2023 Annual Report of DR Corporation Limited
8
2023 Annual Report
DR Corporation Limited
April 2024
2023 Annual Report
2023 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.
Despite the steady growth across China’s jewelry industry During the Reporting Period, the diamond market
was definitely influenced by aggravated structural differentiation, intense competition, sluggish demands for
diamond jewelry as consumer discretionary and obviously increasing gold safe-haven demands. According
to statistics from the Gems & Jewelry Trade Association of China, the diamond products market declined
about 27% year-on-year in 2023. With a fully self-managed sales model and diamond jewelry as the
mainstay, the Company’s operating revenue dropped 40.78% year-on-year in 2023, which was consistent
with the diamond market trend.
In context of strategic brand upgrading, DRCO has adjusted corporate channel strategy and optimized the
channel layout to enhance brand image and service experience. Some low-potential stores and those
incompatible with the brand image were closed, relocated or replaced. According to the Accounting
Standards for Business Enterprises and the Company’s accounting policies, DRCO made provisions for
asset impairment on stores that showed signs of impairment, and made bad debt provision for lease
deposits that could not be recovered due to early closure of the stores, based on the prudence principle of
accounting. The above-mentioned matters had a major impact on the Company’s performance in net profits
during the reporting period, with the net profits attributable to shareholders down by 90.54% year-on-year.
In face of ever-changing market, DRCO will make active response and proactively adjust strategies to boost
brand potential and product competitiveness. In particular, we will focus on sound business operation and
store profitability, and take actions to reduce costs and increase efficiency, with a view to promoting
sustainable and stable development of the Company.
During the reporting period, there were neither material adverse changes in DRCO's principal business and
core competitiveness, nor overcapacity or persistent decline in the jewelry industry without any significant
risks to sustainable operation of the Company (see details in “I. Industrial situation during the reporting
period”, “II. DRCO main business during the reporting period” and “III. Analysis of core competitiveness”
under Part III. Management Discussion and Analysis).
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
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2023 Annual Report of DR Corporation Limited
Self-disciplinary Supervision Guidelines No.3 for Companies Listed on Shenzhen Stock Exchange - Industry
Information Disclosure.
According to the profit distribution plan approved by the Board of Directors, a cash dividend of
RMB5.00(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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2023 Annual Report of DR Corporation Limited
Table of Contents
Part I. Important Notes, Contents and Terminology ...................................................................1
Part II. Company Profile and Key Financial Indicators ................................................................8
Part III. Management Discussion and Analysis ...........................................................................14
Part IV. Corporate Governance ......................................................................................................68
Part V. Environmental Protection and Social Responsibility ................................................. 103
Part VI. Important Matters ........................................................................................................... 104
Part VII.Changes in Shares and Information of Shareholders .................................................188
Part VIII. Information about Preferred Shares ............................................................................ 204
Part X. Financial Report ................................................................................................................ 205
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2023 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 2023 annual report, which has been signed by DRCO’s legal representative;
V Other documents available for inspection.
The above-mentioned documents are kept at the Board Secretary Office of DRCO.
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2023 Annual Report of DR Corporation Limited
Terminology
Terms Definition
Company, DRCO and DR DR Corporation Limited
Corporation
Darry Corporation Shenzhen Darry Jewelry Co., Ltd., the predecessor of DR
Corporation Limited
DR Investment DR Investment (Zhuhai) Co., Ltd., formerly known as Shenzhen DR
Investment Co., Ltd., is the controlling shareholder of DRCO.
Wendi No.1 Gongqingcheng Wendi No.1 Investment Management Partnership
(LP), a shareholder of DRCO
Wendi No.2 Gongqingcheng Wendi No.2 Investment Management Partnership
(LP), a shareholder of DRCO
Wendi No.3 Gongqingcheng Wendi No.3 Investment Management Partnership
(LP), a shareholder of DRCO
Darry Qianhai Shenzhen Darry Commercial Management Services Co., Ltd., a
wholly-owned subsidiary of DRCO
Love Only AI Shenzhen Love Only AI Cloud Technology Co., Ltd., a wholly- owned
subsidiary of DRCO.
Haoduo Diamond Haoduo Diamond (Shenzhen) Co., Ltd., a wholly-owned subsidiary of
DRCO
Shanghai Darry Shanghai Darry Diamond Co., Ltd., a wholly-owned subsidiary of
DRCO.
Chongqing Darry Chongqing Darry Jewelry Co., Ltd., a wholly-owned subsidiary of
DRCO
Couple Shenzhen Couple Only (Shenzhen) Jewelry Co., Ltd., a wholly-owned
subsidiary of DRCO
He’er Culture He’er Culture (Shenzhen) Co., Ltd., formerly known as Shenzhen
Shechushe Jewelry Co., Ltd., is a wholly-owned subsidiary of DRCO.
He’er Culture (Hainan) He’er Culture (Hainan) Co., Ltd., a first-tier wholly-owned subsidiary
of DRCO
DR LUXURY Singapore DR LUXURY (SINGAPORE) PTE. LTD., a wholly-owned subsidiary
of He’er Culture (Hainan) Co., Ltd.
DR LUXURY Netherlands DR Luxury Netherlands Holding B.V., a wholly-owned subsidiary of
DR LUXURY (SINGAPORE) PTE. LTD.
LOVEMONT Malaysia LOVEMONT （ MALAYSIA ） SDN.BHD., a wholly-owned subsidiary
of DR LUXURY (SINGAPORE) PTE. LTD.
DR LUXURY USA DR LUXURY USA INC, a wholly-owned subsidiary of DR Luxury
Netherlands Holding B.V.'
Love of My Love Wedding Love of My Love Wedding Planning (Shenzhen) Co., Ltd., a first-tier
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2023 Annual Report of DR Corporation Limited
Planning (Shenzhen) wholly-owned subsidiary of DRCO
Shenzhen DR Jewelry Sales Shenzhen DR Jewelry Sales Co., Ltd., a first-tier wholly-owned
subsidiary of DRCO
Happy Love Psychological Happy Love Psychological Research Center (Shenzhen) Co., Ltd., a
Research Center first-tier wholly-owned subsidiary of DRCO
Love of My Love Wedding Love of My Love Wedding Planning (Sanya) Co., Ltd., a first-tier
Planning (Sanya) wholly-owned subsidiary of DRCO
Lovemont Hong Kong Lovemont Hong Kong Limited, a wholly-owned subsidiary of DR
LUXURY (SINGAPORE) PTE. LTD.
Haoduo Diamond Zhizao Haoduo Diamond Zhizao (Shenzhen) Co., Ltd., a wholly-owned
subsidiary of Haoduo Diamond (Shenzhen) Co., Ltd.
Hong Kong DR GROUP DR GROUP COMPANY LIMITED, a wholly-owned subsidiary of
Shenzhen Love Only AI Cloud Technology Co., Ltd.
Hong Kong DR DARRY JEWELRY (HK) LIMITED, a wholly owned subsidiary of DR
GROUP COMPANY LIMITED
Couple Hong Kong Couple Only Jewelry HongKong Company Limited , a wholly owned
subsidiary of DR GROUP COMPANY LIMITED
French DR JEWELRY DR JEWELRY, a wholly owned subsidiary of DR GROUP COMPANY
LIMITED
Qianhai Wendi Shenzhen Qianhai Wendi Management Consulting Co., Ltd.
EveryYear Travel Photography Shenzhen EveryYear Travel Photography Culture Co., Ltd.
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, 2023 – December 31, 2023
Articles of Association Articles of Association of DR Corporation Limited
Listing Listing and trading of DRCO’s shares on the Shenzhen Stock
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 Shenzhen Administration for Market Regulation
Market Regulation
Company Law Company Law of the People's Republic of China
Securities Law Securities Law of the People's Republic of China
Carat (in Ct) 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. One carat can be
subdivided into 100 points for calculation of smaller diamonds;
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2023 Annual Report of DR Corporation Limited
therefore, a 50-point diamond is 0.5 carat.
Finished Diamond The diamond after cutting, polishing and other processing that can be
used to make jewelries
Gold jewelry Jewelry with gold as the main raw material
Gold lease DRCO leases physical gold from the bank for an agreed term and
upon expiration, returns physical gold of the same quantity and
variety and pays the bank a gold leasing fee as agreed.
㎡ Square meter, a unit to measure the area
DTC Direct to Customer, a direct-to-consumer business model
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2023 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
DRCO
any)
Legal representative of
Zhang Guotao
DRCO
Room 306, Wing Building of Luohu Investment Holding Building, No. 112
Registered Address Qingshuihe 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
History of changes in of Cuishan Road and Wenjin North Road, Dongxiao Street, Luohu District,
registered address Shenzhen" to "Room 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
Office address
District, 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 13th Floor, Tower C, China
Address Resources Land Building, Resources Land Building,
Nanshan District, Shenzhen 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
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2023 Annual Report of DR Corporation Limited
Website of the stock exchange for publishing
Shenzhen Stock Exchange (SZSE): www.szse.cn
DRCO’s annual report
Securities Times, Securities Daily, China Securities
Name and website of media designated for
Journal, Shanghai Securities News,
publishing the annual report
www.cninfo.com.cn
Place for inspection of DRCO’s annual report The Board Secretary Office of DRCO.
IV. Other Relevant Information
Accounting firm engaged by DRCO
Ernst & Young Hua Ming LLP (Special General
Name of accounting firm
Partnership)
Room 01-12, 17th Floor, EY Tower, Oriental Plaza,
Office address No.1 East Chang'an Street, Dongcheng District,
Beijing
Names of signing accountants Li Jianguang 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, Hu Fangxing and Fang December 15, 2021 -
China Securities Co., Ltd.
Pengcheng 1st Road, Yifeng December 31, 2024
Futian District, 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
2023 2022 YoY Changes 2021
Operating Revenue
2,180,277,744.00 3,681,574,412.68 -40.78% 4,622,729,780.48
(RMB)
Net profit attributable to
shareholders of the 68,957,568.40 729,241,946.67 -90.54% 1,301,768,398.86
parent company (RMB)
Net profit attributable to
shareholders of the -120,482,993.14 613,246,940.64 -119.65% 1,248,508,013.88
parent company after
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2023 Annual Report of DR Corporation Limited
deducting non-recurring
gains and losses (RMB)
Net cash flow from
36,965,507.81 818,011,112.24 -95.48% 1,544,212,850.71
operating activities (RMB)
Basic earnings per share
0.17 1.82 -90.66% 3.62
(RMB/share)
Diluted earnings per
0.17 1.82 -90.66% 3.62
share (RMB/share)
Weighted average return
1.04% 10.68% -9.64% 32.61%
on net assets
YoY Changes
At the end of 2023 At the end of 2022 At the end of 2021
preceding year
Total assets (RMB) 7,530,082,307.45 8,815,748,380.27 -14.58% 8,269,184,150.24
Total equity attributable
to shareholders of the 6,472,637,841.96 6,803,046,203.96 -4.86% 6,866,575,701.17
parent company (RMB)
For each of the past three fiscal years, the annual net profit before or after deduction of non-recurring profit
or loss, whichever is lower, has been negative; the recent year's audit report indicates uncertainty about the
company's ability to continue operating.
□ Yes No
The lower of DRCO's net profit before or after deduction of non-recurring profit or loss is negative.
Yes □ No
Item 2023 2022 Remarks
Operating Revenue
2,180,277,744.00 3,681,574,412.68 /
(RMB)
It is mainly the revenue from
wedding planning business,
Revenue deductions sales of products to be
6,520,708.61 31,393,058.65 disposed,packaging
(RMB)
materials and other
revenues.
Revenue after deduction
2,173,757,035.39 3,650,181,354.03 /
(RMB)
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2023 Annual Report of DR Corporation Limited
VI. Key Financial Indicators on Quarterly Basis
Unit: RMB
Q1 Q2 Q3 Q4
Operating Revenue 705,008,310.46 536,798,959.96 500,227,028.95 438,243,444.63
Net profit
attributable to
100,931,877.53 -47,520,815.11 20,731,956.90 -5,185,450.92
shareholders of the
listed company
Net profit
attributable to
shareholders of the
listed company after 50,459,166.64 -99,820,334.06 -18,185,975.49 -52,935,850.23
deducting non-
recurring gains and
losses
Net cash flows from
92,814,601.29 -51,795,042.10 -46,916,743.66 42,862,692.28
operating activities
The above financial indicators or their aggregate amounts differ significantly from the relevant financial
indicators disclosed in the DRCO’s quarterly or semi-annual reports.
□ Yes No
VII. Differences in Accounting Data Under Domestic and International Accounting Standards
1. The differences in net profit and net assets disclosed in financial reports prepared according to
International Financial Reporting Standards (IFRS) and Chinese Accounting Standards (CAS).
□ Applicable Not applicable
This report is prepared in accordance with Chinese Accounting Standards and does not include differences
in net profit and net assets disclosed during the reporting period under both International Financial Reporting
Standards (IFRS) and Chinese Accounting Standards.
2. The difference in net profit and net assets disclosed in financial reports prepared according to both
overseas accounting standards and Chinese accounting standards.
□ Applicable Not applicable
This report is prepared in accordance with Chinese Accounting Standards and does not include differences
in net profit and net assets disclosed during the reporting period under both Overseas Financial Reporting
Standards and Chinese Accounting Standards.
VIII. Non-recurring Profit/Loss Items and Amounts
Applicable □ Not applicable
Unit: RMB
Item Amount in 2023 Amount in 2022 Amount in 2021 Description
Non-current asset disposal 1,483,669.10 1,244,949.25 -732,715.39
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2023 Annual Report of DR Corporation Limited
gains or losses (including the
write-off portion of previously
recognized asset impairment
provisions)
Government grants
recognized in the current
period's income, excluding
those closely related to the
company's normal operations,
conforming to national policy 17,239,801.74 23,433,558.47 11,022,474.28
regulations, enjoyed under
established criteria, and
persistently impacting the
company's income and
expenses
Gains and losses on changes Gains and losses
in the fair value of financial on changes in fair
assets and liabilities held by value of financial
non-financial enterprises and assets held for
gains and losses on the trading, and
232,611,194.40 128,297,407.98 59,197,417.83
disposal of financial assets investment income
and liabilities, except for from wealth
effective hedging operations management
related to regular business products during the
operations of DRCO reporting period.
Collection of long
Reversal of provision for
overdue payments
impairment of receivables
1,476,671.46 0.00 0.00 from shopping
subject to separate
malls during the
impairment test
reporting period.
Mainly increase in
liquidated
Other non-operating income
damages arising
or expenses other than the -4,827,618.30 631,427.63 -747,789.79
from early closure
above items
of stores during the
reporting period.
Less: Income tax effect 58,543,156.86 37,612,337.30 15,479,001.95
Total 189,440,561.54 115,995,006.03 53,260,384.98 --
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 listed in Interpretative Announcement No. 1 on the
Disclosure of Information by Companies Issuing Securities Publicly — Non-recurring Gains and Losses as
recurring items
Applicable □ Not applicable
Item Amount involved (RMB) Explanation
The value-added tax refund
Government grants that comply
obtained due to the portion of the
8,266,133.90 with national policies and continue
actual tax burden on diamond
to enjoy in accordance with certain
imports exceeding 4%, which
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2023 Annual Report of DR Corporation Limited
qualifies for immediate refund. standard quotas or quantities
VAT exemption for small-scale
taxpayers with monthly sales not
exceeding 100,000 yuan (or 300,000 1,118,925.88
yuan for quarterly sales if a quarter is
a tax period)
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2023 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 2023, world economic recovery was weak, inflation remained at a high level globally, the spillover effects
of tightened monetary policies in major economies became prominent, de-globalization and geopolitical risks
increased. The external environment became increasingly complex and severe.The domestic economic
recovery process is volatile, affected by the slowdown of China's economic growth and the lack of
consumption power caused by the real estate market entering the downward period, the overall recovery
speed of the consumer industry is less than the market expectations. According to an investigation of the
People’s Bank of China (PBOC), the willingness to save of Chinese depositors stayed at an all-time high in
2023, which, coupled with a setback in consumer confidence, led to the amount of new deposits substantially
exceeding that of new loans for the second consecutive year. Nevertheless, consumption still showed strong
resilience among the three drivers of growth. In 2023, China's GDP grew by 5.2% over the previous year,
with 4.3% of the growth fueled by final consumption expenditure, making it the principal driver of the
economic recovery. A further breakdown of the data on total retail sales of consumer goods suggests a wide
disparity in the recovery of different consumption types in China. The consumption of catering services was
better than that of commodities, and the consumption of consumer staples was stronger than that of
consumer discretionary. The consumption structure exhibited a divided trend.
“Recovery and expanding consumption” remained key words throughout the year. To boost consumption,
diversified consumption scenarios were reopened and developed in a more orderly fashion. Responding to
the strategy of expanding domestic demand, relevant policies gave full play to the fundamental role of
consumption in economic development and continued to enhance the lasting power of high-quality
development. For instance, the National Development and Reform issued the “Measures to Restore and
Expand Consumption”, which proposed 20 specific measures to stabilize spending on big-ticket items and
expand service consumption and formed a policy package. Several authorities proposed to stimulate
consumption with a focus on resident income, financial services and the consumption environment, etc., and
specific initiatives represented by consumption vouchers were launched one after another. The consumer
market is becoming increasingly complex and diversified. The consumers are both emotional and rational in
decision-making. In particular, as the quality of life improves, people tend to pursue individualized and
customized consumption. Consumption is getting more and more diversified no matter in terms of innovative
product design, individualized marketing strategy or cross-industry integrated development.
(II) Overview of the development of the jewelry industry
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2023 Annual Report of DR Corporation Limited
In 2023, the global jewelry market was US$353.26 billion, in which the Asia-Pacific jewelry market accounted
for 59.9%. This huge market share was mainly attributed to the high demand for jewelry in densely populated
countries. As a major player in the global jewelry market, China's jewelry industry has entered a new
business cycle. According to the “2023 Development Report of China's Jewelry Industry” issued by the
Gems & Jewelry Trade Association of China, the total market size of China's jewelry industry in 2023 was
approximately RMB820 billion, an increase of 14% over 2022. The gold products market stood at
approximately RMB518 billion, up 26.3% year-on-year; the jade market was around RMB150 billion, rising
2% year-on-year; and the diamond products market was about RMB60 billion, down 26.8% year-on-year.
With the increase in disposable income, the iteration of jewelry craftsmanship and design, as well as the
ever-changing consumer demand, Statista expects China’s jewelry market to grow at a compound growth
rate (CAGR) of 4.39% from 2024 to 2028, and there is still room for growth in China's jewelry market.
By category, the natural diamond market remained sluggish in 2023, and the price of finished diamond was
declining. Due to supply control in the upstream and production cuts in the midstream, the B2B price of
natural diamond rebounded visibly in the last two months, but the Rapaport Diamond Price Index showed
that except for 0.30 carat, the other three segments all decreased in 2023, respectively by 25.9%, 20.6% and
11.3%, suggesting a weak market demand for natural diamond. According to the “Diamond Insight Report
2023” of De Beers, China's middle class is growing dramatically from one in five (21%) in 2010 to one in two
(51%) in 2022, and possibly to two-thirds by 2030. The diamond industry in China may benefit from this with
RMB140 billion of business opportunities.
In short, the jewelry industry is undergoing an unprecedented reform with the development of global
economy and the change of consumption concepts. The development of digitization in the jewelry industry,
the growing concern about sustainable development, and the pursuit of individualization and spiritual
satisfaction are driving multi-dimensional upgrading of the jewelry industry. China, as the most promising
consumer market for jewelry, will see a new development pattern. The diamond jewelry industry has begun a
cyclical adjustment filled with challenges and tests, and the leading players that would continue to improve
their core competitiveness and brand potential could seize the opportunity of industry adjustment to
exchange time for space and gain a bigger market share.
1. Increase in residents disposal income drives steady growth of the industry, and the combined
emergence of diversified consumer demands and customer behaviors
Consumption has become a key driver of China’s economic growth in which the residents disposal income
level is an important factor. In 2023, the per capita disposable income in China was RMB39,218, up 6.1%
from the previous year, which was faster than the growth of GDP. The growth in disposal income lays the
foundation for increasing the penetration rate of diamond jewelry as consumer discretionary. In the mid- and
long- run, there is much room for the penetration rate and per customer transaction of diamond jewelry to
rise in China. According to data from World Jewelry Association as quoted by Forward (Qianzhan Industrial
Research Institute), the penetration rates of diamond jewelry in tier-1, tier-2, and tier-3 cities and below were
respectively 61%, 48% and 37%, lower than the penetration rates of gold and platinum. The “Diamond
Insight Report 2023” showed that the penetration rate of diamond consumption, per capita annual spending
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2023 Annual Report of DR Corporation Limited
on diamond, and per capital possession of diamond in China were less than 50% of those in the US and
Japan. This shows that with the continuous improvement of per capita disposal income and penetration rate
is likely to spur the expansion of the jewelry industry.
In China, one of the largest consumer markets in the world, there is a strong demand for diversified and
innovative products and services. The ever-changing preferences and behavioral patterns of Chinese
consumers bring tremendous opportunities and challenges for jewelry brands. With a middle-income
population of 470 million, China is going through a consumer transition from focus on cost performance to
focus on appearance to focus on psychological satisfaction. In addition to the asset preservation and
appreciation function of jewelry, diversified consumption demands and consumer behaviors emerge in
combination as the consumer group and consumption scenarios expand. According to statistics from the
Gems & Jewelry Trade Association of China and Ernst & Young, female consumers are primarily interested
in the design of jewelry. Therefore, the ability to thoroughly understand the emotional and scenario demands
of consumers, the research, development and design ability, and the value and meaning conveyed will be
increasingly important for brands in competition.
2. Market fluctuation accelerates industry reshuffle, and the rise of self-owned brands
leads to market concentration towards top brands
After the public health emergency and the withdrawal of capital from consumer goods, the transformation
and upgrading of traditional jewelers that rely on extensive channel coverage to build barriers to competition
and gain market share with stores accelerate the exit of small and medium-sized jewelry brands and the
concentration of market resources towards the top companies. Jewelers with brand appeal and influence
may integrate upstream and downstream resources and enlarge their market share more efficiently, leading
the market to move towards the top brands. According to data from Euromonitor, China’s jewelry industry
showed a tendency of concentration towards the top brands during 2016-2023, with CR10 increasing from
19.1% to almost 35.6%, and despite a relatively fragmented competition landscape, the top companies still
have room to further raise their market share. A research conducted by McKinsey for Chow Tai Fook in 2022
suggested that the sales of Chinese branded diamond would grow at 10%-14% annually in the coming years.
The continuous improvement in the concentration of jewelry brands is inseparable from the deep
involvement of China's self-owned brands in globalization. The diversification of brand innovation, the
development of new consumer brands and the creation of brand consumption atmosphere all fuel the rise of
self-owned brands. In the competition with international brands, self-owned brands continue to accumulate
product innovation ability and brand power. According to the “Diamond Insight Report 2023” of De Beers,
established brands represented a staggering 92% of all diamond jewelry purchases in 2022, while in 2016,
the percentage was only 44%. Among them, Chinese brands led the purchase of diamond jewelry and
contributed approximately 80% of the total purchases, indicating that consumers buy diamond jewelry for the
brand culture, emotional connotations, extensive recognition and brand influence. This phenomenon where
brand is the vehicle and culture is the language reflects the deep fusion of Chinese culture and modern
consumerism.
3. The jewelry industry enters a new development stage, and structural differentiation intensifies
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2023 Annual Report of DR Corporation Limited
In 2023, catalyzed by multiple factors such as the sustained surge in gold prices in the short to mid term, the
further broadening of consumption scenarios, and the iteration and upgrading of new crafts and designs, the
gold jewelry industry showed a relatively impressive performance among consumer discretionary. Data from
the National Bureau of Statistics shows that the total retail sales of consumer goods in 2023 was RMB47.15
trillion, an increase of 7.2% over the previous year. The retail sales of gold and silver jewelry in the consumer
market was strong, with the total retail sales of gold and silver jewelry above the designated size amounting
to RMB331 billion, up 13.3% year-on-year, which was the second fastest growth.
Gold is a precious metal strongly correlated with the monetary system, the economic cycle, and the global
economy. Based on its inherent monetary attributes, gold continues to be a safe haven of assets for Chinese
consumers. According to the latest statistics released by China Gold Association, the whole country
consumed 1,089.69 tons of gold in 2023, an increase of 8.78% compared with the same period in 2022,
including 706.48 tons of gold jewelry, a year-on-year increase of 7.97%; 299.60 tons of gold bars and coins,
a year-on-year increase of 15.70%; and 83.61 tons of gold for industrial and other purposes, a year-on-year
decrease of 5.50%. Benefiting from the continuous rise in gold prices and the increasing demand of
residents for value preservation and risk hedging, investment in physical gold attracted greater attention and
the consumption of gold bars and coins, which have relatively low premiums, showed a quantitative growth.
However, the demand for diamond, which also belongs to jewelry, experienced cyclical adjustments. IDEX
data showed that the closing price of the finished diamond price index at the end of December 2023 was
16.53% lower than that at the end of December 2022, while the annual drop in 2022 was 6.4%. Moreover,
according to customs statistics for Shanghai Diamond Exchange, diamond transactions at Shanghai
Diamond Exchange totaled US$3.109 billion during January-December 2023, a decrease of 29.7% year-on-
year. Meanwhile, the emergence of lab grown diamonds aroused public discussion on the "value of
diamond", and consumers misunderstood the scarcity and uniqueness of natural diamonds to varying
degrees as a result of publicity by some We Media accounts. However, quite a number of industry
practitioners believe that lab grown diamonds and natural diamonds are two completely different markets
and segments, and that lab grown diamonds provide a new option for the diamond consumer market, which
will help to expand the volume of the diamond market as a whole. Frost & Sullivan projected that the global
diamond market would see a supply-demand gap of 159 million carats by 2030. Hence, some senior industry
analysts believe that the decline in natural diamonds is essentially a correction of the rapid rise in diamond
prices between 2020 and 2021. As diamond production falls, the long-term scarcity of diamonds will be
restored and the price index will gradually pick up.
4. The transition from “channel model” to “new retail model” promotes digital transformation of
the industry
In the past, consumers decided whether a brand was reliable mainly based on the size of its channels, so
popular jewelry brands penetrated the market mostly by expanding their channels to reach as many
consumers as possible. In recent years, however, as the "aesthetic consciousness" awakens, general
consumers can hardly form an independent consumer preference through repeated purchases of jewelry,
which is high-priced low-frequency consumer goods, making external reputation particularly important. As a
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2023 Annual Report of DR Corporation Limited
result, brand operators that focus on terminal marketing, product innovation and digital capacity building are
more likely to gain new growth momentum in the new consumer environment, which accelerates the
transition of the jewelry industry from the "channel model" to the "new retail model". Meanwhile, the rapid
development of online media influences transmission efficiency, which gives consumers enough options and
selective power. Thus, jewelry brands must accurately grasp the end consumer demands and respond
quickly. the importance of the whole-link digital capacity is increasingly highlighted in the demand-led stage.
In the demand-led stage, digital capability across the chain becomes increasingly important.
Over the past three years, changes in consumers, media, and brands have shaped a new direction for online
and offline integration. Digital transformation enables jewelry companies to deliver personalized services and
customized products better, and they can understand consumer preferences and needs more accurately
based on data collection and analysis. In addition to improvements in product development, design and other
tangible aspects, consumer experience and experiential consumption are becoming essential links in the
consumption chain. According to the "2024 Consumer and Media Trends Report" issued by GroupM, 84% of
consumers would experience a product before making a purchase offline, in which 31% would view a
product online and then experience and buy it offline. The influence of recommendations and co-branding on
consumers' final purchases increased by 25% year-on-year in 2023. The percentage of consumers who
searched for more information before making an online purchase grew from 58% in 2022 to 65 % in 2023.
The consumer buying behaviors show that, more and more consumers tend to buy from channels such as
official website, mini program and private traffic pool of shopping guides, and consumers are increasingly
influenced by the recommendations of celebrities and opinion leaders on We Media platforms.
5. Deep insight into consumer needs is still a key factor in the long-term development of the
jewelry industry
China's consumer market is changing rapidly, with the core element of competition shifting from production
and channels to the consumer's mentality. It is crucial for brands to gain deep insights into consumer needs,
secure a favorable position in consumers' minds, and build a cognitive advantage through a differentiated
positioning. In 2023, some jewelry brands combined traditional craftsmanship, wedding culture and Chinese
and Western aesthetic elements into their jewelry design based on a thorough understanding of traditional
wedding culture and modern consumer needs, and developed uniquely differentiated products that won the
hearts of consumers. Furthermore, brand impression that represents the products is the key to consumer
recognition. It requires jewelry brands to make prospective arrangements in terms of design concept
planning, selection of suitable technology, and cultivation of cultural connotations.
Given the strong link between jewelry brand and consumer trust, quality, personal taste and style, brand has
become a significant driver of consumers' purchasing decisions. Jewelry brands that have accumulated
certain brand assets tend to be more influential. According to the "2023 Jewelry Consumer Trends Report",
56% of respondents in China associated jewelry brands with trust and quality, while 53% associated brands
with the expression of personal taste and style. Consumers on the Chinese mainland were more brand-
conscious than their Hong Kong counterparts, as the report found that 86% of respondents on the Chinese
mainland attached more importance to brand. Thus, the credibility and quality of jewelry brands play a pivotal
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2023 Annual Report of DR Corporation Limited
role in influencing purchase decisions. Moreover, consumers expect to see values and emotions consistent
with their own in the image, story and underlying philosophy of the brand they choose, so jewelry brands with
emotional connotations, value propositions, attitudes and tonality are likely to further broaden their
consumption scenarios. According to the "2023 Jewelry Consumer Trends Report", the value proposition of
natural diamond is multifaceted and not limited to its scarcity and value preservation function. Chinese
consumers associate natural diamond with significant moments in their lives, anniversaries, love and
achievements. Female respondents showed the most striking emotional connection to diamond. 82% of
female consumers believed that diamond represented eternal love/true love or symbolised constant
commitment and fidelity in a proposal.
II. DRCO main business during the reporting period
DRCO abides by 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) Main business of DRCO
Insisting on the corporate vision of global leader in true love culture”, DRCO is a globalized public company
engaging in high-end diamonds and jewelry and related services with true love culture. Focusing on such
business scenarios as engagement, wedding, anniversaries and gold bridal gifts, DRCO continues to deliver
worldwide consumers with high-quality jewelry products and unique true love experience & services.
With the mission of "helping more people express love and making love happy for a long time" and to help
widely express love and make love forever, DR Diamond Ring, the company's high-end jewelry brand, is
dedicated to spreading and witnessing true love stories worldwide, and encourages everyone to bravely
seek true love, forging a global brand image characterized by romance, love, fashion and sincerity. Through
a global online and offline DTC (Direct to Consumer) retail network, our products are available in over 200
cities at domestic and overseas (e.g. Paris, France, and Hong Kong, China). Empowered by differentiated
positioning, professional designs and unique service experience, DR has become one of leading brands in
the worldwide market of diamond rings, and reaped 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, for several consecutive years. During the reporting period,
the Company was listed into Top 100 Luxury Goods Enterprises for 2023 by Deloitte. Moreover, DR
Diamond Ring also received the prestigious "Chinese Image Brands Award 2023” from CCTV.
At whatever time, everyone still yearns for a lifetime of true love deep in his heart, DR Condenses the most
devout and attitude of true love belief. Therefore, we sincerely hope to help more people express, find and
enjoy true love forever, and promote such belief around the world, which is original intention and aspiration
for creating DR brand. To this end, every DR diamond ring is customized for only one person. And around
the user's lifelong romance continues to expand, DR brand offers "Wedding+" services covering wedding
rings, proposal/wedding planning, anniversary gifts, and wedding photography or portrait. The beginning and
destination of DR brand is centered on witnessing, spreading and serving true love.
(II) Main products of DRCO
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2023 Annual Report of DR Corporation Limited
The Company is dedicated to creating high-quality innovative products and providing superlative services to
offer each customer a unique experience of true love. Our main products currently include engagement rings,
wedding rings, anniversary gifts, and gold bridal gifts. During the reporting period, the Company collaborated
with renowned domestic and international craftsmen, who pay tribute to the determination to love forever
with a deep dedication to craftsmanship. With a unique aesthetic attitude and stringent craftsmanship
standards, they meticulously crafted each piece of jewelry representing "the sole true love in one life".
(III) An Overview of the Operational Status
1. Customized fully self-operated sales model
The company adopts an integrated omni-channel approach, providing consumers with a seamless online
and offline shopping experience. Channels such as the official website, mini-program, Tmall, and JD flagship
stores serve as online platforms for browsing and purchasing, while offline stores offer physical retail
experiences. This strategy leverages the efficiency of online platforms and the tactile experience of offline
channels.
For brand promotion, image building, and unified management, the DR brand follows a fully self-operated
model, with all stores managed and operated by the company. Both online and offline products are uniformly
priced, primarily offering customized products to customers. Under the customization model, customers
place orders and make payments (either deposits or full payments) online or offline. The company then
arranges production through outsourcing, delivers the products directly to customers' doorsteps after
receiving the final payment, or allows customers to collect the products from designated stores.
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2023 Annual Report of DR Corporation Limited
To enhance the romantic experience for customers, the company offers a range of value-added services,
including the "True Love Agreement," "Love Confirmation Certificate," and co-hosting of marriage proposal
ceremonies at stores. These services enrich the overall consumer experience, further reinforcing the brand's
identity and emotional connection with customers.
(1) Revenue by business segment during the reporting period
During the reporting period, the Company achieved revenue of RMB 2,180.28 million, a decrease of 40.78%
compared to the same period last year, and the corresponding order quantity decreased by 38.18% year-on-
year. However, the average transaction price remained relatively stable, a decrease of 3.28% year-on-year
(excluding other businesses).In terms of business model classification, the revenue from online self-operated,
offline directly operated, and offline jointly operated channels amounted to RMB227.09 million, RMB1,769.41
million, and RMB177.26 million respectively. This represents decreases of 42.45%, 40.63%, and 35.59%
respectively compared to the same period last year. Revenue from other business activities amounted to
RMB6.52 million, representing a decrease of 79.23% compared to the same period last year, mainly due to a
reduction in product disposals during the reporting period.
During the reporting period, the company's comprehensive gross profit margin was 68.83%, a decrease of
0.96 percentage points compared to the same period last year. Both online and offline business models are
the company's main business, accounting for over 99% of revenue. The gross profit margin of the main
business is basically consistent with the comprehensive gross profit margin, and the level of gross profit
margin remains relatively stable.
Revenue by business segments during the reporting period
Unit: RMB0’000
2023 2022 YoY
YoY
chang
Business change
Operating Gross Operating Gross e in
Segment Revenue Revenue in
cost margin cost margin gross
revenue
margin
Online Self- 22,708.81 7,589.49 66.58% 39,459.33 12,847.89 67.44% -42.45% -0.86%
Operated
Offline Direct- 176,941.40 54,320.50
69.30% 298,037.34 86,718.60 70.90% -40.63% -1.60%
Operated
Offline Joint- 17,725.50 5,664.30 68.04% 27,521.47 8,713.53 68.34% -35.59% -0.29%
Operated
Other 652.07 381.03 41.57% 35.45
3,139.31 2,947.23 6.12% -79.23%
Businesses %
Total 218,027.77 67,955.33 68.83% 368,157.45 111,227.25 69.79% -40.78% -0.96%
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.
(2) Stores in the reporting period
① Changes in number of stores
During the reporting period, the company proactively adjusted its store channel strategy to adapt to market
changes. It conducted assessments of existing stores and optimized channels based on factors such as
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2023 Annual Report of DR Corporation Limited
changes in commercial districts, alignment with customer demographics, and brand positioning. Throughout
the reporting period, the company opened 24 new stores (8 in Q1, 7 in Q2, 4 in Q3, and 5 in Q4) and closed
184 stores (9 in Q1, 18 in Q2, 86 in Q3, and 71 in Q4), resulting in a net reduction of 160 stores.
As of the end of the reporting period, the company operated a total of 528 stores, all of which were self-
operated. These stores were located in 209 cities across 31 provinces/autonomous regions/municipalities in
China, with 2 non-mainland stores located in Paris, France, and Hong Kong, China. The majority of domestic
stores were situated in third-tier cities and above, with 330 stores located in first and second-tier cities,
accounting for approximately 62.74% of the total, and 196 stores located in third-tier cities and below,
accounting for approximately 37.26% of the total.
Store Movements
Open Close
Classificatio Opening Net Closing
Tier of city Change in Change in change
n number New Closed number
business mode business mode
Direct--
operated 411 11 2 122 1 -110 301
Tier-1 and
Joint-
tier-2 operated
38 1 1 9 2 -9 29
Subtotal 449 12 3 131 3 -119 330
Direct--
operated 218 11 - 49 1 -39 179
Tier-3, 4
Joint-
and below operated
19 1 1 4 - -2 17
Subtotal 237 12 1 53 1 -41 196
Direct--
operated 2 - - - - - 2
Overseas Joint-
- - - - - - -
operated
Subtotal 2 - - - - - 2
Direct--
operated 631 22 2 171 2 -149 482
Total Joint-
57 2 2 13 2 -11 46
operated
Total 688 24 4 184 4 -160 528
② Newly opened stores
During the reporting period, DRCO opened 24 new self-operated stores, a decrease of 230 YoY. During the
reporting period, the newly opened stores realized revenue of RMB 34.19 million, accounting for 1.57% of
the total revenue; their gross profits reached RMB 23.91 million.
Newly opened stores
Unit: RMB0’000
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2023 Annual Report of DR Corporation Limited
2023 2022
Mode Region Number As % of Number As % of
Area Gross Area Gross
of Revenue total of Revenue total
(m) profit (m) profit
stores revenue stores revenue
North
China - - - - - 6 413.00 1,409.48 0.38% 986.49
East
China - - - - - 8 436.28 822.41 0.22% 538.26
Joint- South
operated China - - - - - 1 65.00 378.43 0.10% 265.26
Central
China 1 110.00 63.05 0.03% 44.49 1 31.00 398.99 0.11% 255.46
Northwest 1 36.60 210.69 0.10% 128.52 - - - - -
Subtotal of joint-
operated stores 2 146.60 273.74 0.13% 173.00 16 945.28 3,009.31 0.82% 2,045.47
Northeast 1 98.00 155.97 0.07% 95.24 17 1,443.78 2,269.53 0.62% 1,590.26
North
2 211.00 285.71 0.13% 199.52 27 2,639.87 5,281.82 1.43% 3,783.43
China
East
5 395.15 606.17 0.28% 435.06 84 7,630.04 9,425.75 2.56% 6,703.03
China
Direct-
South
operated 3 334.33 462.18 0.21% 326.37 25 2,561.07 3,133.24 0.85% 2,229.32
China
Central
2 134.00 131.39 0.06% 89.97 26 2,629.97 3,324.86 0.90% 2,372.48
China
Northwest 6 625.56 772.49 0.35% 542.54 18 1,535.64 3,107.10 0.84% 2,186.87
Southwest 3 245.82 730.86 0.34% 529.02 41 4,692.06 3,135.16 0.85% 2,231.48
Subtotal of direct-
22 2,043.86 3,144.78 1.44% 2,217.72 238 23,132.43 29,677.45 8.06% 21,096.87
operated stores
Total 24 2,190.46 3,418.52 1.57% 2,390.72 254 24,077.71 32,686.77 8.88% 23,142.34
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
In 2023, the Company actively adjusted and optimized the store channel strategy to focus on improving the
quality and profitability of the stores. During the reporting period, the Company closed 184 stores, including
171 direct-operated and 13 joint-operated ones. These closed stores eared revenue of RMB 226.25 million
during the reporting period. Based on the revenue of RMB 567.92 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 -341.67
million, representing -15.67% of the revenue in the reporting period.
Analysis of the impact of closed stores on revenue during the reporting period
Unit: RMB0’000
Revenue Revenue in the Impact of Impact of
Mode Region Closed during the same period of closed stores closed stores
reporting the preceding on DRCO as a % of
23
2023 Annual Report of DR Corporation Limited
period year created by during the revenue during
stores closed reporting the reporting
during the period period
reporting period
Northeast 1 143.64 404.14 -260.50 -0.12%
North China 1 99.31 315.99 -216.68 -0.10%
Joint- East China 6 493.88 1,225.73 -731.85 -0.34%
operated South China 2 315.39 807.74 -492.34 -0.23%
Central China 2 130.48 275.92 -145.44 -0.07%
Southwest 1 122.50 388.57 -266.07 -0.12%
Subtotal of joint- operated
13 1,305.21 3,418.09 -2,112.88 -0.97%
stores
Northeast 7 628.98 1,209.68 -580.70 -0.27%
North China 16 2,445.51 6,164.20 -3,718.69 -1.71%
East China 81 8,886.44 22,583.06 -13,696.62 -6.28%
Direct-
operate
South China 22 2,652.14 9,065.46 -6,413.32 -2.94%
Central China 12 2,102.24 5,221.35 -3,119.10 -1.43%
Northwest 12 1,886.99 4,426.82 -2,539.83 -1.16%
Southwest 21 2,717.32 4,703.26 -1,985.94 -0.91%
Subtotal of direct- operated
171 21,319.62 53,373.82 -32,054.20 -14.70%
stores
Total 184 22,624.83 56,791.92 -34,167.08 -15.67%
Note1: 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
Note 2: 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.
④ Performance analysis for stores during the reporting period
During the reporting period, for direct-operated stores, the revenue of a single store was RMB 3.03 million,
down 47.24% from the same period of last year; the gross profit of a single store was RMB 2.10 million,
down 48.43% from the same period of last year, and the area efficiency of a single stores was RMB 0.03
million, down 46.29% from the same period of last year; for joint-operated stores, the revenue of a single
store was RMB 3.41 million, down 39.31% from the same period of last year; the gross profit of a single store
was RMB 2.32 million, down 39.57% from the same period of last year, and the area efficiency of a single
stores was RMB 0.05 million, down 39.13% from the same period of last year. This is primarily due to an
excessive density of stores in certain cities, leading to revenue dilution for individual stores. The company
also had significant room for improvement and enhancement in channel layout, site selection, customer flow
conversion, and store operation management. After adjusting and optimizing channels in the second half of
the year, the decrease in single-store revenue, gross profit, and sales per square meter (efficiency) was
reduced compared to the first half of the year. Additionally, the impact of external macroeconomic conditions
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2023 Annual Report of DR Corporation Limited
and the diamond-studded market on the gold product market led to an overall decline in company sales,
resulting in significant decreases in single-store revenue, gross profit, and efficiency compared to the same
period last year.
Store revenue and gross profit
Unit: RMB0’000
2023 2022 YoY change
Aver-Sing- Sing- Singl
Class age Aver- Single Single -
ificati numb le - Single Single le - age Single Single- e - Single Single-
store
- store -store store - store - store store store -store store
on er of store reven gross area numb area reven gross area Revenu gross
area
area er of efficienc
store ue profit effici ㎡ ue profit effici e profit
㎡ stores y
s ency ency
Direc
t-
584 89.11 302.98 209.97 3.40 519 91.00 574.25 407.17 6.33 -47.24% -48.43% -46.29%
oper
ated
Joint
-
52 68.29 340.88 231.95 4.99 49 69.00 561.66 383.84 8.20 -39.31% -39.57% -39.13%
oper
ated
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
N Opening Business Revenu Operating Operating
Store Name Mode
o. time area (㎡) e cost profit
DR Store in Guangzhou Tianhe direct-
1 2017/11/11 266.00 1,267.19 403.44 -79.92
Zhengjia Plaza operated
DR Store in Xi'an SAGA direct-
2 2018/7/28 168.00 1,262.19 399.07 317.94
International Shopping Mall operated
joint-
3 DR A Store in Lanzhou Center 2021/6/22 83.00 1,112.01 350.82 404.09
operated
direct-
4 DR Store in Chengdu IFS 2018/1/17 93.00 1,063.22 339.52 334.64
operated
direct-
5 DR Store in Beijing IKEA Livat 2018/7/5 60.00 916.63 288.75 417.94
operated
DR Store in Fuyang Yingzhou direct-
6 2020/11/9 111.99 884.20 256.17 396.22
Wanda Plaza operated
direct-
7 DR Store in Jinhua Yiwu Zhixin 2018/4/18 122.00 860.46 268.33 380.68
operated
DR Store in Langfang Wanda direct-
8 2020/8/7 98.70 852.29 265.08 399.54
Plaza operated
DR Store in Foshan direct-
9 2020/12/30 110.00 795.35 264.00 327.39
Wangfujing Ziweigang operated
DR Guojin Store in direct- 788.48 242.11 289.20
10 2017/10/2 74.00
Changsha Wuyi Square operated
Note: Operating profit = revenue - operating costs - store expenses, excluding expenses shared with the
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2023 Annual Report of DR Corporation Limited
headquarters.
(3) Online sales during the reporting period
DRCO online business is mainly carries out through own sales platform (i.e. DRCO portal) and third-party
sales platforms. During the reporting period, DRCO's revenue from online business was RMB 227.09 million,
down 42.45% from the same period last year and accounting for 10.42% of the Company’s revenues.
Specifically, the revenue from self-owned sales platform was RMB 33.73 million, down 53.96% from the
same period last year; and the revenue from third-party sales platforms was RMB 193.35million, down
39.82% from the same period last year.
According to DRCO's purchase rules, all customers from the third-party sales platforms need to register on
DRCO's self-owned sales platform ( i.e. DRCO portal). As of the end of the reporting period, the registered
customers on DRCO portal totaled about 12.21 million including around 1.55million new ones during the
reporting period. In 2023, the per customer transaction on DRCO portal was about RMB 5,800, down 7.94%
from the same period last year.
Online Sales
Unit: RMB0’000
2023 2022 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 platform 3,461.84 3,373.47 14.86% 7,983.61 7,327.52 18.57% -56.64% -53.96%
Third-party sales platforms 21,555.97 19,335.34 85.14% 34,988.44 32,131.81 81.43% -38.39% -39.82%
Total 25,017.81 22,708.81 100.00% 42,972.05 39,459.33 100.00% -41.78% -42.45%
Note 1: The self-owned sales platform is DRCO portal, 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 abundant industrial chain resources and deepening industrial division of labor, the company
adopts a light-asset operation strategy, employing an outsourced processing production model for all
finished products. On one hand, leveraging external production capabilities enhances operational efficiency,
while on the other hand, the company focuses on brand building, channel expansion, product development,
and supply chain integration, contributing to favorable operational performance. The company dynamically
adjusts the allocation of orders to suppliers based on evaluation criteria such as supplier capacity, product
qualification rate, and delivery delay rate to ensure product quality and delivery deadlines. The company has
always attached great importance to product quality, continuously improving the product quality control
system. It implements professional quality inspection personnel or related professional equipment control in
various stages such as raw material procurement, outsourced production, and product circulation.
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2023 Annual Report of DR Corporation Limited
Additionally, all products sold to end consumers undergo testing by national-level third-party inspection
agencies and are equipped with relevant professional certificates.
3. Procurement mode
In order to ensure standardized and quality raw material procurement, DRCO's supply chain department is
fully responsible for purchasing raw materials, mainly end product diamonds. DRCO formulates and
implements procurement plans based on business demands, inventory and short-term market price trends.
During the reporting period, the Company introduced new services in gold leasing and platinum procurement.
For the gold leasing service, the Company leases physical gold from a bank for a specified period, and
returns gold with the same quantity and type to the bank and pays the leasing fees upon maturity as per the
agreement.
(1) Major procurements during the reporting period
During the reporting period, the total procurement amount for the company's main raw materials and
commissioned processing was RMB 517.52 million, a decrease of 59.79% compared to the same period last
year. This decrease is mainly attributed to the decline in company performance and the decrease in new
store openings, the demand for goods preparation has decreased.
Out of this total, gold procurement amounted to RMB 58.59 million, which is gold leased by the company
from banks. Diamond procurement amounted to RMB 252.14 million, a decrease of 50.47% compared to the
same period last year. The total amount for commissioned processing procurement was RMB 200.23 million,
a decrease of 74.26% compared to the same period last year. The proportion of commissioned processing
procurement decreased by 21.76% compared to the same period last year.
This adjustment is mainly due to the company's efforts to further reduce procurement costs, improve
procurement efficiency and effectiveness by restructuring its procurement. During the reporting period, some
jewelry materials that were previously provided by external processing vendors were changed to be supplied
by the company to external processing vendors. Additionally, the company transitioned most of the
diamonds with a weight of 0.03 carats and below from being provided by external processing vendors to
being purchased directly by the company..
Major procurement during the reporting period
Unit: RMB0’000
2023 2022
Item As % of total As % of total YoY change
Purchase amount Purchase amount
purchases purchases
Diamond 25,214.39 48.72% 50,902.86 39.55% -50.47%
Gold leasing 5,858.99 11.32% - - -
Platinum 655.89 1.27% - - -
Consigned
processing 20,022.91 38.69% 77,796.66 60.45% -74.26%
Total 51,752.18 100.00% 128,699.52 100.00% -59.79%
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2023 Annual Report of DR Corporation Limited
Note 1: The purchase amount in the table is based on the price excluding tax.
Note 2: The purchase of diamonds includes both finished and rough diamond.
(2) Purchase channels and quantities of diamonds and gold 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, the company's main raw material
diamond procurement quantity was 42,334.59 carats, a decrease of 36.97% compared to the same period
last year. The total amount of gold purchased during the reporting period was 148,000 grams.
Purchase channels and quantities of diamonds and gold as the main raw material during the reporting period
2023 2022
Purchase YoY
Item Unit Channel As % of change
Purchase As % of total Purchase
total
quantity purchase quantity
purchase
Domestic 75.28% 52,812.15 78.63% -39.66%
31,868.89
market
Overseas 10,465.70 24.72% 14,350.32 21.37% -27.07%
Diamond Carat markets
Total 42,334.59 100.00% 67,162.47 100.00% -36.97%
Gold Gram Leasing 148,000.00 100.00% - - -
Platinum Gram Purchase 33,284.10 100.00% - - -
Note : The purchase of diamonds includes both finished and rough diamond.
(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 and lower demand for new stores.
2023 2022
YoY
Item Unit Purchase Purchase Purchase Purchase change
quantity quantity quantity quantity
Consigned processing Pieces 302,042.00 100.00% 616,308.00 100.00% -50.99%
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, the company's inventory consisted of raw materials, work in progress, finished
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2023 Annual Report of DR Corporation Limited
goods, materials for commissioned processing, goods dispatched, and operating supplies, with raw materials
and finished goods being the main components. As of the end of the reporting period, the balance of
inventory was RMB 537.18 million. During the reporting period, a provision for inventory depreciation of RMB
10.24 million was recorded, resulting in a net book value of inventory of RMB 526.94million.
The end-of-period balance for raw materials was RMB 126.51 million, a decrease of 6.06% compared to the
beginning of the period. The end-of-period balance for work in progress was RMB 4.02 million, an increase
of 42.18% compared to the beginning of the period, mainly due to an increase in dismantled goods awaiting
processing. The end-of-period balance for finished goods was RMB 392.19 million, a decrease of 24.00%
compared to the beginning of the period. The end-of-period balance for materials for commissioned
processing was RMB 11.43 million, a decrease of 30.64% compared to the beginning of the period, mainly
due to the impact of declining sales performance. The end-of-period balance for goods dispatched was RMB
0.32 million, a decrease of 73.65% compared to the beginning of the period, mainly due to a reduction in
inventory awaiting delivery to customers. The end-of-period balance for operating supplies was RMB 2.71
million, a decrease of 47.66% compared to the beginning of the period.
Inventory Breakdown as of the End of Reporting Period
Unit: RMB0’000
December 31, 2023 December 31, 2022
Item YoY change
Amount % Amount %
Raw materials 12,650.75 23.55% 13,467.14 19.91% -6.06%
Work in process 401.57 0.75% 282.43 0.42% 42.18%
Finished goods 39,219.00 73.01% 51,604.41 76.29% -24.00%
Outsourced
processing 1,143.18 2.13% 1,648.25 2.44% -30.64%
materials
Shipping goods 31.86 0.06% 120.93 0.18% -73.65%
Turnover
271.32 0.51% 518.34 0.77% -47.66%
materials
Total 53,717.68 100.00% 67,641.50 100.00% -20.58%
Note: The above figures are rounded to two decimal places. Some of the figures are slightly different in the e
ndings 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 long-term 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
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2023 Annual Report of DR Corporation Limited
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, the Company places a strong
emphasis on product design, craftsmanship, and quality. We collaborate with renowned jewelry designers
from both domestic and international markets through our Paris Design Center to create true love jewelry
pieces for customers from a global perspective.
(I) Advantage of the emotional connotation of the brand
In 2023, the Company's brand mission was upgraded from "Empowering More Beautiful Love" to "helping
more people express love, making love last forever". In this bustling and restless time seeking for efficiency,
wealth and value, the Company sticks to the values of “the sole true love in one life” highly in line with the
people’ pursuit of enduring, exclusive, and genuine love, which results in unique emotional connotation of
DR brand.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.
(II) Advantage of being loved by fans
DR brand boasts a host of active fan base, including over 30 million followers from well-known social
platforms like Weibo, WeChat, Tik Tok, Kuaishou and Xiaohongshu, especially overseas TikTok achieves
more than 580,000 followers. Hence, DR brand is evaluated as "the most recognized jewelry brand among
the youth". DR brand is well positioned for love and lifestyle in vertical segments and attaches importance to
the consumer’s experience in true love. We devote to diversifying and improving the experience and
ceremonial sense in consumption. A great number of fans and consumers spontaneously spread our brand
philosophy by posting their love stories and highlight moments through Weibo, WeChat Moments and short
videos, becoming our brand spokespersons and resulting in a viral effect on DR brand promotion.
(III) Operational Advantage of Omnichannel DTC
The Company is an omni-channel DTC model combining offline stores with online operation. As to the offline
sales, DRCO adheres to proprietary operation to ensure consistently excellent consumer experience. During
the reporting period, the Company actively adjusted and optimized the channel strategy in accordance with
the changes in business circles, matching with customer bases and brand positioning. On the other hand,
DRCO seizes the opportunity of consumption and technology upgrading in the new retail era to establish
online modern and efficient brand operation model through mobile Internet. By integrating social platforms,
video media, E-platforms and search engines, we constantly push brand promotion and online business to
publicize brand proposition. In addition, DRCO True Love ecosystem has been established through DTC
model, composing of core and mass customers, suppliers and 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
customers.
(IV) Advantage of light customization and light asset
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2023 Annual Report of DR Corporation Limited
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.
(V) Advantage in product design and innovation
With the spirit of innovation and craftmanship, DRCO is committed to creating high-quality products that
highlights romance, maximalism and longevity, 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 global perspective, exceptional design
inspiration and skillful technique. Additionally, we continuous to evolve product quality and processing by
constantly developing and optimizing our patented products. DRCO has won a host of prestigious design
awards at home and abroad, and currently possesses more than 200 national patents, far ahead of the
industry average.
IV. Analysis of Main Business
1. Overview
(I) Overview of operating performance in the reporting period
In 2023, the Company's net profit attributable to shareholders of the listed company was RMB 68.96 million,
a decrease of 90.54% over the same period of the previous year, which was mainly because: 1) affected by
the market situation and consumer demand, the Company's operating income dropped by 40.78% to RMB
2,180.28 million over the same period of the previous year; and 2) the Company proactively adjusted its
channel strategy and closed 184 stores during the reporting period. According to the principle of prudence,
the Company made an asset impairment loss of RMB 92.46 million for stores showing signs of impairment
based on the results of impairment calculation, which represented an increase of 282.34% over the same
period of the previous year; meanwhile, due to the early closure of stores, the loss of lease deposit that could
not be recovered amounted to RMB 16.31 million, representing an increase of 3,956.16% over the same
period of the previous year; (3) The investment income and gain/loss on changes in fair value from
investment in wealth management products during the reporting period was RMB 232.61 million,
representing an increase of 81.31% over the same period of the previous year; 4) the foregoing matters
combined resulted in a decrease in the total profits as compared with the same period of the previous year,
and the Company accrued corporate income tax expense of RMB 43.87 million, a decrease of 71.90% as
compared with the same period of the previous year.
During the reporting period, the Company's net profits after non-recurring gains and losses was RMB -
120.48 million, a decrease of 119.65% compared with the same period of the previous year. The impact of
non-recurring gains and losses on the Company's net profits was RMB 189.44 million, which was mainly the
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2023 Annual Report of DR Corporation Limited
gains and losses on changes in the fair value of trading financial assets and the investment income from
wealth management products.
(II) Overview of business operation management during the reporting period
(1) Constantly build brand power with original aspiration
①The True Love Public Welfare Initiative continues its influence, triggering nearly 400 million engagements
worldwide and setting an example of true love.
In early 2023, the company launched a public welfare initiative with a theme of "Search for 100 Diamond
Wedding Couples Around the World". By the end of the year, we visited and presented the stories of 100
diamond wedding couples in 26 cities, and invited many media and the public to participate in this true love
journey. It triggered nearly 400 million interactions worldwide. We deeply believe that everyone deserves a
unique and lifelong love. Leveraging the genuine stories of love enduring through the years, we use our
brand's influence to continue advocating for the positive energy of love. Through the delayed ceremonial
sense from DR diamond rings, we helped these elderly couples realize their romance dream that was
impossible in the previous time. Through our efforts, they were able to rediscover romance in their later
years, feeling care and respect from the community. It not only highlights the sense of social responsibility of
DR as a famous brand, but also consolidates the Company's social image as a "global leader of true love
culture". Through this public welfare initiative, the concept of "the sole true love in one life" advocated by the
Company has also been highly recognized in the society, and empowers the young generation with the
courage and strength to pursue true love in the impatient era. We will continue to work hard to use our
products and services to convey the concept of true love, so that more people can feel the beauty and power
of love.
② True Love Academy joined hands with Fanshu to advocate the true love proposition
During the reporting period, the Company, by virtue of its leading position in the industry and deep
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2023 Annual Report of DR Corporation Limited
accumulation of brand resources, founded the True Love Academy, aiming at exploring and researching the
essence of true love. Focusing on the current situation of marriage and dating and paying attention to social
topics such as the difficulty of young people to fall in love, the Company, together with the well-known
reading brand Fanshu (formerly Fan Deng Reading Club), held an offline intimate relationship sharing
session entitled "Love is an Ability" for our fans in the hope of exploring love and marriage with a more
professional and scientific attitude and easing the modern people's anxieties and uneasiness about their
relationships. The sharing session invited Liang Yongan, a professor from Fudan University, to interact with
Christopher Meng, the author of Intimacy, on the spot, aiming to help address young people's love confusion
based on their actual needs so as to provide them with some practical help through more in-depth interactive
exchanges offline. At the same time, DRCO also joined forces with Fanshu to introduce a list about books on
the intimate relationships, sharing the content of Mr. Fan Deng's personal reading about the books for free
for a limited period of time to more groups who are troubled by intimate relationships, in the hope that every
pair of love couples that should have come to the end of time will not regret due to the scarcity, and will reap
the wisdom and courage to love one person with their whole life through continuous learning of the ability to
love and to be loved.
③ On the Qixi Festival (Chinese Valentine's Day), DRCO provided emergency roses domestically and
internationally, serving as a cultural ambassador by promoting traditional Chinese culture worldwide.
During the Qixi Festival in 2023, the Company prepared "Emergency Roses" in various locations such as the
Eiffel Tower, the Louvre, and along the Seine River in Paris, France, aiming to encouraging young couples to
express their love to each other bravely on the Qixi Day. Using emergency roses as a medium and
promoting Qixi Festival culture, the DRCO brought the French people in an immersive experience of the
Chinese Valentine's Day, conveying the brand concept of "true love knows no boundaries." This event
showcased the Company's brand as a bridge for the spirit of true love, shouldering the responsibility of a
major national brand. The effort aimed to promote the Chinese traditional cultural festivals, facilitate the
globalization of Chinese culture, and bring the brand into the international spotlight.
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2023 Annual Report of DR Corporation Limited
④ Constructing a cliff auditorium with the art of red thread, creating traditional Chinese aesthetics, and
conveying the faith of true love with craftsmanship
During the reporting period, the Company inherited and promoted Chinese culture under the theme of "Red
Thread". On the Qixi Festival, the Company utilized the red thread as a medium closely associated with its
brand to create the DR cliff auditorium in Dali, blending traditional Chinese and Western love symbols. The
concept of the red thread consistently embodies the belief of "the sole true love in one life", continuously
spreading the brand's true love concept. Through the high-profile offline check-in activities, the Company
expanded its user base, demonstrating the brand's philosophy of "the sole true love in one life". This strategy
enhanced user engagement and experience, reaching the users on a deeper level and increasing brand
favorability. The DR cliff auditorium promoted the brand by combining online and offline activities, providing
users with a tangible and virtual experience. The related topics were played for more than 27 million times,
completing the transition of the brand from spiritual building to physical architecture. This initiative not only
became one of the brand's tangible assets but also established a new and powerful symbol in the brand's
memory.
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2023 Annual Report of DR Corporation Limited
⑤ Cultivate the mission of the brand, develop insights into the new media trends, and innovate the mode of
short videos
In 2023, the Company's new media base shifted from accounts to platforms to rise to the challenge of larger
market traffic capacity.Our traffic covers all mainstream platforms such as Douyin, Kuaishou, Xiaohongshu,
and WeChat Video Account. On the WeChat Video Account, DRCo produced several videos with 100,000+
likes, exposing our brand for more than 1.1 billion times. Our brand enjoys strong loyalty and stickiness. In
addition, our live sales on the Douyin platform hit a new high, with a YoY growth of over 300% in 2023.
(2) Focus on improving the operation quality of stores, and optimizing and upgrading channels
During the reporting period, based on the upgrading of the overall brand strategy, the Company took the
initiative to adjust its channel strategy to enhance our brand image and service experience. Focusing on
improving the operation quality and profitability of stores, the Company optimized and upgraded the existing
channels. After conducting an all-round inventory of all stores, the Company took the initiative to close,
relocate and replace some stores with low potential or inconsistent with the brand image to further improve
the channel network and optimize the channel upgrading, and made every effort to consolidate resources to
enter high-potential business circles and create urban benchmark flagship stores, such as Xi'an SKP store
and Changsha IFS store. To enhance brand momentum, attract online and offline traffic, and increase the
influence of individual stores while providing customers with an improved service experience and a better
ambiance, the company began implementing a plan in the second half of 2023 to optimize and upgrade
existing store spaces with a new image. The program focused on the culture of true love and the sense of
brand ceremony, and used the store space as an important touch point for brand content, interactive
ceremony and customer experience, creating an immersive space for trying on and experiencing true love by
creating a relaxed, comfortable and enjoyable light French romantic design style. At the same time, the
company and other brands jointly held online and offline activities to attract users to offline stores: online
activities helped promote private community activities, while offline activities generated traffic and attracted
users to online channels.
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2023 Annual Report of DR Corporation Limited
(3) Innovate and upgrade product craftsmanship to create tokens of love with using utmost artisanal skills
Placing high importance on user needs, the Company collaborates with renowned international jewelry
designers to develop jewelry products and consistently drives innovation and improvement in product
craftsmanship. By enriching and enhancing product structures continuously, DRCO meticulously crafts each
piece of true love work with a unique aesthetic approach and stringent craftsmanship standards. In terms of
material innovation, the Company invented the double-layer electroplating process for 18K white gold. This
technique ensures that the plating layer is firmly fixed to the 18K base material, which reduces the wear of
the plating layer and guarantees the durability and color retention of the product. The 18K white gold double-
layer electroplating process has been certified by national authoritative testing agencies, and its authenticity,
wear resistance, and resistance to acid and alkali corrosion meet internationally recognized standards.
During the reporting period, the Company collaborated with master artisans from the Florence workshop in
Italy to develop the DR HEART "Italian Masterpiece Engagement Ring" series called "Ti Amo". The
craftsmen of the Italian workshop, who have inherited 60 years of excellence in jewelry craftsmanship, used
a woven gold carving technique to present the ancient art of gold jewelry and carving in an artistic manner,
creating engagement rings with a style reminiscent of the Renaissance period; in 2023, the unique D Series
pieces with distinctive DR brand characteristics were developed and launched. The entire series is crafted
with high quality diamonds and has received numerous awards at home and abroad, including the French
Design Award, the MUSE Gold Award, and the Bronze Prize of International Design Awards.
DR Bridal Gold inherits the essence of the traditional Chinese wedding culture, and integrates the design
concepts and advanced technology of fashional jewelry into high-quality gold jewelry, with each piece
containing the auspicious symbols of traditional culture. During the reporting period, the Company
cooperated with Cheng Shumei, a master craftsman of intangible cultural heritage, who supervised the
creation of the timeless masterpiece - gold series featuring the filigree inlay production skill, a technique of
intangible cultural heritage. This new offering demonstrates the original spirit of the Company's brand.
(4) Strengthen information security, empower business development with AI, build smart stores
During the reporting period, the Company actively participated in industry security operation training
sessions and seminars, and continued to strengthen internal information security construction, and
safeguarded the Company's information security and user privacy in all aspects by carrying out training on
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2023 Annual Report of DR Corporation Limited
information security system and security awareness, formulating coding security specifications, and holding
network attack and defense drills. In accordance with the Measures for the Administration of Multi-Level
Information Security Protection, the Company conducted an annual assessment of the protection of
classified information, and the relevant application systems successfully passed the Level 3 protection
assessment. Following the trend of digital innovation technology, the Company combined the generative
capability of large models with offline retail scenarios to provide digital support for service processes of
stores thereby enhancing the expertise, memory and communication capability of the staff at stores and
enabling smart stores; based on the demand for business improvement and efficiency enhancement, the
Company used AI to empower a number of business links such as the multilingual AI customer service tool
for overseas business.
(5) Promote organizational transformation and build talent echelon
DRCO’s talent echelon strategy provides solid support for its "sustainable" and "high-quality" development.
The Company continually enhances its talent assessment system, utilizing a multi-dimensional competency
model for talent evaluation and establishing innovative criteria for talent selection and employment.
Mechanisms have been put in place to attract, develop, and retain a diverse and dedicated workforce.
During the reporting period, in alignment with business growth, the Company continuously optimized its
organizational structure and personnel composition, clearly defining departmental responsibilities,
establishing management incentive mechanisms, reducing human resource management costs, and
enhancing overall organizational efficiency. In line with the Company’s future strategic planning, new
business departments were rapidly established and put into operation, which provided a large talent pool for
the new directions in 2024 thereby driving the Company’s robust business development. for the new
direction in 2024 to ensure swift progress in business development.
2. Revenue and cost
(1) Composition of revenue
Overall revenue
Unit: RMB
2023 2022
As % of As % of YoY change
Amount Amount
revenue revenue
Total revenue 2,180,277,744.00 100% 3,681,574,412.68 100% -40.78%
By industry
Jewelry 2,173,757,035.39 99.70% 3,650,181,354.03 99.15% -40.45%
Other
businesses 6,520,708.61 0.30% 31,393,058.65 0.85% -79.23%
By product
Engagement
diamond rings 1,699,139,354.11 77.93% 2,902,464,272.49 78.84% -41.46%
Wedding
diamond rings 449,380,892.69 20.61% 713,611,440.73 19.38% -37.03%
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2023 Annual Report of DR Corporation Limited
Other
accessories 25,236,788.59 1.16% 34,105,640.81 0.93% -26.00%
Other
businesses 6,520,708.61 0.30% 31,393,058.65 0.85% -79.23%
East China 744,028,070.54 34.13% 1,330,407,724.72 36.14% -44.08%
North China 322,536,502.42 14.79% 494,723,176.92 13.44% -34.80%
South China 301,661,875.55 13.84% 569,475,102.89 15.47% -47.03%
Southwest
China 255,457,360.25 11.72% 403,596,567.80 10.96% -36.70%
Central China 204,328,898.81 9.37% 385,624,889.68 10.47% -47.01%
Northwest
China 175,768,057.06 8.06% 254,084,920.53 6.90% -30.82%
Northeast
China 164,396,516.08 7.54% 236,390,244.31 6.42% -30.46%
Hong Kong,
Macao and 6,212,560.22 0.28% 5,045,201.05 0.14% 23.14%
Taiwan
Overseas 5,887,903.07 0.27% 2,226,584.78 0.06% 164.44%
Online Self-
Operated 227,088,072.66 10.42% 394,593,297.77 10.72% -42.45%
Offline Direct-
operated 1,769,414,000.22 81.16% 2,980,373,391.95 80.95% -40.63%
Offline Joint-
Operated 177,254,962.51 8.13% 275,214,664.31 7.48% -35.59%
Other
businesses 6,520,708.61 0.30% 31,393,058.65 0.85% -79.23%
(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
YoY
YoY change
Operating Gross YoY change change of
Revenue of operating
costs margin of revenue gross
cost
margin
By industry
Jewelry 2,173,757,035.39 675,742,928.54 68.91% -40.45% -37.59% -1.43%
By product
Engagement
70.19% -41.46% -38.14% -1.60%
diamond rings 1,699,139,354.11 506,538,634.64
Wedding
449,380,892.69 158,007,633.73 64.84% -37.03% -36.88% -0.08%
diamond rings
By region
East China 744,028,070.54 232,330,826.88 68.77% -44.08% -43.30% -0.43%
North China 322,536,502.42 100,505,394.43 68.84% -34.80% -33.90% -0.42%
South China 301,661,875.55 97,471,182.41 67.69% -47.03% -40.58% -3.51%
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2023 Annual Report of DR Corporation Limited
Southwest
255,457,360.25 76,828,781.06 69.93% -36.70% -35.86% -0.39%
China
By sales model
Online Self-
227,088,072.66 75,894,918.38 66.58% -42.45% -40.93% -0.86%
Operated
Offline Direct-
1,769,414,000.22 543,205,041.64 69.30% -40.63% -37.36% -1.60%
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
□ Applicable Not applicable
(3) Whether DRCO's sales revenue from physical goods is more than that from services
Yes □ No
Industry 2023 2022 YoY change
Item Unit
classification
Sales Pieces 360,990 517,656 -30.26%
Production
Jewelry
Inventory Pieces 225,982 284,930 -20.69%
Procurement Pieces 302,042 616,308 -50.99%
volume
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 procurement volume during the reporting period dropped 50.99% year on year due to the
declining demands for inventories as a result of the decrease in sales.
(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
2023 2022
Industry As % of As % of YoY
Item
classification Amount operating Amount operating change
cost cost
Jewelry Operating cost 675,742,928.54 99.44% 1,082,800,171.20 97.35% -37.59%
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2023 Annual Report of DR Corporation Limited
Other
Operating cost 3,810,329.34 0.56% 29,472,295.09 2.65% -87.07%
businesses
Unit: RMB
2023 2022
Industry YoY
Item
classification As % of As % of change
Amount operating Amount operating
cost cost
Engagement
Operating 506,538,634.64 74.54% 818,862,367.00 73.62% -38.14%
diamond
cost
ring
Wedding
Operating 158,007,633.73 23.25% 250,339,820.40 22.51% -36.88%
diamond
cost
ring
Other Operating 11,196,660.17 1.65% 13,597,983.80 1.22% -17.66%
accessories cost
Other Operating 3,810,329.34 0.56% 29,472,295.09 2.65% -87.07%
businesses cost
Note:
The total operating cost in the reporting period was RMB 680 million, a decrease of 38.9% compared with
the same period last year, mainly due to the decrease of 40.78% 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, the Company established 10 new subsidiaries/sub-subsidiaries and dissolved 8
subsidiaries. Details are as follows:
Date of Method for changing
Company name establishment/ the consolidation Shareholding ratio
Deregistration scope
He’er Culture (Hainan) Co., Ltd. 2023/05/29 New in 2023 100%
Shenzhen DR Jewelry Sales 2023/07/21 New in 2023 100%
Forever True Love Wedding Planning
2023/07/21 New in 2023 100%
(Shenzhen)
Happy Love Phycology Research Center
2023/10/19 New in 2023 100%
(Shenzhen)
Forever True Love Wedding Planning
2023/11/06 New in 2023 100%
(Sanya)
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2023 Annual Report of DR Corporation Limited
DR LUXURY (SINGAPORE) PTE. LTD. 2023/6/9 New in 2023 100%
DR Luxury Netherlands Holding B.V. 2023/6/19 New in 2023 100%
LOVEMONT（MALAYSIA） SDN.BHD. 2023/6/20 New in 2023 100%
DR LUXURY USA INC 2023/6/24 New in 2023 100%
LOVEMONT HONG KONG LIMITED 2023/7/27 New in 2023 100%
Shangqiu DR Jewelry 2023/10/13 Deregistered in 2023 100%
Wuhan DR Jewelry 2023/10/26 Deregistered in 2023 100%
Nanchang DR Jewelry 2023/10/17 Deregistered in 2023 100%
Handan DR Jewelry 2023/10/8 Deregistered in 2023 100%
Guangzhou DR Jewelry 2023/10/23 Deregistered in 2023 100%
Langfang DR Jewelry 2023/10/19 Deregistered in 2023 100%
Foshan DR Jewelry 2023/12/27 Deregistered in 2023 100%
Urumqi DR Jewelry 2023/12/25 Deregistered in 2023 100%
(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 2,730,498.69
(RMB)
Sales to top five customers as % of total annual 0.12%
sales
Related-party sales in the sales to top five 0.00%
customers as % of total annual sales
Information about Top 5 Customers
As % of total annual
No. Customer name Sales (RMB)
sales
1 Xue* 684,299.84 0.03%
41
2023 Annual Report of DR Corporation Limited
All Gamers
2 （Chengdu ） Network 566,037.74 0.03%
Technology Co Ltd
3 Zhang* 542,725.65 0.02%
4 Ma* 497,200.03 0.02%
5 Fu* 440,235.43 0.02%
Total -- 2,730,498.691 0.12%2
Note: 1. The sales figures in the table are all exclusive of tax.
Note: 2. The numbers in the table are rounded to two decimal places. Due to rounding, there may be slight
differences in the final digits, which are not calculation errors.Other notes about key customers.
Note: 3. This client is one of the clients of wedding planning。
□ Applicable Not applicable
Key suppliers of DRCO
Total purchase amount of top five suppliers 265,471,439.41
(RMB)
Total purchases from top five suppliers as % of 51.30%
total annual purchase amount
Related-party purchases in the purchases from
top five suppliers as % of total annual 0.00%
purchases
Information about Top 5 Suppliers
Purchase amount As % of total annual
No. Supplier name
(RMB) purchase
1 Supplier 1 131,149,993.84 25.34%
2 Supplier 2 44,231,873.55 8.55%
China Minsheng
3 Banking Corp., Ltd. 30,579,877.69 5.91%
Shenzhen Branch
4 Supplier 4 29,846,398.46 5.77%
5 Supplier 5 29,663,295.87 5.73%
Total -- 1 51.30%
265,471,439.41
Note 1: The purchase amount is the tax-exclusive amount.
Other notes about key suppliers
□ Applicable Not applicable
3. Expenses
Unit: RMB
42
2023 Annual Report of DR Corporation Limited
Explanation of significant
2023 2022 YoY change
changes
This was mainly due to the
decrease in both the rent
(commission rent),
measured as the
unrecognized lease
Selling expenses 1,228,761,165.59 1,422,037,537.50 -13.59%
liability, and platform
service fees as a result of
the decrease in revenues,
as well as the decrease in
advertising expenses.
This was mainly due to the
decrease in non-deductible
Administrative
151,996,111.88 164,205,877.87 -7.44% input tax on intra-group
expenses transactions during the
reporting period.
This was mainly due to the
decrease in interest
income from demand
deposits during the
Financial
25,770,104.86 21,536,754.47 19.66% reporting period as the
expenses fund-raising projects were
put into use and the
Company purchased fixed-
term financial products.
This was mainly due to
increasing R&D
R&D expenditure 21,715,215.75 17,944,132.37 21.02%
expenditure during the
reporting period.
4. R&D expenditure
Applicable □ Not applicable
Implications on
Name of key R&D
Project purpose Project progress Intended goals DRCO's future
project
development
While DR's main bu Cover scenarios suc
siness continues to h as engagement/w
grow, we are expan edding planning and
ding our Wedding+ wedding photograp
new business, buildi hy. Conduct refined
ng the Wedding+ pl management of all a The expansion of th
atform to support bu spects relating to m e DR Wedding+ will
DR Engagement Pr siness diversificatio erchant entry, soluti help improve user s
Under R&D
oject n, making internal c on uploading and do ervice, expand the u
ollaboration transpa wnloading, sales, de ser base, and increa
rent and efficient, an livery, merchant sett se sales revenue.
d empowering merc lement, etc., which
hants to digitally ma helps the enterprise
nage their business standardize new bu
so as to build a stro siness and improve
ng connection. work efficiency.
With the developme Building the Diamon The SAP Diamond
SAP Diamond Zhiza nt of the Company's d Zhizao account an Zhizao System will
o System R&D Proj business, in order t Under R&D d developing related enable the manage
ect o enhance the Com business processes ment and optimizati
pany's competitiven based on business on of the whole busi
43
2023 Annual Report of DR Corporation Limited
ess, expand busine scenarios will enabl ness chain from rou
ss lines and improv e online systematic gh procurement to r
e efficiency, DRCO management over d ough diamond proc
started to build a co ata and processes essing, thus shorten
mplete set of busine ing the diamond pro
ss lines covering the curement cycle, red
whole process from ucing business cost
rough procurement s and injecting new
to diamond processi vitality into the Com
ng, aiming to shorte pany's future develo
n the procurement c pment.
ycle and reduce cos
ts.
The operation staff
at headquarters will
The goal is to create Use the platform to
be able to accuratel
an integrated touch push potential custo
y identify potential c
point platform that c mers and contact ta
ustomers and timely
onnects headquarte ctics to shop assista
inform shop assista
rs, shop assistants, nts who will then ca
nts who will directly
and users, enabling n directly reach user
contact potential cu
timely responses an s to create more bu
Shop Assistant Wor stomers to win busi
d feedback to user n Under R&D siness opportunitie
kstation Project ness opportunities.
eeds. Through this s. Meanwhile, the fe
This will greatly impr
platform, operationa edbacks will be sent
ove the sales efficie
l staff at headquarte to the backend offic
ncy and customer s
rs can instantly pus e for data collection
atisfaction, thus layi
h potential customer that will help develo
ng a solid foundatio
s and contact tactics p operation strategi
n for the Company’s
to shop assistants. es.
future developmen
t.
The ticket managem
ent system will enab
Departments collab This project is desig le the systematic m
orate frequently bot ned to build a flexibl anagement of the c
h internally and exte e and configurable ti ollaboration proces
rnally, but collaborat cket management s s, so as to strengthe
ion lacks systematiz ystem according to t n the teamwork with
ation, resulting in in he Company's vario in the enterprise an
creased communica us business scenari d improve the work
tion costs. In order t os, including collabo efficiency. Meanwhil
Ticket management
o enhance efficienc Under R&D rative forms, proces e, the system will co
system
y, it is planned to es s models, approval llect and analyze th
tablish a ticket man nodes, data permiss e ticket data for man
agement system to r ions and other functi agers to make accur
ealize real-time trac ons, so as to suppor ate and comprehen
king and comprehen t the Company's div sive business decisi
sive closed-loop ma ersified and rapidly ons thus supporting
nagement of the coll changing business the Company's com
aboration process. development needs. petitiveness and sus
tainable developme
nt.
This project aims to The new system will The project will build
build an overseas b be flexible and high a flexible and efficie
usiness system to a ly customizable to m nt official website sy
Overseas Official W
ddress the current b Under R&D eet dynamically cha stem to enhance the
ebsite Project
usiness challenges nging business nee operational efficien
and lay a solid foun ds. System function cy and competitiven
dation for future dev s will include the dis ess of the Company
44
2023 Annual Report of DR Corporation Limited
elopment. By impro play of official websi 's overseas busines
ving the operational te content, real-time s. It will provide stro
efficiency and comp uploading and unlo ng support for future
etitiveness of the ov ading of products, a business expansion
erseas business, th nd the smooth oper and lay a solid tech
e Company will be a ation of the entire cu nical foundation for f
ble to cover more m stomer shopping pr uture innovation and
arkets and improve ocess. At the same t business growth. At
customer services. ime, the system will the same time, it wil
be scalable enough l provide broader op
to adapt to future bu portunities for the C
siness development ompany to expand o
needs. verseas markets an
d realize the strategi
c goal of long-term s
ustainable develop
ment.
With the influencer
management syste
m, the Company will
be able to centraliz
e the management
of private domain inf
luencer resources a
nd achieve compreh
In order to support t
ensive control over t
he expansion of the
he influencer cooper
Company's oversea
ation process. The s
Given the Company' s business, this proj
ystem will record th
s continuous busine ect will establish a s
e information of influ
ss growth and overs ophisticated influenc
encer cooperation a
eas market expansi er management syst
nd collect the perfor
on, this project is to em, including the m
Influencer manage mance data of influe
promote DR product Under R&D anagement of privat
ment system ncers on a regular b
s by cooperating wit e domain influencer
asis, establish the p
h influencers and to pools, the managem
erformance data da
comprehensively ev ent of influencer coo
shboard and realize
aluate their perform peration information
the real-time monito
ance. and the real-time m
ring of influencers' i
onitoring of influenc
nputs and outputs.
ers' performance da
This will provide acc
ta.
urate data support f
or managers and m
arketers to make bu
siness decisions, an
d facilitate the Com
pany's future busine
ss development and
brand promotion.
The data volume ha Build a highly availa An efficient, shared,
s increased with the ble and scalable dat secure and easy-to
Company's busines a storage system to -use data platform w
s growth. In order to ensure data security ill support the operat
Data Platform Proje support the busines and stability; build a ional decision-makin
Under R&D
ct s operation, meet th n efficient data proc g, business innovati
e data needs of vari essing and analysis on and economic be
ous departments, a system to support re nefit management.
nd improve the deci al-time data process The platform will rea
sion-making efficien ing and batch data p lize centralized stor
45
2023 Annual Report of DR Corporation Limited
cy, the Company es rocessing; provide ri age, processing and
tablished a unified d ch data visualization analysis of data, im
ata platform to provi and report generati prove the efficiency
de reliable data sup on functions to meet of data utilization, pr
port. users' diversified d omote the Company
ata presentation ne 's digital transformat
eds. ion of and enhance t
he Company's com
petitiveness. This wi
ll lay a solid foundati
on and provide sust
ainable growth mom
entum for the Comp
any's future develop
ment.
Setting up backend
marketing campaign
By configuring mark
configurations and
eting campaign act
monitoring user dat
ivities on the mini-p
a feedback help enh
This project is to intr rogram, the compa
ance user experienc
oduce new member ny will be able to dr
e. Existing customer
ship card categories ive customer acqui
s can invite new cus
to encourage custo sition and retention
tomers to redeem v
Middle-end Platform mer retention and pr and enrich the use
Under R&D ouchers. If the new
for Appointment ovide users with a ri r experience. This
customers successf
ch points redemptio will help increase u
ully place an order a
n experience in the l ser engagement, i
nd redeem the vouc
oyalty rewards stor mprove user retent
her, the existing cus
e. ion, and ultimately
tomers will earn poi
drive business gro
nts that can be used
wth and brand imp
to redeem gifts in th
act.
e points redemption
store.
Improve product de
velopment and desi Increase investment
gn capabilities to ad in R&D and design,
dress market compe expand its in-house Satisfy the needs of
tition; make more eff full-time R&D and d end consumers and
Construction of the
orts to design classi Under R&D esign team, and imp enhance DRCO's br
Diamond Jewelry R
c style products to e rove and influence.
&D Design Center
nhance the product
uniqueness; introdu DRCO's independe
ce scarce IPs to enh nt R&D and design
ance the brand valu capabilities.
e.
R&D Staff of DRCO
2023 2022 Change
Number of R&D staff 66 47 40.43%
R&D staff as % of labor
2.06% 1.05% 1.01%
force
Education background of R&D staff
Bachelor’s degree 48 34 41.18%
Master’s degree 4 4 0.00%
46
2023 Annual Report of DR Corporation Limited
Junior college and below 14 9 55.56%
Age distribution of R&D staff
<30ys 30 22 36.36%
30-40ys 33 24 37.50%
>40ys 3 1 200.00%
R&D expenditure and Percentage in Revenue in Last Three Years
2023 2022 2021
R&D expenditures
(RMB) 21,715,215.75 17,944,132.37 16,822,042.92
R&D expenditures
as % of revenue 1.00% 0.49% 0.36%
Capitalized R&D
expenditures (RMB) 0.00 0.00 0.00
Percentage of
capitalized R&D 0.00% 0.00% 0.00%
expenditure
Capitalized R&D
expenditure as % of
net profit in the current 0.00% 0.00% 0.00%
period
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 2023 2022 YoY change
Subtotal of cash inflows
2,363,975,825.01 4,047,355,144.09 -41.59%
from operating activities
Subtotal of cash outflows
2,327,010,317.20 3,229,344,031.85 -27.94%
from operating activities
Net cash flows from
36,965,507.81 818,011,112.24 -95.48%
operating activities
Subtotal of cash inflows
8,574,936,260.32 5,412,132,131.53 58.44%
from investing activities
Subtotal of cash outflows
8,121,047,907.58 9,725,178,220.62 -16.49%
from investing activities
Net cash flows from
453,888,352.74 -4,313,046,089.09 110.52%
investing activities
Subtotal of cash inflow
533,333,453.61 536,119,714.66 -0.52%
from financing activities
47
2023 Annual Report of DR Corporation Limited
Subtotal of cash outflows
1,319,525,263.45 1,266,121,911.18 4.22%
from financing activities
Net cash flows from
-786,191,809.84 -730,002,196.52 -7.70%
financing activities
Net increase in cash and
-294,661,419.66 -4,219,885,422.83 93.02%
cash equivalents
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
1. Depreciation, amortization, and provision for asset impairment for the current year amounted to RMB731.0
8 million . This part of the cost and expenses reduced profits, but no cash outflow was generated;
2. The net income from investment and financing activities is RMB 209.54 million(including financial expense
s and income from wealth management products), which increases profits. However, the cash flow generate
d does not belong to operating activities;
3. The net decrease of operating receivables and payables was RMB 553.54 million (including the net decre
ase of notes and accounts payable by RMB 477.26 million), which increased the cash outflow. The main rea
son is that the outstanding purchase payments and taxes payable at the end of the previous year were paid i
n this period, and with changes in operating conditions, this part of the payment has also significantly decrea
sed at the end of this period.
V. Non-primary Business
Applicable □ Not applicable
48
2023 Annual Report of DR Corporation Limited
Unit: RMB
As % of total Whether
Amount Reasons
profit sustainable
It is mainly the
investment income
Investment from redeeming the
201,459,628.10 178.55% No
income mature wealth
management products
from banks.
Mainly gains on
Gains/losses from changes in fair value of
changes in fair 31,151,566.30 27.61% financial assets No
value recognized during the
reporting period.
Mainly include the
provision for inventory
Asset impairment -105,342,656.15 -93.37% impairment loss and No
impairment of long-
term assets.
Mainly include
Non-operating
2,881,923.18 2.55% compensations No
income
received by DRCO.
Mainly include breach
Non-operating
7,709,541.48 6.83% penalties and overdue No
expenses
fines.
Mainly gains on disposal
Gains on disposal of of long-term assets
19,708,867.36 17.47% No
assets during the reporting
period.
1. Immediate
refund of VAT
Mainly immediate refund levied on diamond
of VAT levied on diamond imports:
Other incomes 26,746,998.56 23.71%
imports, and government sustainable. 2.
subsidies. Government
subsidies: not
sustainable.
Mainly the provision for
unrecoverable lease
Loss on credit
-7,519,950.73 -6.66% deposits due to the early No
impairment
closure of loss-making
stores.
VI. Analysis of Assets and Liabilities
1. Significant changes in the composition of assets
Unit: RMB
2023 2023
As %
As % of of Change in Explanation of
Amount total Amount total proportion significant changes
assets asset
s
Cash and 227,854,223.17 3.03% 521,904,818.30 5.92% -2.89% Mainly due to the
49
2023 Annual Report of DR Corporation Limited
cash fact that the
equivalents Company bought
more wealth
management
products during the
reporting period.
Accounts
83,147,399.06 1.10% 84,478,911.52 0.96% 0.14%
receivable
Inventories 526,939,044.37 7.00% 669,886,638.00 7.60% -0.60%
Fixed assets 12,617,322.42 0.17% 14,068,805.09 0.16% 0.01%
Mainly due to the
Right-of-use declining number of
208,971,654.66 2.78% 590,506,167.36 6.70% -3.92%
assets stores during the
reporting period.
Short-term
389,995,277.14 5.18% 433,993,449.44 4.92% 0.26%
borrowings
Contract
109,633,363.46 1.46% 126,705,661.82 1.44% 0.02%
liabilities
Mainly due to the
Lease declining number of
67,781,149.67 0.90% 276,542,164.23 3.14% -2.24%
liabilities stores during the
reporting period.
Foreign assets account for a relatively high proportion.
□ Applicable Not applicable
2. Assets and liabilities measured at fair value
Applicable □ Not applicable
Unit: RMB
Gains
and Cumulati Impairme
losses on ve fair nt Amount Amount
changes value accrued of of
Opening Other Closing
Item in fair change during purchase disposal
amount change s amount
value for recognize the in current in current
the d in reporting period period
current equity period
period
Financial assets
1. Held-
for-
trading
financial
assets 5,609,891, 34,920,37 7,350,000, 8,152,865, 4,841,946,
(excludin 931.68 7.10 000.00 603.71 705.07
g
derivative
financial
assets)
Subtotal 5,609,891, 34,920,37 7,350,000, 8,152,865, 4,841,946,
of 931.68 7.10 000.00 603.71 705.07
50
2023 Annual Report of DR Corporation Limited
financial
assets
5,609,891, 34,920,37 7,350,000, 8,152,865, 4,841,946,
Total 931.68 7.10 000.00 603.71 705.07
-
Financia l 66,909,34 7,864,600. 62,813,55
0.00 3,768,810.
liabilities 6.72 00 7.52
80
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 December 31, 2023, the Group utilized restricted cash totaling RMB 890,612.21 (December 31, 2022:
RMB 279,787.68), which was mainly due to preservation of law issue（As at the reporting date, the payment
has been made）or change of account types.
VII. Investment Status Analysis
1. Overall situation
Applicable □ Not applicable
Investment in the reporting Investment in the same period
Change
period (RMB) of last year (RMB)
8,121,047,907.58 9,725,178,220.62 -16.49%
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
There were no securities investments during the reporting period.
(2) Investments in derivatives
□ Applicable Not applicable
There were no derivative investments during the reporting period.
5. Use of raised funds
Applicable □ Not applicable
51
2023 Annual Report of DR Corporation Limited
(1) Overall use of proceeds
Applicable □ Not applicable
Unit: RMB0’000
Total
Perce
amoun
Accum ntage
t of
ulated of
procee
Total ed accum Use Amou
ds
amoun Accum amoun ulated Total and nt of
whose
t of ulated t amoun amoun destin procee
Year Metho intend Year
Total procee amoun procee t t of ation ds idle
of d of ed use of
procee ds t of ds procee unuse of for
fundrai fundrai was fundrai
ds used procee whose ds d unuse more
sing sing chang sing
in the ds intend whose procee d than
ed
current used ed use intend ds procee two
during
period was ed use ds years
the
chang was
reporti
ed chang
ng
ed
period
Invest
in
intende
d
project
Public 467,63 444,38 132,37 281,95 162,42
2021 0 0 0.00% s and 0
offering 6.88 0.28 1.85 2.14 8.14
repleni
sh
workin
g
capital
467,63 444,38 132,37 281,95 162,42
Total -- 0 0 0.00% -- 0
6.88 0.28 1.85 2.14 8.14
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 40,010,000 ordinary shares (A shares) with
a nominal value of RMB 1.00 and an issue price of RMB 116.88 per share, raising proceeds of
RMB 4,676,368,800. The sponsorship and underwriting fees (excluding VAT) for the IPO were
RMB 217,341,600. On December 10, 2021, the total proceeds of RMB 4,460,725,300 after
deducting the underwriting fees (excluding VAT) of RMB 215,643,500 were remitted by the
underwriter China Securities to DRCO's special account for proceeds.
The total proceeds raised by DRCO via the IPO were RMB 4,676,368,800, and the net proceeds were RMB
4,443,802,800 after deducting sponsorship and underwriting fees (excluding VAT) of RMB 217,341,600,
and other issuance fees (excluding VAT) of RMB 15,224,300 (including: audit and capital verification fees
of RMB 4,471,300, legal counsel fees of RMB 5,422,100, information disclosure fees of RMB 4,018,900,
issuance fees and other fees of RMB 1,312,100). 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, 2023, the accumulated amount of the proceeds used by DRCO was RMB 2,819.52
million, of which RMB 1,209.52million was used to invest in committed items and RMB1,610 million was
52
2023 Annual Report of DR Corporation Limited
used to permanently supplement the working capital.
As of December 31, 2023, the balance of idle funds (including surplus proceeds) for cash management was
RMB 1725 million.
As of December 31, 2023, the balance of DRCO's special account for the proceeds was RMB 21.96 million
(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
Whet
Committ her Cumul
Cumul Date Wheth
ed the Invest Benef ative
ative when Whet er the
investm proje Total Amou ment its benefit
amou the her feasibil
ent ct commi Adjust nt progre realiz s
nt project the ity of
projects has tted ed invest ss as ed realize
invest reache expec the
and been invest total ed in of the durin d as of
ed as s its ted project
investm chan ment invest the end of g the the
of the intend benefi has
ent ged of ment reporti the report end of
end of ed ts are chang
areas of (inclu proce (1) ng period ing the
the servic realiz ed
surplus ding eds period (3)=(2 perio reporti
period eable ed signific
proceed partly )/(1) d ng
(2) state antly
s chan period
ged)
Committed investment projects
Constru Dece
-
ction of No 73,92 73,92 14,22 73,92 100.0 mber 19,35
13,97 No No
channel 1.4 1.4 6.72 1.4 0% 31, 4.61
8.13
network 2023
Constru
Dece
ction of Not
No 11,04 11,04 1,957. 6,506. 58.89 mber
informat applic
7.45 7.45 66 34 % 31, No
ion able
2026
system
Constru
ction of
R&D,
Creativit
y and Dece
Not
Design No 5,389. 5,389. 1,187. 2,476. 45.96 mber
applic
Center 93 93 47 95 % 31, No
able
for 2025
Diamon
d
Jewelrie
s
Repleni
shing Not
No 38,00 38,00 38,04 100.1
working 0 applic No
0 0 7.45 2%
capital able
Subtotal
of -
-- 128,3 128,3 17,37 120,9 19,35
committ -- -- 13,97 -- --
58.78 58.78 1.85 52.14 4.61
ed 8.13
investm
53
2023 Annual Report of DR Corporation Limited
ent
projects
Investment areas of surplus proceeds
Undeter
mined
use of Not
No 132,0 132,0
surplus applic No
21.5 21.5
proceed able
s
Repleni
shing
working -- 184,0 184,0 115,0 161,0 87.50
-- -- -- -- --
capital 00 00 00 00 %
(if any)
Subtotal
of
investm
ents of -- 316,0 316,0 115,0 161,0
-- -- -- --
surplus 21.5 21.5 00 00
proceed
s
-
Total -- 444,3 444,3 132,3 281,9 19,35
-- -- 13,97 -- --
80.28 80.28 71.85 52.14 4.61
8.13
1. Channel network construction project: the project generated cumulative benefits of
RMB 193.55 million by the end of the reporting period of 2023, and benefits of RMB -
139.78 million during the reporting period. The project achieved the estimated benefits by
the end of the reporting period of 2022, but failed to do so by the end of the current
reporting period mainly due to lower-than-expected sales under the influence of the
macro environment and market demands.
2. Information system project: 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
Describe the the Board of Supervisors to review the Proposal on Postponing Certain Proceeds-funded
circumstances Projects. Accordingly DRCO was approved to extend the date for the project to reach the
and reasons why scheduled serviceability status of the proceeds-funded project from December 31, 2023
the planned to December 31, 2024, without changing the implementation entity, the implementation
progress and method, the use of proceeds and the intended investment amount;
expected Factors as the market environment and the business expansion and stricter requirements
benefits have not for corporate governance have resulted in higher requirements for the information system
been realized by construction. As a result, DRCO needs to conduct adequate surveys and discussions
project (including before implementing the information system construction project, so as to facilitate the
the reason for sales growth or the increase of the operational efficiency. In order to better manage the
"not applicable" progress of the project, on April 25, 2024, DRCO convened the ninth meeting of the
concerning second session of the Board of Directors and the ninth meeting of the second session of
"whether the the Board of Supervisors to review the Proposal on Postponing Certain Proceeds-funded
expected Projects. Accordingly, DRCO was approved to extend the completion date of the
benefits are proceeds-funded project from December 31, 2024 to December 31, 2026 in order to
realized") more effectively utilize the proceeds.
3. R&D, Creativity and Design Center for Diamond Jewelries: It is Shenzhen Darry
Commercial Management Services that is responsible for constructing the project, which
is designed to take three years. As the market 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. 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 was approved to extend the completion date of the proceeds-funded
54
2023 Annual Report of DR Corporation Limited
project from December 31, 2023 to December 31, 2025, without changing the
implementation entity, the implementation method, the use of proceeds and the intended
investment amount;
Explanation of Not applicable.As of June 30, 2023, the "channel network construction project" has been
significant implemented and reached the intended usable state, the second half of the year due to macro
changes in environmental factors and market demand, resulting in project benefits less than expected.
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 RMB3,500,000,000
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 review
and approval. Such funds can be used on a revolving basis within the aforesaid amount
and term; on December 29, 2022, DRCO held the 4th meeting of the second session of
the Board of Directors and the 4th meeting of the 2nd session of the Board of
Supervisors, and 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 RMB3,000,000,000 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; on December 28, 2023, the Company held the 8th meeting
of the 2nd session of the Board of Directors and the 8th Meeting of the 2nd Session of
Amount, use and the Board of Supervisors at the Company’s meeting room; on January 16, 2024, the
progress of use Company held the first Extraordinary General Meeting in 2024, reviewing and approving
of surplus the “Proposal on Cash Management for Part of Idle Proceeds and Self-owned Funds”.
proceeds The meeting authorized DRCO to use not more than RMB1,800,000,000 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. As of
December 31, 2023, the balance of surplus proceeds for cash management was
RMB1,660,000,000.
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; on April 26, 2023, DRCO held
the 5th meeting of the 2nd session of the Board of Directors and the 5th Meeting of the
2nd 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 RMB900,000,000 of surplus proceeds to permanently
replenish the working capital, representing 28.48% of the total surplus proceeds; this
proposal was deliberated and approved at the shareholders' meeting on May 26, 2023.
As of December 31, 2023, DRCO had transferred RMB1,610,000,000 from its special
account for the proceeds to permanently supplement the working capital.
Changes in the
implementation Not applicable
location of
projects funded
55
2023 Annual Report of DR Corporation Limited
by the proceeds
Adjustment of
the
implementation
method of Not applicable
projects 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
Early investment Invested in Advance and Paid for Issuance Expenses with Proceeds", and agreed that
and replacement DRCO may use the proceeds to replace the self-raised funds of RMB370,182,800
of projects invested in advance and funds of RMB5,455,000 paid for issuance expenses, which
funded by the totaled RMB 375,637,800. Ernst & Young Hua Ming (Special General Partnership)
proceeds issued the "Capital 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 RMB
366,804,400 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.
Use idle
proceeds to
temporarily Not applicable
replenish
working capital
Applicable
1.The remaining raised funds for the "Supplementary Working Capital Project" amounted
The amount and to RMB553,600, and for the "Channel Network Construction Project" amounted to
reasons for the RMB16,159,900.
balance of 2.During the implementation of the raised capital projects, the company strictly adhered
proceeds after to the relevant regulations on the use of raised funds and prudently utilized them. While
project ensuring that the implementation of the raised capital investment projects was not
implementation affected and that the raised funds were secure, the company engaged in cash
management of idle raised funds to improve the efficiency of their utilization. This
resulted in certain investment returns and interest income generated during the period of
deposit.
DRCO's unused proceeds are used to purchase approved cash management products
Use and and deposited in a special account. As of December 31, 2023, the balance of proceeds
destination of deposited in the special account was RMB 21,960,000; the balance of the idle proceeds
unused (including surplus proceeds) for cash management was RMB1,725,000,000, consisting
proceeds of RMB1,660,000,000 as the balance of the wealth management products bought by
surplus proceeds and RMB65,000,000 as the balance of the wealth management
products bought by the capital of the committed investment projects.
Problems or
other
circumstances in Not applicable
the use and
disclosure of
proceeds
(3) Changes in projects funded by proceeds
□ Applicable Not applicable
56
2023 Annual Report of DR Corporation Limited
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 more
Unit: RMB
Company Company Registere Total Net Operatin
Main business Revenue Net profit
name type d capital assets assets g profit
Shenzhen Information
Love Only AI technology
Subsidiar 25,000,00 367,675,5 160,641,6 273,680,6 149,643,4 127,173,5
Cloud services,
y 0.00 87.42 56.92 80.81 21.55 16.83
Technology overseas sales
Co., Ltd. business
Supply chain
management,
Shenzhen R&D and
Darry design,
Commercial Subsidiar customized 10,000,00 162,053,2 133,864,8 186,268,3 143,309,5 120,944,1
Management y product 0.00 49.60 50.15 10.63 07.54 13.57
Service Co., services and
Ltd. related
supporting
services
The acquisition and disposal of subsidiaries during the reporting period
Applicable □ Not applicable
Method of acquiring and
Impact on overall operation and
Company name disposing of subsidiaries during
performance
the reporting period
He’er Culture (Hainan) Co., Ltd. Fund the establishment No significant impact
Shenzhen DR Jewelry Sales Fund the establishment No significant impact
Forever True Love Wedding Planning
(Shenzhen)
Fund the establishment No significant impact
Happy Love Phycology Research
Center (Shenzhen)
Fund the establishment No significant impact
Forever True Love Wedding Planning
(Sanya)
Fund the establishment No significant impact
DR LUXURY (SINGAPORE) PTE.
LTD.
Fund the establishment No significant impact
57
2023 Annual Report of DR Corporation Limited
DR Luxury Netherlands Holding B.V. Fund the establishment No significant impact
LOVEMONT （ MALAYSIA ）
Fund the establishment No significant impact
SDN.BHD.
DR LUXURY USA INC Fund the establishment No significant impact
LOVEMONT HONG KONG LIMITED Fund the establishment No significant impact
Shangqiu DR Jewelry Deregistered No significant impact
Wuhan DR Jewelry Deregistered No significant impact
Nanchang DR Jewelry Deregistered No significant impact
Handan DR Jewelry Deregistered No significant impact
Guangzhou DR Jewelry Deregistered No significant impact
Langfang DR Jewelry Deregistered No significant impact
Foshan DR Jewelry Deregistered No significant impact
Urumqi DR Jewelry Deregistered No significant impact
Information about major subsidiaries and associates
1. Subsidiary Love Only AI primarily engages in company information technology services and overseas
sales business. During the reporting period, it achieved a net profit of RMB 127.17 million, a decrease of
47.45% compared to the same period last year.
2. Subsidiary Darry Qianhai is primarily engaged in company supply chain management, research and
development design, customized product services, and related supporting services. During the reporting
period, it achieved a net profit of RMB 120.94 million, a decrease of 44.92% compared to 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
Always putting great importance on the long-term development, DRCO focuses on the development strategy
of “diamond ring as No.1, multi-brand and multi-category” and proposes the strategic goal of “becoming a
new luxury group with multiple brands”. Centering around the overall development strategy, DRCO will seize
the important opportunities arising from the rapid development of Chinese and even the global jewelry
industries. By improving the image and influence of the brand, refining R&D and design capabilities and
enhancing the influence in international markets, each of the Company’s brands will be able to focus on the
differentiated value and leverage the core competitiveness of the company promotes the coordinated
development of multi-brands.
(II) Business development plan for 2024
The complexity and uncertainty of the market environment, fluctuations in the global economy, changes in
consumer behavior and the evolution of the competitive landscape have all had a profound impact on our
business. Against this backdrop, we've realized that only through continuous innovation, efficiency
improvement and brand value enhancement can we maintain our leading position in the fiercely competitive
marketplace. In 2024, the Company will continue to focus on the core brand DR and adhering to the concept
of "the sole true love in one life", enhance our brand value and market competitiveness, and actively respond
58
2023 Annual Report of DR Corporation Limited
to market changes and challenges through brand building and refined business operation and management.
1. Brand power
(1) Increase brand value
① Upgrade brand image: Optimize standard store spaces, innovate in the development of display props;
establish a visual material library, unify visual standards, and upgrade the brand's primary colors; optimize
packaging materials and visual materials for activities; upgrade brand symbols and ensure full-channel
coverage; ② Accumulate brand assets: From brand stories to product stories, establish brand background
and brand paradigm, shoot high-energy brand films, and creative short films that range from brand stories to
product stories; ③ Brand events: actively participate in international exchanges and cooperation, enhance
the brand’s international awareness, create art experience spaces and love experience spaces, organize co-
branding activities for both the brand and products, press releases for brand upgrade and season-specific
love events, and so on.
(2) Optimize brand communication
Explore and guide user needs via the brand concept, look for micro-moments between the brand and users,
diversify the language and content of brand communication, refine the core of the brand communication,
align the contents with the products, strengthen the brand's emotional attributes, arouse the desire for the
brand, enhance the brand momentum and influence, gain popularity both online and offline; create the
extreme brand reputation through projects associated with the brand concept and the social value, improve
the brand communication and the brand impact; set up a special communication team to innovate the
content of the new platforms and the brand's sense of ceremony to form new touchpoints; disseminate warm
and grounded content with positive energy and characteristics of the era to reflect the attitude and warmth of
the brand.
2. Product competitiveness
DRCO always responds to market changes with emotionally appealing products, unique emotional
experiences, and an exclusive service system that matches the stores products, and users. The Company
continuously innovates and develops products that embody brand identity and true love emotion, spreads
the brand's true love concept and empower the brand through high-quality products that bridge the
communication between the brand and users to further enhance the brand image.
In 2024, the Company will continue to increase investment in product design and technology research and
development, explore the combination of jewelry and expression of love. Our R&D will focus on materials,
design, technology and other aspects to promote product innovation, launch new products to meet the
market demands, and create brand identity and classic works for brand communication to meet the needs of
different scenarios, different users and different channels. We will provide consumers with more unique and
high-quality choices, iteratively update the core products of the DR brand, improve product quality, diversify
designs, and set up a special team for gold to design and launch gold-themed wedding suits consisting of
five gold and one diamond products, so as to consolidate the brand's core competitiveness in the wedding
market; we will refine the "Wedding+" platform by including proposal/wedding planning, wedding
59
2023 Annual Report of DR Corporation Limited
photography, portraits and other supporting services; we will integrate and promote prestigious works, create
a cross-department closed-loop from new product release to retail sales so as to enable the coordinated
management across the whole lifecycle of the products and establish a department-wide process and point-
in-time planning; we will trace diamonds in conjunction with industry partners, and collaborate with
professional organizations including Natural Diamond Council, Platinum Guild International and IGI to boost
the sustainable development of the diamond industry.
3. Sales channels
(1) Expand channel layout
In 2024, the Company will continue to optimize the channel structure and upgrade the channel hierarchy,
maintaining flexibility and sensitivity to the market at all times, so as to effectively address external threats
and seize the opportunities in leading channels in a timely manner, and further strengthen the brand
potential and enhance the operational efficiency through channel optimization and development. On the one
hand, we will continue to complete the optimization of projects in first- and second-tier cities and the tail end
of business circles, focusing our resources on building the potential of leading stores and enhancing the
overall financial benefits the cities; on the other hand, we will gradually return to the single-store model in
cities below the third-tier level. In terms of newly opened stores, we will focus on the leading commercial
projects in cities where we have not yet entered, and plan to build new brand flagship stores with leading
commercial real estate groups; adhering to the principle of prudent assessment, we will enter into some
important tier-3 and tier-4 cities without our footprints, so as to further improve the channel layout. With the
effective progress of the channel layout adjustment plan and the maturity of the advantageous newly opened
stores, the overall benefits generated by channels will be greatly improved.
(2) Operation of stores
Offline stores are the window of front-end user experience. In 2023, the Company conducted a host of
activities during holidays such as Valentine's Day, 520, Qixi, National Day, Christmas and New Year's Day.
We launched a series of DP checking-in projects in 52 cities nationwide, which enhanced the perception of
the DR brand among customers of related shopping malls through brand-specific displays and guided
passersby to share their experiences. In 2024, we will continue to optimize store operations and
management to enhance the user experience and provide customers with better solutions to express their
love:
①Upgrade the operation system: Enhance the service quality and customer experience of stores by refining
service processes and strengthening the service skills and professionalism of employees; establish a training
and knowledge-sharing platform to provide training courses, management experience sharing, and best
practice cases to store managers in a digital manner; optimize store layout and displays to enhance product
presentation, utilize visual display tools such as showcases, models, and posters to highlight product
features and brand image, further solidifying the shopping environment guided by Dream Wedding values;
improve inventory management and supply chain distribution capabilities of stores, utilize sales data and
market trend analysis for sales forecasting and demand planning, so as to increase inventory turnover rate
and capital utilization efficiency; strengthen the operation and management capabilities of store managers;
60
2023 Annual Report of DR Corporation Limited
provide store managers with data analysis tools for them to better understand the sales data, customer
behaviors and market trends. Develop an intelligent user opportunity identification system to better identify
the needs of users for rings, manage and follow the information, shopping records and feedbacks of
customers.
②Classify the operation of stores: Implement hierarchical management based on factors such as store size,
geographic location and customer demand to develop more accurate strategic planning and operational
strategies, and provide support and management resources to different levels of stores; provide tailored
training and support to stores at different levels to improve their operating results and customer satisfaction.
③User services: Design targeted links and focuses for user experience service based on the characteristics
and service expectations of different users, provide comprehensive product knowledge and personalized
recommendation services, emphasize brand awareness and engagement, and create more opportunities for
users to deepen understanding of works and engage in dialogue. Design and establish a membership
system to offer unique membership benefits; utilize analysis of membership data to implement personalized
promotions and services, enhancing customer satisfaction and shopping experience.
(III) Risks in corporate operation and countermeasures
1. Industry and market volatility risks
As a consumer good with a strong discretionary attribute, diamonds are sensitive to external macroeconomic
conditions and the disposable income of residents. In recent years, intensified competition within the
diamond industry, insufficient demand for diamond jewelry, slow economic recovery and increasing
preference for gold as a safe haven have led to rising demand for gold and adverse effects on the diamond
jewelry industry. The Company's revenues suffered a sharp decline due to our fully self-operated sales
model and main business focusing on diamond jewelry. In the future, if external economic growth slows or
stagnates and the disposable income of the population declines, this could affect consumer behavior and
further constrain market demand for diamonds. In addition, geopolitical crises in recent years have
heightened international trade tensions, which could create uncertainty for overseas diamond sourcing. The
Company has always firmly believed that a long-term perspective is essential for navigating through
economic cycles, and that competition in the industry and fluctuations in the market environment present
both risks and opportunities. In response to the above risks, the Company will respond to market changes,
make strategic adjustments, maintain our core competitive advantages, strengthen brand power, product
competitiveness and sales channels, and improve cost control and operational efficiency; and continue to
pay attention to the situation of the gold market and timely diversify product offerings to actively cope with
the impact brought by the industry cycle and fluctuations in the market environment. 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
61
2023 Annual Report of DR Corporation Limited
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, further
strengthen qualification review over new suppliers and other indicators as on-site check and blind testing of
samples, monitor the diamond color an a monthly basis and conduct sample testing of the materials
produced by suppliers, and ensure that the full quality control system is effectively implemented in all
aspects.
3. Risk of declining brand influence
The Company's brand influence has an important influence on the sustainable development of its
performance. In the era of mobile Internet, consumption habits and trends also continue to evolve, and new
brands and new business concepts continue to emerge, as a result of which the Company is still facing the
risk of a decrease in the attractiveness of its brand concept. As the social and network environment
continues to evolve, the risk of public opinion is also increasing. If the Company has internal management
problems in brand publicity, registered trademark protection, terminal store image, product quality, product
intellectual property rights and after-sales service, it will directly lead to a decline in brand influence and may
face negative public opinion reports, which will have a negative impact on the Company's brand reputation,
operating results and ability to sustain operations. The Company's brand reputation, business performance
and sustainability will be negatively impacted. In response, DRCO has taken the following measures: (1)
strengthen brand building, extend the creation and output of high-quality content with valuable connotations
based on the unique brand concept, and enhance and increase the value and the positive influence of the
brand; (2) Increase the investment in product design and technology R&D to encourage product innovation,
and continue to enhance the competitiveness of products, and consolidate the core competitiveness of the
brand in the wedding market; (3) adjust channel strategies in accordance with changes in the business
circles, the alignment between customer bases and brand positioning, and continuously optimize the channel
structure to upgrade the levels of channels; (4) protect intellectual property rights such as trademarks
involved in the course of business to protect the Company’s interests and brand image.
4. Risk of stores with low performance
The Chinese market is currently at a critical moment of economic recovery and transformation, and there are
also external uncertainties, leading to insufficient demand for discretionary consumer goods. Under the fully
self-operated sales model, the Company may face lower-than-expected sales results and impairment risk. In
response, DRCO has taken the following measures: (1) regularly conduct a comprehensive inventory check
of stores, and take the initiative to close, relocate and replace underperforming stores or stores that are
inconsistent with the brand image; (2) focus resources on creating momentum for outperforming stores to
improve the overall financial performance in cities; (3) hire an external professional consulting team to build
an ideal model of terminal stores in all aspects, and implement the city operation improvement plan for the
single-store-in-single-city projects; (4) refine store management, optimize internal processes, and strengthen
the control of rental costs to reduce fixed rental costs and improve operational efficiency.
5. Risks of large balance and write-down of inventories
62
2023 Annual Report of DR Corporation Limited
To ensure timely response to product customization demands, the company maintains a certain number of
raw materials and inventory goods during operations. In the future, if there are significant fluctuations in
prices of key raw materials such as diamonds or market prices of inventory goods, the Company may face
the risk of further provision for inventory write-down. To address this risk, the Company will increase the
value added of and enhance the competitiveness of products by improving and upgrading products
according to market demand. Additionally, the Company will actively adjust procurement strategies,
strengthen safe and strategic inventory management, accelerate inventory turnover, dynamically monitor
inventory situations, and mitigate the risk of inventory write-downs.
XII. Registration form for surveys, communication, interviews and other activities during the
reporting period
Applicable □ Not applicable
Main
discussion
Type of
Date Place Method Interviewer contents and Date
interviewer
material
provided
Captial Group,
GF Securities,
January 4, Online Online
Institution New China
2023 meeting communication
Asset
Management For details,
Industry
Guolian please refer
prospect,
Securities, to the record
January 5, Online Online market
Institution China Post & of investor
2023 meeting communication landscape,
Capital Fund relations
current
Management activities
situation and
Personnel disclosed by
prospect of
from 17 DRCO on
DRCO’s
institutions January 10,
business
including 2023 on
operation
January 6, Company’s Yinhua Fund, www.cninfo.c
Field survey Institution
2023 meeting room Dongfang Alfa om.cn
Fund Manage
ment, and
Infore Capital
Management
Personnel For details,
from Industry please refer
institutions prospect, to the record
including 8 market of investor
Southwest landscape, relations
January 10, Online Online Securities, current activities
Institution
2023 meeting communication SWS MU situation and disclosed by
Fund prospect of DRCO on
Management, DRCO’s January 19,
and Bosera business 2023 on
Fund operation www.cninfo.c
Management om.cn
Fidelity,
January 11, Online Online Sealand
Institution
2023 meeting communication Securities,
Caitong Fund
63
2023 Annual Report of DR Corporation Limited
Management,
Dongwu
Securities
January 11, Company’s
Field survey Institution Ocean Link
2023 meeting room
Western
January 12, Online Online Security, HFT
Institution
2023 meeting communication Investment
Management
Personnel
from 13
institutions
including
Morgan
Stanley
January 13, Company’s
Field survey Institution Huaxin Fund
2023 meeting room
Management
Company,
Matthews
Asia, and
Penghua Fund
Management
GF Securities,
January 18, Online Online
Institution SWS Mu Fund
2023 meeting communication
Management
January 31, Company’s CITIC
Field survey Institution
2023 meeting room Securities
Personnel
from 40
institutions
including
Goldman
Sachs, Huatai-
January 31, Online Online pinebridge
Institution
2023 meeting communication Fund
Management,
For details,
and
please refer
Centennial Industry
to the record
Insurance prospect,
of investor
Asset market
relations
Management landscape,
activities
Guosen current
disclosed by
Securities, situation and
February 1, Online Online DRCO on
Institution Schroder prospect of
2023 meeting communication February 16,
Investment DRCO’s
2023 on
Management business
www.cninfo.c
February 1, Company’s Essence operation
Field survey Institution om.cn
2023 meeting room Securities
Personnel
from 43
institutions
including
Springs
February 2, Online Online
Institution Capital,
2023 meeting communication
Founder
Fubon Fund
Management
and Sinolink
Securities
64
2023 Annual Report of DR Corporation Limited
Asset
Management
GF Securities,
February 3, Company’s
Field survey Institution Caitong Fund
2023 meeting room
Management
GF Securities,
February 7, Company’s New China
Field survey Institution
2023 meeting room Asset
Management
Personnel
from 14
institutions
including
Huachuang
February 8, Company’s Securities,
Field survey Institution
2023 meeting room Baoying Fund
Management
and JPMorgan
Asset
Management
(China)
Personnel
from 8
institutions
including E
Fund
February 9, Company’s
Field survey Institution Management,
2023 meeting room
Infore Capital
Management
and CSOP
Asset
Management
Sealand
February 10, Company’s Securities,
Field survey Institution
2023 meeting room Wudi
Investment
Tianfeng
Securities,
February 13, Online Online
Institution Ningyongfu
2023 meeting communication
Fund
Management
Shanghai
February 14, Company’s Securities, T
Field survey Institution
2023 meeting room Rowe Price
Group
Personnel
from 6
institutions
including
February 15, Company’s China Life
Field survey Institution
2023 meeting room Pension,
Cyber Atlas,
and
Changjiang
Pension
Personnel 2022 Annual For details,
Institution, from 109 Report and please refer
Online Online
April 28, 2023 retail institutions 2023Q1 to the record
meeting communication
investor including Report of investor
CITIC presentations relations
65
2023 Annual Report of DR Corporation Limited
Securities, activities
China Life disclosed by
AMP Asset DRCO on
Management May 4, 2023
and Fortune on
Fund www.cninfo.c
Management, om.cn
as well as
some retail
investors
Huachuang
Company’s Securities,
May 6, 2023 Field survey Institution
meeting room Taikang Asset
Management
Company’s
May 12, 2023 Field survey Institution Brilliance
meeting room
Personnel
For details,
from 6
please refer
institutions Industry
to the record
including prospect,
of investor
Guotai Junan, market
Company’s relations
May 15, 2023 Field survey Institution Wanli Fuda landscape,
meeting room activities
Investment, current
disclosed by
Wutong situation and
DRCO on
Yinfeng prospect of
May 24, 2023
Wealth DRCO’s
on
Management business
www.cninfo.c
China operation
om.cn
Merchants
Company’s Securities,
May 16, 2023 Field survey Institution
meeting room Eagle
Investment,
First Beijing
Top Wealth
Company’s Building,
May 17, 2023 Field survey Institution
meeting room Beyond
Investment
Sangeng
Company’s
May 22, 2023 Field survey Institution Asset
meeting room
Management
Online Online
July 14, 2023 Institution point72
meeting communication For details,
Industry
please refer
prospect,
Personnel to the record
market
from 30 of investor
landscape,
institutions relations
current
including activities
Online Online situation and
July 20, 2023 Institution CITIC disclosed by
meeting communication prospect of
Securities, DRCO on
DRCO’s
Guosheng July 24, 2023
business
Securities and on
operation
GF Securities www.cninfo.c
om.cn
Personnel
from 83 For details,
institutions 2023 Interim please refer
August 29, Online Online Institution,
including Report to the record
2023 meeting communication retail investor
Huitianfu Fund Presentation of investor
Management, relations
Sequoia activities
66
2023 Annual Report of DR Corporation Limited
Capital and disclosed by
China DRCO on
Resources August 31,
SZITIC Trust, 2023 on
as well as www.cninfo.c
some retail om.cn
investors
China
Southern Fund Industry For details,
August 30, Company’s
Field survey Institution Management, prospect, please refer
2023 meeting room
Founder market to the record
Securities landscape, of investor
Tianfeng current relations
Securities, situation and activities
September 5, Company’s
Field survey Institution Wutong prospect of disclosed by
2023 meeting room
Yinfeng DRCO’s DRCO on
Capital business September 6,
Yinhua Fund, operation 2023 on
September 6, Company’s www.cninfo.c
Field survey Institution Changjiang
2023 meeting room
Securities om.cn
Personnel
from 62
institutions
For details,
including
please refer
AEON
to the record
Insurance
of investor
Asset
Institution, 2023Q3 relations
October 27, Online Online Management,
retail Report activities
2023 meeting communication Springs
investor Presentation disclosed by
(Beijing)
DRCO on
Capital,
October 29,
Guohua
2023 on
Shining Asset
www.cninfo.c
Management,
om.cn
and some
retail investors
XIII. Implementation of “Quality Improvement & Return Increase” Action Plan
Whether the Company disclosed the “Quality Improvement & Return Increase” Action Plan.
□ Yes No
67
2023 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 revised the “Articles of Association”, the “Rules of Procedure of the Board
of Directors”, the “Rules of Work of the Audit Committee”, the “Working Rules of the Nomination Committee”,
the “Working Rules of the Strategy and Sustainable Development Committee”, the “Working Rules of the
Remuneration and Appraisal Committee”, the “Working System of the Independent Directors”, the “Working
Rules of the General Manager”, the “Internal Audit Management System”, the “Investor Relations
Management System”, the “Financing Management System”, the “Administrative Measures for Connected
Transactions”, the “Administrative Measures for External Investment”, and the “External Guarantee
Management System”, and formulated the “Management System for Shares Held by Directors, Supervisors
and Senior Managers and Changes thereof”, as well as the “System for Specialized Meetings of
Independent Directors”, thereby further improving the corporate governance system.
(II) Shareholders and general meetings
During the reporting period, DRCO held one annual general meeting and one 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.
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2023 Annual Report of DR Corporation Limited
(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 four 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 and its shareholders.The holding of board
meetings and the contents of resolutions of the company are legal and effective, and there is no violation of
relevant laws and regulations to exercise power.The independent directors conscientiously fulfilled their
responsibilities and gave full play to their functions of participation in decision-making, supervision and
counterbalance, and professional consulting on the Board of Directors, and remained independent, objective,
and prudent, to safeguard the overall interests of DRCO and the legitimate rights and interests of minority
shareholders.
(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 four 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) Information Disclosure and Transparency
In strict compliance with the Rules Governing the Listing of Stocks on Shenzhen Stock Exchange, the
Administrative Measures for Information Disclosure of Listed Company, and other laws, regulations, rules
and regulatory documents, as well as the Articles of Association, DRCO earnestly fulfilled the obligation of
information disclosure and appointed the Board Secretary to take charge of the information disclosure work
and ensure information disclosure in a truthful, accurate, timely, fair and complete manner. During the
reporting period, DRCO designated Securities Times, Securities Daily, China Securities Journal, Shanghai
Securities News and CNINFO (www.cninfo.com.cn) as the newspapers and websites for information
disclosure to ensure all shareholders have equal access to information.
(VI) Management of Investor Relations
DRCO always values investor relations, and continues to build and explore an investor relations
management model, promote two-way communication with investors, and protect investor interests. During
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2023 Annual Report of DR Corporation Limited
the reporting period, DRCO strictly observed relevant laws and regulations such as the Guidelines on
Investor Relations Management for Listed Companies, and internal systems such as the “Articles of
Association”, and followed the basic principles of "full compliance, investor equality, proactive communication,
honesty and good faith", to ensure all investors had equal access to its information. DRCO built a perfect
investor relations management system, set up a special post for investor relations management, and
continuously standardized the investor relations management process to enhance communication with
existing and potential investors, and improve investors' understanding and recognition of the company.
Smooth communication with investors was ensured to the greatest extent through hotline, new media
platforms, official accounts, email and the “Investor Relations” column on its website, as well as on-site
reception.
(VII) Stakeholders
DRCO actively fulfills its corporate social responsibility, 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 2023
Environmental, Social and Governance Report, as detailed in the “2023 ESG Report” disclosed by DRCO on
www.cninfo.com.cn on 27 April 2024.
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.
(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
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2023 Annual Report of DR Corporation Limited
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.
(II) 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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2023 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 of
Date of Date of Resolution of
Session Type of meeting attending
convening disclosure meeting
investors
For details,
January 17, January 17,
please refer to
2023 2023 the
Announcement
on the
Resolution of
The First
Extraordinary Extraordinary the First
General General 88.19% Extraordinary
Meeting of Meeting of
Shareholders Shareholders General Meeting
in 2023 of Shareholders
in 2023
published on
www.cninfo.com
.cn (No. 2023-
003)
For details,
May 26, May 26,
please refer to
2023 2023 the
Announcement
for the
2022 Annual Resolution of
Annual general
General
meeting of 88.18% the 2022 Annual
Meeting of
shareholders General Meeting
Shareholders
of Shareholders
published on
www.cninfo.com
.cn (No. 2023-
033)
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
72
2023 Annual Report of DR Corporation Limited
VI. Corporate Governance of Red-chip Company
□ Applicable Not applicable
VII. Directors, Supervisors and Senior Management
1. Basic information
Num
ber
Numbe of
r of shar
Reas
shares Number of Number of Other es
ons
End held at sharesincr sharesincr increa held
Start for
Employ date the eased eased ses or at
Gen A date chan
Name Position ment of beginni during the during the decrea end
der ge of ges
status tenu ng of current current ses of
tenure in
re the period period (share curre
share
period (shares) (shares) s) nt
s
(share perio
s) d
(shar
es)
July
Zhang July
Incumb 7,
Guota Male 38 Chairman 11, 0 0 0 0 0
ent 202
o 2019
5
Aug
General Appoint
Zhang July ust
Manager ment
Guota Male 38 11, 25, 0 0 0 0 0
(Presiden and
o 2019 202
t) removal
3
July
July
Lu Fem Incumb 7,
37 Director 11, 0 0 0 0 0
Yiwen ale ent 202
2019
5
General Appoint Augus July
Lu Fem
37 Manager ment t 25, 7, 0 0 0 0 0
Yiwen ale
(Presiden and 2023 202
73
2023 Annual Report of DR Corporation Limited
t) removal 5
Director,
Deputy Mar
Wei General ch
Resigne July 1,
Qingxi Male 41 Manager 31, 0 0 0 0 0
d 2019
ng (Vice 202
President 3
)
Director,
Deputy
General
Manager
(Vice
July
Huang President July
Incumb 7,
Shuiro Male 49 ), 11, 0 0 0 0 0
ent 202
ng Secretary 2019
5
of the
Board
and Chief
Financial
Officer
July
Hu July
Incumb 7,
Xiaom Male 43 Director 11, 0 0 0 0 0
ent 202
ing 2019
5
July
Chen March
Incumb 7,
Qishe Male 38 Director 8, 0 0 0 0 0
ent 202
ng 2021
5
July
Zhao May
Fem Incumb 7,
Ranra 34 Director 26, 0 0 0 0 0
ale ent 202
n 2023
5
July
Li Independ Incumb Januar
Male 41 7, 0 0 0 0 0
Yang ent ent y 15,
202
74
2023 Annual Report of DR Corporation Limited
Director 2020 5
July
Independ Januar
Liang Incumb 7,
Male 46 ent y 15, 0 0 0 0 0
Jun ent 202
Director 2020
5
Nove July
Independ
Zhong Incumb mber 7,
Male 51 ent 0 0 0 0 0
Min ent 24, 202
Director
2020 5
Chairman
July
Huang of the
Fem Incumb July 8, 7,
Yingf 35 Board of 0 0 0 0 0
ale ent 2022 202
eng Superviso
5
rs
July
Superviso
Shen Fem Incumb July 8, 7,
34 r 0 0 0 0 0
Ai ale ent 2022 202
5
Employee
April
Represen July
Yin Resigne 10,
Male 44 tative 11, 0 0 0 0 0
Luwen d 202
Superviso 2019
3
r
Employee
July
Wu Represen April
Fem Incumb 7,
Wanh 30 tative 10, 0 0 0 0 0
ale ent 202
ong Superviso 2023
5
r
Total -- -- -- -- -- -- 0 0 0 0 0 --
Whether any directors, supervisors and senior officers were dismissed during the reporting period
Yes □ No
1. On March 31, 2023, the Board of Directors received a resignation in writing from Mr. Wei Qingxing, a
director and senior executive of DRCO, who applied for resignation from his positions as director, member of
the Remuneration and Appraisal Committee and deputy general manager (vice president) for personal
75
2023 Annual Report of DR Corporation Limited
reasons. After his resignation, Mr. Wei Qingxing will no longer hold any position in DRCO.
2. On April 10, 2023, the Supervisory Committee received a written resignation from Mr. Yin Luwen, who
applied for resignation from his position as Employee Representative Supervisor as a result of work
adjustment. As at the end of the reporting period, he no longer held any position in DRCO.
3. On August 25, 2023, the Board of Directors received a written resignation from Mr. Zhang Guotao, who
applied for resignation from the position of General Manager (President) so as to focus more on DRCO's
long-term development strategy and planning, but he would continue to serve as Chairman of the Second
Session of the Board of Directors and Chairman of the Strategy and Sustainable Development Committee.
Changes in directors, supervisors and senior management of DRCO
Applicable □ Not applicable
Name Position Type Date Reason
Director, Deputy General Resign for personal
Wei Qingxing Resigned March 31, 2023 reasons
Manager (Vice President)
Employee representative
Yin Luwen Resigned April 10, 2023 Work Adjustment
supervisor
Elected by the
Employee representative employee
Wu Wanhong Elected April 10, 2023
supervisor representative
meeting
Elected by the
Zhao Ranran Director Elected May 26, 2023
general meeting
General Manager
Zhang Guotao Dismissed August 25, 2023 Work Adjustment
(President)
General Manager Appointed by the
Lu Yiwen Appointed August 25, 2023
(President) Board of Directors
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 and now acts as DRCO’s chairman, 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
76
2023 Annual Report of DR Corporation Limited
China. Born in 1987, she holds an EMBA degree from China Europe International Business 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 Corporationand now acts as the director and general manager (president), 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
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 , 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.
⑥Ms. Zhao Ranran
Ms. Zhao Ranran, director of DRCO, s a Chinese citizen without permanent residence permit outside China.
Born in 1989, holds a bachelor's degree from Central China Normal University. She joined the company in
July 2013 and have served as Senior Manager and Deputy Director of User Operations; From July 2019 to
July 2022, served as the Chairman of the first Supervisory Board of the company; she have been serving as
the head of the company's brand communication department since July 2019.
⑦ Mr. Li Yang
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2023 Annual Report of DR Corporation Limited
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.
⑧ 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.
⑨ Mr. Zhong Min
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
responsible head for brand content 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
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2023 Annual Report of DR Corporation Limited
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 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”.
② 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
Whether receive
Name of Position held in
Name of Start date of End Date of remunerations in
shareholder shareholder
employee tenure tenure shareholder
entity entity
entity
Executive
DR Investment
Director, November 24,
Zhang Guotao (Zhuhai) Co., No
General 2015
Ltd.
Manager
Gongqingcheng
Wendi No.1 Executive
December 1,
Zhang Guotao Investment Partner (with a No
2017
Management proxy appointed)
Partnership (LP)
Gongqingcheng
Wendi No.2 Executive
December 1,
Zhang Guotao Investment Partner (with a No
2017
Management proxy appointed)
Partnership (LP)
Gongqingcheng
Executive December 4,
Zhang Guotao Wendi No.3 No
Partner (with a 2017
Investment
79
2023 Annual Report of DR Corporation Limited
Management proxy appointed)
Partnership (LP)
DR Investment
November 24,
Lu Yiwen (Zhuhai) Co., Supervisor No
2015
Ltd.
Description of
the position in
Not applicable
the shareholder
entity
Position in other entity
Applicable □ Not applicable
Whether
Name of Name of other Position held Start date of End Date of receive
person entity in other entity tenure tenure remunerations
in other entity
Shenzhen
Executive
Qianhai Wendi
Director, September 5, No
Zhang Guotao Management
General 2017
Consulting Co.,
Manager
Ltd.
Zhuhai Wendi
Executive
Design No
Zhang Guotao Consulting Co.,
Director, July 26, 2021
Manager
Ltd.
Zhuhai Wendi Executive
Zhang Guotao Technology Co., Director, July 27, 2021 No
Ltd. Manager
Shenzhen
Executive
EveryYear
Director, August 10, No
Zhang Guotao Travel
General 2021
Photography
Manager
Culture Co., Ltd.
Shenzhen
EveryYear
December 13, No
Lu Yiwen Travel Supervisor
2019
Photography
Culture Co., Ltd.
Zhuhai Wendi
Lu Yiwen Technology Co., Supervisor July 27, 2021 No
Ltd.
Zhuhai Wendi
Design
Lu Yiwen Supervisor July 26, 2021 No
Consulting Co.,
Ltd.
Huang Shuirong Shenzhen Executive March 30, No
80
2023 Annual Report of DR Corporation Limited
Rongzhi Partner 2015
Lianchuang
Investment
Enterprise (LP)
Independent
360 Ludashi
Li Yang Non- Executive June 5, 2019 Yes
Holdings Limited
Director
Cheung Kong
Graduate Associate
Li Yang July 1, 2017 Yes
School of Professor
Business
Westingarea
Supply Chain Independent February 09,
Li Yang Yes
(Shanghai) Co., Director 2022
Ltd.
Xintianli
Independent
Li Yang Technology Co., July 11, 2022 Yes
Director
Ltd.
Beijing Zhierxing
November 14,
Zhong Min Culture Media Director No
2013
Co., Ltd.
Shenzhen
Yuezhong January 16, September 1,
Zhong Min Director No
Culture Group 2019 2023
Co., Ltd
Shenzhen
Yuezhong
Tianze Real January 5,
Zhong Min Director May 22, 2023 No
Estate 2013
Development
Co., Ltd.
Shenzhen December 26,
Zhong Min Yuezhong Director Yes
2006
Investment
81
2023 Annual Report of DR Corporation Limited
Holding Co., Ltd.
Shenzhen
Binhai Penghui
November 15,
Zhong Min Fund Chairman No
2018
Management
Co., Ltd.
Guangzhou
Fangbang Independent December 12,
Zhong Min Yes
Electronics Co., Director 2016
Ltd.
Description of
position in None
other entity
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
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2023 Annual Report of DR Corporation Limited
Whether
receive
Total pre-tax
compensation
Position Employment compensation
Name Gender Age from any
osition status received from
connected
DRCO
party of
DRCO
Zhang
Male 38 Chairman Incumbent 417.72 No
Guotao
Chairman,
General
Lu Yiwen Female 37 Incumbent 190.8 No
Manager
(President)
Director,
Deputy
General
Wei Qingxing Male 41 Resigned 80.16 No
Manager
(Vice
President)
Director,
Deputy
General
Manager
Huang (Vice
Male 49 Incumbent 134.11 No
Shuirong President),
Secretary of
the Board and
Financial
Manager
Hu Xiaoming Male 43 Director Incumbent 67.12 No
Chen
Male 38 Director Incumbent 70.21 No
Qisheng
Zhao Ranran Female 34 Director Incumbent 56.05 No
Li Yang Male 41 Independent Incumbent 10 No
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2023 Annual Report of DR Corporation Limited
Director
Independent
Liang Jun Male 46 Incumbent 10 No
Director
Independent
Zhong Min Male 51 Incumbent 10 No
Director
Chairman of
Huang
Female 35 the Board of Incumbent 84.3 No
Yingfeng
Supervisors
Shen Ai Female 34 Supervisor Incumbent 43.26 No
Employee
Yin Luwen Male 44 Representativ Resigned 12.11 No
e Supervisor
Employee
Wu Wanhong Female 30 Representativ Incumbent 33.04 No
e Supervisor
Total -- -- -- -- 1,218.88 --
Other notes
Applicable □ Not applicable
During the reporting period, the pre-tax remuneration received by Chairman Zhang Guotao from DRCO
increased as compared to 2022, which was mainly due to an increase in the exchange rate for the
remuneration in Hong Kong dollars over 2022.
VIII. Performance of Duties by DRCO Directors during Reporting Period
1. Board of Directors in the reporting period
Meeting Date of convening Date of disclosure Resolution of meeting
For details, please refer
to the Announcement for
5th Meeting of the the Resolution of the 5th
Second Session of Board April 26, 2023 April 28, 2023 Meeting of the Second
of Directors Session of Board of
Directors published on
www.cninfo.com.cn (No.
84
2023 Annual Report of DR Corporation Limited
2023-029)
For details, please refer
to the Announcement for
the Resolution of the 6th
6th Meeting of the
Meeting of the Second
Second Session of Board August 25, 2023 August 29, 2023
Session of Board of
of Directors
Directors published on
www.cninfo.com.cn (No.
2023-047)
7th Meeting of the Review and pass the
Second Session of Board October 25, 2023 Resolution on the Third
of Directors Quarter Report 2023
For details, please refer
to the Announcement for
the Resolution of the 8th
8th Meeting of the
Meeting of the Second
Second Session of Board December 28, 2023 December 30, 2023
Session of Board of
of Directors
Directors published on
www.cninfo.com.cn (No.
2023-062)
2. Attendance of directors at the Board meetings and the general meetings
Attendance of directors at the Board meetings and the general meetings
Attendance
Required
in Board Absence
attendance Attendance Number of
meetings from two Attendance
Name of in Board in Board Attendance absences
via consecutive at general
director(s) meetings meetings in by proxy from Board
communicat meetings or meetings
during the person meetings
ion not
year
equipment
Zhang
4 3 1 0 0 No 1
Guotao
Lu Yiwen 4 3 1 0 0 No 1
Wei 0 0 0 0 0 No 1
85
2023 Annual Report of DR Corporation Limited
Qingxing
Huang
4 4 0 0 0 No 2
Shuirong
Hu
4 4 0 0 0 No 2
Xiaoming
Chen
4 4 0 0 0 No 2
Qisheng
Zhao
3 3 0 0 0 No 1
Ranran
Li Yang 4 0 4 0 0 No 2
Liang Jun 4 1 3 0 0 No 2
Zhong Min 4 0 4 0 0 No 2
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
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
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2023 Annual Report of DR Corporation Limited
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 Other
Important Details of
Name of of Date of Contents of descriptions on
Members opinions and objections
committee meetings convening the meetings duty
suggestions (if any)
held performance
The Audit
Committee
reviewed the
1. Guide the
matters under
internal audit
consideration
work and play
in strict
the role of the
accordance
Audit
with the
Department in
Articles of
"improving
Association,
corporate
Review the the Rules of
governance,
“Resolution on Work of the
adding value
the 4Q2022 Audit
Zhong and achieving
January Work Review Committee and
Min, objectives”.
9, 2023 and 2023 relevant laws
Audit Liang
5 2. Communicate
Work Plan of and
Committee Jun,
with the
DRCO’s Audit regulations,
Huang
accounting firm
Department fully
Shuirong
on the work
communicated
plan and
with DRCO
arrangements
and the
for the annual
auditors and
audit in 2023,
unanimously
the priorities
approved
therein and
relevant
other matters.
resolutions
after
discussion.
April 25, 1. Review the The Audit 1. Communicate
2023 “Resolution on Committee with the
87
2023 Annual Report of DR Corporation Limited
the 2022 reviewed the accounting firm
Annual Report matters under to ensure that
and Its consideration the financial
Summary”; in strict statements give
accordance a true, fair and
2. Review the
"Resolution with the complete
on the
Articles of reflection of the
2023Q1
Quarterly Association, overall financial
Results”
the Rules of position of
3. Review the
“Resolution on Work of the DRCO;
the 2022
Audit
Financial 2. Guide the
Results; Committee and
internal audit
4. Review the
relevant laws
"Resolution work and play
on the 2022 and
the role of the
Internal
regulations,
Control Self Audit
assessment and
Department in
Report";
unanimously
5. Review the "improving
“Resolution on approved
corporate
2022 Annual
relevant
Report on governance,
Deposit and resolutions
adding value
Use of
after
Proceeds” and achieving
discussion with
6.Review the objectives”.
related parties.
“Resolution on
the Storage
and Use of
Funds Raised
in 1Q2023”;
7. Review the
“Resolution on
Renewing
Engagement
of Audit
Institution in
2023”
8. Review the
“Resolution on
the Work of
DRCO’s Audit
Department in
1Q2023”
88
2023 Annual Report of DR Corporation Limited
1. Review the The Audit
“Resolution on Committee
the 2023 reviewed the
Interim Report matters under
and Its consideration
Summary”; in strict
accordance
2. Review the Guide the
with the
“Resolution on internal audit
Articles of
2023 Interim work and play
Association,
Report on the role of the
the Rules of
Deposit and Audit
Work of the
Use of Department in
August Audit
24, 2023 Proceeds” "improving
Committee and
corporate
3. Review the relevant laws
governance,
“Resolution on and
adding value
Revision of regulations,
and achieving
the Internal and
objectives”.
Audit unanimously
Management approved
System”; relevant
4. Review the resolutions
“Resolution on after
the 2023Q2
Work of discussion with
DRCO’s Audit related parties.
Department”
The Audit
1. Review the
Committee Guide the
"Resolution
reviewed the internal audit
on the
matters under work and play
2023Q3
consideration the role of the
Quarterly
in strict Audit
Results”
accordance Department in
October
24, 2023 2. Resolution
with the "improving
on reviewing
Articles of corporate
the “2023Q3 governance,
Association,
Special
the Rules of adding value
Report on
Work of the and achieving
Deposit and objectives”
Audit
Use of
Committee and
89
2023 Annual Report of DR Corporation Limited
Proceeds” relevant laws
and
3. Review the
regulations,
“Resolution on
and
the 2023Q3
unanimously
Work of
approved
DRCO’s Audit
relevant
Department”
resolutions
after
discussion with
related parties.
The Audit
Committee
reviewed the
matters under
consideration
in strict
accordance
with the
Review the
Articles of
“Resolution on
Association,
Revision of
December the Rules of
the Internal
28, 2023 Work of the
Audit
Audit
Management
Committee and
System”
relevant laws
and
regulations,
and
unanimously
approved the
resolution after
discussion.
Strategy and Zhang 2 Review the The Strategy
April 26,
Sustainable Guotao, “Resolution on and
2023
Development Li Yang, the Sustainable
90
2023 Annual Report of DR Corporation Limited
Committee Hu Sustainable Development
Xiaoming Development Committee, in
Report for strict
2022” accordance
with the
Articles of
Association,
the Working
Rules of the
Strategy and
Sustainable
Development
Committee and
relevant laws
and
regulations,
unanimously
approved the
resolution after
discussion.
The Strategy
and
Sustainable
Development
Committee, in
strict
accordance
Review the
with the
“Resolution on
Articles of
December Formulating
Association,
28, 2023 the ESG
the Working
System of
Rules of the
DRCO”
Strategy and
Sustainable
Development
Committee and
relevant laws
and
regulations,
91
2023 Annual Report of DR Corporation Limited
unanimously
approved the
resolution after
discussion.
The
Remuneration
and Appraisal
Committee, in
1.Review the strict
“Resolution on accordance
the Plan for with the
Remuneration Articles of
and Association,
Allowance of the Working
Liang
Remuneration Directors”; Rules of the
Jun 、 April 25,
and Appraisal 1 Remuneration
2. Review the
Zhong 2023
Committee and Appraisal
“Resolution on
Min Committee and
the Plan for
relevant laws
Remuneration
and
and
regulations,
Allowance of
unanimously
Senior
approved
Management”;
relevant
resolutions
after in-depth
discussion.
Review the The
Li Yang,
"Resolution Nomination
Lu
Nomination April 26, on Nominating Committee
Yiwen, 2
Committee 2023 Zhao Ranran considered the
Zhong
as a Non matters under
Min
Independent consideration
92
2023 Annual Report of DR Corporation Limited
Director in strict
Candidate for accordance
the Second with the
Board of Articles of
Directors" Association,
the Working
Rules of the
Nomination
Committee,
and relevant
laws and
regulations,
and conducted
a serious
review of the
qualifications
of director
candidates.
After
discussion,
relevant
nominations
were
unanimously
approved.
The
Nomination
Committee
considered the
Review the
matters under
“Resolution on
consideration
the
August in strict
Appointment
25, 2023 accordance
of DRCO’s
with the
General
Articles of
Manager”
Association,
the Working
Rules of the
Nomination
93
2023 Annual Report of DR Corporation Limited
Committee,
and relevant
laws and
regulations,
and conducted
a serious
review of the
qualifications
of general
manager
candidate.
After
discussion,
relevant
nomination
was
unanimously
approved.
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. Employee number, professional composition, and educational background
Number of current employees of the parent
Company as of the end of the reporting period 2,595
(persons)
Number of current employees of major
subsidiaries as of the end of the reporting 602
period (persons)
Total number of current employees as of the 3,197
end of the reporting period (persons)
Total number of paid employees in the current 3,197
period (persons)
Number of retired employees for whom the
parent company and its major subsidiaries are 0
responsible for the retirement benefits (persons)
Professional composition
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2023 Annual Report of DR Corporation Limited
Category Number of persons
Sales personnel 2,890
Technical personnel 88
Financial personnel 59
Administrative personnel 160
Total 3,197
Education background
Category Quantity (person)
Master's degree and above 43
Bachelor’s degree 661
Junior college below 2,493
Total 3,197
2. Remuneration policy
DRCO continues to improve the remuneration-driven incentive mechanism to ensure the compliance
ofvarious remuneration management activities, as well as external competitiveness and internal fairness 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
During the reporting period, DRCO continued to improve its staff training program in line with the annual
strategic planning and staff development requirements. It developed separate training programs for new and
existing staff, and tailor-made training courses agreeing with its business objectives, so as to improve the
comprehensive quality of employees and boost overall operational results. Online learning and offline
intensive training were regularly organized for new employees in functional departments to help them better
understand the corporate culture, brand, products and processes, and fit into the workplace quickly. The
professional competence training for managers in functional departments improved the managers’
understanding of the Company’s strategic priorities and enhanced their strategic execution ability. Training
for retail staff focused on brand concept interpretation, professional improvement of works, and sales service
enhancement, and learning sessions of varied forms were launched nationwide, which raised the
95
2023 Annual Report of DR Corporation Limited
professional knowledge of terminal stores, enhanced the professionalism, ability to explain the works and
service consciousness of employees, and improved customer experience. DRCO launched “True Love
Setting Sail” and “Setting Sail Premium+” programs through cooperation with external agencies to cultivate
new employees and help them pass the transition period and meet post requirements. A couple of practical
courses were developed to empower employees in terms of vocational psychology, sales skills and
continuous development. To help store managers fully understand the Company’s development strategy and
sales planning, DRCO worked out a store manager training program with a variety of specialized courses to
help store managers effectively manage business data and improve decision-making ability through online
learning and offline tutoring. The above-mentioned programs enhanced overall qualification and professional
skills of DRCO’s employees, addressed the needs of its staff for self improvement, and promoted continuous
development of the Company.
4. Labor outsourcing
Applicable □ Not applicable
Total working hours for labour outsourcing 71,494.00
Total remuneration paid for labour outsourcing
3,152,092.04
(RMB)
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 26, 2023, DRCO held the 2022 annual general meeting of shareholders
to consider and approve the Resolution on the Profit Distribution Plan for 2022. Based on the total share
capital of 400,010,000 shares as of December 31, 2022, DRCO distributed RMB10.00 in cash (tax inclusive)
for every 10 shares to all shareholders, amounting to a total cash dividend of RMB400,010,000 (tax
inclusive), No bonus shares were offered and no capital reserve was converted into share capital. This profit
distribution plan was completed on June 20, 2023.
Special notes on cash dividend policy
Whether complies with the provisions of the
Articles of Association or the requirements of Yes
the resolution of the general meeting of
shareholders:
Whether the criteria and proportion of dividend Yes
distribution are clear and unambiguous
96
2023 Annual Report of DR Corporation Limited
Whether relevant decision-making procedures Yes
and mechanisms are sound:
Whether independent directors have performed Yes
their duties and played their due roles:
If DRCO does not distribute cash dividends, disclose
specific reasons and propose measures to increase Not Applicable
investor returns:
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
0
ten shares (share)
Amount to be distributed for every ten shares (RMB)
5
(tax inclusive)
Number of shares to be converted into share capital
0
for every ten shares (share)
Share capital base in distribution proposal (shares) 400,010,000.00
Amount of cash dividend (RMB) (including tax) 200,005,000.00
Amount of cash dividend in other forms (e.g. share
0.00
repurchase) (RMB)
Total cash dividends (including other methods)
200,005,000.00
(RMB)
Distributive profit (RMB) 1,146,144,024.77
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2023 Annual Report of DR Corporation Limited
Proportion of total cash dividends (including other
100.00%
methods) in total profit distribution
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
Audited by Ernst & Young Hua Ming Certified Public Accountants (Special General Partnership), the net
profit attributable to shareholders of the listed company in the consolidated financial statements for the year
2023 amounted to RMB 68,957.568.40, of which the net profit attributable to the parent company was RMB
300,096,158.65. According to the relevant provisions of the Company Law and the Company's Articles of
Association, when distributing the current year's after-tax profit, the Company should set aside 10% of the
profit into the statutory surplus reserve. As of December 31, 2023, the cumulative balance of the statutory
surplus reserve has reached 50% of the Company's registered capital, and no further statutory surplus
reserve will be withdrawn in 2023. As of December 31, 2023, the cumulative undistributed profits in the
consolidated financial statements of the Company amounted to RMB 1,408,207,801.55, and the cumulative
undistributed profits of the parent company amounted to RMB 1,146,144,024.77.Taking full account of the
cash flow situation and ensuring the normal operation and long-term development of the company,
adhering to the principle of continuous return to shareholders and sharing the company's operating results
with all shareholders, the proposed profit distribution plan for the year 2023 is as follows: Based on the total
share capital of 400,010,000 shares of the Company as of December 31, 2023, a cash dividend of
RMB5.00 (including tax) will be distributed to all shareholders for every 10 shares held, totaling a cash
dividend of RMB 200,005,000.00 (including tax), with no bonus shares and no capital reserve to be
converted into share capital. If there is a change in the total share capital of the Company before the
implementation of the distribution plan, the Company will adjust the distribution ratio accordingly while
keeping the total distribution amount 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
98
2023 Annual Report of DR Corporation Limited
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 major deficiencies in internal control identified during the reporting period
□ Yes No
XV. Management and Control over Subsidiaries During Reporting Period
Company Integration Progress of Countermeas Working Follow-up
Problems
name plan integration ures progress resolution
Not Not Not Not Not Not Not
applicable applicable applicable applicable applicable applicable 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- April 27, 2024
assessment Report
99
2023 Annual Report of DR Corporation Limited
Disclosure index of the full text of
Please refer to see the "2023 Internal Control Self-Evaluation Report"
the Internal Control Self-
disclosed by www.cninfo.com.cn
assessment Report
Total assets of entities included in
the scope of assessment as a
percentage of total assets in 100.00%
DRCO's consolidated financial
statements
Revenue of entities included in the
scope of assessment as a
100.00%
percentage of revenue in DRCO's
consolidated financial statements
Criteria to evaluate deficiencies
Category Financial report Non-financial report
1) Material weakness: correction (1) Material weakness: Violation of
of material errors in published the State’s laws, regulations or
financial reports; failure of the regulatory documents; lack of
audit committee and the audit decision-making procedures or
department to oversee the internal unscientific decision-making
control; findings of fraud involving process that results in material
directors, supervisors and senior errors; lack of systems or systemic
management of DRCO; material failures of the system for important
misstatements in current financial businesses; failure to rectify
reports identified by the CPA but material weakness identified by
Qualitative criteria not by DRCO's internal control the internal control assessment.
department. (2) Significant errors resulting from
(2)Significant deficiency: failure to deviations of DRCO's decision-
select and apply accounting making process from the
policies in accordance with GAAP; objectives; deficiencies in
failure to establish anti-fraud significant business policies or
procedures and control measures; systems; failure to correct
and one or more deficiencies of significant deficiencies identified in
the financial reporting, for which the internal control assessment.
the truthfulness and accuracy of (3) General deficiency: Inefficiency
the financial statements cannot be of DRCO's decision-making
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2023 Annual Report of DR Corporation Limited
reasonably assured. process; deficiencies in general
business policies or systems;
(3)General deficiency: Other
failure to correct general
control deficiencies related to
deficiencies identified in the
financial reporting that do not
internal control assessment.
constitute material weakness or
significant deficiency.
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
(2) Significant deficiency: 1% ≤ from direct or potential negative
misstatement <2% of consolidated impacts of the deficiencies in
revenue. internal control are measured
against the total consolidated
(3) General deficiency:
assets.
Misstatement <1% of consolidated
revenue. (1) Material weakness: direct
Quantitative criteria property losses ≥ 1% of the total
2. Losses resulting or likely to
consolidated assets.
result from deficiencies in internal
controls are measured against (2) Significant deficiency: 0.5% ≤
total consolidated assets if they direct property losses <1% of total
have impacts on the asset consolidated assets.
management.
(3) General deficiency: direct
(1) Material weakness: property losses <0.5% of total
Misstatement ≥ 1% of the 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.
101
2023 Annual Report of DR Corporation Limited
Number of material weaknesses in
0
financial reporting (#)
Number of material weaknesses in
0
non-financial reporting (#)
Number of significant deficiencies
0
in financial reporting (#)
Number of significant deficiencies
0
in non-financial reporting (#)
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
102
2023 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
Company's
Name of DRCO Reason for production and
Penalty results rectification
or subsidiary penalty Violation operation of the
measures
listed company
Not applicable Not applicable Not applicable Not applicable Not applicable Not 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 details, please refer to the ESG Report for 2023 disclosed by DRCO at www.cninfo.com.cn on April 27,
2024.
III Consolidating and Expanding Achievements in Poverty Alleviation While Revitalizing Rural
Areas
Not applicable
103
2023 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
Status of
Commitment Commitme Commitme Commitme
Reason Description fulfillmen
maker nt type nt time nt period
t
Commitme
nts made in
the
acquisition Not
report or applicable
equity
change
report
Commitme
nts made
during Not
asset applicable
restructurin
g
1.The company
shares directly
or indirectly
held by DRCO
prior to the
proposed
offering shall
not be
transferred or
Commitme entrusted to
nts made at others; or be
DR December
the time of Commitme repurchased by
Investment December 15, 2021 Performi
the initial nts to lock- DRCO, for a
(Zhuhai) Co., 15, 2021 to June ng
public up period of 36
Ltd. 15, 2025
offering or months from
refinancing 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
104
2023 Annual Report of DR Corporation Limited
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 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
105
2023 Annual Report of DR Corporation Limited
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
106
2023 Annual Report of DR Corporation Limited
to the fact that
the company
steps down as
the controlling
shareholder of
DRCO.
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
Gongqingche
months from
ng Wendi
the date of
No.1
listing of
Investment
DRCO's
Management
shares.
Partnership
(LP), 2.If the closing
Commitme Gongqingche price of the
nts made at ng Wendi company
December
the time of No.2 Commitme shares is lower
December 15, 2021 Performi
the initial Investment nts to lock- than the issue
15, 2021 to June ng
public Management up price for twenty
15, 2025
offering or Partnership consecutive
refinancing (LP), trading days
Gongqingche within six
ng Wendi months after
No.3 the listing of
Investment DRCO; or is
Management less than the
Partnership issue price at
(LP) 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 by six
107
2023 Annual Report of DR Corporation Limited
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
108
2023 Annual Report of DR Corporation Limited
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.
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
Commitme shares.
nts made at December
the time of Zhang Commitme 2.If the closing
December 15, 2021 Performi
the initial Guotao and nts to lock- price of the
15, 2021 to June ng
public Lu Yiwen up company
15, 2025
offering or shares is lower
refinancing 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-
trading day),
the lock-up
period when
109
2023 Annual Report of DR Corporation Limited
the company
shares are held
by me 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.Within six
months after
resignation, do
not transfer the
company
shares directly
or indirectly
held by oneself;
if I resign within
six months of
DRCO's shares
being listed, I
shall not
transfer any
shares held
directly or
indirectly in
DRCO within
18 months of
my resignation;
if I resign
between the
seventh and
twelfth months
of DRCO's
110
2023 Annual Report of DR Corporation Limited
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
111
2023 Annual Report of DR Corporation Limited
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.
In case of
reducing the
shareholding
within two
years after the
expiry of the
Commitme aforesaid lock-
nts made at up period,
DR DRCO will June 16,
the time of Commitme
Investment exactly comply June 16, 2025 to Performi
the initial nts to share
(Zhuhai) Co., with relevant 2025 June 15, ng
public reduction
Ltd. regulations of 2027
offering or
refinancing the CSRC and
the SZSE on
share
reduction,
prudently
formulate a
share reduction
plan; reduce
112
2023 Annual Report of DR Corporation Limited
the
shareholding by
law; make an
official
announcement
three trading
days prior to
the reduction;
and fulfill
information
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
113
2023 Annual Report of DR Corporation Limited
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
114
2023 Annual Report of DR Corporation Limited
terminated due
to the fact that
the company
steps down as
the controlling
shareholder.
In case of
reducing the
shareholding
within two
years after the
expiry of the
aforesaid lock-
up period,
DRCO will
exactly comply
with relevant
regulations of
the CSRC and
Gongqingche the SZSE on
ng Wendi share
No.1 reduction,
Investment prudently
Management formulate a
Partnership share reduction
(LP), plan; reduce
Commitme Gongqingche the
nts made at ng Wendi shareholding by
law; make an June 16,
the time of No.2 Commitme
official June 16, 2025 to Performi
the initial Investment nts to share
announcement 2025 June 15, ng
public Management reduction
three trading 2027
offering or Partnership
refinancing (LP), days prior to
Gongqingche the reduction;
ng Wendi and fulfill
No.3 information
Investment disclosure
Management obligations in a
Partnership timely and
(LP) 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
115
2023 Annual Report of DR Corporation Limited
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
116
2023 Annual Report of DR Corporation Limited
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.
I. Treatment of
accumulated
profits before
the offering
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
Commitme offering of
nts made at Commitme shares will be
the time of DR
nts to profit shared by the December Permanent Performi
the initial Corporation
distribution new and 15, 2021 ly valid ng
public Limited
policy existing
offering or shareholders of
refinancing 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
117
2023 Annual Report of DR Corporation Limited
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
118
2023 Annual Report of DR Corporation Limited
profit
distribution if
the conditions
for cash 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;
119
2023 Annual Report of DR Corporation Limited
(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, except
for the
company and
its wholly-
owned or
controlled
subsidiaries,
Commitme the company/I
nts on and other
Commitme DR horizontal enterprises,
nts made at Investment competition organizations
the time of (Zhuhai) Co., , connected or entities December Permanent Performi
the initial Ltd., Zhang transaction controlled by 15, 2021 ly valid ng
public Guotao and s, and the
offering or Lu Yiwen capital company/me
refinancing appropriatio are not
n currently
engaged,
directly or
indirectly, in
any business
activities that
constitute
competition
with the main
business of the
company and
its wholly-
owned or
controlled
subsidiaries;
2. No
120
2023 Annual Report of DR Corporation Limited
engagement or
association with
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,
121
2023 Annual Report of DR Corporation Limited
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
breach shall
122
2023 Annual Report of DR Corporation Limited
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
123
2023 Annual Report of DR Corporation Limited
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 from the
date of the
signature of
124
2023 Annual Report of DR Corporation Limited
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
Commitme dividend
nts made at distribution, December
Commitme bonus issue,
the time of DR 15, 2021
nts to post- transfer of December Performi
the initial Corporation to
IPO price shares, issue of 15, 2021 ng
public Limited December
stabilization additional
offering or 14, 2024
refinancing 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
125
2023 Annual Report of DR Corporation Limited
because of
force majeure
factors
(hereinafter
referred to as
the "Triggering
Condition"),
DRCO and its
controlling
shareholders
as well as
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
126
2023 Annual Report of DR Corporation Limited
for the
repurchase, the
impact of the
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
127
2023 Annual Report of DR Corporation Limited
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.
128
2023 Annual Report of DR Corporation Limited
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 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
129
2023 Annual Report of DR Corporation Limited
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
130
2023 Annual Report of DR Corporation Limited
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
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
Commitme of the Takeover
nts made at of Listed December
DR Commitme Companies in
the time of 15, 2021
Investment nt to post- any of the December Performi
the initial to
(Zhuhai) Co., IPO price following cases: 15, 2021 ng
public December
Ltd. stabilization
offering or 14, 2024
① The closing
refinancing
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
131
2023 Annual Report of DR Corporation Limited
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).
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
132
2023 Annual Report of DR Corporation Limited
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,
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
133
2023 Annual Report of DR Corporation Limited
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
134
2023 Annual Report of DR Corporation Limited
DRCO.
Following the
increase of our
shareholding,
the equity
distribution of
DRCO will
continue to
comply with the
listing
requirements.
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
135
2023 Annual Report of DR Corporation Limited
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 Takeover
of Listed
Zhang Companies and
Guotao, Lu the Rules on
Commitme Yiwen, Wei
nts made at the December
Qingxing, Commitme
the time of Management of 15, 2021
Huang nt to post- Shares Held by December Performi
the initial to
Shuirong, Hu IPO price the Directors, 15, 2021 ng
public December
Xiaoming, stabilization Supervisors
offering or 14, 2024
Chen and Senior
refinancing Qisheng and
Management
Lin Zhenghai Officers of
Listed
Companies and
the Changes
Thereof in any
of the following
cases:
① The closing
price for each
of the 10
consecutive
trading days
from the day
after the
controlling
shareholder's
136
2023 Annual Report of DR Corporation Limited
shareholding
increase plan is
implemented is
lower 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).
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
137
2023 Annual Report of DR Corporation Limited
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
138
2023 Annual Report of DR Corporation Limited
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 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
139
2023 Annual Report of DR Corporation Limited
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
140
2023 Annual Report of DR Corporation Limited
commitment
will not be
terminated due
to the change
of my position
or resignation.
If the issuer
and its
subsidiaries
receive a notice
of correction
from the
competent
administrative
authorities
because the
properties
leased by them
have not been
registered for
lease filing in
accordance
with the laws,
regulations and
normative
Commitme documents
nts to currently in
Commitme DR compensati force, the
nts made at Investment ng the company/I will
the time of (Zhuhai) Co., issuer for actively December Permanent Performi
the initial Ltd., Zhang possible supervise the 15, 2021 ly valid ng
public Guotao and losses due issuer and its
offering or Lu Yiwen to the subsidiaries to
refinancing leased make
property 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
141
2023 Annual Report of DR Corporation Limited
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
authorities to
make
retroactive
payments due
Commitme
to failure to
nt to
make full
Commitme retroactive
DR payment of
nts made at payment of
Investment social security
the time of social
(Zhuhai) Co., contributions or December Permanent Performi
the initial security
Ltd., Zhang housing fund in 15, 2021 ly valid ng
public contribution
Guotao and accordance
offering or s and
Lu Yiwen with laws, the
refinancing housing
company/I shall
provident
be fully liable
fund
for the
retroactive
payments and
shall ensure
that the issuer
or its
subsidiaries
shall not suffer
any financial
loss as a result.
Commitme Binding 1. In the event
nts made at measures of a breach of
the time of DR in case of the relevant
commitments, December Permanent Performi
the initial Corporation failure to
DRCO will 15, 2021 ly valid ng
public Limited fulfill
offering or commitmen promptly
refinancing ts disclose the
fact and
142
2023 Annual Report of DR Corporation Limited
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;
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,
Commitme Binding except for force
nts made at measures majeure or
DR
the time of in case of other reasons
Investment December Permanent Performi
the initial failure to beyond our
(Zhuhai) Co., 15, 2021 ly valid ng
public fulfill control, the
Ltd.
offering or commitmen company will
refinancing ts 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
143
2023 Annual Report of DR Corporation Limited
commitments
will belong to
the company.
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.
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 1. In the event
Guotao, Lu of a breach of
Yiwen, Wei the relevant
Qingxing, commitments, I
Commitme Huang Binding will promptly
nts made at Shuirong, Hu measures disclose the
the time of Xiaoming, in case of fact and
Chen reasons for the December Permanent Performi
the initial failure to
Qisheng, Li breach and, 15, 2021 ly valid ng
public fulfill
offering or Yang, Liang commitmen except for force
refinancing Jun, Zhong ts majeure or
Min, Lin other reasons
Zhenghai, beyond my
Zhao control, I will
Ranran, Yin make a public
Luwen and apology to
144
2023 Annual Report of DR Corporation Limited
Wang Tong DRCO’s
shareholders
and public
investors;
2. Any profit
made as a
result of the
non-fulfillment
of the relevant
commitments
will belong to
DRCO. The
obligator 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.
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
145
2023 Annual Report of DR Corporation Limited
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
DRCO's
development
history, and
there are no
disputes or
Commitme potential
nts relating disputes over
to equities, etc.
Commitme disclosing 3. No
nts made at shareholder stockholders
the time of DR information directly or December Permanent Performi
the initial Corporation when indirectly hold 15, 2021 ly valid ng
public Limited applying for shares of the
offering or initial public issuer, which is
refinancing offering and prohibited by
listing on laws and
the ChiNext regulations.
Market
4. No
intermediary
participating
into the offering
or its
supervisor,
senior
management or
managerial
personnel
directly or
indirectly hold
shares of the
issuer.
5. DRCO does
not have any
improper
transfer of
benefits with
the issuer's
146
2023 Annual Report of DR Corporation Limited
equity.
6. If DRCO
breaches the
above
commitments, it
will be liable for
all legal
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
Commitme transferred
nts made at each year will
Share June 16,
the time of Zhang not exceed
reduction June 16, 2025 to Performi
the initial Guotao and 25% of the total
commitmen 2025 June 15, ng
public Lu Yiwen number of
t 2027
offering or shares I hold
refinancing 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
147
2023 Annual Report of DR Corporation Limited
formulate a
shareholding
reduction plan,
reduce the
shareholding
through lawful
means, and
make an
announcement
through DRCO
three trading
days prior to
the reduction,
and fulfill
information
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
148
2023 Annual Report of DR Corporation Limited
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
149
2023 Annual Report of DR Corporation Limited
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
Commitme the offering
nts made at Share conditions as
the time of DR required by
repurchase December Permanent Performi
the initial Corporation laws, within 10
commitmen 15, 2021 ly valid ng
public Limited working days
t
offering or from the date
refinancing such illegal
facts are
determined by
the CSRC, the
stock exchange
or a competent
authority such
as a judicial
authority,
DRCO will
initiate the
share
repurchase
procedure in
accordance
with laws to
repurchase all
the new shares
in the initial
public offering.
150
2023 Annual Report of DR Corporation Limited
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-
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
Commitme DRCO's
DR proposed
nts made at Investment Share
the time of offering and
(Zhuhai) Co., repurchase listing, which December Permanent Performi
the initial Ltd., Zhang commitmen 15, 2021 ly valid ng
public constitutes a
Guotao and t material and
offering or Lu Yiwen
refinancing substantial
effect on the
determination
of whether
DRCO
complies with
the offering
conditions as
required by
151
2023 Annual Report of DR Corporation Limited
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
restricted
shares having
been
transferred, and
the
consideration
for such
buyback will not
be lower than
the issue price
of DRCO 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
152
2023 Annual Report of DR Corporation Limited
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.
1. The
company/I
undertake and
guarantee that
there is no
fraud in the
proposed
offering and
listing of
DRCO;
2. If DRCO
does not meet
DR the listing
Commitme Commitme
Corporation conditions, but
nts made at nts to share
Limited, DR fraudulently
the time of repurchase
Investment obtains the December Permanent Performi
the initial in case of
(Zhuhai) Co., issuance 15, 2021 ly valid ng
public fraudulent
Ltd., Zhang registration and
offering or offering and
Guotao and has been listed,
refinancing listing
Lu Yiwen 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.
Commitme Measures The proposed
nts made at for and public offering
the time of DR commitmen may lead to December Permanent Performi
the initial Corporation ts to cover dilution of 15, 2021 ly valid ng
public Limited diluted investors'
offering or immediate immediate
refinancing returns returns. In
153
2023 Annual Report of DR Corporation Limited
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 and
safeguard the
legitimate rights
and interests of
small and
medium-sized
investors,
DRCO intends
to take
following
measures to
enhance
DRCO's
profitability and
strengthen
DRCO's ability
to sustain
returns:
1. Strengthen
the main
business and
improving
DRCO's
sustainable
profitability:
DRCO is
mainly engaged
in brand
operation,
customized
154
2023 Annual Report of DR Corporation Limited
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
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
competitivenes
s in terms of
brand strength,
capital strength,
marketing
network
coverage and
product design
capability.
2. Accelerate
155
2023 Annual Report of DR Corporation Limited
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
156
2023 Annual Report of DR Corporation Limited
progress of the
proceeds-
funded
projects. These
projects will
help DRCO
further enhance
its market
competitivenes
s, 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
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
157
2023 Annual Report of DR Corporation Limited
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
158
2023 Annual Report of DR Corporation Limited
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
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
159
2023 Annual Report of DR Corporation Limited
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
160
2023 Annual Report of DR Corporation Limited
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
competitivenes
s and
sustainable
profitability,
increasing its
future earnings
and enhancing
the return 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.
DR Commitme 1. The
Commitme company/I shall
nts made at Investment nts to
(Zhuhai) Co., recovering not abuse the December Permanent Performi
the time of position as a
the initial Ltd., Zhang diluted 15, 2021 ly valid ng
Guotao and immediate controlling
public shareholder/act
offering or Lu Yiwen returns
ual controller,
161
2023 Annual Report of DR Corporation Limited
refinancing 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
rules on
measures and
commitments to
cover diluted
immediate
returns, if the
relevant rules
of DRCO and
the
commitments of
the
company/me
are not in 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
162
2023 Annual Report of DR Corporation Limited
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.
1. I neither
transmit
benefits to
other entities or
individuals
without
compensation
or on unfair
terms, nor in
Zhang
any other way
Guotao, Lu
harm the
Yiwen, Wei
interests of
Commitme Qingxing,
DRCO.
nts made at Huang Commitme
the time of Shuirong, Hu nts to cover 2. I exercise
December Permanent Performi
the initial Xiaoming, diluted restraint in duty
15, 2021 ly valid ng
public Chen immediate consumption.
offering or Qisheng, Li returns
3. I shall not
refinancing Yang, Liang
use DRCO's
Jun, Zhong
assets to
Min and Lin
engage in
Zhenghai
investment and
consumption
activities
unrelated to the
performance of
my duties.
4. I will actively
promote the
improvement of
163
2023 Annual Report of DR Corporation Limited
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
164
2023 Annual Report of DR Corporation Limited
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
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
Commitme not contain any
Commitme nts to
nts made at false records,
undertaking misleading
the time of DR
liability for statements or December Permanent Performi
the initial Corporation
compensati material 15, 2021 ly valid ng
public Limited
on in omissions, and
offering or accordance
refinancing DRCO shall be
with laws jointly and
severally liable
for the
authenticity,
accuracy and
completeness
of the
information
165
2023 Annual Report of DR Corporation Limited
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,
DRCO shall
compensate
the investor for
the loss 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
166
2023 Annual Report of DR Corporation Limited
requirements of
the CSRC or
the stock
exchange.
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
the company/I
shall be jointly
and severally
liable for the
authenticity,
accuracy and
completeness
of the
Commitme information
Commitme DR nts to
nts made at thereof.
Investment undertaking
the time of (Zhuhai) Co., liability for 2. If an investor December Permanent Performi
the initial Ltd., Zhang compensati suffers loss in 15, 2021 ly valid ng
public Guotao and on in securities
offering or Lu Yiwen accordance trading as a
refinancing with laws 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
167
2023 Annual Report of DR Corporation Limited
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
Zhang and listing on
Guotao, Lu the ChiNext
Yiwen, Wei Market does
Qingxing, not contain any
Huang false records,
Commitme
Commitme Shuirong, Hu misleading
nts to
nts made at Xiaoming, statements or
assume
the time of Chen material
liability for December Permanent Performi
the initial Qisheng, Li omissions, and
compensati 15, 2021 ly valid ng
public Yang, Liang I shall be jointly
on in
offering or Jun, Zhong and severally
accordance
refinancing Min, Lin liable for the
with laws
Zhenghai, authenticity,
Zhao accuracy and
Ranran, Yin completeness
Luwen and of the
Wang Tong information
thereof.
2. If an investor
suffers loss in
securities
168
2023 Annual Report of DR Corporation Limited
trading as a
result of a false
statement,
misleading
statement or
material
omission in
DRCO's
prospectus, I
shall
compensate
the investor for
the loss in
accordance
with laws.
3. In case of
any breach of
the relevant
commitments,
DRCO will
promptly
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
169
2023 Annual Report of DR Corporation Limited
impact arising
from the non-
fulfillment of the
relevant
commitments
have been fully
eliminated.
Commitme
nts to Not
equity applicable
incentive
Other
commitmen
ts to Not
minority applicable
shareholder
s of DRCO
Other Not
commitmen applicable
ts
Whether
the
commitmen Yes
t is fulfilled
on time
Details of
specific
reasons
and next
steps for Not applicable
any
outstanding
delayed
commitmen
t
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.
170
2023 Annual Report of DR Corporation Limited
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 or canceled subsidiaries. The details are as follows:
Acquisition and disposal Whether this reporting period
Company name of subsidiaries during the is included in the scope of
reporting period consolidation
Yes
He’er Culture (Hainan) Co., Ltd. Invest to establish
DR LUXURY (SINGAPORE) PTE. LTD. Invest to establish Yes
DR Luxury Netherlands Holding B.V. Invest to establish Yes
LOVEMONT (MALAYSIA) SDN.BHD. Invest to establish Yes
DR LUXURY USA INC Invest to establish Yes
Shenzhen DR Jewelry Sales Co., Ltd. Invest to establish Yes
Love of My Love Wedding Planning
Invest to establish Yes
(Shenzhen) Co., Ltd.
LOVEMONT HONG KONG LIMITED Invest to establish Yes
171
2023 Annual Report of DR Corporation Limited
Happy Love Psychological Research
Invest to establish Yes
Center (Shenzhen) Co., Ltd.
Love of My Love Wedding Planning
Invest to establish Yes
(Sanya) Co., Ltd.
Shangqiu DR Jewelry Cancellation Yes
Wuhan DR Jewelry Cancellatio Yes
Nanchang DR Jewelry Cancellatio Yes
Handan DR Jewelry Cancellatio Yes
Guangzhou DR Jewelry Cancellatio Yes
Langfang DR Jewelry Cancellatio Yes
Foshan DR Jewelry Cancellatio Yes
Urumqi DR Jewelry Cancellatio Yes
Note: Overseas companies are sub-subsidiaries, and the other are subsidiaries.
VIII. Appointment and Dismissal of Accounting Firms
Currently appointed
Ernst & Young Hua Ming LLP (Special General
Name of domestic accounting firm Partnership)
Remuneration of domestic accounting firm 228
(RMB0'000)
Number of consecutive years of audit by 7 years
domestic accounting firm
Name of certified public accountants of Li Jianguang, Chen Huijin
domestic accounting firm
Number of continuous years of audit services by
certified public accountants of domestic 1 year, 2 years
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
172
2023 Annual Report of DR Corporation Limited
□ Applicable Not applicable
X. Matters Relating to Bankruptcy and Reorganization
□ Applicable Not applicable
No bankruptcy and reorganization-related matters occurred during the reporting period.
XI. Material Litigations and Arbitrations
Applicable □ Not applicable
Basic Whether
Amount Progress of Ruling Enforcemen
information estimated Date of Index for
involved litigation results and t of
on litigation liabilities disclosure inquiry
(RMB0'000) (arbitration) impacts judgment
(arbitration) are formed
There were
79 cases
that don't
meet the
criteria for
Cases
disclosure
closed at
of material As of the
the end of
litigation end of the
the
(arbitration) reporting
reporting
and in period, 50
period were
which of the
executed in
DRCO is aforementio Not
784.16 No No impact accordance
the ned cases applicable
with the
plaintiff/clai had been
judgments/r
mant, closed and
ulings or
including 66 29 were
settlement
claims pending.
and
brought by
mediation
DRCO for
programs.
infringemen
t of
intellectual
property
rights.
There are As of the Cases Not
591.44 No No impact
four cases end of the closed at applicable
173
2023 Annual Report of DR Corporation Limited
that don't reporting the end of
meet the period, 3 of the
criteria for the reporting
disclosure aforementio period were
of material ned cases executed in
litigation had been accordance
(arbitration) closed and with the
and in 1 were judgments/r
which pending. ulings or
DRCO is settlement
the and
defendant/r mediation
espondent. 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
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.
174
2023 Annual Report of DR Corporation Limited
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.
(3) Leasing
Applicable □ Not applicable
Description of leasing matters
DRCO’s leased assets are mainly leased for self-operated stores which have been recognized as right-of-
use assets according to the new accounting standards for lease, and there are no other significant leased
assets. For details, please refer to 11. Right-of-use Assets/VII. Notes to the Consolidated Financial
Statement/Part X Financial Statements.
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.
2. Material guarantees
175
2023 Annual Report of DR Corporation Limited
Applicable □ Not applicable
Unit: RMB0’000
External guarantees provided by DRCO and its subsidiaries (excluding guarantees for subsidiaries)
Date of
disclosu
Whether
re of Actual Counter
Actual it is a
announ Guarant amount Type of Collater - Guarant
occurre Whether guarant
Debtor cement ee of guarant al (if guarant ee
nce fulfilled ee for a
on amount guarant ee any) ee (if period
date related
guarant ee any)
party
ee
amount
DRCO's guarantee for subsidiaries
Date of
disclosu
Whether
re of Actual Counter
Actual it is a
announ Guarant amount Type of Collater - Guarant
occurre Whether guarant
Debtor cement ee of guarant al (if guarant ee
nce fulfilled ee for a
on amount guarant ee any) ee (if period
date related
guarant ee any)
party
ee
amount
DR
Joint
Group
and
Compan 4,950 0 No No No No
several
y
liability
Limited
Haoduo
Joint
Diamon October
April 22, and 36
d 20,000 26, 10,000 No No Yes No
2022 several months
(Shenzh 2022
liability
en)
Joint
Beijing August
700 0 and No No No No
DR 29,
several
176
2023 Annual Report of DR Corporation Limited
Jewelry 2022 liability
Beijing Joint
August Septem
Huazua and 7
29, 350 ber 1st, 169.96 No No Yes No
n DR several months
2022 2022
Jewelry liability
Beijing Joint
August January
Zhongz and 24
29, 500 31, 192.65 No No No No
uan DR several months
2022 2023
Jewelry liability
Joint
Chengd August
and
u DR 29, 1,000 0 No No No No
several
Jewelry 2022
liability
Joint
Chengd August
and 45
u DR 29, 700 412.35 No No No1 No
several months
Jewelry 2022
liability
Joint
Hangzh August Februar
and 27
ou DR 29, 1,000 y 1st, 119.15 No No No No
several months
Jewelry 2022 2023
liability
Joint
Hangzh August October
and 12
ou DR 29, 550 1st, 162.74 No No Yes No
several months
Jewelry 2022 2022
liability
Joint
Jinan August Septem
and 31
DR 29, 500 ber 1st, 396.49 No No No No
several months
Jewelry 2022 2022
liability
Joint
Kunmin August Februar
and 46
g DR 29, 500 y 1st, 109.75 No No No No
several months
Jewelry 2022 2023
liability
177
2023 Annual Report of DR Corporation Limited
Joint
Ningbo August October
and 44
DR 29, 600 29, 173.36 No No No No
several months
Jewelry 2022 2022
liability
Joint
Ningbo August January
and 47
DR 29, 600 1st, 95.97 No No No No
several months
Jewelry 2022 2023
liability
Joint
Shangh August
and
ai DR 29, 600 0 No No No No
several
Jewelry 2022
liability
Joint
Shangh August
and
ai DR 29, 500 0 No No No No
several
Jewelry 2022
liability
Joint
Shangh August October
and 41
ai DR 29, 450 1st, 237.37 No No No No
several months
Jewelry 2022 2022
liability
Joint
Shenzh August
and
en DR 29, 400 0 No No No No
several
Jewelry 2022
liability
Joint
Shenzh August
May 1st, and 34
en DR 29, 400 242.08 No No No No
2023 several months
Jewelry 2022
liability
Joint
Shenya August Septem
and 21
ng DR 29, 450 ber 1st, 196.68 No No No No
several months
Jewelry 2022 2022
liability
Shenya August Joint
400 0 No No No No
ng DR 29, and
178
2023 Annual Report of DR Corporation Limited
Jewelry 2022 several
liability
Joint
Suzhou August April
and 12
DR 29, 450 1st, 28.99 No No No No
several months
Jewelry 2022 2023
liability
Suzhou Joint
August
Zhongz and 51
29, 550 404.87 No No No No
uan DR several months
2022
Jewelry liability
Joint
Tianjin August Decemb
and 17
DR 29, 750 er 1st, 319.64 No No No2 No
several months
Jewelry 2022 2022
liability
Joint
Wuhan August
and
DR 29, 250 0 No No No No
several
Jewelry 2022
liability
Wuhan Joint
August
Zhongz and
29, 100 0 No No No No
uan DR several
2022
Jewelry liability
Xi'an
Joint
DR August October
and 35
Jewelry 29, 450 1st, 161.14 No No No No
several months
Accesso 2022 2022
liability
ries
Joint
Xi'an August
and
DR 29, 100 0 No No No No
several
Jewelry 2022
liability
Changs August Septem Joint
45
ha DR 29, 900 ber 1st, 894.06 and No No No No
months
Jewelry 2022 2022 several
179
2023 Annual Report of DR Corporation Limited
liability
Joint
Changs August Decemb
and 31
ha DR 29, 100 er 1st, 85.25 No No No No
several months
Jewelry 2022 2022
liability
Joint
Henan August
and
DR 29, 300 0 No No No No
several
Jewelry 2022
liability
Joint
Zhengz August January
and 45
hou DR 29, 350 1st, 141.9 No No No No
several months
Jewelry 2022 2023
liability
Joint
Chongqi August Septem
and 21
ng DR 29, 500 ber 1st, 431.92 No No No3 No
several months
Jewelry 2022 2022
liability
Joint
Shenzh October
and 7
en DR 28, 200 64.64 No No Yes No
several months
Jewelry 2022
liability
Chongqi Joint
October
ng and 40
28, 530 476.66 No No No No
Darry several months
2022
Jewelry liability
Joint
Yiwu October
and
DR 28, 250 0 No No No No
several
Jewelry 2022
liability
Joint
Zhouko October January
and 33
u DR 28, 50 1st, 32.81 No No No No
several months
Jewelry 2022 2023
liability
180
2023 Annual Report of DR Corporation Limited
Joint
Xining October
and
DR 28, 100 0 No No No No
several
Jewelry 2022
liability
Joint
Heze October
and
DR 28, 100 0 No No No No
several
Jewelry 2022
liability
Joint
Donggu October January
and 15
an DR 28, 200 1st, 52.66 No No No No
several months
Jewelry 2022 2023
liability
Joint
Nancha October
and
ng DR 28, 180 0 No No No No
several
Jewelry 2022
liability
Joint
Yinchua October
and
n DR 28, 160 0 No No No No
several
Jewelry 2022
liability
Joint
Weifang October
and
DR 28, 300 0 No No No No
several
Jewelry 2022
liability
Joint
Mianyan October Februar
and 32
g DR 28, 140 y 1st, 117.83 No No No No
several months
Jewelry 2022 2023
liability
Joint
Shenzh October Februar
and 14
en DR 28, 140 y 1st, 90.06 No No No No
several months
Jewelry 2022 2023
liability
Shenya October Joint
150 0 No No No No
ng DR 28, and
181
2023 Annual Report of DR Corporation Limited
Jewelry 2022 several
liability
Joint
Jining October April
and 31
DR 28, 50 1st, 43.67 No No No No
several months
Jewelry 2022 2023
liability
Joint
October
Linyi DR and
28, 230 0 No No No No
Jewelry several
2022
liability
Joint
Fuyang October
and
DR 28, 120 0 No No No No
several
Jewelry 2022
liability
Joint
Shangqi October
and
u DR 28, 100 0 No No No No
several
Jewelry 2022
liability
Joint
Guangz Decemb
and
hou DR er 31, 1,180 0 No No No No
several
Jewelry 2022
liability
Joint
Handan Decemb
and
DR er 31, 120 0 No No No No
several
Jewelry 2022
liability
Joint
Langfan Decemb
and
g DR er 31, 150 0 No No No No
several
Jewelry 2022
liability
Joint
Urumqi Decemb
and
DR er 31, 100 0 No No No No
several
Jewelry 2022
liability
182
2023 Annual Report of DR Corporation Limited
Baoding Joint
Decemb
DR and
er 31, 88 0 No No No No
Jewelry several
2022
Sales liability
Joint
Guiyang Decemb
and
DR er 31, 162 0 No No No No
several
Jewelry 2022
liability
Joint
Foshan Decemb
and
DR er 31, 100 0 No No No No
several
Jewelry 2022
liability
Joint
Jiaxing Decemb
and
DR er 31, 100 0 No No No No
several
Jewelry 2022
liability
DR
Joint
Group
April 28, and
Compan 10,000 0 No No No No
2023 several
y
liability
Limited
Joint
October
and 36
23, 10,000 No No No No
several months
2023
liability
Haoduo
Diamon Joint
Novemb
d April 28, and 36
30,000 er 1st, 8,000 No No No No
(Shenzh 2023 several months
2023
en) Co., liability
Ltd.
Joint
Novemb
and 36
er 2, 10,000 No No No No
several months
2023
liability
Total guarantee 40,000 Total actual 29,267.52
183
2023 Annual Report of DR Corporation Limited
amount approved guarantee amount
for subsidiaries for subsidiaries
during the during the
reporting period reporting period
(B1) (B2)
Balance of total
Total guarantee
actual guarantee
amount approved
amount for
for subsidiaries as 63,850 33,195.39
subsidiaries as at
at the end of the
the end of the
reporting period
reporting period
Guarantees by subsidiaries for subsidiaries
Date of
disclosu
Whether
re of Actual Counter
Actual a
announ Guarant amount Type of Collater - Guarant
occurre Whether guarant
Debtor cement ee of guarant al (if guarant ee
nce fulfilled ee for a
on amount guarant ee any) ee (if period
date connect
guarant ee any)
ed party
ee
amount
Total guarantee amount of DRCO (i.e., the sum of the first three items)
Total amount of Total actual
approved guarantee amount
guarantee during incurred during
40,000 29,267.52
the reporting the reporting
period (A1 + B1 + period (A2 + B2 +
C1) C2)
Total guarantee Balance of total
amount approved actual guarantee
as at the end of amount as at the
63,850 33,195.39
the reporting end of the
period (A3 + B3 + reporting period
C3) (A4 + B4 + C4)
Total actual guarantee amount (i.e., 5.13%
184
2023 Annual Report of DR Corporation Limited
A4 + B4 + C4) as a percentage of
DRCO's net assets
Including:
Balance of guarantees provided to
shareholders, actual controllers and 0
their related parties (D)
Balance of debt guarantees provided,
directly or indirectly, to those with a 434.734
gearing ratio of more than 70% (E)
Difference between total guarantee
0
amount and 50% of net assets (F)
Total (D+E+F) 434. 73
Details of the circumstances, if any,
under which the guarantee liability
arose during the reporting period or
Not applicable
there is evidence of a likelihood of
joint and several liability, for
outstanding guarantee contracts
Details of external guarantees against
Not applicable
established procedures (if any)
Note 1: As of the end of the reporting period, RMB456,500 of the actual guarantee amount for Chengdu DR
Jewelry Co., Ltd. had been honored.
Note 2: As at the end of the reporting period, RMB 728,300 of the actual guarantee amount for Tianjin DR
Jewelry Co., Ltd. has been honored.
Note 3: As at the end of the reporting period, RMB1,434,400 of the actual guarantee amount for Chongqing
DR Jewelry Co., Ltd. has been honored.
Note 4:The balance of this guarantee is all guarantees provided by the company to wholly-owned
subsidiaries.
Description of the use of composite guarantee
3. Entrusted cash and assets under management
(1) Entrusted wealth management
Applicable □ Not applicable
185
2023 Annual Report of DR Corporation Limited
Overview of entrusted wealth management during the reporting period
Unit: RMB0’000
Provision for
impairment of
Source of funds
Entrusted wealth Amount overdue wealth
for entrusted Outstanding
Specific type management and not management
wealth balance
amount recovered amount overdue
management.
and not
recovered
Wealth
management
Funds raised 289,500.00 172,500.00 0 0
products of
banks
Wealth
management Proprietary
310,850.23 293,571.33 0 0
products of funds
banks
Wealth
management
Proprietary
products of 141,300.00 138,800.00 0 0
funds
securities
brokers
Total 741,650.23 604,871.33 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
186
2023 Annual Report of DR Corporation Limited
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
187
2023 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
Increase or decrease from the change (+,-) After this change
change
Issue of Convers
Percent Bonus Percent
Quantity new ion of Other Subtotal Quantity
age share age
shares reserves
I.
Shares
subject 360,000, 360,000,
to 90.00% 90.00%
000 000
selling
restrictio
ns
1.
Shares
held by
the state
2.
Shares
held by
state-
owned
legal
persons
3.
Shares
held by 360,000, 360,000,
other 90.00% 90.00%
000 000
domesti
c
entities
Includin
g:
shares 360,000, 360,000,
held by 90.00% 90.00%
000 000
domesti
c legal
persons
Shares
held by
domesti
c natural
persons
4.
Shares
held by
foreign
investor
188
2023 Annual Report of DR Corporation Limited
s
Includin
g:
Shares
held by
oversea
s legal
persons
Shares
held by
oversea
s natural
persons
II.Share
s not
subject 40,010,0 40,010,0
to 10.00% 10.00%
00 00
selling
restrictio
ns
1. RMB-
denomin 40,010,0 40,010,0
ated 10.00% 10.00%
00 00
ordinary
shares
2.
Foreign
shares
listed
domesti
cally
3.
Foreign
shares
listed
oversea
s
4. Other
III. Total 400,010, 100.00% 400,010,
100.00%
shares 000 000
Reasons for changes in shares
□ Applicable Not applicable
Approval of changes in shares
□ Applicable Not applicable
Transfer of changes in shares
□ Applicable Not applicable
189
2023 Annual Report of DR Corporation Limited
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
□ Applicable Not applicable
2. Changes in restricted shares
Applicable □ Not applicable
Unit: shares
Number of Increase in Number of
Number of
restricted the number restricted
restricted Reason for
Name of shares at of restricted shares Date of
shares at selling
shareholder the shares released release
end of restriction
beginning of during the during the
period
the period period period
DR
Investment 342,000,000 0 0 342,000,000 Pre-IPO June 16,
(Zhuhai) shares 2025
Co., Ltd.
Gongqingch
eng Wendi
No.1
7,200,000 0 0 7,200,000 Pre-IPO June 16,
Investment
shares 2025
Managemen
t Partnership
(LP)
Gongqingch
eng Wendi
No.2
7,200,000 0 0 7,200,000 Pre-IPO June 16,
Investment
shares 2025
Managemen
t Partnership
(LP)
Gongqingch
eng Wendi
No.3
3,600,000 0 0 3,600,000 Pre-IPO June 16,
Investment
shares 2025
Managemen
t Partnership
(LP)
Total 360,000,000 0 0 360,000,000 -- --
II. Issuance and Listing of Securities
1. Issuance of securities (excluding preferred shares) during the reporting period
□ Applicable Not applicable
190
2023 Annual Report of DR Corporation Limited
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
Total number
Total
number of
number holders
of
of of
holders preferr
holders
of ed
Total of shares
preferre
number ordinary (if any) Total
d whose
of shares number
shares voting
holders as of rights of
(if any)
of the end were shareho
whose restore
ordinary of the lders
14,636 13,824 voting 0 d at the 0 0
shares previous end of holding
rights the
as of month special
were previou
the end precedi s voting
restored
of the ng the month shares
at the precedi
reportin date of (if any)
end of ng the
g period publicati date of
the
on of publicat
reportin ion of
the
g period the
annual annual
(see
report report
Note 9) (see
Note 9)
Shareholdings of shareholders holding 5% or more or of the top 10 shareholders (excluding shares
borrowed via margin financing)
Numbe Increas Numbe Numbe Pledged, marked or frozen
r of e/decre r of r of
Name Nature
Shareh shares ase shares shares
of of
olding held at during held held
shareh shareh Share status Quantity
ratio the end the subject not
older older
of the reportin to subject
reportin g selling to
191
2023 Annual Report of DR Corporation Limited
g period restricti selling
period ons restricti
ons
Domesti
DR
c non-
Investm 342,000 342,000
state- 85.50% 0 0 Not applicable 0
ent
owned ,000 ,000
(Zhuhai)
legal
Co., Ltd.
person
Gongqin
gcheng
Wendi Domesti
No.1 c non-
7,200,0 7,200,0
Investm state- 1.80% 0 0 Not applicable 0
ent owned 00 00
Manage legal
ment person
Partners
hip (LP)
Gongqin
gcheng
Wendi Domesti
No.2 c non-
7,200,0 7,200,0
Investm state- 1.80% 0 0 Not applicable 0
ent owned 00 00
Manage legal
ment person
Partners
hip (LP)
Gongqin
gcheng
Wendi Domesti
No.3 c non-
3,600,0 3,600,0
Investm state- 0.90% 0 0 Not applicable 0
ent owned 00 00
Manage legal
ment person
Partners
hip (LP)
Zhuhai
Runxin
Zhirong State-
No.1 owned 2,566,7 2,566,7
0.64% 165,000 0 Not applicable 0
Investm legal 35 35
ent person
Partners
hip (LP)
Domesti
Li c
0.16% 637,500 604,600 0 637,500 Not applicable 0
Rongjun natural
person
192
2023 Annual Report of DR Corporation Limited
China
Securiti
es -
CMB -
China
Securiti
es DR
No. 1 -
Strategi Other 0.15% 594,544 0 594,544 Not applicable 0
211,908
c
Placem
ent
Collectiv
e Asset
Manage
ment
Plan
Hong
Kong
Securiti Oversea
es s legal 0.15% 587,828 363,112 0 587,828 Not applicable 0
Clearing person
Compan
y Ltd.
Bank of
China －
GF
China
Securiti
es
Pension
Industry Other 0.12% 482,784 187,000 0 482,784 Not applicable 0
Index
Initiated
Securiti
es
Investm
ent
Fund
Domesti
#Wang
c
Hongmi 0.11% 428,255 253,221 0 428,255 Not applicable 0
natural
ng
person
193
2023 Annual Report of DR Corporation Limited
Zhuhai Runxin Zhirong No.1 Investment Partnership (LP) has become one of DRCO’s
Any Strategic
top 10 shareholders as DRCO placed 2,566,735 shares that were locked up from
investor or
December 15, 2021 to December 14, 2022. These shares were released and traded on
general legal
the market from December 15, 2022.
person becomes
China Securities - CMB - China Securities DR No. 1 Strategic Placement Collective
one of top 10
Asset Management Plan is a special asset management plan through which DRCO’s
shareholder as a
senior management and core employees took part in the strategic allotment of DRCO’s
result of the
initial public offering. As a result, this asset management plan became one of DRCO’s
placement of new
top 10 shareholders after DRCO placed 978,952 shares that were locked up from
shares (if any)
December 15, 2021 to December 14, 2022. These shares were released and traded on
(see Note 4)
the market from December 15, 2022.
Zhang Guotao and Lu Yiwen, the actual controllers of DRCO, hold a 100% stake in DR
Relationship or Investment (Zhuhai). DR Investment (Zhuhai), Gongqingcheng Wendi No.1 Investment
acting in concert Management Partnership (LP), Gongqingcheng Wendi No.2 Investment Management
among Partnership (LP) and Gongqingcheng Wendi No.3 Investment Management Partnership
the aforesaid (LP) are all the enterprises controlled by Zhang Guotao, DRCO’s actual controller.
shareholders 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
Not applicable。
rights via a proxy
or as a 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
Type of shares
Name of Number of unrestricted shares held at the end
Type of shares Quantity
194
2023 Annual Report of DR Corporation Limited
shareholder of the reporting period
Zhuhai Runxin
RMB-
Zhirong No.1
2,566,735 denominated 2,566,735
Investment
ordinary shares
Partnership (LP)
RMB-
Li Rongjun 637,500 denominated 637,500
ordinary shares
The shares
allotted to China
Securities - CMB -
China Securities RMB-
DR No. 1 594,544 denominated 594,544
Strategic ordinary shares
Placement
Collective Asset
Management Plan
Hong Kong
RMB-
Securities
587,828 denominated 587,828
Clearing
ordinary shares
Company Ltd.
Bank of China －
GF China
Securities RMB-
Pension Industry 482,784 denominated 482,784
Index Initiated ordinary shares
Securities
Investment Fund
RMB-
#Wang Hongming 428,255 denominated 428,255
ordinary shares
RMB-
Li Xiuzhi 405,400 denominated 405,400
ordinary shares
195
2023 Annual Report of DR Corporation Limited
RMB-
#He Guixian 264,800 denominated 264,800
ordinary shares
RMB-
Ni Birong 231,199 denominated 231,199
ordinary shares
ICBC － China
Universal Private RMB-
Enterprise Vitality 218,066 denominated 218,066
Hybrid Securities ordinary shares
Investment Fund
Relationship or
acting in concert
among
the top 10
shareholders of
unrestricted DRCO is not aware of any connected relationship among the aforesaid top 10
tradable shares, shareholders of unrestricted shares, or between the top 10 shareholders of unrestricted
and between the shares and the top 10 shareholders, nor is DRCO aware of any parties acting in
top 10 concert.
shareholders of
unrestricted
tradable shares
and the top 10
shareholders
Description of
Among the top 10 shareholders without trading limited condition, Wang Hongming holds
shareholders
4,700 shares through a general securities account and 423,555 shares through a
involved in margin
customer credit transaction guarantee securities account with Huatai Securities,
financing and
altogether 428,255 shares; He Guixian holds 0 shares through a general securities
securities lending
account and 264,800 shares through a customer credit transaction guarantee securities
(if any) (see Note
account with CITIC Securities, altogether 264,800 shares.
5)
Share lending through margin financing among the top 10 shareholders
Applicable □ Not applicable
Unit: share
196
2023 Annual Report of DR Corporation Limited
Share lending through margin financing among the top 10 shareholders
Beginning number of Beginning number of Ending number of Ending number of
shares in general shares lent through shares in general shares lent through
Sharehold account and credit margin financing and account and credit margin financing and
er (full account not returned account not returned
name)
Total % of total Total % of total Total % of total Total % of total
shares equity shares equity shares equity shares equity
Zhuhai
Runxin
Zhirong
No. 1
Investmen 2,401,735. 165,000.0 2,566,735.
0.60% 0.04% 0.64% 0.00 0.00%
t 00 0 00
Partnershi
p (Limited
Partnershi
p)
Changes of the top 10 shareholders from the previous period
Applicable □ Not applicable
Unit: share
Changes of the top 10 shareholders from the previous period
Ending number of shares in
Ending number of shares lent
general account and credit
through margin financing and not
Shareholder (full New/exit in the account, and shares lent through
returned
name) reporting period margin financing and not returned
Total shares % of total equity Total shares % of total equity
Bank of China－
Guotai
Jiangyuan
Advantage Exit 0 0.00% 01 0.00%
Choice Flexible
Configuration
Hybrid
197
2023 Annual Report of DR Corporation Limited
Securities
Investment Fund
China
Construction
Bank － Hwabao
Ecological China Exit 0 0.00% 02 0.00%
Hybrid
Securities
Investment Fund
China AMC －
National Social
Exit 0 0.00% 03 0.00%
Security Fund
Portfolio 422
Aeon Life －
Traditional
Exit 0 0.00% 04 0.00%
Insurance
Product
Bank of China－
Guotai Zhiyuan
Advantage
Exit 0 0.00% 05 0.00%
Hybrid
Securities
Investment Fund
China
Construction
Bank － Hwabao
Event Driven Exit 0 0.00% 06 0.00%
Hybrid
Securities
Investment Fund
Cigna & CMB
Life Insurance － Exit 0 0.00% 07 0.00%
Traditional
Bank of Exit 0 0.00% 08 0.00%
198
2023 Annual Report of DR Corporation Limited
Communications
－ Zhonghai
Advantage
Growth
Securities
Investment Fund
Li Rongjun New 0 0.00% 637,500 0.16%
Hong Kong
Securities
New 0 0.00% 587,828 0.15%
Clearing
Company Ltd.
Bank of China－
GF China
Securities
Pension Industry New 0 0.00% 482,784 0.12%
Index Initiated
Securities
Investment Fund
Wang Hongming New 0 0.00% 428,255 0.11%
Li Xiuzhi New 0 0.00% 405,400 0.10%
He Guixian New 0 0.00% 264,800 0.07%
Ni Birong New 0 0.00% 231,199 0.06%
ICBC － China
Universal
Private
Enterprise New 0 0.00% 218,066 0.05%
Vitality Hybrid
Securities
Investment Fund
Note 1: DRCO does not have the data because the “Bank of China－Guotai Jiangyuan Advantage Choice
Flexible Configuration Hybrid Securities Investment Fund” is not on the list of the top 200 shareholders as at
the end of the reporting period issued by China Securities Depository and Clearing Corporation.
Note 2: DRCO does not have the data because the “China Construction Bank－Hwabao Ecological China
199
2023 Annual Report of DR Corporation Limited
Hybrid Securities Investment Fund” is not on the list of the top 200 shareholders as at the end of the
reporting period issued by China Securities Depository and Clearing Corporation.
Note 3: DRCO does not have the data because the “China AMC － National Social Security Fund Portfolio
422”is not on the list of the top 200 shareholders as at the end of the reporting period issued by China
Securities Depository and Clearing Corporation.
Note 4: DRCO does not have the data because the “Aeon Life－Traditional Insurance Product” is not on the
list of the top 200 shareholders as at the end of the reporting period issued by China Securities Depository
and Clearing Corporation.
Note 5: DRCO does not have the data because the “Bank of China － Guotai Zhiyuan Advantage Hybrid
Securities Investment Fund” is not on the list of the top 200 shareholders as at the end of the reporting
period issued by China Securities Depository and Clearing Corporation.
Note 6: DRCO does not have the data because the “China Construction Bank－Hwabao Event Driven Hybrid
Securities Investment Fund” is not on the list of the top 200 shareholders as at the end of the reporting
period issued by China Securities Depository and Clearing Corporation.
Note 7: DRCO does not have the data because the “Cigna & CMB Life Insurance－Traditional” is not on the
list of the top 200 shareholders as at the end of the reporting period issued by China Securities Depository
and Clearing Corporation.
Note 8: DRCO does not have the data because the “Bank of Communications－Zhonghai Advantage Growth
Securities Investment Fund” is not on the list of the top 200 shareholders as at the end of the reporting
period issued by China Securities Depository and Clearing Corporation.
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
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
Name of controlling Date of
representative/pers Organization code Main business
shareholder establishment
on in charge of the
200
2023 Annual Report of DR Corporation Limited
entity
General items:
investment activities
with own funds;
business
management
consulting;
information
DR Investment November 24, 9144030035876522 consulting services
Zhang Guotao
(Zhuhai) Co., Ltd. 2015 74 (excluding licensing
information
consulting services);
marketing planning;
corporate image
planning; non-
residential real
estate leasing.
Shareholdings of
other domestic and
foreign listed
companies
controlled and Not applicable。
participated in by
the controlling
shareholders during
the reporting period
Changes in the controlling shareholder during the reporting period
□ Applicable Not applicable
here was no change in the controlling shareholder of DRCO during the reporting period.
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
Relationship with actual
Name of actual controller Nationality right of abode in other
controller
countries or regions
201
2023 Annual Report of DR Corporation Limited
Zhang Guotao Himself China No
Lu Yiwen Herself China No
Main occupation and Zhang Guotao is the chairman of DRCO, and Lu Yiwen is a director and the
position general manager (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
Shenzhen Qianhai Wendi Management Consulting
深圳前海温迪管理咨询有限公司
Co., Ltd.
迪阿投资(珠海) 有限公司 DR Investment (Zhuhai) Co., Ltd.
202
2023 Annual Report of DR Corporation Limited
Gongqingcheng Wendi No.1 Investment
共青城温迪壹号投资管理合伙企业(有限合伙)
Management Partnership (LP)
Gongqingcheng Wendi No.2 Investment
共青城温迪贰号投资管理合伙企业(有限合伙)
Management Partnership (LP)
Gongqingcheng Wendi No.3 Investment
共青城温迪叄号投资管理合伙企业(有限合伙)
Management Partnership (LP)
迪阿股份有限公司 DR Corporation Limited
Note: The controlling relationship as of December 31,
注： 上图为截止 2023 年 12 月 31 日的控制关系图
2023
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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2023 Annual Report of DR Corporation Limited
Part VIII. Information about Preferred Shares
□ Applicable Not applicable
There are no preferred shares during the reporting period.
204
2023 Annual Report of DR Corporation Limited
Part X Financial Report
I. Auditor’s report
Auditor’s opinion Unqualified opinion
Date of signing April 25,2024
Auditor Ernst & Young Hua Ming LLP
Ernst & Young Hua Ming (2024) Shen Zi No.
Report document number
70031863_H01
Chinese Certified Public Accountant Li Jianguang, Chen Huijin
Auditor’s Report (Body)
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 t
he consolidated and company balance sheets as at 31 December 2023, and the consolidated and comp
any income statements, the consolidated and company statements of changes in equity and the consoli
dated and company statements of cash flows for the year then ended, and notes to the financial statem
ents.
In our opinion, the accompanying financial statements present fairly, in all material respects, the consoli
dated and the Company’s financial position as at 31 December 2023, and the consolidated and the Co
mpany’s financial performance and cash flows for the year then ended in accordance with Accounting S
tandards 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 o
f Ethics for Certified Public Accountants (the “Code”), and we have fulfilled our other ethical responsibiliti
es in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and a
ppropriate 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 o
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2023 Annual Report of DR Corporation Limited
ur audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provid
e a separate opinion on these matters. For each matter below, our description of how our audit address
ed the matter is provided in that context.
We have fulfilled the responsibilities described in the “Auditor’s responsibilities for the audit of the financi
al statements” section of our report, including in relation to these matters. Accordingly, our audit include
d the performance of procedures designed to respond to our assessment of the risks of material misstat
ement of the financial statements. The results of our audit procedures, including the procedures perform
ed to address the matters below, provide the basis for our audit opinion on the accompanying financial s
tatements.
Key audit matters: How our audit addressed the matters:
Revenue recognition
For the year ended 31 December 2023, the conso Our procedures in relation to revenue recognition
lidated revenue of DR Corporation Limited and its mainly included:
subsidiaries (hereinafter collectively referred to as
the "Group") was RMB2.18 billion. 1) Obtaining an understanding of the accounting p
olicies of revenue recognition and reviewing main s
The Group's current business model mainly includ ales contract terms to assess the appropriateness
es: retail directly to the end consumers through off of revenue recognition policies;
line direct-operated stores, e-commerce platforms
and offline joint-operated stores. And the Group re 2) Obtaining an understanding of and evaluating th
cognized revenue when the end customers receiv e internal control of transaction process of revenue
ed goods. recognition, and testing the operation effectivenes
s of relevant control within the reporting period;
The total amount of revenue as a KPI is material t
o the financial statements as a whole and there is 3) Performing tests of details and reviewing custo
a huge volume of scattered revenue transactions. mers’ orders, receipt records, express delivery rec
And there is an inherent risk that management ma ords, bank slips and invoices, etc.;
y manipulate revenue to achieve specific purpose.
Therefore, revenue recognition is identified as a k 4) Performing confirmation procedures for receivab
ey audit matter. les;
For further disclosure, refer to Note V.26 Revenue 5) Obtaining an understanding of the settlement m
and Note VII..34 Revenue and costs of sales. ethod between the Company and customers, inspe
cting the correspondence between cash receipts a
nd accounts receivable or contract liabilities, and a
greeing to the bank statements;
6) Performing revenue cut-off procedures, inspecti
ng the outbound bills and express delivery records
for one month before or after the balance sheet dat
e and agreeing with the vouchers, and checking w
hether they belonged to the same accounting perio
d;
7) Performing analytical review procedures for reve
nue, including analysis of monthly revenue trend a
nd analysis of revenue trends for different types of
products, etc.
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2023 Annual Report of DR Corporation Limited
Key audit matters: How our audit addressed the matters:
Existence of inventory and valuation of net realizable value
As at 31 December 2023, the outstanding balance Our procedures in relation to existence of inve
of the Group's inventory was RMB537 million (net ntory and valuation of net realizable value mai
of provision for decline in value of inventories of nly included:
RMB10.24 million).
1) Obtaining an understanding of and evaluati
At the balance sheet date, inventories are stated a ng internal control relating to inventory procur
t the lower of cost and net realizable value. The in ement, stocktake and provision for decline in v
ventories are written down below cost to net realiz alue of inventories, and testing the operation e
able value and the write-down is recognized in pro ffectiveness of relevant control within the repo
fit or loss if the cost is higher than the net realizabl rting period;
e value. Net realizable value is the estimated selli
ng price in the ordinary course of business less th 2) Attending the annual physical inventory cou
e estimated costs of completion, the estimated co nt, inspecting the Company's physical inventor
sts necessary to make the sale and relevant taxe y count plan and observing whether the plan
s, which involves significant management estimati was implemented properly;
on. Furthermore, the unit price of inventory is high
and there is a higher inherent risk of easy theft an 3) Performing stocktaking procedures on a sa
d difficult to distinguish authenticity. Therefore, the mple basis, checking the quantity and weight
existence of inventory and valuation of net realiza of the inventories, inspecting the certificates of
ble value is regarded as a key audit matter. the inventories and verifying the certificate nu
mber on the website of the appraisal organizat
Further disclosure refers to Note V.14 Inventories, ion;
Note V.30 Other significant accounting policies a
nd accounting estimates and Note VII.6 Inventorie 4) Comparing the estimated selling price used
s. in the net realizable value with the recent pric
e in the market, comparing estimated selling e
xpenses and related taxes with the actual selli
ng expenses and taxes to assess the appropri
ateness;
5) Retrospectively comparing provision for writ
e-down of inventories in prior year and its mov
ements in current year, and obtaining the list o
f defective and obsolete products to evaluate t
he sufficiency of the provision.
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2023 Annual Report of DR Corporation Limited
Key audit matters: How our audit addressed the matters:
Provision for impairment losses of stores’ asset groups
The asset groups of the Group’s stores mainly incl Our procedures in relation to provision for imp
ude long-term assets such as long-term prepaid e airment of stores’ asset groups mainly include
xpenses and right-of-use assets. As at 31 Decem d:
ber 2023, the total carrying amount of the above a
ssets was RMB239 million, including RMB89.90 m 1) Obtaining an understanding of and evaluati
illion of provision for impairment made for stores’ a ng internal control relating to impairment testin
sset groups whose recoverable amount was lower g of stores’ asset groups;
than their carrying amount.
2) Discussing with management the basis for
As stores’ asset groups are significant to these fin determining indicators of impairment of stores’
ancial statements as a whole, and the provision fo asset groups, and evaluating whether manag
r impairment of stores’ asset groups involves signi ement’s judgment on indicators of impairment
ficant management judgments and estimates, we of stores’ asset groups was reasonable;
consider the provision for impairment of stores’ as
set groups made by DR Corporation Limited as a 3) Communicating with management and inter
key audit matter. nal valuation experts to evaluate key paramet
ers of valuation; evaluating, with the assistanc
For further disclosure, refer to Note V.20 Impairme e of internal valuation experts, the reasonable
nt of long-term assets, Note V.21 Long-term prepai ness of methods, assumptions and estimates
d expenses, Note V.29 Leases, Note V.30 Other si used to discount expected future cash flows of
gnificant accounting policies and accounting estim the asset groups based on ASBE requiremen
ates, Note VII.11 Right-of-use assets and Note VII. ts;
13 Long-term prepaid expenses.
4) Evaluating whether disclosures related to i
mpairment of stores’ asset groups in these fin
ancial statements met ASBE requirements.
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2023 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 no
t express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit or otherwise appears to be materially missta
ted.
If, based on the work we have performed, we conclude that there is a material misstatement of this othe
r 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 stat
ements
The management of the Company is responsible for the preparation and fair presentation of the financia
l 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 th
at 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 abilit
y to continue as a going concern, disclosing, as applicable, matters related to going concern and using t
he 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 proce
ss.
(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 ar
e free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that inc
ludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an au
209
2023 Annual Report of DR Corporation Limited
dit conducted in accordance with CSAs will always detect a material misstatement when it exists. Missta
tements can arise from fraud or error and are generally considered material if, individually or in the aggr
egate, they could reasonably be expected to influence the economic decisions of users taken on the ba
sis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgement and maintain professi
onal scepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fr
aud 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 collu
sion, 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 effec
tiveness of internal control.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting es
timates and related disclosures made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern basis of accountin
g 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 o
ur opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s re
port. However, future events or conditions may cause the Company to cease to continue as a going co
ncern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the di
sclosures, 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 bus
iness activities within the Company to express an opinion on the financial statements. We are responsi
ble for the direction, supervision and performance of the group audit. We remain solely responsible for
our audit opinion.
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2023 Annual Report of DR Corporation Limited
We communicate with those charged with governance regarding, among other matters, the planned sco
pe 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 e
thical 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 saf
eguards.
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 year and are therefore th
e 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 matte
r should not be communicated in our report because the adverse consequences of doing so would reas
onably be expected to outweigh the public interest benefits of such communication.
Ernst & Young Hua Ming LLP Chinese Certified Public Accountant:
Li Jianguang
(Engagement Partner)
Chinese Certified Public Accountant:
Chen Huijin
Beijing, the People’s Republic of China 25 April 2024
211
2023 Annual Report of DR Corporation Limited
II. Financial statements
The notes to financial statements are expressed in Renminbi Yuan.
1. Consolidated balance sheet
Preparer: DR Corporation Limited
31 December 2023
Currency: Renminbi Yuan
Account 31 December 2023 31 December 2022
Current assets:
Currency funds 227,854,223.17 521,904,818.30
Financial assets held for tradin
4,841,946,705.07 5,609,891,931.68
g
Accounts receivable 83,147,399.06 84,478,911.52
Prepayments 34,724,152.09 74,226,434.15
Other receivables 5,614,656.53 8,184,551.61
Inventories 526,939,044.37 669,886,638.00
Current portion of non-current a
446,602,964.10 106,967,867.16
ssets
Other current assets 131,984,050.79 73,454,925.61
Total current assets 6,298,813,195.18 7,148,996,078.03
Non-current assets:
Debt investments 891,976,307.01 794,553,996.36
Fixed assets 12,617,322.42 14,068,805.09
Right-of-use assets 208,971,654.66 590,506,167.36
Intangible assets 6,608,420.04 4,262,597.76
Long-term prepaid expenses 50,207,871.43 169,750,383.92
Deferred tax assets 15,293,850.94 8,191,216.36
Other non-current assets 45,593,685.77 85,419,135.39
Total non-current assets 1,231,269,112.27 1,666,752,302.24
Total assets 7,530,082,307.45 8,815,748,380.27
Current liabilities:
Short-term borrowings 389,995,277.14 433,993,449.44
Trading financial liabilities 62,813,557.52 -
Notes payable 47,986,785.70 466,527,730.97
Accounts payable 28,164,899.34 86,880,869.77
Contract liabilities 109,633,363.46 126,705,661.82
Employee benefits payable 52,933,070.66 68,736,988.33
Taxes payable 18,207,805.96 59,885,139.66
Other payables 44,381,542.05 102,563,944.81
Current portion of non-current li
195,515,150.71 351,516,900.54
abilities
Other current liabilities 11,288,478.87 13,670,511.44
Total current liabilities 960,919,931.41 1,710,481,196.78
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2023 Annual Report of DR Corporation Limited
Non-current liabilities:
Lease liabilities 67,781,149.67 276,542,164.23
Provisions 14,103,391.00 16,925,816.91
Deferred tax liabilities 14,639,993.41 8,752,998.39
Total non-current liabilities 96,524,534.08 302,220,979.53
Total liabilities 1,057,444,465.49 2,012,702,176.31
Equity:
Share capital 400,010,000.00 400,010,000.00
Capital reserves 4,459,965,139.16 4,459,777,716.81
Accumulated other comprehen
4,449,901.25 3,993,254.00
sive income
Surplus reserves 200,005,000.00 200,005,000.00
Retained earnings 1,408,207,801.55 1,739,260,233.15
Total equity attributable to shar
6,472,637,841.96 6,803,046,203.96
eholders of the parent
Total shareholders’ equity 6,472,637,841.96 6,803,046,203.96
Total liabilities and shareholder
7,530,082,307.45 8,815,748,380.27
s’ equity
Legal representative: Zhang Guotao Financial controller: Huang Shuirong Accounting supervisor: Ou Zh
ipeng
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2023 Annual Report of DR Corporation Limited
2. Parent company's balance sheet
Currency: Renminbi Yuan
Account 31 December 2023 31 December 2022
Current assets:
Currency funds 195,314,775.95 219,622,694.30
Financial assets held for tradin
4,636,980,087.44 5,223,419,915.33
g
Accounts receivable 107,234,146.13 84,598,028.47
Prepayments 28,159,458.09 66,437,718.07
Other receivables 224,498,084.63 270,167,536.46
Including: Dividends receivab
96,000,000.00 131,000,000.00
le
Inventories 517,950,509.71 668,791,848.75
Current portion of non-current a
347,035,401.68 105,561,584.41
ssets
Other current assets 68,496,153.02 47,317,542.08
Total current assets 6,125,668,616.65 6,685,916,867.87
Non-current assets:
Debt investments 787,775,721.47 650,014,736.30
Long-term equity investments 201,935,477.77 207,935,477.77
Fixed assets 7,674,038.14 10,265,370.22
Right-of-use assets 176,707,741.44 535,960,869.57
Intangible assets 351,782.75 829,361.80
Long-term prepaid expenses 45,849,747.57 163,000,773.79
Deferred tax assets 12,146,753.43 5,365,472.60
Other non-current assets 42,891,321.87 81,537,896.29
Total non-current assets 1,275,332,584.44 1,654,909,958.34
Total assets 7,401,001,201.09 8,340,826,826.21
Current liabilities:
Short-term borrowings 60,000,000.00 -
Trading financial liabilities 62,813,557.52 -
Notes payable 359,262,543.58 857,478,959.01
Accounts payable 106,655,119.15 273,460,934.14
Contract liabilities 100,572,333.72 122,481,130.76
Employee benefits payable 36,167,620.75 54,833,838.35
Taxes payable 14,344,956.11 18,231,870.82
Other payables 192,424,646.39 102,895,296.16
Current portion of non-current li
173,309,407.81 311,609,516.04
abilities
Other current liabilities 10,288,264.17 13,211,410.16
Total current liabilities 1,115,838,449.20 1,754,202,955.44
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2023 Annual Report of DR Corporation Limited
Non-current liabilities:
Lease liabilities 52,972,065.86 255,560,231.06
Provisions 13,919,541.00 16,816,666.91
Deferred tax liabilities 12,146,753.43 8,396,162.20
Total non-current liabilities 79,038,360.29 280,773,060.17
Total liabilities 1,194,876,809.49 2,034,976,015.61
Equity:
Share capital 400,010,000.00 400,010,000.00
Capital reserves 4,459,965,366.83 4,459,777,944.48
Surplus reserves 200,005,000.00 200,005,000.00
Retained earnings 1,146,144,024.77 1,246,057,866.12
Total shareholders’ equity 6,206,124,391.60 6,305,850,810.60
Total liabilities and shareholders’
7,401,001,201.09 8,340,826,826.21
equity
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2023 Annual Report of DR Corporation Limited
3. Consolidated income statement
Currency: Renminbi Yuan
Account 2023 2022
I. Total Revenue 2,180,277,744.00 3,681,574,412.68
Including: Revenue 2,180,277,744.00 3,681,574,412.68
II. Total Costs 2,228,826,160.48 2,939,356,663.12
Including: Cost of sales 679,553,257.88 1,112,272,466.29
Taxes and surcharge
121,030,304.52 201,359,894.62
s
Selling expenses 1,228,761,165.59 1,422,037,537.50
Administrative expens
151,996,111.88 164,205,877.87
es
Research and develo
21,715,215.75 17,944,132.37
pment expenses
Finance expenses 25,770,104.86 21,536,754.47
Including: Interest e
xpense 22,148,238.97 23,830,354.96
s
Interest inc
8,288,198.44 21,912,750.27
ome
Add: Other income 26,746,998.56 39,777,673.00
Investment income (loss is
expressed with negative 201,459,628.10 89,003,045.62
value)
Fair value gains (loss
is expressed with negative v 31,151,566.30 39,294,362.36
alue)
Credit impairment los
ses (loss is expressed with n (7,519,950.73) 1,793,479.08
egative value)
Impairment losses of
assets (loss is expressed wit (105,342,656.15) (28,420,774.69)
h negative value)
Gains on disposal of
assets (loss is expressed wit 19,708,867.36 1,244,949.25
h negative value)
III. Operating profit (loss is expres
117,656,036.96 884,910,484.18
sed with negative value)
Add: Non-operating incom
2,881,923.18 1,237,090.46
e
Less: Non-operating expen
7,709,541.48 768,433.58
ses
IV. Profit before tax (total loss is e
112,828,418.66 885,379,141.06
xpressed with negative value)
Less: Income tax expense
43,870,850.26 156,137,194.39
s
V. Profit (net loss is expressed wi
68,957,568.40 729,241,946.67
th negative value)
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2023 Annual Report of DR Corporation Limited
1. Classified by continuity
of operation
(1) Profit from continuing
operations (net loss is expre 68,957,568.40 729,241,946.67
ssed with negative value)
(2) Profit from discontinu
ed operations (net loss is exp - -
ressed with negative value)
2. Classified by ownership
(1) Profit attributable to s
hareholders of the parent co 68,957,568.40 729,241,946.67
mpany
(2) Loss attributable to n
- -
on-controlling interests
VI. Other comprehensive income/
456,647.25 6,687,238.92
(loss), net of tax
Other comprehensive inco
me/(loss), net of tax attributa 456,647.25 6,687,238.92
ble to owners of the parent
Other comprehensive incom
e that may be reclassified to 456,647.25 6,687,238.92
profit or loss
Exchange differences on tran
slation of foreign currency fin 456,647.25 6,687,238.92
ancial statements
VII. Total comprehensive income 69,414,215.65 735,929,185.59
Total comprehensive inco
me attributable to owners of t 69,414,215.65 735,929,185.59
he parent company
Total comprehensive inco
me attributable to non-control - -
ling interests
VIII. Earnings per share
1. Basic earnings per shar
0.17 1.82
e
2. Diluted earnings per sha
0.17 1.82
re
Legal representative: Zhang Guotao Financial controller: Huang Shuirong Accounting supervisor: Ou Zh
ipeng.
217
2023 Annual Report of DR Corporation Limited
4. Parent company's income statement
Currency: Renminbi Yuan
Account 2023 2022
I. Revenue 2,010,592,757.73 3,534,932,354.30
Less: Cost of sales 665,347,541.25 1,092,567,667.81
Taxes and surcharges 108,051,410.12 194,895,366.29
Selling expenses 1,131,004,661.01 1,515,688,864.56
Administrative expenses 390,460,699.86 624,911,561.61
Research and developme
0.00 71,920.44
nt expenses
Finance expenses 17,217,940.04 17,360,792.79
Including: Interest expe
14,229,104.56 19,305,582.75
nses
Interest inco
6,827,374.58 19,773,708.70
me
Add: Other income 9,632,263.68 22,208,183.65
Investment income (loss is
653,594,748.45 560,828,577.30
expressed with negative value)
Fair value gains (loss is ex
29,656,965.02 40,995,261.08
pressed with negative value)
Credit impairment losses (l
oss is expressed with negative val (7,385,315.73) 1,836,341.83
ue)
Impairment losses of asset
s (loss is expressed with negative (100,643,050.35) (28,017,790.85)
value)
Gains on disposal of asset
s (loss is expressed with negative 18,585,721.49 1,276,888.55
value)
II. Operating profit (loss is express
301,951,838.01 688,563,642.36
ed with negative value)
Add: Non-operating income 1,837,867.01 1,150,898.78
Less: Non-operating expenses 6,706,248.93 627,988.18
III. Profit before tax (total loss is ex
297,083,456.09 689,086,552.96
pressed with negative value)
Less: Income tax expenses (3,012,702.56) 54,932,406.16
IV. Profit (net loss is expressed wit
300,096,158.65 634,154,146.80
h negative value)
Profit from continuing operations
(net loss is expressed with negativ 300,096,158.65 634,154,146.80
e value)
VI. Total comprehensive income 300,096,158.65 634,154,146.80
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2023 Annual Report of DR Corporation Limited
5. Consolidated statement of cash flows
Currency: Renminbi Yuan
Account 2023 2022
I. CASH FLOWS FROM OPERA
TING ACTIVITIES:
Cash receipts from the sal
e of goods and the rendering 2,278,366,294.04 3,968,278,134.60
of services
Receipts of taxes and surc
31,218,358.13 16,421,754.59
harges refunds
Other cash receipts relatin
54,391,172.84 62,655,254.90
g to operating activities
Total cash inflows from operating
2,363,975,825.01 4,047,355,144.09
activities
Cash payments for goods
1,006,024,236.82 1,406,475,658.87
and services
Cash payments to and on
558,894,605.16 573,104,253.10
behalf of employees
Payments of all types of ta
350,767,441.44 621,952,499.15
xes and surcharges
Other cash payments relati
411,324,033.78 627,811,620.73
ng to operating activities
Total cash outflows from operatin
2,327,010,317.20 3,229,344,031.85
g activities
Net cash flows from operating act
36,965,507.81 818,011,112.24
ivities
II. CASH FLOWS FROM INVEST
ING ACTIVITIES:
Cash receipts from returns
8,403,748,941.31 5,328,462,790.68
of investments
Cash receipts from returns
171,066,968.49 83,386,608.45
on investments
Net cash receipts from dis
posal of fixed assets, intangi
120,350.52 282,732.40
ble assets and other long-ter
m assets
Total cash inflows from investing
8,574,936,260.32 5,412,132,131.53
activities
Cash payments to acquire
fixed assets, intangible asset 77,196,087.26 155,426,398.41
s and other long-term assets
Cash payments for invest
8,043,851,820.32 9,569,751,822.21
ments
Total cash outflows from investin
8,121,047,907.58 9,725,178,220.62
g activities
Net cash flows from investing acti
453,888,352.74 (4,313,046,089.09)
vities
III. CASH FLOWS FROM FINAN
CING ACTIVITIES:
Cash proceeds from invest
0.00 0.00
ments by others
Cash receipts from borrowi
517,721,409.20 525,418,991.66
ngs
Other cash receipts relatin
15,612,044.41 10,700,723.00
g to financing activities
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2023 Annual Report of DR Corporation Limited
Total cash inflows from financing
533,333,453.61 536,119,714.66
activities
Cash repayments for debts 559,721,849.22 94,320,809.11
Cash payments for distribu
tion of dividends or profit and 408,807,640.15 800,397,477.89
interest expenses
Including: Payments for dis
tribution of dividends or profit
s to non-controlling sharehol
ders of subsidiaries
Other cash payments relati
350,995,774.08 371,403,624.18
ng to financing activities
Total cash outflows from financin
1,319,525,263.45 1,266,121,911.18
g activities
Net cash flows from financing acti
(786,191,809.84) (730,002,196.52)
vities
IV. EFFECT OF EXCHANGE RA
TE CHANGES ON CASH AND C 676,529.63 5,151,750.54
ASH EQUIVALENTS
V. NET INCREASE IN CASH AN
(294,661,419.66) (4,219,885,422.83)
D CASH EQUIVALENTS
Add: Cash and cash equiv
521,625,030.62 4,741,510,453.45
alents at beginning of period
VI. CASH AND CASH EQUIVAL
226,963,610.96 521,625,030.62
ENTS AT END OF PERIOD
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2023 Annual Report of DR Corporation Limited
6. Parent company's statement of cash flows
Currency: Renminbi Yuan
Account 2023 2022
I. CASH FLOWS FROM OPERA
TING ACTIVITIES:
Cash receipts from the sal
e of goods and the rendering 2,347,244,990.19 3,991,469,167.77
of services
Receipts of taxes and surc
22,840,647.61 56,556.06
harges refunds
Other cash receipts relatin
399,867,497.80 265,606,344.91
g to operating activities
Total cash inflows from operating
2,769,953,135.60 4,257,132,068.74
activities
Cash payments for goods
1,011,624,072.25 1,495,604,940.61
and services
Cash payments to and on
459,678,315.90 484,718,641.12
behalf of employees
Payments of all types of ta
222,211,813.20 474,368,886.96
xes and surcharges
Other cash payments relati
1,323,785,442.55 1,405,354,651.27
ng to operating activities
Total cash outflows from operatin
3,017,299,643.90 3,860,047,119.96
g activities
Net cash flows from operating act
(247,346,508.30) 397,084,948.78
ivities
II. CASH FLOWS FROM INVEST
ING ACTIVITIES:
Cash receipts from returns
7,877,941,603.71 4,888,931,144.07
of investments
Cash receipts from returns
665,199,284.52 622,149,442.68
on investments
Net cash receipts from dis
posal of fixed assets, intangi
120,350.52 282,732.40
ble assets and other long-ter
m assets
Net cash receipts from dis
posal of subsidiaries and oth 14,008,195.97 0.00
er business units
Other cash receipts relatin
0.00 0.00
g to investing activities
Total cash inflows from investing
8,557,269,434.72 5,511,363,319.15
activities
Cash payments to acquire
fixed assets, intangible asset 72,009,896.77 150,904,158.20
s and other long-term assets
Cash payments for invest
7,631,186,071.23 9,041,789,749.98
ments
Net cash payments for acq
uisition of subsidiaries and ot 0.00 0.00
her business units
Other cash payments relati
0.00 0.00
ng to investing activities
Total cash outflows from investin
7,703,195,968.00 9,192,693,908.18
g activities
Net cash flows from investing acti 854,073,466.72 (3,681,330,589.03)
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2023 Annual Report of DR Corporation Limited
vities
III. CASH FLOWS FROM FINAN
CING ACTIVITIES:
Cash proceeds from invest
0.00 0.00
ments by others
Cash receipts from borrowi
60,000,000.00 0.00
ngs
Other cash receipts relatin
15,195,224.09 10,700,723.00
g to financing activities
Total cash inflows from financing
75,195,224.09 10,700,723.00
activities
Cash repayments for debts 0.00 0.00
Cash payments for distribu
tion of dividends or profit and 400,122,500.00 800,020,000.00
interest expenses
Other cash payments relati
306,542,100.91 350,987,128.44
ng to financing activities
Total cash outflows from financin
706,664,600.91 1,151,007,128.44
g activities
Net cash flows from financing acti
(631,469,376.82) (1,140,306,405.44)
vities
IV. EFFECT OF EXCHANGE RA
TE CHANGES ON CASH AND C 0.00 0.00
ASH EQUIVALENTS
V. NET INCREASE IN CASH AN
(24,742,418.40) (4,424,552,045.69)
D CASH EQUIVALENTS
Add: Cash and cash equiv
219,342,906.62 4,643,894,952.31
alents at beginning of period
VI. CASH AND CASH EQUIVAL
194,600,488.22 219,342,906.62
ENTS AT END OF PERIOD
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7. Consolidated statement of changes in equity
For the current period
Currency: Renminbi Yuan
Attributable to shareholders of the Company Minorit Total sharehol
Share capital Capital reserv Other comprehen Surplus rese Retained earni Subtotal y inter ders’ equity
es sive income rve ngs ests
I. Balance at the
end of the prior
year and the be 400,010,000.0 4,459,777,716. 200,005,000. 1,739,260,233. 6,803,046,203. 6,803,046,203.
ginning of year 0 81 3,993,254.00 00 15 96 - 96
II. Changes for t
he year
1. Total compre
hensive income - - 456,647.25 - 68,957,568.40 69,414,215.65 - 69,414,215.65
2. Owners’ contr
ibutions and red
uction in capital
Amount of share
-based payment
s recognized in
equity - 187,422.35 - - - 187,422.35 - 187,422.35
3. Profit distribut
ion
Appropriation to
surplus reserve - - - - - - - -
Distribution to s (400,010,000.0 (400,010,000.0 (400,010,000.0
hareholders - - - - 0) 0) 0)
III. Balance at e 400,010,000.0 4,459,965,139. 200,005,000. 1,408,207,801. 6,472,637,841. 6,472,637,841.
nd of year 0 16 4,449,901.25 00 55 96 96
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2023 Annual Report of DR Corporation Limited
For the prior period
Currency: Renminbi Yuan
Attributable to shareholders of the Company Minorit Total sharehol
Share capital Capital reserve Other compreh Surplus reser Retained earni Subtotal y inter ders’ equity
s ensive income ve ngs ests
I. Balance at th
e end of the pri
or year and th
e beginning of 400,010,000. 4,459,216,399. 179,210,032. 1,830,833,254. 6,866,575,701. 6,866,575,701.
year 00 61 (2,693,984.92) 06 42 17 17
II. Changes for
the year
1. Total compr
ehensive inco 729,241,946.67 735,929,185.59 735,929,185.59
me - - 6,687,238.92 - -
2. Owners’ con
tributions and r
eduction in ca
pital
Amount of sha
re-based paym
ents recognize
d in equity - 561,317.20 - - - 561,317.20 - 561,317.20
3. Profit distrib
ution
Appropriation t
o surplus reser 20,794,967.9 (20,794,967.94)
ve - - - 4 - - -
Distribution to (800,020,000.0 (800,020,000.0 (800,020,000.0
shareholders - - - - 0) 0) 0)
III. Balance at 400,010,000.0 4,459,777,716.8 200,005,000.0 1,739,260,233.1 6,803,046,203.9 6,803,046,203.9
end of year 0 1 3,993,254.00 0 5 6 0.00 6
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2023 Annual Report of DR Corporation Limited
8. Parent company's statement of changes in equity
For the current period
Currency: Renminbi Yuan
Total shareholders’
Share capital Capital reserves Surplus reserve Retained earnings
equity
I. Balance at the end of
the prior year and the
beginning 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
II. Changes for the year
1. Total comprehensive
income - - - 300,096,158.65 300,096,158.65
2. Owners’ contribution
s and reduction in capit
al
Amount of share-based
payments recognized i
n equity - 187,422.35 - - 187,422.35
3. Profit distribution
Appropriation to surplu
s reserve - - - - -
Distribution to sharehol
ders - - - (400,010,000.00) (400,010,000.00)
III. Balance at end of ye
ar 400,010,000.00 4,459,965,366.83 200,005,000.00 1,146,144,024.77 6,206,124,391.60
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2023 Annual Report of DR Corporation Limited
For the prior period
Currency: Renminbi Yuan
Total shareholders’ e
Share capital Capital reserves Surplus reserve Retained earnings
quity
I. Balance at the end of t 400,010,000.00 4,459,216,627.28 179,210,032.06 1,432,718,687.26 6,471,155,346.60
he prior year and the beg
inning of year
II. Changes for the year
1. Total comprehensive i
ncome - - - 634,154,146.80 634,154,146.80
2. Owners’ contributions
and reduction in capital
Amount of share-based p
ayments recognized in e
quity - 561,317.20 - - 561,317.20
3. Profit distribution
Appropriation to surplus r
eserve - - 20,794,967.94 (20,794,967.94) 0.00
Distribution to sharehold
ers - - - (800,020,000.00) (800,020,000.00)
III. Balance at end of yea
r 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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2023 Annual Report of DR Corporation Limited
III. General information
DR Corporation Limited (the “Company”) is a limited liability company registered in Shenzhen, Guangdong P
rovince of the People’s Republic of China. The Company was established on 8 April 2010 with a term of perp
etual operation. The Company is registered in Room 306, Wing Building of Luohu Investment Holding Buildin
g, 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 RMB15,300 an
d RMB14,700 with proportion of contribution of 51% and 49% respectively. The addition of capital has been
verified by Shenzhen Zhengsheng Accounting Firm that issued a “Capital Verification Report” (Shenzhengsh
eng (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 Shenz
hen Administration For Market Regulation and the approved name was Shenzhen Yinsaite Enterprise Manag
ement Consulting Co., Ltd.
According to the resolution of the shareholders’ meeting on 11 July 2011, Jin Chong transferred his 49% equ
ity interest to Lu Yiwen. On 20 July 2011, the shareholders’ meeting of Shenzhen Yinsaite Enterprise Manag
ement 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 o
f jewelry, diamonds, platinum, gold, silver and related accessories, cosmetics, perfumes, leather products, cl
othing, shoes and hats; domestic trade; import and export of goods and technology.” On 28 July 2011, the C
ompany completed the corresponding industrial and commercial change registration process at Shenzhen A
dministration For Market Regulation for the equity transfer and the change of the Company’s name and busi
ness scope.
According to the resolution of the shareholders’ meeting on 5 September 2011, the Company applied to She
nzhen Administration For Market Regulation on 6 September 2011 for approval of increasing the registered c
apital from RMB30,000 to RMB1 million, and the new registered capital was RMB970,000, of which Zhang G
uotao subscribed and paid RMB494,700, Lu Yiwen subscribed and paid RMB475,300. The proportion of con
tribution of Zhang Guotao and Lu Yiwen were 51% and 49% respectively. The addition of capital has been v
erified 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 1 December 2014, the Company applied to Shen
zhen Administration For Market Regulation on 10 December 2014 for approval of increasing the registered c
apital from RMB1 million to RMB100 million, of which Zhang Guotao subscribed RMB50.49 million and Lu Yi
wen subscribed RMB48.51 million. On 1 April 2015, 2 April 2015 and 8 June 2015, Zhang Guotao paid capit
al 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 capit
al of Zhang Guotao and Lu Yiwen remained unchanged. Pursuant to the Company’s change decision on 18
December 2015, Zhang Guotao and Lu Yiwen transferred their 51% and 49% equity interest in the Company
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2023 Annual Report of DR Corporation Limited
to DR Investment (Zhuhai) Co., Ltd. (“DR Investment”), and on 29 January 2016 and 7 November 2016, DR
Investment paid capital contributions of RMB18 million and RMB51 million, respectively, and the paid in capit
al 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).
According to the resolution of the shareholders’ meeting on 22 November 2017, DR Investment transferred it
s 5% equity interest in the Company to Gongqingcheng Wendi No.1 Investment Management Partnership (L
P) (“Wendi No. 1”), Gongqingcheng Wendi No.2 Investment Management Partnership (LP) (“Wendi No. 2”) a
nd Gongqingcheng Wendi No.3 Investment Management Partnership (LP) (“Wendi No. 3”) respectively. On
24 November 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 19 June 2019, the Company ch
anged from a limited company to a corporation limited company based on the audited net assets. The Comp
any’s name changed from Shenzhen Darry Jewelry Co., Ltd. to DR Corporation Limited and the shareholdin
g ratio of each shareholder before and after the change remained unchanged. As of 28 February 2019, the a
djusted net assets of the limited company were RMB396,540,157.74, of which RMB360,000,000.00 was con
verted 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 exceedi
ng the share capital of RMB36,540,157.74 was accounted as “capital reserve” and shared by all shareholder
s.
In accordance with the approval of the Listing Committee of the Growth Enterprise Market of the Shenzhen S
tock 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 16 September 2021, the Company condu
cted 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 Co
mpany was listed on the Shenzhen Stock Exchange on 15 December 2021.
The parent and ultimate parent company of the Group is DR Investment (Zhuhai) Co., Ltd., which is incorpor
ated in the People’s Republic of China.
The financial statements were approved by board of directors on 25 April 2024.
IV. Basis of preparation of the financial statements
1. Basic of preparation
These financial statements have been prepared in accordance with Accounting Standards for Business Ente
rprises - Basic Standard and specific accounting standards, implementation guidance, interpretations and ot
her relevant provisions issued subsequently by the Ministry of Finance (the “MOF”) (collectively referred to a
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2023 Annual Report of DR Corporation Limited
s “ASBEs”). In addition, the financial statements also disclosed relevant financial information in accordance
with the Rules for the Preparation and Reporting of Information Disclosure by Companies Offering Securities
to the Public No. 15 - General Provisions on Financial Reports.
2. Going concern
The financial statements have been prepared on a going concern basis.
V. Significant accounting policies and accounting estimates
Tips of specific accounting policies and accounting estimates:
The Group has formulated specific accounting policies and accounting estimates based on the characteristic
s of actual production and operation, which are mainly reflected in impairment allowance for receivables, inv
entory valuation method, provision for decline in value of inventories, amortization of long-term prepaid expe
nses, depreciation of right-of-use assets, impairment of long-term assets, revenue recognition and measure
ment, 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 2023, and the financial performance and the cash flows for the year then ended in accor
dance with Accounting Standards for Business Enterprises.
2. Accounting year
The Group has adopted the calendar year as its accounting year, i.e., from 1 January to 31 December.
3. Operating cycle
The Group has adopted a normal operating cycle of 12 months as the criterion for classifying the liquidity of it
s assets and liabilities.
4. Functional currency
The Company’s functional and presentation currency is Renminbi Yuan (“RMB”). The currency unit is expres
sed in RMB unless otherwise stated.
Each subsidiary of the Group determines its own functional currency based on the primary economic environ
ment in which it operates. In preparation of the financial statements, their functional currencies are translated
into RMB.
5. Determination method and selection basis for criteria for significance
Applicable □ Not applicable
Items Criteria for significance
The amount of the recovery or reversal accounts for
Significant recovery or reversal of impairment allow more than 10% of the total impairment allowance f
ance for receivables or receivables and the amount is more than 5 millio
n
The amount of the write-off accounts for more than
Significant actual write-off of receivables 10% of the total impairment allowance for receivabl
es and the amount is more than RMB 5 million
The amount of the debt investment accounts for mo
Significant debt investments
re than 10% of the total debt investment
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2023 Annual Report of DR Corporation Limited
The amount of the write-off accounts for more than
Significant actual write-off of debt investments
10% of the total of debt investments
Asset group with significant impairment amount for t The impairment amount of a single store asset grou
he current year p is more than RMB 2 million
The amount of the prepayment and dividends recei
Significant prepayments and dividends receivable a vable aged over one year accounts for more than 1
ged over one year 0% of the total of prepayments and dividends receiv
able and the amount is more than RMB 5 million
The amount of the contract liability aged over one y
Significant contract liabilities aged over one year ear accounts for more than 10% of the total of contr
act liabilities
The amount of the account payable and other paya
ble overdue or aged over one year accounts for mor
Significant accounts payable and other payables ov
e than 10% of the total of accounts payable and oth
erdue or aged over one year
er payables and the amount is more than RMB 5 mi
llion
The amount of the overdue short-term borrowing ac
Significant overdue short-term borrowings counts for more than 10% of total of short-term borr
owings
The amount of the cash receipt or payment relating
Significant cash receipts or payments relating to inv to investing activities accounts for more than 10% o
esting activities f total of cash receipts or payments relating to inves
ting activities and is greater than RMB 5 million
The net profit of the subsidiary accounts for more th
Significant subsidiaries
an 10% of the consolidated net profit of the Group
6. Accounting treatment of business combinations involving enterprises under common control and b
usiness combinations not involving enterprises under common control
Business combinations are classified into business combinations involving entities under common control an
d business combinations not involving entities under common control.
(2)Business combination 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 combinatio
n, and that control is not transitory.
The assets and liabilities (including goodwill arising from the ultimate controlling party’s acquisition of the enti
ty being absorbed) that are obtained by the absorbing entity in a business combination involving entities und
er common control shall be measured on the basis of their carrying amounts in the financial statements of th
e ultimate controlling party at the combination date. The difference between the carrying amount of the net a
ssets obtained and the carrying amount of the consideration paid for the combination (or the aggregate face
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2023 Annual Report of DR Corporation Limited
value of shares issued as consideration) shall be adjusted to capital premium under capital reserves. If the c
apital premium is not sufficient to absorb the difference, any excess shall be adjusted against retained earnin
gs.
(3)Business combination 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 both before and after the co
mbination.
The acquirer shall measure the acquiree’s identifiable assets, liabilities and contingent liabilities acquired in t
he business combination at their fair values on the acquisition date.
Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable n
et assets, the difference is treated as an asset and recognized as goodwill, which is measured at cost on initi
al recognition. Where the cost of the combination is less than the acquirer’s interest in the fair value of the ac
quiree’s identifiable net assets, the acquirer reassesses the measurement of the fair values of the acquiree’s
identifiable assets, liabilities and contingent liabilities and measurement of the cost of the combination. If afte
r that reassessment, the cost of the combination is still less than the acquirer’s interest in the fair value of the
acquiree’s identifiable net assets, the acquirer recognizes the remaining difference immediately in profit or lo
ss for the current period.
7. Determination criteria of control and preparation of consolidated financial statements
The scope of the consolidated financial statements, which include the financial statements of the Company a
nd all of its subsidiaries, is determined on the basis of control. A subsidiary is an entity that is controlled by th
e Company (such as an enterprise, a deemed separate entity, or a structured entity controlled by the Compa
ny). The control of an investor over an investee is achieved only when there are three elements: the investor
has power over the investee; has rights to variable returns from its involvement with the investee; and has th
e ability to affect those returns through its power over the investee.
If the accounting policies or accounting periods adopted by the subsidiary are inconsistent with those of the
Company, necessary adjustments shall be made to the financial statements of the subsidiary in accordance
with the Company’s accounting policies and accounting periods when preparing the consolidated financial st
atements. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactio
ns 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 a
mounts are still allocated against minority interests.
For subsidiaries acquired through business combinations not involving entities under common control, the fin
ancial performance and cash flows of the acquiree shall be consolidated from the date on which the Group o
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2023 Annual Report of DR Corporation Limited
btains control and continue to be consolidated until the date such control ceases. While preparing the consoli
dated financial statements, the Group shall adjust the subsidiary’s financial statements, on the basis of the fa
ir 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 financ
ial 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 a
re made to related items in the financial statements for the prior period as if the reporting entity after the com
bination has been in existence since the date the ultimate controlling party first obtained the control.
The Group reassesses whether or not it controls an investee if any change in facts and circumstances indica
tes that there are changes to one or more of the three elements of control.
8. Recognition criteria of cash and cash equivalents
Cash comprises the Group’s cash on hand and bank deposits that can be readily withdrawn on demand. Cas
h equivalents are short-term, highly liquid investments that are readily convertible into known amounts of cas
h and are subject to an insignificant risk of changes in value.
9. 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, but the funds invested by investors denominated
in foreign currencies are translated at the spot exchange rates prevailing at the dates of transactions. Monet
ary items denominated in foreign currencies are translated at the spot exchange rates ruling at the balance s
heet date. Differences arising on settlement or translation of monetary items are recognized in profit or loss,
with the exception of those relating to foreign currency borrowings specifically for the construction and acquis
ition of qualifying assets, which are capitalized in accordance with the guidance for capitalization of borrowin
g costs. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated
using the exchange rates upon initial recognition, 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 exch
ange rates at the date when the fair value was measured. The resulting exchange differences are recognize
d in profit or loss or other comprehensive income depending on the nature of the non-monetary items.
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 th
e spot exchange rate at the balance sheet date; and equity items other than “unappropriated profit” are transl
ated at the spot exchange rates at the dates of transactions; revenue and expense items in profit or loss are
translated using the spot exchange rates prevailing at the dates of transactions. The resulting exchange diffe
rences 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
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2023 Annual Report of DR Corporation Limited
disposal only involves a portion of a particular foreign operation, the component of other comprehensive inco
me 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 exchang
e rates prevailing on the dates of cash flows. The effect of exchange rate changes on cash is separately pres
ented as an adjustment item in the statement of cash flows.
10. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability o
r equity instrument of another entity.
(1) Recognition and derecognition
The Group recognizes a financial asset or a financial liability when it becomes a party to the contractual provi
sions 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 derecognized (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 obli
gation to pay the received cash flows in full without material delay to a third party under a “pass-through” arra
ngement; and either has transferred substantially all the risks and rewards of the financial asset, or has neith
er transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of t
he financial asset.
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expire
s. When an existing financial liability is replaced by another from the same lender on substantially different te
rms, or the terms of an existing liability are substantially modified, such an exchange or modification is treate
d as a derecognition of the original liability and a recognition of a new liability, and the difference between the
respective carrying amounts is recognized in profit or loss.
Regular way purchases and sales of financial assets are recognized and derecognized using trade date acc
ounting. Regular way purchases or sales of financial assets are purchases or sales of financial assets in acc
ordance with the terms of contracts 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 fi
nancial asset.
(2) Classification and measurement of financial liabilities
The Group’s financial assets are classified at initial recognition into financial assets at fair value through profi
t or loss and financial assets at amortized cost, based on the Group’s business model for managing financial
assets by enterprises and the contractual cash flow characteristics of the financial assets.
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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 o
r 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 recognized in pr
ofit or loss, and transaction costs relating to other financial assets are included in the initial recognition amou
nts.
The subsequent measurement of financial assets depends on their classification as follows:
1 Debt investments measured at amortized cost
The Group measures financial assets at amortized cost if both of the following conditions are met: the financi
al asset is held within a business model with the objective to hold financial assets in order to collect contractu
al cash flows; the contractual terms of the financial asset give rise on specified dates to cash flows that are s
olely payments of principal and interest on the principal amount outstanding. Interest income of such financia
l assets is recognized using the effective interest method. Gains and losses are recognized in current profit o
r loss when the asset is derecognized, modified or impaired.
2 Financial assets at fair value through profit or loss
The financial assets other than the above financial assets measured at amortized cost and financial assets a
t 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 recogni
zed in profit or loss.
(3) Classification and measurement of financial liabilities
Other than those arising from the gold leasing business, the Group’s financial liabilities are, on initial recognit
ion, classified into financial liabilities measured at amortized cost. Transaction costs relating to the financial li
abilities measured at amortized cost are included in the initial recognition amounts.
The subsequent measurement of financial liabilities depends on their classification as follows:
1 Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities designated upon initial recogni
tion as at fair value through profit or loss. Financial liabilities designated at fair value through profit or loss are
subsequently measured at fair value and gains or losses are recognized in profit or loss, except for the gain
s or losses arising from the Group’s own credit risk which are presented in other comprehensive income. If g
ains or losses arising from the Group’s own credit risk which are presented in other comprehensive income
will lead to or expand accounting mismatch in profit or loss, the Group will include all the changes in fair valu
e (including the amount affected by changes in the Group’s own credit risk) of such financial liabilities in profi
t or loss.
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Financial liabilities are designated as upon initial recognition at fair value through profit or loss only if one of t
he following conditions is met:
(1) Such designation eliminates or significantly reduces accounting mismatches;
(2) A combination of financial instruments is managed and evaluated on a fair value basis, in accordance wit
h the documented risk management or investment strategy, and information about them is reported to key m
anagement personnel on that basis;
(3) A hybrid instrument that contains one or more embedded derivatives, unless these embedded derivatives
do not significantly change the cash flows of the hybrid instrument, or it is apparent that these embedded de
rivatives should not be separated from the related hybrid instrument;
(4) A hybrid instrument that contains embedded derivatives that need to be separated but cannot be measur
ed separately on acquisition or at the balance sheet date.
Financial liabilities designated as at fair value through profit or loss upon initial recognition cannot be reclassi
fied as other categories of financial liabilities; other categories of financial liabilities cannot be re-designated
as financial liabilities at fair value through profit or loss after initial recognition.
Based on the above conditions, such financial liabilities designated by the Group mainly include financial liab
ilities held for trading arising from the gold leasing business.
1 Financial liabilities at amortized cost
After initial recognition, such financial liabilities are measured at amortized cost using the effective interest m
ethod.
(4) Impairment of financial assets
Based on expected credit losses, the Group undertakes impairment treatment and recognizes loss provision
s for financial assets measured at amortized cost.
For the receivables that do not contain a significant financing component, the Group applies the simplified ap
proach 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 bal
ance 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 th
e outstanding balance and effective interest rate; if the credit risk has significantly increased since initial reco
gnition but are not credit-impaired (stage 2), the Group shall measure loss provisions based on the amount o
f expected credit losses for the entire lifetime and calculate interest income according to the outstanding bala
nce and effective interest rate; if the credit impairment has occurred after initial recognition (stage 3), the Gro
up shall measure loss provisions based on the amount of expected credit losses for the entire lifetime and ca
lculate interest income at the amortized cost and effective interest rate. At the balance sheet date, if the Grou
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p only has financial instruments with lower credit risk, the Group assumes that the credit risk of the financial i
nstrument 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 expecte
d credit losses of relevant financial instruments on the basis of their common risk characteristics and the agin
g portfolio. The Group determines the aging according to the billing date. The Group assesses ECLs individu
ally, except for those of financial instruments evaluated based on the above portfolio.
For the Group’s disclosure of the criteria for determining the significant increase in credit risk and the definitio
n of assets that have incurred credit impairment, please refer to Note XII.
The Group measures expected credit losses on a financial instrument in a way that reflects: an unbiased and
probability-weighted amount that is determined by evaluating a range of possible outcomes; the time value o
f money; and reasonable and supportable information that is available without undue cost or effort at the bala
nce sheet date about past events, current conditions and forecasts of future economic conditions.
When the Group no longer reasonably expects to collect all or part of the contractual cash flows of the financ
ial asset, the Group directly writes down the outstanding balance of the financial asset.
(5) 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.
(6) Transfers of financial assets
A financial asset is derecognized when the Group has transferred substantially all the risks and rewards of th
e asset to the transferee. A financial asset is not derecognized when the Group retains substantially all the ri
sks and rewards of the financial asset.
When the Group has neither transferred nor retained substantially all the risks and rewards of the financial a
sset, it either derecognizes the financial asset and recognizes the assets and liabilities created in the transfer
when it has not retained control of the asset; or 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.
Continuing involvement that takes the form of a guarantee over the transferred financial asset is measured at
the lower of the carrying amount of the financial asset and the guarantee amount. The guarantee amount is
the maximum amount of consideration that the Group could be required to repay.
The Company complies with the disclosure requirements of the “Jewellery Related Business” in the “Self-reg
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ulatory Guidelines for Listed Companies on Shenzhen Stock Exchange No. 3 - Disclosure of Industry Inform
ation”.
11. Accounts receivable
The method of determining expected credit losses on accounts receivable and related accounting treatment
can be referred to the policies relating to financial instruments.
12. 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.
13. Contract assets
The Group presents contract assets or contract liabilities in the balance sheet based on the relationship betw
een the fulfillment of performance obligations and payments from customers. The Group presents contract a
ssets 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 transferre
d to a customer, and that right is conditioned on something other than the passage of time.
For details of how the Group measures and accounts for the ECLs of a contract asset, refer to Note V.10.
14. 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 - Ind
ustry Information Disclosure.
Inventory includes raw materials, work in process, finished products, turnover materials, shipped commoditie
s and commissioned processing materials.
Inventories are initially carried at cost. Cost of inventories comprises all costs of purchase, manufacture over
head and other cost. The actual cost of inventories upon delivery is calculated using the specific identificatio
n method. Turnover materials include low value consumables and packing materials, which are amortized us
ing 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 realizable value. The inventorie
s are written down below cost to net realizable value and the write-down is recognized in profit or loss if the c
ost is higher than the net realizable value.
Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs
of completion, the estimated costs necessary to make the sale and relevant taxes. Inventories are written do
wn item by item.
The Company is required to comply with the disclosure requirements for retail industry specified in the Self-di
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sciplinary Supervision Guidelines No. 3 for Companies Listed on Shenzhen Stock Exchange - Industry Infor
mation Disclosure.
15. Debt investments
For the determination method and accounting treatment method of expected credit loss of debt investments,
refer to policies related to financial instruments.
16. 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 i
ndividual 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 af
fect the number of the investor's returns.
Under the cost method, a long-term equity investment is measured at its initial investment cost. When additio
nal 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 inc
ome in profit or loss.
On disposal of a long-term equity investment, the difference between the carrying amount and the actual acq
uisition price is recognized in profit or loss for the period.
17. Fixed assets
(1) Recognition criteria
A fixed asset is recognized 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 fix
ed asset that meets the recognition criteria shall be included in the cost of the fixed asset, and the carrying a
mount of the component of the fixed asset that is replaced shall be derecognized. Otherwise, such expenditu
res are recognized in profit or loss as incurred.
Fixed assets are initially measured at cost. The cost of a purchased fixed asset comprises the purchase pric
e, 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 meth
od applied at least at each year end, and makes adjustments if necessary.
(2) Depreciation method
Depreciation meth Depreciation perio Residual value rat Annual depreciatio
Category
od d e (%) n rate (%)
Transportation facil Straight-line metho
4 years 5% 23.75%
ities d
Office equipment a Straight-line metho
3-5 years 5% 19.00%-31.67%
nd other facilities d
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18. Borrowing costs
The borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying
asset are capitalized. The amounts of other borrowing costs incurred are recognized as an expense in the pe
riod in which they are incurred.
Borrowing costs are capitalized when expenditures for such asset and borrowing costs are incurred and activ
ities relating to the acquisition, construction or production of the asset that are necessary to prepare the asse
t for its intended use or sale have commenced.
Capitalization 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 recognized in profit or
loss.
During the capitalization period, the amount of interest eligible for capitalization for each accounting period s
hall be determined as follows:
(1) where funds are borrowed specifically for the purpose of obtaining a qualifying asset, the amount of intere
st eligible for capitalization 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 incom
e 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 capitalization is determined by applying a weighted average interest rate on the general borrowin
gs 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.
Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or produ
ction of a qualifying asset is suspended abnormally by activities other than those necessary to get the asset r
eady for its intended use or sale, when the suspension is for a continuous period of more than 3 months. Bor
rowing costs incurred during these periods are recognized as an expense in profit or loss until the acquisition,
construction or production is resumed.
19. Intangible assets
(1) Useful life and its determination basis, estimation, amortization method or review procedures
An intangible asset shall be recognized only when it is probable that the economic benefits associated with t
he 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 economi
c benefits to the Group. An intangible asset is regarded as having an indefinite useful life when there is no fo
reseeable limit to the period over which the asset is expected to generate economic benefits for the Group.
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An intangible asset with a finite useful life is amortized 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 amortization method at least
at each year end and makes adjustment if necessary.
The intangible assets of the Group are mainly software products and trademarks, and they are amortized usi
ng the straight-line method over their useful lives. Their useful lives are as follows:
Category Useful life
Software 1-5 years
Trademark 5 years
(2) The aggregate scope of research and development expenditure and relevant accounting treatment
The Group classifies the expenditures on an internal research and development project into expenditure on t
he research phase and expenditure on the development phase. Expenditure on the research phase is recog
nized in profit or loss as incurred. Expenditure 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 wil
l be available for use or sale; (ii) the intention to complete the intangible asset and use or sell it; (iii) how the i
ntangible asset will generate probable economic benefits (among other things, the Group can demonstrate th
e 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 othe
r resources to complete the development and the ability to use or sell the intangible asset; and (v) the ability t
o measure reliably the expenditure attributable to the intangible asset during the development phase. Expen
diture on the development phase which does not meet these above criteria is recognized in profit or loss whe
n incurred.
20. Impairment of long-term assets
The Group determines the impairment of assets, other than the impairment of inventories, deferred tax asset
s 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 impaire
d. 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 th
e 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 whi
ch 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 independ
ent 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 amou
nt is reduced to the recoverable amount by the Group. The reduction in the carrying amount is treated as an i
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mpairment loss and recognized in profit or loss. A provision for impairment loss of the asset is recognized ac
cordingly.
Once the above impairment loss is recognized, it cannot be reversed in subsequent accounting periods.
21. Long-term prepaid expenses
Long-term prepaid expenses are amortized using the straight-line method as follows:
Category Amortization period
Leasehold improvements 1-5 years
Others 1-3 years
22. Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Company has re
ceived consideration or an amount of consideration is due from the customer, such as an amount of consider
ation that an entity has received before the transfer of the promised goods or services.
23. Employee benefits
(1) Accounting treatment of short-term employee benefits
During an accounting period when employees render services to the entity, the amount of short-term employ
ee benefits actually incurred should be recognized as a liability and be recognized in profit or loss for the curr
ent period or in cost of related assets.
(2) Accounting treatment of post-employment benefits
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 o
r loss.
(3) Accounting treatment of termination benefits
The Group provides termination benefits to employees and recognizes an employee benefits liability for termi
nation 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 recognizes costs involving the payment of termination benefits.
24. Provisions
An obligation related to a contingency shall be recognized by the Group as a provision when (i) the obligation
is a present obligation of the Group, (ii) it is probable that an outflow of economic benefits from the Group wil
l be required to settle the obligation, and (iii) a reliable estimate can be made of the amount of the obligation,
except for contingent considerations and contingent liabilities assumed in a business combination not involvi
ng entities under common control.
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 va
lue of money as a whole. The carrying amount of provisions is reviewed at the balance sheet date. Where th
ere is clear evidence that the carrying amount of a provision does not reflect the current best estimate, the ca
rrying amount is adjusted to the current best estimate.
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25. 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 servic
es 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 th
e fair value of the equity instruments granted to the employees. If such equity-settled share-based payment c
ould vest immediately, related costs or expenses at an amount equal to the fair value on the grant date are r
ecognized, with a corresponding increase in capital reserves; if such equity-settled share-based payment co
uld not vest until the completion of services for a vesting period, or until the achievement of a specified perfor
mance condition, the Group at each balance sheet date during the vesting period recognizes the services re
ceived for the current period as related costs and expenses, with a corresponding increase in capital reserve
s, 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 bas
ed on an assessment by a third-party independent asset appraiser, as described in Note XV.
Where the terms of an equity-settled share-based payment are modified, as a minimum an expense is recog
nized as if the terms had not been modified. In addition, an expense is recognized for any modification that in
creases the total fair value of the share-based payments, or is otherwise beneficial to the employee as meas
ured at the date of modification.
Where an equity-settled share-based payment is canceled, it is treated as if it had vested on the date of canc
ellation, and any expense not yet recognized for the payment is recognized immediately. If an employee or o
ther parties can choose whether to meet a non-vesting condition, the Group treats the employee’s or other p
arties' failure to meet that non-vesting condition during the vesting period as a cancellation. However, if a ne
w award is substituted for the canceled award, and is designated as a replacement on the date that it is grant
ed, the canceled 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 sha
res or other equity instruments of the Group.
26. Revenue
Disclosure of accounting policies adopted for revenue recognition and measurement by type of business
The Group recognizes revenue when it has fulfilled its performance obligations under the contract, that is, wh
en the customer obtains control of the relevant goods or services. The acquisition of control of the relevant g
oods or services is defined as the ability to dominate the use of the goods or the provision of the services an
d to derive substantially all the economic benefits therefrom.
Contracts for the sale of goods
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A contract for the sale of goods between the Group and the customer usually includes commitments to transf
er the goods, which vary depending on the agreement with the customer. The amount of consideration to whi
ch the Group expects to be entitled in exchange for transferring control of the goods to the customer is deter
mined as the transaction price in accordance with the terms of the contract and in combination with past busi
ness practices.
The principal business of the Group is to retail goods to customers using the self-operated model through offl
ine direct-operated stores, offline joint-operated stores and e-commerce platforms. The Group recognizes re
venue at the point in the performance of each individual performance obligation taking into account a combin
ation of the acquisition of the current right to receive the goods, the transfer of significant risks and rewards o
f ownership of goods, the transfer of legal title to goods, the transfer of physical possession of goods, and th
e customer's acceptance of goods.
For the Offline Joint-Operated business 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. Having considered the legal form of the contract and relevant facts and circumstances (the p
rimary responsibility for the transfer of goods to customers, the inventory risk bore before or after the transfer
of goods, and whether the Group is entitled to determine the transaction price of the goods), the Group cons
iders that the Group undertakes primary responsibility for the transfer of goods to customers, is entitled to de
termine the transaction price, and bears the inventory risk. Therefore, the Group is a principal and recognize
s revenue based on the total consideration received or receivable when customers receive the goods.
For sales with a right of return, the Group recognizes the revenue in the amount of consideration to which th
e Group expects to be entitled in exchange for transferring control of the goods to the customer, and recogni
zes 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 me
asured by reference to the carrying amount of the goods less any expected costs to recover the goods (inclu
ding potential decreases in the value of the returned goods), that is, right-of-return assets, and recognized co
st of sales based on the carrying 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 retu
rn and remeasures the assets and liabilities above.
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 ass
ure customers that the goods sold meet the established standards, in accordance with Note V.24 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 transactio
n price to the service-type quality assurance in proportion to the relative proportion of the separate selling pri
ce for the provision of the quality assurance of goods and services, and recognizes revenue when the custo
mer acquires control of the service. When assessing whether a service-type warranty provides a customer wi
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th a separate service in addition to the assurance that the good complies with agreed-upon specifications, th
e Group considers whether the warranty is required by law, the length of the warranty coverage period and t
he nature of the tasks that the Group promises to perform, etc.
For contracts with additional customer purchase options, the Group evaluates the option to provide a materia
l right to the customer when the customer acquires control of the relevant goods. Revenue is recognized on t
he basis of the amount of consideration expected to be entitled to be received as a result of the transfer of g
oods to the customer, and revenue is apportioned to each individual performance obligation based on the rel
ative proportion to the individual selling prices of the goods committed to the individual performance obligatio
ns.
Different revenue recognition methods and measurement methods involved in different operating models ad
opted by similar businesses
The Company shall comply with the disclosure requirements of “retail industry” in Shenzhen Stock Exchange
Guideline No.3 on Self-Monitoring for Listed Companies – Industry Information Disclosure.
The Company shall comply with the disclosure requirements of “jewelry-related business” in Shenzhen Stock
Exchange Guideline No.3 on Self-Monitoring for Listed Companies – Industry Information Disclosure.
27. Government grants
Government grants are recognized 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 measu
re 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 a
ssets, it shall be regarded as government grants related to assets; If the government documents are not clea
r, the judgment shall be based on the basic conditions that must be met to obtain the government grant. If th
e basic conditions are to form long-term assets through purchase, construction or other means, it shall be re
garded as government grants related to assets, and otherwise it shall be regarded as government grants rela
ted to income.
A government grant related to income is accounted for as follows: (i) if the grant is a compensation for relate
d expenses or losses to be incurred in subsequent periods, the grant is recognized as deferred income, and
released in profit or loss or offset against related expenses over the periods in which the related costs are re
cognized; or (ii) if the grant is a compensation for related expenses or losses already incurred, it is recognize
d 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 re
cognized as deferred income and amortized in profit or loss over the useful life of the related asset by annual
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installments in a systematic and rational way (however, a government grant measured at a nominal amount
is recognized 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 i
n which the relevant assets are disposed of.
28. Deferred tax assets/deferred tax liabilities
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 differen
ces between the tax bases and the carrying amounts of the items, which have a tax base according to relate
d tax laws but are not recognized as assets and liabilities.
Deferred tax liabilities are recognized for all taxable temporary differences, except:
(1) when the taxable temporary difference arises from the initial recognition of goodwill, or an asset or liabilit
y in a transaction that is not a business combination and, at the time of transaction, affects neither accountin
g profit nor taxable profit or loss, and no equal taxable and deductible temporary differences arise on initial re
cognition of the asset and liability in such transaction;
(2) in respect of taxable temporary differences associated with investments in subsidiaries, associates and j
oint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probabl
e that the temporary differences will not be reversed in the foreseeable future.
Deferred tax assets are recognized for all deductible temporary differences, and the carryforward of unused t
ax losses and any unused tax credits. Deferred tax assets are recognized to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences, the carryforward of unuse
d tax losses and unused tax credits can be utilized, except:
(1) when the deductible temporary difference arises from a transaction that is not a business combination a
nd, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss, and no equal
taxable and deductible temporary differences arise on initial recognition of the asset and liability in such trans
action;
(2) in respect of the deductible temporary differences associated with investments in subsidiaries, associate
s and joint ventures, the temporary differences will be reversed in the foreseeable future and taxable profit wi
ll be available against which the temporary differences can be utilized 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 realized 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 consequenc
es that would follow from the manner in which the Group expects, at the balance sheet date, to recover the a
ssets or settle the liabilities.
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2023 Annual Report of DR Corporation Limited
The carrying amount of deferred tax assets is reviewed at the balance sheet date and reduced to the extent t
hat it is no longer probable that sufficient taxable profit will be available in future periods to allow the benefit o
f deferred tax assets to be utilized. Unrecognized deferred tax assets are reassessed at the balance sheet d
ate and are recognized 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.
Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally enforceable rig
ht to set off current tax assets and current tax liabilities, and the deferred tax assets and deferred tax liabilitie
s relate to income taxes levied by the same taxation authority on either the same taxable entity or different ta
xable entities which intend either to settle current tax assets and liabilities on a net basis, or to realize the as
sets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred ta
x assets or liabilities are expected to be recovered.
29. Leases
(1) Accounting treatment for leases as lessee
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. If a party of the c
ontract conveys the right to control the use of an identified asset or identified assets for a period of time in ex
change for consideration, the contract shall be a lease contract or contains lease.
As lessee
The Group recognizes right-of-use assets and lease liabilities for leases.
(1) Right-of-use assets
At the commencement date of the lease term, the Group recognizes its right to use the leased asset during t
he lease term as a right-of-use asset and is initially measured at cost. Right-of-use asset costs include: the in
itial measured amount of the lease liability; the amount of lease payments paid on or before the start date of t
he lease period (deduct the amount related to the lease incentive already enjoyed); initial direct costs incurre
d 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 ter
ms of the lease. 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 ass
et from the commencement date to the end of the useful life of the asset. Otherwise, the Group depreciates t
he assets from the commencement date to the earlier of the end of the useful life of the asset or the end of th
e lease term.
(2) Lease liabilities
At the commencement date of the lease, the Group recognizes the present value of the unpaid lease payme
nts as a lease liability. Lease payments include fixed and substantial fixed payments net of lease incentives,
246
2023 Annual Report of DR Corporation Limited
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 exerci
se the termination option, provided that the Group reasonably determines that the option or the term of the le
ase 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 th
e 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 a
nd recognizes it in profit and loss for the current period, except otherwise stipulated in the cost of related ass
ets. Variable lease payments that are not included in the measurement of the lease liabilities are recognized
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 wh
en it recognizes interest and reduces the carrying amount of the lease liability when it pays the lease payme
nt. After a lease term commences, when there is a change in the amount of in-substance fixed lease paymen
ts, a change in the amounts expected to be payable under a residual value guarantee, a change in future lea
se payments resulting from a change in an index or a rate used to determine those payments, a change in a
ssessment of an option to purchase the underlying asset, renew or terminate the lease, or change in the actu
al exercise of an option, the Group remeasures the carrying amount of the lease liability by discounting the r
evised lease payments.
(3) 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 USD5,000 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 a
s a lease of a low-value asset. The Group has chosen to recognize right-of-use assets and lease liabilities fo
r both short-term leases and low-value asset leases.
30. Other significant accounting policies and accounting estimates
The preparation of the financial statements requires management to make judgments, estimates and assum
ptions 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 as
sumptions and estimates could result in outcomes that could require a material adjustment to the carrying a
mounts of the assets or liabilities affected in the future.
Judgments
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 recognized in the consolidated financial statements:
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2023 Annual Report of DR Corporation Limited
Business model
The classification of financial assets at initial recognition depends on the Group’s business model for managi
ng financial assets. Factors considered by the Group in judging the business model include enterprise evalu
ation, 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 r
eceived by the management personnel of the businesses concerned. In assessing whether the business mo
del is aimed at receiving contractual cash flows, the Group is required to analyze and exercise judgment in r
espect of the reasons, timing, frequency and values of any disposals prior to maturity of the financial assets.
Whether a contract is, or contains, a lease
The Group entered into a service agreement under Offline Joint-Operated business model. The Group believ
es that, based on the agreement, there is an identified asset and the Group controls the right to use the asse
t during the lease period. Therefore, the service agreement contains a lease and the Group treats it as a leas
e.
Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the balance s
heet date, which have a significant risk of causing a material adjustment to the carrying amounts of assets a
nd 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 applic
ation of the expected credit loss model requires significant judgments and estimates and consideration of all
reasonable and supportable information, including forward-looking information. When making such judgment
s and estimates, the Group infers the expected changes in the debtor’s credit risk based on historical repaym
ent data combined with economic policies, macroeconomic indicators, industry risks and other factors. Differ
ent estimates may affect the impairment provision, and the amount of impairment provision made may not eq
ual 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 fin
ancial assets at the balance sheet date. Other non-current assets other than financial assets are tested for i
mpairment when there are indications that the carrying amounts may not be recoverable. An impairment exis
ts 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 fr
om it. The calculation of the fair value less costs of disposal is based on available data from binding sales tra
nsactions 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 b
e derived from an asset or asset group are undertaken, management must estimate the expected future cas
248
2023 Annual Report of DR Corporation Limited
h flows from the asset or asset group and choose a suitable discount rate in order to calculate the present va
lue of those cash flows. Further details are included in Note VII.44.
Deferred tax assets
Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that sufficient tax
able profit will be available against which the losses can be utilized. Significant management judgment is req
uired to determine the amount of deferred tax assets that can be recognized, based upon the likely timing an
d level of future taxable profits together with future tax planning strategies.
Inventory provision determined on net realizable 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 re-estimates at each balance sheet date whether the net realizable value of individual inventory it
ems 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 str
uctured deposits linked to the spot exchange rate of EUR to USD requires the Group to estimate projected fu
ture 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 lea
se terms in accordance the lease contract. The management estimates provisions arising from the fulfillment
of recovery obligations based on industry conditions and historical experience. At the balance sheet date, m
anagement reviews the carrying amount of the provisions and makes appropriate adjustments to reflect the c
urrent best estimates.
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. Accordin
g to the economic environment, the Group takes the observable interest rate as the reference basis for deter
mining the incremental borrowing rate, then adjusts the observable interest rate based on its own circumstan
ces, underlying assets, lease terms and amounts of lease liabilities to determine the applicable incremental b
orrowing rate.
31. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
□Applicable Not applicable
(2) Changes in significant accounting estimates
□Applicable Not applicable
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2023 Annual Report of DR Corporation Limited
(3) Items related to adjustment of the financial statements as at the beginning of the current year sinc
e the initial application of the new accounting standard in 2023
□Applicable Not applicable
VI. Taxes
1. Major categories of taxes and tax rates
Category Basis Tax rate
Difference between sales amount
and output tax calculated at appli
Value added tax 3%, 6%, 13%, 20%
cable tax rate after deducting inp
ut tax allowed to be deducted
Sales of taxable consumer goods
Excise tax 5%
(ad valorem)
Urban maintenance and construc Value added taxes and excise tax
5%, 7%
tion tax es actually paid
15%, 16.5%, 17%, 20%, 21%, 2
Corporate income tax Taxable income
4%, 25%, 25.8%, 28%
Value added taxes and excise tax
Educational surcharge 3%
es actually paid
Value added taxes and excise tax
Local education surcharge 2%
es actually paid
Disclosure of information on taxpayers with different corporate income tax rates
Name of taxpayers Income tax rate
DR Corporation Limited 25.00%
He’er Culture (Shenzhen) Co., Ltd 15.00%
Shenzhen Darry Commercial Management Service
15.00%
s Co., Ltd
Shenzhen Love Only AI Cloud Technology Co., Ltd 15.00%
DR Group Company Limited 16.50%
DARRY JEWELRY (HK) LIMITED 16.50%
Couple Only Jewelry HongKong Company Limited 16.50%
LOVEMONT HONG KONG LIMITED 16.50%
DR LUXURY (SG) PTE.LTD 17.00%
DR LUXURY USA INC 21.00%
LOVEMONT (MALAYSIA)SDN.BHD 24.00%
Shanghai Darry Diamond Co., Ltd 25.00%
Haoduo Diamond (Shenzhen) Co., Ltd 25.00%
DR Luxury NL Holding B.V. 25.80%
DR Jewelry 28.00%
Other subsidiaries of the Group incorporated in Chi
20.00%
nese mainland
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2023 Annual Report of DR Corporation Limited
2. Tax benefits
(1) 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 Serv
ice Industry Cooperation Zone (Cai Shui [2021] No. 30), from 1 January 2021 to 31 December 2025, the ent
erprise income tax policy of the Shenzhen Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperati
on Zone will be continued, and eligible enterprises located in the Qianhai Shenzhen-Hong Kong Modern Ser
vice 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 2023.
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 Com
pany, obtained the qualification of high-tech enterprise on 16 October 2023, which is valid for three years, an
d can enjoy a preferential income tax rate of 15% for high-tech enterprises from 2023 to 2025. In 2023, we wi
ll levy corporate income tax at a rate of 15%.
According to the Announcement of the Ministry of Finance and the State Administration of Taxation on the Pr
eferential Income Tax Policy for Small and Micro Enterprises and Individual Industrial and Commercial Enter
prises (No. 6 of 2023), from 1 January 2023 to 31 December 2027, 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 Announcement of the Ministry of Finance and the State Administration of Taxation on Further
Implementation of the Preferential Income Tax Policy for Small and Micro Enterprises (Cai Shui [2022] No. 1
3), corporate income tax will be reduced by half. Some subsidiaries of the Company will meet the conditions
of small and micro-profit enterprises in 2023 and apply the corresponding preferential policies on their own.
(2) VAT tax benefits
According to the Notice of the Ministry of Finance, the General Administration of Customs and the State Adm
inistration of Taxation on Adjusting the Relevant Tax Policies of the Diamond and Shanghai Diamond Excha
nge (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 excee
ds 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 tre
atment of immediate refund for the part of the actual VAT burden in the import process exceeding 4%.
According to the Announcement of the State Administration of Taxation on Tax Collection and Administration
Matters Relating to VAT Relief and Other Policies for Small-scale VAT Taxpayers (SAT Announcement No.
1 [2023]), small-scale taxpayers who engage in VAT taxable sales and their total monthly sales do not excee
d RMB100,000 (or RMB300,000 if one quarter is a tax period) are exempted from VAT. According to the Ann
251
2023 Annual Report of DR Corporation Limited
ouncement of the State Administration of Taxation of the Ministry of Finance on VAT Relief Policies for Small
-scale VAT Taxpayers (Announcement No. 19 of 2023 of the State Administration of Taxation of the Ministry
of Finance), small-scale VAT taxpayers with monthly sales of less than RMB100,000 (inclusive) are exempte
d from VAT; for small-scale VAT taxpayers subject to taxable sales income at a levy rate of 3%, the VAT at a
levy rate of 1% will be reduced; for items subject to a 3% pre-levy rate, the prepayment VAT at a pre-levy rat
e of 1% will be reduced. Some of the Company’s branches are small-scale taxpayers and meet the above st
andards, and will be exempt from VAT in 2023.
(3) Additional tax incentives
According to the Announcement of the Ministry of Finance and the State Administration of Taxation on Furth
er Implementing the “Six Taxes and Two Fees” Reduction and Reduction Policy for Small and Micro Enterpri
ses (Announcement No. 10 of 2022 of the State Administration of Taxation of the Ministry of Finance), the pe
ople’s governments of provinces, autonomous regions and municipalities directly under the Central Governm
ent can determine that small-scale tax taxpayers of value-added tax, small and micro-profit enterprises and i
ndividual industrial and commercial enterprises may reduce resource tax, urban maintenance and constructi
on tax, real estate tax, urban land use tax, stamp tax (excluding securities transaction stamp tax), farmland o
ccupation tax, education surcharge, and local education surcharge within a 50% tax amount range. In 2023,
some of the Company’s branches are small and micro-profit enterprises, and some of the Company’s branch
es are small-scale taxpayers and meet the above standards, so corresponding preferential policies for reduct
ion and exemption will be applied.
According to the Circular of the Ministry of Finance and the State Administration of Taxation on Expanding th
e 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 oblig
or 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 t
urnover 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 fro
m education surcharge, local education surcharge and water conservancy construction funds in 2023.
3. Others
VII. Notes to the consolidated financial statements
1. Currency funds
Currency: Renminbi Yuan
Item Closing balance Opening balance
Cash on hand 434,213.76 391,749.23
Cash at banks 224,395,861.65 513,078,584.94
Others 3,024,147.76 8,434,484.13
Total 227,854,223.17 521,904,818.30
Including: Total amounts dep
7,753,196.85 4,313,836.35
osited overseas
252
2023 Annual Report of DR Corporation Limited
Other descriptions:
(1) The Group's other currency funds mainly included account balances on third-party payment platforms suc
h as WeChat pay and Alipay.
(2) As at 31 December 2023, the Group’s restricted currency funds totaled RMB 890,612.21 (31 Decembe
r 2022: RMB279,787.68), which was mainly due to preservation of law issue（As at the reporting date, the p
ayment has been made）or change of account types.
(3) The Group obtains interest income on its bank deposits at the interest rate for demand deposits.
2. Financial assets held for trading
Currency: Renminbi Yuan
Item Closing balance Opening balance
Financial assets at fair value thro
4,841,946,705.07 5,609,891,931.68
ugh profit or loss
Including:
Structured deposits 445,437,534.25 330,189,591.78
Wealth management products 4,396,509,170.82 5,279,702,339.90
Including:
Total 4,841,946,705.07 5,609,891,931.68
Other descriptions:
(1) The structured deposits are capital protected floating income bank structured deposit investments linked
to the CSI 500 index, CSI 300 index 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 wealt
h management products.
3. Accounts receivable
(1) Disclosed by aging
Currency: Renminbi Yuan
Aging Closing outstanding balance Opening outstanding balance
Within 1 year, inclusive 85,531,799.66 87,167,396.78
1 to 2 years 659,976.99 2,359,626.25
Total 86,191,776.65 89,527,023.03
(2) Disclosed by method of determining provision for credit losses
Currency: Renminbi Yuan
Closing balance Opening balance
Outstanding b Provision for bad Outstanding bala Provision for bad
alance debts Carryin nce debts Carryin
Category
Provisi g amo Provisi g amo
Amo Percen Amoun Amoun Percen Amoun
on rati unt on rati unt
unt tage t t tage t
o o
Accounts 0.00 0.00% 0.00 0.00% 0.00 1,476, 1.65% 1,476, 100.0 0.00
253
2023 Annual Report of DR Corporation Limited
receivabl 671.46 671.46 0%
e for whic
h provisio
n for bad
debts is i
ndividuall
y assess
ed
Including:
1,476, 1,476, 100.0
Mall A 0.00 0.00% 0.00 0.00% 0.00 1.65% 0.00
671.46 671.46 0%
Accounts
receivabl
e for whic
86,1
h provisio 83,14 88,05 84,47
91,7 100.0 3,044, 98.3 3,571,
n for bad 3.53% 7,399. 0,351. 4.06% 8,911.
76.6 0% 377.59 5% 440.05
debts is c 06 57 52
5
ollectively
assesse
d
Including:
Accounts
receivabl
e from P 29,7
29,79 22,63 22,63
OS machi 97,9 34.5 25.2
0.00 0.00% 7,960. 0,287. 0.00 0.00% 0,287.
nes and e 60.8 7% 8%
89 88 88
-commer 9
ce platfor
ms
Accounts
56,3
receivabl 53,34 65,42 61,84
93,8 65.4 3,044, 73.0 3,571,
e from sh 5.40% 9,438. 0,063. 5.46% 8,623.
15.7 3% 377.59 7% 440.05
opping m 17 69 64
6
alls
86,1
83,14 89,52 84,47
91,7 100.0 3,044, 100.0 5,048,
Total 3.53% 7,399. 7,023. 5.64% 8,911.
76.6 0% 377.59 0% 111.51
06 03 52
5
Impairment allowance which is individually assessed: 0
Currency: Renminbi Yuan
254
2023 Annual Report of DR Corporation Limited
Opening balance Closing balance
Name Outstanding Impairment Outstanding Impairment Reasons for
Percentage
balance allowance balance allowance provision
1,476,671.4 1,476,671.4
Mall A 0.00 0.00 0.00%
6 6
1,476,671.4 1,476,671.4
Total 0.00 0.00
6 6
Impairment allowance which is collectively assessed: 3,044,377.59
Currency: Renminbi Yuan
Closing balance
Name
Outstanding balance Impairment allowance Percentage
Accounts receivable fro
m POS machines and e- 29,797,960.89 0.00 0.00%
commerce platforms
Accounts receivable fro
56,393,815.76 3,044,377.59 5.40%
m shopping malls
Total 86,191,776.65 3,044,377.59
Description of the basis for determining the combination:
Impairment allowance which is assessed by the combination of credit risk characteristics
If the Group recognizes impairment allowance based on the general model of ECLs:
□Applicable Not applicable
(3) Impairment allowance recognized, recovered or reversed for the current period
Impairment allowance for the current period:
Currency: Renminbi Yuan
Changes for the period
Opening bal Closing bala
Category Recovery or
ance Provision Write-offs Others nce
reversal
Accounts rec
eivable from 5,048,111.5 2,997,697.8 5,003,734.0 3,044,377.5
0.00 2,302.31
shopping ma 1 0 3 9
lls
5,048,111.5 2,997,697.8 5,003,734.0 3,044,377.5
Total 0.00 2,302.31
1 0 3 9
255
2023 Annual Report of DR Corporation Limited
Including: significant recovery or reversal of impairment allowance for the current period:
Currency: Renminbi Yuan
The basis and ratio
nality of determinin
Amount recovered Reasons for revers Methods for revers
Name of entity g the ratio for origi
or reversed al al
nal impairment allo
wance
It is not expected t
o be recovered be
Mall A 1,476,671.46 Not applicable Currency recovery cause the mall has
been in arrears for
a long time.
Total 1,476,671.46
(4) The top 5 largest accounts receivable and contract assets at end of year categorized by debtor
Currency: Renminbi Yuan
Proportion of to
Closing balanc
Closing balanc tal closing bala
Closing balanc Closing balanc e of impairment
e of accounts r nce of account
Name of entity e of trade recei e of contract as of accounts re
eceivable and c s receivable an
vables sets ceivable and co
ontract assets d contract asse
ntract assets
ts
No.1 12,540,139.89 0.00 12,540,139.89 14.55% 0.00
No.2 5,483,230.73 0.00 5,483,230.73 6.36% 0.00
No.3 4,261,580.43 0.00 4,261,580.43 4.94% 0.00
No.4 2,736,504.30 0.00 2,736,504.30 3.17% 147,728.12
No.5 2,469,627.90 0.00 2,469,627.90 2.87% 133,321.00
Total 27,491,083.25 0.00 27,491,083.25 31.89% 281,049.12
4. Other receivables
Currency: Renminbi Yuan
Item Closing balance Opening balance
Other receivables 5,614,656.53 8,184,551.61
Total 5,614,656.53 8,184,551.61
(1) Other receivables
1) Other receivables categorized by nature
Currency: Renminbi Yuan
Nature Closing outstanding balance Opening outstanding balance
Social insurances and housing fu
4,485,068.29 5,805,962.39
nd borne by employees
Temporary loans for employees 327,705.15 1,365,064.13
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2023 Annual Report of DR Corporation Limited
Others 2,706,883.09 2,918,525.09
Total 7,519,656.53 10,089,551.61
2) Disclosed by aging
Currency: Renminbi Yuan
Aging Closing outstanding balance Opening outstanding balance
Within 1 year, inclusive 5,614,656.53 8,184,551.61
1 to 2 years 1,905,000.00
2 to 3 years 1,905,000.00
Total 7,519,656.53 10,089,551.61
3) Disclosed by method of determining provision for credit losses
Applicable □Not applicable
Currency: Renminbi Yuan
Closing balance Opening balance
Outstanding bala Provision for bad Outstanding bala Provision for bad
Catego nce debts Carryin nce debts Carryin
ry Provisi g amo Provisi g amo
Amoun Percen Amoun Amoun Percen Amoun
on rati unt on rati unt
t tage t t tage t
o o
Accou
nts rec
eivable
for whi
ch prov
ision fo 1,905, 25.3 1,905, 100.0 1,905, 18.8 1,905, 100.0
0.00 0.00
r bad d 000.00 3% 000.00 0% 000.00 8% 000.00 0%
ebts is
individ
ually a
ssesse
d
Including:
Provisi
on for
bad de
bts whi 5,614, 74.6 5,614, 8,184, 81.1 8,184,
0.00 0.00% 0.00 0.00%
ch is a 656.53 7% 656.53 551.61 2% 551.61
ssesse
d on a
portfoli
257
2023 Annual Report of DR Corporation Limited
o basis
Including:
10,08
7,519, 100.0 1,905, 25.3 5,614, 100.0 1,905, 18.8 8,184,
Total 9,551.
656.53 0% 000.00 3% 656.53 0% 000.00 8% 551.61
61
Impairment allowance which is individually assessed:
Currency: Renminbi Yuan
Opening balance Closing balance
Name Outstanding Provision for Outstanding Provision for Provision rati Reasons for
balance bad debts balance bad debts o provision
It is not expe
cted to be re
covered due
1,905,000.0 1,905,000.0 1,905,000.0 1,905,000.0 to deteriorati
Company A 100.00%
0 0 0 0 ng operation
condition of
the counter
party.
If the Group recognizes bad debt provision based on general ECL model:
Currency: Renminbi Yuan
Stage 1 Stage 2 Stage 3
Provision for bad d 12-Month expecte Lifetime expected Lifetime expected
Total
ebts d credit losses credit losses (Non- credit losses (Credi
credit-impaired) t-impaired)
Balance at 1 Janu
1,905,000.00 1,905,000.00
ary 2023
Balance at 1 Janu
ary 2023 provided i
n the current perio
d
Balance at 31 Dec
1,905,000.00 1,905,000.00
ember 2023
Basis for the division of each stage and provision ratio for impairment allowance
Changes in outstanding balance with significant changes in the amount of loss provision in the current period
□Applicable Not applicable
258
2023 Annual Report of DR Corporation Limited
4) Impairment allowance recognized, recovered or reversed for the current period
Impairment allowance for the current period:
Currency: Renminbi Yuan
Changes for the period
Opening bal Closing bala
Category Recovery or Transfer or
ance Provision Others nce
reversal write-off
Impairment
allowance fo 1,905,000.0 1,905,000.0
0.00 0.00 0.00 0.00
r other recei 0 0
vables
1,905,000.0 1,905,000.0
Total 0.00 0.00 0.00 0.00
0 0
Including: significant reversal or recovery of impairment allowance for the current period:
Currency: Renminbi Yuan
The basis and ratio
nality of determinin
Recovery or revers Reasons for revers Methods for recove
Name of entity g the ratio for origi
al al ry
nal impairment allo
wance
5) The top 5 largest other receivables at the end of the year categorized by debtor
Currency: Renminbi Yuan
Proportion of to
Closing balanc
Nature of other Closing balanc tal closing bala
Name of entity Aging e of impairment
receivables e nce of other rec
allowance
eivables
Payments for fi
No.1 1,905,000.00 Over 1 years 25.33% 1,905,000.00
xed assets
Temporary loa
No.2 ns for employe 200,000.00 Within 1 year 2.66% 0.00
es
Temporary loa
No.3 ns for employe 33,002.50 Within 1 year 0.44% 0.00
es
Temporary loa
No.4 ns for employe 22,854.58 Within 1 year 0.30% 0.00
es
Temporary loa
No.5 ns for employe 20,000.00 Within 1 year 0.27% 0.00
es
259
2023 Annual Report of DR Corporation Limited
Total 2,180,857.08 29.00% 1,905,000.00
5. Prepayments
(1) Prepayments presented by aging
Currency: Renminbi Yuan
Closing balance Opening balance
Aging
Amount Percentage Amount Percentage
Within 1 year 33,060,094.20 95.21% 74,104,582.84 99.84%
1 to 2 years 1,664,057.89 4.79% 121,851.31 0.16%
Total 34,724,152.09 74,226,434.15
Description of the reason why significant prepayments aged over one year were not settled in time:
As at 31 December 2023, the Group had no significant prepayments aged over one year (31 December 202
2: nil).
(2) The top 5 largest prepayments at end of year categorized by receivers
Proportion of total closin Remarks
Name of entity Closing balance g balance of prepayment
s
No.1 1,856,560.99 5.35% Consultancy fees
No.2 1,300,800.46 3.75% Promotion fees
No.3 1,035,000.00 2.98% Design fees
No.4 807,435.66 2.33% Promotion fees
No.5 807,318.97 2.32% Promotion fees
Total 5,807,116.08 16.73%
6. Inventories
Weather the Company has followed the disclosure requirements to real estate industry
No
(1) Category of inventories
Currency: Renminbi Yuan
Closing balance Opening balance
Provision for
Provision for d
decline in val
ecline in value
ue of inventor
of inventories o
Item Outstanding ies or provisio Carrying a Outstanding Carrying amo
r provision for i
balance n for impairm mount balance unt
mpairment of c
ent of contrac
ontract perform
t performance
ance costs
costs
126,507,534. 126,507,534. 134,671,437. 134,671,437.4
Raw materials
93 93 41 1
Goods on han 392,190,024. 381,952,260. 516,044,105. 509,515,703.5
10,237,764.15 6,528,401.70
d 81 66 23 3
260
2023 Annual Report of DR Corporation Limited
Turnover mate 2,713,164.17
2,713,164.17 5,183,351.50 5,183,351.50
rials
Goods upon d
318,575.15 318,575.15 1,209,323.01 1,209,323.01
elivery
Semi-finished
4,015,757.66 4,015,757.66 2,824,345.36 2,824,345.36
products
Outsourced pr
11,431,751.8 11,431,751.8 16,482,477.1
ocessing mate 16,482,477.19
0 0 9
rials
537,176,808. 526,939,044. 676,415,039. 669,886,638.0
Total 10,237,764.15 6,528,401.70
52 37 70 0
The Company should comply with the disclosure requirements about “Jewelry related business “in the Shenz
hen Stock Exchange for Self-regulation of Listed Companies No. 3–Industry-specific Information Disclosure
Distribution of inventories at the end of reporting period
Currency: RMB 10 thousand Yuan
Closing outstanding balance of inventories
Turn
Item Semi-finished p Goods on Outsourced processing Raw mate over Goods upon d
Total
roducts hand materials rials mate elivery
rials
Karat gold je 37,59
348.23 37,178.30 43.76 - - 23.63
welry 3.92
Platinum jew 1,002.
44.18 946.15 3.81 - - 8.01
elry 15
986.5
Gold jewelry - 986.01 0.27 - - 0.22
0
12,618.4 13,71
Diamond - - 1,095.11 - -
1 3.52
Turnover ma 271. 271.3
- - - - -
terials 32 2
150.2
Others 9.16 108.54 0.23 32.34 - -
7
12,650.7 271. 53,717.
Total 401.57 39,219.00 1,143.18 31.86
5 32 68
261
2023 Annual Report of DR Corporation Limited
(2) Provision for decline in value of inventories and impairment provision for contract performance cos
ts
Currency: Renminbi Yuan
Increase Decrease
Opening bal Closing bala
Item Reversal or
ance Provision Other Other nce
write-off
Goods on ha 6,528,401.7 12,880,040. 9,170,677.8 10,237,764.
nd 0 30 5 15
6,528,401.7 12,880,040. 9,170,677.8 10,237,764.
Total
0 30 5 15
Provision for decline in value of inventories which is assessed on a portfolio basis
Currency: Renminbi Yuan
At end of period At beginning of period
Provision Provision r
Provision for Provision fo
Name Closing ratio for d Opening atio for de
decline in val r decline in
balance ecline in v balance cline in val
ue value
alue ue
Goods on ha 392,190,024.8 10,237,764.1 6,528,401.7
2.61% 516,044,105.23 1.27%
nd 1 5 0
392,190,024.8 10,237,764.1 6,528,401.7
Total 2.61% 516,044,105.23 1.27%
1 5 0
The standard of provision for decline in value of inventories which is assessed on a portfolio basis
Net realizable value of inventories is the estimated selling price of inventories less further processing costs, e
xpected selling expenses and related taxes.
The reason for write-off of the provision for decline in value of goods on hand is that inventories have been s
old or disposal of relevant write-off of the provision for decline in value of inventories.
7. Current portion of non-current assets
Currency: Renminbi Yuan
Item Closing balance Opening balance
Debt investments due within one year 390,061,500.32 66,085,379.00
Other debt investments due within one y
0.00 0.00
ear
Deposits 63,410,461.50 41,240,679.30
Bad debt provision for current portion of
-6,868,997.72 -358,191.14
non-current assets
Total 446,602,964.10 106,967,867.16
262
2023 Annual Report of DR Corporation Limited
(1) Debt investments due within one year
Applicable □ Not applicable
1) Debt investments due within one year
Currency: Renminbi Yuan
Closing balance Opening balance
Provision f Provision f
Name Outstanding b Carrying amo Outstanding Carrying am
or impairm or impairm
alance unt balance ount
ent ent
Certificate of
deposit with
a maturity of
390,061,500.3 390,061,500.3 66,085,379.0 66,085,379.
more than o 0.00 0.00
2 2 0 00
ne year and
due within o
ne year
390,061,500.3 390,061,500.3 66,085,379.0 66,085,379.
Total 0.00 0.00
2 2 0 00
Changes in impairment provision for the current period for debt investments due within one year
Currency: Renminbi Yuan
Item Opening balance Increase Decrease Closing balance
2) Important debt investments due within one year at end of period
Currency: Renminbi Yuan
Effective interest rate Overdue principal
Coupon r Maturity dat
Item Par value Closing b Opening Closing b Opening
ate e
alance balance alance balance
Certificate
of deposit 3 Decembe
90,000,000.00 3.55% 3.42% 0.00 0.00
of Bank of r 2024
Ningbo
Corporate
certificate
of deposit 07 Februar
50,000,000.00 3.65% 3.65% 0.00 0.00
of China M y 2024
insheng B
ank
Corporate
certificate
19 Februar
of deposit 50,000,000.00 3.65% 3.65% 0.00 0.00
y 2024
of China M
insheng B
263
2023 Annual Report of DR Corporation Limited
ank
Certificate
of deposit 20 Februar
50,000,000.00 3.65% 3.65% 0.00 0.00
of Ping An y 2024
Bank
240,000,000.0
Total
0
8. Other current assets
Currency: Renminbi Yuan
Item Closing balance Opening balance
Return cost of receivable 151,973.99 272,853.07
Wealth management products 85,819,724.44 31,378,714.16
Prepaid income tax 7,032,156.60 23,359,776.18
Input VAT to be certified, deducte
31,107,132.76 15,125,504.86
d, and retained
Expenses to be amortized 7,873,063.00 3,318,077.34
Total 131,984,050.79 73,454,925.61
Other descriptions:
9. Debt investments
(1) Details of debt investments
Currency: Renminbi Yuan
Closing balance Opening balance
Provision Provision
Item Outstanding b Carrying amou Outstanding b Carrying amou
for impair for impair
alance nt alance nt
ment ment
Certificat
e of depo
sit with a
891,976,307.0 891,976,307.0 794,553,996.3 794,553,996.3
maturity o 0.00
1 11 6 6
f more th
an one ye
ar
891,976,307.0 891,976,307.0 794,553,996.3 794,553,996.3
Total 0.00
1 1 6 6
As of December 31, 2023, the balance of book debts investments mainly consisted of large certificates of de
posit with a maturity period of more than one year acquired by the Group, with maturity dates ranging from F
ebruary 2025 to March 2026, and deposit interest rates ranging from 3.10% to 3.55% (December 31, 2022:
maturity dates ranging from February 2024 to October 2027, and deposit interest rates ranging from 3.30% t
o 4.05%)
264
2023 Annual Report of DR Corporation Limited
(2) Important debt investments at end of period
Currency: Renminbi Yuan
Closing balance Opening balance
Effectiv Over
Effective Overd
Item Par val Coupo Maturit Par v Coupo e inter Maturity due p
interest ue prin
ue n rate y date alue n rate est rat date rincip
rate cipal
e al
Certific
ate of
deposit 100,00 8 Nove 100,0 8 Nove
of Ban 0,000. 3.55% 3.55% mber 2 00,00 3.55% 3.55% mber 20 0.00
k of Do 00 025 0.00 25
nggua
n
Certific
ate of
deposit 100,00 06 Feb
of Chi 0,000. 3.30% 3.30% ruary 2
na Min 00 026
sheng
Bank
Certific
ate of
200,00
deposit 1 Marc
0,000. 3.30% 3.30%
of Chi h 2026
00
na CITI
C Bank
Time d
eposits
150,00 14 Mar
of Chi
0,000. 3.25% 3.25% ch 202
na Eve
00 6
rbright
Bank
550,00 100,0
Total 0,000. 00,00 0.00
00 0.00
265
2023 Annual Report of DR Corporation Limited
10. Fixed assets
Currency: Renminbi Yuan
Item Closing balance Opening balance
Fixed assets 12,617,322.42 14,068,805.09
Total 12,617,322.42 14,068,805.09
(1) Fixed assets
Currency: Renminbi Yuan
Transportation equipm Office equipment and oth
Item Total
ent ers
I. Original book value:
1. Opening balance 5,057,888.38 19,331,198.09 24,389,086.47
2. Increase 16,433.15 4,611,716.20 4,628,149.35
(1) Purchases 16,433.15 4,610,381.30 4,626,814.45
(2) Transfers from co
nstruction in progress
(3) Increase from bus
iness combinations
Exchange differences on trans
lation of financial statements d
1,334.90 1,334.90
enominated in foreign currenc
y
3. Decrease 359,869.85 359,869.85
(1) Disposal or retire
359,869.85 359,869.85
ment
4. Closing balance 5,074,321.53 23,583,044.44 28,657,365.97
II. Accumulated depreciation
1. Opening balance 2,322,481.67 7,997,799.71 10,320,281.38
2. Increase 768,004.07 5,240,940.31 6,008,944.38
(1) Provision 768,004.07 5,239,926.63 6,007,930.70
Exchange differences on trans
lation of financial statements d
1,013.68 1,013.68
enominated in foreign currenc
y
3. Decrease 289,182.21 289,182.21
(1) Disposal or retire
289,182.21 289,182.21
ment
4. Closing balance 3,090,485.74 12,949,557.81 16,040,043.55
III. Provision for impairment
266
2023 Annual Report of DR Corporation Limited
1. Opening balance
2. Increase
(1) Provision
3. Decrease
(1) Disposal or retire
ment
4. Closing balance
IV. Carrying amount
1. Closing carrying amoun
1,983,835.79 10,633,486.63 12,617,322.42
t
2. Opening carrying amou
2,735,406.71 11,333,398.38 14,068,805.09
nt
11. Right-of-use assets
(1) Right-of-use assets
Currency: Renminbi Yuan
Item Buildings Total
I. Original book value:
1. Opening balance 1,050,335,607.36 1,050,335,607.36
2. Increase 149,402,589.96 149,402,589.96
(1) Increase 148,955,722.58 148,955,722.58
(2) Exchange differences on tran
slation of financial statements de 446,867.38 446,867.38
nominated in foreign currency
3. Decrease 452,819,130.17 452,819,130.17
(1) Disposal 452,819,130.17 452,819,130.17
4. Closing balance 746,919,067.15 746,919,067.15
II. Accumulated depreciation
1. Opening balance 436,053,985.67 436,053,985.67
2. Increase 352,240,987.29 352,240,987.29
(1) Provision 351,904,368.67 351,904,368.67
(2) Exchange differences on tran
slation of financial statements de 336,618.62 336,618.62
nominated in foreign currency
3. Decrease 310,828,690.17 310,828,690.17
(1) Disposal 310,828,690.17 310,828,690.17
4. Closing balance 477,466,282.79 477,466,282.79
III. Provision for impairment
267
2023 Annual Report of DR Corporation Limited
1. Opening balance 23,775,454.33 23,775,454.33
2. Increase 57,013,861.16 57,013,861.16
(1) Provision 56,741,019.03 56,741,019.03
(2) Exchange differences on tran
slation of financial statements de 272,842.13 272,842.13
nominated in foreign currency
3. Decrease 20,308,185.79 20,308,185.79
(1) Disposal 20,308,185.79 20,308,185.79
4. Closing balance 60,481,129.70 60,481,129.70
IV. Carrying amount
1. Closing carrying amount 208,971,654.66 208,971,654.66
2. Opening carrying amount 590,506,167.36 590,506,167.36
(2) Impairment testing of right-of-use assets
Applicable □ Not applicable
The net recoverable amount is determined by fair value less disposal expenses
□Applicable Not applicable
The recoverable amount is determined according to the present value of the future cash flows
Applicable □ Not applicable
Currency: Renminbi Yuan
Basis for
determi
Length o Key par
Recovera Impaire ning key
Carrying f predicti Key parameters of predic ameters
Item ble amou d amou paramet
amount on perio tion period of stabl
nt nt ers of pr
d e period
ediction
period
The earli
er of the
(1) Operating income: for
expiratio
ecasts are based on the
n date of
DR Gua company's strategic obje
the leas
ngzhou ctives, the external envir
5,312,28 1,164,79 4,147,4 e contra
Tianhe C onment, consumer stimul N/A N/A
0.86 2.61 88.25 ct and th
ity Plaza us policies introduced by
e expect
store the state and the historic
ed closin
al revenue growth of the
g date of
shops;
the stor
(2) Operating costs: calc
e
ulated based on historica
268
2023 Annual Report of DR Corporation Limited
l average gross margins;
(4)Operating expenses: calcu
lated based on historical
expenses as a percentag
e of operating income.
(5)Pre-tax discount rate: 14.4
8%
(1) Operating income: for
ecasts are based on the
company's strategic obje
ctives, the external envir
The earli
onment, consumer stimul
er of the
us policies introduced by
expiratio
DR Beiji the state and the historic
n date of
ng Zhon al revenue growth of the
the leas
gguancu shops;
4,631,33 811,267. 3,820,0 e contra
n Link S (2) Operating costs: calc N/A N/A
5.21 32 67.89 ct and th
hopping ulated based on historica
e expect
Center st l average gross margins;
ed closin
ore (3)Operating expenses:
g date of
calculated based on hist
the stor
orical expenses as a per
e
centage of operating inc
ome. (4)
Pre-tax discount rate: 14.
48%
The earli
er of the (1) Operating income: for
expiratio ecasts are based on the
n date of company's strategic obje
DR Kun the leas ctives, the external envir
ming PA 2,812,01 2,812,0 e contra onment, consumer stimul
0.00 N/A N/A
RK1903 4.82 14.82 ct and th us policies introduced by
store e expect the state and the historic
ed closin al revenue growth of the
g date of shops;
the stor (2) Operating costs: calc
e ulated based on historica
l average gross margins;
269
2023 Annual Report of DR Corporation Limited
(3)Operating expenses:
calculated based on hist
orical expenses as a per
centage of operating inc
ome.
(4)Pre-tax discount rate:
14.48%
(1) Operating income: for
ecasts are based on the
company's strategic obje
ctives, the external envir
The earli onment, consumer stimul
er of the us policies introduced by
expiratio the state and the historic
n date of al revenue growth of the
DR Shan
the leas shops;
ghai Gra
3,075,01 685,741. 2,389,2 e contra (2) Operating costs: calc
nd Gate N/A N/A
8.16 35 76.81 ct and th ulated based on historica
way Stor
e expect l average gross margins;
e
ed closin
g date of (3)Operating expenses:
the stor calculated based on hist
e orical expenses as a per
centage of operating inc
ome.
(4) Pre-tax discount rate:
14.48%
15,830,6 2,661,80 13,168,
Total
49.05 1.28 847.77
Reasons for clearly differences between the foregoing information and information or external information us
ed for impairment testing in prior year
Reasons for clearly differences between the information used for impairment testing in prior year by the Com
pany and actual conditions in that year
Other descriptions:
The Group uses single stores as an asset group and performs impairment tests on each asset group with ind
icators of impairment. The recoverable value of an asset group is determined based on the present value of t
he estimated future cash flows of individual stores over the remaining lease term or the estimated operatin
g period. The impairment is the amount of carring value lessing recoverable value. The above shows the imp
airment test of the asset group for which the amount of impairment is significant in the current year, and the c
270
2023 Annual Report of DR Corporation Limited
arrying value is the total amount of the asset group's right-of-use assets and long-term amortization expense
s.
12. Intangible assets
(1) Intangible assets
Currency: Renminbi Yuan
Land use rig Non-patent t
Item Patents Software Trademarks Total
hts echnology
I. Original bo
ok value:
1. Opening 13,580,747. 13,580,747.
balance 83 83
5,212,440.4 5,380,763.1
2. Increase 168,322.76
0 6
(1) Purchase 5,212,440.4 5,380,763.1
168,322.76
s 0 6
(2) Internal
R&D
(3) Increase
from busines
s combinatio
ns
3. Decreas
460,377.36 460,377.36
e
(1) Disposal 460,377.36 460,377.36
4. Closing b 13,288,693. 5,212,440.4 18,501,133.
alance 23 0 63
II. Accumulat
ed amortizati
on
1. Opening 9,318,150.0 9,318,150.0
balance 7 7
2,288,302.1 2,630,723.9
2. Increase 342,421.77
3 0
2,288,302.1 2,630,723.9
(1) Provision 342,421.77
3 0
3. Decreas
e
271
2023 Annual Report of DR Corporation Limited
(1) Disposal 56,160.38 56,160.38
4. Closing b 11,550,291. 11,892,713.
342,421.77
alance 82 59
III. Provision
for impairme
nt
1. Opening
balance
2. Increase
(1) Provision
3. Decreas
e
(1) Disposal
4. Closing b
alance
IV. Carrying
amount
1. Closing c
1,738,401.4 4,870,018.6 6,608,420.0
arrying amo
1 3 4
unt
2. Opening
4,262,597.7 4,262,597.7
carrying amo
6 6
unt
Intangible assets arising from internal research and development at the end of the year account for 0.00% of
the intangible assets balance.
13. Long-term prepaid expenses
Currency: Renminbi Yuan
Opening balan Closing balanc
Item Increase Amortization Other decrease
ce e
Expenses on i
mprovement of
169,750,383.9
fixed assets un 13,195,249.21 97,016,164.88 35,721,596.82 50,207,871.43
2
der operating le
ases
169,750,383.9
Total 13,195,249.21 97,016,164.88 35,721,596.82 50,207,871.43
2
Other descriptions:
272
2023 Annual Report of DR Corporation Limited
(1) The Group uses a single store as an asset group, and conducts an impairment test on the asset group of
the store showing any indication of impairment. The recoverable amount of the asset group is determined ac
cording to the present value of the estimated future cash flow. The details are disclosed in notes Vll.11 in th
e consolidated fnancial statements.
(2) According to the result of impairment test, the carrying amount of some store asset groups is lower than t
he recoverable amount, and the corresponding provision for impairment of long-term prepaid expenses is R
MB35,721,596.82.
14. Deferred tax assets/deferred tax liabilities
(1) Deferred tax assets before offsetting
Currency: Renminbi Yuan
Closing balance Opening balance
Item Deductible tempor Deferred tax asset Deductible tempor Deferred tax asset
ary differences s ary differences s
Provision for asset
111,821,826.34 26,138,406.75 40,067,827.14 10,003,234.08
impairment
Unrealized profit o
n inter-company tr 3,658,302.65 914,575.66 7,326,359.23 1,831,589.81
ansactions
Deductible losses 54,919,145.86 8,733,943.91 7,400,282.50 895,178.30
Provision for store
restoration obligati 10,493,433.70 2,623,358.43 8,561,231.41 2,140,307.85
ons
Difference betwee
n tax and accounti 256,182,711.66 58,796,450.30 582,115,033.63 144,045,844.11
ng of lease liability
Total 437,075,420.21 97,206,735.05 645,470,733.91 158,916,154.15
273
2023 Annual Report of DR Corporation Limited
(2) Deferred tax liabilities before offsetting
Currency: Renminbi Yuan
Closing balance Opening balance
Item Taxable temporary Deferred tax liabiliti Taxable temporary Deferred tax liabiliti
differences es differences es
Changes in fair val
ue of financial ass 94,022,539.08 23,211,068.90 62,891,931.68 15,568,533.63
ets
Accrued interest o
n certificates of de 55,022,301.44 13,112,046.59 21,709,575.40 5,402,625.35
posit
Difference betwee
n tax and accounti
269,452,784.36 60,229,762.03 560,020,830.90 138,506,777.20
ng of right-of-use a
ssets
Total 418,497,624.88 96,552,877.52 644,622,337.98 159,477,936.18
(3) Deferred tax assets or liabilities shown in the net amount after offsetting
Currency: Renminbi Yuan
The offset amount
The offset amount Closing balance of Opening balance o
of deferred tax ass
of deferred tax ass deferred tax assets f deferred tax asse
Item ets and liabilities at
ets and liabilities at or liabilities after o ts or liabilities after
beginning of perio
end of period ffsetting offsetting
d
Deferred tax asset
81,912,884.11 15,293,850.94 150,724,937.79 8,191,216.36
s
Deferred tax liabiliti
81,912,884.11 14,639,993.41 150,724,937.79 8,752,998.39
es
(4) Details of the Group's unrecognized deferred tax assets
Currency: Renminbi Yuan
Item Closing balance Opening balance
Deductible losses 190,916,873.26 31,521,098.68
Unrecognized provision for impair
134,635.01 10,423,943.75
ment
Total 191,051,508.27 41,945,042.43
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2023 Annual Report of DR Corporation Limited
(5) Deductible losses on unrecognized deferred tax assets will become due in the following years
Currency: Renminbi Yuan
Year Closing balance Opening balance Remarks
2023 0.00 0.00
2024 0.00 100,839.02
2025 1,207,915.36 1,930,613.69
2026 2,014,907.27 2,500,649.53
2027 1,479,152.70 2,508,965.13
2028 159,995,313.06 0.00
Infinity 26,219,584.86 24,480,031.31
Total 190,916,873.26 31,521,098.68
Other descriptions:
DR Jewelry, a subsidiary established in France, incurred a cumulative loss of RMB26,219,584.87 on 31 Dec
ember 2023 (the cumulative loss incurred on 31 December 2022 was RMB24,480,031.31), which can be ma
de up indefinitely in the future. As at 31 December 2023, the deductible tax losses that were not recognized
by DR Corporation Limited as deferred tax assets were RMB154,330,960.63 (31 December 2022: Nil), which
will expire in 2028.
The Group calculates and recognizes deferred tax assets arising from deductible temporary differences at th
e 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 differenc
es and deductible losses.
15. Other non-current assets
Currency: Renminbi Yuan
Closing balance Opening balance
Item Outstanding Provision for Carrying am Outstanding Provision for Carrying am
balance impairment ount balance impairment ount
45,593,685. 45,593,685. 85,069,135. 85,069,135.
Deposit
77 77 39 39
Employee b
350,000.00 350,000.00
orrowing
45,593,685. 45,593,685. 85,419,135. 85,419,135.
Total
77 77 39 39
Other descriptions:
As at 31 December 2023, the Group assessed the expected credit loss ratio as low based on historical loss r
ates and forward-looking macroeconomic data.
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2023 Annual Report of DR Corporation Limited
16. Assets with restricted ownership or right of use
Currency: Renminbi Yuan
Closing balance Opening balance
Outstandi Carryin Restrict Carryin Restrict Restrictions
Item Restri Outstandin
ng balanc g amou ed type g amou ed type
ctions g balance
e nt nt
No feedback on b
Curren ank reconciliation
890,612.2 890,61 279,78
cy fund frozen 279,787.68 frozen results, miscalcul
1 2.21 7.68
s ation of banks, et
c.
890,612.2 890,61 279,78
Total 279,787.68
1 2.21 7.68
Other descriptions:
As at 31 December 2023, the Group’s restricted currency funds totaled RMB 890,612.21 (31 December 202
2: RMB279,787.68), which was mainly due to preservation of law issue（As at the reporting date, the payme
nt has been made）or change of account types.
17. Short-term borrowings
(1) Classification of short-term borrowings
Currency: Renminbi Yuan
Item Closing balance Opening balance
Credit loans 60,000,000.00
Discounted borrowing on bills 329,995,277.14 433,993,449.44
Total 389,995,277.14 433,993,449.44
Description of classification of short-term borrowings:
The discounted borrowing on bills refers to the amount of bank acceptance bills issued between affiliated co
mpanies within the scope of consolidation that have been discounted but not yet matured at the end of the y
ear.
The credit loan is a short-term borrowing obtained by the Company from Shenzhen Hi-tech Zone Branch of
Bank of China Limited. The borrowing period is from November 2023 to May 2024. The interest rate is a float
ing rate, which is re-priced every 6 months. The first installment is the one-year loan market quotation interes
t rate recently announced by the National Interbank Funding Center as of the working day before the actual
withdrawal date minus 95 basis points (31 December 2023: 2.5%).
276
2023 Annual Report of DR Corporation Limited
18. Trading financial liabilities
Currency: Renminbi Yuan
Item Closing balance Opening balance
Trading financial liabilities
Including:
Financial liabilities designated at f
62,813,557.52 0.00
air value through profit or loss
Including:
Gold leasing 62,813,557.52 0.00
Total 62,813,557.52 0.00
Other descriptions:
The Company borrowed gold from banks for production and operation. Before maturity date, the Company w
ould return the gold to the banks with the same quantity and specification purchased through Shanghai Gold
Exchange or borrowed from the banks, and pay the agreed lease interest. The lease term is within one year
(one year inclusive). As at 31 December 2023, the cost of the financial liabilities was RMB59,044,746.72 and
the change in fair value was RMB-3,768,810.80 (2022: Nil).
19. Notes payable
Currency: Renminbi Yuan
Category Closing balance Opening balance
Bank acceptance bills 47,986,785.70 466,527,730.97
Total 47,986,785.70 466,527,730.97
The total amount of notes payable due and unpaid at end of period was RMB0.00.
20. Accounts payable
(1) Accounts payable are listed as follows
Currency: Renminbi Yuan
Item Closing balance Opening balance
Accounts payable 28,164,899.34 86,880,869.77
Total 28,164,899.34 86,880,869.77
(2) Significant accounts payable aged over 1 year or overdue
Currency: Renminbi Yuan
Reason for not being paid or carri
Item Closing balance
ed forward
The supplier fails to reach the set
Over 1 year 3,485,224.98 tlement conditions as agreed in th
e contract
Total 3,485,224.98
Other descriptions:
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2023 Annual Report of DR Corporation Limited
21. Other payables
Currency: Renminbi Yuan
Item Closing balance Opening balance
Other payables 44,381,542.05 102,563,944.81
Total 44,381,542.05 102,563,944.81
(1) Other payables
1) Other payables categorized by nature
Currency: Renminbi Yuan
Item Closing balance Opening balance
Rent and property management f
13,469,448.60 11,248,679.47
ees payable
Renovation expenses payable 15,322,612.68 63,140,256.23
Advertisement expenses payable 2,429,097.28 11,515,571.63
Other expenses accrued 7,390,825.59 9,961,766.20
Deposit 2,334,052.80 1,639,911.88
Others 3,435,505.10 5,057,759.40
Total 44,381,542.05 102,563,944.81
2) Significant other accounts payable older than 1 year or past due
Reason for non-reimbursement o
Item Closing balance
r carry-over
3）The top 5 largest other payables at end of period categorized by counterparty
Other descriptions:
As at 31 December 2023, there were no significant other payables aged over 1 year or overdue (31 Decemb
er 2022: Nil).
22. Contract liabilities
Currency: Renminbi Yuan
Item Closing balance Opening balance
Receipt in advance of order paym
109,633,363.46 126,705,661.82
ent
Total 109,633,363.46 126,705,661.82
Note: 1 Contract liabilities mainly represent advance receipts collected from customers before the Group fulfills
its performance obligations. Revenue relating to this contract will be recognized when the Group fulfils its pe
rformance obligations. Normally, when the Group receives advance payments from customers, it will normall
y fulfill its performance obligations and recognize revenue within 30 days.
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2023 Annual Report of DR Corporation Limited
Significant contract liabilities aged over 1 year
Currency: Renminbi Yuan
Reasons for having not been paid
Item Closing balance
or carried forward
The amount and reason for significant changes in carrying amount within the reporting period.
Currency: Renminbi Yuan
Item Changes Reasons
23. Employee benefits payable
(1) Employee benefits payable are listed as follows
Currency: Renminbi Yuan
Item Opening balance Increase Decrease Closing balance
I. Short-term empl
68,736,988.33 474,943,001.59 490,746,919.26 52,933,070.66
oyee benefits
II. Post-employme
nt benefits - define 57,135,027.29 57,135,027.29
d contribution plan
III. Termination be
11,012,658.61 11,012,658.61
nefits
Total 68,736,988.33 543,090,687.49 558,894,605.16 52,933,070.66
(2) Short-term employee benefits are as follows:
Currency: Renminbi Yuan
Item Opening balance Increase Decrease Closing balance
1. Salaries, bonus
es, allowances and 65,393,029.23 415,385,784.74 430,058,308.38 50,720,505.59
subsidies
2. Staff welfare 3,154,849.89 8,732,618.74 10,728,427.93 1,159,040.70
3. Social security c
29,908,332.41 29,908,332.41
ontributions
Including: Medical i
28,004,917.61 28,004,917.61
nsurance
Work-related injury
1,085,367.16 1,085,367.16
insurance
Maternity insuranc
818,047.64 818,047.64
e
4. Housing funds 19,538,449.26 18,561,374.64 977,074.62
5. Union fund and
Employee educatio 189,109.21 1,377,816.44 1,490,475.90 76,449.75
n fund
Total 68,736,988.33 474,943,001.59 490,746,919.26 52,933,070.66
279
2023 Annual Report of DR Corporation Limited
(3) Defined contribution plan are as follows:
Currency: Renminbi Yuan
Item Opening balance Increase Decrease Closing balance
1. Basic pension in
55,518,960.79 55,518,960.79
surance
2. Unemployment i
1,616,066.50 1,616,066.50
nsurance premium
Total 57,135,027.29 57,135,027.29
Other descriptions:
As at 31 December 2023, the Group had no arrears in the nature of remuneration payable to employees.
24. Taxes payable
Currency: Renminbi Yuan
Item Closing balance Opening balance
Value added tax 5,728,457.95 8,465,825.13
Excise tax 9,698,112.45 14,173,620.72
Corporate income tax 301,256.61 34,164,857.66
Individual income tax withheld 869,148.96 780,127.00
Urban maintenance and construc
964,902.69 1,347,723.05
tion tax
Education surcharge 375,449.44 549,380.64
Local education surcharge 250,299.91 362,786.55
Others 20,177.95 40,818.91
Total 18,207,805.96 59,885,139.66
Other descriptions:
25. Current portion of non-current liabilities
Currency: Renminbi Yuan
Item Closing balance Opening balance
Lease liabilities due within 1 year 195,515,150.71 351,516,900.54
Total 195,515,150.71 351,516,900.54
Other descriptions:
26. Other current liabilities
Currency: Renminbi Yuan
Item Closing balance Opening balance
Output VAT to be transferred 11,288,478.87 13,670,511.44
Total 11,288,478.87 13,670,511.44
Note 1: The Group has presented the output VAT portion of the advance receipts as the amount of VAT to b
e resold tax.
280
2023 Annual Report of DR Corporation Limited
Changes in short-term bonds payable:
Currency: Renminbi Yuan
Accru
Amortiza
Par Openi ed in
Coupo Issue Bonds tion of p Closin Defaul
v Issue Ter ng b teres Repayme
Name n rat amo issu remium g bal t or n
al date m alan t at p nt
e unt ed or depr ance ot
ue ce ar va
eciation
lue
Total
Other descriptions:
27. Lease liabilities
Currency: Renminbi Yuan
Item Closing balance Opening balance
Lease payments payable 67,781,149.67 276,542,164.23
Total 67,781,149.67 276,542,164.23
Other descriptions:
28. Provisions
Currency: Renminbi Yuan
Item Closing balance Opening balance Reasons
Provision for returns is made f
or sales of goods with sales r
eturn conditions. The Group
Provision for returns 487,409.00 921,567.41
makes provision for returns b
ased on historical experience
data and sales.
Shop restoration obligations r
epresent costs that the Grou
p, as the lessee, expects to in
cur under the lease agreeme
Shop restoration obligati nt to restore the leased asset
13,615,982.00 16,004,249.50
ons s to the condition agreed und
er the terms of the lease. The
Group estimates restoration c
osts based on industry conditi
ons and historical experience.
Total 14,103,391.00 16,925,816.91
Other descriptions, including description of significant assumptions and estimates related to significant provis
ions:
281
2023 Annual Report of DR Corporation Limited
29. Share capital
Currency: Renminbi Yuan
Movements during the year
Housing fu
Opening b Closing ba
New share Bonus issu nd transfer
alance Others Subtotal lance
s issued e red to shar
es
400,010,0 400,010,0
Total
00.00 00.00
Other descriptions:
30. Capital reserves
Currency: Renminbi Yuan
Item Opening balance Increase Decrease Closing balance
Share premium 4,403,792,844.63 4,403,792,844.63
Other capital reser
-227.67 -227.67
ves
Share-based paym
ents included in th 26,344,118.97 187,422.35 26,531,541.32
e capital reserve
Shareholding syste
29,640,980.88 29,640,980.88
m transformation
Total 4,459,777,716.81 187,422.35 4,459,965,139.16
Other descriptions, including description of changes for the period and reasons:
31. Other comprehensive income
Currency: Renminbi Yuan
Amount for the current period
Less: Re
Less: Re Profit attr
Amount i classifica
classifica ibutable t Attributa
ncurred b tion from
tion from Less: Inc o shareh ble to no
Opening efore inc other co Closing b
Item other co ome tax olders of n-controll
balance ome tax f mprehen alance
mprehen expense the paren ing intere
or the cur sive inco
sive inco s t compan sts after t
rent perio me to ret
me to pro y after ta ax
d ained ear
fit or loss x
nings
II. Other
compreh
3,993,25 456,647. 4,449,90
ensive in
4.00 25 1.25
come tha
t may be
282
2023 Annual Report of DR Corporation Limited
reclassifi
ed to prof
it or loss
Exchang
e differen
ces on tr
anslation
3,993,25 456,647. 4,449,90
of foreig
4.00 25 1.25
n currenc
y financia
l stateme
nts
Total oth
er compr 3,993,25 456,647. 4,449,90
ehensive 4.00 25 1.25
income
Other descriptions, including adjustment to the transferred effective profit or loss arising from cash flow hedg
e to initially recognized amount of the hedged item：
32. Surplus reserves
Currency: Renminbi Yuan
Item Opening balance Increase Decrease Closing balance
Statutory surplus r
200,005,000.00 200,005,000.00
eserves
Total 200,005,000.00 200,005,000.00
Description of surplus reserves, including description of changes for the period and reasons:
According to the provisions of the Company Law and the Company’s Articles of Association, the Company a
ppropriates 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.
33. Retained earnings
Currency: Renminbi Yuan
Item For the current period For the prior period
Balance at beginning of current p
1,739,260,233.15 1,830,833,254.42
eriod after adjustment
Add: Net profit attributable to shar
eholders of the parent company f 68,957,568.40 729,241,946.67
or the current period
Less: Appropriation to statutory s
urplus 0.00 20,794,967.94
reserves
Declaration of dividends on o 400,010,000.00 800,020,000.00
283
2023 Annual Report of DR Corporation Limited
rdinary shares
Balance at end of current period 1,408,207,801.55 1,739,260,233.15
Details of adjustment to balance at beginning of current period:
1) No balance adjustment of retained earnings at beginning of current period was made in related to the appl
ication of Accounting Standard for Business Enterprises and other new regulations.
2) No balance adjustment of retained earnings at beginning of current period was made in related to change
s in accounting policies.
3) No balance adjustment of retained earnings at beginning of current period was made in related to significa
nt accounting error correction.
4) No balance adjustment of retained earnings at beginning of current period was made in related to change
s in scope of business combination under the same control.
5) No balance adjustment of retained earnings at beginning of current period was made in related to other ad
justments.
34. Revenue and cost of sales
Currency: Renminbi Yuan
Amount for the current period Amount for the prior period
Item
Revenue Cost Revenue Cost
Principal business 2,173,757,035.39 675,742,928.54 3,650,181,354.03 1,082,800,171.20
Other business 6,520,708.61 3,810,329.34 31,393,058.65 29,472,295.09
Total 2,180,277,744.00 679,553,257.88 3,681,574,412.68 1,112,272,466.29
Whether the lower of the audited net profit before and after deducting non-recurring profit or loss is negative
Yes □ No
Currency: Renminbi Yuan
Details of deductio Details of deductio
Item Current year Prior year
ns ns
Revenue amount 2,180,277,744.00 / 3,681,574,412.68 /
It is mainly the rev It is mainly the rev
enue from wedding enue from wedding
planning busines planning busines
Total amount of re
s, sales of product s, sales of product
venue deduction it 6,520,708.61 31,393,058.65
s to be disposed, p s to be disposed, p
ems
ackaging materials ackaging materials
and other revenue and other revenue
s. s.
Proportion of total
amount of revenue
0.30% 0.85%
deduction items in
revenue
I. Revenue unrelat
ed to the principal
284
2023 Annual Report of DR Corporation Limited
business
1. Revenue from ot
her business other
than normal operat
ing business. For e
xample, the revenu
e from leasing fixe
d assets, intangibl
e assets and pack It is mainly the rev It is mainly the rev
aging materials, se enue from wedding enue from wedding
lling materials, exc planning busines planning busines
hanging non-mone s, sales of product s, sales of product
6,520,708.61 31,393,058.65
tary assets with m s to be disposed, p s to be disposed, p
aterials, and opera ackaging materials ackaging materials
ting entrusted man and other revenue and other revenue
agement business. s. s.
And the revenue i
ncluded in the reve
nue from principal
business but outsi
de the normal busi
ness operation of li
sted companies.
It is mainly the rev It is mainly the rev
enue from wedding enue from wedding
planning busines planning busines
Subtotal of revenu
s, sales of product s, sales of product
e unrelated to prin 6,520,708.61 31,393,058.65
s to be disposed, p s to be disposed, p
cipal business
ackaging materials ackaging materials
and other revenue and other revenue
s. s.
II. Revenue withou
t commercial subst
ance
Subtotal of revenu
e without commerc 0.00 N/A 0.00 N/A
ial substance
Amount of revenue
2,173,757,035.39 / 3,650,181,354.03 /
after deduction
Disaggregation of revenue and cost of sales:
285
2023 Annual Report of DR Corporation Limited
Currency: Renminbi Yuan
Category Segment 1 Segment 2 Total
of contra Cost of s Cost of s Cost of s Cost of s
Revenue Revenue Revenue Revenue
cts ales ales ales ales
Type of b 2,180,27 679,553, 2,180,27 679,553,
usiness 7,744.00 257.88 7,744.00 257.88
Includin
g:
Engage
ment dia 1,699,13 506,538, 1,699,13 506,538,
mond rin 9,354.11 634.64 9,354.11 634.64
gs
Wedding
449,380, 158,007, 449,380, 158,007,
diamond
892.69 633.73 892.69 633.73
rings
Other ac 25,236,7 11,196,6 25,236,7 11,196,6
cessories 88.59 60.17 88.59 60.17
Other bu 6,520,70 3,810,32 6,520,70 3,810,32
sinesses 8.61 9.34 8.61 9.34
Classifie
d by regi 2,180,27 679,553, 2,180,27 679,553,
on of ope 7,744.00 257.88 7,744.00 257.88
ration
Includi
ng:
2,168,17 675,403, 2,168,17 675,403,
Mainland
7,280.71 337.10 7,280.71 337.10
Oversea 12,100,4 4,149,92 12,100,4 4,149,92
s 63.29 0.78 63.29 0.78
Market or
custome
r type
Includi
ng:
Type of c
ontract
Includi
ng:
286
2023 Annual Report of DR Corporation Limited
Classifie
d by time 2,180,27 679,553, 2,180,27 679,553,
of goods 7,744.00 257.88 7,744.00 257.88
transfer
Includi
ng:
Income r
ecognize 2,180,27 679,553, 2,180,27 679,553,
d at a poi 7,744.00 257.88 7,744.00 257.88
nt in time
Classifie
d by cont
ract perio
d
Includi
ng:
Classifie
d by sale 2,180,27 679,553, 2,180,27 679,553,
s channe 7,744.00 257.88 7,744.00 257.88
l
Includi
ng:
Self-empl
2,180,27 679,553, 2,180,27 679,553,
oyment i
7,744.00 257.88 7,744.00 257.88
ncome
2,180,27 679,553, 2,180,27 679,553,
Total
7,744.00 257.88 7,744.00 257.88
Information about the performance obligations:
Amount ass
Type of quali
Nature of the umed by the
Time for fulfil ty assurance
Significant p goods the C Company th
lment of perf Whether it is provided by
Item ayment term ompany com at is expecte
ormance obli the principal the Compan
s mits to transf d to be refun
gations y and related
er ded to the cu
obligations
stomer
Under norm The custome Generally, g
when good
Sales of goo al circumsta r has the rig uarantee qu
s are deliver Jewelry Yes
ds nces, the Co ht to return t ality assuran
ed
mpany deliv he product w ce is provid
287
2023 Annual Report of DR Corporation Limited
ers the good ithin 15 days ed to the cus
s within 15-6 after receivi tomer. Refer
0 days after t ng it, so it is to Note V.2
he consumer necessary to 6 for details
has paid in estimate the of accountin
advance for t return rate b g assets
he order. ased on the
historical sal
es situation
and calculat
e the provisi
on for return,
which is det
ailed in Note
VII.28.
Other descriptions
Under the self-operated business, the customer completes the performance obligations when receiving the g
oods. 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, s
o 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.28.
Information relating to the transaction price allocated to the remaining performance obligations:
At the end of the reporting period, the amount of revenue corresponding to the performance obligations that
have been signed but have not yet been fulfilled or completed was RMB109,633,363.46. Among them, RMB
is expected to be recognized in, RMB is expected to be recognized in, and RMB is expected to be recognize
d in.
Information about variable consideration in the contract:
Significant changes in the contract or significant transaction price adjustments
Currency: Renminbi Yuan
Item Accounting treatment Amount affected on revenue
Other descriptions:
35. Taxes and surcharges
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
Excise tax 94,846,226.96 161,139,856.39
Urban maintenance and construc
14,685,678.85 21,999,220.70
tion tax
Education surcharge 6,012,263.70 9,396,015.92
Resource tax 0.00 0.00
288
2023 Annual Report of DR Corporation Limited
Property tax 0.00 0.00
Land use tax 0.00 0.00
Vehicle use tax 4,620.00 4,300.00
Stamp tax 1,469,675.40 2,556,251.77
Local education surcharge 4,011,599.61 6,264,009.84
Others 240.00 240.00
Total 121,030,304.52 201,359,894.62
Other descriptions:
36. Administrative expenses
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
Wages or salaries 76,131,686.65 79,373,604.27
Input tax not deductible for intra-g
24,529,983.06 34,246,969.57
roup transactions
Depreciation and amortization 20,230,746.21 20,269,089.25
Professional agency service expe
15,193,056.82 12,916,862.65
nses
Office expenses 4,384,275.67 5,786,187.86
Property management and utility
3,898,623.79 4,008,808.69
expenses
Traveling expenses 1,356,038.53 2,344,355.77
Share-based payment expenses 187,422.35 561,317.20
Others 6,084,278.80 4,698,682.61
Total 151,996,111.88 164,205,877.87
Other descriptions:
37. Selling expenses
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
Wages or salaries 447,166,997.01 474,286,451.10
Marketing expenses 207,691,788.25 339,084,488.01
Depreciation and amortization 435,539,360.20 433,607,701.53
Property management and utility
73,305,894.36 57,143,404.37
expenses
Platform service fees 11,837,832.98 19,859,964.05
Office expenses 13,981,781.58 26,456,827.29
Traveling expenses 8,109,667.15 9,990,373.37
Professional agency service expe
5,205,649.32 3,107,987.63
nses
Rents excluded in the lease liabili
6,427,115.11 37,374,018.79
ties
289
2023 Annual Report of DR Corporation Limited
Courier expenses 2,383,810.20 3,204,581.15
Packaging expenses 1,043,861.83 3,421,251.49
Others 16,067,407.60 14,500,488.72
Total 1,228,761,165.59 1,422,037,537.50
Other descriptions:
38. Research and development expenses
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
Wages or salaries 18,580,887.31 14,846,366.43
Commissioned development serv
2,596,996.98 2,294,282.27
ice expenses
Depreciation and amortization 536,909.46 544,874.10
Others 422.00 258,609.57
Total 21,715,215.75 17,944,132.37
Other descriptions:
39. Finance expenses
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
Interest expenses 22,148,238.97 23,830,354.96
Less: Interest income 8,288,198.44 21,912,750.27
Foreign exchange differences 1,377,037.20 1,548,872.47
Bank charges 10,533,027.13 18,070,277.31
Total 25,770,104.86 21,536,754.47
Other descriptions:
40. Other income
Currency: Renminbi Yuan
Source of other income Amount for the current period Amount for the prior period
Government grants related to rou
17,239,801.74 23,433,558.47
tine activities
VAT levied and refunded1 8,266,133.90 15,833,085.31
Tax benefits2 1,118,925.88 162,770.75
Others 122,137.04 348,258.47
Note1 : According to the Notice of the General Administration of Customs of the Ministry of Finance and the St
ate Administration of Taxation on Adjusting the Relevant Tax Policies of the Diamond and Shanghai Diamon
d Exchange (Cai Shui [2006] No. 65), polished diamonds imported through the customs declaration of the co
mpetent customs of the Diamond Exchange shall be levied and refunded immediately if the actual VAT burd
en exceeds 4% at the import stage. Shanghai Darry, a subsidiary of the Company, has the membership of th
e Shanghai Diamond Exchange and enjoys the tax treatment of immediate refund for the part of the actual V
AT burden in the import process exceeding 4%.
290
2023 Annual Report of DR Corporation Limited
Note 2: According to the Announcement of the State Administration of Taxation on the Exemption of Small-sc
ale Taxpayers from VAT Collection and Administration (SAT Announcement No. 19 [2023]), small-scale taxp
ayers who engage in VAT taxable sales and their total monthly sales do not exceed RMB100,000 (or RMB30
0,000 if one quarter is a tax period). Some of the Company’s branches are small-scale taxpayers and meet t
he above standards, and will be exempt from VAT in 2023.
41. Fair value gains
Currency: Renminbi Yuan
Source of fair value gains Amount for the current period Amount for the prior period
Financial assets held for trading 34,920,377.10 39,294,362.36
Financial liabilities held for tradin
-3,768,810.80 0.00
g
Total 31,151,566.30 39,294,362.36
Other descriptions:
42. Investment income
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
Investment income of financial as
sets held-for-trading during the h 158,725,753.87 71,309,897.15
olding period
Interest income earned during the
holding period of debt investmen 43,188,743.26 17,693,148.47
t
Investment income received from
disposal of financial liabilities des
-454,869.03 0.00
ignated at fair value through profit
or loss
Total 201,459,628.10 89,003,045.62
Other descriptions:
43. Credit impairment losses
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
Impairment loss for accounts rec
2,006,036.23 3,698,479.08
eivable
Impairment loss for other receiva
0.00 -1,905,000.00
bles
Impairment loss for non-current a
-9,525,986.96 0.00
ssets due within one year
Total -7,519,950.73 1,793,479.08
Other descriptions:
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2023 Annual Report of DR Corporation Limited
44. Impairment losses of assets
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
I. Losses from decline in value of
inventories and losses from impai
-12,880,040.30 -4,237,633.79
rment of contract performance co
st
XII. Others -92,462,615.85 -24,183,140.90
Total -105,342,656.15 -28,420,774.69
Other descriptions:
Others:
The amount for 2023, RMB-92,462,615.85, includes impairment loss of long-term prepaid expenses (RMB-3
5,721,596.82) and impairment loss of right-of-use assets (RMB-56,741,019.03);
The amount for 2022, RMB-24,183,140.90, includes impairment loss of long-term prepaid expenses (RMB-5,
680,172.80) and impairment loss of right-of-use assets (RMB-18,502,968.10).
45. Gains on disposal of assets
Currency: Renminbi Yuan
Source of gains on disposal of as
Amount for the current period Amount for the prior period
sets
Gain or loss on disposal of long-t
19,708,867.36 1,244,949.25
erm assets
46. Non-operating income
Currency: Renminbi Yuan
Amount included in non-
Amount for the current p Amount for the prior peri
Item recurring profit or loss fo
eriod od
r the current period
Compensation 2,632,045.72 1,166,242.21 2,632,045.72
Others 249,877.46 70,848.25 249,877.46
Total 2,881,923.18 1,237,090.46 2,881,923.18
Other descriptions:
47. Non-operating expenses
Currency: Renminbi Yuan
Amount included in non-
Amount for the current p Amount for the prior peri
Item recurring profit or loss fo
eriod od
r the current period
Liquidated damages and
7,042,543.67 582,566.17 7,042,543.67
late fees
Others 666,997.81 185,867.41 666,997.81
Total 7,709,541.48 768,433.58 7,709,541.48
Other descriptions:
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2023 Annual Report of DR Corporation Limited
The liquidated damages and late fees in 2023 were mainly the liquidated damages arising from the early clos
ure of stores.
48. Income tax expenses
(1) Statement of income tax expenses
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
Current tax 45,086,187.04 155,414,780.78
Deferred tax -1,215,336.78 722,413.61
Total 43,870,850.26 156,137,194.39
(2) Reconciliation of income tax expenses to the accounting profit
Currency: Renminbi Yuan
Item Amount for the current period
Profit before tax 112,828,418.66
Tax at the statutory/applicable tax rate 28,207,104.66
Effect of different tax rates for some subsidiaries -25,567,086.24
Effect of adjustments to income tax in respect of pri
1,605,343.32
or periods
Effect of cost, expense and loss not deductible for t
1,653,345.92
ax
Effect of utilizing deductible loss not recognized for
-111,694.40
deferred tax assets for the prior period
Effect of deductible temporary difference or deducti
ble loss not recognized for deferred tax assets for th 40,333,986.11
e current period
R&D expenses are super-deducted -2,250,149.11
Income tax expenses 43,870,850.26
Other descriptions:
The income tax of the Group has been provided at the applicable rate on the estimated assessable taxable p
rofits arising in Mainland China. Income taxes on profits assessable elsewhere have been calculated at the r
ates of tax prevailing in the countries/jurisdictions in which the Group operates, in accordance with existing la
ws, interpretations and practices.
49. Other comprehensive income
Refer to Note VII. 31 for details.
50. Items in the cash flow statement
(1) Cash relating to operating activities
Other cash receipts relating to operating activities
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
Recover store renovations and o
7,460,972.41 8,835,864.26
ther deposits
293
2023 Annual Report of DR Corporation Limited
Receipt of platform rebates 242,142.62 4,325,330.25
Bank interest income 8,288,198.44 20,667,425.02
Government grants 17,239,801.74 23,433,558.47
Others 21,160,057.63 5,393,076.90
Total 54,391,172.84 62,655,254.90
Description of other cash receipts relating to operating activities:
Other cash payments relating to operating activities
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
Payment of rent commission, pro
perty management and utility exp 76,949,766.73 82,717,265.80
enses
Payment of marketing expenses 217,121,618.34 352,347,629.80
Payment of office and travel expe
28,540,022.33 44,110,164.16
nses
Payment of courier expenses 6,627,529.76 10,942,674.44
Payment of packaging expenses 12,469,544.20 37,612,628.87
Payment of card fee 10,986,186.41 18,070,277.46
Payment of renovation and other
3,638,793.10 10,025,830.66
deposits
Payment of consultation and testi
34,787,513.75 44,946,232.79
ng
Payment of e-commerce platform
11,643,632.23 21,387,218.80
service fee
Others 8,559,426.93 5,651,697.95
Total 411,324,033.78 627,811,620.73
Other cash payments relating to operating activities
(2) Cash relating to investing activities
Other cash receipts relating to investing activities
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
Other significant cash receipts relating to investing activities
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
Receipt of investments in bank fin
1,700,000,000.00 770,000,000.00
ancial products
Receipt of investments in structur
6,703,748,941.31 4,558,462,790.68
ed deposits
Total 8,403,748,941.31 5,328,462,790.68
Description of other cash receipts relating to investing activities:
294
2023 Annual Report of DR Corporation Limited
Other cash payments relating to investing activities
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
Significant cash payments relating to investing activities
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
Payment of bank financial produc
1,610,000,000.00 1,385,000,000.00
ts investment
Payment of structured deposit inv
6,433,851,820.32 8,184,751,822.21
estments
Total 8,043,851,820.32 9,569,751,822.21
Description of other cash payments relating to investing activities
(3) Cash relating to financing activities
Other cash receipts relating to financing activities
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
Receipts of returned rental depos
12,925,343.87 5,435,963.01
it
Receipts of withholding dividend t
2,686,700.54 5,264,759.99
ax
Total 15,612,044.41 10,700,723.00
Description of other cash receipts relating to financing activities:
Other cash payments relating to financing activities
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
Payment of fixed rent 343,219,838.63 335,781,536.76
Payment of rental deposit 5,089,234.91 30,357,327.43
Payment of withholding dividend
2,686,700.54 5,264,759.99
bonus tax
Total 350,995,774.08 371,403,624.18
Description of other cash payments relating to financing activities
Changes in liabilities arising from financing activities
□Applicable Not applicable
Increase Decrease
Non-cash
Opening balanc cash move Non-cash m cash movem movement Closing bal
Item e ments ovements ents s ance
Short-term borr
433,993,449.44 517,721,40 561,719,581. 389,995,27
owings
295
2023 Annual Report of DR Corporation Limited
9.20 50 7.14
15,612,04 406,809,90 414,585,843. 66,018,51 44,381,54
Other payables 102,563,944.81
4.41 7.87 32 1.72 2.05
Lease liabilities
(Including leas
343,219,838. 21,542,92 263,296,30
e liabilities due 628,059,064.77
63 5.76 0.38
within one yea
r)
1,164,616,459. 533,333,45 406,809,90 1,319,525,26 87,561,43 697,673,11
Total
02 3.61 7.87 3.45 7.48 9.57
51. Supplement to cash flow statement
(1) Supplement to cash flow statement
Currency: Renminbi Yuan
Supplementary information Amount for the current period Amount for the prior period
1. Reconciliation of profit/(loss) to
cash flows from operating activiti
es
Profit 68,957,568.40 729,241,946.67
Add: Provision for impairment o
105,342,656.15 28,420,774.69
f assets
Depreciation of fixed asset
s, depletion of oil and natural gas
6,007,930.70 3,974,151.64
assets and depreciation of bearer
biological assets
Depreciation of right-of-us
351,904,368.67 355,607,929.93
e assets
Amortization of intangible
2,630,723.90 2,940,850.52
asset
Amortization of long-term
97,016,164.88 91,898,732.79
prepaid expenses
Loss on disposal of fixed a
ssets, intangible assets and other
-19,708,867.36 -1,244,949.25
long-term assets (gains are expr
essed with negative value)
Loss of retirement of fixed
assets (gains are expressed with
negative value)
Loss on fair value changes
-31,151,566.30 -39,294,362.36
(gains are expressed with negati
296
2023 Annual Report of DR Corporation Limited
ve value)
Financial expenses (gains
are expressed with negative valu 23,070,045.62 24,133,902.03
e)
Investment losses (gains a
-201,459,628.10 -89,003,045.62
re expressed with negative value)
Decrease in deferred tax a
ssets (increase is expressed with -7,102,331.80 -3,425,426.97
negative value)
Increase in deferred tax lia
bilities (decrease is expressed wit 5,886,995.02 4,146,880.41
h negative value)
Decrease in inventories (in
crease is expressed with negativ 189,112,300.03 -229,917,478.98
e value)
Decrease in operating rec
eivables (increase is expressed w 19,295,931.37 861,877.87
ith negative value)
Increase in operating paya
bles (decrease is expressed with -577,721,730.54 -63,635,737.18
negative value)
Others 4,884,947.17 3,305,066.05
Net cash flows from operat
36,965,507.81 818,011,112.24
ing activities
2. Significant investment and fina
ncing activities not involving cash
receipts and payments
Debts transferred to capital
Convertible corporate bonds du
e within one year
Fixed assets under finance lea
ses
3. Net changes in cash and cash
equivalents:
Cash at end of period 226,963,610.96 521,625,030.62
Less: Cash at beginning of peri
521,625,030.62 4,741,510,453.45
od
Add: Cash equivalents at end o
f period
Less: Cash equivalents at begi
297
2023 Annual Report of DR Corporation Limited
nning of period
Net increase in cash and cash
-294,661,419.66 -4,219,885,422.83
equivalents
(2) Composition of cash and cash equivalents
Currency: Renminbi Yuan
Item Closing balance Opening balance
I. Cash 226,963,610.96 521,625,030.62
Including: Cash on hand 434,213.76 391,749.23
Bank deposits on demand 223,505,249.44 512,798,797.26
Other currency funds on d
3,024,147.76 8,434,484.13
emand
III. Cash and cash equivalents at
226,963,610.96 521,625,030.62
end of period
52. Foreign currency monetary items
(1) Foreign currency monetary items
Currency: Renminbi Yuan
Closing balance denomi
Item nated in foreign currenci Exchange rate Closing balance in RMB
es
Cash and bank balance
s
Including: USD 841,955.84 7.0827 5,963,320.63
EUR 47,495.39 7.8592 373,275.77
HKD 1,563,197.08 0.9062 1,416,600.46
Accounts payable
Including: USD 30,245.26 7.0827 214,218.10
HKD 17,201.72 0.9062 15,588.54
Other payables
Including: HKD 127,913.12 0.9062 115,917.43
EUR 7,467.81 7.8592 58,691.01
USD 10,032.97 7.0827 71,060.52
SGD 1,993.20 5.3772 10,717.84
Accounts receivable
Including: USD 69,652.10 7.0827 493,324.93
EUR
HKD 470,945.35 0.9062 426,780.10
298
2023 Annual Report of DR Corporation Limited
Long-term borrowings
Including: USD
EUR
HKD
Other descriptions:
Foreign currency monetary items refer to non-RMB monetary items.
(2) Description of overseas operating entities. For key overseas operating entities, their major oversea
s operating place, functional currencies and selection basis shall be disclosed. In case of any chang
es in functional currencies, the reasons for such changes shall also be disclosed.
□Applicable Not applicable
53. Leases
(1) The Company as a lessee
Applicable □Not applicable
Variable lease payments not included in the measurement of lease liabilities (if applicable)
Applicable □ Not applicable
As a lessee
2023 2022
Interest expenses on lease liabilities 14,955,205.03 21,536,754.47
Variable lease payments not included in the measure
ment of lease liabilities (if applicable) 6,427,115.11 37,374,018.79
Cash outflows for fixed lease payments 343,219,838.63 335,781,536.76
Total cash outflow for leases 364,602,158.77 394,692,310.02
The Group has lease contracts for various items of buildings, used in its operations, and leases are usually f
or 1 to 5 years. Lease contracts usually stipulate that the Group cannot sublease the leased assets, and som
e lease contracts require the Group's financial indicators to be maintained at a certain level. There are sever
al lease contracts that include extension and termination options and variable lease payments. Refer to “Pot
ential future cash outflows not included in the measurement of lease liabilities” for the impact of clauses relati
ng 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 deri
ved 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 s
ales generated from the underlying store. These clauses are used, when possible, in order to match lease pa
yments with stores generating higher cash flows.
As at 31 December 2023, the leasing status of the Group's premises and buildings was as follows:
299
2023 Annual Report of DR Corporation Limited
Number of shops and Variable pay
offices (pcs) Fixed payments ments Total payments
Fixed payments o
nly 284 180,191,040.24 180,191,040.24
Variable payments 266 163,028,798.39 6,427,115.11 169,455,913.50
Total 550 343,219,838.63 6,427,115.11 349,646,953.74
If the sales of all the Group's stores increase by 5%, the total lease payments are expected to increase by 0.
13%; If the sales of all the Group's stores decrease by 5%, the total lease payment is expected to decrease
by 0.11%
Leases that have been promised but not yet commenced
The Group's expected future cash outflows for of leases that have been promised but not yet commenced ar
e as follows:
2023 2022
Within 1 year, inclusive 384,600.00 7,807,604.75
1 to 2 years, inclusive 1,056,600.00 11,664,137.21
2 to 3 years, inclusive 842,250.00 9,947,015.73
Over 3 years 540,000.00 3,088,983.25
Total 2,823,450.00 32,507,740.94
Other information relating to leases
For right-of-use assets, refer to Note VII.11.
Simplification of rental expenses for short-term leases and low-value asset leases (if applicable)
□Applicable Not applicable
Situations involving sale and leaseback transactions
(2) The Group as a lessor
Operating lease as a lessor
□Applicable Not applicable
Operating lease as a lessor
□Applicable Not applicable
Annual undiscounted lease receipts for the next five years
□Applicable Not applicable
Reconciliation of undiscounted lease receipts to net lease investments
(3) Recognize profit or loss on sales of finance leases as a manufacturer or dealer
□Applicable Not applicable
300
2023 Annual Report of DR Corporation Limited
VIII. Research and development expenditure
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
Wages and salaries 18,580,887.31 14,846,366.43
Commissioned development serv
2,596,996.98 2,294,282.27
ice expenses
Depreciation and amortization 536,909.46 544,874.10
Others 422.00 258,609.57
Total 21,715,215.75 17,944,132.37
Including: research and develop
21,715,215.75 17,944,132.37
ment expenses
IX. Changes in scope of consolidation
1. Changes in scope of consolidation caused by other reasons
Description of changes in scope of consolidation caused by other reasons (e.g., establishment and liquidatio
n of subsidiaries) and other relevant conditions:
Name of entity Purpose for the establis The way of change Impact on overall
hment/cancellation s in scope of conso performance
lidation
He’er Culture (Hainan) Co., Ltd Business needs New in 2023 Not significant
Shenyang DR Jewelry Sales Co., Ltd Business needs New in 2023 Not significant
Lifetime Love Wedding Planning (Shen Business needs New in 2023 Not significant
zhen) Co., Ltd
Happy Love Psychology Research Cen Business needs New in 2023 Not significant
ter (Shenzhen) Co., Ltd
Lifetime Love Wedding Planning (Sany Business needs New in 2023 Not significant
a) Co., Ltd
DR LUXURY (SINGAPORE) PTE. LT Business needs New in 2023 Not significant
D.
DR Luxury Netherlands Holding B.V. Business needs New in 2023 Not significant
LOVEMONT (MALAYSIA) SDN.BHD. Business needs New in 2023 Not significant
DR LUXURY USA INC Business needs New in 2023 Not significant
LOVEMONT HONG KONG LIMITED Business needs New in 2023 Not significant
Shangqiu DR Jewelry Co., Ltd Business adjustments Canceled in 2023 Not significant
Wuhan DR Jewelry Co., Ltd Business adjustments Canceled in 2023 Not significant
Nanchang DR Jewelry Co., Ltd Business adjustments Canceled in 2023 Not significant
Handan DR Jewelry Co., Ltd Business adjustments Canceled in 2023 Not significant
Guangzhou DR Jewelry Co., Ltd Business adjustments Canceled in 2023 Not significant
Langfang DR Jewelry Co., Ltd Business adjustments Canceled in 2023 Not significant
301
2023 Annual Report of DR Corporation Limited
Foshan DR Jewelry Co., Ltd Business adjustments Canceled in 2023 Not significant
Urumqi DR Jewelry Co., Ltd Business adjustments Canceled in 2023 Not significant
X. Equity in other entities
1. Equity in subsidiaries
(1) Composition of enterprise group
Currency: Renminbi Yuan
Name of th Principal o Place of in Ownership interest (%)
Registered Nature of Mode of a
e subsidiar peration pl corporatio
capital business Direct Indirect cquisition
y ace n
Store sale
s in Hong
DR Group Kong and
30,000,00 Hong Kon Hong Kon
Company overseas l 100.00% Set up
0.001 g, China g, China
Limited oose stone
procurem
ent
Member of
Shanghai
Diamond
Exchange,
Shanghai responsibl
Darry Dia 5,000,000. e for the pr
Shanghai Shanghai 100.00% Set up
mond Co., 00 ocurement
Ltd and custo
ms declara
tion of ove
rseas loos
e stone
Chongqing
Store sale
Darry Jew 4,000,000.
Chongqing Chongqing s in Chong 100.00% Set up
elry Co., Lt 00
qing
d
Shenzhen
Informatio
Love Only
25,000,00 n Technol
AI Cloud T Shenzhen Shenzhen 100.00% Set up
0.00 ogy Servic
echnology
es
Co., Ltd.
Couple On 5,000,000. Sub-brand
Shenzhen Shenzhen 100.00% Set up
ly (Shenzh 00 cultivation
302
2023 Annual Report of DR Corporation Limited
en) Jewelr
y Co., Ltd.
Supply ch
ain manag
Shenzhen ement, R&
Darry Com D design,
mercial Ma 10,000,00 customize
Shenzhen Shenzhen 100.00% Set up
nagement 0.00 d product
Service C services a
o., Ltd nd related
supporting
services
DARRY J
EWELRY 1,289,000. Hong Kon Hong Kon Sub-brand
100.00% Set up
(HK) LIMIT 002 g, China g, China cultivation
ED
Couple On
ly Jewelry
10,000,00 Hong Kon Hong Kon Sub-brand
HongKong 100.00% Set up
0.00 3
g, China g, China cultivation
Company
Limited
Regional s
DR Jewelr 1,000,000.
France France ales in Fra 100.00% Set up
y 004
nce
He’er Cult
Creative pl
ure (Shenz 10,000,00
Shenzhen Shenzhen anning ser 100.00% Set up
hen) Co., 0.00
vices
Ltd
Responsib
Haoduo Di
le for dom
amond (Sh 60,000,00
Shenzhen Shenzhen estic bare 100.00% Set up
enzhen) C 0.00
stone proc
o., Ltd
urement
Xiamen D Store sale
1,000,000.
R Jewelry Xiamen Xiamen s in Xiame 100.00% Set up
00
Co., Ltd n
Shenyang Store sale
1,000,000.
DR Jewelr Shenyang Shenyang s in Sheny 100.00% Set up
00
y Co., Ltd ang
Tianjin DR 5,000,000. Tianjin Tianjin Store sale 100.00% Set up
303
2023 Annual Report of DR Corporation Limited
Jewelry C 00 s in Tianjin
o., Ltd
Chengdu Store sale
5,000,000.
DR Jewelr Chengdu Chengdu s in Cheng 100.00% Set up
00
y Co., Ltd du
Kunming Store sale
5,000,000.
DR Jewelr Kunming Kunming s in Kunmi 100.00% Set up
00
y Co., Ltd ng
Shanghai Store sale
3,000,000.
DR Jewelr Shanghai Shanghai s in Shang 100.00% Set up
00
y Co., Ltd hai
Suzhou Zh
Store sale
ongzuan D 3,000,000.
Suzhou Suzhou s in Suzho 100.00% Set up
R Jewelry 00
u
Co., Ltd.
Jinan DR J
4,000,000. Store sale
ewelry C Jinan Jinan 100.00% Set up
00 s in Jinan
o., Ltd
Shenzhen Store sale
1,000,000.
DR Jewelr Shenzhen Shenzhen s in Shenz 100.00% Set up
00
y Co., Ltd hen
Beijing Zh
ongzuan D 1,000,000. Store sale
Beijing Beijing 100.00% Set up
R Jewelry 00 s in Beijing
Co., Ltd
Suzhou D Store sale
1,000,000.
R Jewelry Suzhou Suzhou s in Suzho 100.00% Set up
00
Co., Ltd. u
Shenyang
DR Jewelr Store sale
3,000,000.
y Accessor Shenyang Shenyang s in Sheny 100.00% Set up
00
ies Co., Lt ang
d.
Hangzhou Store sale
5,000,000.
DR Jewelr Hangzhou Hangzhou s in Hangz 100.00% Set up
00
y Co., Ltd. hou
Beijing DR
1,000,000. Store sale
Jewelry C Beijing Beijing 100.00% Set up
00 s in Beijing
o., Ltd
Wuhan Zh 1,000,000. Wuhan Wuhan Store sale 100.00% Set up
304
2023 Annual Report of DR Corporation Limited
ongzuan D 00 s in Wuha
R Jewelry n
Co., Ltd
Xi'an DR J
1,000,000. Store sale
ewelry C Xi'an Xi'an 100.00% Set up
00 s in Xi'an
o., Ltd
Chengdu
Store sale
DR True L 1,000,000.
Chengdu Chengdu s in Cheng 100.00% Set up
ove Jewelr 00
du
y Co., Ltd
Ningbo DR Store sale
5,000,000.
Jewelry C Ningbo Ningbo s in Ningb 100.00% Set up
00
o., Ltd o
Beijing Hu
azuan DR 1,000,000. Store sale
Beijing Beijing 100.00% Set up
Jewelry C 00 s in Beijing
o., Ltd
Chongqing Store sale
4,000,000.
DR Jewelr Chongqing Chongqing s in Chong 100.00% Set up
00
y Co., Ltd qing
Hangzhou
Store sale
DR True L 5,000,000.
Hangzhou Hangzhou s in Hangz 100.00% Set up
ove Jewelr 00
hou
y Co., Ltd
Henan DR
1,000,000. Store sale
Jewelry C Henan Henan 100.00% Set up
00 s in Henan
o., Ltd
Xi'an Zhon
gzuan DR 3,000,000. Store sale
Xi'an Xi'an 100.00% Set up
Jewelry C 00 s in Xi'an
o., Ltd
Zhengzho
Store sale
u DR Jewe 3,000,000. Zhengzho Zhengzho
s in Zheng 100.00% Set up
lry Co., Lt 00 u u
zhou
d.
Shenzhen Store sale
1,000,000.
DR Jewelr Shenzhen Shenzhen s in Shenz 100.00% Set up
00
y Co., Ltd hen
Shenzhen 1,000,000. Store sale
Shenzhen Shenzhen 100.00% Set up
DR Jewelr 00 s in Shenz
305
2023 Annual Report of DR Corporation Limited
y Orname hen
nt Co., Ltd
Changsha Store sale
5,000,000.
DR Jewelr Changsha Changsha s in Chang 100.00% Set up
00
y Co., Ltd. sha
Shanghai
Store sale
DR Jewelr 1,000,000.
Shanghai Shanghai s in Shang 100.00% Set up
y Orname 00
hai
nt Co., Ltd
Shanghai
Store sale
DR Jewelr 1,000,000.
Shanghai Shanghai s in Shang 100.00% Set up
y Sales C 00
hai
o., Ltd
Zhoukou D Store sale
1,000,000.
R Jewelry Zhoukou Zhoukou s in Zhouk 100.00% Set up
00
Co., Ltd. ou
Yiwu DR J
1,000,000. Store sale
ewelry C Yiwu Yiwu 100.00% Set up
00 s in Yiwu
o., Ltd.
Heze DR J
1,000,000. Store sale
ewelry C Heze Heze 100.00% Set up
00 s in Heze
o., Ltd.
Dongguan Store sale
1,000,000.
DR Jewelr Dongguan Dongguan s in Dongg 100.00% Set up
00
y Co., Ltd. uan
Xining DR
1,000,000. Store sale
Jewelry C Xining Xining 100.00% Set up
00 s in Xining
o., Ltd
Linyi DR J
1,000,000. Store sale
ewelry C Linyi Linyi 100.00% Set up
00 s in Linyi
o., Ltd
Yinchuan Store sale
1,000,000.
DR Jewelr Yinchuan Yinchuan s in Yinchu 100.00% Set up
00
y Co., Ltd an
Weifang D Store sale
1,000,000.
R Jewelry Weifang Weifang s in Weifa 100.00% Set up
00
Co., Ltd ng
Jining DR
1,000,000. Store sale
Jewelry C Jining Jining 100.00% Set up
00 s in Jining
o., Ltd
306
2023 Annual Report of DR Corporation Limited
Mianyang Store sale
1,000,000.
DR Jewelr Mianyang Mianyang s in Miany 100.00% Set up
00
y Co., Ltd ang
Fuyang D Store sale
1,000,000.
R Jewelry Fuyang Fuyang s in Fuyan 100.00% Set up
00
Co., Ltd g
Baoding D
Store sale
R Jewelry 1,000,000.
Baoding Baoding s in Baodi 100.00% Set up
Sales Co., 00
ng
Ltd
Guiyang D Store sale
1,000,000.
R Jewelry Guiyang Guiyang s in Guiya 100.00% Set up
00
Co., Ltd ng
Haoduo Di
amond Zhi Rough dia
10,000,00
zao (Shen Shenzhen Shenzhen mond cut 100.00% Set up
0.00
zhen) Co., production
Ltd
Jiaxing DR Store sale
1,000,000.
Jewelry C Jiaxing Jiaxing s in Jiaxin 100.00% Set up
00
o., Ltd g
He’er Cult Cultural an Newly set
10,000,00
ure (Haina Sanya Sanya d creative 100.00% up in the c
0.00
n) Co., Ltd services urrent year
Shenyang
Jewelry ret Newly set
DR Jewelr 10,000,00
Shenzhen Shenzhen ail busines 100.00% up in the c
y Sales C 0.00
s urrent year
o., Ltd
Lifetime Lo
ve Weddin Wedding p Newly set
10,000,00
g Planning Shenzhen Shenzhen lanning ser 100.00% up in the c
0.00
(Shenzhe vices urrent year
n) Co., Ltd
Happy Lov
Happiness
e Psycholo
and love r Newly set
gy Resear 5,000,000.
Shenzhen Shenzhen elated res 100.00% up in the c
ch Center 00
earch and urrent year
(Shenzhe
consulting
n) Co., Ltd
DR LUXU 10,000,00 Singapore Singapore Responsib 100.00% Newly set
307
2023 Annual Report of DR Corporation Limited
RY (SING 0.005 le for over up in the c
APORE) P seas inves urrent year
TE. LTD. tment and
sales in Si
ngapore
DR Luxury
Investment Newly set
Netherlan 100,000.0 The Nethe The Nethe
Managem 100.00% up in the c
ds Holding 06 rlands rlands
ent urrent year
B.V.
LOVEMO
Regional s Newly set
NT (MALA
1.00 7
Malaysia Malaysia ales in Mal 100.00% up in the c
YSIA) SD
aysia urrent year
N.BHD.
Regional s
DR LUXU United Sta United Sta ales in the Newly set
RY USA I 75,000.008 te of Ameri te of Ameri United Sta 100.00% up in the c
NC ca ca te of Ameri urrent year
ca
Lifetime Lo
ve Weddin Wedding p Newly set
5,000,000.
g Planning Sanya Sanya lanning ser 100.00% up in the c
00
(Sanya) C vices urrent year
o., Ltd
LOVEMO Overseas l
Newly set
NT HONG 100,000.0 Hong Kon Hong Kon oose diam
100.00% up in the c
KONG LIM 09 g, China g, China ond procur
urrent year
ITED ement
Note: 1. It is denominated in HKD.
2. It is denominated in USD.
3. It is denominated in HKD.
4. It is denominated in EUR.
5. It is denominated in SGD.
6. It is denominated in EUR.
7. It is denominated in MYR.
8. It is denominated in USD.
9. It is denominated in USD.
Description of the reason why the shareholding proportion held in subsidiary is different from the voting right
proportion:
Not applicable.
308
2023 Annual Report of DR Corporation Limited
The grounds for controlling the investees of which the Group is holding half or less than half of the voting righ
ts, and the grounds for not controlling the investees of which the Group is holding more than half of the votin
g rights:
Not applicable.
For significant structured entities included into the scope of consolidation, the basis for control:
Not applicable.
Basis for determining whether the Company is an agent or a principal:
Not applicable.
Other descriptions:
Not applicable.
XI. Government grants
1. Government grants recognized at amounts receivable at the end of the reporting period
□ Applicable Not applicable
Reasons for failing to receive the estimated amount of government grants at the estimated time point
□ Applicable Not applicable
2. Liability items relating to government grants
□ Applicable Not applicable
3. Government grants included in current profit or loss
Applicable □ Not applicable
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
Recognized in other income 17,239,801.74 23,433,558.47
Other descriptions
XII. Financial instruments and related risks
1. Risks arising from financial instruments
(1) Financial instruments by category
Carrying amounts of various financial instruments at the balance sheet date are as follows:
As at 31 December 2023, financial assets at fair value through profit or loss were RMB4,841,946,705.07 (31
December 2022: RMB5,609,891,931.68), mainly listed in financial assets held for trading; financial assets at
amortized cost were RMB1,782,123,891.79 (31 December 2022: RMB1,627,082,032.11), mainly listed in cur
rency funds, accounts receivable, other receivables, other current assets, debt investments, current portion o
f non-current assets, and other non-current assets; financial liabilities at fair value through profit or loss were
RMB62,813,557.52 (31 December 2022: nil), mainly listed in financial liabilities held for trading; financial liabi
lities at amortized cost were RMB510,528,504.23 (31 December 2022: RMB1,089,965,994.99), mainly listed
in short-term borrowings, notes payable, accounts payable, other payables.
(2) Risks of financial instruments
309
2023 Annual Report of DR Corporation Limited
The Group is exposed to various financial instrument risks in its day-to-day activities, mainly including credit r
isk, liquidity risk and market risk (including exchange rate risk). The Group's risk management policies are ou
tlined below.
The Group diversifies the risk of financial instruments through appropriate diversification of investment and b
usiness portfolio, and reduces the risk of concentration on specific counterparties by formulating appropriate
risk management policies.
Credit risk
The Group trades only with recognized and creditworthy third parties. According to the Group's policy, a cred
it review is required for all customers who require credit transactions. In addition, the Group continuously mo
nitors 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 currency funds and financial a
ssets held for trading are reputable banks with high credit ratings.
Other financial assets of the Group include accounts receivable, other receivables and other non-current ass
ets whose credit risk derives from counterparty defaults and whose maximum exposure is equal to the carryi
ng amount of these instruments.
Since the Group trades only with recognized and creditworthy third parties, there is no requirement for collat
eral. Credit risk is centrally managed by industry. As at 31 December 2023, the Group had a specific credit ri
sk concentration and 66.76% of the Group's accounts receivable (31 December 2022: 73.07%) were shoppin
g malls that collected orders on their behalf.
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.
Definition of credit-impaired financial assets
The Group's main criterion for determining that credit impairment has occurred is that the number of days pa
st due exceeds 90 days. However, in some cases, if internal or external information indicates that the contra
ct amount may not be recovered in full before considering any credit enhancements held, the Group will also
consider it as credit impairment.
The impairment of financial assets may not be necessarily due to a single discrete event, the combined effec
ts of multiple events may result in financial assets being credit-impaired.
Liquidity risk
310
2023 Annual Report of DR Corporation Limited
The Group's objective is to use a variety of financing instruments to maintain a balance between the continuit
y and flexibility of financing. The Group finances its operations through funds from operations and borrowing
s.
As at 31 December 2023, the Group had no debt maturing for more than 1 year (31 December 2022: nil).
The tables below summarize the maturity profile of the Company’s financial liabilities and lease liabilities bas
ed on undiscounted contractual cash flows:
Financial liabilities and lease liabilities
2023
Within 1 year 1-3 years 3-5 years Over 5 year Total
s
Sh or t- te r
m borro
wings 390,632,777.14 - - - 390,632,777.14
Notes pay
able 47,986,785.70 - - - 47,986,785.70
Accounts
payable 28,164,899.34 - - - 28,164,899.34
Other pay
ables 44,381,542.05 - - - 44,381,542.05
Provisions 10,178,765.00 3,056,709.00 380,508.00 13,615,982.00
Current p
ortion of
non-cur
rent liabi
lities 201,537,017.35 - - - 201,537,017.35
Lease liab
ilities - 56,118,094.107 13,994,560.27 70,112,654.37
Total 722,881,786.58 59,174,803.10 14,375,068.27 796,431,657.95
2022
Within 1 year 1-3 years 3-5 years Over 5 years Total
Short-ter
m borro
wings 433,993,449.44 - - - 433,993,449.44
Notes pay
able 466,527,730.97 - - - 466,527,730.97
311
2023 Annual Report of DR Corporation Limited
Accounts
payable 86,880,869.77 - - - 86,880,869.77
Other pay
ables 102,563,944.81 - - - 102,563,944.81
Provision
s 7,025,902.00 5,636,047.50 2,263,200.00 1,079,100.00 16,004,249.50
Current p
ortion of
non-cu
rrent lia
bilities 351,516,900.54 - - - 351,516,900.54
Lease lia
bilities - 256,890,726.07 17,947,797.81 1,703,640.35 276,542,164.23
1,448,508,797.5 262,526,773.57 20,210,997.81 2,782,740.35 1,734,029,309.2
Total 3 6
Currency risk
The Group is exposed to transactional exchange rate risk resulting from sales or purchases made by busine
ss units in currencies other than their functional currency. In FY2023, approximately 0.55% (2022: 0.18%) of
the Group's sales were denominated in currencies other than the functional currency of business units in whi
ch the sales occurred, while approximately 0.61% (2022: 0.22%) of the cost was denominated in currencies
other than the functional currency of business units. The Group does not engage in foreign exchange hedgin
g.
The table below provides a sensitivity analysis of exchange rate risk and reflects the impact of potential reas
onable changes in USD, EUR and HKD exchange rates on net profit or loss (due to changes in the fair value
of monetary assets and monetary liabilities) and other comprehensive income/(loss), net of tax, under the as
sumption that all other variables remain unchanged.
312
2023 Annual Report of DR Corporation Limited
2023
Net other compre
Change in USD hensive income Total shareholders’ equ
rate Net profit/loss after tax ity
Increase/(decrea Increase/(decreas Increase/(decreas
se) e) e) Increase/(decrease)
If RMB weakens against US
D 3% 185,141.01 - 185,141.01
If RMB strengthens against
USD (3%) (185,141.01) - (185,141.01)
2022
Net other compreh
Change in USD r ensive income Total shareholders’ equ
ate Net profit/loss after tax ity
Increase/(decrea Increase/(decrea Increase/(decreas
se) se) e) Increase/(decrease)
If RMB weakens against US
D 3% 1,233,808.76 - 1,233,808.76
If RMB strengthens against U
SD (3%) (1,233,808.76) - (1,233,808.76)
1. Capital management
The primary objectives of the Group’s capital management are to safeguard the Group’s ability to continue a
s a going concern and to maintain healthy capital ratios in order to support its business and maximize shareh
olders’ value.
The Group manages and adjusts its capital structure in response to changes in the economic situation and th
e risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Group may adju
st the dividend payment to shareholders or issue new shares. The Group is not bound by any externally imp
osed capital requirements. In 2023 and 2022, the capital management objectives, policies or procedures rem
ain unchanged.
The Group monitors capital using the debt-to-asset ratio, which is total liabilities divided by total assets. It is t
he Group's policy to maintain a reasonable debt-to-asset ratio. The Group’s debt-to-asset ratio at the balanc
e sheet date is as follows:
313
2023 Annual Report of DR Corporation Limited
2023 2022
Total assets 7,530,082,307.45 8,815,748,380.27
Total liabilities 1,057,444,465.49 2,012,702,176.31
Debt-to-asset ratio 14.04% 22.83%
XIII. Disclosure of fair value
1. Closing balance of assets and liabilities measured at fair value
Currency: Renminbi Yuan
Closing balance
Fair value measure Fair value measure Fair value measure
Items
ments within Level ments within Level ments within Level Total
1 2 3
I. Recurring fair val
-- -- -- --
ue measurements
(I) Financial assets
4,841,946,705.07 4,841,946,705.07
held for trading
1. Financial assets
at fair value throu 4,841,946,705.07 4,841,946,705.07
gh profit or loss
Total assets meas
ured at fair value o 4,841,946,705.07 4,841,946,705.07
n a recurring basis
(VII) Financial liabil
ities designated as
being measured a
62,813,557.52 62,813,557.52
t fair value and sub
ject to current gain
s and losses
Total liabilities mea
sured at fair value
62,813,557.52 62,813,557.52
on a recurring basi
s
II. Non-recurring fa
ir value measurem -- -- -- --
ents
2. Basis of determining the market prices of recurring and non-recurring measurements within Level 1
The financial liabilities at fair value through profit or loss refer to the physical gold leased by the Company fro
m banks, and there is an active market for gold (i.e., Shanghai Gold Exchange), and the Shanghai Gold Exc
hange publishes the closing price of gold contract transactions on each trading day. At the end of the reporti
314
2023 Annual Report of DR Corporation Limited
ng period, the Company determines the market price based on the closing price of gold contract transactions
published by Shanghai Gold Exchange on the same day or the latest previous trading day.
3. Qualitative and quantitative information on the valuation techniques used and significant parameter
s 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 usin
g expected future cash flows expected to be available in the market and discounted at an interest rate deter
mined based on the best estimate of the expected level of risk.
4. Qualitative and quantitative information on the valuation techniques used and significant parameter
s 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 amounts and sensitivity analysis
of unobservable parameters in recurring measurements within Level 3
Not applicable
6. For items measured at fair value on a recurring basis, disclose the amounts of any transfers betwee
n different levels of the fair value hierarchy, the reasons for those transfers and the policy for determi
ning when transfers between levels are deemed to have occurred.
No transfers between different levels occurred during the reporting period.
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 currency funds, accounts receivable, other receivables, other current assets,
notes payable, accounts payable and other payables and the fair value is in line with the carrying amount du
e to the short remaining period.
9. Others
XIV. Related party relationships and transactions
1. Parent
Proportion of o Proportion of v
Name of the pa Place of incorp Nature of busin Registered capi wnership intere oting power in t
rent oration ess tal st in the Comp he Company
any (%) (%)
Business mana
gement consult
DR Investment ing, business in
RMB50,000,00
(Zhuhai) Co., Lt Zhuhai formation cons 85.50% 85.50%
0.00
d. ulting, investme
nt managemen
t, etc.
Information about the parent
The parent “Shenzhen DR Investment Co., Ltd.” changed its name to the current “DR Investment (Zhuhai) C
o., Ltd.” in January 2022.
315
2023 Annual Report of DR Corporation Limited
The ultimate controlling party of the Company is Mr. Zhang Guotao and Mrs. Lu Yiwen.
Other descriptions:
2. Subsidiary
Information about the subsidiaries of the Company is disclosed in Note X.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
A wholly-owned subsidiary of DR Investment, the C
Shenzhen Every Year Travel Photography Culture ompany's controlling shareholder; An enterprise indi
Co., Ltd. rectly controlled by the actual controllers Zhang Gu
otao and Lu Yiwen
Director, general manager and other senior manage
Key management personnel of the Company
ment of the Company
Other descriptions:
4. Related party transactions
(1) Leases by related parties
The Company as a lessor:
Currency: Renminbi Yuan
Rental income recogniz Rental income recogniz
Name of lessee Type of leased assets
ed for the current period ed for the prior period
The Company as a lessee:
Currency: Renminbi Yuan
Simplification o
Variable lease
f rental expens
payments not i
es for short-ter Interest expens
ncluded in the Rental paymen Increase in righ
m leases and l e on lease liabil
measurement o t t-of-use asset
ow-value asset ities incurred
f lease liabilitie
Type leases (if applic
Name s (if applicable)
of lea able)
of les
sed a Amo
sor
ssets Amou Amou Amou Amou unt f Amou Amou Amou Amou
Amoun
nt for t nt for t nt for t nt for t or th nt for t nt for t nt for t nt for t
t for the
he cur he pri he cur he pri e cur he cur he pri he cur he pri
prior p
rent p or peri rent p or peri rent rent p or peri rent p or peri
eriod
eriod od eriod od perio eriod od eriod od
d
DR In Opera
84,046. 2,070.
vestm ting le
00 30
ent (Z ases
316
2023 Annual Report of DR Corporation Limited
huhai)
Co.,
Ltd.
Note:
In December 2019, Shenzhen Darry Commercial Management Services Co., Ltd. entered into an operating l
ease agreement with DR Investment (Zhuhai) Co., Ltd. (formerly known as Shenzhen DR Investment Co., Lt
d.) at the market price, with a total lease cost of RMB1,539,077.98, the original lease period was from 13 De
cember 2019 to 31 December 2022. Early termination of the leased asset on 28 February 2022 by making sc
heduled rental payments.
(2) Compensation of key management personnel
Currency: Renminbi Yuan
Items Amount for the current period Amount for the prior period
Compensation of key manageme
12,556,600.01 13,606,393.29
nt personnel
Including: share-based payment
367,807.31 356,652.33
expenses
XV. Share-based payment
1. Summary
Applicable □ Not applicable
Currency: Renminbi Yuan
Equity instruments gr Equity instruments ex Equity instruments Equity instruments whic
Category anted in current perio ercised in current peri unlocked in curre h became invalid in curr
of recipi d od nt period ent period
ent Amou
Number Amount Number Amount Number Number Amount
nt
Manage
288,000.0
ment per 0 0.00 0 0.00 0 0.00 516,361.18
0
sonnel
288,000.0
Total 516,361.18
0
Stock options or other equity instruments issued and outstanding by the Company at end of period
Applicable □ Not applicable
Stock options issued and outstanding by Other equity instruments issued and outs
Category of recipie the Company at end of period tanding by the Company at end of period
nt Range of exercise Remaining term of Range of exercise Remaining term of
prices the contract prices the contract
Sales, Manageme
nt and R&D person RMB1.67 0-0.89 years
nel
317
2023 Annual Report of DR Corporation Limited
Other descriptions:
(1) First equity incentive scheme
On 18 January 2017, the Company approved the “Shenzhen Darry Jewelry Co., Ltd. Equity Incentive schem
e” (the “Incentive scheme”) through a resolution of the shareholders’ meeting, and the Company's first equity
incentive scheme granted the Company the number of restricted shares to 15 incentive recipients through th
e Gongqingcheng Wendy No.1 Investment Management Partnership (Limited Partnership), the Gongqingche
ng Wendy No.2 Investment Management Partnership (Limited Partnership) and the Gongqingcheng Wendy
No.3 Investment Management Partnership (Limited Partnership)1,150,000 shares (after the Company’s conv
ersion 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 20 November 2017, and the term
s and conditions of the agreement between the enterprise and the employees on the share payment have be
en 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 20 November 2017 as the grant dat
e. Gongqingcheng Wendy No.1 Investment Management Partnership (Limited Partnership), Gongqingcheng
Wendy No.2 Investment Management Partnership (Limited Partnership) and Gongqingcheng Wendy No.3 In
vestment 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 s
tipulated in the incentive scheme, and the Company’s shares held by the incentive recipients shall not be tra
nsferred within one year from the date of listing on the Shenzhen Stock Exchange. Share-based payment ex
penses for restricted stock granted under the first equity incentive scheme were fully recognized in 2021.
(2) Second equity incentive scheme
On 20 November 2019, the Company approved the “DR Corporation Limited Equity Incentive scheme” throu
gh the resolution of the second extraordinary general meeting of shareholders in 2019, and the Company’s s
econd equity incentive scheme granted 2,412,000 restricted shares of the Company to 12 incentive recipient
s through the Gongqingcheng Wendy No.1 Investment Management Partnership (Limited Partnership) and t
he Gongqingcheng Wendy No.2 Investment Management Partnership (Limited Partnership), with 20 Novem
ber 2019 as the grant date. The grant price is RMB1.67 per share. Gongqingcheng Wendy No.1 Investment
Management Partnership (Limited Partnership) and Komsomolsk Wendy No.2 Investment Management Part
nership (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 sche
me, 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 20 November 2019 also stipulates that this incentive scheme is appli
cable to the recipients of the first equity incentive scheme. This change extends the service period of the first
equity incentive recipients, which is not conducive to the change of incentive recipients, so the Company still
recognizes share-based payment expenses for the first equity incentive scheme in accordance with the feas
ible conditions before the amendment.
318
2023 Annual Report of DR Corporation Limited
(3) Modification of the second equity incentive scheme and newly granted restricted stock
On 11 March 2020, the Company passed the resolution of the second extraordinary general meeting of shar
eholders in 2020, approving the amendment of the second equity incentive scheme “DR Corporation Limited
Equity Incentive Scheme”, which added that in the case of the incentive recipients leaving the Company withi
n 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 conditio
ns 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 period
s. At the same time, pursuant to the revised second equity incentive scheme, the Group granted 810,000 ne
w restricted shares to two incentive recipients through Gongqingcheng Wendy No. 1 Investment Manageme
nt Partnership (Limited Partnership) on 11 March 2020 at a grant price of RMB1.67 per share.
On 14 June 2023 and 26 July 2023, two incentive recipients of the original second equity incentive scheme l
eft the Company, and the recognized share-based payment expense of RMB516,361.18 was reversed in 20
23.
Based on the fair value of restricted stock at the time of grant and the estimated exercise date and turnover r
ate assessed by the valuation firm engaged by the Company according to the income method, the total shar
e-based payment expenses recognized for the second equity incentive scheme in 2023 and the newly grante
d restricted stock are RMB187,422.35 (2022: RMB561,317.20).
2. Equity-settled share-based payments
Applicable □ Not applicable
Currency: Renminbi Yuan
Methodology for determining the fair value of equity
Income method
instruments at the grant date
Significant parameters for determining the fair value Expected income growth rate, perpetual growth rate
of equity instruments at the grant date and discount rate
Basis for determining the number of exercisable eq Best estimate of the number of equity instruments e
uity instruments xpected to vest
Reasons for material differences between the curre
Nil
nt and prior period estimates
Accumulated amount charged to capital reserve for
26,531,541.32
equity-settled share-based payments
Total expenses recognized for equity-settled share-
187,422.35
based payments during the current period
Other descriptions:
3. Cash-settled share-based payments
□Applicable Not applicable
4. Share-based payment expenses
Applicable □ Not applicable
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2023 Annual Report of DR Corporation Limited
Currency: Renminbi Yuan
Equity-settled share-based paym Cash-settled share-based payme
Category of recipient
ent expenses nt expenses
Management personnel 187,422.35
Total 187,422.35
Other descriptions:
5. Modification and termination of share-based payments
None
XVI. Commitments and contingencies
1. Significant commitments
Significant commitments existing as at the balance sheet date
As at the date of approval of these financial statements, the Group had no commitments required to be discl
osed.
2. Contingencies
(1) Material contingencies existing as at the balance sheet date
As at the date of approval of these financial statements, the Group had no contingencies required to be discl
osed.
(2) To state that the Company has no material contingencies required to be disclosed
The Group had no material contingencies required to be disclosed.
3. Others
XVII. Other significant events
1. Segment information
(1) Determination basis and accounting policies of reporting segments
(2) Summarized financial information of reporting segment
Currency: Renminbi Yuan
Elimination among segm
Item Total
ents
(3) Reasons should be provided where a company has no reporting segments or is unable to disclose t
he total assets and total liabilities of each reporting segment
The management of the Group considers the internal organizational structure, management requirements an
d internal reporting system and other aspects to believe that the businesses of the companies in the Group h
ave obvious similarities, all of which are in the jewelry retail industry. Management regularly reviews the Gro
up's overall financial statements for resource allocation and performance evaluation, and as a result, accordi
ng to Accounting Standard for Business Enterprises No. 35 - Segment Reporting, the Group's operations con
stitute a single operating segment and no segment reporting information is prepared.
(4) Other descriptions
Information on products and services
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2023 Annual Report of DR Corporation Limited
Income from external transactions
Currency: Renminbi Yuan
2023 2022
Engagement diamond rings 1,699,139,354.11 2,902,464,272.49
Wedding diamond rings 449,380,892.69 713,611,440.73
Other accessories 25,236,788.59 34,105,640.81
Other business 6,520,708.61 31,393,058.65
Total 2,180,277,744.00 3,681,574,412.68
Geographic information
The Group's geographical division is relatively concentrated, and 99.64% of the external transaction income
was attributable to the Chinese mainland region in 2023 (2022: 99.80%); As at 31 December 2023, 99.85%
of non-current assets were attributable to the Chinese mainland region (31 December 2022: 99.83%).
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.
XVIII. Notes to key items of the Company’s financial statements
1. Accounts receivable
(1) Disclosed by aging
Currency: Renminbi Yuan
Aging Closing outstanding balance Opening outstanding balance
Within 1 year, inclusive 109,571,866.94 87,242,136.25
1 to 2 years 659,976.99 2,359,626.25
Total 110,231,843.93 89,601,762.50
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2023 Annual Report of DR Corporation Limited
(2) Disclosed by method of determining provision for credit losses
Currency: Renminbi Yuan
Closing balance Opening balance
Outstanding balance Impairment allowance Outstanding balance Impairment allowance
Category Carrying amo Carrying amo
Percentag Provision rat Provision r
Amount Amount unt Amount Percentage Amount unt
e io (%) atio (%)
Accounts receivable for
which impairment allow 1,476,671.
0.00 0.00% 0.00 0.00% 0.00 1.65% 1,476,671.46 100.00% 0.00
ance is individually ass 46
essed
Including:
1,476,671.
Mall A 0.00 0.00% 0.00 0.00% 0.00 1.65% 1,476,671.46 100.00% 0.00
46
Accounts receivable for
which impairment allow 110,231,84 2,997,697. 107,234,146. 88,125,09
100.00% 2.72% 98.35% 3,527,062.57 4.00% 84,598,028.47
ance is collectively ass 3.93 80 13 1.04
essed
Including:
Amounts due from subsi 31,063,66 31,063,668.5 2,071,189.
28.18% 0.00 0.00% 2.31% 0.00 0.00% 2,071,189.38
diaries 8.50 0 38
Accounts receivable fro
28,153,04 28,153,043.6 21,471,63
m POS machines and 25.54% 0.00 0.00% 23.96% 0.00 0.00% 21,471,639.56
3.64 4 9.56
e-commerce platforms
Accounts receivable fro 51,015,13 2,997,697. 48,017,433.9 64,582,26
46.28% 5.88% 72.08% 3,527,062.57 5.46% 61,055,199.53
m the mall 1.79 80 9 2.10
110,231,84 2,997,697. 107,234,146. 89,601,76
Total 100.00% 2.72% 100.00% 5,003,734.03 5.58% 84,598,028.47
3.93 80 13 2.50
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2023 Annual Report of DR Corporation Limited
Impairment allowance which is individually assessed: 0
Currency: Renminbi Yuan
Opening balance Closing balance
Name Outstanding Impairment Outstanding Impairment Provision rati Reasons for
balance allowance balance allowance o (%) provision
1,476,671.4 1,476,671.4
Mall A 0.00 0.00 0.00%
6 6
1,476,671.4 1,476,671.4
Total 0.00 0.00
6 6
Impairment allowance which is collectively assessed: 2,997,697.80
Currency: Renminbi Yuan
Closing balance
Name
Outstanding balance Impairment allowance Provision ratio (%)
Accounts receivable fro
51,015,131.79 2,997,697.80 5.88%
m the mall
Total 51,015,131.79 2,997,697.80
Description of the basis for determining the collective assessment:
Impairment allowance based on credit risk characteristics
If the Group recognizes impairment allowance based on the general model of ECLs:
□Applicable Not applicable
(3) Impairment allowance recognized, recovered or reversed for the current period
Impairment allowance for the current period:
Currency: Renminbi Yuan
Changes for the period
Opening bal Closing bala
Category Recovery or
ance Provision Write-offs Others nce
reversal
Accounts rec
5,003,734.0 2,997,697.8 5,003,734.0 2,997,697.8
eivable from 0.00 0.00
3 0 3 0
the mall
5,003,734.0 2,997,697.8 5,003,734.0 2,997,697.8
Total 0.00 0.00
3 0 3 0
Including: significant recovery or reversal of impairment allowance for the current period:
Currency: Renminbi Yuan
323
2023 Annual Report of DR Corporation Limited
The basis and ratio
nality of determinin
Amount recovered Reason for reversa Methods for revers
Name of entity g the ratio for origi
or reversed l al
nal impairment allo
wance
It is not expected t
o be recovered be
Recovery in curren
Mall A 1,476,671.46 Not applicable cause the mall has
cy
been in arrears for
a long time.
Total 1,476,671.46
(4) The top 5 largest accounts receivable and contract assets at end of period categorized by debtor
Currency: Renminbi Yuan
Proportion of to
Closing balanc
Closing balanc tal closing bala
Closing balanc Closing balanc e of impairment
e of accounts r nce of account
Name of entity e of accounts r e of contract as of accounts re
eceivable and c s receivable an
eceivable sets ceivable and co
ontract assets d contract asse
ntract assets
ts
No.1 12,459,151.76 0.00 12,459,151.76 11.30% 0.00
No.2 6,279,055.21 0.00 6,279,055.21 5.70% 0.00
No.3 5,451,977.15 0.00 5,451,977.15 4.95% 0.00
NO.4 4,261,580.43 0.00 4,261,580.43 3.87% 0.00
No.5 2,736,504.30 0.00 2,736,504.30 2.48% 147,728.12
Total 31,188,268.85 0.00 31,188,268.85 28.30% 147,728.12
2. Other receivables
Currency: Renminbi Yuan
Item Closing outstanding balance Opening outstanding balance
Dividends receivable 96,000,000.00 131,000,000.00
Other receivables 128,498,084.63 139,167,536.46
Total 224,498,084.63 270,167,536.46
(1) Dividends receivable
1) Category of dividends receivable
Currency: Renminbi Yuan
Item (or investee) Closing balance Opening balance
324
2023 Annual Report of DR Corporation Limited
Shenzhen Love Only AI Cloud Te
81,000,000.00 0.00
chnology Co., Ltd.
Shenzhen Darry Commercial Ma
15,000,000.00 31,000,000.00
nagement Service Co., Ltd
He’er Culture (Shenzhen) Co., Lt
0.00 100,000,000.00
d
Total 96,000,000.00 131,000,000.00
2) Significant dividends receivable aged over 1 year
Currency: Renminbi Yuan
Impairment or not
Reasons for not be
Item (or investee) Closing balance Aging and basis for judg
ing recovered
ment
3) Disclosed by method of determining provision for credit losses
□Applicable Not applicable
(2) Other receivables
1) Other receivables categorized by nature
Currency: Renminbi Yuan
Nature Closing balance Opening balance
Amounts due from subsidiaries 124,899,102.54 132,210,236.41
Social insurances and housing fu
2,671,188.70 4,697,357.08
nd borne by employees
Temporary loans for employees 295,945.15 1,337,667.07
Others 2,536,848.24 2,827,275.90
Total 130,403,084.63 141,072,536.46
2) Disclosed by aging
Currency: Renminbi Yuan
Aging Closing outstanding balance Opening outstanding balance
Within 1 year, inclusive 128,498,084.63 139,167,536.46
1 to 2 years 0.00 1,905,000.00
2 to 3 years 1,905,000.00 0.00
Total 130,403,084.63 141,072,536.46
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2023 Annual Report of DR Corporation Limited
3) Disclosed by method of determining provision for credit losses
Currency: Renminbi Yuan
Closing balance Opening balance
Outstanding bala Impairment allow Outstanding bala Impairment allow
Catego nce ance Carryin nce ance Carryin
ry Provisi g amou Provisi g amou
Amoun Percen Amoun Amoun Percen Amoun
on ratio nt on ratio nt
t tage t t tage t
(%) (%)
Impair
ment al
lowanc
e whic 1,905,0 100.0 1,905,0 100.0 1,905,0 100.0 1,905,0 100.0
0.00 0.00
h is ind 00.00 0% 00.00 0% 00.00 0% 00.00 0%
ividuall
y asse
ssed
Including:
Impair
ment al
lowanc
128,49 128,49 139,16 139,16
e whic 100.0 100.0
8,084.6 0.00 0.00% 8,084.6 7,536.4 0.00 0.00% 7,536.4
h is coll 0% 0%
3 3 6 6
ectively
asses
sed
Including:
130,40 128,49 141,07 139,16
100.0 1,905,0 100.0 1,905,0
Total 3,084.6 1.46% 8,084.6 2,536.4 1.35% 7,536.4
0% 00.00 0% 00.00
3 3 6 6
Impairment allowance which is individually assessed:
Currency: Renminbi Yuan
Opening balance Closing balance
Name Outstanding Impairment Outstanding Impairment Provision rati Reasons for
balance allowance balance allowance o (%) provision
It is not expe
1,905,000.0 1,905,000.0 1,905,000.0 1,905,000.0 cted to be re
Company A 100.00%
0 0 0 0 covered due
to deteriorati
326
2023 Annual Report of DR Corporation Limited
ng operation
condition of
the counter
party.
1,905,000.0 1,905,000.0 1,905,000.0 1,905,000.0
Total
0 0 0 0
If the Group recognizes impairment allowance based on the general model of ECLs:
Currency: Renminbi Yuan
Stage 1 Stage 2 Stage 3
Impairment allowa
Lifetime ECLs (Not Lifetime ECLs (Cre Total
nce 12-month ECLs
credit-impaired) dit-impaired)
Balance at 31 Dec
1,905,000.00 1,905,000.00
ember 2023
Balance at 1 Janu
ary 2023 provided i
n the current perio
d
Balance at 31 Dec
1,905,000.00 1,905,000.00
ember 2023
Basis for the division of each stage and provision ratio for impairment allowance
Changes in outstanding balance with significant changes in the amount of loss provision in the current peri
od
□Applicable Not applicable
4) Impairment allowance recognized, recovered or reversed for the current period
Impairment allowance for the current period:
Currency: Renminbi Yuan
Changes for the period
Opening bala Closing bala
Category Recovery or Reversal or
nce Provision Others nce
reversal write-off
Impairment a
llowance for
1,905,000.00 0.00 0.00 0.00 0.00 1,905,000.00
other receiva
bles
Total 1,905,000.00 0.00 0.00 0.00 0.00 1,905,000.00
Including: significant reversal or recovery of impairment allowance for the current period:
327
2023 Annual Report of DR Corporation Limited
Currency: Renminbi Yuan
The basis and ratio
nality of determinin
Amount recovered Reason for reversa Methods for revers
Name of entity g the original ratio f
or reversed l al
or impairment allo
wance
5) The top 5 largest other receivables at end of period categorized by debtor
Currency: Renminbi Yuan
Proportion of to
Closing balanc
Closing balanc tal closing bala
Name of entity Nature Aging e of impairment
e nce of other rec
allowance
eivables
Amounts due fr
No.1 88,165,382.48 Within 1 year 67.61% 0.00
om subsidiaries
Amounts due fr
No.2 22,275,150.38 Within 1 year 17.08% 0.00
om subsidiaries
Amounts due fr
No.3 7,015,514.31 Within 1 year 5.38% 0.00
om subsidiaries
Amounts due fr
No.4 4,158,763.69 Within 1 year 3.19% 0.00
om subsidiaries
Amounts due fr
No.5 1,750,180.83 Within 1 year 1.34% 0.00
om subsidiaries
123,364,991.6
Total 94.60% 0.00
9
3. Long-term equity investments
Currency: Renminbi Yuan
Closing balance Opening balance
Item Outstanding Provision for Carrying am Outstanding Provision for Carrying am
balance impairment ount balance impairment ount
Investments
201,935,47 201,935,47 207,935,47 207,935,47
in subsidiari
7.77 7.77 7.77 7.77
es
201,935,47 201,935,47 207,935,47 207,935,47
Total
7.77 7.77 7.77 7.77
328
2023 Annual Report of DR Corporation Limited
(1) Investments in subsidiaries
Currency: Renminbi Yuan
Opening Changes for the current period Closing b
Opening Closing b
balance o alance of
balance Provision alance (c
Investee f provisio Reductio provisio
(carrying Additions for impai Others arrying a
n for imp ns n for imp
amount) rment mount)
airment airment
Shanghai
Darry Di 5,000,00 5,000,00
amond C 0.00 0.00
o., Ltd
Chongqi
ng Darry 4,000,00 4,000,00
Jewelry 0.00 0.00
Co., Ltd
Shenzhe
n Love O
nly AI Cl 25,000,0 25,000,0
oud Tech 00.00 00.00
nology C
o., Ltd.
Couple O
nly (Shen
5,000,00 5,000,00
zhen) Je
0.00 0.00
welry C
o., Ltd.
Shenzhe
n Darry
Commer
10,000,0 10,000,0
cial Man
00.00 00.00
agement
Service
Co., Ltd
He’er Cul
ture (She 9,935,47 9,935,47
nzhen) C 7.77 7.77
o., Ltd
Haoduo 60,000,0 60,000,0
Diamond 00.00 00.00
329
2023 Annual Report of DR Corporation Limited
(Shenzh
en) Co.,
Ltd
Other su 89,000,0 8,000,00 14,000,0 83,000,0
bsidiaries 00.00 0.00 00.00 00.00
207,935, 8,000,00 14,000,0 201,935,
Total
477.77 0.00 00.00 477.77
4. Revenue and cost of sales
Currency: Renminbi Yuan
Amount for the current period Amount for the prior period
Item
Revenue Cost Revenue Cost
Primary business 2,005,711,510.45 662,886,503.09 3,504,011,054.08 1,059,821,992.30
Other business 4,881,247.28 2,461,038.16 30,921,300.22 32,745,675.51
Total 2,010,592,757.73 665,347,541.25 3,534,932,354.30 1,092,567,667.81
Disaggregation of revenue and cost of sales:
Currency: Renminbi Yuan
Segment 1 Segment 2 Total
Category of contra
Revenu Cost of Revenu Cost of Revenu Cost of Revenu Cost of
cts
e sales e sales e sales e sales
Type of business
Including:
Classified by geog
raphical region
Including:
Market or type of c
ustomer
Including:
Type of contract
Including:
Classified by timin
g of transfer of goo
ds or services
Including:
330
2023 Annual Report of DR Corporation Limited
Classified by contr
act duration
Including:
Classified by sales
channel
Including:
Total
Information about its performance obligations:
The nature
Timing of sa of the good Types of war
Significant Whether
tisfaction of s that the e Amounts expected to be r ranties and r
Item payment te it is a pr
performance ntity has pr efunded to a customer elated obliga
rms incipal
obligation omised to tr tions
ansfer
Normally,
when the C Customers are entitled to Generally, g
ompany re return merchandise within uarantee qu
ceives an a 15 days of receipt and th ality assuran
dvance pay erefore a return rate is es ce is provid
Sales when good
ment from Jewelry and timated and a provision fo ed to the cus
of goo s are deliver Yes
a custome ornaments r returns is required base tomer. Refer
ds ed
r, it will deli d on historical sales. Prov to Note V.2
ver the pro ision for returns made at t 6 for details
duct within he end of the year is deta of accountin
15-60 day iled in Note VII.28. g assets
s.
Other descriptions
Under the self-operated model, the performance obligation is completed when the customer receives the g
oods. Typically for direct store operations, goods are delivered within 30 days of receipt of the contract pric
e; for associated stores in cooperation with shopping malls and e-commerce platforms, the contract price i
s typically received within 15-60 days of delivery of the goods. The customer has the right to return the pro
duct within 15 days after receiving it, so it is necessary to estimate the return rate based on the historical s
ales situation and calculate the provision for return, which is detailed in Note VII.28.
331
2023 Annual Report of DR Corporation Limited
Information related to transaction price allocated to the remaining performance obligation:
At the end of the reporting period, the amount of revenue corresponding to the performance obligations tha
t have been contracted but have not yet been fulfilled or completely fulfilled is RMB100,572,333.72 yuan, o
f which, revenue is expected to be recognized for RMB in the year Y, revenue is expected to be recognize
d for RMB in the year Y, revenue is expected to be recognized for RMB in the year Y.
Significant variations in contract or material adjustment to transaction price
Currency: Renminbi Yuan
Item Accounting treatment Effect of income
Other descriptions:
5. Investment income
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
Dividend income of a subsidiary 470,008,243.54 480,000,000.00
Investment income received from
disposal of held-for-trading finan 149,403,162.82 65,266,805.97
cial assets
Investment income earned during
the holding period of debt invest 34,638,211.12 15,561,771.33
ment
Investment income received from
disposal of financial liabilities at f -454,869.03 0.00
air value through profit or loss
Total 653,594,748.45 560,828,577.30
XIX. Supplementary information
1. Breakdown of non-recurring profit or loss for the current period
Applicable □Not applicable
Currency: Renminbi Yuan
Item Amount Description
Gains or losses on disposal of no
1,483,669.10
n-current assets
Government grants (except for go
vernment grants which are closel 17,239,801.74
y related to normal business oper
332
2023 Annual Report of DR Corporation Limited
ations of the Company, are in co
mpliance with national policies an
d regulations, are available at det
ermined standards and have cont
inuous impact on the gains or los
ses of the Company) charged to
gains or losses for the period
Gains or losses on changes in fai
r value of financial assets and fin
Gains or losses arising on chang
ancial liabilities held and gains or
es in fair value of financial assets
losses on disposal of financial as
held for trading and investment in
sets and financial liabilities by no 232,611,194.40
come arising on wealth managem
n-financial enterprises, other than
ent products during the reporting
those used in the effective hedgi
period.
ng activities relating to normal op
erating business
Reversal of provision for account During the reporting period, the lo
s receivable that are tested for im 1,476,671.46 ng-term overdue payment was re
pairment losses individually covered from the shopping mall.
Mainly due to the increase in liqui
Other non-operating income and dated damages arising from the e
-4,827,618.30
expenses other than the above arly closure of stores during the r
eporting period.
Less: income tax effects 58,543,156.86
Total 189,440,561.54 --
Details of other profit and loss items that meet the definition of non-recurring income and loss:
□Applicable Not applicable
The Company had no other specific circumstances that meet the definition of non-recurring profit and loss i
tems.
The non-recurring profit and loss items listed in Explanatory Announcement No. 1 on Information Disclosur
e by Companies Offering Securities to the Public – Non-Recurring Profit or Loss are defined as regular pro
fit and loss items:
Applicable □Not applicable
Item Amount (RMB) Reason
VAT refund upon collection for th Government grants which are clo
e actual tax burden on diamond i 8,266,133.90 sely related to normal business o
mports exceeding 4% perations of the Company, are in
333
2023 Annual Report of DR Corporation Limited
VAT exemption for small-scale ta compliance with national policies
xpayers with monthly sales not ex and regulations, are available at
ceeding 100,000 yuan (or 300,00 1,118,925.88 determined standards and have c
0 yuan for quarterly sales if a qua ontinuous impact on the gains or l
rter is a tax period) osses of the Company
2. Return on net assets and earnings per share
Earnings per share
Profit for the reporting p Weighted average of ret
Basic earnings per shar Diluted earnings per sha
eriod urn on net assets
e (RMB/share) re (RMB/share)
Net profit attributable to
ordinary shareholders of 1.04% 0.17 0.17
the Company
Net profit after non-recur
ring profit or loss attribut
-1.82% -0.30 -0.30
able to ordinary shareho
lders of the Company
3. Differences in accounting data under domestic and overseas accounting standards
(1) Differences in net profit and net assets between financial reports under the international accountin
g standards and the Chinese accounting standards.
□Applicable Not applicable
(2) Differences in net profit and net assets between financial reports under the foreign accounting stan
dards and the Chinese accounting standards.
□Applicable Not applicable
(3) Reasons for differences in accounting data under domestic and foreign accounting standards. Whe
re adjustments are made for the difference in the data audited by an overseas audit institution, the name of
the overseas institution shall be indicated.
□Applicable Not applicable
334
