial reporting (#) 0
Number of significant deficiencies in non-financial reporting (#) 0
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2022 Annual Report of DR Corporation Limited
2. Internal control audit reports or assurance reports
Not applicable
XVII. Rectification in Self-Inspection Required By Special Campaign to Improve
Governance Of Listed Companies
Not applicable.
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2022 Annual Report of DR Corporation Limited
Part V. Environmental Protection and Social Responsibility
I. Material Environmental Issues
Whether the listed company and its subsidiaries are among key pollutant-discharging entities announced
by environmental protection authorities
□Yes No
Administrative penalties imposed for environmental issues during the reporting period
Impact on the production Company's
Name of DRCO Reason for Penalty
Violation and operation of the listed rectification
or subsidiary penalty results
company measures
Not Not Not
Not applicable Not applicable Not applicable
applicable applicable applicable
Refer to other environmental information disclosed by key pollutant-discharging entities
Not applicable.
Measures taken to reduce carbon emissions during the reporting period and their effect
□ Applicable Not Applicable
Reasons for not disclosing other environmental information
Not applicable.
II. Social Responsibility
For more details, please refer to the 2022 Sustainability Report disclosed by DRCO on April 28, 2023 on
www.cninfo.com.cn.
III. Consolidating and Expanding Achievements in Poverty Alleviation While Revitalizing
Rural Areas
Not applicable.
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2022 Annual Report of DR Corporation Limited
Part VI. Important Matters
I. Fulfillment of Commitments
1. Commitments fulfilled during the reporting period or suspended at the end of the reporting period by DRCO's de facto controllers, shareholders,
related parties, acquirers and other committed parties
Applicable □ Not Applicable
Commitment Commitment Commitment Commitment Status of
Reason Description
maker type time period fulfillment
Commitments made in the
acquisition report or equity Not applicable
change report
Commitments made during Not applicable
asset restructuring
1. The company shares directly or
indirectly held by DRCO prior to the
proposed offering shall not be
transferred or entrusted to others; or
be repurchased by DRCO, for a period
of 36 months from the date of listing of
DRCO's shares.
Commitments made at the December 15,
DR Investment Commitments 2. If the closing price of the company December
time of the initial public 2021 to June Performing
(Zhuhai) Co., Ltd. to lock-up shares is lower than the issue price for 15, 2021
offering or refinancing 15, 2025
twenty consecutive trading days within
six months after the listing of DRCO; or
is less than the issue price at the end
of the six months after the listing (June
15, 2022, extended in case of non-
trading day), the lock-up period when
the company shares are held by
DRCO shall be automatically extended
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2022 Annual Report of DR Corporation Limited
by six months (subject to adjustment in
accordance with the relevant
regulations of CSRC and SZSE in the
event of ex-rights and ex-dividend
events such as dividend distribution,
bonus issue, transfer of shares, issue
of additional shares or rights issue by
DRCO during the above-mentioned
period).
3. In case of any breach of the relevant
commitments, DRCO will promptly
announce relevant facts and reasons,
and will publicly apologize to the
shareholders and public investors
except of force majeure or other
reasons beyond control. Any profit
made as a result of the non-fulfillment
of the commitments will belong to
DRCO. The company shall be held
liable for compensating DRCO or
investors in accordance with laws in
the event of any loss that is caused to
DRCO or investors as a result of the
non-fulfillment of the relevant
commitment. DRCO shall have the
right to temporarily withhold the cash
dividends (if any) to which the
company is entitled until adverse
impact arising from the non-fulfillment
of the relevant commitments have
been fully eliminated.
The above commitments shall not be
terminated due to the fact that the company
steps down as the controlling shareholder
of DRCO.
Commitments made at the Gongqingcheng Commitments 1. The company shares directly or December December 15, Performing
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2022 Annual Report of DR Corporation Limited
time of the initial public Wendi No.1 to lock-up indirectly held by DRCO prior to the 15, 2021 2021 to June
offering or refinancing Investment proposed offering shall not be 15, 2025
Management transferred or entrusted to others; or
Partnership (LP), be repurchased by DRCO, for a period
Gongqingcheng of 36 months from the date of listing of
Wendi No.2 DRCO's shares.
Investment
Management 2. If the closing price of the company
Partnership (LP), shares is lower than the issue price for
Gongqingcheng twenty consecutive trading days within
Wendi No.3 six months after the listing of DRCO; or
Investment is less than the issue price at the end
Management of the six months after the listing (June
Partnership (LP) 15, 2022, extended in case of non-
trading day), the lock-up period when
the company shares are held by
DRCO shall be automatically extended
by six months (subject to adjustment in
accordance with the relevant
regulations of CSRC and SZSE in the
event of ex-rights and ex-dividend
events such as dividend distribution,
bonus issue, transfer of shares, issue
of additional shares or rights issue by
DRCO during the above-mentioned
period).
3. In case of any breach of the relevant
commitments, DRCO will promptly
announce relevant facts and reasons,
and will publicly apologize to the
shareholders and public investors
except of force majeure or other
reasons beyond control. Any profit
made as a result of the non-fulfillment
of the commitments will belong to
DRCO. The company shall be held
liable for compensating DRCO or
investors in accordance with laws in
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2022 Annual Report of DR Corporation Limited
the event of any loss that is caused to
DRCO or investors as a result of the
non-fulfillment of the relevant
commitment.
1. The company shares directly or
indirectly held by DRCO prior to the
proposed offering shall not be
transferred or entrusted to others; or
be repurchased by DRCO, for a period
of 36 months from the date of listing of
DRCO's shares.
2. If the closing price of the company
shares is lower than the issue price for
twenty consecutive trading days within
six months after the listing of DRCO; or
is less than the issue price at the end
of the six months after the listing (June
15, 2022, extended in case of non-
Commitments made at the trading day), the lock-up period when December 15,
Zhang Guotao Commitments the company shares are held by me December
time of the initial public 2021 to June Performing
and Lu Yiwen to lock-up shall be automatically extended by six 15, 2021
offering or refinancing 15, 2025
months (subject to adjustment in
accordance with the relevant
regulations of CSRC and SZSE in the
event of ex-rights and ex-dividend
events such as dividend distribution,
bonus issue, transfer of shares, issue
of additional shares or rights issue by
DRCO during the above-mentioned
period).
3. I shall not transfer any shares held
directly or indirectly in DRCO within six
months of my resignation; if I resign
within six months of DRCO's shares
being listed, I shall not transfer any
shares held directly or indirectly in
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2022 Annual Report of DR Corporation Limited
DRCO within 18 months of my
resignation; if I resign between the
seventh and twelfth months of DRCO's
shares being listed, I shall not transfer
any shares held directly or indirectly in
DRCO within 12 months of my
resignation.
4. In case of any breach of the relevant
commitments, I will promptly announce
the facts and reasons for the breach of
commitments, and will publicly
apologize to DRCO's shareholders and
public investors except of force
majeure or other reasons beyond my
control. Any profit made as a result of
the non-fulfillment of the relevant
commitments will belong to DRCO. I
shall be held liable for compensating
DRCO or investors in accordance with
laws in the event of any loss that is
caused to DRCO or investors as a
result of the non-fulfillment of the
relevant commitments. DRCO shall
have the right to temporarily withhold
the cash dividends (if any) to which I
am entitled and suspend the payment
of my remuneration or allowances
during my employment with DRCO
until adverse impact arising from the
non-fulfillment of the relevant
commitments have been fully
eliminated.
The above commitment shall not terminate
if I step down as the actual controller of
DRCO or if I change my position or resign
from DRCO.
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2022 Annual Report of DR Corporation Limited
The shares allotted to China Securities -
CMB - China Securities DR No. 1 Strategic
Placement Collective Asset Management
Plan shall be subject to a 12-month lock-up
period from the date when the stock of the
proposed initial public offering is traded on
the Shenzhen Stock Exchange. Upon the
expiry of the lock-up period, the relevant
regulations of the CSRC and the Shenzhen
China Securities - Stock Exchange on share reduction shall
CMB - China apply to the shar reduction by the strategic
Securities DR No. investors.
1 Strategic
The shares allotted to Zhuhai Runxin December 15,
Commitments made at the Placement
Commitments Zhirong No.1 Investment Partnership (LP) December 2021 to
time of the initial public Collective Asset Fulfilled
to lock-up will be subject to a 12-month lock-up period 15, 2021 December 14,
offering or refinancing Management
from the date when the stock of the 2022
Plan, Zhuhai
Runxin Zhirong proposed initial public offering is traded on
No.1 Investment the Shenzhen Stock Exchange. Upon the
Partnership (LP) expiry of the lock-up period, the relevant
regulations of the CSRC and the Shenzhen
Stock Exchange on share reduction shall
apply to the shar reduction by the strategic
investors. The shares of the issuer allotted
in this strategic placement shall not be
transferred, entrusted to third-parties or
repurchased by the issuer for a period of
12 months from the date of the initial public
offering and listing of the issuer.
In case of reducing the shareholding within
two years after the expiry of the aforesaid
lock-up period, DRCO will exactly comply
Commitments made at the Commitments with relevant regulations of the CSRC and June 16, June 16, 2025
DR Investment
time of the initial public to share the SZSE on share reduction, prudently 2025 to June 15, Performing
(Zhuhai) Co., Ltd.
offering or refinancing reduction formulate a share reduction plan; reduce 2027
the shareholding by law; make an official
announcement three trading days prior to
the reduction; and fulfill information
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2022 Annual Report of DR Corporation Limited
disclosure obligations in a timely and
accurate manner in accordance with the
rules of the SZSE. The price for the
reduction transaction shall not be lower
than the issue price (subject to adjustments
in accordance with the relevant regulations
of CSRC and SZSE in the event of ex-
rights and ex-dividend events such as
dividend distribution, bonus issue, transfer
of shares, issue of additional shares or
rights issue by DRCO during the above-
mentioned period).
In case of any breach of the relevant
commitments, DRCO will promptly
announce relevant facts and reasons, and
will publicly apologize to the shareholders
and public investors except of force
majeure or other reasons beyond control.
Any profit made as a result of the non-
fulfillment of the commitments will belong to
DRCO. The company shall be held liable
for compensating DRCO or investors in
accordance with laws in the event of any
loss that is caused to DRCO or investors
as a result of the non-fulfillment of the
relevant commitment. DRCO shall have the
right to temporarily withhold the cash
dividends (if any) to which the company is
entitled until adverse impact arising from
the non-fulfillment of the relevant
commitments have been fully eliminated.
The above commitments shall not be
terminated due to the fact that the company
steps down as the controlling shareholder.
Commitments made at the Gongqingcheng Commitments In case of reducing the shareholding within June 16, June 16, 2025 Performing
time of the initial public Wendi No.1 to share two years after the expiry of the aforesaid 2025 to June 15,
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2022 Annual Report of DR Corporation Limited
offering or refinancing Investment reduction lock-up period, DRCO will exactly comply 2027
Management with relevant regulations of the CSRC and
Partnership (LP), the SZSE on share reduction, prudently
Gongqingcheng formulate a share reduction plan; reduce
Wendi No.2 the shareholding by law; make an official
Investment announcement three trading days prior to
Management the reduction; and fulfill information
Partnership (LP), disclosure obligations in a timely and
Gongqingcheng accurate manner in accordance with the
Wendi No.3 rules of the SZSE. The price for the
Investment reduction transaction shall not be lower
Management than the issue price (subject to adjustments
Partnership (LP) in accordance with the relevant regulations
of CSRC and SZSE in the event of ex-
rights and ex-dividend events such as
dividend distribution, bonus issue, transfer
of shares, issue of additional shares or
rights issue by DRCO during the above-
mentioned period).
In case of any breach of the aforesaid
commitments, DRCO will promptly
announce the facts and reasons for the
breach of commitments, and will publicly
apologize to the shareholders and public
investors except of force majeure or other
reasons beyond control. Any profit made as
a result of the non-fulfillment of the relevant
commitments will belong to DRCO. The
company shall be held liable for
compensating DRCO or investors in
accordance with laws in the event of any
loss that is caused to DRCO or investors
as a result of the non-fulfillment of the
relevant commitments.
DR Corporation Commitments I. Treatment of accumulated profits before December Permanently
Commitments made at the to profit Performing
time of the initial public Limited the offering 15, 2021 valid
distribution
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2022 Annual Report of DR Corporation Limited
offering or refinancing policy According to the resolution of the Fourth
Extraordinary General Meeting of
Shareholders of DRCO in 2020, the
accumulated undistributed profits realized
before the proposed public offering of
shares will be shared by the new and
existing shareholders of DRCO after the
offering.
II. Dividend distribution policy after initial
public offering
According to the resolution of DRCO's
Fourth Extraordinary General Meeting of
Shareholders in 2020, DRCO’s profit
distribution policy after the offering and
listing is as follows:
1. Principles of profit distribution
DRCO implements a continuous and stable
profit distribution policy that attaches
importance to providing investors with a
reasonable and stable return on their
investment and taking into account the
long-term and sustainable development of
DRCO.
2. Form of profit distribution
DRCO may distribute dividends in cash,
stock, or a combination of cash and stock.
DRCO will give priority to paying dividends
in cash; if DRCO is growing rapidly,
dividends may be paid in shares or a
combination of cash and shares.
3. Cash dividend policy
In principle, DRCO makes an annual cash
profit distribution if the conditions for cash
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2022 Annual Report of DR Corporation Limited
profit distribution are met; DRCO may
make an interim cash profit distribution if
appropriate. If DRCO's distributable profit
for the year are positive and there are no
significant investment plans or material
cash payments, DRCO's annual
distribution of profits in cash shall not be
less than 10% of the distributable profits
realized for the year. Significant investment
plan or material cash payment may be one
of the following circumstances:
(1) DRCO's proposed external investment,
acquisition of assets or purchase of
equipment over the next twelve months
meets or exceeds 50% of DRCO's latest
audited net assets and exceeds RMB50
million;
(2) DRCO's proposed external investment,
acquisition of assets or purchase of
equipment over the next twelve months
meets or exceeds 30% of DRCO's latest
audited total assets.
I. Commitment on avoiding horizontal
competition
1. As of the date of this commitment letter,
Commitments except for the company and its wholly-
on horizontal owned or controlled subsidiaries, the
DR Investment
Commitments made at the competition, company/I and other enterprises, December
(Zhuhai) Co., Ltd., Permanently
time of the initial public connected organizations or entities controlled by the 15, 2021 Performing
Zhang Guotao valid
offering or refinancing transactions, company/me are not currently engaged,
and Lu Yiwen
and capital directly or indirectly, in any business
appropriation activities that constitute competition with
the main business of the company and its
wholly-owned or controlled subsidiaries;
2. No engagement or association with
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2022 Annual Report of DR Corporation Limited
others, directly or indirectly, is allowed in
any business which is the same as, similar
to or in any way competitive with the issuer.
3. All of efforts shall be made to ensure
other affiliates of the commitment makers
not to deal in any business that is the same
as, similar to or in any way competitive with
the issuer.
4. No investment shall be permitted in a
company, enterprise or other entity or
organization whose business is the same
as, similar to or in any way competitive with
the issuer.
5. Any know-how or business secrets, such
as sales channels or customer information,
shall be disclosed to any other company,
enterprise or other entity, organization or
person whose business is the same as,
similar to or in any way competitive with
that of the issuer.
6. If, in the future, the company/I get any
business opportunity from any third party
that may compete with the issuer in the
same line of business, the company/I will,
in accordance with the principle of the
priority of the issuer, inform the issuer
immediately and assist the issuer to the
extent possible in obtaining such business
opportunity;
7. If the company/I breach the above
commitments and cause financial loss to
the issuer, the company/I shall be jointly
and severally liable for all losses suffered
by the issuer as a result, and the proceeds
obtained by DRCO/I as a result of such
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2022 Annual Report of DR Corporation Limited
breach shall accrue to the issuer.
II. Commitment on reducing and regulating
connected transactions
1. The company/I shall try to avoid or
reduce the occurrence of connected
transactions with DRCO and the subsidiary
entities, and urge the associate parities of
the company and mine to avoid or reduce
the connected transactions with DRCO and
the subsidiary entities.
2. If the transactions between I/the
company or relevant parities of mine/the
company with DRCO and the subsidiary
entities are necessary and unavoidable,
I/the company undertakes to operate at
arm's length in accordance with market-
based principles and fair prices, and
comply with the transaction procedures and
information disclosure obligations in
accordance with the relevant laws and
regulations, regulatory documents, rules of
the stock exchange and the Articles of
Association of DRCO, and ensure that the
legitimate rights and interests of the issuer
and its other shareholders or stakeholders
are not prejudiced by connected
transactions.
3. If I/the company or the connected party
of mine/the company breaches the above
commitment, I/the company shall be held
liable for all the liabilities arising therefrom
and shall fully compensate or indemnify
DRCO and its shareholders or
stakeholders for all losses caused thereby.
4. This commitment letter shall take effect
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2022 Annual Report of DR Corporation Limited
from the date of the signature of mine/the
company and shall expire on the date when
12 months have elapsed since I/the
company cease to be affiliated with DRCO.
If, within three years after the listing of
DRCO's shares, the closing price of DRCO
(subject to adjustments in accordance with
the relevant regulations of CSRC and
SZSE in the event of ex-rights and ex-
dividend events such as dividend
distribution, bonus issue, transfer of
shares, issue of additional shares or rights
issue by DRCO) is lower than DRCO's
audited net asset value per share in the
most recent period for 20 consecutive
trading days (excluding the trading days on
which the trading of DRCO's shares is
suspended for the whole day, the same
below) not because of force majeure
Commitments December 15,
Commitments made at the factors (hereinafter referred to as the
DR Corporation to post-IPO December 2021 to
time of the initial public "Triggering Condition"), DRCO and its Performing
Limited price 15, 2021 December 14,
offering or refinancing controlling shareholders as well as
stabilization 2024
directors (other than independent directors)
and senior management undertake to
implement the following price stabilization
measures in accordance with the laws,
regulations and DRCO's Articles of
Association without affecting the listing
condition of DRCO:
1. When the Triggering Condition is met,
DRCO will convene the Board Meeting
within 10 trading days to discuss the share
repurchase proposal. The repurchase
proposal includes, but not limited to, the
number of shares to be repurchased, the
repurchase price range, the source of
funds for the repurchase, the impact of the
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2022 Annual Report of DR Corporation Limited
repurchase on DRCO's share price and
DRCO's operation, etc. After the proposal
is passed by the Board Meeting, the
shareholders' meeting will be convened in
accordance with laws to review the
proposal regarding share buyback and
pass a resolution thereon, which must be
approved by a least 2/3 of the voting rights
held by the shareholders present at the
meeting. The specific implementation plan
will be announced after DRCO makes a
resolution at the Board meeting and the
general meeting in accordance with laws.
2. After the general meeting of
shareholders deliberates and approves the
share repurchase plan, DRCO will notify
the creditors in accordance with laws, and
submit relevant materials to the securities
regulators, the stock exchange and other
competent departments for approval or
filing procedures. The corresponding share
repurchase plan will be initiated 10 trading
days after the completion of all necessary
approval, filing, information disclosure and
other relevant procedures. Following the
share repurchase, DRCO's equity
distribution will continue to comply with the
listing requirements.
3. The repurchase period shall not exceed
three months from the date of approval of
the final share repurchase plan by the
general meeting or the Board of Directors.
4. DRCO will repurchase the shares with its
own funds at a price not higher than the
latest audited net asset value per share
(subject to adjustments in accordance with
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2022 Annual Report of DR Corporation Limited
the relevant regulations of CSRC and
SZSE in the event of ex-rights and ex-
dividend events such as dividend
distribution, bonus issue, transfer of
shares, issue of additional shares or rights
issue by DRCO after the base date of the
audit), and the buyback shall be made by
way of call auction trading, tender offer or
other means approved by the securities
regulators. However, if DRCO's share price
no longer meets the conditions for initiating
price stabilization measures prior to the
implementation of the share repurchase
plan, DRCO may discontinue the plan.
5. The total amount of funds used by
DRCO to repurchase shares shall not
exceed the total amount of funds raised
from DRCO's initial public offering of
ordinary shares in RMB (A shares), and the
amount of funds used to repurchase shares
in a single fiscal year shall not exceed 20%
of the audited net profit attributable to
shareholders of the parent company for the
previous fiscal year, and the number of
shares repurchased in a single fiscal year
shall not exceed 2% of the total share
capital of DRCO.
6. If DRCO breaches any of the foregoing
commitments, it will promptly disclose the
facts and reasons for the breach and,
except of force majeure or other reasons
beyond DRCO's control, will apologize to
DRCO's shareholders and public investors
and at the same time propose
supplementary or alternative commitments
to protect the interests of investors as far
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2022 Annual Report of DR Corporation Limited
as possible.
1. When the Triggering Condition for
DRCO is met, the company will increase
our shareholdings in DRCO in accordance
with laws and regulations including the
Measures for the Administration of the
Takeover of Listed Companies in any of the
following cases:
① The closing price of the DRCO is lower
than its latest net asset value per share for
each of the 10 consecutive trading days
from the day after DRCO completes its
share repurchase plan (subject to
adjustments in accordance with the
relevant regulations of CSRC and SZSE in
the event of ex-rights and ex-dividend
Commitment events such as dividend distribution, bonus December 15,
Commitments made at the DR Investment to post-IPO issue, transfer of shares, issue of additional December 2021 to
time of the initial public shares or rights issue by DRCO after the Performing
(Zhuhai) Co., Ltd. price 15, 2021 December 14,
offering or refinancing stabilization base date of the audit). 2024
② The Triggering Condition is again
triggered within 3 months from the day after
DRCO completes the implementation of its
share repurchase plan.
③ DRCO cannot implement the share
repurchase plan.
2. Within two trading days after the
Triggering Condition is satisfied, the
company will notify the Board of Directors
of DRCO which will then publish an
announcement on the increase of our
holdings. The company will commence the
increase on the day following the
announcement and shall complete the
increase within 30 trading days after the
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2022 Annual Report of DR Corporation Limited
relevant legal procedures are fulfilled.
3. To stabilize the stock price, the company
will buy shares of DRCO through auction
trading on the secondary market at a price
of not higher than the latest audited net
asset value per share (subject to
adjustments in accordance with the
relevant regulations of CSRC and SZSE in
the event of ex-rights and ex-dividend
events such as dividend distribution, bonus
issue, transfer of shares, issue of additional
shares or rights issue by DRCO after the
base date of the audit). However, if the
share price of DR Corporation Limited no
longer meets the conditions for initiating
price stabilization measures within three
trading days after it discloses our share
purchase plan, the company may
discontinue the proposed share purchase
plan.
4. The amount of funds used by the
company for every single holding increase
shall not be less than 10% nor more than
20% of the accumulated cash dividends
received from DRCO in the last three fiscal
years; the total amount of funds used for
holding increases in a single fiscal year
shall not exceed 50% of the accumulated
cash dividends received from DRCO in the
most recent three fiscal years; and the
number of shares purchased in a single
fiscal year shall not exceed 2% of the total
share capital of DRCO. Following the
increase of our shareholding, the equity
distribution of DRCO will continue to
comply with the listing requirements.
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2022 Annual Report of DR Corporation Limited
5. The company undertakes not to sell the
additional shares within six months of
completion of the proposed increase.
6. If the company breaches any of the
foregoing commitments, DRCO will
promptly disclose the facts and reasons for
the breach and, except of force majeure or
other reasons beyond our control, we will
apologize to shareholders and public
investors of DRCO who have the right to
temporarily withhold the cash dividends (if
any) that the company should enjoy until
the corresponding measures are taken and
implemented as committed.
The above commitments shall not be
terminated due to the fact that the company
stepped down as the controlling
shareholder of DRCO.
1. When the Triggering Condition for
DRCO is met, I will increase my
shareholdings in DRCO in accordance with
laws and regulations including the
Measures for the Administration of the
Zhang Guotao, Lu Takeover of Listed Companies and the
Yiwen, Wei Rules on the Management of Shares Held
Commitment by the Directors, Supervisors and Senior December 15,
Commitments made at the Qingxing, Huang
to post-IPO Management Officers of Listed Companies December 2021 to
time of the initial public Shuirong, Hu Performing
price 15, 2021 December 14,
offering or refinancing Xiaoming, Chen and the Changes Thereof in any of the
stabilization following cases: 2024
Qisheng and Lin
Zhenghai
① The closing price for each of the 10
consecutive trading days from the day after
the controlling shareholder's shareholding
increase plan is implemented is lower than
the latest audited net asset value per share
(ex-rights and ex-dividend treatment shall
106
2022 Annual Report of DR Corporation Limited
be made in the event of equity distribution,
conversion of reserves into share capital or
rights issue after the base date of the
audit).
② The Triggering Condition is again
triggered within 3 months from the day after
the controlling shareholder completes its
shareholding increase plan.
③ The controlling shareholder cannot
implement the share repurchase plan.
2. Within two trading days after the
Triggering Condition is satisfied, I will notify
the Board of Directors of DRCO which will
then publish an announcement on my
shareholding increase. I will commence the
increase on the day following the
announcement and shall complete the
increase within 30 trading days after the
relevant legal procedures are fulfilled.
3. To stabilize the stock price, I will buy
shares of DRCO through auction trading on
the secondary market at a price of not
higher than the latest audited net asset
value per share (ex-rights and ex-dividend
treatment shall be made in the event of
equity distribution, conversion of reserves
into share capital or rights issue after the
base date of the audit). However, if the
share price of DRCO no longer meets the
conditions for initiating price stabilization
measures within three trading days after
DRCO discloses my share purchase plan, I
may discontinue the proposed share
purchase plan. The funds used for a single
increase in shareholding shall not be less
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2022 Annual Report of DR Corporation Limited
than 20% of the total after-tax remuneration
received from DRCO in the previous year;
the funds used to increase shareholdings in
a single fiscal year shall not be more than
50% of the total after-tax remuneration
received from DRCO in the previous year;
and the cumulative increase in
shareholding in a single fiscal year shall not
exceed 2% of the enlarged share capital of
DRCO.
4. I undertakes not to sell the additional
shares within six months of completion of
the proposed increase, and guarantee that
the increase in my shareholding shall not
cause the shareholding distribution of
DRCO to fail to meet the listing conditions.
5. If I breach any of the foregoing
commitments, DRCO will promptly disclose
the facts and reasons for the breach and,
except of force majeure or other reasons
beyond my control, I will apologize to
shareholders and public investors of DRCO
who will cease to pay me remuneration or
allowances within five trading days from the
foregoing, and the shares of DRCO held
directly or indirectly by me shall not be
transferred. Meanwhile, DRCO shall have
the right to temporarily withhold the cash
dividends (if any) that I should enjoy until
the corresponding measures are taken and
implemented as committed.
The above commitment will not be
terminated due to the change of my
position or resignation.
DR Investment Commitments If the issuer and its subsidiaries receive a Performing
Commitments made at the December Permanently
(Zhuhai) Co., Ltd., to notice of correction from the competent
108
2022 Annual Report of DR Corporation Limited
time of the initial public Zhang Guotao compensating administrative authorities because the 15, 2021 valid
offering or refinancing and Lu Yiwen the issuer for properties leased by them have not been
possible registered for lease filing in accordance
losses due to with the laws, regulations and normative
the leased documents currently in force, the
property company/I will actively supervise the issuer
and its subsidiaries to make rectification in
accordance with the requirements.
In the event that the issuer and its
subsidiaries suffer financial losses due to
failure to register the lease, defects in the
title of the leased property or defects in the
rights of the lessor, defects in the
properties built on the leased collective
land or administratively allocated land, the
company/I shall agree to use our own
funds to fully compensate the issue and its
subsidiaries so that they do not suffer any
financial losses as a result.
In the event that the issuer or its
subsidiaries are required by the competent
Commitment
authorities to make retroactive payments
to retroactive
DR Investment due to failure to make full payment of social
Commitments made at the payment of
(Zhuhai) Co., Ltd., security contributions or housing fund in December Permanently
time of the initial public social security Performing
Zhang Guotao accordance with laws, the company/I shall 15, 2021 valid
offering or refinancing contributions
and Lu Yiwen be fully liable for the retroactive payments
and housing
and shall ensure that the issuer or its
provident fund
subsidiaries shall not suffer any financial
loss as a result.
1. In the event of a breach of the relevant
Binding commitments, DRCO will promptly disclose
Commitments made at the measures in the fact and reasons for the breach and,
DR Corporation December Permanently
time of the initial public case of failure except for force majeure or other reasons Performing
Limited 15, 2021 valid
offering or refinancing to fulfill beyond DRCO's control, DRCO will make a
commitments public apology to its shareholders and
public investors;
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2022 Annual Report of DR Corporation Limited
2. If the failure to fulfill the relevant
commitments caused losses to investors,
DRCO shall compensate investors for
losses in accordance with laws.
1. In the event of a breach of the relevant
commitments, the company will promptly
disclose the fact and reasons for the
breach and, except for force majeure or
other reasons beyond our control, the
company will make a public apology to
DRCO’s shareholders and public investors.
2. Any profit made as a result of the non-
fulfillment of the relevant commitments will
Binding
belong to the company. The company shall
Commitments made at the measures in
DR Investment be held liable for compensating DRCO or December Permanently
time of the initial public case of failure Performing
(Zhuhai) Co., Ltd. investors in accordance with laws in the 15, 2021 valid
offering or refinancing to fulfill
event of any loss that is caused to DRCO
commitments
or investors as a result of the non-
fulfillment of the relevant commitments.
3. In the event of a breach of the relevant
commitments, DRCO shall be entitled to
withhold the cash dividends (if any) to
which the company is entitled until the
adverse impact arising from the non-
fulfillment of the relevant commitments has
been fully eliminated.
Zhang Guotao, Lu 1. In the event of a breach of the relevant
Yiwen, Wei commitments, I will promptly disclose the
Qingxing, Huang Binding fact and reasons for the breach and, except
Commitments made at the Shuirong, Hu measures in for force majeure or other reasons beyond
Xiaoming, Chen December Permanently
time of the initial public case of failure my control, I will make a public apology to Performing
Qisheng, Yang Li, 15, 2021 valid
offering or refinancing to fulfill DRCO’s shareholders and public investors;
Liang Jun, Zhong commitments
Min, Lin 2. Any profit made as a result of the non-
Zhenghai, Zhao fulfillment of the relevant commitments will
Ranran, Yin belong to DRCO. The obligator shall be
110
2022 Annual Report of DR Corporation Limited
Luwen and Wang held liable for compensating DRCO or
Tong investors in accordance with laws in the
event of any loss that is caused to DRCO
or investors as a result of the non-
fulfillment of the relevant commitments.
3. In the event of a breach of the relevant
commitments, DRCO shall be entitled to
withhold the cash dividends (if any) to
which I am entitled and suspend the
payment of my remuneration or allowances
during my employment with DRCO until the
adverse impact arising from the non-
fulfillment of the relevant commitments has
been fully eliminated.
1. DRCO has disclosed the information of
shareholders in the prospectus in a true,
complete and accurate manner;
2. There are no cases of proxy
shareholding or fiduciary shareholding in
Commitments DRCO's development history, and there
relating to are no disputes or potential disputes over
disclosing equities, etc.
shareholder
3. No stockholders directly or indirectly hold
Commitments made at the information
DR Corporation shares of the issuer, which is prohibited by December Permanently
time of the initial public when applying Performing
Limited laws and regulations. 15, 2021 valid
offering or refinancing for initial
public offering 4. No intermediary participating into the
and listing on offering or its supervisor, senior
the ChiNext management or managerial personnel
Market directly or indirectly hold shares of the
issuer.
5. DRCO does not have any improper
transfer of benefits with the issuer's equity.
6. If DRCO breaches the above
commitments, it will be liable for all legal
111
2022 Annual Report of DR Corporation Limited
consequences arising therefrom.
After the expiry of the lock-up commitment,
I will declare annually to DRCO the shares
I have owned directly or indirectly in DRCO
and any changes therein during my tenure
as a director, supervisor or senior manager
of DRCO. The shares transferred each
year will not exceed 25% of the total
number of shares I hold directly or
indirectly in DRCO.
In case of reducing the shareholding within
two years after the expiry of the lock-up
period, I will exactly comply with the
relevant regulations of the CSRC and the
SZSE on shareholding reduction, prudently
formulate a shareholding reduction plan,
reduce the shareholding through lawful
Commitments made at the Share means, and make an announcement June 16, 2025
Zhang Guotao June 16,
time of the initial public reduction through DRCO three trading days prior to to June 15, Performing
and Lu Yiwen 2025
offering or refinancing commitment the reduction, and fulfill information 2027
disclosure obligations in a timely and
accurate manner in accordance with the
rules of the SZSE. The reduction price shall
not be lower than the issue price (subject to
adjustments in accordance with the
relevant regulations of CSRC and SZSE in
the event of ex-rights and ex-dividend
events such as dividend distribution, bonus
issue, transfer of shares, issue of additional
shares or rights issue by DRCO during the
above-mentioned period).
In case of any breach of the relevant
commitments, I will promptly announce the
facts and reasons for the breach of
commitments, and will publicly apologize to
DRCO's shareholders and public investors
112
2022 Annual Report of DR Corporation Limited
except of force majeure or other reasons
beyond my control. Any profit made as a
result of the non-fulfillment of the relevant
commitments will belong to DRCO. I shall
be held liable for compensating DRCO or
investors in accordance with laws in the
event of any loss that is caused to DRCO
or investors as a result of the non-
fulfillment of the relevant commitments.
DRCO shall have the right to temporarily
withhold the cash dividends (if any) to
which I am entitled and suspend the
payment of my remuneration or allowances
during my employment with DRCO until
adverse impact arising from the non-
fulfillment of the relevant commitments
have been fully eliminated.
If, as a result of a false record, misleading
statement or material omission in the
prospectus for DRCO's proposed offering
and listing, which constitutes a material and
substantial effect on the determination of
whether DRCO complies with the offering
conditions as required by laws, within 10
working days from the date such illegal
Commitments made at the Share facts are determined by the CSRC, the
DR Corporation stock exchange or a competent authority December Permanently
time of the initial public repurchase Performing
Limited such as a judicial authority, DRCO will 15, 2021 valid
offering or refinancing commitment
initiate the share repurchase procedure in
accordance with laws to repurchase all the
new shares in the initial public offering. The
repurchase price shall be no less than the
issue price of DRCO's shares plus interest
on deposits with banks for the same period
from the issue of the shares to the time of
repurchase (the above price will be
adjusted accordingly in the event of ex-
113
2022 Annual Report of DR Corporation Limited
dividend or ex-rights actions such as
dividend payment, bonus issue, conversion
of reserves into share capital, issuance of
additional shares or rights issue after the
listing of DRCO).
If, as a result of a false record, misleading
statement or material omission in the
prospectus for DRCO's proposed offering
and listing, which constitutes a material and
substantial effect on the determination of
whether DRCO complies with the offering
conditions as required by laws, within 10
working days from the date such illegal
facts are determined by the CSRC, the
stock exchange or a competent authority
such as a judicial authority, the company/I
will initiate the share buyback procedure in
accordance with laws to buy back all
DR Investment
Commitments made at the Share restricted shares having been transferred,
(Zhuhai) Co., Ltd., December Permanently
time of the initial public repurchase and the consideration for such buyback will Performing
Zhang Guotao 15, 2021 valid
offering or refinancing commitment not be lower than the issue price of DRCO
and Lu Yiwen
plus the interest on deposits with banks for
the same period from the time of stock
issuance to the time of buyback (subject to
adjustment in accordance with the relevant
regulations of CSRC and SZSE in the
event of ex-rights and ex-dividend events
such as dividend distribution, bonus issue,
transfer of shares, issue of additional
shares or rights issue by DRCO during the
above-mentioned period). At the same
time, the company/I will urge DRCO to
repurchase all of its new shares issued
during the IPO.
DR Corporation Commitments December Permanently
Commitments made at the 1. The company/I undertake and guarantee Performing
Limited, DR to share 15, 2021 valid
time of the initial public that there is no fraud in the proposed
Investment repurchase in
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2022 Annual Report of DR Corporation Limited
offering or refinancing (Zhuhai) Co., Ltd., case of offering and listing of DRCO;
Zhang Guotao fraudulent
and Lu Yiwen offering and 2. If DRCO does not meet the listing
listing conditions, but fraudulently obtains the
issuance registration and has been listed,
the company/I will take share repurchase
process to buy back all new stocks publicly
issued by DRCO within 5 days after
confirmed by competent authorities like
CSRC.
The proposed public offering may lead to
dilution of investors' immediate returns. In
order to further implement the relevant
provisions of the Opinions of the General
Office of the State Council on Further
Strengthening the Protection of the
Legitimate Rights and Interests of Small
and Medium-sized Investors in the Capital
Market (Guo Ban Fa [2013] No. 110),
optimize the investment return mechanism
Measures for and safeguard the legitimate rights and
and interests of small and medium-sized
Commitments made at the commitments investors, DRCO intends to take following
DR Corporation measures to enhance DRCO's profitability December Permanently
time of the initial public to cover Performing
Limited and strengthen DRCO's ability to sustain 15, 2021 valid
offering or refinancing diluted
immediate returns:
returns 1. Strengthen the main business and
improving DRCO's sustainable profitability:
DRCO is mainly engaged in brand
operation, customized sales, R&D and
design of jewelry, and customizes high-
quality diamond-inlaid jewelry such as
engagement and wedding rings. To
consolidate its core business, DRCO will
take advantage of the rapid development of
China's jewelry industry. Through the
proposed public offering and listing, DRCO
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2022 Annual Report of DR Corporation Limited
will enhance its brand image and influence,
expand its marketing network, strengthen
its information systems and improve its
creative design ability of diamond jewelry.
DRCO will consolidate its industry
leadership and sharpen its sustainable
profitability by enhancing its core
competitiveness in terms of brand strength,
capital strength, marketing network
coverage and product design capability.
2. Accelerate the investment progress of
proceeds-funded projects, improve the
efficiency of capital utilization, and strive to
achieve the expected returns from the
projects soon as possible
The proceeds-funded projects include
marketing network construction,
information system construction, the R&D
and creative design center for diamond
jewelry and working capital replenishment,
all of which are related to DRCO's main
business. DRCO will speed up the
construction progress of these projects and
improve the capital utilization to enhance
its profitability as soon as possible.
Meanwhile, the use of the proceeds will be
strictly managed to ensure the smooth
progress of the proceeds-funded projects.
These projects will help DRCO further
enhance its market competitiveness,
consolidate its existing sales channel
advantages and R&D and design
capabilities, increase expand the market
share of its main business, and increase
the return for shareholders.
3. Increase the efficiency of daily
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2022 Annual Report of DR Corporation Limited
operations, reduce operating costs, and
improve business performance
DRCO will further reduce its operating
costs through reasonable means, and
improve internal control, operating
efficiency and profitability. At the same
time, DRCO will strive to improve the
human resources management and the
supporting compensation system to
motivate employees at all levels, continue
to attract top talents and strengthen talent
training, optimize the talent pools and
reduce the risk of brain drain, hence laying
a solid foundation for its rapid
development.
4. Refine the profit distribution policy, and
optimize the return on investment
mechanism
In order to establish a continuous, stable
and scientific mechanism for investors
regarding the return on investment and to
ensure the continuity and stability of the
profit distribution policy through the
systematic institutional arrangements,
DRCO has, in accordance with the relevant
requirements, clarified the specific
conditions, ratio and form of profit
distribution, improved the decision-making
procedures and mechanism for profit
distribution as well as the principles for
adjusting the profit distribution policy.
DRCO will distribute profits in strict
accordance with the Articles of Association
and other regulations, formulate and
implement a continuous and stable cash
dividend plan, and further improve the profit
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2022 Annual Report of DR Corporation Limited
distribution system, especially the cash
dividend policy where necessary, refine the
investor return mechanism, and effectively
safeguard the legitimate rights and
interests of investors and improve the
mechanism for protecting the rights and
interests of minority investors.
5. Further improving the protection system
for minority investors
DRCO has formulated a series of systems
such as the Investor Relations
Management System and the Information
Disclosure Management System to fully
protect the rights of minority investors to be
informed and to participate in decision-
making, and such institutional
arrangements ensure their rights to access
the corporate information, choose
management officers and participate in
major decisions. DRCO undertakes to
further improve the relevant systems for
protecting minority protectors in
accordance with the implementation rules
or requirements issued by regulatory
authorities including the CSRC and the
stock exchange as well as the common
practices of listed peers.
The above-mentioned measures are
designed to not only ensure the effective
use of the funds raised by DRCO and but
also prevent the risk of diluting the
immediate return by the proposed offering,
which are conducive to sharpening
DRCO's core competitiveness and
sustainable profitability, increasing its
future earnings and enhancing the return
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for shareholders. However, due to the
objective existence of internal and external
risks faced by DRCO, the implementation
of the above measures does not represent
a guarantee of future profits made by
DRCO.
1. The company/I shall not abuse the
position as a controlling shareholder/actual
controller, shall not interfere with the
operation and management activities of
DRCO beyond authority, and shall not
encroach on the interests of DRCO.
2. The company/I will actively urge DRCO
to effectively implement the relevant
measures to recover the immediate return.
3. After the CSRC or the SZSE has issued
separate opinions and implementation
Commitments rules on measures and commitments to
DR Investment
Commitments made at the to recovering cover diluted immediate returns, if the
(Zhuhai) Co., Ltd., December Permanently
time of the initial public diluted relevant rules of DRCO and the Performing
Zhang Guotao 15, 2021 valid
offering or refinancing immediate commitments of the company/me are not in
and Lu Yiwen
returns line with such rules, the company/I
undertake to promptly make additional
commitments in accordance with the rules
of the CSRC or the SZSE and actively urge
DRCO to make new commitments to
satisfy the requirements of the CSRC or
the SZSE;
4. If the company/I breach the above
commitments and cause losses to DRCO
or investors, the company/I will bear the
responsibility to compensate DRCO or
investors in accordance with laws.
Commitments made at the Zhang Guotao, Lu Commitments 1. I neither transmit benefits to other Performing
December Permanently
time of the initial public Yiwen, Wei to cover entities or individuals without compensation
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2022 Annual Report of DR Corporation Limited
offering or refinancing Qingxing, Huang diluted or on unfair terms, nor in any other way 15, 2021 valid
Shuirong, Hu immediate harm the interests of DRCO.
Xiaoming, Chen returns
Qisheng, Li Yang, 2. I exercise restraint in duty consumption.
Liang Jun, Zhong 3. I shall not use DRCO's assets to engage
Min and Lin in investment and consumption activities
Zhenghai unrelated to the performance of my duties.
4. I will actively promote the improvement
of DRCO's remuneration system to make it
better comply with the requirements of
covering diluted immediate returns; I will
support the Board of Directors or
Remuneration Committee of DRCO in
formulating, amending and supplementing
DRCO's remuneration system in line with
the implementation of DRCO's measures to
recover the returns.
5. When promoting DRCO's share
incentive scheme (if any), I will actively
promote the link between the exercise
terms of the share incentive and the
implementation of DRCO's measures to
recover the return.
6. After the CSRC or the SZSE has issued
separate opinions and implementation
rules on measures and commitments to
cover diluted immediate returns, if my
commitments are not in line with such
rules, I undertake to promptly make
additional commitments in accordance with
the rules of the CSRC or the SZSE to
satisfy the requirements of the CSRC or
the SZSE;
7. If I breach the above commitments and
cause losses to DRCO or investors, I will
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bear the responsibility to compensate
DRCO or investors in accordance with
laws.
1. The prospectus for DRCO's initial public
offering and listing on the ChiNext Market
does not contain any false records,
misleading statements or material
omissions, and DRCO shall be jointly and
severally liable for the authenticity,
accuracy and completeness of the
information thereof.
2. If an investor suffers loss in securities
trading as a result of a false statement,
Commitments misleading statement or material omission
to undertaking in DRCO's prospectus, DRCO shall
Commitments made at the DR Corporation liability for compensate the investor for the loss in December Permanently
time of the initial public Performing
Limited compensation accordance with laws; 15, 2021 valid
offering or refinancing in accordance
with laws 3. In the event of a breach of the relevant
commitments, DRCO will promptly disclose
the fact and reasons for the breach and,
except for force majeure or other reasons
beyond DRCO's control, DRCO will make a
public apology to its shareholders and
public investors. If losses are caused to
investors, compensation will be made in
accordance with laws. Meanwhile, DRCO
will make timely rectification in accordance
with the requirements of the CSRC or the
stock exchange.
Commitments 1. The prospectus for DRCO's initial public
DR Investment to undertaking offering and listing on the ChiNext Market
Commitments made at the (Zhuhai) Co., Ltd., liability for does not contain any false records, December Permanently
time of the initial public misleading statements or material Performing
Zhang Guotao compensation 15, 2021 valid
offering or refinancing and Lu Yiwen in accordance omissions, and the company/I shall be
with laws jointly and severally liable for the
authenticity, accuracy and completeness of
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the information thereof.
2. If an investor suffers loss in securities
trading as a result of a false statement,
misleading statement or material omission
in DRCO's prospectus, the company/I shall
compensate the investor for the loss in
accordance with laws;
3. In case of any breach of the foresaid
commitments, DRCO will promptly disclose
the facts and reasons for the breach and,
except of force majeure or other reasons
beyond our control, the company will
apologize to shareholders and public
investors of DRCO who shall have the right
to temporarily withhold the cash dividends
(if any) to which the company is entitled
until such time as adverse impact arising
from the non-fulfillment of the relevant
commitments have been fully eliminated.
1. The prospectus for DRCO's initial public
offering and listing on the ChiNext Market
Zhang Guotao, Lu does not contain any false records,
Yiwen, Wei misleading statements or material
Qingxing, Huang omissions, and I shall be jointly and
Shuirong, Hu Commitments severally liable for the authenticity,
Xiaoming, Chen to assume accuracy and completeness of the
Commitments made at the Qisheng, Yang Li, liability for information thereof. December Permanently
time of the initial public Performing
Liang Jun, Zhong compensation 2. If an investor suffers loss in securities 15, 2021 valid
offering or refinancing Min, Lin in accordance trading as a result of a false statement,
Zhenghai, Zhao with laws misleading statement or material omission
Ranran, Yin in DRCO's prospectus, I shall compensate
Luwen and Wang the investor for the loss in accordance with
Tong laws.
3. In case of any breach of the relevant
commitments, DRCO will promptly
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2022 Annual Report of DR Corporation Limited
announce the facts and reasons for the
breach of commitments, and will publicly
apologize to DRCO's other shareholders
and public investors except of force
majeure or other reasons beyond my
control. DRCO shall have the right to
temporarily withhold the cash dividends (if
any) to which I am entitled and suspend the
payment of my remuneration or allowances
during my employment with DRCO until
such time as adverse impact arising from
the non-fulfillment of the relevant
commitments have been fully eliminated.
Commitments to equity Not applicable
incentive
Other commitments to
minority shareholders of Not applicable
DRCO
Other commitments Not applicable
Whether the commitment Yes
is fulfilled on time
Details of specific reasons
and next steps for any Not applicable
outstanding delayed
commitment
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2022 Annual Report of DR Corporation Limited
2. If there is a profit forecast for DRCO's assets or projects and the reporting period is still within
the profit forecast period, DRCO provides an explanation of the assets or projects meeting the
original profit forecast and the reasons thereof
□ Applicable Not Applicable
II. Whether the Controlling Shareholders and Other Associates of DRCO Have
Misappropriated DRCO’s Funds for Non-Business Purpose
□ Applicable Not Applicable
No controlling shareholders and other associates of DRCO have misappropriated DRCO’s funds for non-
business purpose.
III. Whether External Guarantees Are Provided in Violation of Provisions
□ Applicable Not Applicable
During the reporting period, DRCO didn’t provide external guarantees in violation of provisions.
IV. Statements of the Board of Directors on Latest "Non-standard Audit Report"
□ Applicable Not Applicable
V. Statements of the Board of Directors, the Board of Supervisors and the Independent
Directors (if any) on the "Non-standard Audit Report" Issued by the Accounting Firm for
the Reporting Period
□ Applicable Not Applicable
VI. Statements of the Board of Directors on Any Change in Accounting Policies and
Accounting Estimates or Any Correction of Significant Accounting Errors during
Reporting Period
□ Applicable Not Applicable
VII. Statements on Changes in Scope of Consolidated Financial Statements Compared
with Financial Report for the Preceding Year
Applicable □ Not Applicable
During the reporting period, DRCO established 51 new subsidiaries and one sub-subsidiary company,
which were included in the scope of consolidation from the date of establishment. The details are as
follows:
Whether included into the
Company name Date of establishment
scope of consolidation
Xiamen DR Jewelry April 25, 2022 Yes
Shenyang DR Jewelry April 26, 2022 Yes
Tianjin DR Jewelry April 27, 2022 Yes
Chengdu DR Jewelry May 6, 2022 Yes
Kunming DR Jewelry May 9, 2022 Yes
Shanghai DR Jewelry May 11, 2022 Yes
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2022 Annual Report of DR Corporation Limited
Suzhou Zhongzuan DR Jewelry May 13, 2022 Yes
Jinan DR Jewelry May 13, 2022 Yes
Shenzhen DR Jewelry May 17, 2022 Yes
Beijing Zhongzuan DR Jewelry May 17, 2022 Yes
Suzhou DR Jewelry May 18, 2022 Yes
Shenyang DR Jewelry Accessories May 18, 2022 Yes
Hangzhou DR Jewelry May 24, 2022 Yes
Beijing DR Jewelry May 24, 2022 Yes
Wuhan DR Jewelry May 25, 2022 Yes
Wuhan Zhongzuan DR Jewelry May 25, 2022 Yes
Xi'an DR Jewelry May 26, 2022 Yes
Chengdu DR True Love Jewelry May 27, 2022 Yes
Ningbo DR Jewelry May 27, 2022 Yes
Beijing Huazuan DR Jewelry May 31, 2022 Yes
Chongqing DR Jewelry June 7, 2022 Yes
Hangzhou DR True Love Jewelry June 7, 2022 Yes
Henan DR Jewelry June 14, 2022 Yes
Xi'an DR Jewelry Accessories June 15, 2022 Yes
Zhengzhou DR Jewelry June 16, 2022 Yes
Shenzhen DR Jewelry Accessories June 17, 2022 Yes
Shenzhen DR Jewelry Ornament June 22, 2022 Yes
Changsha DR Jewelry June 24, 2022 Yes
Shanghai DR Jewelry Accessories July 1, 2022 Yes
Shanghai DR Jewelry Sales July 26, 2022 Yes
Zhoukou DR Jewelry September 29, 2022 Yes
Yiwu DR Jewelry September 29, 2022 Yes
Heze DR Jewelry September 30, 2022 Yes
Dongguan DR Jewelry October 9, 2022 Yes
Xining DR Jewelry October 11, 2022 Yes
Linyi DR Jewelry October 11, 2022 Yes
Yinchuan DR Jewelry October 13, 2022 Yes
Weifang DR Jewelry October 13, 2022 Yes
Nanchang DR Jewelry October 13, 2022 Yes
Jining DR Jewelry October 15, 2022 Yes
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2022 Annual Report of DR Corporation Limited
Mianyang DR Jewelry October 17, 2022 Yes
Fuyang DR Jewelry October 19, 2022 Yes
Shangqiu DR Jewelry October 19, 2022 Yes
Urumqi DR Jewelry October 26, 2022 Yes
Handan DR Jewelry October 26, 2022 Yes
Baoding DR Jewelry October 26, 2022 Yes
Guangzhou DR Jewelry October 27, 2022 Yes
Guiyang DR Jewelry October 31, 2022 Yes
Langfang DR Jewelry October 31, 2022 Yes
Haoduo Diamond Zhizao
November 16, 2022 Yes
(Shenzhen)
Foshan DR Jewelry November 18, 2022 Yes
Jiaxing DR Jewelry November 30, 2022 Yes
Note: All of the above are subsidiaries, except for Haoduo Diamond Zhizao (Shenzhen).
VIII. Appointment and Dismissal of Accounting Firms
Currently appointed
Ernst & Young Hua Ming
Name of domestic accounting firm LLP (Special General
Partnership)
Remuneration of domestic accounting firm (RMB0'000) 235
Number of consecutive years of audit by domestic accounting firm 6 years
Name of certified public accountants of domestic accounting firm Liao Wenjia, Chen Huijin
Number of continuous years of audit services by certified public accountants of 6 years, 1 year
domestic accounting firm
Whether to change the accounting firm
□Yes No
Appointment of accounting firm for internal control audit, financial adviser or sponsor
□ Applicable Not Applicable
IX. Risk of Delisting after Disclosure of Annual Report
□ Applicable Not Applicable
X. Matters Relating to Bankruptcy and Reorganization
□ Applicable Not Applicable
No bankruptcy and reorganization-related matters occurred during the reporting period.
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2022 Annual Report of DR Corporation Limited
XI. Material Litigations and Arbitrations
Applicable □ Not Applicable
Whether Ruling
Amount
Basic information on litigation estimated Progress of litigation results Date of Index for
involved Enforcement of judgment
(arbitration) liabilities (arbitration) and disclosure inquiry
(RMB0'000)
are formed impacts
There were 60 cases that don't meet
As of the end of the Cases closed at the end of
the criteria for disclosure of material
reporting period, 29 of the reporting period were
litigation (arbitration) and in which
the aforementioned No executed in accordance Not
DRCO is the plaintiff/claimant, 657.04 No
cases had been impact with the judgments/rulings applicable
including 56 claims brought by
closed and 31 were or settlement and
DRCO for infringement of intellectual
pending. mediation programs.
property rights.
Cases closed at the end of
By the end of the
There are nine cases that don't meet the reporting period were
reporting period, the
the criteria for disclosure of material No executed in accordance Not
57.97 No nine cases mentioned
litigation (arbitration) and in which impact with the judgments/rulings applicable
above had been
DRCO is the defendant/respondent. or settlement and
closed.
mediation programs.
XII. Punishment and Rectification
□ Applicable Not Applicable
There were no significant punishment or rectifications during the reporting period.
XIII. Integrity of DRCO and Its Controlling Shareholders and Actual Controllers
□ Applicable Not Applicable
XIV. Material Connected Transactions
1. Connected transactions related to daily operation
□ Applicable Not Applicable
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2022 Annual Report of DR Corporation Limited
There were no connected transactions related to daily operation during the reporting period.
2. Connected transactions related to the acquisition or disposal of assets or equity interests
□ Applicable Not Applicable
There were no connected transactions related to the acquisition or disposal of assets or equity interests
during the reporting period.
3. Connected transactions relating to common external investments
□ Applicable Not Applicable
There were no connected transactions relating to common external investments during the reporting
period.
4. Related creditor’s right and debt transactions
□ Applicable Not Applicable
There were no related creditor’s right and debt transactions during the reporting period.
5. Transactions with financial companies with connected relationship
□ Applicable Not Applicable
There were no deposits, loans, credit facilities or other financial operations between DRCO and
connected parties or financial companies with connected relationships.
6. Transactions between financial companies controlled by DRCO and connected parties
□ Applicable Not Applicable
There were no deposits, loans, credit facilities or other financial operations between financial companies
controlled by DRCO and connected parties of DRCO.
7. Other material connected transactions
□ Applicable Not Applicable
There were no other material connected transactions during the reporting period.
XV. Contracts of Significance and Their Execution
1. Trust, contracting and leasing matters
(1) Trust
□ Applicable Not Applicable
There was no trust during the reporting period.
(2) Contracting
□ Applicable Not Applicable
There was no contracting during the reporting period.
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2022 Annual Report of DR Corporation Limited
(3) Leasing
Applicable □ Not Applicable
Description of leasing matters
The offline self-operated stores of DRCO are all leased externally, and the depreciation of right-of-use
assets and rentals not included in the measurement of lease liabilities arising from the leasing of such
stores during the period amounted to RMB379.75 million, representing 52.08% of the net profit
attributable to shareholders of the parent company for the period.
Projects whose gains/losses attributable to DRCO account for more than 10% of DRCO's total profit for
the reporting period
□ Applicable Not Applicable
There were no projects whose gains/losses attributable to DRCO account for more than 10% of DRCO's
total profit for the reporting period.
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2022 Annual Report of DR Corporation Limited
2. Material guarantees
Applicable □ Not Applicable
Unit: RMB0'000
External guarantees provided by DRCO and its subsidiaries (excluding guarantees for subsidiaries)
Date of disclosure Whether it is
Actual Actual Counter-
of announcement Guarantee Type of Collateral Guarantee Whether a guarantee
Debtor occurrence amount of guarantee
on guarantee amount guarantee (if any) period fulfilled for a related
date guarantee (if any)
amount party
DRCO's guarantee for subsidiaries
Date of disclosure Whether a
Actual Actual Counter-
of announcement Guarantee Type of Collateral Guarantee Whether guarantee for
Debtor occurrence amount of guarantee
on guarantee amount guarantee (if any) period fulfilled a connected
date guarantee (if any)
amount party
DR Group Joint and
Company 4,950 0 several No No 36 months No No
Limited liability
Haoduo Joint and
October 26,
Diamond April 22, 2022 20,000 10,000 several No No 36 months No No
2022
(Shenzhen) liability
Joint and
Beijing DR
August 29, 2022 700 0 several No No No No
Jewelry
liability
Beijing Joint and
September
Huazuan DR August 29, 2022 350 169.96 several No No 7 months No No
1, 2022
Jewelry liability
Beijing Joint and
Zhongzuan August 29, 2022 500 0 several No No No No
DR Jewelry liability
Chengdu DR August 29, 2022 1,000 0 Joint and No No No No
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2022 Annual Report of DR Corporation Limited
True Love several
Jewelry liability
Joint and
Chengdu DR
August 29, 2022 700 412.35 several No No 45 months No No
Jewelry
liability
Hangzhou Joint and
DR True August 29, 2022 1,000 0 several No No No No
Love Jewelry liability
Joint and
Hangzhou October 1,
August 29, 2022 550 162.74 several No No 12 months No No
DR Jewelry 2022
liability
Joint and
Jinan DR September
August 29, 2022 500 396.49 several No No 31 months No No
Jewelry 1, 2022
liability
Joint and
Kunming DR
August 29, 2022 500 0 several No No No No
Jewelry
liability
Joint and
Ningbo DR October 29,
August 29, 2022 1,200 173.36 several No No 44 months No No
Jewelry 2022
liability
Shanghai DR Joint and
Jewelry August 29, 2022 600 0 several No No No No
Sales liability
Shanghai DR Joint and
Jewelry August 29, 2022 500 0 several No No No No
Accessories liability
Joint and
Shanghai DR October 1,
August 29, 2022 450 237.37 several No No 41 months No No
Jewelry 2022
liability
Shenzhen August 29, 2022 400 0 Joint and No No No No
DR Jewelry several
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2022 Annual Report of DR Corporation Limited
Ornament liability
Shenzhen Joint and
DR Jewelry August 29, 2022 400 0 several No No No No
Accessories liability
Shenyang Joint and
September
DR Jewelry August 29, 2022 450 196.68 several No No 21 months No No
1, 2022
Accessories liability
Joint and
Shenyang
August 29, 2022 400 0 several No No No No
DR Jewelry
liability
Joint and
Suzhou DR
August 29, 2022 450 0 several No No No No
Jewelry
liability
Suzhou Joint and
Zhongzuan August 29, 2022 550 404.87 several No No 51 months No No
DR Jewelry liability
Joint and
Tianjin DR December
August 29, 2022 750 319.64 several No No 17 months No No
Jewelry 1, 2022
liability
Joint and
Wuhan DR
August 29, 2022 250 0 several No No No No
Jewelry
liability
Wuhan Joint and
Zhongzuan August 29, 2022 100 0 several No No No No
DR Jewelry liability
Xi'an DR Joint and
October 1,
Jewelry August 29, 2022 450 161.14 several No No 35 months No No
2022
Accessories liability
Joint and
Xi'an DR
August 29, 2022 100 0 several No No No No
Jewelry
liability
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2022 Annual Report of DR Corporation Limited
Joint and
Changsha September
August 29, 2022 900 894.06 several No No 45 months No No
DR Jewelry 1, 2022
liability
Joint and
Changsha December
August 29, 2022 100 85.25 several No No 31 months No No
DR Jewelry 1, 2022
liability
Joint and
Henan DR
August 29, 2022 300 0 several No No No No
Jewelry
liability
Joint and
Zhengzhou
August 29, 2022 350 0 several No No No No
DR Jewelry
liability
Joint and
Chongqing September
August 29, 2022 500 431.92 several No No 21 months No No
DR Jewelry 1, 2022
liability
Joint and
Shenzhen
October 28, 2022 200 64.64 several No No 7 months No No
DR Jewelry
liability
Chongqing Joint and
Darry October 28, 2022 530 476.66 several No No 40 months No No
Jewelry liability
Joint and
Yiwu DR
October 28, 2022 250 0 several No No No No
Jewelry
liability
Joint and
Zhoukou DR
October 28, 2022 50 0 several No No No No
Jewelry
liability
Joint and
Xining DR
October 28, 2022 100 0 several No No No No
Jewelry
liability
Heze DR October 28, 2022 100 0 Joint and No No No No
several
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2022 Annual Report of DR Corporation Limited
Jewelry liability
Joint and
Dongguan
October 28, 2022 200 0 several No No No No
DR Jewelry
liability
Joint and
Nanchang
October 28, 2022 180 0 several No No No No
DR Jewelry
liability
Joint and
Yinchuan DR
October 28, 2022 160 0 several No No No No
Jewelry
liability
Joint and
Weifang DR
October 28, 2022 300 0 several No No No No
Jewelry
liability
Joint and
Mianyang
October 28, 2022 140 0 several No No No No
DR Jewelry
liability
Shenzhen Joint and
DR Jewelry October 28, 2022 140 0 several No No No No
Ornament liability
Joint and
Shenyang
October 28, 2022 150 0 several No No No No
DR Jewelry
liability
Joint and
Jining DR
October 28, 2022 50 0 several No No No No
Jewelry
liability
Joint and
Linyi DR
October 28, 2022 230 0 several No No No No
Jewelry
liability
Joint and
Fuyang DR
October 28, 2022 120 0 several No No No No
Jewelry
liability
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2022 Annual Report of DR Corporation Limited
Joint and
Shangqiu DR
October 28, 2022 100 0 several No No No No
Jewelry
liability
Joint and
Guangzhou December 31,
1,180 0 several No No No No
DR Jewelry 2022
liability
Joint and
Handan DR December 31,
120 0 several No No No No
Jewelry 2022
liability
Joint and
Langfang DR December 31,
150 0 several No No No No
Jewelry 2022
liability
Joint and
Urumqi DR December 31,
100 0 several No No No No
Jewelry 2022
liability
Baoding DR Joint and
December 31,
Jewelry 88 0 several No No No No
2022
Sales liability
Joint and
Guiyang DR December 31,
162 0 several No No No No
Jewelry 2022
liability
Joint and
Foshan DR December 31,
100 0 several No No No No
Jewelry 2022
liability
Joint and
Jiaxing DR December 31,
100 0 several No No No No
Jewelry 2022
liability
Total guarantee amount approved for 40,000 Total actual guarantee amount for subsidiaries 14,587.13
subsidiaries during the reporting period (B1) during the reporting period (B2)
Total guarantee amount approved for 44,950 Balance of total actual guarantee amount for 14,587.13
subsidiaries as at the end of the reporting period subsidiaries as at the end of the reporting period
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2022 Annual Report of DR Corporation Limited
(B3) (B4)
Guarantees by subsidiaries for subsidiaries
Date of disclosure Whether a
Actual Actual Counter-
of announcement Guarantee Type of Collateral Guarantee Whether guarantee for
Debtor occurrence amount of guarantee
on guarantee amount guarantee (if any) period fulfilled a connected
date guarantee (if any)
amount party
Total guarantee amount of DRCO (i.e., the sum of the first three items)
Total amount of approved guarantee during the 40,000 Total actual guarantee amount incurred during the 14,587.13
reporting period (A1 + B1 + C1) reporting period (A2 + B2 + C2)
Total guarantee amount approved as at the end 44,950 Balance of total actual guarantee amount as at the 14,587.13
of the reporting period (A3 + B3 + C3) end of the reporting period (A4 + B4 + C4)
Total actual guarantee amount (i.e., A4 + B4 + 2.14%
C4) as a percentage of DRCO's net assets
Among them:
Description of the use of composite guarantee
3. Entrusted cash and assets under management
(1) Entrusted wealth management
Applicable □ Not Applicable
Overview of entrusted wealth management during the reporting period
Unit: RMB0'000
Source of funds for Provision for impairment of wealth
Entrusted wealth Outstanding Amount overdue
Specific type entrusted wealth management amount overdue and
management amount balance and not recovered
management. not recovered
Wealth management
Funds raised 349,100 289,500 0 0
products of banks
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2022 Annual Report of DR Corporation Limited
Wealth management
Proprietary funds 301,117.95 301,117.95 0 0
products of banks
Wealth management
products of securities Proprietary funds 50,100 50,100 0 0
brokers
Total 700,317.95 640,717.95 0 0
Details of high-risk entrusted wealth management products featuring large amount, low safety and illiquidity
□ Applicable Not Applicable
Entrusted wealth management not expected to recover the principal, or 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 contracts of significance
□ Applicable Not Applicable
There were no other contracts of significance during the reporting period.
XVI. Other Important Matters
□ Applicable Not Applicable
There were no other significant matters that need to be explained during the reporting period.
XVII. Significant Matters of DRCO's Subsidiaries
□ Applicable Not Applicable
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2022 Annual Report of DR Corporation Limited
Part VII. Changes in Shares and Information of Shareholders
I. Changes in Shares
1. Changes in shares
Unit: Shares
Before this change Increase or decrease from the change (+,-) After this change
Issue of new Bonus Conversion of
Quantity Percentage Other Subtotal Quantity Percentage
shares share reserves
1. Shares subject to selling - -
365,824,503 91.45% 360,000,000 90.00%
restrictions 5,824,503 5,824,503
1. Shares held by the state
2. Shares held by state- - -
2,574,603 0.64% 0 0.00%
owned legal persons 2,574,603 2,574,603
3. Shares held by other - -
363,239,838 90.81% 360,000,000 90.00%
domestic entities 3,239,838 3,239,838
Including: shares held by - -
363,236,573 90.81% 360,000,000 90.00%
domestic legal persons 3,236,573 3,236,573
Shares held by domestic 3,265 0.00% -3,265 -3,265 0 0.00%
natural persons
4. Shares held by foreign 10,062 0.00% -10,062 -10,062 0 0.00%
investors
Including: Shares held by 10,062 0.00% -10,062 -10,062 0 0.00%
overseas legal persons
Shares held by overseas
natural persons
2. Shares not subject to 34,185,497 8.55% 5,824,503 5,824,503 40,010,000 10.00%
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selling restrictions
1. RMB-denominated 34,185,497 8.55% 5,824,503 5,824,503 40,010,000 10.00%
ordinary shares
2. Foreign shares listed
domestically
3. Foreign shares listed
overseas
4. Other
III. Total shares 400,010,000 100.00% 0 0 400,010,000 100.00%
Reasons for changes in shares
Applicable □ Not Applicable
(1) During the initial public offering, DRCO placed 2,278,816 restricted shares to offline investors, which accounted for 0.5697% of DRCO’s total share capital
and were subject to a 6-month lock-up period. These restricted shares were already released on June 15, 2022. For details, please refer to the "Suggestive
Announcement on the Release of Restricted Shares Placed to Offline Investors during Initial Public Offering " (Announcement No. 2022-032) published by
DRCO on June 13, 2022 on www.cninfo.com.cn.
(2) During the initial public offering, DRCO placed 3,545,687 restricted shares to strategic investors, which accounted for 0.8864% of DRCO’s total share
capital and were subject to a 12-month lock-up period. These restricted shares were already released on December 15, 2022. For details, please refer to the
"Suggestive Announcement on the Release of Restricted Shares Placed to Strategic Investors during Initial Public Offering " (Announcement No. 2022-067)
published by DRCO on December 13, 2022 on www.cninfo.com.cn.
Approval of changes in shares
□ Applicable Not Applicable
Transfer of changes in shares
□ Applicable Not Applicable
Impact of changes in shares on financial indicators such as basic and diluted earnings per share and net asset value per share attributable to DRCO's
holders of ordinary shares for the most recent year and the most recent period
□ Applicable Not Applicable
Other disclosure deemed necessary by DRCO or required by securities regulatory authorities
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□ Applicable Not Applicable
2. Changes in restricted shares
Applicable □ Not Applicable
Unit: shares
Number of restricted Increase in the Number of
Number of
shares at the number of restricted shares Reason for selling Date of
Name of shareholder restricted shares
beginning of the restricted shares released during restriction release
at end of period
period during the period the period
June 16,
DR Investment (Zhuhai) Co., Ltd. 342,000,000 342,000,000 Pre-IPO shares
2025
Gongqingcheng Wendi No.1
June 16,
Investment Management 7,200,000 7,200,000 Pre-IPO shares
2025
Partnership (LP)
Gongqingcheng Wendi No.2
June 16,
Investment Management 7,200,000 7,200,000 Pre-IPO shares
2025
Partnership (LP)
Gongqingcheng Wendi No.3
June 16,
Investment Management 3,600,000 3,600,000 Pre-IPO shares
2025
Partnership (LP)
China Securities -CMB - China
Securities DR No. 1 Strategic Restricted shares for December
978,952 978,952 0
Placement Collective Asset strategic investors 15, 2022
Management Plan
Zhuhai Runxin Zhirong No.1 Restricted shares for December
2,566,735 2,566,735 0
Investment Partnership (LP) strategic investors 15, 2022
Restricted shares
Restricted shares placed to
placed to offline June 15,
offline investors during initial 2,278,816 2,278,816 0
investors during initial 2022
public offering
public offering
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Total 365,824,503 0 5,824,503 360,000,000 -- --
II. Issuance and Listing of Securities
1. Issuance of securities (excluding preferred shares) during the reporting period
□ Applicable Not Applicable
2. Changes in the total number of shares and shareholder structure of DRCO, and changes in the asset and liability structure of DRCO
□ Applicable Not Applicable
3. Existing internal employee shares
□ Applicable Not Applicable
III. Shareholders and Actual Controllers
1. Number of shareholders and their shareholdings
Unit: shares
Total
number of
Total number holders of
of holders of preferred
Total number of
ordinary shares (if Total
holders of
Total number of shares as of any) number of
preferred shares
holders of the end of whose shareholders
(if any) whose
ordinary shares 13,735 the previous 13,785 voting rights were 0 voting 0 holding 0
as of the end of month rights were special
restored at the
the reporting preceding restored at voting
end of the
period the date of the end of shares (if
reporting period
publication of the any)
(see Note 9)
the annual previous
report month
preceding
the date of
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2022 Annual Report of DR Corporation Limited
publication
of the
annual
report (see
Note 9)
Shareholdings of shareholders holding 5% or more or of the top 10 shareholders
Number of Pledged, marked or frozen
Number of Number of
shares
shares held Increase/decrease shares held
Name of Nature of Shareholding held not
at the end of during the subject to
shareholder shareholder ratio subject to Share status Quantity
the reporting reporting period selling
selling
period restrictions
restrictions
Domestic
DR Investment
non-state-
(Zhuhai) Co., 85.50% 342,000,000 0 342,000,000 0
owned legal
Ltd.
person
Gongqingcheng
Domestic
Wendi No.1
non-state-
Investment 1.80% 7,200,000 0 7,200,000 0
owned legal
Management
person
Partnership (LP)
Gongqingcheng
Domestic
Wendi No.2
non-state-
Investment 1.80% 7,200,000 0 7,200,000 0
owned legal
Management
person
Partnership (LP)
Gongqingcheng
Domestic
Wendi No.3
non-state-
Investment 0.90% 3,600,000 0 3,600,000 0
owned legal
Management
person
Partnership (LP)
Zhuhai Runxin State- 0.60% 2,401,735 -165,000 0 2,401,735
Zhirong No.1 owned legal
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2022 Annual Report of DR Corporation Limited
Investment person
Partnership (LP)
Bank of China -
Guotai
Jiangyuan
Selected
Flexible
Other 0.24% 957,546 956,754 0 957,546
Configuration
Hybrid
Securities
Investment
Fund
China Securities
- CMB - China
Securities DR
No. 1 Strategic
Other 0.20% 806,452 -172,500 0 806,452
Placement
Collective Asset
Management
Plan
China
Construction
Bank - Huabao
Eco-China
Other 0.17% 688,567 642,253 0 688,567
Hybrid
Securities
Investment
Fund
China AMC -
Social Security
Other 0.13% 527,032 527,032 0 527,032
Fund 422
Portfolio
Centennial Life
Insurance Co., Other 0.11% 450,927 450,927 0 450,927
Ltd.- Traditional
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2022 Annual Report of DR Corporation Limited
Insurance
Products
Zhuhai Runxin Zhirong No.1 Investment Partnership (LP) has become one of DRCO’s top 10 shareholders as DRCO placed
2,566,735 shares that were locked up from December 15, 2021 to December 14, 2022. These shares were released and
Any Strategic investor or traded on the market from December 15, 2022.
general legal person becomes
one of top 10 shareholder as a China Securities - CMB - China Securities DR No. 1 Strategic Placement Collective Asset Management Plan is a special
result of the placement of new asset management plan through which DRCO’s senior management and core employees took part in the strategic allotment
shares (if any) (see Note 4) of DRCO’s initial public offering. As a result, this asset management plan became one of DRCO’s top 10 shareholders after
DRCO placed 978,952 shares that were locked up from December 15, 2021 to December 14, 2022. These shares were
released and traded on the market from December 15, 2022.
Zhang Guotao and Lu Yiwen, the actual controllers of DRCO, hold a 100% stake in DR Investment (Zhuhai). DR Investment
Relationship or acting in (Zhuhai), Gongqingcheng Wendi No.1 Investment Management Partnership (LP), Gongqingcheng Wendi No.2 Investment
concert among Management Partnership (LP) and Gongqingcheng Wendi No.3 Investment Management Partnership (LP) are all the
the aforesaid shareholders enterprises controlled by Zhang Guotao, DRCO’s actual controller. Other than that, DRCO is not aware of any connected
relationship among the aforesaid shareholders, nor is DRCO aware of any parties acting in concert.
Whether the above-mentioned
shareholders exercise voting
rights via a proxy or as a Not applicable.
proxy, or waive their voting
rights
Whether top 10 shareholders
have special accounts for Not applicable.
share repurchase (if any) (see
Note 10)
Shareholdings of the top 10 shareholders of unrestricted shares
Number of unrestricted shares Type of shares
Name of shareholder held at the end of the reporting
period Type of shares Quantity
RMB-denominated
Zhuhai Runxin Zhirong No.1 Investment Partnership (LP) 2,401,735 2,401,735
ordinary shares
Bank of China - Guotai Jiangyuan Selected Flexible Configuration Hybrid 957,546 RMB-denominated 957,546
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2022 Annual Report of DR Corporation Limited
Securities Investment Fund ordinary shares
The shares allotted to China Securities - CMB - China Securities DR No. 1 RMB-denominated
806,452 806,452
Strategic Placement Collective Asset Management Plan ordinary shares
China Construction Bank - Huabao Eco-China Hybrid Securities Investment RMB-denominated
688,567 688,567
Fund ordinary shares
RMB-denominated
China AMC - Social Security Fund 422 Portfolio 527,032 527,032
ordinary shares
RMB-denominated
Centennial Life Insurance Co., Ltd. - Traditional Insurance Products 450,927 450,927
ordinary shares
Bank of China - Guotai Zhiyuan Advantage Hybrid Securities Investment RMB-denominated
428,303 428,303
Fund ordinary shares
China Construction Bank - Huabao Event-driven Hybrid Securities RMB-denominated
401,557 401,557
Investment Fund ordinary shares
RMB-denominated
China Merchants Xinnuo Life Insurance - Traditional 400,509 400,509
ordinary shares
Bank of Communications - Zhonghai Quality Growth Securities Investment RMB-denominated
398,544 398,544
Fund ordinary shares
Relationship or acting in concert among DRCO is not aware of any connected relationship among the aforesaid top 10
the top 10 shareholders of unrestricted tradable shares, and between the shareholders of unrestricted shares, or between the top 10 shareholders of
top 10 shareholders of unrestricted tradable shares and the top 10 unrestricted shares and the top 10 shareholders, nor is DRCO aware of any
shareholders parties acting in concert.
Description of shareholders involved in margin financing and securities No.
lending (if any) (see Note 5)
Does DRCO have weighted voting right arrangement
□ Applicable Not Applicable
Whether DRCO's top 10 holders of ordinary shares and top 10 holders of unrestricted ordinary shares engaged in any repurchase agreement-based
transaction during the reporting period.
□Yes No
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2022 Annual Report of DR Corporation Limited
DRCO's top 10 holders of ordinary shares and top 10 holders of unrestricted ordinary shares did not engage in any repurchase agreement-based transaction
during the reporting period.
2. Controlling shareholders of DRCO
Nature of controlling shareholder: natural person
Type of controlling shareholder: legal person
Legal
Date of
Name of controlling shareholder representative/person in Organization code Main business
establishment
charge of the entity
General items: investment activities with own
funds; business management consulting;
November 24, information consulting services (excluding
DR Investment (Zhuhai) Co., Ltd. Zhang Guotao 914403003587652274
2015 licensing information consulting services);
marketing planning; corporate image planning;
non-residential real estate leasing.
Shareholdings of other domestic
and foreign listed companies
controlled and participated in by Not applicable.
the controlling shareholders during
the reporting period
Changes in the controlling shareholder during the reporting period
□ Applicable Not Applicable
There was no change in the controlling shareholder of DRCO during the reporting period.
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3. DRCO's actual controller and its parties acting in concert
Nature of actual controller: domestic natural person
Type of actual controller: natural person
Whether possess the right of
Name of actual Relationship with
Nationality abode in other countries or
controller actual controller
regions
Zhang Guotao Himself China No
Lu Yiwen Herself China No
Zhang Guotao is currently the Chairman and General Manager
Main occupation and (President) of DRCO, and Lu Yiwen is currently the Director and
position Deputy General Manager (Vice President) of DRCO.
Domestic and foreign
listed companies held Not applicable.
during the past 10
years
Change in actual controllers during the reporting period
□ Applicable Not Applicable
There was no change in the actual controller of DRCO during the reporting period.
Ownership and controlling relationship between DRCO and controlling shareholder
张国涛 Zhang Guotao
卢依雯 Lu Yiwen
深圳前海温迪管理咨询有限公司 Shenzhen Qianhai Wendi Management
Consulting Co., Ltd.
迪阿投资(珠海) 有限公司 DR Investment (Zhuhai) Co., Ltd.
共青城温迪壹号投资管理合伙企业(有限合伙) Gongqingcheng Wendi No.1 Investment
Management Partnership (LP)
共青城温迪贰号投资管理合伙企业(有限合伙) Gongqingcheng Wendi No.2 Investment
Management Partnership (LP)
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2022 Annual Report of DR Corporation Limited
共青城温迪叄号投资管理合伙企业(有限合伙) Gongqingcheng Wendi No.3 Investment
Management Partnership (LP)
迪阿股份有限公司 DR Corporation Limited
注：上图为截止 2022 年 12 月 31 日的控制关 Note: The controlling relationship as of
系图 December 31, 2022
The actual controller controls DRCO through trust or other asset management means
□ Applicable Not Applicable
4. The cumulative shares pledged by the controlling shareholder or the largest
shareholder of DRCO and its parties acting in concert accounts for 80% of the
shareholdings they hold in DRCO
□ Applicable Not Applicable
5. Other legal-person shareholders holding more than 10% of DRCO’s shares
□ Applicable Not Applicable
6. Reduction of restricted shares by controlling shareholders, actual controllers,
restructuring parties and other commitment entities
□ Applicable Not Applicable
IV. Implementation of Share Repurchase during Reporting Period
Progress of the share repurchases
□ Applicable Not Applicable
Progress of the reduction of share repurchased shares by means of call auction trading
□ Applicable Not Applicable
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Part VIII. Information about Preferred Shares
□ Applicable Not Applicable
There are no preferred shares during the reporting period.
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2022 Annual Report of DR Corporation Limited
Part IX. Information about Bonds
□ Applicable Not Applicable
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2022 Annual Report of DR Corporation Limited
Part X. Financial Statement
I. Auditor’s report
Auditor’s opinion Unqualified opinion
Date of signing April 26, 2023
Auditor Ernst & Young Hua Ming LLP
Ernst & Young Hua Ming (2023) Shen Zi
Report document number No.61403707_H01
Chinese Certified Public Accountant Liao Wenjia Chen Huijin
To the board of directors of DR Corporation Limited
(I) Opinion
We have audited the financial statements of DR Corporation Limited (the“Company”),
which comprise the consolidated and company balance sheets as at 31 December 2022,
and the consolidated and company income statements, the consolidated and company
statements of changes in equity and the consolidated and company statements of cash
flows for the year then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material
respects, the consolidated and the Company’s financial position as at 31 December 2022,
and the consolidated and the Company’s financial performance and cash flows for the
year then ended in accordance with Accounting Standards for Business Enterprises
(“ASBEs”).
(II) Basis for opinion
We conducted our audit in accordance with China Standards on Auditing (“CSAs”). Our
responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are
independent of the Company in accordance with China Code of Ethics for Certified Public
Accountants (the “Code”), and we have fulfilled our other ethical responsibilities in
accordance with the Code. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
(III) Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. These matters
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
For each matter below, our description of how our audit addressed the matter is provided
in that context.
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2022 Annual Report of DR Corporation Limited
(III) Key Audit Matters (continued)
We have fulfilled the responsibilities described in the “Auditor’s responsibilities for the
audit of the financial statements” section of our report, including in relation to these
matters. Accordingly, our audit included the performance of procedures designed to
respond to our assessment of the risks of material misstatement of the financial
statements. The results of our audit procedures, including the procedures performed to
address the matters below, provide the basis for our audit opinion on the accompanying
financial statements.
Key Audit Matters: How our audit addressed the matter:
Revenue recognition
For the year ended 31 December 2022, the Our procedures in relation to revenue
consolidated revenue of DR Corporation recognition mainly included:
Limited and its subsidiaries (hereinafter
collectively referred to as the "Group") was 1) Obtaining an understanding of the
RMB36.82 billion. accounting policies of revenue
recognition and reviewing main sales
The Group's current business model contract terms to assess the
mainly includes: retail directly to the end appropriateness of revenue recognition
consumers through offline direct-operated policies;
stores, e-commerce platforms and offline 2) Obtaining an understanding of the
joint-operated stores. And the Group transaction process of revenue
recognised revenue when the end recognition and testing the relevant
customers received goods. controls relating to the process for
revenue recognition;
The total amount of revenue is material to 3) Performing tests of details and
the whole financial statements and there is inspecting customers’ orders, orders
a hudge volume of revenue transactions. from customers, receipt records,
And there is an inherent risk that express delivery records, bank slips
management may manipulate revenue to and invoices, etc.;
achieve specific purpose. Therefore, 4) Performing confirmation procedures
revenue recognition is identified as a key for account receivables;
audit matter. 5) Obtaining an understanding of the
settlement method between the
Further disclosure refers to Note V.27 company and customers, inspecting the
Revenue from contracts with customers correspondence between cash receipts
and Notes VII.32 Revenue. and receivables or contract liabilities,
and verifying the bank statements;
6) Performing revenue cut-off
procedures and inspecting the
outbound bill and express delivery
records with the vouchers, and check
whether it belongs to the same
accounting period;
7) Performing the analytical review
procedures, including analysis of
monthly revenue trend and analysis of
revenue trends for different types of
products., etc.
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2022 Annual Report of DR Corporation Limited
(III) Key Audit Matters (continued)
Key Audit Matters: How our audit addressed the matter:
Existence of inventory and valuation of net realizable value
As at 31 December 2022, the carrying Our procedures in relation to existence
amount of the Group's inventory was of inventory and valuation of net
RMB676 million (net of allowance for realizable value mainly included:
inventories of RMB6.53 million).
1) Obtaining an understanding of the
At the balance sheet date, inventories are processes of inventory procurement,
stated at the lower of cost and net stocktake and inventory provision and
realisable value. The inventories are testing the relevant controls relating to
written down below cost to net realisable the processes;
value and the write-down is recognised in 2) Attending the annual physical
profit or loss if the cost is higher than the inventory count, inspecting the
net realisable value. Net realisable value is Company's physical inventory count
the estimated selling price in the ordinary plan and observing whether the plan
course of business less the estimated was implemented properly;
costs of completion, the estimated costs 3) Performing stocktaking procedure on
necessary to make the sale and relevant a sample basis, checking the quantity
taxes, which involves significant and weight of the inventories,
management estimation. Furthermore, the inspecting the certificates of the
unit price of inventory is high and there is a inventoris and verifying the certificate
higher inherent risk of easy theft and number on the website of the appraisal
difficult to distinguish authenticity. department;
Therefore, the existence of inventory and 4) Comparing the estimated selling
valuation of net realizable value is price used in the net realizable value
regarded as a key audit matter. with the recent price in the market,
comparing estimated selling expenses
Further disclosure refers to Note V.12 and related taxes with the actual selling
Inventories, V.31 Significant Accounting expenses and tax expenses to assess
Judgments and Estimates and Notes VII.6 the appropriateness;
Inventories. 5) Retrospectively comparing provision
for written-down of inventories in prior
year and its movements in current year,
and obtaining the list of defective and
obsolete products to evaluate the
reasonableness of the provision.
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2022 Annual Report of DR Corporation Limited
(IV) Other Information
The management of the Company is responsible for other Information. The other
information comprises the information included in the Annual Report, other than the
consolidated financial statements and our auditor's report thereon.
Our opinion on the consolidated 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 other information is materially
inconsistent with the consolidated 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 the fact. We have nothing
to report in this regard.
(V) Responsibilities of the management and those charged with governance for the
financial statements
The management of the Company is responsible for the preparation and fair presentation
of the financial statements in accordance with ASBEs, and for designing, implementing
and maintaining such internal control as the 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, the 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 the
management either intends to liquidate the Company or to cease operations or has 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 generally 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.
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2022 Annual Report of DR Corporation Limited
(VI) Auditor’s responsibilities for the audit of the financial statements (continued)
As part of an audit in accordance with CSAs, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
（1） 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.
（2） Obtain an understanding of internal control relevant to the audit in
order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of internal
control.
（3） Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by the
management.
（4） Conclude on the appropriateness of the 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.
（5） Evaluate the overall presentation, structure and content of the
financial statements, including the disclosures, and whether the financial
statements represent the underlying transactions and events in a manner that
achieves fair presentation.
（6） 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.
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2022 Annual Report of DR Corporation Limited
(VI) Auditor’s responsibilities for the audit of the financial statements (continued)
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.
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.
Ernst & Young Hua Ming LLP Chinese Certified Public Accountant:
Liao Wenjia
(Engagament Partner)
Chinese Certified Public Accountant:
Chen Huijin
Beijing, the People’s Republic of China 26 April 2023
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2022 Annual Report of DR Corporation Limited
II. Financial statements
The notes to financial statements are expressed in RMB Yuan
(I) Consolidated balance sheet
Preparer: DR Corporation Limited
31 December 2022
Currency: RMB Yuan
Account 31 December 2022 31 December 2021
Current assets
Currency funds 521,904,818.30 4,741,510,453.45
Financial assets held for trading 5,609,891,931.68 1,824,097,569.32
Accounts receivable 84,478,911.52 174,880,676.50
Prepayments 74,226,434.15 60,177,173.86
Other receivables 8,184,551.61 10,279,311.35
Inventories 669,886,638.00 439,973,154.82
Current portion of non-current assets 106,967,867.16 192,823,541.46
Other current assets 73,454,925.61 7,149,060.31
Total current assets 7,148,996,078.03 7,450,890,941.07
Non-current assets
Debt investments 794,553,996.36 218,585,379.05
Fixed assets 14,068,805.09 6,325,614.51
Right-of-use assets 590,506,167.36 429,297,028.76
Intangible assets 4,262,597.76 5,879,992.23
Long-term prepaid expenses 169,750,383.92 93,552,123.84
Deferred tax assets 8,191,216.36 4,765,789.39
Other non-current assets 85,419,135.39 59,887,281.39
Total non-current assets 1,666,752,302.24 818,293,209.17
Total assets 8,815,748,380.27 8,269,184,150.24
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2022 Annual Report of DR Corporation Limited
31 December 2021 31 December 2021
Current liabilities
Short-term borrowings 433,993,449.44 -
Notes payable 466,527,730.97 341,669,947.83
Accounts payable 86,880,869.77 113,777,232.26
Contract liabilities 126,705,661.82 210,146,744.15
Employee benefits payable 68,736,988.33 73,334,819.63
Tax payables 59,885,139.66 121,838,351.39
Other payables 102,563,944.81 72,156,628.68
Current portion of non-current liabilities 351,516,900.54 215,037,794.03
Other current liabilities 13,670,511.44 21,980,739.83
Total current liabilities 1,710,481,196.78 1,169,942,257.80
Non-current liabilities
Lease liabilities 276,542,164.23 215,671,484.31
Provisions 16,925,816.91 12,388,588.98
Deferred income tax liabilities 8,752,998.39 4,606,117.98
Total non-current liabilities 302,220,979.53 232,666,191.27
Total liabilities 2,012,702,176.31 1,402,608,449.07
Equity
Share capital 400,010,000.00 400,010,000.00
Capital reserves 4,459,777,716.81 4,459,216,399.61
Accumulated other comprehensive income 3,993,254.00 (2,693,984.92)
Surplus reserves 200,005,000.00 179,210,032.06
Retained earnings 1,739,260,233.15 1,830,833,254.42
Total equity attributable to shareholders of
the parent 6,803,046,203.96 6,866,575,701.17
Total shareholders’ equity 6,803,046,203.96 6,866,575,701.17
Total liabilities and shareholders’ equity 8,815,748,380.27 8,269,184,150.24
Legal representative:Zhang Guotao Financial controller:Huang Shuirong Accounting supervisor:Huang Shuirong
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2022 Annual Report of DR Corporation Limited
(II) Company balance sheet
Currency: RMB Yuan
Account 31 December 2022 31 December 2021
Current assets
Currency funds 219,622,694.30 4,643,894,952.31
Financial assets held for trading 5,223,419,915.33 1,560,924,654.25
Accounts receivable 84,598,028.47 217,326,141.49
Prepayments 66,437,718.07 55,601,722.43
Other receivables 270,167,536.46 234,208,768.92
Including: Dividend receivables 131,000,000.00 200,000,000.00
Inventories 668,791,848.75 432,072,513.48
Current portion of non-current assets 105,561,584.41 138,094,463.09
Other current assets 47,317,542.08 5,376,992.08
Total current assets 6,685,916,867.87 7,287,500,208.05
Non-current assets
Debt investments 650,014,736.30 218,585,379.05
Long-term equity investments 207,935,477.77 65,435,477.77
Fixed assets 10,265,370.22 3,852,092.63
Right-of-use assets 535,960,869.57 410,760,027.49
Intangible assets 829,361.80 1,593,381.81
Long-term prepaid expenses 163,000,773.79 92,937,620.58
Deferred tax assets 5,365,472.60 2,920,318.50
Other non-current assets 81,537,896.29 56,839,315.20
Total non-current assets 1,654,909,958.34 852,923,613.03
Total assets 8,340,826,826.21 8,140,423,821.08
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2022 Annual Report of DR Corporation Limited
31 December 2022 31 December 2021
Current liabilities
Notes payable 857,478,959.01 341,669,947.83
Accounts payable 273,460,934.14 387,374,488.91
Contract liabilities 122,481,130.76 207,625,421.20
Employee benefits payable 54,833,838.35 59,756,341.73
Tax and surcharges payables 18,231,870.82 84,564,180.48
Other payables 102,895,296.16 145,014,657.71
Current portion of non-current liabilities 311,609,516.04 208,660,151.45
Other current liabilities 13,211,410.16 21,817,780.17
Total current liabilities 1,754,202,955.44 1,456,482,969.48
Non-current liabilities
Lease liabilities 255,560,231.06 196,766,214.31
Provisions 16,816,666.91 12,290,088.98
Deferred tax liabilities 8,396,162.20 3,729,201.71
Total non-current liabilities 280,773,060.17 212,785,505.00
Total liabilities 2,034,976,015.61 1,669,268,474.48
Equity
Share capital 400,010,000.00 400,010,000.00
Capital reserves 4,459,777,944.48 4,459,216,627.28
Surplus reserve 200,005,000.00 179,210,032.06
Retained earnings 1,246,057,866.12 1,432,718,687.26
Total shareholders’ equity 6,305,850,810.60 6,471,155,346.60
Total liabilities and shareholders’ equity 8,340,826,826.21 8,140,423,821.08
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2022 Annual Report of DR Corporation Limited
(III) Consolidated income statement
Currency: RMB Yuan
2022 2021
Total Revenue 3,681,574,412.68 4,622,729,780.48
Including: Revenue 3,681,574,412.68 4,622,729,780.48
Total Costs 2,939,356,663.12 3,069,217,618.02
Including: Cost of sales 1,112,272,466.29 1,380,551,157.67
Taxes and surcharges 201,359,894.62 255,187,611.06
Selling expenses 1,422,037,537.50 1,217,911,552.07
Administrative expenses 164,205,877.87 172,830,287.87
Research and development expenses 17,944,132.37 16,822,042.92
Finance expenses 21,536,754.47 25,914,966.43
Including: Interest expenses 23,830,354.96 12,331,582.92
Interest income 21,912,750.27 7,845,026.93
Add: Other income 39,777,673.00 33,062,670.73
Investment income (loss is expressed with
negative value) 89,003,045.62 41,629,744.15
Fair value gains (loss is expressed with
negative value) 39,294,362.36 17,567,673.68
Credit impairment losses (loss is expressed
with negative value) 1,793,479.08 (2,379,194.21)
Impairment losses (loss is expressed with
negative value) (28,420,774.69) (10,153,366.31)
Gains/(loss) on disposal of assets 1,244,949.25 (732,715.39)
Operating profits 884,910,484.18 1,632,506,975.11
Add: Non-operating income 1,237,090.46 1,158,823.31
Less: Non-operating expenses 768,433.58 2,057,244.49
Profit before tax 885,379,141.06 1,631,608,553.93
Less: Income tax expenses 156,137,194.39 329,850,761.92
Profit 729,241,946.67 1,301,757,792.01
Classified by continuity of operation
Profit from continuing operations 729,241,946.67 1,301,757,792.01
Classified by ownership
Profit attributable to shareholders of the parent
company 729,241,946.67 1,301,768,398.86
Loss attributable to non-controlling interests - (10,606.85)
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2022 Annual Report of DR Corporation Limited
2022 2021
Other comprehensive income/(loss), net of tax 6,687,238.92 (1,439,296.79)
Other comprehensive income/(loss), net of tax
attributable to owners of the parent 6,687,238.92 (1,439,296.79)
Other comprehensive income that may be
reclassified to profit or loss 6,687,238.92 (1,439,296.79)
Exchange differences on translation of foreign
currency financial statements 6,687,238.92 (1,439,296.79)
Total comprehensive income 735,929,185.59 1,300,318,495.22
Total comprehensive income attributable to
shareholders of the parent company 735,929,185.59 1,300,329,102.07
Total comprehensive income attributable to
non-controlling interests - (10,606.85)
Earnings per share
Basic earnings per share 1.82 3.62
Diluted earnings per share 1.82 3.62
Legal representative:Zhang Guotao Financial controller:Huang Shuirong Accounting supervisor:Huang Shuirong
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2022 Annual Report of DR Corporation Limited
(IV) Company income statement
Currency: RMB Yuan
2022 2021
Revenue 3,534,932,354.30 4,417,870,859.56
Less: Cost of sales 1,092,567,667.81 1,386,106,265.88
Taxes and surcharges 194,895,366.29 248,207,290.51
Selling expenses 1,515,688,864.56 1,153,400,250.19
Administrative expenses 624,911,561.61 825,777,804.26
Research and development expenses 71,920.44 144,727.20
Finance expenses 17,360,792.79 25,400,867.38
Including: Interest expenses 19,305,582.75 11,705,018.34
Interest income 19,773,708.70 7,616,647.67
Add: Other income 22,208,183.65 8,530,733.48
Investment income (loss is expressed
with negative value) 560,828,577.30 531,078,472.73
Fair value gains (loss is expressed with
negative value) 40,995,261.08 15,952,456.41
Credit impairment losses (loss is
expressed with negative value) 1,836,341.83 (2,379,194.21)
Impairment losses of assets (loss is
expressed with negative value) (28,017,790.85) (4,741,845.92)
Gains/(Loss) on disposal of non-current
assets 1,276,888.55 (732,715.39)
Operating profit 688,563,642.36 1,326,541,561.24
Add: Non-operating income 1,150,898.78 531,648.31
Less: Non-operating expenses 627,988.18 2,053,634.32
Profit before income taxes 689,086,552.96 1,325,019,575.23
Less: Income tax expenses 54,932,406.16 208,271,624.63
Profit 634,154,146.80 1,116,747,950.60
Profit from continuing operations 634,154,146.80 1,116,747,950.60
Total comprehensive income 634,154,146.80 1,116,747,950.60
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2022 Annual Report of DR Corporation Limited
(v) Consolidated statement of cash flows
Currency: RMB Yuan
2022 2021
I. CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from the sale of goods and the
rendering of services 3,968,278,134.60 4,909,484,433.62
Receipts of tax and surcharges refunds 16,421,754.59 21,840,823.43
Other cash receipts relating to operating
activities: 62,655,254.90 25,387,020.28
Total cash inflows from operating activities 4,047,355,144.09 4,956,712,277.33
Cash payments for goods and services 1,406,475,658.87 1,525,942,725.15
Cash payments to and on behalf of employees 573,104,253.10 457,826,157.72
Payments of all types taxes and surcharges 621,952,499.15 800,925,900.53
Other cash payments relating to operating
activities 627,811,620.73 627,804,643.22
Total cash outflows from operating activities 3,229,344,031.85 3,412,499,426.62
Net cash flows from operating activities 818,011,112.24 1,544,212,850.71
II. CASH FLOWS FROM INVESTING ACTIVITIES
Cash receipts from returns of investments 5,328,462,790.68 2,331,900,000.00
Cash receipts from returns on investments 83,386,608.45 29,563,244.92
Net cash receipts from disposal of fixed assets
and other long-term assets 282,732.40 487,127.07
Total cash inflows from investing activities 5,412,132,131.53 2,361,950,371.99
Cash payments to acquire fixed assets,
intangible assets and other long-term assets 155,426,398.41 103,755,422.85
Cash payments for investments 9,569,751,822.21 3,428,812,666.67
Total cash outflows from investing activities 9,725,178,220.62 3,532,568,089.52
Net cash flows from investing activities (4,313,046,089.09) (1,170,617,717.53)
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2022 Annual Report of DR Corporation Limited
2022 2021
III. CASH FLOWS FROM FINANCING
ACTIVITIES
Cash proceeds from investments by others - 4,460,725,283.02
Cash receipts from borrowings 525,418,991.66 -
Other cash receipts relating to financing
activities 10,700,723.00 5,483,723.60
Total cash inflows from financing activities 536,119,714.66 4,466,209,006.62
Cash repayments for debts 94,320,809.11 -
Cash payments for distribution of dividends or
profit and interest expenses 800,397,477.89 -
Other cash payments relating to financing
activities 371,403,624.18 277,845,213.25
Total cash outflows from financing activities 1,266,121,911.18 277,845,213.25
Net cash flows from financing activities (730,002,196.52) 4,188,363,793.37
IV.EFFECT OF EXCHANGE RATE CHANGES
ON
CASH AND CASH EQUIVALENTS 5,151,750.54 (1,944,316.29)
V. NET INCREASE IN CASH AND CASH
EQUIVALENTS (4,219,885,422.83) 4,560,014,610.26
Add: Cash and cash equivalents at beginning
of year 4,741,510,453.45 181,495,843.19
VI.CASH AND CASH EQUIVALENTS
AT END OF YEAR 521,625,030.62 4,741,510,453.45
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2022 Annual Report of DR Corporation Limited
(VI) Company statement of cash flows
Currency: RMB Yuan
2022 2021
I. CASH FLOWS FROM OPERATING
ACTIVITIES
Cash receipts from the sale of goods
and the rendering of services 3,991,469,167.77 4,898,129,642.04
Receipts of tax and surcharges refunds 56,556.06 -
Other cash receipts relating to operating
activities: 265,606,344.91 46,238,064.27
Total cash inflows from operating
activities 4,257,132,068.74 4,944,367,706.31
Cash payments for goods and services 1,495,604,940.61 1,523,908,136.40
Cash payments to and on behalf of
employees 484,718,641.12 396,345,267.90
Payments of all types of taxes and
surcharges 474,368,886.96 634,431,986.90
Other cash payments relating to
operating activities 1,405,354,651.27 1,247,967,092.93
Total cash outflows from operating
activities 3,860,047,119.96 3,802,652,484.13
Net cash flows from operating activities 397,084,948.78 1,141,715,222.18
II. CASH FLOWS FROM INVESTING
ACTIVITIES
Cash receipts from returns of
investments 4,888,931,144.07 1,854,000,000.00
Cash receipts from returns on
investments 622,149,442.68 390,847,204.33
Net cash received from disposal of fixed
assets and other long-termt assets 282,732.40 487,127.07
Total cash inflows from investing
activities 5,511,363,319.15 2,245,334,331.40
Cash payments to acquire fixed assets,
intangible assets and other long-term
assets 150,904,158.20 92,542,519.51
Cash payments for investments 9,041,789,749.98 2,948,048,144.44
Total cash outflows from investing
activities 9,192,693,908.18 3,040,590,663.95
Net cash flows from investing activities (3,681,330,589.03) (795,256,332.55)
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2022 Annual Report of DR Corporation Limited
2022 2021
III. CASH FLOWS FROM FINANCING
ACTIVITIES
Cash proceeds from investments by
others - 4,460,725,283.02
Other cash receipts relating to financing
activities 10,700,723.00 5,483,723.60
Total cash inflows from financing
activities 10,700,723.00 4,466,209,006.62
Cash payments for distribution of
dividends or profit and interest
expenses 800,020,000.00 -
Other cash payments relating to
financing activities 350,987,128.44 271,106,564.48
Total cash outflows from financing
activities 1,151,007,128.44 271,106,564.48
Net cash flows from financing activities (1,140,306,405.44) 4,195,102,442.14
IV.EFFECT OF EXCHANGE RATE
CHANGES ON CASH AND CASH
EQUIVALENTS - (115.68)
V. Net Increase in Cash and Cash
Equivalents (4,424,552,045.69) 4,541,561,216.09
Add: Cash and cash equivalents at
beginning of year 4,643,894,952.31 102,333,736.22
VI.Closing balance of cash and cash
equivalents 219,342,906.62 4,643,894,952.31
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2022 Annual Report of DR Corporation Limited
(VII) Consolidated statement of changes in equity
Year ended 31 December 2022
Currency: RMB Yuan
Total
Attributable to shareholders of the Company Minority shareholders’
interests equity
Other
Share capital Capital reserves comprehensive Surplus reserve Retained earnings Subtotal
income
I. Balance at end of prior year
and beginning of year 400,010,000.00 4,459,216,399.61 (2,693,984.92) 179,210,032.06 1,830,833,254.42 6,866,575,701.17 - 6,866,575,701.17
II. Changes for the year
1. 1Total comprehensive income - - 6,687,238.92 - 729,241,946.67 735,929,185.59 - 735,929,185.59
2. (IOwners’ contributions and
reduction in capital
Amount of share-based
payments recognised in
equity - 561,317.20 - - - 561,317.20 - 561,317.20
3. PProfit distribution
Appropriation to surplus
reserve - - - 20,794,967.94 (20,794,967.94) - - -
Distribution to shareholders - - - - (800,020,000.00) (800,020,000.00) - (800,020,000.00)
III. Balance at end of year 400,010,000.00 4,459,777,716.81 3,993,254.00 200,005,000.00 1,739,260,233.15 6,803,046,203.96 - 6,803,046,203.96
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2022 Annual Report of DR Corporation Limited
Year ended 31 December 2021
Currency: RMB Yuan
Total
Attributable to shareholders of the Company Minority shareholders’
interests equity
Other
Surplus
Share capital Capital reserves comprehensive Retained earnings Subtotal
reserves
income
I. Balance at end of prior year
and beginning of year 360,000,000.00 51,332,087.41 (1,254,688.13) 67,535,237.00 640,739,650.62 1,118,352,286.90 45,856.95 1,118,398,143.85
II. Changes for the year
1. 1.Total comprehensive income - - (1,439,296.79) - 1,301,768,398.86 1,300,329,102.07 (10,606.85) 1,300,318,495.22
2. (IOwners’ contributions and
reduction in capital
(1) Capital contributions by
owners 40,010,000.00 4,403,792,844.63 - - - 4,443,802,844.63 (35,250.10) 4,443,767,594.53
(2) Amount of share-based
payments recognised in
equity - 4,091,695.24 - - - 4,091,695.24 - 4,091,695.24
3. PProfit distribution
(1) Appropriation to surplus
reserve - - - 111,674,795.06 (111,674,795.06) - - -
4. Transfer within equity
(1) Acquire non-controlling
interests - (227.67) - - - (227.67) - (227.67)
III. Balance at end of year 400,010,000.00 4,459,216,399.61 (2,693,984.92) 179,210,032.06 1,830,833,254.42 6,866,575,701.17 - 6,866,575,701.17
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2022 Annual Report of DR Corporation Limited
(VIII) Company statement of changes in shareholders’ equity
Year ended 31 December 2022
Currency: RMB Yuan
Total shareholders’
Share capital Capital reserves Surplus reserves Retained earnings
equity
I. Balance at end of prior year and beginning of
year 400,010,000.00 4,459,216,627.28 179,210,032.06 1,432,718,687.26 6,471,155,346.60
II. Changes for the year
1. 1Total comprehensive income - - - 634,154,146.80 634,154,146.80
(1) Amount of share-based payments recognised
in equity - 561,317.20 - - 561,317.20
2. Profit distribution
(1) Appropriation to surplus reserve - - 20,794,967.94 (20,794,967.94) -
(2) Distribution to shareholders - - - (800,020,000.00) (800,020,000.00)
III. Balance at end of year 400,010,000.00 4,459,777,944.48 200,005,000.00 1,246,057,866.12 6,305,850,810.60
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2022 Annual Report of DR Corporation Limited
Year ended 31 December 2021
Currency: RMB Yuan
Total shareholders’
Share capital Capital reserves Surplus reserves Retained earnings
equity
I. Balance at end of prior year and beginning
of year 360,000,000.00 51,332,087.41 67,535,237.00 427,645,531.72 906,512,856.13
II. Changes for the year
1. 1Total comprehensive income - - - 1,116,747,950.60 1,116,747,950.60
2. Owners’ contributions and reductions in
capital
(1) Shareholders’ contributions and reduction
in capital 40,010,000.00 4,403,792,844.63 - - 4,443,802,844.63
(2) Amount of share-based payments
recognised in equity - 4,091,695.24 - - 4,091,695.24
3. Profit distribution
(1) Appropriation to surplus reserve - - 111,674,795.06 (111,674,795.06) -
III. Balance at end of year 400,010,000.00 4,459,216,627.28 179,210,032.06 1,432,718,687.26 6,471,155,346.60
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2022 Annual Report of DR Corporation Limited
III. General information
DR Corporation Limited(the “Company”) is a limited liability company registered in Shenzhen,
Guangdong Province of the People’s Republic of China. The Company was establised on
April 8, 2010 with a term of perpetual operation. The Company is registered in Room 306,
Wing Building of Luohu Investment Holding Building, No. 112 Qingshuihe 1st Road,
Qingshuihe Community, Qingshuihe Street, Luohu District, Shenzhen.
The Company was established by Zhang Guotao and Jin Chong who contributed a capital of
RMB 15,300 and RMB 14,700 with proportion of contribution of of 51% and 49% respectively.
The addition of capital has been verified by Shenzhen Zhengsheng Accounting Firm that
issued a "Capital Verification Report" (Shenzhengsheng (Internal) Yan Zi [2010] No. 376). The
legal representative is Zhang Guotao, and the business scope is marketing planning. The
company obtained the name pre-approval notice (No. 2583011 [2010]) from Shenzhen
Administration For Market Regulation and the approved name was Shenzhen Yinsaite
Enterprise Management Consulting Co., Ltd.
According to the resolution of the shareholders' meeting on July 11, 2011, Jin Chong
transferred his 49% equity interest to Lu Yiwen. On July 20, 2011, the shareholders' meeting
of Shenzhen Yinsaite Enterprise Management Consulting Co., Ltd. made a resolution to
approve the change of the Company's name to " Shenzhen Darry Jewelry Co., Ltd.." ("Darry
Corporation"), and the business scope was changed to "purchase and sale of jewelry,
diamonds, platinum, gold, silver and related accessories, cosmetics, perfumes, leather
products, clothing, shoes and hats; domestic trade; import and export of goods and
technology." On July 28, 2011, the Company completed the corresponding industrial and
commercial change registration process at Shenzhen Administration For Market Regulation
for the equity transfer and the change of the Company's name and business scope.
According to the resolution of the shareholders' meeting on September 5, 2011, the Company
applied to Shenzhen Administration For Market Regulation on September 6, 2011 for approval
of increasing the registered capital from RMB 30,000 to RMB 1 million, and the new registered
capital was RMB 970,000, of which Zhang Guotao subscribed and paid RMB 494,700, Lu
Yiwen subscribed and paid RMB 475,300. The proportion of contribution of Zhang Guotao and
Lu Yiwen were 51% and 49% respectively. The addition of capital has been verified by Ernst &
Young Hua Ming LLP that issued a “Capital Verification Report” (Ernst & Young Hua Ming
(2020) Yan Zi No. 61403707_H01).
According to the resolution of the shareholders' meeting on December 1, 2014, the Company
applied to Shenzhen Administration For Market Regulation on December 10, 2014 for
approval of increasing the registered capital from RMB 1 million to RMB 100 million, of which
Zhang Guotao subscribed RMB 50.49 million and Lu Yiwen subscribed RMB 48.51 million. On
April 1, 2015, April 2, 2015 and June 8, 2015, Zhang Guotao paid capital contributions of
RMB5 million, RMB5 million and RMB20 million respectively, and the paid in capital of the
Company after these series of capital contribution was RMB31 million, and the proportion of
subscribed capital of Zhang Guotao and Lu Yiwen remained unchange. Pursuant to the
Company’s change decision on December 18, 2015, Zhang Guotao and Lu Yiwen transferred
their 51% and 49% equity interest in the Company to DR Investment (Zhuhai) Co., Ltd. ("DR
Investment"), and on January 29, 2016 and November 7, 2016, DR Investment paid capital
contributions of RMB18 million and RMB51 million, respectively, and the paid in capital of the
Company after these series of capital contribution was RMB100 million. The addition of capital
has been verified by Ernst & Young Hua Ming LLP that issued a “Capital Verification
Report”(Ernst & Young Hua Ming (2020) Yan Zi No. 61403707_H02).
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2022 Annual Report of DR Corporation Limited
III. General information (continuted)
According to the resolution of the shareholders' meeting on November 22, 2017, DR
Investment transferred its 5% equity interest in the Company to Gongqingcheng Wendi No.1
Investment Management Partnership (LP) ("Wendi No. 1"), Gongqingcheng Wendi No.2
Investment Management Partnership (LP) ("Wendi No. 2") and Gongqingcheng Wendi No.3
Investment Management Partnership (LP) ("Wendi No. 3") respectively. On November 24,
2017, the above equity transfer was completed and the three limited partnerships held 2%, 2%
and 1% of the equity interests of the Company respectively.
According to the resolution of the shareholders' meeting of the Company on June 19, 2019,
the Company changed from a limited company to a corporation limited company based on the
audited net assets. The Company’s name changed from Shenzhen Darry Jewelry Co., Ltd. to
DR Corporation Limited and the shareholding ratio of each shareholder before and after the
change remained unchanged. As of February 28, 2019, the adjusted net assets of the limited
company were RMB396,540,157.74, of which RMB360,000,000.00 was converted into
360,000,000.00 ordinary shares of the corporation limited company.The registered share
capital was changed to RMB360,000,000.00, with a par value of RMB1 per share. The portion
of net assets exceeding the share capital of RMB 36,540,157.74 was accounted as "capital
reserve" and shared by all shareholders.
In accordance with the approval of the Listing Committee of the Growth Enterprise Market of
the Shenzhen Stock Exchange and the CSRC's "Approval on Agreeing the Registration of DR
Corporation Limited for Initial Public Offering of Shares (Zheng Jian Xu Ke No. [2021] 3043)"
on September 16, 2021, the Company conducted an initial public offering of 40,001,000
ordinary shares (A shares) with an issue price of RMB116.88 per share. The additional
registered capital from the IPO has been verified by Ernst & Young Hua Ming LLP that issued
a "Capital Verification Report" (Ernst & Young Hua Ming (2021) Yan Zi No. 61403707_H01)..
The Company was listed on the Shenzhen Stock Exchange on December 15, 2021.
The parent and ultimate parent company of the Group is DR Investment (Zhuhai) Co., Ltd.,
which is incorporated in the People’s Republic of China.
The financial statements were approved by board of directors on 26 April 2023.
The scope of consolidation in the consolidated financial statements is determined on the basis
of control. See Note VIII for changes in the current year.
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IV. Basis of preparation of the financial statements
(I) Basic of preparation
These financial statements have been prepared in accordance with Accounting Standards for
Business Enterprises - Basic Standard and specific accounting standards, implementation
guidance, interpretations and other relevant provisions issued subsequently by the Ministry of
Finance (the “MOF”) (collectively referred to as “ASBEs”).
(II) Going concern
The financial statements have been prepared on a going concern basis.
V. Significant accounting policies and accounting estimates
The Group has formulated specific accounting policies and accounting estimates based on the
characteristics of actual operation, which are mainly reflected in impairment allowance for
accounts receivable, inventory valuation method, amortization of long-term prepaid expenses,
depreciation of right-of-use assets, impairment of long-term assets, revenue recognition and
measurement, etc.
1.Statement of compliance with Accounting Standards for Business Enterprises
The financial statements present truly and completely the financial positions of the Group and
the Company as at 31 December 2022, and the financial performance and the cash flows for
the year then ended in accordance with Accounting Standards for Business Enterprises.
2.Accounting year
The Group has adopted the calendar year as its accounting year , from 1 January to 31
December.
3.Business Cycle
The Group has adopted a normal operating cycle of 12 months as the criterion for classifying
the liquidity of its assets and liabilities.
4.Functional currency
The Company’s functional and presentation currency is Renminbi (“RMB”). The currency unit
is RMB Yuan unless otherwise stated .
Each subsidiary of the Group determines its own functional currency based on the primary
economic environment in which it operates. In preparation of the financial statements, their
functional currencies are translated into RMB.
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V. Significant accounting policies and accounting estimates (continued)
5.Business combinations
Business combinations are classified into business combinations involving entities under
common control and business combinations not involving entities under common control.
(I) Business combinations involving entities under common control
A business combination involving entities under common control is a business combination in
which all of the combining entities are ultimately controlled by the same party or parties both
before and after the combination, and that control is not transitory.
The assets and liabilities (including goodwill arising from the ultimate controlling party’s
acquisition of the entity being absorbed) that are obtained by the absorbing entity in a
business combination involving entities under common control shall be measured on the basis
of their carrying amounts in the financial statements of the ultimate controlling party at the
combination date. The difference between the carrying amount of the net assets obtained and
the carrying amount of the consideration paid for the combination (or the aggregate face value
of shares issued as consideration) shall be adjusted to the capital premium under capital
reserves. If the capital premium is not sufficient to absorb the difference, any excess shall be
adjusted against retained earnings.
(II) Business combinations not involving entities under common control
A business combination not involving entities under common control is a business
combination in which all of the combining entities are not ultimately controlled by the same
party or parties before and after the combination.
The acquirer shall measure the acquiree’s identifiable assets, liabilities and contingent
liabilities acquired in the business combination at their fair values on the acquisition date.
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V. Significant accounting policies and accounting estimates (continued)
5.Business combinations (continued)
(II) Business combinations not involving entities under common control (continued)
Goodwill is initially recognized and measured at cost, being the excess of the aggregate of the
fair value of the consideration transferred (or the fair value of the equity securities issued) and
any fair value of the Group’s previously held equity interest in the acquiree over the Group’s
interest in the fair value of the acquiree’s net identifiable assets. After initial recognition,
goodwill is measured at cost less any accumulated impairment losses. Where the aggregate
of the fair value of the consideration transferred (or the fair value of the equity securities
issued) and any fair value of the Group’s previously held equity interest in the acquiree is
lower than the Group’s interest in the fair value of the acquiree’s net identifiable assets, the
Group reassesses the measurement of the fair value of the acquiree’s identifiable assets,
liabilities and contingent liabilities and the fair value of the consideration transferred (or the fair
value of the equity securities issued), together with the fair value of the Group’s previously
held equity interest in the acquiree. If after that reassessment, the aggregate of the fair value
of the consideration transferred (or the fair value of the equity securities issued) and the
Group’s previously held equity interest in the acquiree is still lower than the Group’s interest in
the fair value of the acquiree’s net identifiable assets, the Group recognizes the remaining
difference in profit or loss.
6.Consolidated financial statements
The scope of the consolidated financial statements, which include the financial statements of
the Company and all of its subsidiaries, is determined on the basis of control. A subsidiary is
an entity that is controlled by the Company (such as an enterprise, a deemed separate entity,
or a structured entity controlled by the Company).
In the preparation of the consolidated financial statements, the financial statements of
subsidiaries are prepared for the same accounting year as the Company, using consistent
accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash
flows relating to transactions between members of the Group are eliminated in full on
consolidation.
When the amount of loss for the period attributable to the minority shareholders of a
subsidiary exceeds the minority shareholders' portion of the opening balance of shareholders
equity of the subsidiary, the excess amounts are still allocated against minority interests.
For subsidiaries acquired through business combinations not involving entities under common
control, the financial performance and cash flows of the acquiree shall be consolidated from
the date on which the Group obtains control, and continue to be consolidated until the date
such control ceases. While preparing the consolidated financial statements, the Group shall
adjust the subsidiary’s financial statements, on the basis of the fair values of the identifiable
assets, liabilities and contingent liabilities recognized on the acquisition date.
For subsidiaries acquired through business combinations involving entities under common
control, the financial performance and cash flows of the entity being absorbed shall be
consolidated from the beginning of the period in which the combination occurs. While
preparing the comparative financial statements, adjustments are made to related items in the
financial statements for the prior period as if the reporting entity after the combination has
been in existence since the date the ultimate controlling party first obtained the control.
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V. Significant accounting policies and accounting estimates (continued)
6.Consolidated financial statements (continued)
The Group reassesses whether or not it controls an investee if any change in facts and
circumstances indicates that there are changes to one or more of the three elements of control.
7.Cash and cash equivalents
Cash comprises the Group’s cash on hand and bank deposits that can be readily withdrawn
on demand. Cash equivalents are short-term, highly liquid investments that are readily
convertible into known amounts of cash, and are subject to an insignificant risk of changes in
value.
8.Foreign currency transactions and foreign currency translation
The Group translates foreign currency transactions into its functional currency.
Foreign currency transactions are initially recorded, on initial recognition in the functional
currency using the spot exchange rates prevailing at the dates of transactions/average
exchange rates for the period in which the transactions occur/weighted average exchange
rates for the period in which the transactions occur. Monetary items denominated in foreign
currencies are translated at the spot exchange rates ruling at the balance sheet date.
Differences arising on settlement or translation of monetary items are recognised in profit or
loss, with the exception of those relating to foreign currency borrowings specifically for the
construction and acquisition of qualifying assets, which are capitalised in accordance with the
guidance for capitalisation of borrowing costs. Non-monetary items that are measured in terms
of historical cost in a foreign currency are translated using the exchange rates at the dates of
the initial transactions, and the amount denominated in the functional currency is not changed.
Non-monetary items measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value was measured. The resulting exchange
differences are recognised in profit or loss or other comprehensive income depending on the
nature of the non-monetary items.
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V. Significant accounting policies and accounting estimates (continued)
8.Foreign currency transactions and foreign currency translation (continued)
For foreign operations, the Group translates their functional currency amounts into RMB when
preparing the financial statements as follows: as at the balance sheet date, the assets and
liabilities are translated using the spot exchange rate at the balance sheet date; and equity
items other than “unappropriated profit” are translated at the spot exchange rates at the dates
of transactions; revenue and expense items in profit or loss are translated using the average
exchange rates for the period during which the transactions occur. The resulting exchange
differences are recognized in other comprehensive income. On disposal of a foreign
operation, the component of other comprehensive income relating to that particular foreign
operation is recognized in profit or loss. If the disposal only involves a portion of a particular
foreign operation, the component of other comprehensive income relating to that particular
foreign operation is recognized in profit or loss on a pro-rata basis.
Foreign currency cash flows and the cash flows of foreign subsidiaries are translated using the
spot exchange rates prevailing on the dates of cash flows. The effect of exchange rate
changes on cash is separately presented as an adjustment item in the statement of cash
flows.
9.Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity.
(I) Recognition and derecognition
The Group recognizes a financial asset or a financial liability when it becomes a party to the
contractual provisions of a financial instrument.
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is primarily derecognised (i. e., removed from the Group’s consolidated
balance sheet) when:
(1) the rights to receive cash flows from the financial asset have expired; or
(2) the Group has transferred its rights to receive cash flows from the financial asset, or has
assumed an obligation to pay the received cash flows in full without material delay to a third
party under a “pass-through” arrangement; and either (a) has transferred substantially all the
risks and rewards of the financial asset, or (b) has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred control of the financial
asset.
A financial liability is derecognised when the obligation under the liability is discharged or
cancelled, or expires. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as a derecognition of the original liability
and a recognition of a new liability, and the difference between the respective carrying
amounts is recognised in profit or loss.
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V. Significant accounting policies and accounting estimates (continued)
9.Financial instruments (continued)
Regular way purchases and sales of financial assets are recognised and derecognised using
trade date accounting. Regular way purchases or sales are purchases or sales of financial
assets that require delivery within the period generally established by regulation or convention
in the marketplace. The trade date is the date that the Group committed to purchase or sell a
financial asset.
(II) Classification and measurement of financial assets
The Group's financial assets are classified at initial recognition into financial assets at fair
value through profit or loss and financial assets at amortised cost, based on the Group's
business model for managing financial assets by enterprises and the contractual cash flow
characteristics of the financial assets.
Financial assets are measured at fair value on initial recognition, but accounts receivable or
notes receivable arising from the sale of goods or rendering of services that do not contain
significant financing components or for which the Group has applied the practical expedient of
not adjusting the effect of a significant financing component due within one year, are initially
measured at the transaction price.
For financial assets at fair value through profit or loss, relevant transaction costs are directly
recognised in profit or loss, and transaction costs relating to other financial assets are included
in the initial recognition amounts.
The subsequent measurement of financial assets depends on their classification as follows:
Debt investments measured at amortised cost
The Group measures financial assets at amortised cost if both of the following conditions are
met: the financial asset is held within a business model with the objective to hold financial
assets in order to collect contractual cash flows; the contractual terms of the financial asset
give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding. Interest income of such financial assets is recognised using
the effective interest method. Gains and losses are recognised in current profit or loss when
the asset is derecognised, modified or impaired.
Financial assets at fair value through profit or loss
The financial assets other than the above financial assets measured at amortised cost and
financial assets at fair value through other comprehensive income are classified as financial
assets at fair value through profit or loss. Such financial assets are subsequently measured at
fair value with net changes in fair value recognised in profit or loss
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V. Significant accounting policies and accounting estimates (continued)
9.Financial instruments (continued)
(III) Classification and measurement of financial liabilities
The Group’s financial liabilities are, on initial recognition, classified into other financial
liabilities. Transaction costs relating to other financial liabilities are included in the initial
recognition amounts.
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities measured at amortized cost
After initial recognition, such financial liabilities are measured at amortised cost using the
effective interest method.
(IV) Impairment of financial instruments
Based on expected credit losses, the Group undertakes impairment treatment and recognises
loss provisions for financial assets measured at amortised cost.
Credit losses represent the difference between all contractual cash flows receivable by the
Group under a contract and all cash flows expected to be collected, discounted at the original
effective interest rate, being the present value of the entire cash shortfall. Of this amount,
financial assets purchased or originated by the Group that are credit impaired should be
discounted at the credit-adjusted effective interest rate of the financial assets.
For trade receivables that do not contain a significant financing component, the Group applies
the simplified approach to recognize a loss allowance based on lifetime ECLs.
For financial assets other than above measured by the simplified approach, the Group
evaluates at each balance sheet date whether the credit risk has significant increased since
initial recognition. If the credit risk has not significantly increased since initial recognition
(stage 1), the Group shall measure loss provisions based on the amount of expected credit
losses for the next 12 months and calculate interest income according to the book value and
effective interest rate; if the credit risk has significantly increased since initial recognition but
are not credit-impaired (stage2), the Group shall measure loss provisions based on the
amount of expected credit losses for the entire lifetime and calculate interest income
according to the book value and effective interest rate; if the credit impairment has occurred
after initial recognition (stage 3), the Group shall measure loss provisions based on the
amount of expected credit losses for the entire lifetime and calculate interest income at the
amortised cost and effective interest rate. At the balance sheet date, if the Group only has
financial instruments with lower credit risk, the Group assumes that the credit risk of the
financial instrument has not increased significantly since initial recognition.
The Group evaluates the expected credit losses of financial instruments on an individual and
portfolio basis. The Group takes into account the credit risk characteristics of different
customers and evaluates the expected credit losses of relevant financial instruments on the
basis of the aging portfolio.
For the Group's disclosure of the criteria for determining the significant increase in credit risk
and the definition of assets that have incurred credit impairment, please refer to Note X.
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V. Significant accounting policies and accounting estimates (continued)
9.Financial instruments (continued)
The Group directly reduces the carrying amount of financial assets when the Group no longer
reasonably expects that the contractual cash flow of such financial assets may be fully or
partially recoverable.
(V) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the
balance sheet if there is a currently enforceable legal right to offset the recognized amounts
and there is an intention to settle on a net basis, or to realize the assets and settle the
liabilities simultaneously.
(VI) Transfers of financial assets
A financial asset is derecognized when the Group has transferred substantially all the risks
and rewards of the asset to the transferee. A financial asset is not derecognized when the
Group retains substantially all the risks and rewards of the financial asset.
When the Group has neither transferred nor retained substantially all the risks and rewards of
the financial asset, it either (i) derecognizes the financial asset and recognizes the assets and
liabilities created in the transfer when it has not retained control of the asset; or (ii) continues
to recognize the transferred asset to the extent of the Group's continuing involvement, in
which case, the Group also recognizes an associated liability.
The Company complies with the disclosure requirements of the "Jewellery Related Business"
in the "Self-regulatory Guidelines for Listed Companies on Shenzhen Stock Exchange No. 3 -
Disclosure of Industry Information”.
10.Trade receivables
The method of determining expected credit losses on trade receivables and related
accounting treatment can be referred to the policies relating to financial instruments.
11.Other receivables
The method of determining expected credit losses on other receivables and the accounting
treatment can be referred to the accounting policies regarding financial instruments.
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V. Significant accounting policies and accounting estimates (continued)
12.Inventories
The Company is required to comply with the disclosure requirements for jewelry-related
business specified in the Self-disciplinary Supervision Guidelines No.3 for Companies Listed
on Shenzhen Stock Exchange - Industry Information Disclosure..
The Company is required to comply with the disclosure requirements for retail industry
specified in the Self-disciplinary Supervision Guidelines No.3 for Companies Listed on
Shenzhen Stock Exchange - Industry Information Disclosure.
Inventory includes raw materials, work in process, finished products, turnover materials,
shipped commodities and commissioned processing materials.
Inventories are initially carried at cost. Cost of inventories comprises all costs of purchase,
manufacuture overhead and other cost. Turnover materials include low value consumables
and packing materials, which are amortised using the immediate write-off method.
The perpetual inventory system is maintained for the stock system.
At the balance sheet date, inventories are stated at the lower of cost and net realisable value.
The inventories are written down below cost to net realisable value and the write-down is
recognised in profit or loss if the cost is higher than the net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business less the
estimated costs of completion, the estimated costs necessary to make the sale and relevant
taxes. Inventories are written down item by item.
13.Contract assets
The Group presents contract assets or contract liabilities in the balance sheet based on the
relationship between the fulfilment of performance obligations and payments from customers.
The Group presents contract assets and contract liabilities under the same contract on a net
basis after offsetting them against each other.
A contract asset is the right to consideration in exchange for goods or services that the Group
has transferred to a customer, and that right is conditioned on something other than the
passage of time.
The method of determining expected credit losses on contract assets and the accounting
treatment can be referred to the policies relating to financial instruments.
14.Debt investments
The method of determining expected credit losses on debt investments and the accounting
treatment can be referred to the relevant policies on financial instruments.
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V. Significant accounting policies and accounting estimates (continued)
15.Long-term equity investments
Long-term equity investments include equity investments in subsidiaries.
The long-term equity investment that the company can control the investee is accounted by
cost method in individual financial statements of the company. Control is the power over the
investee, exposure or rights to variable returns from its involvement with the investee, and the
ability to use its power over the investee to affect the number of the investor's returns.
Under the cost method, a long-term equity investment is measured at its initial investment
cost. When additional investment is made or the investment is recouped, the cost of the long-
term equity investment is adjusted accordingly. Cash dividends or profit distributions declared
by the investee are recognized as investment income in profit or loss.
On disposal of a long-term equity investment, the difference between the carrying amount and
the actual acquisition price is recognized in profit or loss for the period.
16.Fixed assets
(I) Recognition
A fixed asset is recognised only when it is probable that economic benefits associated with the
asset will flow to the Group and the cost of the asset can be measured reliably. Subsequent
expenditures incurred for a fixed asset that meets the recognition criteria shall be included in
the cost of the fixed asset, and the carrying amount of the component of the fixed asset that is
replaced shall be derecognised. Otherwise, such expenditures are recognised in profit or loss
as incurred.
Fixed assets are initially measured at cost. The cost of a purchased fixed asset comprises the
purchase price, relevant taxes and any directly attributable expenditure for bringing the asset
to its working condition for its intended use.
The Group reviews the useful life and estimated net residual value of a fixed asset and the
depreciation method applied at least at each year end, and makes adjustments if necessary.
(II) Depreciation method
Estimated net Annual
residual value depreciation rate
Category Depreciation method Useful life rate(%) (%)
Transportation facilities Straight-line method 4 years 5.00 23.75
Office equipment and other
facilities Straight-line method 3 to 5 years 5.00 19.00-31.67
V. Significant accounting policies and accounting estimates (continued)
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17.Borrowing costs
The borrowing costs that are directly attributable to the acquisition, construction or production
of a qualifying asset are capitalised. The amounts of other borrowing costs incurred are
recognised as an expense in the period in which they are incurred. Qualifying assets are
assets (fixed assets, investment properties, inventories, etc.) that necessarily take a
substantial period of time of acquisition, construction or production to get ready for their
intended use or sale.
The capitalisation of borrowing costs commences only when all of the following conditions are
satisfied:
(1) expenditures for the asset have been incurred;
(2) borrowing costs have been incurred; and
(3) activities that are necessary to acquire, construct or produce the asset for its intended
use or sale have been undertaken.
Capitalisation of borrowing costs ceases when the qualifying asset being acquired,
constructed or produced gets ready for its intended use or sale. Any borrowing costs
subsequently incurred are recognised in profit or loss.
During the capitalisation period, the amount of interest eligible for capitalisation for each
accounting period shall be determined as follows:
(1) where funds are borrowed specifically for the purpose of obtaining a qualifying asset,
the amount of interest eligible for capitalisation is the actual interest costs incurred on
that borrowing for the period less any bank interest earned from depositing the borrowed
funds before being used on the asset or any investment income on the temporary
investment of those funds; or
(2) where funds are borrowed generally for the purpose of obtaining a qualifying asset, the
amount of interest eligible for capitalisation is determined by applying a weighted
average interest rate on the general borrowings to the weighted average of the excess of
the cumulative expenditures on the asset over the expenditures on the asset funded by
the specific borrowings.
Capitalisation of borrowing costs is suspended during periods in which the acquisition,
construction or production of a qualifying asset is suspended abnormally by activities other
than those necessary to get the asset ready for its intended use or sale, when the suspension
is for a continuous period of more than 3 months. Borrowing costs incurred during these
periods are recognised as an expense in profit or loss until the acquisition, construction or
production is resumed.
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V. Significant accounting policies and accounting estimates (continued)
18.Right-of-use assets
The Group's right-of-use assets consist primarily of buildings and structures.
At the commencement date of the lease term, the Group recognizes its right to use the leased
asset during the lease term as a right-of-use asset and is initially measured at cost. Right-of-
use asset costs include: the initial measured amount of the lease liability; The amount of lease
payments paid on or before the start date of the lease period, if there is a lease incentive,
deduct the amount related to the lease incentive already enjoyed; initial direct costs incurred
by the lessee; The costs expected of the lessee to incur to dismantle and remove the leased
assets, restore the premises where the leased assets are located, or restore the leased assets
to the state agreed in the terms of the lease. If the Group remeasures the lease liability due to
changes in the amount of lease payments, the carrying amount of the right-of-use assets will
be adjusted accordingly.
Where the Group remeasures a lease liability as a result of changes in lease payments, the
carrying amount of the right-of-use asset is adjusted accordingly.
The right-of-use assets are depreciated on a straight-line basis subsequently by the Group. If
the Group is reasonably certain that the ownership of the underlying asset will be transferred
to the Group at the end of the lease term, the Group depreciates the asset from the
commencement date to the end of the useful life of the asset. Otherwise, the Group
depreciates the assets from the commencement date to the earlier of the end of the useful life
of the asset or the end of the lease term.
19.Intangible assets
(I) Valuation methods, useful lives, impairment
An intangible asset shall be recognised only when it is probable that the economic benefits
associated with the asset will flow to the Group probably and the cost of the asset can be
measured reliably.
The useful life of an intangible asset is determined on the basis of the period for which it will
provide economic benefits to the Group. An intangible asset is regarded as having an
indefinite useful life when there is no unforeseeable limit to the period over which the asset is
expected to generate economic benefits for the Group.
An intangible asset with a finite useful life is amortised using the straight-line method over its
useful life. For an intangible asset with a finite useful life, the Group reviews the useful life and
amortisation method at least at each year end and makes adjustment if necessary.
The intangible assets of the Group are mainly software with the useful lives from 1 to 5 years
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V. Significant accounting policies and accounting estimates (continued)
19.Intangible assets (continued)
(II) Accounting policy for internal research and development expenditure
The Group classifies the expenditures on an internal research and development project into
expenditure on the research phase and expenditure on the development phase. Expenditure
on the research phase is recognised in profit or loss as incurred. Expenditur on the
development phase is capitalized only when the Group can demonstrate all of the following: (i)
the technical feasibility of completing the intangible asset so that it will be available for use or
sale; (ii) the intention to complete the intangible asset and use or sell it; (iii) how the intangible
asset will generate probable economic benefits(among other things, the Group can
demonstrate the existence of a market for the output of the intangible asset or the intangible
asset itself or, if it is to be used internally, the usefulness of the intangible asset); (iv) the
availability of adequate technical, financial and other resources to complete the development
and the ability to use or sell the intangible asset; and (v) the ability to measure reliably the
expenditure attributable to the intangible asset during the development phase. Expenditure on
the development phase which does not meet these above criteria is recognised in profit or
loss when incurred.
20.Impairment of assets
The Group determines the impairment of assets, other than the impairment of inventories,
deferred tax assets and financial assets, using the following methods:
The Group assesses at the balance sheet date whether there is any indication that an asset
may be impaired. If any indication exists that an asset may be impaired, the Group estimates
the recoverable amount of the asset and performs impairment testing.
The recoverable amount of an asset is the higher of its fair value less costs to sell and the
present value of the future cash flows expected to be derived from the asset. The Group
estimates the recoverable amount on an individual basis unless it is not possible to estimate
the recoverable amount of the individual asset, in which case the recoverable amount is
determined for the asset group to which the asset belongs. Identification of an asset group is
based on whether major cash inflows generated by the asset group are largely independent of
the cash inflows from other assets or asset groups.
When the recoverable amount of an asset or asset group is less than its carrying amount, the
carrying amount is reduced to the recoverable amount by the Group. The reduction in the
carrying amount is treated as an impairment loss and recognised in profit or loss. A provision
for impairment loss of the asset is recognised accordingly.
Once the above impairment loss is recognised, it cannot be reversed in subsequent
accounting periods.
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V. Significant accounting policies and accounting estimates (continued)
21.Long-term prepaid expenses
Long-term prepaid expenses are amortised using the straight-line method as follows:
Category Amortisation period
Leasehold improvements 1 to 5 years
Others 1 to 3 years
22. Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the
Company has received consideration or an amount of consideration is due from the customer,
such as an amount of consideration that an entity has received before the transfer of the
promised goods or services.
23.Employee benefits
(I) Short-term employee benefits
During an accounting period when employees render services to the entity, the amount of
short-term employee benefits actually incurred should be recognised as a liability and be
recognised in profit or loss for the current period or in cost of related assets.
(II) Post-employment benefits (defined contribution plan)
The employees of the Group participate in a pension scheme and unemployment insurance
managed by the local governments, and the corresponding expenses shall be included in the
cost of related assets or profit or loss.
(III) Termination benefits
The Group provides termination benefits to employees and recognises an employee benefits
liability for termination benefits, with a corresponding charge to profit or loss, at the earlier of
when the Group can no longer withdraw the offer of those benefits resulting from an
employment termination plan or a curtailment proposal and when the Group recognise costs
involving the payment of termination benefits.
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V. Significant accounting policies and accounting estimates (continued)
24.Lease liabilities
At the commencement date of the lease, the Group recognizes the present value of the
unpaid lease payments as a lease liability. Lease payments include fixed and substantial fixed
payments net of lease incentives, variable lease payments depending on index or ratio,
amounts expected to be payable based on the residual value of the guarantee, and the
exercise price of the purchase option or the amount to be required to exercise the termination
option, provided that the Group reasonably determines that the option or the term of the lease
reflects the Group's exercise of the option to terminate the lease.
In calculating the present value of lease payments, the Group uses the implied interest rate of
the lease as the discount rate; If the interest rate included in the lease cannot be determined,
the interest rate of the lessee's incremental borrowing shall be used as the discount rate.The
Group calculates the interest expense of the lease liability during each period of the lease
term in accordance with the constant periodic rate of interest and recognizes it in profit and
loss for the current period, except otherwise stipulated in the cost of related assets. Variable
lease payments that are not included in the measurement of the lease liabilities are
recognised in profit or loss as incurred, except those in the costs of the related asset as
required.
After the commencement date of the lease, the Group increases the carrying amount of the
lease liability when it recognizes interest and reduces the carrying amount of the lease liability
when it pays the lease payment. After a lease term commences, when there is a change in the
amount of in-substance fixed lease payments, a change in the amounts expected to be
payable under a residual value guarantee, a change in future lease payments resulting from a
change in an index or a rate used to determine those payments, a change in assessment of
an option to purchase the underlying asset, renew or terminate the lease, or change in the
actual exercise of an option, the Group remeasures the carrying amount of the lease liability
by discounting the revised lease payments.
25.Provisions
An obligation related to a contingency shall be recognised by the Group as a provision when
all of the following conditions are satisfied, except for contingent considerations and
contingent liabilities assumed in a business combination not involving entities under common
control:
(1) the obligation is a present obligation of the Group;
(2) it is probable that an outflow of economic benefits from the Group will be required to settle
the obligation; and
(3) a reliable estimate can be made of the amount of the obligation.
A provision is initially measured at the best estimate of the expenditure required to settle the
related present obligation, taking into account factors pertaining to a contingency such as the
risks, uncertainties and time value of money as a whole. Provisions are reviewed at each
balance sheet date. Where there is clear evidence that the carrying amount of a provision
does not reflect the current best estimate, the carrying amount is adjusted to the current best
estimate.
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V. Significant accounting policies and accounting estimates (continued)
26.Share-based payments
A share-based payment is classified as either an equity-settled share-based payment or a
cash-settled share-based payment. An equity-settled share-based payment is a transaction in
which the Group receives services and uses shares or other equity instruments as
consideration for settlement.
An equity-settled share-based payment in exchange for services received from employees is
measured at the fair value of the equity instruments granted to the employees. If such equity-
settled share-based payment could vest immediately, related costs or expenses at an amount
equal to the fair value on the grant date are recognized, with a corresponding increase in
capital reserves; if such equity-settled share-based payment could not vest until the
completion of services for a vesting period, or until the achievement of a specified
performance condition, the Group at each balance sheet date during the vesting period
recognizes the services received for the current period as related costs and expenses, with a
corresponding increase in capital reserves, at an amount equal to the fair value of the equity
instruments at the grant date, based on the best estimate of the number of equity instruments
expected to vest. The fair value of equity instruments is determined based on an assessment
by a third-party independent asset appraiser, as described in Note XIII.
For awards that do not ultimately vest because non-market performance and/or service
conditions have not been met, no expense is recognized. Where awards include a market or
non-vesting condition, the transactions are treated as vesting irrespective of whether the
market or non-vesting condition is satisfied, provided that all other performance and/or service
conditions are satisfied.
Where the terms of an equity-settled share-based award are modified, as a minimum an
expense is recognized as if the terms had not been modified. In addition, an expense is
recognized for any modification that increases the total fair value of the share-based
payments, or is otherwise beneficial to the employee as measured at the date of modification.
Where an equity-settled share-based award is cancelled, it is treated as if it had vested on the
date of cancellation, and any expense not yet recognized for the award is recognized
immediately. If an employee or other parties can choose whether to meet a non-vesting
condition, the Group treats the employee’s or other parties' failure to meet that non-vesting
condition during the vesting period as a cancellation. However, if a new award is substituted
for the cancelled award, and is designated as a replacement on the date that it is granted, the
cancelled and new awards are treated as if they were a modification of the original award. The
cost of cash-settled transactions is measured at the fair value of the liability which is
determined on the basis of shares or other equity instruments of the Group.
27.Revenue from contracts with customers
The Company is required to comply with the disclosure requirements for retail industry
specified in the Self-disciplinary Supervision Guidelines No.3 for Companies Listed on
Shenzhen Stock Exchange - Industry Information Disclosure.
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V. Significant accounting policies and accounting estimates (continued)
27.Revenue from contracts with customers (continued)
The Company is required to comply with the disclosure requirements for jewelry-related
business specified in the Self-disciplinary Supervision Guidelines No.3 for Companies Listed
on Shenzhen Stock Exchange - Industry Information Disclosure..
The Group recognises revenue when it has fulfilled its performance obligations under the
contract, that is, when the customer obtains control of the relevant goods or services. The
acquisition of control of the relevant goods or services is defined as the ability to dominate the
use of the goods or the provision of the services and to derive substantially all the economic
benefits therefrom.
Contracts for the sale of goods
A contract for the sale of goods between the Group and the customer usually only includes the
performance obligation to transfer the goods. The Group generally recognizes revenue at the
point in the performance of each individual performance obligation taking into account a
combination of the acquisition of the current right to receive the goods, the transfer of
significant risks and rewards of ownership of goods, the transfer of legal title to goods, the
transfer of physical possession of goods, and the customer's acceptance of goods.
The Group mainly adopts the self-operated model for sales, which sells goods to customers in
retail form and recognizes revenue when customers receive them.
Sales with a right of return
For sales with a right of return, the Group recognizes the revenue in the amount of
consideration to which the Group expects to be entitled in exchange for transferring control of
the goods to the customer, and recognizes the amount expected to be refunded as a result of
the sales return as a refund liability. At the same time, an asset recognized for an entity’s right
to recover goods from a customer on settling a refund liability is measured by reference to the
carrying amount of the goods less any expected costs to recover the goods (including
potential decreases in the value of the returned goods), that is, right-of-return assets, and
recognized cost of sales based on thecarrying amount of the transferred goods at the time of
transfer of the goods less the net amount of the asset cost above. At each balance sheet date,
the Group re-estimate the future sales return and remeasures the assets and liabilities above.
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V. Significant accounting policies and accounting estimates (continued)
27.Revenue from contracts with customers (continued)
Warranties
The Group provides a warranty in connection with the sale of a good in accordance with the
contract and the relevant laws and regulations, etc. The Group accounts for assurance-type
quality assurance in order to assure customers that the goods sold meet the established
standards, in accordance with Note 3 and 19. For service-type quality assurance that provides
a separate service in addition to the established standards for assuring the customer that the
goods sold meet the established standards, the Group apportions part of the transaction price
to the service-type quality assurance in proportion to the relative proportion of the separate
selling price for the provision of the quality assurance of goods and services, and recognizes
revenue when the customer acquires control of the service.When assessing whether a
service-type warranty provides a customer with a separate service in addition to the
assurance that the good complies with agreed-upon specifications, the Group considers
whether the warranty is required by law, the length of the warranty coverage period and the
nature of the tasks that the Group promises to perform, etc.
Principal/agent
Under the Offline Joint-Operatedbusiness model, cooperative shopping malls provide stores
or counters to the Group for the sale of goods, and the shopping malls receive a commission
according to a certain percentage of the turnover. The Group undertakes primary
responsibility for the transfer of goods to customers, is entitled to determine the transaction
price, and bears the inventory risk. Therefore the Group is a principal and recognizes revenue
based on the total consideration received or receivable when customers receive the goods.
Additional purchase option included with the customer
Where an additional purchase option is attached to the customer, the Group evaluates the
option to provide a material right to the customer when the customer acquires control of the
relevant goods. Revenue is recognized on the basis of the amount of consideration expected
to be entitled to be received as a result of the transfer of goods to the customer, and revenue
is apportioned to each individual performance obligation based on the relative proportion to
the individual selling prices of the goods committed to the individual performance obligations.
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V. Significant accounting policies and accounting estimates (continued)
28.Government grants
Government grants are recognised when all attaching conditions will be complied with and the
grants will be received. If a government grant is in the form of a transfer of a monetary asset, it
is measured at the amount received or receivable. If a government grant is in the form of a
transfer of a non-monetary asset, it is measure at fair value; if fair value is not reliably
determinable, it is measured at a nominal amount.
If government documents stipulate that it is used for the purchase, construction, or other forms
of long-term assets, it shall be regarded as government grants related to assets; If the
government documents are not clear, the judgment shall be based on the basic conditions that
must be met to obtain the government grant. If the basic conditions are to form long-term
assets through purchase, construction or other means, it shall be regarded as government
grants related to assets, and otherwise it shall be regarded as government grants related to
income..
A government grant related to income is accounted for as follows: (i) if the grant is a
compensation for related expenses or losses to be incurred in subsequent periods, the grant
is recognised as deferred income, and released in profit or loss or offset against related
expenses over the periods in which the related costs are recognised; or (ii) if the grant is a
compensation for related expenses or losses already incurred, it is recognised immediately in
profit or loss or offset against relevant expenses.
A government grant relating to an asset shall be offset against the carrying amounts of
relevant assets, or recognised as deferred income and amortised in profit or loss over the
useful life of the related asset by annual instalments in a systematic and rational way
(however, a government grant measured at a nominal amount is recognised directly in profit or
loss). Where the assets are sold, transferred, retired or damaged before the end of their
useful lives, the rest of the remaining deferred income is released to profit or loss for the
period in which the relevant assets are disposed of.
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V. Significant accounting policies and accounting estimates (continued)
29.Deferred tax
Deferred tax is provided using the balance sheet liability method, on all temporary differences
at the balance sheet date between the tax bases of assets and liabilities and their carrying
amounts, and temporary differences between the tax bases and the carrying amounts of the
items, which have a tax base according to related tax laws but are not recognised as assets
and liabilities.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
(1) when the taxable temporary difference arises from the initial recognition of
goodwill, or an asset or liability in a transaction that is not a business combination and, at
the time of transaction, affects neither accounting profit nor taxable profit or loss; and
(2) in respect of taxable temporary differences associated with investments in
subsidiaries, associates and joint ventures, when the timing of the reversal of the
temporary differences can be controlled and it is probable that the temporary differences
will not be reversed in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, and the
carryforward of unused tax losses and any unused tax credits. Deferred tax assets are
recognised 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 unused tax
credits can be utilised, except:
(1) when the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; and
(2) in respect of the deductible temporary differences associated with investments in
subsidiaries, associates and joint ventures, deferred tax assets are only recognised to the
extent that it is probable that the temporary differences will be reversed in the foreseeable
future and taxable profit will be available against which the temporary differences can be
utilised in the future.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates that
are expected to apply to the period when the asset is realised or the liability is settled, in
accordance with the requirements of tax laws. The measurement of deferred tax assets and
deferred tax liabilities reflects the tax consequences that would follow from the manner in
which the Group expects, at the balance sheet date, to recover the assets or settle the
liabilities.
The carrying amount of deferred tax assets is reviewed at the balance sheet date and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available in future
periods to allow the benefit of deferred tax assets to be utilised. Unrecognised deferred tax
assets are reassessed at the balance sheet date and are recognised to the extent that it has
become probable that sufficient taxable profit will be available to allow all or part of the
deferred tax assets to be recovered.
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V. Significant accounting policies and accounting estimates (continued)
29.Deferred tax (continued)
Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally
enforceable right to set off current tax assets and current tax liabilities, and the deferred tax
assets and deferred tax liabilities relate to income taxes levied by the same taxation authority
on either the same taxable entity or different taxable entities which intend either to settle
current tax assets and liabilities on a net basis, or to realise the assets and settle the liabilities
simultaneously, in each future period in which significant amounts of deferred tax assets or
liabilities are expected to be recovered.
30.Leases
(1) Accounting treatment for operating lease
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. If
a party of the contract conveys the right to control the use of an identified asset or identified
assets for a period of time in exchange for consideration, the contract shall be a lease contract
or contains lease.
As lessee
The Group's recognition of right-of-use assets and lease liabilities for leases is shown in Note
V.18 and V.24..
Short-term leases and leases of low-value assets
The Group considers a lease that, at the commencement date of the lease, has a lease term
of 12 months or less, and does not contain any purchase option as a short-term lease; and a
lease for which the value of the individual underlying asset is not more than RMB40,000 or
USD5000 when it is new as a lease of low-value assets. If the Group subleases an asset, or
expects to sublease an asset, the head lease does not qualify as a lease of a low-value asset.
The Group has chosen to recognize right-of-use assets and lease liabilities for both short-term
leases and low-value asset leases. See Note V.18 and V.24 for details.
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2022 Annual Report of DR Corporation Limited
V. Significant accounting policies and accounting estimates (continued)
31.Other Significant accounting policies and accounting estimates
The preparation of the financial statements requires management to make judgements,
estimates and assumptions that affect the reported amounts of revenue, expenses, assets
and liabilities, and their accompanying disclosures, and the disclosure of contingent liabilities
at the balance sheet date. Uncertainty about these assumptions and estimates could result in
outcomes that could require a material adjustment to the carrying amounts of the assets or
liabilities affected in the future.
Judgements
In the process of applying the Group’s accounting policies, management has made the
following judgments which have the most significant effect on the amounts recognised in the
consolidated financial statements:
Business model
The classification of financial assets at initial recognition is dependens on the Group’s
business model for managing financial assets. Factors considered by the Group in judging the
business model include enterprise evaluation, the method of reporting the results of financial
assets to key management members, the risks affecting the results of financial assets and the
method for managing such risks, as well as the form of remuneration received by the
management personnel of the businesses concerned. In assessing whether the business
model is aimed at receiving contractual cash flows, the Group is required to analyse and
exercise judgement in respect of the reasons, timing, frequency and values of any disposals
prior to maturity of the financial assets.
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2022 Annual Report of DR Corporation Limited
V. Significant accounting policies and accounting estimates (continued)
31. Other Significant accounting policies and accounting estimates (continued)
Judgements (continued)
Whether a contract is, or contains, a lease
The Group entered into a service agreement under Offline Joint-Operated business model.
The Group believes that, based on the agreement, there is an identified asset and the Group
controls the right to use the asset during the lease period. Therefore, the service agreement
contains a leaseand the Group treats is as a lease.
Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at
the balance sheet date, which have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the future accounting periods, are described
below.
Impairment of financial instruments
The Group uses the expected credit loss model to assess the impairment of financial
instruments. The application of the expected credit loss model requires significant judgements
and estimates and consideration of all reasonable and supportable information, including
forward-looking information. When making such judgements and estimates, the Group infers
the expected changes in the debtor's credit risk based on historical repayment data combined
with economic policies, macroeconomic indicators, industry risks and other factors. Different
estimates may affect the impairment provision, and the amount of impairment provision made
may not equal to the actual amount of impairment loss in the future.
Impairment of non-current assets other than financial assets
The Group assesses whether there are any indications of impairment for all non-current
assets other than financial assets at the balance sheet date. Other non-current assets other
than financial assets are tested for impairment when there are indications that the carrying
amounts may not be recoverable. An impairment exists when the carrying amount of an asset
or asset group exceeds its recoverable amount, which is the higher of its fair value less costs
of disposal and the present value of the future cash flows expected to be derived from it . The
calculation of the fair value less costs of disposal is based on available data from binding
sales transactions in an arm’s length transaction of similar assets or observable market prices
less incremental costs for disposing of the assets. When the calculations of the present value
of the future cash flows expected to be derived from an asset or asset group are undertaken,
management must estimate the expected future cash flows from the asset or asset group and
choose a suitable discount rate in order to calculate the present value of those cash flows.
Further details are included in Note VII.42。
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2022 Annual Report of DR Corporation Limited
V. Significant accounting policies and accounting estimates (continued)
31. Other Significant accounting policies and accounting estimates (continued)
Estimation uncertainty (continued)
Deferred tax assets
Deferred tax assets are recognised for all unused tax losses to the extent that it is probable
that sufficient taxable profit will be available against which the losses can be utilised.
Significant management judgement is required to determine the amount of deferred tax assets
that can be recognised, based upon the likely timing and level of future taxable profits together
with future tax planning strategies.
Variable consideration involving sales returns
The Group makes reasonable estimate of a group of contracts with similar characteristics
according to the historical sales data, the current sales situation, as well as customer changes,
market changes and other relevant information. The estimated return rate may not be equal to
the actual return rate in the future and the Group reassesses the return rate at each balance
sheet date and determines accounting based on the reassessed return rate.
Inventory provision determined on net realisable value
In accordance with the inventory accounting policy, the Group measures the lower of cost and
net realizable value, and makes provision for inventory price decline when the cost is higher
than the net realizable value. The Group restimates at each balance sheet date whether the
net realizable value of individual inventory items is lower than the cost of inventory.
Fair value of wealth management products and structured deposits
The fair value measurement of non-principal protected floating income wealth management
products and structured deposits linked to the spot exchange rate of EUR to USD requires the
Group to estimate projected future cash flows, credit risk volatility and discount rates, and is
therefore uncertain.
Provisions for store recovery
As the lessee, the Group undertakes the obligation to restore the leased assets to the state
agreed in the lease terms in accordance the lease contract. The management estimates
provsions arising from the fullfillment of recovery obligations based on industry conditions and
historical experience. At the balance sheet date, management reviews the carrying amount of
the provisions and makes appropriate adjustments to reflect the current best estimates.
Share-based payments
Based on fair value at the grant date, the Group makes the best estimate of the number of
exercisable equity instruments based on subsequent information available at the latest
available subsequent information at fair value at the grant date, and includes the services
acquired in the current period in the relevant costs or expenses. Management must estimate
the Group's projected future cash flows to assess the fair value of the equity instruments grant
date and estimate the number of vestigable equity instruments.
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2022 Annual Report of DR Corporation Limited
V. Significant accounting policies and accounting estimates (continued)
31. Other Significant accounting policies and accounting estimates (continued)
Estimation uncertainty (continued)
Lessee’s incremental borrowing rate
If the interest rate implicit in the lease cannot be readily determined, the Group measures the
lease liability at the present value of the lease payments discounted using the lessee’s
incremental borrowing rate. According to the economic environment, the Group takes the
observable interest rate as the reference basis for determining the incremental borrowing rate,
then adjusts the observable interest rate based on its own circumstances, underlying assets,
lease terms and amounts of lease liabilities to determine the applicable incremental borrowing
rate.
32. Changes in significant accounting policies and accounting estimates
N/A
VI. Taxes
1.Major categories of taxes and tax rates
Category Basis Tax rate
General taxpayers calculate output tax at 6%, 13% or 20%
of their taxable income and pay VAT on the difference after
deducting the allowable input VAT deduction for the current
period. Small-scale taxpayers are charged at a levy rate of3%, 6%,
Value added tax 3%. 13%, 20%
Sales revenue of gold and silver jewellery sold at the retail
Excise tax stage. 5%
Urban maintenance
and construction taxTurnover taxes actually paid. 5%, 7%
16.5%,
Corporate income taxTaxable income 25%, 28%
Education surcharge Turnover taxes actually paid. 3%
Local education
surcharge Turnover taxes actually paid. 2%
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2022 Annual Report of DR Corporation Limited
VI. Taxes (continued)
1.Major categories of taxes and tax rates (continued)
Disclosure of information on taxpayers with different corporate income tax rates
Name of taxpayers Income tax rate
DR Corporation Limited 25%
Shanghai Darry Diamond Co., Ltd 25%
Couple Only (Shenzhen) Jewelry Co., Ltd 20%
He’er Culture (Shenzhen) Co., Ltd 15%
Shenzhen Darry Commercial Management Services Co., Ltd 15%
Chongqing Darry Jewelry Co., Ltd 20%
Shenzhen Love Only AI Cloud Technology Co., Ltd 15%
Haoduo Diamond (Shenzhen) Co., Ltd 25%
Haoduo Diamond Zhizao (Shenzhen) Co., Ltd 20%
DR Group Company Limited 16.5%
DARRY JEWELRY (HK) LIMITED 16.5%
Couple Only Jewelry HongKong Company Limited 16.5%
DR Jewelry 28%
Xiamen DR Jewelry Co., Ltd 20%
Shenyang DR Jewelry Co., Ltd 20%
Tianjin DR Jewelry Co., Ltd 20%
Chengdu DR Jewelry Co., Ltd 20%
Kunming DR Jewelry Co., Ltd 20%
Shanghai DR Jewelry Co., Ltd 20%
Suzhou Zhongzuan DR Jewelry Co., Ltd 20%
Jinan DR Jewelry Co., Ltd 20%
Shenzhen DR Jewelry Co., Ltd 20%
Beijing Zhongzuan DR Jewelry Co., Ltd 20%
Suzhou DR Jewelry Co., Ltd 20%
Shenyang DR Jewelry Accessories Co., Ltd 20%
Hangzhou DR Jewelry Co., Ltd 20%
Beijing DR Jewelry Co., Ltd 20%
Wuhan DR Jewelry Co., Ltd 20%
Wuhan Zhongzuan DR Jewelry Co., Ltd 20%
Xi’an DR Jewelry Co., Ltd 20%
Chengdu DR True Love Jewelry Co., Ltd 20%
Ningbo DR Jewelry Co., Ltd 20%
Beijing Huazuan DR Jewelry Co., Ltd 20%
Chongqing DR Jewelry Co., Ltd 20%
Hangzhou DR True Love Jewelry Co., Ltd 20%
Henan DR Jewelry Co., Ltd 20%
Xi’an DR Jewelry and Accessories Co., Ltd 20%
Zhengzhou DR Jewelry Co., Ltd 20%
Shenzhen DR Jewelry Accessories Co., Ltd 20%
Shenzhen DR Jewelry Ornament Co., Ltd 20%
Changsha DR Jewelry Co., Ltd 20%
Shanghai DR Jewelry Accessories Co., Ltd 20%
Shanghai DR Jewelry Sales Co., Ltd 20%
Zhoukou DR Jewelry Co., Ltd 20%
Yiwu DR Jewelry Co., Ltd 20%
Heze DR Jewelry Co., Ltd 20%
Dongguan DR Jewelry Co., Ltd 20%
Xining DR Jewelry Co., Ltd 20%
Linyi DR Jewelry Co., Ltd 20%
Yinchuan DR Jewelry Co., Ltd 20%
Weifang DR Jewelry Co., Ltd 20%
Nanchang DR Jewelry Co., Ltd 20%
Jining DR Jewelry Co., Ltd 20%
Mianyang DR Jewelry Co., Ltd 20%
Fuyang DR Jewelry Co., Ltd 20%
Shangqiu DR Jewelry Co., Ltd 20%
Urumqi DR Jewelry Co., Ltd 20%
Handan Jewelry Co., Ltd 20%
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2022 Annual Report of DR Corporation Limited
VI. Taxes (continued)
1.Major categories of taxes and tax rates (continued)
Name of taxable entity Income tax rate
Baoding DR Jewelry Sales Co., Ltd 20%
Guangzhou DR Jewelry Co., Ltd 20%
Guiyang DR Jewelry Co., Ltd 20%
Langfang DR Jewelry Co., Ltd 20%
Foshan DR Jewelry Co., Ltd 20%
Jiaxing DR Jewelry Co., Ltd 20%
2.Tax benefits
(I) Income tax benefits
According to the Notice of the Ministry of Finance and the State Administration of Taxation on
Extending the Preferential Policies for Enterprise Income Tax in the Shenzhen Qianhai
Shenzhen-Hong Kong Modern Service Industry Cooperation Zone (Cai Shui [2021] No. 30),
from January 1, 2021 to December 31, 2025, the enterprise income tax policy of the
Shenzhen Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone will be
continued, and eligible enterprises located in the Qianhai Shenzhen-Hong Kong Modern
Service Industry Cooperation Zone will be subject to enterprise income tax at a reduced rate
of 15%. Shenzhen Darry Commercial Management Service Co., Ltd. and He’er Culture
(Shenzhen) Co., Ltd., subsidiaries of the Company, are established in the Qianhai Shenzhen-
Hong Kong Modern Service Industry Cooperation Zone, and will be subject to corporate
income tax at a reduced rate of 15% in 2022.
According to the provisions of the Enterprise Income Tax Law of the People's Republic of
China, Shenzhen Love Only AI Cloud Technology Co., Ltd.(hereinafter referred to as " Love
Only AI "), a subsidiary of the Company, obtained the qualification of high-tech enterprise on
December 11, 2020, which is valid for three years, and can enjoy a preferential income tax
rate of 15% for high-tech enterprises from 2020 to 2022. In 2022, we will levy corporate
income tax at a rate of 15%.
In accordance with the Inland Revenue (Inland Revenue Department) 2018 (No. 3) Ordinance
promulgated by the Inland Revenue Department of the Government of the Hong Kong Special
Administrative Region on 29 March 2018, the two-tiered profits tax system has been
implemented with effect from 1 April 2018, and the income tax rate of DR Group Company
Limited, a subsidiary of the Company, has been reduced to 8.25% for the first HKd 2 million
profit in 2022, and profits thereafter will continue to be taxed at 16.5%.
According to the Announcement of the State Administration of Taxation of the Ministry of
Finance on the Implementation of the Preferential Income Tax Policy for Small and Micro
Enterprises and Individual Industrial and Commercial Enterprises (No. 12 of 2021), from
January 1, 2021 to December 31, 2022, the annual taxable income of small and micro-profit
enterprises does not exceed RMB1 million, on the basis of the preferential policies stipulated
in Article 2 of the Notice of the State Administration of Taxation of the Ministry of Finance on
the Implementation of the Inclusive Tax Reduction and Reduction Policy for Small and Micro
Enterprises (Cai Shui [2019] No. 13), Corporate income tax will be reduced by half. Some
subsidiaries of the Company will meet the conditions of small and micro-profit enterprises in
2022 and apply the corresponding preferential policies on their own.
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2022 Annual Report of DR Corporation Limited
VI. Taxes (continued)
2.Tax benefits (continued)
(II) VAT tax benefits
According to the Notice of the General Administration of Customs of the Ministry of Finance
and the State Administration of Taxation on Adjusting the Relevant Tax Policies of the
Diamond and Shanghai Diamond Exchange (Cai Shui [2006] No. 65), polished diamonds
imported through the customs declaration of the competent customs of the Diamond
Exchange shall be levied and refunded immediately if the actual VAT burden exceeds 4% at
the import stage. Shanghai Darry Diamond Co., Ltd. (hereinafter referred to as "Shanghai
Darry"), a subsidiary of the Company, has the membership of the Shanghai Diamond
Exchange and enjoys the tax treatment of immediate refund for the part of the actual VAT
burden in the import process exceeding 4%.
In accordance with the provisions of Announcement No. 7 of 2021 of the Ministry of Finance
and the State Administration of Taxation, the Ministry of Finance and the State Administration
of Taxation announced the preferential tax policies stipulated in No. 13 of 2020, and the
implementation period was extended to December 31, 2021. Among them, from April 1, 2021
to December 31, 2021, small-scale VAT taxpayers in Hubei Province will apply the taxable
sales income at a rate of 3%, minus the 1% levy rate; For items subject to a 3% pre-levy rate,
the prepayment VAT at a pre-levy rate of 1% will be reduced. According to the provisions of
Announcement No. 15 of 2022 of the State Administration of Taxation of the Ministry of
Finance, the implementation period of the preferential tax policies stipulated in Article 1 of the
Announcement No. 7 of 2021 of the State Administration of Taxation of the Ministry of Finance
has been extended to March 31, 2022. Some branches of the company are small-scale
taxpayers and meet the above standards, and will apply the corresponding preferential
policies in 2022.
According to the Announcement of the State Administration of Taxation on the Exemption of
Small-scale Taxpayers from VAT Collection and Administration (SAT Announcement No. 5
[2021]), small-scale taxpayers who engage in VAT taxable sales and their total monthly sales
do not exceed RMB150,000 (or RMB450,000 if one quarter is a tax period). According to the
Announcement of the State Administration of Taxation of the Ministry of Finance on VAT
Exemption for Small-scale VAT Taxpayers (Announcement No. 15 of 2022 of the State
Administration of Taxation of the Ministry of Finance), from April 1, 2022 to December 31,
2022, small-scale VAT taxpayers are exempt from VAT on taxable sales income at a rate of
3%. Some of the Company's branches are small-scale taxpayers and meet the above
standards, and will be exempt from VAT in 2022.
201
2022 Annual Report of DR Corporation Limited
VI. Taxes (continued)
2.Tax benefits (continued)
(III) Additional tax incentives
According to the Announcement of the State Administration of Taxation of the Ministry of
Finance on Further Implementing the "Six Taxes and Two Fees" Reduction and Reduction
Policy for Small and Micro Enterprises (Announcement No. 10 of 2022 of the State
Administration of Taxation of the Ministry of Finance), the people's governments of provinces,
autonomous regions and municipalities directly under the Central Government can determine
that small-scale tax taxpayers of value-added tax, small and micro-profit enterprises and
individual industrial and commercial enterprises may reduce resource tax, urban maintenance
and construction tax, real estate tax, urban land use tax, stamp tax (excluding securities
transaction stamp tax), farmland occupation tax, education surcharge, and local education
surcharge within a 50% tax amount range.In 2022, some of the Company's branches are
small and micro-profit enterprises, and some of the Company's branches are small-scale
taxpayers and meet the above standards, so corresponding preferential policies for reduction
and exemption will be applied.
According to the Circular of the State Administration of Taxation of the Ministry of Finance on
Expanding the Scope of Exemption for Relevant Government Funds (Cai Shui [2016] No. 12),
the scope of education fee surcharge, local education surcharge and water conservancy
construction fund will be exempted by the obligor whose monthly sales or turnover currently
taxed monthly does not exceed RMB30,000 (quarterly sales or turnover that pays quarterly tax
does not exceed RMB90,000). Extended to payers whose monthly sales or turnover for
monthly tax does not exceed RMB100,000 (quarterly sales or turnover for quarterly tax does
not exceed RMB300,000). Some branches of the Company meet the above standards and will
be exempted from education surcharge, local education surcharge and water conservancy
construction funds in 2022.
202
2022 Annual Report of DR Corporation Limited
VII.Notes to key items of the consolidated financial statements
1.Currency funds
Currency: RMB Yuan
Closing balance Opening balance
Cash on hand 391,749.23 260,691.68
Cash at banks 513,078,584.94 4,737,174,517.72
Others (Note 1) 8,434,484.13 4,075,244.05
Total 521,904,818.30 4,741,510,453.45
Including:
Offshore currency funds 4,313,836.35 4,687,559.73
Total amount with restrictions
on use due to mortgage,
pledge or freeze 279,787.68 -
Notes:
(1) The Group's other curreny funds mainly included account balances on third-party
payment platforms such as WeChat pay and Alipay.
(2) As at 31 December 2022, the Group’s restricted currency funds totalled
RMB279,787.68 (31 December 2021: nil), which was restriced due to the failure to provide
bank-enterprise reconciliation results or bank's misjudgment.
(3) As at 31 December 2022, the Group had no funds held offshore with repatriation
restrictions.
2.Financial assets held for trading
Currency: RMB Yuan
Closing balance Opening balance
Financial assets at fair value through profit
or loss 5,609,891,931.68 1,824,097,569.32
Structured Deposits (Note 1) 330,189,591.78 50,004,109.59
Wealth management products (Note 2） 5,279,702,339.90 1,774,093,459.73
Total 5,609,891,931.68 1,824,097,569.32
Notes:
(1) The structured deposits are capital protected floating income bank structured
deposit investments linked to the 7-day interbank repo fixed rate and the spot exchange
rate of the euro against the US dollar.
(2) The wealth management products are capital protected and non-capital protected
floating income wealth management products.
203
2022 Annual Report of DR Corporation Limited
VII.Notes to key items of the consolidated financial statements (continued)
3.Accounts receivable
(I) Accounts receivable and provisions are disclosed by category as follows：
Currency: RMB Yuan
Closing balance Opening balance
Gross carrying amount Provision Gross carrying amount Provision
Category
Percentage Provision Carrying Percentage Provision
Amount (%) Amount ratio (%) amount Amount (%) Amount ratio (%) Carrying amount
Impairment allowance
which is individually
assessed 1,476,671.46 1.65 1,476,671.46 100 - 1,750,141.69 0.95 1,695,434.95 96.87 54,706.74
Including:
Mall A 1,476,671.46 1.65 1,476,671.46 100 - 1,576,671.46 0.86 1,576,671.46 100 -
Mall B - - - - - 173,470.23 0.09 118,763.49 68.46 54,706.74
Impairment allowance
which is assessed by
the combination of
credit risk
characteristics 88,050,351.57 98.35 3,571,440.05 5.46 84,478,911.52 181,875,610.67 99.05 7,049,640.91 5.39 174,825,969.76
Including:
Accounts receivable
from POS machines
and e-commerce
platforms 22,630,287.88 25.28 - - 22,630,287.88 51,090,898.25 27.82 - 0 51,090,898.25
Accounts receivable
from the mall 65,420,063.69 73.07 3,571,440.05 5.46 61,848,623.64 130,784,712.42 71.23 7,049,640.91 5.39 123,735,071.51
Total 89,527,023.03 100.00 5,048,111.51 5.64 84,478,911.52 183,625,752.36 100 8,745,075.86 3.87 174,880,676.50
Impairment allowance which is individually assessed: 1,476,671.46
204
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
3.Accounts receivable (continued)
Currency: RMB Yuan
Name Closing balance
Gross Expected
Expected
Carrying credit loss Reasons for provision
credit loss
amount ratio (%)
The mall has been in
arrears for a long time
and is expected to be
unable to recover the
Mall A 1,476,671.46 1,476,671.46 100.00 money.
Total 1,476,671.46 1,476,671.46
Impairment allowance which is assessed by the combination of credit risk characteristics：
3,571,440.05
Currency: RMB Yuan
Closing balance
Name Expected
Gross Expected credit
credit loss
carrying amount loss
ratio (%)
Accounts receivable from POS
machines and e-commerce platforms 22,630,287.88 - -
Accounts receivable from shopping
malls 65,420,063.69 3,571,440.05 5.46
Total 88,050,351.57 3,571,440.05
An aging analysis of accounts receivable is as follows:
Currency: RMB Yuan
Aging Gross carrying amount
Within 1 year 87,167,396.78
1 to 2 years 2,359,626.25
Total 89,527,023.03
205
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
3.Accounts receivable (continued)
(II) The movements in impairment allowance for accounts receivable are as follows:
Currency: RMB Yuan
Change during the period Closing
Category Opening balance
Provision Recovery or reversal Write-offs Others balance
Receivables
from malls 8,745,075.86 3,523,852.25 7,220,816.60 - - 5,048,111.51
Total 8,745,075.86 3,523,852.25 7,220,816.60 - - 5,048,111.51
As at 31 December 2022, the top 5 accounts receivable by amount were as follows:
Currency: RMB Yuan
Percentage for total accounts
Name Gross carrying amount receivable (%) Impairment allowance
No.1 6,736,028.18 7.52 -
No.2 5,255,656.37 5.87 -
No.3 3,398,156.16 3.80 185,513.59
No.4 3,103,513.74 3.47 -
No.5 2,970,154.16 3.32 -
Total 21,463,508.61 23.98 185,513.59
4.Prepayments
An aging analysis of prepayments is as follows:
Currency: RMB Yuan
Closing balance Opening balance
Aging Gross Percentage Gross Percentage
carrying amount (%) carrying amount (%)
Within 1
year 74,104,582.84 99.84 59,675,367.95 99.17
1 to 2
years 121,851.31 0.16 501,805.91 0.83
Total 74,226,434.15 100.00 60,177,173.86 100.00
As at 31 December 2022, the Group had no material prepayments with an aging of more than
1 year (2021: nil）.
206
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VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
4.Prepayments (continued)
As at 31 December 2022, the top 5 prepayments by amounts are as follows:
Currency: RMB Yuan
Gross Percentage for total
Name carrying amount prepayments（%） Remarks
No.1 15,891,971.10 21.41 Business promotion fees
No.2 4,501,071.45 6.06 Business promotion fees
No.3 3,683,835.67 4.96 Business promotion fees
No.4 2,190,191.35 2.95 Goods Payments
No.5 1,879,111.75 2.53 Business promotion fees
Total 28,146,181.32 37.91
5.Other receivables
Currency: RMB Yuan
Closing balance Opening balance
Other receivables 8,184,551.61 10,279,311.35
Total 8,184,551.61 10,279,311.35
(I) Other receivables
1) The
category of other receivables by nature is as follows:
Currency: RMB Yuan
Nature Closing balance Opening balance
Social insurances and housing fund borne by
employees 5,805,962.39 4,144,173.18
Temporary loans for employees 1,365,064.13 1,042,294.95
Others 2,918,525.09 5,092,843.22
Total 10,089,551.61 10,279,311.34
207
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
5.Other receivables (continued)
2) Changes in the impairment allowance in other receivables based on expected
credit losses over the next 12 months are as follows:
Currency: RMB Yuan
Stage 1 Stage 2 Stage 3 Total
12-month Lifetime Credit-impaired
expected credit expected financial assets
losses credit (Lifetime expected credit
losses losses)
Opening - - - -
balance - - 1,905,000.00 1,905,000.00
Closing - - 1,905,000.00 1,905,000.00
balance
An aging analysis of other receivables is as follows:
Currency: RMB Yuan
Aging Gross carrying amount
Within 1 year 8,184,551.61
1 to 2 years 1,905,000.00
Total 10,089,551.61
3) The movements in impairment allowance for other receivables are as follows:
Currency: RMB Yuan
Opening Change during the period Closing
Category
balance Provision Reversal Write-offs Others balance
Impairment
allowance
for other
receivables - 1,905,000.00 - - - 1,905,000.00
Total - 1,905,000.00 - - - 1,905,000.00
208
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
5.Other receivables (continued)
4) As at 31 December 2022, the top 5 other receivables by amount are as follows:
Currency: RMB Yuan
Percentage of other Impairment
Name Nature Closing balance Aging receivables (%) allowance
Payments
for fixed
No.1 assets 1,905,000.00 Over 1 years 18.88 1,905,000.00
Temporary
loans for
No.2 employees 519,603.72 Within 1 year 5.15 -
Temporary
loans for
No.3 employees 210,000.00 Within 1 year 2.08 -
Temporary
loans for
No.4 employees 200,000.00 Within 1 year 1.98 -
Temporary
loans for
No.5 employees 199,445.04 Within 1 year 1.98 -
Total 3,034,048.76 30.07 1,905,000.00
209
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
6.Inventories
Whether the company is required to comply with the disclosure requirements of the real estate industry
No
(1) The category of inventories by nature is as follows:
Currency: RMB Yuan
Closing balance Opening balance
Category Gross carrying Gross carrying
amount Provision Carrying amount amount Provision Carrying amount
Raw materials 134,671,437.41 - 134,671,437.41 102,243,341.98 - 102,243,341.98
Finished goods 516,044,105.23 6,528,401.70 509,515,703.53 312,523,116.54 6,660,967.36 305,862,149.18
Turnover materials 5,183,351.50 - 5,183,351.50 4,694,252.13 - 4,694,252.13
Shipping Goods 1,209,323.01 - 1,209,323.01 3,806,404.24 - 3,806,404.24
Outsourced processing materials 16,482,477.19 - 16,482,477.19 17,136,689.29 - 17,136,689.29
Work in process 2,824,345.36 - 2,824,345.36 6,230,318.00 - 6,230,318.00
Total 676,415,039.70 6,528,401.70 669,886,638.00 446,634,122.18 6,660,967.36 439,973,154.82
The Company is required to comply with the disclosure requirements for "jewelry-related business" specified in the Self-disciplinary Supervision
Guidelines No.3-Industry Information Disclosure of companies listed on the Shenzhen Stock Exchange.
210
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
6.Inventories (continued)
Carrying Amount of inventory by categories as at year-end
Currency: RMB0’000
Carrying amount as at year-end
Outsourced
Work in Processing Turnover Shipping
Items process Finished Goods Materials Raw Material Material Goods Total
K Gold Jewelry 232.19 48,581.88 45.35 - - 110.39 48,969.81
Platinum Jewelry 38.41 2,057.39 2.87 - - 10.55 2,109.21
Gold Jewelry - 892.20 8.90 - - - 901.09
Diamond - - 1,576.17 13,467.14 - - 15,043.31
Turnover - - - -
Material 518.34 - 518.34
Others 11.84 72.95 14.96 - - - 99.75
Total 282.44 51,604.42 1,648.25 13,467.14 518.34 120.94 67,641.51
211
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
6.Inventories (continued)
(2) The changes in provision for inventories and provision for impairment of contract performance costs are as follows:
2022
Currency: RMB Yuan
Increase Decrease
Opening balance Provision Others Reversal or Write-off Others Closing balance
Finished
goods 6,660,967.36 6,245,162.69 - 6,377,728.35 - 6,528,401.70
Total 6,660,967.36 6,245,162.69 - 6,377,728.35 - 6,528,401.70
No inventory with restriction as at 31 December 2022 (31 December 2021: Nil).
Net realizable value of inventory is the net value of the estimated selling price of inventory less further processing costs and estimated selling
expenses and related taxes.
The reason for the provision for resold inventory is that the finished product has been sold or disposed of as a corresponding resold inventory
decline
212
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
7.Current portion of non-current assets
Currency: RMB Yuan
Closing balance Opening balance
Debt investments due within one year 66,085,379.00 161,632,035.74
Deposits 41,240,679.30 31,549,696.86
107,326,058.30 193,181,732.60
Less：Provisions 358,191.14 358,191.14
Total 106,967,867.16 192,823,541.46
Notes:
As at 31 December 2022, the Group's large-sum certificates of deposit due within one year
were RMB66,085,379.00, with a maturity date of April 2023 and a deposit interest rate of
3.80%.
As at 31 December 2022, the Group's tenancy deposit due within one year was
RMB41,240,679.30.
As at 31 December 2022, the deposit for the provision for bad debts was a deposit owed by
shopping malls and individual landlords to stores that had been retired, and the Group did not
expect to be able to recover the amount, and the single amount was not material.
213
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
8.Other current assets
Currency: RMB Yuan
Closing balance Opening balance
Right-of-return assets 272,853.07 779,762.70
Wealth management products 31,378,714.16 -
Prepaid income tax 23,359,776.18 -
VAT tax credit 14,808,790.02 -
Deferred expenses 3,318,077.34 1,125,752.23
Value added taxes recoverable and to be
certified 316,714.84 2,815,346.92
New material samples - 2,428,198.46
Total 73,454,925.61 7,149,060.31
9.Debt investments
Currency: RMB Yuan
Closing balance Opening balance
Provision for Outstanding Provision for
Outstanding balance impairment Carrying amount balance impairment Carrying amount
Large-sum
certificates
of deposit
with a term
of over one
year 794,553,996.36 - 794,553,996.36 218,585,379.05 - 218,585,379.05
Total 794,553,996.36 - 794,553,996.36 218,585,379.05 - 218,585,379.05
Notes:
The debt investment as at 31 December 2022 was a large deposit certificate purchased by the
Group with a maturity period of more than one year, with a maturity date of February 2024 to
October 2027 and a deposit interest rate of 3.30%-4.05% (31 December 2021: a maturity date
of April 2023 to February 2024, and a deposit interest rate of 3.65%-3.80%).
214
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
10.Fixed assets
Currency: RMB Yuan
Closing balance Opening balance
Fixed assets 14,068,805.09 6,325,614.51
Disposal of fixed assets - -
Total 14,068,805.09 6,325,614.51
(1) Fixed assets
Currency: RMB Yuan
Transportation Office equipment
facilities and other facilities Total
Cost
Opening balance 2,623,519.41 11,001,307.64 13,624,827.05
Purchases 3,085,947.43 8,696,052.19 11,781,999.62
Exchange differences on
translation of foreign
currency financial
statements - 5,476.23 5,476.23
Disposals or retirements (651,578.46) (371,637.97) (1,023,216.43)
Closing balance 5,057,888.38 19,331,198.09 24,389,086.47
Accumulated depreciation
Opening balance 2,357,181.05 4,942,031.49 7,299,212.54
Provision 584,300.16 3,389,851.48 3,974,151.64
Exchange differences on
translation of foreign
currency financial
statements - 5,003.43 5,003.43
Disposals or retirements (618,999.54) (339,086.69) (958,086.23)
Closing balance 2,322,481.67 7,997,799.71 10,320,281.38
Provision for impairment
Opening balance - - -
Provision - - -
Disposals or retirements - - -
Closing balance - - -
Carrying amount
At end of year 2,735,406.71 11,333,398.38 14,068,805.09
At beginning of year 266,338.36 6,059,276.15 6,325,614.51
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
215
2022 Annual Report of DR Corporation Limited
11.Right-of-use assets
Currency: RMB Yuan
Buildings Total
Cost
Opening balance 685,380,285.48 685,380,285.48
Addition 540,488,065.90 540,488,065.90
Disposals (176,038,243.89) (176,038,243.89)
Exchange differences on translation of
foreign currency financial statements 505,499.87 505,499.87
Closing balance 1,050,335,607.36 1,050,335,607.36
Accumulated depreciation
Opening balance 250,955,103.46 250,955,103.46
Provision 355,607,929.93 355,607,929.93
Disposals (170,718,457.79) (170,718,457.79)
Exchange differences on translation of
foreign currency financial statements 209,410.07 209,410.07
Closing balance 436,053,985.67 436,053,985.67
Provision for impairment
Opening balance 5,128,153.26 5,128,153.26
Provision 18,502,968.10 18,502,968.10
Write-off - -
Exchange differences on translation of
foreign currency financial statements 144,332.97 144,332.97
Closing balance 23,775,454.33 23,775,454.33
Carrying amount
At end of year 590,506,167.36 590,506,167.36
At beginning of year 429,297,028.76 429,297,028.76
216
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
12.Intangible assets
2022
Currency: RMB Yuan
Software Total
Cost
Opening balance 12,257,291.78 12,257,291.78
Purchases 1,323,456.05 1,323,456.05
Disposals - -
Closing balance 13,580,747.83 13,580,747.83
Accumulated amortization
Opening balance 6,377,299.55 6,377,299.55
Provision 2,940,850.52 2,940,850.52
Disposals - -
Closing balance 9,318,150.07 9,318,150.07
Carrying amount
At end of year 4,262,597.76 4,262,597.76
At beginning of year 5,879,992.23 5,879,992.23
As at 31 December 2022, the Group had no restricted intangible assets or intangible assets
formed through internal research and development (31 December 2021: nil).
217
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
13.Long-term prepaid expenses
Currency: RMB Yuan
Foreign
currency
Disposals statement
during the translation
Opening balance Increase year Amortisation Write-off differences Closing balance
Leasehold
improvements 93,552,123.84 173,768,151.57 - 91,898,732.79 5,680,172.80 9,014.10 169,750,383.92
Total 93,552,123.84 173,768,151.57 - 91,898,732.79 5,680,172.80 9,014.10 169,750,383.92
Notes:
(1) The Group estimates its recoverable amount on a single-store basis, based on
the present value of the projected future cash flows of the asset group.
(2) The Group has recognized an impairment loss of RMB5,680,172.80 in long-term
amortization expenses in 2022, which is due to the carrying amount of stores showing
signs of impairment in 2022 being lower than the recoverable amount (impairment loss on
long-term amortization expenses not recognized in 2021). Due to the termination of the
lease contract of the store for which impairment losses were charged, the long-term
amortization allowance was written off on December 31, 2022 of RMB234,466.15
(December 31, 2021: RMB1,262,966.43).
(3) The Increase of RMB 173,777,165.67 includes the increase in current period of
RMB 173,768,151.57 and exchange differences on translation of foreign currency financial
statements of RMB 9,014.10.
218
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
14.Deferred tax assets/liabilities
(1) Deferred tax assets before offsetting:
Currency: RMB Yuan
Closing balance Opening balance
Deductible
Deductible Deferred tax temporary Deferred tax
temporary differences assets differences assets
Deferred tax assets
Provision for asset impairment 40,067,827.14 10,003,234.08 18,099,129.45 4,524,782.36
Unrealized profit on inter-company
transactions- 7,326,359.23 1,831,589.81 7,375,844.89 1,843,961.22
Deductible losses 7,400,282.50 895,178.30 - -
Provision for store restoration
obligations 8,561,231.41 2,140,307.85 6,230,598.44 1,557,649.61
Difference between tax and
accounting of lease liability 582,115,033.63 144,045,844.11 423,456,841.05 104,072,670.89
Difference between the depreciation
of the fixed asset and the exemption - - 6,912.09 1,140.49
Total 645,470,733.91 158,916,154.15 455,169,325.92 112,000,204.57
(2) Deferred tax liabilities before offsetting:
Closing balance Opening balance
Deductible
Taxable Deferred tax temporary Deferred tax
temporary differences liabilities differences liabilities
Deferred tax liabilities
Changes in fair value of financial
assets 62,891,931.68 15,568,533.63 23,597,569.32 5,582,100.82
Accrued interest on certificates of
deposit 21,709,575.40 5,402,625.35 13,823,397.31 3,241,637.00
Difference between tax and
accounting of right-of-use assets 560,020,830.90 138,506,777.20 419,416,484.21 103,016,795.34
Total 644,622,337.98 159,477,936.18 456,837,450.84 111,840,533.16
(3) Deferred tax assets and liabilities are shown in the net amount after offsetting:
Currency: RMB Yuan
31 December 2022 31 December 2021
Closing Closing
balance after balance after
Offset amount offsetting Offset amount offsetting
Deferred tax assets 150,724,937.79 8,191,216.36 107,234,415.18 4,765,789.39
Deferred tax liabilities 150,724,937.79 8,752,998.39 107,234,415.18 4,606,117.98
219
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
14.Deferred tax assets/liabilities (continued)
(4) Deductible temporary differences and tax losses for which no deferred tax assets
were recognized are as follows:
Currency: RMB Yuan
Closing balance Opening balance
Unrecognized provision 10,423,943.75 10,266,912.85
Deductible losses 31,521,098.68 28,298,391.60
41,945,042.43 38,565,304.45
(5) Deductible temporary differences and deductible losses on unrecognized
deferred tax assets will due in the following years:
Currency: RMB Yuan
Closing balance Opening balance
2022 - 236,104.91
2023 - 389,762.49
2024 100,839.02 260,861.41
2025 1,930,613.69 2,417,901.16
2026 2,500,649.53 2,649,363.35
2027 2,508,965.13 -
Infinity 24,480,031.31 22,344,398.28
Total 31,521,098.68 28,298,391.60
As the relevant companies that incurred the above losses are expected to have a low
probability of making profits in the future and there is no profit sufficient to offset the losses,
the Group has not recognized deferred tax assets for the tax losses incurred by the above
related companies. Among them, DR Jewelry, a subsidiary established in France, incurred a
cumulative loss of RMB 24,480,031.31 on December 31, 2022 (the cumulative loss incurred
on December 31, 2021 was RMB 22,344,398.28), which can be made up indefinitely in the
future.
The Group calculates and recognizes deferred tax assets arising from deductible temporary
differences at the applicable tax rate for the period in which the asset is expected to be
recovered or the liability is liquidated, up to the taxable income that is likely to be acquired in
future periods to offset deductible temporary differences and deductible losses.
220
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VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
15.Other non-current assets
Currency: RMB Yuan
Closing balance Opening balance
Deposit 85,069,135.39 56,507,281.39
Employee borrowing 350,000.00 1,440,000.00
Prepayment for fixed assets - 1,940,000.00
Total 85,419,135.39 59,887,281.39
Other non-current assets are mainly employee borrowings, deposit and prepayment for fixed
assets.
As at 31 December 2022, employee borrowings in other non-current assets were all 4.35%
per annum, unsecured for a term of 2 to 5 years (2021: employee borrowings were all 4.35%
per annum, unsecured with a term of 2 to 5 years).
As at 31 December 2022, the Group assessed the expected credit loss ratio as extremely low
based on historical loss rates and forward-looking macroeconomic data.
16.Short-term borrowings
Currency: RMB Yuan
Closing balance Opening balance
Discounted borrowing on bills 433,993,449.44 -
Total 433,993,449.44 -
The short-term borrowing refer to the amount of bank acceptance bills issued between
affiliated companies within the scope of consolidation that have been discounted but not yet
matured at the end of the year.
17.Bills payable
Currency: RMB Yuan
Closing balance Opening balance
Bank acceptance bills 466,527,730.97 341,669,947.83
Total 466,527,730.97 341,669,947.83
As at 31 December 2022, the Group had no outstanding notes payable (31 December 2021:
nil).
221
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VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
18.Accounts payable
Currency: RMB Yuan
Closing balance Opening balance
Trade payables 86,880,869.77 113,777,232.26
Total 86,880,869.77 113,777,232.26
Trade payables are interest-free and normally settled within four months.
Aging over 1 year:
Currency: RMB Yuan
Closing balance Reasons
Over 1 years 3,419,773.88
Total 3,419,773.88
19.Contract liabilities
Currency: RMB Yuan
Closing balance Opening balance
Receipt in advance of order payment 126,705,661.82 210,146,744.15
Total 126,705,661.82 210,146,744.15
Contract liabilities are mainly receipts in advance collected by the Group from customers
before fulfilling their performance obligations. Revenue related to the contract will be
recognized when the Group fulfills its performance obligations. Normally, when the Group
receives an advance payment from a client, it will generally meet its performance obligations
and recognize revenue within 30 days.
222
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
20.Employee benefits payable
(1) Employee benefits payable
are as follows:
Currency: RMB Yuan
Closing
Opening balance Increase Decrease balance
Short-term
employee
benefits 73,334,819.63 505,256,765.17 509,854,596.47 68,736,988.33
Defined
contribution
plan - 58,804,380.67 58,804,380.67 -
Termination
benefits - 4,445,275.96 4,445,275.96 -
Total 73,334,819.63 568,506,421.80 573,104,253.10 68,736,988.33
(2) Short-term employee benefits
are as follows:
Currency: RMB Yuan
Opening balance Increase Decrease Closing balance
Salaries, bonuses, allowances and
subsidies 70,794,851.52 437,160,111.38 442,561,933.67 65,393,029.23
Staff welfare 2,348,431.09 13,602,343.12 12,795,924.32 3,154,849.89
Social security contributions - 30,387,703.90 30,387,703.90 -
Including: Medical insurance
premiums - 28,399,550.34 28,399,550.34 -
Work injury insurance
premium - 1,138,602.69 1,138,602.69 -
Maternity insurance
premium - 849,550.87 849,550.87 -
Housing funds - 19,935,758.46 19,935,758.46 -
Union running costs and employee
education costs 191,537.02 4,170,848.31 4,173,276.12 189,109.21
Total 73,334,819.63 505,256,765.17 509,854,596.47 68,736,988.33
(3) Defined contribution plan are as follows:
Currency: RMB Yuan
Closing
Opening balance Increase Decrease balance
Basic pension insurance - 57,196,194.14 57,196,194.14 -
Unemployment insurance premium - 1,608,186.53 1,608,186.53 -
Total - 58,804,380.67 58,804,380.67 -
As at 31 December 2022, the Group had no arrears in the nature of remuneration payable to
employees (31 December 2021: nil).
223
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
21.Taxes payable
Currency: RMB Yuan
Closing balance Opening balance
Value added tax 8,465,825.13 18,941,835.49
Excise tax 14,173,620.72 24,517,100.56
Corporate income tax 34,164,857.66 72,022,712.43
Individual income tax withheld 780,127.00 1,723,936.44
Urban maintenance and construction tax 1,347,723.05 2,678,004.36
Education surcharge 549,380.64 1,159,104.98
Local education surcharge 362,786.55 769,269.72
Others 40,818.91 26,387.41
Total 59,885,139.66 121,838,351.39
22.Other payables
Currency: RMB Yuan
Closing balance Opening balance
Other payables 102,563,944.81 72,156,628.68
Total 102,563,944.81 72,156,628.68
Currency: RMB Yuan
Closing balance Opening balance
Rent and property management fees
accrued 11,248,679.47 13,898,288.72
Renovation expenses accrued 63,140,256.23 20,224,879.32
Advertisement expenses accrued 11,515,571.63 17,644,937.59
Other expenses accrued 9,961,766.20 16,120,560.13
Deposit 1,639,911.88 717,671.65
Dealer pledged deposit - 272,361.13
Others 5,057,759.40 3,277,930.14
Total 102,563,944.81 72,156,628.68
As at 31 December 2022, there were no significant other payables older than 1 year (31
December 2021: nil).
224
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
23.Current portion of non-current liabilities
Currency: RMB Yuan
Closing balance Opening balance
Lease liabilities due within 1 year 351,516,900.54 215,037,794.03
Total 351,516,900.54 215,037,794.03
24.Other current liabilities
Currency: RMB Yuan
Closing balance Opening balance
Output VAT to be transferred 13,670,511.44 21,980,739.83
Total 13,670,511.44 21,980,739.83
With effect from 1 January 2020, the Group has applied the new revenue standard to show
the output VAT portion of the advance receipts as the amount of VAT to be resold tax.
25.Lease liabilities
Currency: RMB Yuan
2022 2021
Lease payments payable 276,542,164.23 215,671,484.31
Total 276,542,164.23 215,671,484.31
225
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
26.Accrued liabilities
Currency: RMB Yuan
Closing balance Opening balance Reasons
Provision for returns is made
for sales of goods with sales
return conditions. The Group
makes provision for returns
based on historical
Provision for returns 921,567.41 1,901,930.48 experience data and sales.
Shop restoration obligations
represent costs that the
Group, as the lessee, expects
to incur under the lease
agreement to restore the
leased assets to the condition
agreed under the terms of the
lease. The Group estimates
restoration costs based on
Store restoration industry conditions and
obligations 16,004,249.50 10,486,658.50 historical experience.
Total 16,925,816.91 12,388,588.98
27.Share capital
Currency: RMB Yuan
Movements during the year
Opening balance Closing balance
New shares issued
Share capital 400,010,000.00 - 400,010,000.00
226
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
28.Capital reserves
Currency: RMB Yuan
Opening balance Increase Decrease Closing balance
Share premium 4,403,792,844.63 - - 4,403,792,844.63
Other capital reserves (227.67) - - (227.67)
Share-based payments
included in the capital
reserve 25,782,801.77 561,317.20 - 26,344,118.97
Shareholding system
transformation 29,640,980.88 - - 29,640,980.88
Total 4,459,216,399.61 561,317.20 - 4,459,777,716.81
29.Other comprehensive income
Accumulated balance of other comprehensive income attributable to owners of the parent in
the consolidated balance sheet:
Currency: RMB Yuan
Opening balance Increase/decrease Closing balance
Exchange differences on
translation of foreign currency
financial statements (2,693,984.92) 6,687,238.92 3,993,254.00
227
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
30.Surplus reserves
Currency: RMB Yuan
Opening balance Increase Decrease Closing balance
Statutory surplus
reserves 179,210,032.06 20,794,967.94 - 200,005,000.00
Total 179,210,032.06 20,794,967.94 - 200,005,000.00
According to the provisions of the Company Law and the Company’s Articles of Association,
the Company appropriates 10% of the profit to the statutory surplus reserves. Where the
accumulated amount of the surplus reserves reaches 50% or more of the Company’s
registered capital, further appropriation is not required.
31.Unappropriated profit
Currency:RMB Yuan
2022 2021
Balance at end of the prior year 1,830,833,254.42 640,739,650.62
Net profit attributable to shareholders of the
parent company 729,241,946.67 1,301,768,398.86
Less: Appropriation to statutory surplus
reserves 20,794,967.94 111,674,795.06
Distribution to shareholders 800,020,000.00 -
Balance at end of the current year 1,739,260,233.15 1,830,833,254.42
Note:
1) No balance adjustment of unappropriated profit at the beginning of the period
was made in related to the application of new accounting stangdards and other relevant
regulations.
2) No balance adjustment of unappropriated profit at the beginning of the period
was made in related to changes in accounting policies.
3) No balance adjustment of unappropriated profit at the beginning of the period
was made in related to significant accounting error correction.
4) No balance adjustment of unappropriated profit at the beginning of the period
was made in related to changes in scope of business combination under the same control.
5) No balance adjustment of unappropriated profit at the beginning of the period
was made in related to other adjustments.
228
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
32.Revenue
Currency: RMB Yuan
2022 2021
Revenue Cost Revenue Cost
Primary
business 3,650,181,354.03 1,082,800,171.20 4,594,661,728.12 1,351,159,384.29
Other
business 31,393,058.65 29,472,295.09 28,068,052.36 29,391,773.38
Total 3,681,574,412.68 1,112,272,466.29 4,622,729,780.48 1,380,551,157.67
Disaggregation of revenue from contracts with customers is as follows:
Currency: RMB Yuan
Reporting segments Segment Total
Type of major products: 3,681,574,412.68 3,681,574,412.68
Engagement diamond rings 2,902,464,272.49 2,902,464,272.49
Wedding diamond rings 713,611,440.73 713,611,440.73
Other accessories 34,105,640.81 34,105,640.81
Other businesses 31,393,058.65 31,393,058.65
Area: 3,681,574,412.68 3,681,574,412.68
Mainland 3,674,302,626.84 3,674,302,626.84
Overseas 7,271,785.84 7,271,785.84
Time of income recognition 3,681,574,412.68 3,681,574,412.68
Income recognized at a point in time 3,681,574,412.68 3,681,574,412.68
Sales channel 3,681,574,412.68 3,681,574,412.68
Self-operated business 3,681,574,412.68 3,681,574,412.68
Total 3,681,574,412.68 3,681,574,412.68
229
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Information about the Group’s performance obligations is summarized below:
Under the self-operated business, the customer completes the fulfillment obligation when
receiving the goods. Under normal circumstances, for stores directly operated, the goods are
delivered within 30 days after receiving the contract price; For mall associates and e-
commerce, the contract price is usually received within 15-60 days after delivery. The
customer has the right to return the product within 15 days after receiving it, so it is necessary
to estimate the return rate based on the historical sales situation and calculate the provision
for return, which is detailed in Note VII.26.
The amount of revenue corresponding to performance obligations that have been contracted
for but not yet performed or not yet completed at the end of the reporting period is
RMB126,705,661.82.
33.Taxes and surcharges
Currency: RMB Yuan
2022 2021
Excise tax 161,139,856.39 203,753,443.40
Urban maintenance and construction tax 21,999,220.70 28,155,573.23
Education surcharge 9,396,015.92 12,142,841.53
Resource tax - -
Property tax - -
Land use tax - -
Vehicle use tax 240.00 3,965.00
Stamp tax 2,556,251.77 3,036,410.62
Local education surcharge 6,264,009.84 8,095,227.28
Others 4,300.00 150.00
Total 201,359,894.62 255,187,611.06
34.Selling expenses
Currency: RMB Yuan
2022 2021
Wages and salaries 474,286,451.10 388,931,056.98
Marketing and professional service
expenses 342,192,475.64 331,584,427.26
Depreciation and amortization 433,607,701.53 296,660,541.66
Rents excluded in the lease liabilities 37,374,018.79 80,853,973.32
Property management and utility expenses 57,143,404.37 40,621,864.37
Platform commissions 19,859,964.05 31,772,382.68
Administrative expenses 26,456,827.29 18,307,182.94
Traveling expenses 9,990,373.37 8,160,359.06
Packaging expenses 3,421,251.49 6,124,592.74
Courier expenses 3,204,581.15 4,026,001.70
Others 14,500,488.72 10,869,169.36
Total 1,422,037,537.50 1,217,911,552.07
230
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
35.Administrative expenses
Currency: RMB Yuan
2022 2021
Wages and salaries 79,373,604.27 74,199,564.90
Input tax not deductible for intra-group
transactions 34,246,969.57 54,886,573.93
Depreciation and amortization 20,269,089.25 16,639,125.45
Professional agency service expenses 12,916,862.65 8,568,620.05
Office expenses 5,786,187.86 5,839,457.67
Rent, property management and utility
expenses 4,008,808.69 3,661,626.55
Traveling expenses 2,344,355.77 1,386,931.20
Share-based payment expenses 561,317.20 4,091,695.24
Others 4,698,682.61 3,556,692.88
Total 164,205,877.87 172,830,287.87
36.Research and development expenses
Currency: RMB Yuan
2022 2021
Wages and salaries 14,846,366.43 13,585,335.70
Commissioned development service
expenses 2,294,282.27 500,000.00
Software expenses - 1,999,140.78
Depreciation and amortization 544,874.10 536,909.52
Others 258,609.57 200,656.92
Total 17,944,132.37 16,822,042.92
231
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
37.Finance expenses
Currency: RMB Yuan
2022 2021
Interest expenses 23,830,354.96 12,331,582.92
Less: Interest income 21,912,750.27 7,845,026.93
Foreign exchange differences 1,548,872.47 (718,861.97)
Bank charges 18,070,277.31 22,147,272.41
Total 21,536,754.47 25,914,966.43
38.Other income
Currency: RMB Yuan
2022 2021
Government grants related to routine
activities 23,433,558.47 11,022,474.28
VAT levied and refunded (Note 1) 15,833,085.31 21,586,542.12
Tax benefits (Note 2) 162,770.75 150,631.39
Others 348,258.47 303,022.94
Total 39,777,673.00 33,062,670.73
Note 1: According to the Notice of the General Administration of Customs of the Ministry of
Finance and the State Administration of Taxation on Adjusting the Relevant Tax Policies of the
Diamond and Shanghai Diamond Exchange (Cai Shui [2006] No. 65), polished diamonds
imported through the customs declaration of the competent customs of the Diamond
Exchange shall be levied and refunded immediately if the actual VAT burden exceeds 4% at
the import stage. Shanghai Darry, a subsidiary of the Company, has the membership of the
Shanghai Diamond Exchange and enjoys the tax treatment of immediate refund for the part of
the actual VAT burden in the import process exceeding 4%.
Note 2: According to the Announcement of the State Administration of Taxation on the
Exemption of Small-scale Taxpayers from VAT Collection and Administration (SAT
Announcement No. 5 [2021]), small-scale taxpayers who engage in VAT taxable sales and
their total monthly sales do not exceed RMB150,000 (or RMB450,000 if one quarter is a tax
period). Some of the company's branches are small-scale taxpayers and meet the above
standards, and will be exempt from VAT in 2022.
232
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
39.Investment income
Currency:RMB Yuan
2022 2021
Investment income earned during the holding period of debt
investment 17,693,148.47 12,670,534.30
Investment income received from disposal of held-for-
trading financial assets 71,309,897.15 28,959,209.85
Total 89,003,045.62 41,629,744.15
40.Gains from changes in fair value
Currency: RMB Yuan
2022 2021
Financial assets held for trading 39,294,362.36 17,567,673.68
Total 39,294,362.36 17,567,673.68
41.Credit impairment losses
Currency: RMB Yuan
2022 2021
Impairment loss for other receivables (1,905,000.00) -
Impairment loss for accounts receivable 3,698,479.08 (2,021,003.07)
Impairment loss for non-current assets due within one
year - (358,191.14)
Total 1,793,479.08 (2,379,194.21)
42.Impairment losses of assets
Currency:RMB Yuan
2022 2021
Impairment loss for inventories (4,237,633.79) (4,741,845.92)
Impairment loss for other assets (24,183,140.90) (5,411,520.39)
Total (28,420,774.69) (10,153,366.31)
In 2022, RMB-24,183,140.90 impairment loss for other assets includes impairment loss of
RMB-5,680,172.80 long-term amortization expense and RMB-18,502,968.10 impairment loss
of right-of-use assets;
In 2021, RMB-5,411,520.39 impairment loss for other assets is the impairment loss of right-of-
use assets.
43.Gains/loss on disposal of non-current assets
Currency: RMB Yuan
2022 2021
Gain or loss on disposal of fixed assets 1,244,949.25 (732,715.39)
233
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
44.Non-operating income
Currency: RMB Yuan
2022 2021
Indemnity 1,166,242.21 1,132,491.79
Others 70,848.25 26,331.52
Total 1,237,090.46 1,158,823.31
45.Non-operating expenses
Currency:RMB Yuan
2022 2021
Liquidated damages and late fees 582,566.17 1,506,155.30
Others 185,867.41 551,089.19
Total 768,433.58 2,057,244.49
46.Income tax expenses
Currency:RMB Yuan
2022 2021
Current tax 155,414,780.78 325,543,518.22
Deferred tax 722,413.61 4,307,243.70
Total 156,137,194.39 329,850,761.92
234
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
46.Income tax expenses (continued)
The reconciliation between income tax expenses and profit/(loss) before income tax is as
follows:
Currency: RMB Yuan
2022
Profit/(loss) before income tax 885,379,141.06
Tax at the applicable tax rate 221,344,785.34
Effect of different tax rates for some
(66,104,852.38)
subsidiaries
Adjustments to current tax in respect of
2,011,256.23
prior periods
Effect of non-taxable income -
Expenses not deductible for tax 654,459.45
Tax losses utilized from previous periods (286,039.12)
Unrecognised deductible temporary
differences and tax losses 558,840.92
R&D expenses are super-deducted (2,041,246.37)
Effect on opening deferred tax of change in
(9.68)
the tax rate
Tax charge at the Group’s effective tax
rate 156,137,194.39
Note: The income tax of the Group has been provided at the applicable rate on the estimated
assessable taxable profits arising in Mainland China. Income taxes on profits
assessable elsewhere have been calculated at the rates of tax prevailing in the
countries/jurisdictions in which the Group operates, in accordance with existing laws,
interpretations and practices.
235
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
47.Other comprehensive income
Refer to VII 29
48.Notes to cash flow statement
Supplement to cash flow statement
Currency: RMB Yuan
2022 2021
(1) Proceeds relating to other
operating activities:
Repossession of store renovation and
other deposits 8,835,864.26 4,356,081.61
Recover platform commission rebates 4,325,330.25 -
Bank interest income 20,667,425.02 9,056,564.18
Government grants 23,433,558.47 11,022,474.28
Others 5,393,076.90 951,900.21
Total 62,655,254.90 25,387,020.28
(2) Other cash payments relating to
operating activities:
Payment of rent, property
management and utility expenses 82,717,265.80 98,502,665.53
Payment of marketing expenses 352,347,629.80 339,435,974.58
Payment of office and travel expenses 44,110,164.16 36,153,786.85
Pament of courier expenses 10,942,674.44 15,050,352.27
Payment of packaging expenses 37,612,628.87 29,979,883.57
Payment of card fee 18,070,277.46 22,147,272.40
Payment of renovation and other
deposits 10,025,830.66 1,255,299.95
Payment of consultation and testing 44,946,232.79 23,899,809.76
Payment of commissions to e-
commerce platforms 21,387,218.80 33,867,656.49
Others 5,651,697.95 27,511,941.82
Total 627,811,620.73 627,804,643.22
(3) Proceeds relating to other
investing activities
Withholding and paying dividend tax - -
Total - -
236
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
48.Notes to cash flow statement (continued)
Supplement to cash flow statement (continued)
Currency: RMB Yuan
2022 2021
(4) Proceeds relating to other
investing activities
Withholding and paying dividend tax - -
Total - -
Currency: RMB Yuan
(5) Proceeds relating to other
financing activities
Returned rental deposit 5,435,963.01 5,483,723.60
Withholding and paying dividend tax 5,264,759.99 -
Total 10,700,723.00 5,483,723.60
(6) Other cash payments relating
to financing activities
Payment of listing service fee - 6,354,514.54
Payment of fixed rent 335,781,536.76 241,234,928.05
Rental deposit paid 30,357,327.43 30,220,292.89
Payments made for the acquisition of
minority stakes in subsidiaries - 35,477.77
Withholding and paying dividend tax 5,264,759.99 -
Total 371,403,624.18 277,845,213.25
237
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
49.Notes to cash flow statement
Supplement to cash flow statement (continued)
(1) Reconciliation of profit/(loss) to cash flows from operating activities:
Currency: RMB Yuan
2022 2021
Profit 729,241,946.67 1,301,757,792.01
Add: Impairment losses on assets 28,420,774.69 10,153,366.31
Depreciation of fixed assets 3,974,151.64 1,977,535.10
Depreciation of right-of-use assets 355,607,929.93 252,130,105.39
Amortisation of intangible assets 2,940,850.52 2,352,628.02
Amortisation of long-term prepaid
expenses 91,898,732.79 57,376,308.12
Loss on disposal of fixed assets,
intangible assets and other long-term
assets and loss of retirement of fixed
assets (1,244,949.25) 732,715.39
Loss on disposal of fixed assets - -
Gains / losses from changes in fair value (39,294,362.36) (17,567,673.68)
Finance expenses 24,133,902.03 12,824,258.20
Investment income (89,003,045.62) (41,629,744.15)
Decrease/(increase) in deferred tax
assets (3,425,426.97) 271,076.73
Increase in deferred tax liabilities 4,146,880.41 4,037,714.27
Increase in inventories (229,917,478.98) (147,587,357.77)
Increase in operating receivables 861,877.87 (35,773,305.98)
Increase in operating payables (63,635,737.18) 132,985,401.31
Others 3,305,066.05 10,172,031.44
Net cash flows from operating activities 818,011,112.24 1,544,212,850.71
Closing balance of cash 521,625,030.62 4,741,510,453.45
Less: Opening balance of cash 4,741,510,453.45 181,495,843.19
Net increase in cash and cash equivalents (4,219,885,422.83) 4,560,014,610.26
238
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
49.Notes to cash flow statement (continued)
(2) Cash and cash equivalents
Currency: RMB Yuan
2022 2021
Cash 521,625,030.62 4,741,510,453.45
Including: Cash on hand 391,749.23 260,691.68
Bank deposits on demand 512,798,797.26 4,737,174,517.72
Other currency funds on demand 8,434,484.13 4,075,244.05
Cash and cash equivalents at end of year 521,625,030.62 4,741,510,453.45
Including: restricted cash and cash
equivalents held by parents and subsidiaries - -
50.Foreign currency monetary items
Currency: RMB Yuan
Document Change in USD Translated into
currency rate RMB
Currency funds
USD 6,754,306.75 6.9646 47,041,044.79
EUR 245,311.60 7.4229 1,820,923.48
HKD 472,553.50 0.8933 422,132.04
Accounts receivable
USD 586.47 6.9646 4,084.53
HKD 902,861.47 0.8933 806,526.15
Accounts payable
USD 56,794.80 6.9646 395,553.06
HKD 263,156.96 0.8933 235,078.11
Other payables
HKD 222,747.36 0.8933 198,980.22
EUR 67,151.88 7.4229 498,461.69
Note: Foreign currency monetary items refer to non-RMB monetary items.
239
2022 Annual Report of DR Corporation Limited
VII.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
51.Government grants
Government grants related to routine activities:
Currency: RMB Yuan
Amount recognized in
Related to asset/income Amount Program
current period
Shenzhen Municipal Bureau of Commerce
2022 Consumption Promotion Support
Related to income 10,000,000.00 10,000,000.00
Program Retail Sales (Turnover) Growth
Incentive Program
Shenzhen Bureau of Industry and
Information Technology Quality Brand
Related to income 3,500,000.00 3,500,000.00
Double Enhancement Project Support
Program
3,000,000.00 3,000,000.00
Related to income Shenzhen fashion industry support
Private and small and medium-sized
Related to income 1,500,000.00 enterprises innovation development 1,500,000.00
cultivation support program
Related to income 1,402,600.00 Shenzhen headquarters enterprise support 1,402,600.00
Related to income 1,123,642.91 1,123,642.91
Subsidies for post stabilisation
Related to income 634,293.65 634,293.65
Retention allowance
Relief Policy - Retail enterprises to open e-
Related to income 500,000.00 500,000.00
commerce stores subsidy program
Special fund support for industrial
Related to income 305,000.00 transformation and upgrading in Luohu 305,000.00
District
Related to income 300,000.00 300,000.00
Special funds for industrial development
Related to income 228,007.26 228,007.26
Individual tax refund
High-tech enterprises are cultivated into
Related to income 200,000.00 200,000.00
storage
Luohu District, Shenzhen City for help
Related to income 200,000.00 enterprises benefit the people to bail out 200,000.00
"ten measures"
Related to income 164,500.00 Job expansion subsidies 164,500.00
Related to income 324,916.64 Employment subsidies 324,916.64
Relief Policy - Accommodation and catering 50,000.00
Related to income 50,000.00 and wholesale and retail enterprises
subsidy program
Related to income 598.01 Others 598.01
240
2022 Annual Report of DR Corporation Limited
VIII. Changes in scope of consolidation
Changes in scope of consolidation caused by other reasons
During the reporting period, the following important new subsidiaries were established:
Name The purpose of the The way to changesc Impact on overall
estabilishment opes of performance
consolidation
Xiamen DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Shenyang DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Tianjin DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Chengdu DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Kunming DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Shanghai DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Suzhou Zhongzuan DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Jinan DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Shenzhen DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Beijing Zhongzuan DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Suzhou DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Shenyang DR Jewelry Accessories Co., Ltd. Business needs New in 2022 Not significant
Hangzhou DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Beijing DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Wuhan DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Wuhan Zhongzuan DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Xi’an DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Chengdu DR True Love Jewelry Co., Ltd Business needs New in 2022 Not significant
Ningbo DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Beijing Huazuan DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Chongqing DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Hangzhou DR True Love Jewelry Co., Ltd Business needs New in 2022 Not significant
Henan DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Xi’an DR Jewelry and Accessories Co., Ltd Business needs New in 2022 Not significant
Zhengzhou DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Shenzhen DR Jewelry Headware Co., Ltd Business needs New in 2022 Not significant
Shenzhen DR Jewelry and Accessories Co., Ltd Business needs New in 2022 Not significant
Changsha DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Shanghai DR Jewelry headware Co., Ltd Business needs New in 2022 Not significant
Shanghai DR Jewelry Sales Co., Ltd Business needs New in 2022 Not significant
Zhoukou DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Yiwu DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Heze DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Dongguan DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Xining DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Linyi DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Yinchuan DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Weifang DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Nanchang DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Jining DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Mianyang DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Fuyang DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Shangqiu DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Urumqi DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Handan DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Baoding DR Jewelry Sales Co., Ltd Business needs New in 2022 Not significant
Guangzhou DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Guiyang DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Langfang DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Haoduo Diamond Zhizao (Shenzhen) Co., Ltd. Business needs New in 2022 Not significant
Foshan DR Jewelry Co., Ltd Business needs New in 2022 Not significant
Jiaxing DR Jewelry Co., Ltd Business needs New in 2022 Not significant
All of the above are subsidiaries, except for the above-mentioned Haoduo Diamond Zhizao
(Shenzhen) Co., Ltd. is sub-subsidiary.
241
2022 Annual Report of DR Corporation Limited
IX. Equity in other entities
1.Equity in subsidiaries
(1) The subsidiaries acquired by the Group through establishment are as follows:
Place of Ownership interest Mode of
Name of the subsidiary incorporation Nature of business (%) acquisition
Direct Indirect
Store sales in Hong
Kong and overseas
loose stone
DR Group Company Limited Hong Kong procurement - 100 Set up
Member of Shanghai
Diamond Exchange,
responsible for the
procurement and
customs declaration
Shanghai Darry Diamond Co., of overseas loose
Ltd Shanghai stone 100 - Set up
Chongqing Darry Jewelry Co., Store sales in
Ltd Chongqing Chongqing 100 - Set up
Information
Technology Services
Shenzhen Love Only AI Cloud &Brand operation
Technology Co., Ltd. Shenzhen services 100 - Set up
Couple Only (Shenzhen)
Jewelry Co., Ltd. Shenzhen Sub-brand cultivation 100 - Set up
Supply chain
management, R&D
design, customized
Shenzhen Darry Commercial product services and
Management Service Co., related supporting
Ltd Shenzhen services 100 - Set up
DARRY JEWELRY (HK)
LIMITED Hong Kong Sub-brand cultivation - 100 Set up
Couple Only Jewelry
HongKong Company
Limited Hong Kong Sub-brand cultivation - 100 Set up
Regional sales in
DR Jewelry France France - 100 Set up
Sub-brand cultivation,
He’er Culture (Shenzhen) Co., Creative planning
Ltd Shenzhen services 100 - Set up
Responsible for
Haoduo Diamond (Shenzhen) domestic bare stone
Co., Ltd Shenzhen procurement 100 - Set up
Xiamen DR Jewelry Co., Ltd Xiamen Store sales in Xiamen 100 - Newly set up
Shenyang DR Jewelry Co., Store sales in
Ltd Shenyang Shenyang 100 - Newly set up
Tianjin DR Jewelry Co., Ltd Tianjin Store sales in Tianjin 100 - Newly set up
Store sales in
Chengdu DR Jewelry Co., Ltd Chengdu Chengdu 100 - Newly set up
Store sales in
Kunming DR Jewelry Co., Ltd Kunming Kunming 100 - Newly set up
Store sales in
Shanghai DR Jewelry Co., Ltd Shanghai Shanghai 100 - Newly set up
242
2022 Annual Report of DR Corporation Limited
IX. Equity in other entities (continued)
1.Equity in subsidiaries (continued)
Name of the subsidiary Place of Nature of business Ownership interest Mode of
incorporation (%) acquisition
Direct Indirect
Suzhou Zhongzuan DR Jewelry Co.,
Ltd Suzhou Store sales in Suzhou 100 - Newly set up
Jinan DR Jewelry Co., Ltd Jinan Store sales in Jinan 100 - Newly set up
Shenzhen DR Jewelry Co., Ltd Shenzhen Store sales in Shenzhen 100 - Newly set up
Beijing Zhongzuan DR Jewelry Co., Ltd Beijing Store sales in Beijing 100 - Newly set up
Suzhou DR Jewelry Co., Ltd Suzhou Store sales in Suzhou 100 - Newly set up
Shenyang DR Jewelry Accessories
Co., Ltd. Shenyang Store sales in Shenyang 100 - Newly set up
Hangzhou DR Jewelry Co., Ltd Hangzhou Store sales in Hangzhou 100 - Newly set up
Beijing DR Jewelry Co., Ltd Beijing Store sales in Beijing 100 - Newly set up
Wuhan DR Jewelry Co., Ltd Wuhan Store sales in Wuhan 100 - Newly set up
Wuhan Zhongzuan DR Jewelry Co.,
Ltd Wuhan Store sales in Wuhan 100 - Newly set up
Xi’an DR Jewelry Co., Ltd Xi’an Store sales in Xi'an 100 - Newly set up
Chengdu DR True Love Jewelry Co.,
Ltd Chengdu Store sales in Chengdu 100 - Newly set up
Ningbo DR Jewelry Co., Ltd Ningbo Store sales in Ningbo 100 - Newly set up
Beijing Huazuan DR Jewelry Co., Ltd Beijing Store sales in Beijing 100 - Newly set up
Chongqing DR Jewelry Co., Ltd Chongqing Store sales in Chongqing 100 - Newly set up
Hangzhou DR True Love Jewelry Co.,
Ltd Hangzhou Store sales in Hangzhou 100 - Newly set up
Henan DR Jewelry Co., Ltd Henan Store sales in Henan 100 - Newly set up
Xi’an DR Jewelry and Accessories Co.,
Ltd Xi’an Store sales in Xi’an 100 - Newly set up
Zhengzhou DR Jewelry Co., Ltd Zhengzhou Store sales in Zhengzhou 100 - Newly set up
Shenzhen DR Jewelry Accessories
Co., Ltd Shenzhen Store sales in Shenzhen 100 - Newly set up
Shenzhen DR Jewelry Ornament Co.,
Ltd Shenzhen Store sales in Shenzhen 100 - Newly set up
Changsha DR Jewelry Co., Ltd Changsha Store sales in Changsha 100 - Newly set up
Shanghai DR Jewelry headware Co.,
Ltd Shanghai Store sales in Shanghai 100 - Newly set up
Shanghai DR Jewelry Sales Co., Ltd Shanghai Store sales in Shanghai 100 - Newly set up
Zhoukou DR Jewelry Co., Ltd Zhoukou Store sales in Zhoukou 100 - Newly set up
Yiwu DR Jewelry Co., Ltd Yiwu Store sales in Yiwu 100 - Newly set up
Heze DR Jewelry Co., Ltd Heze Store sales in Heze 100 - Newly set up
Dongguan DR Jewelry Co., Ltd Dongguan Store sales in Dongguan 100 - Newly set up
Xining DR Jewelry Co., Ltd Xining Store sales in Xining 100 Newly set up
Linyi DR Jewelry Co., Ltd Linyi Store sales in Linyi 100 Newly set up
Yinchuan DR Jewelry Co., Ltd Yinchuan Store sales in Yinchuan 100 - Newly set up
Weifang DR Jewelry Co., Ltd Weifang Store sales in Weifang 100 - Newly set up
Nanchang DR Jewelry Co., Ltd Nanchang Store sales in Nanchang 100 - Newly set up
Jining DR Jewelry Co., Ltd Jining Store sales in Jining 100 - Newly set up
Mianyang DR Jewelry Co., Ltd Mianyang Store sales in Mianyang 100 - Newly set up
Fuyang DR Jewelry Co., Ltd Fuyang Store sales in Fuyang 100 - Newly set up
Shangqiu DR Jewelry Co., Ltd Shangqiu Store sales in Shangqiu 100 - Newly set up
Urumqi DR Jewelry Co., Ltd urumchi Store sales in Urumqi 100 - Newly set up
Handan DR Jewelry Co., Ltd Handan Store sales in Handan 100 - Newly set up
Baoding DR Jewelry Sales Co., Ltd Baoding Store sales in Baoding 100 - Newly set up
Guangzhou DR Jewelry Co., Ltd Guangzhou Sold in stores in Guangzhou 100 - Newly set up
Guiyang DR Jewelry Co., Ltd Guiyang Sold in stores in Guiyang 100 - Newly set up
Langfang DR Jewelry Co., Ltd Langfang Store sales in Langfang 100 - Newly set up
Haoduo Diamond Zhizao (Shenzhen)
Co., Ltd. Shenzhen Rough diamond cut production - 100 Newly set up
Foshan DR Jewelry Co., Ltd Foshan Sold in stores in Foshan 100 - Newly set up
Jiaxing DR Jewelry Co., Ltd Jiaxing Store sales in Jiaxing 100 - Newly set up
243
2022 Annual Report of DR Corporation Limited
X. FINANCIAL INSTRUMENTS AND RELATED RISKS
1.Financial instruments by category
Carrying amounts of various financial instruments at the balance sheet date are as follows:
2022
Financial assets
Financial assets at Financial assets at Total
fair value through amortised cost
profit or loss
Required by the
Standards
Currency funds - 521,904,818.30 521,904,818.30
Accounts receivable - 84,478,911.52 84,478,911.52
Other receivables - 2,378,589.22 2,378,589.22
Financial assets held for
trading 5,609,891,931.68 - 5,609,891,931.68
Other current assets - 31,378,714.16 31,378,714.16
Debt investments - 794,553,996.36 794,553,996.36
Current portion of non-
106,967,867.16 106,967,867.16
current assets -
Other non-current assets - 85,419,135.39 85,419,135.39
Total 5,609,891,931.68 1,627,082,032.11 7,236,973,963.79
Financial liabilities
Financial assets at
amortised cost
Short-term borrowings 433,993,449.44
Notes payable 466,527,730.97
Accounts payable 86,880,869.77
Other payables 102,563,944.81
Provisions 16,004,249.50
Total 1,105,970,244.49
244
2022 Annual Report of DR Corporation Limited
X. FINANCIAL INSTRUMENTS AND RELATED RISKS (continued)
1.Financial instruments by category (continued)
Carrying amounts of each category of financial instruments at the balance sheet date are as
follows:
2021
Financial assets
Financial assets at Financial assets at Total
fair value through amortised cost
profit or loss
Required by the
Standards
Currency funds - 4,741,510,453.45 4,741,510,453.45
Accounts receivable - 174,880,676.50 174,880,676.50
Other receivables - 6,135,138.17 6,135,138.17
Financial assets held for
trading 1,824,097,569.32 - 1,824,097,569.32
Debt investments - 218,585,379.05 218,585,379.05
Current portion of non-
192,823,541.46 192,823,541.46
current assets -
Other non-current assets - 57,947,281.39 57,947,281.39
Total 1,824,097,569.32 5,391,882,470.02 7,215,980,039.34
Financial liabilities
Financial assets at amortised
cost
Notes payable 341,669,947.83
Accounts payable 113,777,232.26
Other payables 72,156,628.68
Provisions 10,486,658.50
Total 538,090,467.27
245
2022 Annual Report of DR Corporation Limited
X. FINANCIAL INSTRUMENTS AND RELATED RISKS (continued)
2.Risks of financial instruments
The Group is exposed to various financial instrument risks in its day-to-day activities, mainly
including credit risk, liquidity risk and market risk (including exchange rate risk). The Group's
principal financial instruments include monetary funds, accounts receivable, other receivables,
trading financial assets, debt investments, other current and non-current assets and short-
term borrowings, notes payable and accounts payable, other payables and projected liabilities.
Risks associated with these financial instruments and policies of the risk management to
lowering the risks of the Group are summarised below.
The Board is responsible for planning and establishing the Group's risk management structure,
formulating the Group's risk management policies and relevant guidelines and overseeing the
implementation of risk management measures. The Group has developed risk management
policies to identify and analyse the risks to which the Group is exposed, which clearly define
specific risks and cover many aspects such as market risk, credit risk and liquidity risk
management. The Group regularly evaluates changes in the market environment and
business activities of the Group to decide whether to update its risk management policies and
systems. Risk management of the Group is carried out by the Risk Management Committee in
accordance with the policies approved by the Board. The Risk Management Committee
identifies, evaluates and mitigates relevant risks through close cooperation with other
business units of the Group. The Group's internal audit department conducts regular audits of
risk management controls and procedures and reports the results to the Group's Audit
Committee.
The Group diversifies the risk of financial instruments through appropriate diversification of
invesment and business portfolio, and reduces the risk of concentration on specific
counterparties by formulating appropriate risk management policies.
Credit risk
The Group trades only with recognised and creditworthy third parties. According to the
Group's policy, all customers who require credit transactions are required to conduct a credit
review. In addition, the Group continuously monitors the balance of accounts receivable to
ensure that the Group does not face significant bad debt risks.
These financial instruments have low credit risk because the counterparties of monetary funds
and tradable financial assets are reputable banks with high credit ratings.
Other financial assets of the Group include accounts receivable and other receivables whose
credit risk derives from counterparty defaults and whose maximum exposure is equal to the
carrying amount of these instruments.
Since the Group trades only with recognised and creditworthy third parties, there is no
requirement for collateral. Credit risk is centrally managed by industry. As at 31 December
2022, the Group had a specific credit risk concentration and 73.07% of the Group's accounts
receivable (31 December 2021: 71.23%) were collected by the shopping malls.
X. FINANCIAL INSTRUMENTS AND RELATED RISKS (continued)
246
2022 Annual Report of DR Corporation Limited
2.Risks of financial instruments (continued)
Credit risk (continued)
Determination of significant increase in credit risk
At each balance sheet date, the Group assesses whether the credit risk on the relevant
financial instruments has increased significantly since initial recognition. When determining
whether the credit risk of a financial asset has increased significantly since initial recognition,
the Group considers reasonable and supportable information that is relevant and available
without undue cost or effort, including qualitative and quantitative analysis based on historical
data of the Group, external credit risk ratings and forward-looking information. Based on a
single financial instrument or portfolio of financial assets with similar credit risk characteristics,
the Group determines expected changes in default risk within the duration of financial
instruments through comparing the default risk occur at the balance sheet date with the one
occur at the date of initial recognition.
The Group determines that the credit risk of financial instruments has significantly increased
when one or more of the following quantitative or qualitative criteria below are met:
（1） Quantitative criteria are mainly the probability of default for the remaining
duration of the
reporting date increasing by more than a certain percentage since initial recognition;
（2） Qualitative criteria are mainly the significant detrimental changes in the
borrower’s
operating or financial conditions, and early warning customer lists, etc.
Definition of credit-impaired financial assets
In assessing whether a financial asset is credit-impaired, the Group considers both
quantitative and qualitative indicators and adopts the standard of determination in line with
internal credit risk management goal of the relevant financial instruments. The Group
assesses whether a financial asset is credit-impaired by considering the following factors:
（1） significant financial difficulty of the borrower or issuer;
（2） a breach of contract, such as a default or delinquency in interest or principal
payments;
（3） 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;
（4） it is probable that the borrower will enter bankruptcy or other financial
reorganisation;
（5） the disappearance of an active market for a security because of financial
difficulties of the issuer or borrower;or
（6） Financial assets purchased or sourced at large discounts indicating credit
losses have occurred.
The impairment of financial assets may not be necessarily due to a single discrete event, he
combined effects of multiple events may result in financial assets being credit-impaired.
247
2022 Annual Report of DR Corporation Limited
X. FINANCIAL INSTRUMENTS AND RELATED RISKS (continued)
2.Risks of financial instruments (continued)
Liquidity risk
The Group monitors its risk of shortage of funds using a recurring liquidity planning tool. This
tool considers both the maturity of the financial instruments and projected cash flows from
operations.
As at 31 December 2022, the Group had no debt maturing for more than 1 year (31 December
2021: nil).
The tables below summarise the maturity profile of the Company’s financial liabilities based on
contractual undiscounted cash flows:
Financial liabilities and lease liabilities
2022
Within 1 year 1-3 years 3 to 5 years Over 5 years Total
Short-term
borrowings 433,993,449.44 - - - 433,993,449.44
Notes payable 466,527,730.97 - - - 466,527,730.97
Accounts payable 86,880,869.77 - - - 86,880,869.77
Other payables 102,563,944.81 - - - 102,563,944.81
Provisions 7,025,902.00 5,636,047.50 2,263,200.00 1,079,100.00 16,004,249.50
Current portion of
non-current
liabilities 351,516,900.54 - - - 351,516,900.54
Lease liabilities - 256,890,726.07 17,947,797.81 1,703,640.35 276,542,164.23
Total 1,448,508,797.53 262,526,773.57 20,210,997.81 2,782,740.35 1,734,029,309.26
2021
Within 1 year 1-3 years 3 to 5 years Over 5 years Total
Notes payable 341,669,947.83 - - - 341,669,947.83
Accounts payable 113,777,232.26 - - - 113,777,232.26
Other payables 72,156,628.68 - - - 72,156,628.68
Provisions 4,233,064.50 3,221,544.00 2,278,200.00 753,850.00 10,486,658.50
Current portion of
non-current
liabilities 224,036,789.74 - - - 224,036,789.74
Lease liabilities - 208,742,353.74 18,546,887.65 117,954.70 227,407,196.09
Total 755,873,663.01 211,963,897.74 20,825,087.65 871,804.70 989,534,453.10
248
2022 Annual Report of DR Corporation Limited
X. FINANCIAL INSTRUMENTS AND RELATED RISKS (continued)
2.Risks of financial instruments (continued)
Market risk
Currency risk
The Group is exposed to transactional exchange rate risk resulting from sales or purchases
made by business units in currencies other than their base currency. In FY2022,
approximately 0.18% (2021: 0.12%) of the Group's sales were denominated in currencies
other than the basic accounting currency of the operating units in which the sales occurred,
while approximately 0.22% (2021: 0.14%) of the cost was denominated in currencies other
than the basic currency of account of the operating units. The Group does not engage in
foreign exchange hedging.
The table below presents a sensitivity analysis of exchange rate risk, reflecting the impact that
a reasonably possible change in the exchange rates of the USD, EUR and HKD would have
on net income or loss (due to changes in the fair value of monetary assets and monetary
liabilities) and other comprehensive income, net of tax, assuming all other variables remain
constant.
2022
Net other
comprehensive Total
Change in income shareholders’
USD rate Net profit/loss after tax equity
Increase/ Increase/ Increase/ Increase/
(decrease) (decrease) (decrease) (decrease)
If RMB weakens against
USD 3% 1,233,808.76 - 1,233,808.76
If RMB strengthens
against USD (3%) (1,233,808.76) - (1,233,808.76)
2021
Net other
comprehensive Total
Change in income shareholders’
USD rate Net profit/loss after tax equity
Increase/ Increase/ Increase/ Increase/
(decrease) (decrease) (decrease) (decrease)
If RMB weakens against
USD 3% 2,043,987.72 - 2,043,987.72
If RMB strengthens
against USD (3%) (2,043,987.72) - (2,043,987.72)
249
2022 Annual Report of DR Corporation Limited
X. FINANCIAL INSTRUMENTS AND RELATED RISKS (continued)
3.Capital management
The primary objectives of the Group’s capital management are to safeguard the Group’s ability
to continue as a going concern and to maintain healthy capital ratios in order to support its
business and maximise shareholders’ value.
The Group manages and adjusts its capital structure in response to changes in the economic
situation and the risk characteristics of the underlying assets. To maintain or adjust the capital
structure, the Group may adjust the dividend payment to shareholders, repurchase shares or
issue new shares. The Group is not bound by any externally imposed capital requirements. In
2022 and 2021, the capital management objectives, policies or procedures remain unchanged.
The Group monitors capital using the debt-to-asset ratio, which is total liabilities divided by
total assets. It is the Group's policy to maintain a reasonable gearing ratio.The Group’s debt-
to-asset ratio at the end of the reporting period was as follows:
2022 2021
Total assets 8,815,748,380.27 8,269,184,150.24
Total liabilities 2,012,702,176.31 1,402,608,449.07
Debt-to-asset ratio 22.83% 16.96%
250
2022 Annual Report of DR Corporation Limited
XI.Fair value
1.Assets and liabilities measured at fair value
2022
RMB
Closing balance
Fair value Fair value Fair value
measurements measurements within measurements
within Level 1 Level 2 within Level 3 Total
Recurring fair value
measurements
Financial assets held for
trading trading 5,609,891,931.68 - 5,609,891,931.68
Financial assets at fair
value through profit or
loss - 5,609,891,931.68 - 5,609,891,931.68
Non-recurring fair value
measurements - - - -
2. Basis of determing the market prices of recurring and non-recurring measurements
within Level 1
No recurring and non-recurring measurements within Level 1 at the end of the reporting
period .
3. Qualitative and quantitative information on the valuation techniques used and significant
parameters in recurring and non-recurring measurements within Level 2.
Financial assets at fair value through profit or loss are bank financial products with fair value
determined using expected future cash flows expected to be available in the market and
discounted at an interest rate determined based on the best estimate of the expected level of
risk.
4. Qualitative and quantitative information on the valuation techniques used and significant
parameters in recurring and non-recurring measurements within Level 3
No recurring and non-recurring measurements within Level 3 at the end of the reporting period.
5. Reconciliation information between opening and closing carrying values and sensitivity
analysis of unobservable parameters in recurring measurements within Level 3.
N/A
6. For items measured at fair value on a recurring basis, disclose the amounts of any
transfers between different levels of the fair value hierarchy, the reasons for those transfers
and the policy for determining when transfers between levels are deemed to have occurred.
No transfers between different levels occurred during the reporting period.
251
2022 Annual Report of DR Corporation Limited
XI.Fair value (continued)
7. Changes in valuation techniques that occurred during the period and the reasons for
the changes
No valuation techniques occurred during the reporting period.
8. Fair value of financial assets and financial liabilities that are not measured at fair
value
The Company has assessed its cash and cash equivalents, accounts receivable, other
receivables, other current assets, notes payable, accounts payable and other payables and
the fair value is in line with the carrying value due to the short remaining period.
XII. Related party relationships and transactions
1.Parent
Proportion of Proportion of
ownership voting power in
Place of interest in the the Company
Name of the parent incorporation Nature of business Registered capital Company (%) (%)
Business management
consulting, business
DR Investment (Zhuhai) Co.., information consulting,
Ltd. Zhuhai investment management, etc RMB50,000,000.00 85.50% 85.50%
Note:
The parent "Shenzhen DR Investment Co., Ltd." changed its name to the current "DR
Investment (Zhuhai) Co., Ltd." in January 2022.
The ultimate controlling party of the Company is Mr. Zhang Guotao and Mrs. Lu Yiwen.
2.Subsidiary
Information about the subsidiaries of the Company is disclosed in Note IX.1.
3.Other related parties
Name Related party relationships
Lu Yiwen The actual controller of the Company
Zhang Guotao The actual controller of the Company
Shenzhen Every Year Travel Photography CultureA wholly-owned subsidiary of DR
Co., Ltd. Investment, the Company's controlling
shareholder; An enterprise indirectly
controlled by the actual controllers Zhang
Guotao and Lu Yiwen
Director, general manager and other seniorKey management personnel of the
management of the company Company
252
2022 Annual Report of DR Corporation Limited
XII. Related party relationships and transactions (continued)
4.Major transactions between the Group and its related parties
（1） Sales of goods/ provision of services to related parties
RMB
Related parties Transactions between the Amount for Amount for
Group and its related parties current period prior period
Shenzhen Every Year Travel
Photography Culture Co.,
Ltd. Provision of services - 42,131.61
Note:
In February 2020, the Company entered into a cooperation framework agreement with
Shenzhen Every Year Travel Photography Culture Co., Ltd. stipulating that the Company will
introduce, guide and coordinate users with travel photography needs to EveryYear Travel
Photography and become its effective users, and the service fee and referral fee shall be paid
to the Company at the agreed price every year.
（2） Leases by Related Parties
As lessee
RMB
Lessor Variable lease
Simplification of rental payments not
expenses for short- included in the
Type of term leases and low- measurement of
leased value asset leases(if lease liabilities(if Interest expense on lease Increase in right-of-use a
assets applicable) applicable) Rental payment liabilities incurred sset
Amount for Amount Amount Amount Amount for Amount
current for prior for current for prior Amount for Amount for current Amount for for current Amount for
period period period period current period prior period period prior period period prior period
DR Investment
(Zhuhai) Co., Operating
Ltd. leases - - - - 84,046.00 252,138.00 2,070.30 25,441.72 - 929,427.02
Note:
In December 2019, Shenzhen Darry Commercial Management Services Co., Ltd. entered into an operating lease agreement with DR Investment (Zhuhai) Co.,
Ltd. (formerly known as Shenzhen DR Investment Co., Ltd.) at the market price, with a total lease cost of RMB1,539,077.98, the original lease period was from
13 December 2019 to 31 December 2022, the rent was paid on schedule, and the leased asset was terminated early on 28 February 2022.
（3） Other related party transactions
RMB
Amount for Amount for prior
current period period
Compensation of key management personnel 13,606,393.29 16,525,196.79
Include: share-based payment expenses 356,652.33 1,625,241.26
253
2022 Annual Report of DR Corporation Limited
XIII. Share-based payment
1.Summary
RMB
Equity instruments granted in current period -
Total equity instruments exercised in current period -
Total equity instruments which became invalid in current
period 43,200.00
The exercise price of the
Company's outstanding stock
Range of exercise prices of stock options issued and options at the end of the period was
outstanding by the Company at the end of the period $1.67 per share, with a remaining
and the remaining term of the contract contractual term of 0-1.89
Range of exercise prices of other equity instrument
issued and outstanding by the Company at the end of
the period and the remaining term of the contract None
（1）First share option incentive scheme
On January 18, 2017, the Company approved the "Shenzhen Darry Jewelry Co., Ltd. Equity
Incentive scheme" (the "Incentive scheme") through a resolution of the shareholders' meeting,
and the Company's first share option incentive scheme granted the Company the number of
restricted shares to 15 incentive recipients through the Gongqingcheng Wendi No.1
Investment Management Partnership (Limited Partnership), the Gongqingcheng Wendi No.2
Investment Management Partnership (Limited Partnership) and the Gongqingcheng Wendi
No.3 Investment Management Partnership (Limited Partnership)1,150,000 shares (after the
Company’s conversion into a joint stock company, the number of restricted shares became
4,140,000 shares). Subsequently, the Company signed an equity grant notice with the
incentive recipients on November 20, 2017, and the terms and conditions of the agreement
between the enterprise and the employees on the share payment have been agreed, so the
grant price is RMB 1.67 per share (which has been adjusted in proportion to the number of
shares after the Company’s conversion into a joint stock company) with November 20, 2017
as the grant date. Gongqingcheng Wendi No.1 Investment Management Partnership (Limited
Partnership), Gongqingcheng Wendi No.2 Investment Management Partnership (Limited
Partnership) and Gongqingcheng Wendi No.3 Investment Management Partnership (Limited
Partnership) set restrictive conditions, that is, on the listed date of the company, the incentive
share held by the incentive recipients can meet the feasible rights conditions stipulated in the
incentive scheme, and the Company's shares held by the incentive recipients shall not be
transferred within one year from the date of listing on the Shenzhen Stock Exchange. Share-
based payment expenses for restricted stock granted under the initial share option incentive
scheme were fully recognized in 2021.
254
2022 Annual Report of DR Corporation Limited
XIII. Share-based payment (Continued)
Share-based payment plan (continued)
（2）Second share option incentive scheme
On November 20, 2019, the Company approved the "DR Corporation Limited Share Option
Incentive scheme" through the resolution of the second extraordinary general meeting of
shareholders in 2019, and the Company's second share option incentive scheme granted
2,412,000 restricted shares of the Company to 12 incentive recipients through the
Gongqingcheng Wendi No.1 Investment Management Partnership (Limited Partnership) and
the Gongqingcheng Wendi No.2 Investment Management Partnership (Limited Partnership),
with November 20, 2019 as the grant date. The grant price is RMB1.67 per share.
Gongqingcheng Wendi No.1 Investment Management Partnership (Limited Partnership) and
Komsomolsk Wendi No.2 Investment Management Partnership (Limited Partnership) set
restrictive conditions, that is, after 5 years from the grant date, the incentive share held by the
incentive recipients can meet the feasible right conditions stipulated in the incentive scheme,
and the Company's shares held by the incentive recipients cannot be transferred within three
years from the date of listing on the Shenzhen Stock Exchange.
The second equity incentive scheme on November 20, 2019 also stipulates that this incentive
scheme is applicable to the recipients of the first equity incentive scheme. This change
extends the service period of the first share option incentive recipients, which is not conducive
to the change of incentive recipients, so the Company still recognizes share-based payment
expenses for the first incentive scheme in accordance with the feasible conditions before the
amendment.
（3）Modification of the second share option incentive scheme and newly granted restricted
stock
On March 11, 2020, the Company passed the resolution of the second extraordinary general
meeting of shareholders in 2020, approving the amendment of the second share option
incentive scheme "DR Corporation Limited Equity Incentive Scheme", which added that in the
case of the incentive recipients leaving the Company within 5 years and the Company has
been listed, the incentive share held by the incentive recipients vesting after years of service
since the grant date meets the feasible right conditions. Subject to the fact that the conditions
for listing within 5 years of the Company can be met, the amendment acts as a number of
separate share-based payment schemes, recognizing share-based payment expenses during
their respective vesting periods. At the same time, pursuant to the revised second equity
incentive scheme, the Group granted 810,000 new restricted shares to two incentive
recipients through Gongqingcheng Wendi No. 1 Investment Management Partnership (Limited
Partnership) on March 11, 2020 at a grant price of RMB1.67 per share.
On April 6, 2022, one incentive recipient of the original second share option incentive scheme
left the company, and the recognized share-based payment expense of RMB199,566.87 was
reversed in 2022.
Based on the fair value of restricted stock at the time of grant and the estimated exercise date
and turnover rate assessed by the valuation firm engaged by the Company according to the
income method, the total share-based payment expenses recognized for the second share
option incentive scheme in 2022 and the newly granted restricted stock are RMB561,317.20
(2021: RMB2,144,727.27).
255
2022 Annual Report of DR Corporation Limited
XIII. Share-based payment (Continued)
2. Equity-settled share-based payments
RMB
Methodology for determining the fair value of The fair value of restricted shares at the
equity instruments at the date of grant grant date was assessed by the hired
appraisal agency according to the income
method.
Basis for determining the number of At each balance sheet date during the
exercisable equity instruments vesting period, the number of equity
instruments expected to become exercisable
is modified with the best estimates based on
subsequent information such as the latest
available changes in the number of
exercisable employees.
Reasons for material differences between the
current and prior period estimates Nil
Accumulated amount charged to capital
reserve for equity-settled share-based
payments 26,344,118.97
Total expense recognised for equity-settled
share-based payments during the period 561,317.20
3. Cash-settled share-based payments
N/A
XIV. Commitments and Contingencies
1.Significant commitments
As at the date of approval of this financial statement, the Group had no significant
commitments.
2. Contingencies
(1) Material contingencies existing as at the balance sheet date
As at the date of approval of this financial statement, the Group had no contingencies required
to be disclosed.
(2) To state that the Company has no material contingency that needs to be disclosed
the Group had no contingencies required to be disclosed.
256
2022 Annual Report of DR Corporation Limited
XV. OTHER SIGNIFICANT EVENTS
1.Segment reporting
None.
2.Operating segments
The management of the Group considers the internal organizational structure, management
requirements and internal reporting system and other aspects to believe that the businesses
of the companies in the Group have obvious similarities, all of which are in the jewelry retail
industry. Management regularly reviews the Group's overall financial statements for resource
allocation and performance evaluation, and as a result, according to Accounting Standard for
Business Enterprises No. 35 - Segment Reporting, the Group's operations constitute a single
operating segment and no segment reporting information is prepared.
3.Other information
Information on products and services
Income from external transactions
RMB
2022 2021
Engagement diamond rings 2,902,464,272.49 3,660,710,737.20
Wedding diamond rings 713,611,440.73 866,423,450.66
Other accessories 34,105,640.81 67,527,540.26
Other business 31,393,058.65 28,068,052.36
3,681,574,412.68 4,622,729,780.48
Geographic information
The Group's geographical division is relatively concentrated, and 99.80% of the external
transaction income was attributable to the Chinese mainland region in 2022 (2021: 99.88%);
As at December 31, 2022, 99.83% of non-current assets were attributable to the Chinese
mainland region (December 31, 2021: 99.79%).
Information about major customers
The Group's customers are relatively fragmented and there is no single customer with more
than 10% of the Group's transaction volume.
257
2022 Annual Report of DR Corporation Limited
XV. OTHER SIGNIFICANT EVENTS (continued)
Lease
As lessee
RMB
2022 2021
Interest expenses on lease liabilities 21,536,754.47 12,331,582.92
Variable lease payments not included in the
measurement of lease liabilities 37,374,018.79 54,219,174.61
Cash outflows for fixed lease payments 335,781,536.76 241,234,928.05
Total cash outflow for leases 394,692,310.02 295,454,102.66
The Group has lease contracts for various items of buildings, used in its operations, and
leases are usually for 1 to 5 years. Lease contracts usually stipulate that the Group cannot
sublease the leased assets, and some lease contracts require the Group's financial indicators
to be maintained at a certain level. There are several lease contracts that include extension
and termination options and variable lease payments. Refer to “Potential future cash outflows
not included in the measurement of lease liabilities” for the impact of clauses relating to
variable lease payments on future potential cash outflows.
Potential future cash outflows not included in the measurement of lease liabilities
The Group's potential future cash outflows not included in the measurement of lease liabilities
are mainly derived from variable lease payments, exposure to leases that have been
committed but not yet commenced.
Variable lease payments
Some of the property leases within the Company contain variable lease payment clauses that
are linked to sales generated from the underlying store. These clauses are used, when
possible, in order to match lease payments with stores generating higher cash flows.
As at 31 December 2022, the leasing status of the Group's premises and buildings was as
follows:
RMB
Number of Fixed payments Variable Total payments
shops and payments
offices (pcs)
Fixed payments
only 374 154,088,002.68 - 154,088,002.68
Variable payments 335 181,693,534.08 37,374,018.79 219,067,552.87
Total 709 335,781,536.76 37,374,018.79 373,155,555.55
258
2022 Annual Report of DR Corporation Limited
XIII. OTHER SIGNIFICANT EVENTS (continued)
Lease (continued)
Potential future cash outflows not included in the measurement of lease liabilities (continued)
If the sales of all the Group's stores increase by 5%, the total lease payments are expected to
increase by 0.70%; If the sales of all the Group's stores decrease by 5%, the total lease
payment is expected to decrease by 0.65%
Leases that have been promised but not yet commenced
The expected future annual cash outflows for leases to which the Group is committed but
which have not yet commenced are as follows:
RMB
2022 2021
Within 1 year, inclusive 7,807,604.75 7,347,963.22
1 to 2 years, inclusive 11,664,137.21 11,134,918.23
2 to 3 years, inclusive 9,947,015.73 8,473,927.77
Over 3 years 3,088,983.25 2,411,270.00
32,507,740.94 29,368,079.22
Other information relating to leases
For right-of-use assets, refer to notes V.11.
259
2022 Annual Report of DR Corporation Limited
XVI. NOTES TO FINANCIAL STATEMENTS OF THE COMPANY
1.Accounts receivable
Accounts receivable are disclosed by category as follows：
RMB
Closing balance Opening balance
Carrying
Outstanding balance Impairment allowance amount Outstanding balance Impairment allowance Carrying amount
Provision Provision
Amount Percentage Amount ratio Amount Percentage Amount ratio
Impairment allowance
which is individually
assessed 1,476,671.46 1.65% 1,476,671.46 100.00% - 1,750,141.69 0.77% 1,695,434.95 96.87% 54,706.74
Including:
Mall A 1,476,671.46 1.65% 1,476,671.46 100.00% 0.00 1,576,671.46 0.86% 1,576,671.46 100.00% 0.00
Mall B 173,470.23 0.09% 118,763.49 68.46% 54,706.74
Impairment allowance
based on credit risk 88,125,091.04 98.35% 3,527,062.57 5.46% 84,598,028.47 224,321,075.66 99.23% 7,049,640.91 217,271,434.75
characteristics
Including:
Accounts receivable
from subsidiaries 2,071,189.38 2.31% - - 2,071,189.38 43,257,717.26 19.13% - - 43,257,717.26
Accounts receivable
from POS
machines and e-
commerce
platforms 21,471,639.56 23.96% - - 21,471,639.56 50,278,645.98 22.25% - - 50,278,645.98
Accounts receivable
from the mall 64,582,262.10 72.08% 3,527,062.57 5.46% 61,055,199.53 130,784,712.42 57.85% 7,049,640.91 5.39% 123,735,071.51
89,601,762.50 100.00% 5,003,734.03 5.58% 84,598,028.47 226,071,217.35 100.00% 8,745,075.86 3.87% 217,326,141.49
260
2022 Annual Report of DR Corporation Limited
XIV. NOTES TO FINANCIAL STATEMENTS OF THE COMPANY (continued)
1.Accounts receivable (continued)
Impairment allowance which is individually assessed: 1,476,671.46
RMB
Outstanding Impairment Expected credit
balance allowance loss rate Reasons for provision
The mall has been in arrears for a long time
and is expected to be unable to recover the
Mall A 1,476,671.46 1,476,671.46 100.00% money.
Total 1,476,671.46 1,476,671.46
Impairment allowance based on credit risk characteristics:3,527,062.57
RMB
Closing balance
Carrying amount
Impairment Expected credit
Outstanding
allowance loss ratio (%)
balance
Receivable from malls 64,582,262.10 3,527,062.57 5.46
Total 64,582,262.10 3,527,062.57
An aging analysis of accounts receivable is as follows:
RMB
Carrying amount
Within 1 year 87,242,136.25
1 to 2 years 2,359,626.25
89,601,762.50
261
2022 Annual Report of DR Corporation Limited
XIV. NOTES TO FINANCIAL STATEMENTS OF THE COMPANY (continued)
1.Accounts receivable (continued)
The movements of impairment allowance for accounts receivable are as follows:
RMB
Change during the period Closing
Opening balance
Provision Reversal Write-offs Ohters balance
Receivables
from malls 8,745,075.86 3,479,474.77 7,220,816.60 - - 5,003,734.03
Total 8,745,075.86 3,479,474.77 7,220,816.60 - - 5,003,734.03
As at 31 December 2022, the top 5 accounts receivables by amount are as follows:
RMB
Percentage of total accounts Provision for bad debts
Name Amount receivable Amount
NO. 1 6,711,333.60 7.49% -
NO. 2 5,255,656.37 5.87% -
NO. 3
3,398,156.16 3.79% 185,513.59
NO. 4 3,096,751.05 3.46% -
NO. 5 2,970,154.16 3.31% -
Total 21,432,051.34 23.92% 185,513.59
2.Other receivables
RMB
Closing balance Opening balance
Dividends receivable 131,000,000.00 200,000,000.00
Other receivables 139,167,536.46 34,208,768.92
Total 270,167,536.46 234,208,768.92
Dividends receivable
RMB
Closing balance Opening balance
Shenzhen Darry Commercial Management
Service Co., Ltd. 100,000,000.00 100,000,000.00
He’er Culture (Shenzhen) Co., Ltd. 31,000,000.00 -
Shenzhen Love Only AI Cloud Technology
Co., Ltd. - 100,000,000.00
131,000,000.00 200,000,000.00
262
2022 Annual Report of DR Corporation Limited
XIV. NOTES TO FINANCIAL STATEMENTS OF THE COMPANY (continued)
2.Other receivables (continued)
1)The category of other receivables by nature is as follows:
RMB
Closing balance Opening balance
Payments receivable from subsidiaries 132,210,236.41 24,973,131.19
Social insurances and housing fund borne by
employees 4,697,357.08 3,514,162.46
Temporary loans for employees 1,337,667.07 700,050.62
Others 2,827,275.90 5,021,424.65
Total 141,072,536.46 34,208,768.92
2) Impairment allowance for other receivables is as follows:
RMB
Stage 1 Stage 2 Stage 3 Total
12-month Lifetime Credit-impaired
Impairment expected credit expected financial assets
allowance losses credit losses (Lifetime expected
credit losses)
Opening - - - -
balance - - 1,905,000.00 1,905,000.00
Closing - - 1,905,000.00 1,905,000.00
balance
An aging analysis of other receivables is as follows:
RMB
Carrying Value
Within 1 year 139,167,536.46
1 to 2 years 1,905,000.00
141,072,536.46
The movements in impairment allowance for other receivables is as follows:
RMB
Opening Provision Recovery or Write-off Closing balance
balance reversal
Impairment
allowance for
other
receivables - 1,905,000.00 - - 1,905,000.00
Total - 1,905,000.00 - - 1,905,000.00
263
2022 Annual Report of DR Corporation Limited
XIV. NOTES TO FINANCIAL STATEMENTS OF THE COMPANY (continued)
2.Other receivables (continued)
As at 31 December 2022, the top 5 other receivables by amount are as follows:
RMB
Percentage of Closing
Yuan Currency: total other balance of
Nature Closing balance
RMB Aging impairment
receivables (%）
allowance
Accounts receivable
No.1 from subsidiaries 91,099,947.31 Within 1 year 64.58 -
No.2 Accounts receivable
from subsidiaries 30,780,537.10 Within 1 year 21.82 -
No.3 Accounts receivable
from subsidiaries 6,668,221.83 Within 1 year 4.73 -
No.4 Accounts receivable
from subsidiaries 1,042,726.80 Within 1 year 0.74 -
No.5 Accounts receivable
from subsidiaries 982,200.75 Within 1 year 0.70 -
130,573,633.79 92.57 -
264
2022 Annual Report of DR Corporation Limited
XIV. NOTES TO FINANCIAL STATEMENTS OF THE COMPANY (continued)
3.Long-term equity investments
RMB
Closing balance Opening balance
Impairment Impairment
Carrying amount allowance Carrying value Carrying amount allowance Carrying value
Subsidiaries 207,935,477.77 207,935,477.77 65,435,477.77 65,435,477.77
Total 207,935,477.77 207,935,477.77 65,435,477.77 65,435,477.77
（1） Subsidiaries
RMB
Increase/decrease during the period
Closing balance Impairment Closing balance Closing balance of
Investee of prior year Additions Decrease allowance Others of the year impairment allowancet
Shanghai Darry
Diamond Co., Ltd. 5,000,000.00 - - - - 5,000,000.00 -
Chongqing Darry
Jewelry Co., Ltd.
(Note 1) 500,000.00 3,500,000.00 - - - 4,000,000.00 -
Shenzhen Love
Only AI Cloud
Technology Co.,
Ltd. 25,000,000.00 - - - - 25,000,000.00 -
Couple Only
(Shenzhen)
Jewelry Co., Ltd. 5,000,000.00 - - - - 5,000,000.00 -
Shenzhen Darry
Commercial
Management
Service Co., Ltd 10,000,000.00 - - - - 10,000,000.00 -
He’er Culture
(Shenzhen) Co.,
Ltd 9,935,477.77 - - - - 9,935,477.77 -
Haoduo Diamond
(Shenzhen) Co.,
Ltd. (Note 1) 10,000,000.00 50,000,000.00 - - - 60,000,000.00 -
43 other sales
subsidiaries (Note
2) - 89,000,000.00 - - - 89,000,000.00 -
65,435,477.77 142,500,000.00 - - - 207,935,477.77 -
Note 1: The new long-term equity investment in 2022 is caused by the Company's capital
increase in Chongqing Darry and Haoduo Diamonds.
Note 2: The other 43 sales subsidiaries were established in 2022.
265
2022 Annual Report of DR Corporation Limited
XIV. NOTES TO FINANCIAL STATEMENTS OF THE COMPANY (continued)
4.Revenue
RMB
Amount for current period Amount for prior period
Revenue Cost Revenue Cost
Primary business 3,504,011,054.08 1,059,821,992.30 4,389,965,960.24 1,356,727,891.03
Other business 30,921,300.22 32,745,675.51 27,904,899.32 29,378,374.85
3,534,932,354.30 1,092,567,667.81 4,417,870,859.56 1,386,106,265.88
Information relating to performance obligations:
Under the self-operated model, the performance obligation is completed when the customer
receives the goods. Typically for direct store operations, goods are delivered within 30 days of
receipt of the contract price; for associated stores in cooperation with shopping malls and e-
commerce platforms, the contract price is typically received within 15-60 days of delivery of
the goods. Customers are entitled to return merchandise within 15 days of receipt and
therefore a return rate is estimated and a provision for returns is required based on historical
sales. Provision for returns made at the end of the year is detailed in note VII.26.
Information relating to the transaction price apportioned to the remaining performance
obligation:
The amount of revenue corresponding to performance obligations that have been contracted
for but not yet performed or not yet completed at the end of the reporting period is
RMB122,481,130.76.
5.Investment income
RMB
2022 2021
Investment income earned during the
holding period of debt investment 15,561,771.33 10,422,712.36
Investment income earned during the
holding period of financial assets classified
as held for sale 65,266,805.97 20,655,760.37
Dividend earnings from subsidiaries 480,000,000.00 500,000,000.00
Total 560,828,577.30 531,078,472.73
266
2022 Annual Report of DR Corporation Limited
XVII. SUPPLEMENTARY INFORMATION
1.Breakdown of non-recurring profit or loss
RMB
Item Amount Description
Gain on the disposal of non-current assets 1,244,949.25
Tax refunds or reductions with ultra vires approval or without
official approval documents or occurred contingently 162,770.75
Government grants (except for government grants which are
closely related to normal business operations of the Company,
in compliance with national policies and regulations, and
conform with the amount or quantities at certain standards on
an ongoing basis) charged to gains or losses for the period 23,433,558.47
Gains/ losses from
changes in fair value of
Gain/loss from fair-value change arising from trading financial financial assets held for
assets and trading financial liabilities held and investment gain trading and investment
from disposal of trading financial assets and trading financial income arising from
liabilities, other than effective value protection hedges relating financial products during
to the Company’s ordinary course of business (Note 1); 128,297,407.98 the reporting period.
Other non-operating incomes or expenses other than the above 468,656.88
Less: Income tax effect 37,612,337.30
Total 115,995,006.03
Details of other income and loss items that meet the definition of non-recurring income and loss:
The Company had no other specific circumstances that meet the definition of non-recurring income and
loss items.
The non-recurring profit and loss items listed in Explanatory Announcement No. 1 on Information
Disclosure by Companies Offering Securities to the Public – Non-Recurring Profit or Loss are defined as
regular profit and loss items:
Amount Reason
Government grants that comply with
VAT refund upon collection for the national policies and continue to enjoy in
actual tax burden on diamond accordance with certain standard quotas
imports exceeding 4% 15,833,085.31 or quantities
267
2022 Annual Report of DR Corporation Limited
XVII. SUPPLEMENTARY INFORMATION (continued)
2.Return on net assets and earnings per share
Weighted average of return Earnings per share
Profit for the reporting period on net assets Basic Diluted
Net profit attributable to ordinary
shareholders of the parent
company 10.68% 1.82 1.82
Net profit after non-recurring profit or
loss attributable to ordinary
shareholders of the parent
company 8.98% 1.53 1.53
268
