2022AnnualReport
DRCorporationLimited
April2023
MessagetoShareholders
TotherespectableshareholdersofDRCO:
Insistingonthecorporatevalueofcustomerorientationsincefoundation,DRCorporationLimited(DRCO)hasreapedsomeachievementsthroughcontinuousproductinnovationandserviceimprovement.Bytheendof2022,wetotallyservedover1.5millioncouples,whichisanachievement.Butweallunderstandthatbehindsuccessliescountlesschallengesandobstacles.Inthestutteringyearof2022,muchfiercermarketcompetitivenessandchangingindustriallandscapeposednewchallengestoDRCO.Althoughofperformancedeclineforthefirsttimejustafterourinitiallisting,webelievegrowthspaceandopportunitiesarebredfromweaknessandchanges.Nowadays,DRCOhasusheredinanewdevelopmentstage,presentingafreshnewstart.Asthetraffic-driveneracomestoanend,we’llpursuesustainabilityanddevotetoproductsandservicesthatdelivercompoundingeffectsovertimeduringthisfavorablewindowperiodofresourcesintegration.Consequentlywithdeeprootinthemarketandstrongercorecompetitiveness,DRCOwillcreatesignificantvaluestoourshareholdersandcustomers.
Originalaspiration
Withenhancingjoyandbeautyoftrueloveasouraspiration,weconstantlystrivetodiscover,witnessandspreadloveandromance.Insteadofsomebusinesslogicormodel,DRCOrootsinadreamforeverlastingandhappyemotionalrelationship.It’sthisdreamthatdrivesustobeacenturybrandandwitnessofmoretruelove.Abrandrepresentsconsumers’trustandtheirawarenessandappraisalofacompany’sproducts,servicesandculturalvalues.Establishedbasedonconsumers’recognitionandconfidence,DRCObenefitsthemfromourlong-termdevelopment.Areallyclassicbrandmustbetime-provenandbecomedurablethroughimpactoftrends.Upholdingpeopleorientation,ouraspirationandvisionaimtopleaseandconnectcustomers,andaccompanytheirgrowthandaffection.Jewelryisgenerallypreferredasthebestcarrierforexpressingandtestifyinglove.Especiallyasthesayinggoes,“ADiamondisForever”.Focusonlong-termvalues
Duetoagriculturecivilization,thepeacefulfamily&nationalspiritsandinheritanceofChineseculture,Chinesepeopletraditionallyprefertopreciousgoldandlow-keyjade.Nowadays,diamondsthatareintroducedfromthewestwithdeepconnotationoftruelovehavegainedhighpopularityamongtheyouth.DRCOenjoyssustainablebrandvaluesbydominatingthemostmemorablemomentsforpeopleandrepresentingthesolelovecherishedbyeachfemale.Althoughofvariouschallenges,webelieveourpersistencytowardtherightdirectionisboundtocreatelong-termvaluesforourshareholders.Moreover,ourbrandpowerstemsfromtheexpressionoflovewithpure,strongandunshakablepromise,reflectingthemostlastingandunderlyingdemandofhumanbeings.
Wealwayscenterourdecisionsaroundcustomers,andidentifymarketrecognitionofourbrandinlinewithkeyindicatorslikewordofmouthandcustomergrowth.We’vebeeninvestingconsiderableresourcestoexpandourcustomerbase,raisebrandimageandbolstertechnologies,soastobuildsustainablecompetitivenessinthemarket.Ourpursuitoflong-termbrandvaluesanddecision-makingmaydifferfromothercompanies.Therefore,we’dliketosharekeyideasonourstrategieswithshareholderstoguaranteethesamegoal:
?Wesparenoeffortstomeetcustomerdemandsandimprovetheironline&offline
experiences;
?Poweredbybrandbuilding,wepaygreaterattentiontoofflineoperatingefficiencyand
productdesignandprocessing;
?Wecontinuetomakedecisionsbasedonlong-termdevelopment,whichsometimesmay
affectshort-termresults;?Wewillendeavortoreducecostandincreaseefficiencyaswerecognizetheimportanceofcostcontrolinthehighlycompetitiveindustry;?Wewillfurtherattractandretainexcellenttalentswhoareessentialtobuildupavigorousteamwithcommongoalsandachievesuccess;
?WeattachgreatimportancetoESGandinsistonsustainabilitystrategyforourlong-
termdevelopmentwhileadvocatingourcorevaluestohelpmaintainstablemarriage
andcontributetosocialharmony.
PowerfulcoordinationlikeDiamondsLikemanyothertopenterprises,weworktorecruitandretainthetalentswiththesenseofresponsibilityandownership,whomwedependontoadvanceintherightdirectioninsteadofjustdataanalysis.Excellentemployeesandarecrucialtoaddressdifficultiesinbusinessoperation,forgeagreatbrandandbuilduparemarkableorganization.Wecallforpowerfulcoordinationandthinkingcollisionamongexcellenttalentstoinjectinexhaustiblepowertocorporatedevelopment.
Thefirstcurve&thesecondcurveofDRCOgrowthForthepastdecadeandbeyond,wehavebeencommittedtoforgingDRbrandintoworldwideNo.1brandofengagementrings,whichisdefinitelythefirstcurveofourdevelopment.Bycommunicatingthetrue-loveculture,DRproducts,nomatterofoneringoraseries,willbedeemedascustomers’soleandprimechoiceforproposalandexpressionofloveinthelifetime.UndoubtedlybrandandculturalconfidencewillcreatehugeopportunitiesforChinesebrands,whileincreasinglydifferentiatedandsegmentedconsumerdemandsarepushingvariousnewconsumptionslikeDTC(Direct-to-Consumer).Oursecondcurvehighlightsexpressionoflove,multi-brandandglobalfootprints.Thecorrespondingstrategyiscreatedintwoaspects:furtherdevelopmentofourstrengthbyfullyleveragingourresources,andmeaningfuleffortsinboostingcustomerhappiness,creatingawonderfulscenario,etc.Fourprioritiesfor2023We’dtakethischancetoinformourshareholdersofthefourprioritiesfor2023identifiedinthe
annualemployeemeeting.Brand-driveninnovation:inordertoadvocatetrueloveandwitnessmovelove,DRCOhasmadecomprehensiveplansandpreparationaroundourbrand,includingevolutionofbrandcontentsandcommunication,highbrand-awarenessproductsandimplementationofimpressiveactivities.Alloftheseeffortswillgraduallytakeeffects.Love-orientedservicesystem:DRCOproductsaredesignedtogothroughfromtheonce-in-a-lifepromisetolifetimehappiness,whichrequiresaconsideratebusinessandservicesystemtointerconnectourcustomers.Sincethelatterhalfof2022,wehaveembarkedontheinfrastructureconstructionofanomnichanneloperatingandmarketingsystem,andwillpropelintegratedonline&offlinebusinessthroughoutthecustomerslifecycle.Talentcultivationandreformofmanagementmechanism:attractingmoretalentsarevaluabletoourdevelopmentgoalsandoneofmajorreasonsbehindourlisting.In2023,DRCOwillstartatorganizationalupgrading,forwhichmoreandmoretalentswiththesameideologyareneededtorealizeourstrategies.Result-drivendeliverywithhigherstandardsandefficiency:greateffortsshouldbemadetocreateahigh-performanceculture,leadingtolotsofbenefitssuchasbetterproductsandservicesforcustomers.
Proactivedevelopmentforabrightfuture
Eachofournewgoalsanddecisionsismadeinpracticalandfeasiblemannerandwealwayscanfindoutnewinsightsintothecompany,brandsandcustomersbydeeplycommunicatingwithregionalmanagersandsaleschampions.Therecipeforsuccessissimple,butrequiresdeliberateplanningandactions.Lastbutnotleast,weonbehalfoftheBoardofDirectors,sincerelyappreciateeveryshareholderforyourunderstandingandexpectationsthathopefullycometrue.
Mr.ZhangGuotaoandMrs.LuYiwen,foundersofDRCO
April26,2023
PartI.ImportantNotes,ContentsandTerminology
TheBoardofDirectors,theSupervisoryCommitteeandtheDirectors,SupervisorsandseniormanagementofDRCOwarrantthattheinformationofthisannualreportistrue,accurateandcompletewithoutanyfalsestatements,misleadingstatementsormaterialomissions,andtheyshallassumeindividualandjointlegalresponsibility.BothZhangGuotao,thelegalrepresentativeofDRCOandHuangShuirong,theheadofthefinancialdepartmentinchargeofthecorporateaccountingconfirmthefinancialstatementscontainedintheannualreportaretrue,accurateandcomplete.Alldirectorshaveattendedtheboardmeetingatwhichthisreportwasdeliberated.Anyforward-lookingstatementsinthisreportthataddressfutureplansandobjectivesdonotconstitutematerialcommitmentsbyDRCOtoinvestorsandinvestorsandrelatedpartiesshouldbeawareoftherisksinvolvedandshouldunderstandthedifferencesbetweenplans,projectionsandcommitments.DRCOisrequiredtocomplywiththedisclosurerequirementsforjewelry-relatedbusinessspecifiedintheSelf-disciplinarySupervisionGuidelinesNo.3forCompaniesListedonShenzhenStockExchange-IndustryInformationDisclosure.DRCOhasdisclosedindetailstherisksandcountermeasuresthatDRCOmayfaceinthe"11.FutureDevelopmentOutlook"underthe"III.ManagementDiscussionandAnalysis"ofthisreport.Investorsarerecommendedtopayattentiontoinvestmentrisks.AccordingtotheprofitdistributionplanapprovedbytheBoardofDirectors,acashdividendofRMB10.00(includingtax)forevery10sharesandzerobonusshare(includingtax)toallshareholders,aswellaszerosharetobetransferredtoallshareholdersfromcapitalreserveforevery10shares.
TableofContents
PartI.ImportantNotes,ContentsandTerminology......................................................................................5
PartII.CompanyProfileandKeyFinancialIndicators...............................................................................12
PartIII.Managementdiscussionandanalysis.............................................................................................17
PartIVCorporateGovernance ...... 63
PartV.EnvironmentalProtectionandSocialResponsibility...................................................................88
PartVI.ImportantMatters...................................................................................................................................89
PartVII.ChangesinSharesandInformationofShareholders..............................................................138
PartVIII.InformationaboutPreferredShares.............................................................................................149
PartIX.InformationaboutBonds...................................................................................................................150
PartX.FinancialStatement..............................................................................................................................151
DocumentsAvailableforInspection
IFinancialstatementssignedandsealedbyDRCO'slegalrepresentative,andtheheadofthe
financialdepartmentinchargeofthecorporateaccounting;IIOriginalcopyoftheauditors’reportsealedbytheaccountingfirm,andsignedandsealedbythecertifiedpublicaccountants;IIIAlloriginalcopiesofDRCO’sannouncementsanddocumentspubliclydisclosedonthe
websitesdesignatedbyChinaSecuritiesRegulatoryCommission(CSRC)inthereporting
period;IVOriginalcopyofthe2022annualreport,whichhasbeensignedbyDRCO’slegal
representative;VOtherdocumentsavailableforinspection.TheabovedocumentsareavailableforinspectionatDRCO’sInvestmentandSecuritiesAffairsDepartment.
Terminology
Terms
| Terms | Definition |
| Company,DRCOandDRCorporation | DRCorporationLimited |
| DarryCorporation | ShenzhenDarryJewelryCo.,Ltd.,thepredecessorofDRCorporationLimited |
| DRInvestment | DRInvestment(Zhuhai)Co.,Ltd.,formerlyknownasShenzhenDRInvestmentCo.,Ltd.,isthecontrollingshareholderofDRCO. |
| WendiNo.1 | GongqingchengWendiNo.1InvestmentManagementPartnership(LP),ashareholderofDRCO |
| WendiNo.2 | GongqingchengWendiNo.2InvestmentManagementPartnership(LP),ashareholderofDRCO |
| WendiNo.3 | GongqingchengWendiNo.3InvestmentManagementPartnership(LP),ashareholderofDRCO |
| DarryQianhai | ShenzhenDarryCommercialManagementServicesCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| LoveOnlyAI | ShenzhenLoveOnlyAICloudTechnologyCo.,Ltd.,awholly-ownedsubsidiaryofDRCO. |
| HaoduoDiamond | HaoduoDiamond(Shenzhen)Co.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| ShanghaiDarry | ShanghaiDarryDiamondCo.,Ltd.,awholly-ownedsubsidiaryofDRCO. |
| ChongqingDarry | ChongqingDarryJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| CoupleShenzhen | CoupleOnly(Shenzhen)JewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| He’erCulture | He’erCulture(Shenzhen)Co.,Ltd.,formerlyknownasShenzhenShechusheJewelryCo.,Ltd.,isawholly-ownedsubsidiaryofDRCO. |
| XiamenDRJewelry | XiamenDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| ShenyangDRJewelry | ShenyangDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| TianjinDRJewelry | TianjinDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| ChengduDRJewelry | ChengduDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO. |
| KunmingDRJewelry | KunmingDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO. |
| ShanghaiDRJewelry | ShanghaiDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| SuzhouZhongzuanDRJewelry | SuzhouZhongzuanDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| JinanDRJewelry | JinanDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| ShenzhenDRJewelry | ShenzhenDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
BeijingZhongzuanDRJewelry
| BeijingZhongzuanDRJewelry | BeijingZhongzuanDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| SuzhouDRJewelry | SuzhouDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO. |
| ShenyangDRJewelryAccessories | ShenyangDRJewelryAccessoriesCo.,Ltd.,awholly-ownedsubsidiaryofDRCO. |
| HangzhouDRJewelry | HangzhouDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| BeijingDRJewelry | BeijingDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| WuhanDRJewelry | WuhanDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| WuhanZhongzuanDRJewelry | WuhanZhongzuanDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| Xi’anDRJewelry | Xi'anDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| ChengduDRTrueLoveJewelry | ChengduDRTrueLoveJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| NingboDRJewelry | NingboDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| BeijingHuazuanDRJewelry | BeijingHuazuanDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| ChongqingDRJewelry | ChongqingDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| HangzhouDarryTrueLoveJewelry | HangzhouDarryTrueLoveJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| HenanDRJewelry | HenanDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| Xi'anDRJewelryAccessories | Xi'anDRJewelryAccessoriesCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| ZhengzhouDRJewelry | ZhengzhouDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| ShenzhenDRJewelryAccessories | ShenzhenDRJewelryAccessoriesCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| ShenzhenDRJewelryOrnament | ShenzhenDRJewelryOrnamentCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| ChangshaDRJewelry | ChangshaDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| ShanghaiDRJewelryAccessories | ShanghaiDRJewelryAccessoriesCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| ShanghaiDRJewelrySales | ShanghaiDRJewelrySalesCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| ZhoukouDRJewelry | ZhoukouDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| YiwuDRJewelry | YiwuDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| HezeDRJewelry | HezeDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
DongguanDRJewelry
| DongguanDRJewelry | DongguanDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| XiningDRJewelry | XiningDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| LinyiDRJewelry | LinyiDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| YinchuanDRJewelry | YinchuanDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| WeifangDRJewelry | WeifangDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| NanchangDRJewelry | NanchangDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| JiningDRJewelry | JiningDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| MianyangDRJewelry | MianyangDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| FuyangDRJewelry | FuyangDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| ShangqiuDRJewelry | ShangqiuDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| UrumqiDRJewelry | UrumqiDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| HandanDRJewelry | HandanDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| BaodingDRJewelrySales | BaodingDRJewelrySalesCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| GuangzhouDRJewelry | GuangzhouDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| GuiyangDRJewelry | GuiyangDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| LangfangDRJewelry | LangfangDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| FoshanDRJewelry | FoshanDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| JiaxingDRJewelry | JiaxingDRJewelryCo.,Ltd.,awholly-ownedsubsidiaryofDRCO |
| HaoduoDiamondZhizao | HaoduoDiamondZhizao(Shenzhen)Co.,Ltd.,awholly-ownedsubsidiaryofHaoduoDiamond(Shenzhen)Co.,Ltd. |
| HongKongDRGROUP | DRGROUPCOMPANYLIMITED,awholly-ownedsubsidiaryofShenzhenLoveOnlyAICloudTechnologyCo.,Ltd. |
| HongKongDR | DARRYJEWELRY(HK)LIMITED,awhollyownedsubsidiaryofDRGROUPCOMPANYLIMITED |
| CoupleHongKong | CoupleOnlyJewelryHongKongCompanyLimited,awhollyownedsubsidiaryofDRGROUPCOMPANYLIMITED |
| FrenchDRJEWELRY | DRJEWELRY,awhollyownedsubsidiaryofDRGROUPCOMPANYLIMITED |
| QianhaiWendi | ShenzhenQianhaiWendiManagementConsultingCo.,Ltd. |
| EveryYearTravelPhotography | ShenzhenEveryYearTravelPhotographyCultureCo.,Ltd. |
WendiDesign
| WendiDesign | ZhuhaiWendiDesignConsultingCo.,Ltd. |
| WendiTechnology | ZhuhaiWendiTechnologyCo.,Ltd. |
| ZhuhaiWendiNo.1 | ZhuhaiWendiNo.1InvestmentPartnership(LP) |
| DR | AjewelrybrandownedbyDRCorporationLimited |
| ReportingPeriod | January1,2022–December31,2022 |
| ArticlesofAssociation | ArticlesofAssociationofDRCorporationLimited |
| Listing | ListingandtradingofDRCO’ssharesontheShenzhenStockExchange |
| YuanorRMB | Renminbi,thelawfulcurrencyofthePRC |
| CSRC | ChinaSecuritiesRegulatoryCommission |
| SZSE | ShenzhenStockExchange |
| SDE | ShanghaiDiamondExchange |
| ShenzhenAdministrationforMarketRegulation | ShenzhenAdministrationforMarketRegulation |
| CompanyLaw | CompanyLawofthePeople'sRepublicofChina |
| SecuritiesLaw | SecuritiesLawofthePeople'sRepublicofChina |
| Carat(inCt) | Aunitofmass(weight)ofgems.Theweightofacaratofdiamondsisequalto200milligramsor0.2gramsofdiamonds.Onecaratcanbesubdividedinto100pointsforcalculationofsmallerdiamonds;therefore,a50-pointdiamondis0.5carat. |
| FinishedDiamond | Thediamondaftercutting,polishingandotherprocessingthatcanbeusedtomakejewelries |
| Goldjewelry | Jewelrywithgoldasthemainrawmaterial |
| ㎡ | Squaremeter,aunittomeasurethearea |
| DTC | DirecttoCustomer,adirect-to-consumerbusinessmodel |
PartII.CompanyProfileandKeyFinancialIndicators
I.BasicInformation
Stockabbreviation
| Stockabbreviation | 迪阿股份 | StockCode | 301177 |
| Chinesename | 迪阿股份有限公司 | ||
| Chineseabbreviation | 迪阿股份 | ||
| Englishname(ifany) | DRCorporationLimited | ||
| Englishabbreviation(ifany) | DRCO | ||
| LegalrepresentativeofDRCO | ZhangGuotao | ||
| RegisteredAddress | Room306,WingBuildingofLuohuInvestmentHoldingBuilding,No.112Qingshuihe1stRoad,QingshuiheCommunity,QingshuiheStreet,LuohuDistrict,Shenzhen | ||
| Postalcode | 518023 | ||
| Historyofchangesinregisteredaddress | OnFebruary18,2022,theregisteredaddressofDRCOwaschangedfrom"Room1108-1115(Room8~15,11thfloor),FuGaParkBuildingatIntersectionofCuishanRoadandWenjinNorthRoad,DongxiaoStreet,LuohuDistrict,Shenzhen"to"Room306,WingBuildingLuohuInvestmentHoldingBuilding,No.112Qingshuihe1stRoad,QingshuiheCommunity,QingshuiheStreet,LuohuDistrict,Shenzhen” | ||
| Officeaddress | 12thand13thFloor,TowerC,ChinaResourcesLandBuilding,NanshanDistrict,Shenzhen | ||
| Postalcode | 518057 | ||
| Company’sglobalwebsite | http://www.darryringgroup.com | ||
| IR@darryring.com | |||
II.ContactInformation
| Boardsecretary | Securitiesaffairsrepresentative | |
| Name | HuangShuirong | WangTong |
| Address | 13thFloor,TowerC,ChinaResourcesLandBuilding,NanshanDistrict,Shenzhen | 13thFloor,TowerC,ChinaResourcesLandBuilding,NanshanDistrict,Shenzhen |
| Telephone | 0755-86664586 | 0755-86664586 |
| Fax | 0755-86725390 | 0755-86725390 |
| IR@darryring.com | IR@darryring.com |
III.InformationDisclosureandPlaceforInspection
| WebsiteofthestockexchangeforpublishingDRCO’sannualreport | ShenzhenStockExchange(SZSE):www.szse.cn |
| Nameandwebsiteofmediadesignatedforpublishingtheannualreport | SecuritiesTimes,SecuritiesDaily,ChinaSecuritiesJournal,ShanghaiSecuritiesNews,www.cninfo.com.cn |
| PlaceforinspectionofDRCO’sannualreport | InvestmentandSecuritiesAffairsDepartmentofDRCO |
IV.OtherRelevantInformation
AccountingfirmengagedbyDRCO
Nameofaccountingfirm
| Nameofaccountingfirm | Ernst&YoungHuaMingLLP(SpecialGeneralPartnership) |
| Officeaddress | Room01-12,17thFloor,EYTower,OrientalPlaza,No.1EastChang'anStreet,DongchengDistrict,Beijing |
| Namesofsigningaccountants | LiaoWenjiaandChenHuijin |
SponsorengagedbyDRCOtoperformcontinuingsupervisionduringthereportingperiod?Applicable□NotApplicable
| NameofSponsor | Officeaddress | Nameofsponsorrepresentative | Continuoussupervisionperiod |
| ChinaSecuritiesCo.,Ltd. | 35thFloor,ShenzhenMediaGroupTower,Pengcheng1stRoad,FutianDistrict,Shenzhen | HuFangxingandFangYifeng | December15,2021-December31,2024 |
FinancialadvisersengagedbyDRCOtoperformcontinuingsupervisionduringthereportingperiod
□Applicable?NotApplicable
V.KeyAccountingDataandFinancialIndicatorsWhetherDRCOneedstoretroactivelyadjustorrestatetheaccountingdataofthepreviousyears
□Yes?No
| 2022 | 2021 | YoYChanges | 2020 | |
| Revenue(RMB) | 3,681,574,412.68 | 4,622,729,780.48 | -20.36% | 2,464,497,974.60 |
| Netprofitattributabletoshareholdersoftheparentcompany(RMB) | 729,241,946.67 | 1,301,768,398.86 | -43.98% | 563,304,918.84 |
| Netprofitattributabletoshareholdersoftheparentcompanyafterdeductingnon-recurringgainsandlosses(RMB) | 613,246,940.64 | 1,248,508,013.88 | -50.88% | 540,418,472.80 |
| Netcashflowfromoperatingactivities(RMB) | 818,011,112.24 | 1,544,212,850.71 | -47.03% | 893,551,134.53 |
| Basicearningspershare(RMB/share) | 1.82 | 3.62 | -49.72% | 1.56 |
| Dilutedearningspershare(RMB/share) | 1.82 | 3.62 | -49.72% | 1.56 |
| Weightedaveragereturnonnetassets | 10.68% | 32.61% | -21.93% | 63.02% |
| Attheendof2022 | Attheendof2021 | YoYChangesprecedingyear | Attheendof2020 | |
| Totalassets(RMB) | 8,815,748,380.27 | 8,269,184,150.24 | 6.61% | 1,931,631,364.56 |
Totalequityattributabletoshareholdersoftheparentcompany(RMB)
| Totalequityattributabletoshareholdersoftheparentcompany(RMB) | 6,803,046,203.96 | 6,866,575,701.17 | -0.93% | 1,118,352,286.90 |
ThelowerofDRCO'snetprofitbeforeorafterdeductionofnon-recurringprofitorlossforthelastthreefinancialyearsisnegativeandtheauditreportforthelatestyearindicatesthatthereisuncertaintyaboutDRCO'sabilitytocontinueasagoingconcern.
□Yes?NoThelowerofDRCO'snetprofitbeforeorafterdeductionofnon-recurringprofitorlossisnegative.
□Yes?NoVI.KeyFinancialIndicatorsonQuarterlyBasis
Unit:RMB
| Q1 | Q2 | Q3 | Q4 | |
| Revenue | 1,221,199,779.32 | 864,133,585.54 | 957,699,618.41 | 638,541,429.41 |
| Netprofitattributabletoshareholdersoftheparentcompany | 375,842,072.65 | 202,683,468.47 | 193,992,549.30 | -43,276,143.751 |
| Netprofitattributabletoshareholdersoftheparentcompanyafterdeductingnon-recurringgainsandlosses | 342,352,186.63 | 147,753,013.94 | 143,385,918.79 | -20,244,178.722 |
| Netcashflowsfromoperatingactivities | 428,576,836.89 | 39,667,794.16 | 245,669,005.45 | 104,097,475.74 |
Notes:
1.Thenegativenetprofitattributabletoshareholdersofparentcompaniesinthefourthquarterismainlyduetothefollowingreasons:①asignificantdeclineinrevenueduetoexternalenvironmentalinfluences;
②itwasaresultofthefairvaluechangeofthefinancialassetsbecauseofsomefactorsincludingadjustmentsoffinancialpoliciesandthechangesinthemarketexpectationsforeconomicdevelopment;③theprovisionforimpairmentlossinsomestoreswasalsoanimportantreason.
2.Thenetprofitattributabletoshareholdersoftheparentcompanyafterdeductingnon-recurringgainsandlosseswasnegative.mainlyduetoasignificantdeclineinrevenueduetoexternalenvironmentalfactors;Ontheotherhand,mainlyduetotheprovisionforimpairmentlossesinsomestores.WhethertheabovefinancialindicatorsortheircombinedtotalaremateriallydifferentfromcorrespondingfinancialindicatorsdisclosedinDRCO’squarterlyandinterimreports
□Yes?No
VII.AccountingDataDifferencesUnderDomesticandForeignAccounting
Standards
1)Differenceinnetprofitandnetassetsinthefinancialstatementsdisclosed
simultaneouslypursuanttotheInternationalAccountingStandardsandthePRCAccountingStandardsforBusinessEnterprises
□Applicable?NotApplicableThereisnodifferenceinnetprofitandnetassetsinthefinancialstatementsdisclosedsimultaneouslypursuanttotheInternationalAccountingStandardsandthePRCAccounting
StandardsforBusinessEnterprisesduringthereportingperiod.
2)DifferenceinnetprofitandnetassetsinthefinancialstatementsdisclosedsimultaneouslypursuanttotheForeignAccountingStandardsandthePRCAccountingStandardsforBusinessEnterprises
□Applicable?NotApplicableThereisnodifferenceinnetprofitandnetassetsinthefinancialstatementsdisclosedsimultaneouslypursuanttotheForeignAccountingStandardsandthePRCAccountingStandardsforBusinessEnterprisesduringthereportingperiod.
VIII.Non-recurringProfit/LossItemsandAmounts?Applicable□NotApplicable
Unit:RMB
Item
| Item | Amountin2022 | Amountin2021 | Amountin2020 | Description |
| Gains/(Loss)ondisposalofnon-currentassets(includingthewrite-offportionoftheprovisionforimpairmentofassets) | 1,244,949.25 | -732,715.39 | -416,861.00 | |
| Taxrefundsorreductionswithultraviresapprovalorwithoutofficialapprovaldocumentsoroccurredcontingently | 162,770.75 | 150,631.39 | 599,131.38 | |
| Governmentgrants(exceptforgovernmentgrantswhicharecloselyrelatedtonormalbusinessoperationsofDRCO,incompliancewithnationalpoliciesandregulations,andconformwiththeamountorquantitiesatcertainstandardsonanongoingbasis)chargedtogainsorlossesfortheperiod | 23,433,558.47 | 11,022,474.28 | 7,961,026.39 | |
| Gainsfromfair-valuechangearisingfromtradingfinancialassetsandtradingfinancialliabilitiesheldandinvestmentgainfromdisposaloftradingfinancialassetsandtradingfinancialliabilities,otherthaneffectivevalueprotectionhedgesrelatingtoDRCO’sordinarycourseofbusiness | 128,297,407.98 | 59,197,417.83 | 22,249,157.37 | Gainsandlossesonchangesinfairvalueoffinancialassetsheldfortrading,andinvestmentincomefromwealthmanagementproductsduringthereportingperiod. |
| Othernon-operatingincomeorexpensesotherthantheaboveitems | 468,656.88 | -898,421.18 | -713,574.51 | |
| Less:Incometaxeffect | 37,612,337.30 | 15,479,001.95 | 6,792,391.96 | |
| Effectofminorityinterest(aftertax) | 41.63 | |||
| Total | 115,995,006.03 | 53,260,384.98 | 22,886,446.04 | -- |
Detailsofothergain/lossitemsthatmeetthedefinitionofnon-recurringgains/losses:
□Applicable?NotApplicableDRCOhasnootheritemsinlinewiththedefinitionofnon-recurringgains/losses.Explanationondefiningthenon-recurringitemsintheNo.1ExplanatoryAnnouncementforInformationDisclosurebyCompaniesthatIssueSecuritiestothePublic-Non-recurringGainsandLossesasrecurring
items?Applicable□NotApplicable
Item
| Item | Amountinvolved(RMB) | Explanation |
| VATrefunduponcollectionfortheactualtaxburdenondiamondimportsexceeding4% | 15,833,085.31 | Governmentgrantsthatcomplywithnationalpoliciesandcontinuetoenjoyinaccordancewithcertainstandardquotasorquantities |
PartIII.Managementdiscussionandanalysis
IIndustrialsituationduringthereportingperiod
DRCOisrequiredtocomplywiththedisclosurerequirementsfor"jewelry-relatedbusiness"and"retailindustry"specifiedintheSelf-disciplinarySupervisionGuidelinesNo.3-IndustryInformationDisclosureofcompanieslistedontheShenzhenStockExchange.
(I)OverviewofmacroeconomicenvironmentandmarketconditionsIn2022,manyfactorssuchasgeopoliticalconflicts,globalsupplychaindisruptions,energycrisesandtighteninginflationposedsignificantdownsideriskstotheglobaleconomy.Thedomesticeconomyalsofacedchallengesduetotheturbulentinternationalenvironmentandvariousuncertainties.In2022,China'sGDPgrewby3.0%year-on-year.Amongthethreemajorindustries,theserviceindustrywasthemostseriouslyimpacted.ThepercapitadisposableincomeofresidentsnationwidewasRMB36,883,growingby2.9%afterdeductingpricefactors,whichisbasicallysynchronizedwitheconomicgrowth.PercapitaconsumptionexpenditurewasRMB24,538,down0.2%inrealterms(comparedwithgrowthof12.6%ayearearlier),accountingfor66.5%ofdisposableincome(comparedwith68.6%ayearearlier).Despitetheslowdownineconomicdevelopmentandtheimpactonconsumerconfidence,theChineseeconomycontinuedtoshowgreatresilience.UndertheChinesegovernment'sworkingguidelineof"strivingforprogresswhilemaintainingstability,"thenationaleconomywithstoodthepressureandcontinuedtodevelop,andvariousofflineeconomicactivitieswereundertherecoveryattheendoftheyear.IntheWorldEconomicOutlookreportreleasedbytheInternationalMonetaryFund(IMF)inSingapore,theexpectedgrowthrateoftheglobaleconomyin2023wasraisedto
2.9%from2.7%inOctober2022,andtheexpectedgrowthrateforChinain2023waslevelledupsignificantlyto5.2%.ThisclearlyshowsthattheadjustmentofChina'sdomesticpolicieshasgreatlyimprovedmarketsentimentforeconomicrecovery.In2022,theGeneralOfficeoftheStateCouncilsuccessivelyissuedtheOpinionsonAcceleratingtheDevelopmentofNewTypesofConsumptionwithNewBusinessFormsandModelsandtheOpinionsonFurtherUnleashingConsumptionPotentialandPromotingtheSustainableRecoveryofConsumptiontopromotetheorderlyrecoveryanddevelopmentofconsumption.Thereportofthe20thNationalCongressoftheCommunistPartyofChinaalsoemphasizedeffortstoboostdomesticdemands,strengthenthefundamentalroleofconsumptionineconomicdevelopmentandpromotehigh-qualitydevelopment.InDecember,theCentralCommitteeoftheCommunistPartyofChinaandtheStateCouncilissuedtheDraftStrategicPlanforExpandingDomesticDemand(2022-2035),andtheNationalDevelopmentandReformCommissionissuedtheImplementationPlanofthe"14thFive-YearPlan"forExpandingDomesticDemand,whichclearlystatesthat"comprehensivelypromotingconsumptionandacceleratingtheupgradingofconsumptionquality"isanimportanttaskforexpandingdomesticdemand,andsetsouttherelevantrequirementsandtasks.ThismeansthatChina'sconsumermarkethasbidfarewelltotheeraofarbitrarygrowth,andthatconsumerdemandisconstantlyincreasing,requiringhigh-qualityproductsandservicestomeetbothmaterialandspiritualconsumptionneeds.
(II)Overviewofthedevelopmentofthejewelryindustry
AccordingtotheNationalBureauofStatistics,thetotalretailsalesofconsumergoodsin2022amountedto43.97trillionyuan,down0.2%yearonyear.Amongthem,thetotalretailsalesofgold,silverandjewelryaboveacertainsizeamountedto301.4billionyuan,down1.1%year-on-year,,combinedwithlastyear’shighbase,itrefelectsthestrongresilienceofChina’sJewelryindustry.Accordingtothe"2022DevelopmentReportofChina'sJewelryIndustry"publishedbytheGems&JewelryTradeAssociationofChina(GAC),thetotalmarketvolumeofChina'sjewelryindustryin2022wasabout719billionyuan,basicallythesameasthatin2021.Thegold
productsmarketwas410billionyuan,down2.4%year-on-year,thejademarketwas147billionyuan,up14.8%year-on-year,andthediamondproductsmarketwas82billionyuan,down18%year-on-year.Albeitafullrecoveryin2021,thediamondjewelrymarketfaceddifficultiesin2022.Comparedwithothercategories,theconsumptionscenariosofdiamondproductsarerelativelylimitedwithrelativelyhigherunitprice,leadingtobiggerchallengesinthecontextofdecliningweddingactivitiesandincreasingonlinesalesofothercategories.TheRapaportDiamondPriceIndexshowsthepriceof0.3caratand0.5caratdiamondswhichusedtorisesteadilyinthepastyearsduetostrongdemandsintheChinesemarketfellby7.7%and10.8%respectivelythisyear.Thisalsoindicatestheweaknessofdomesticdemand.Generallyspeaking,China'sjewelryindustryrepeatedlyachievesbreakthroughsanddemonstratestremendousvitalitythroughactivetransformationundermultiplechallenges.Withtherecoveryofofflineconsumption,manyconsumergoodsincludingjewelrythatmeetpeople'sdesireforabetterlifewillexperiencearevival.Inthepastthreeyears,allcategoriesofjewelryhavebeencontinuouslyinnovatedandimprovedinseveraldimensionsfromculturetotechnologies,achievingquantitativeaccumulationandqualitativetransformation,suchasmoreprecisebrandculturebuilding,moreefficientsupplychains,morecustomizedanddiverseproductdesign,andmorecomprehensiveend-customerexperience.Atpresent,Chinaisalreadythelargestgoldconsumerandthesecondlargestdiamondconsumerintheworld,andwillusherinanewdevelopmentpatternasthemostpromisingjewelryconsumermarketintheworld.
1.Marketfluctuationsaccelerateindustryrestructuring,andindustryconcentrationcontinuouslyshiftstowardthetopcompaniesUnderthepressureofeconomicdownturn,thegrowinggapbetweenenterprisesintermsofperformance,marketshareandcompetitivenessinthejewelryindustryisbecomingevenmoreapparent,andmarketresourcesarecontinuouslyflowingintothetopenterprisesintheindustry.Thisisconduciveforjewelrybrandswithbrandappealandinfluencetointegrateupstreamanddownstreamresourcesmoreefficientlyandexpandmarketshare.Inthefuture,thedegreeofconcentrationintheindustrywillcontinuetoincrease.AccordingtoEuromonitor,from2016to2022,theconcentrationratioofChina'sjewelryindustryconstantlyinclinedtowardtheheadcompanies,withtheCR10jumpingfrom17.2%tonearly30%.Theheadcompaniesstillhavepotentialstofurtherincreasetheirmarketshareinarelativelyfragmentedcompetitivelandscapecomparedto56%and49%inHongKong,ChinaandJapanrespectively.Asitisdifficultforordinaryconsumerstodistinguishthequalityandvalueofdiamondjewelry,theyrelymoreonbrandtrustwhenselectingjewelry.Jewelrycompanieswithahighbrandreputationwillbepreferred.ConsideringstablegrowthofChineseeconomyinthefutureandthesteadyriseinresidents'incomeduetoeconomicgrowth,itisexpectedthattheChinesejewelryindustrywillachievestablegrowthunderthedualpromotionofindustryconcentrationandexpandedmarketshareoftheheadcompanies.AccordingtothestatisticsandforecastsofStatista,aninternationaldatainstitute,thecompoundannualgrowthrateofthemarketisexpectedtobe4.45%from2023to2026(accordingtothehistoricaldatapublishedbyGAC,thecompoundgrowthrateofmajorjewelrycategoriesfrom2013to2022was5.8%fordiamonds,3.3%forgoldand3.3%forjade).Inadditiontothedemandside,thesupplysidegraduallyshiftsfromthetraditionalstrategyfocusingonsalesandpricecompetitiontobrandbuildinganddeepinsightintoconsumers’behaviorsanddemands.Thesechangesinresponsetotheeraofpersonalizedconsumptionwillalsodriveexpansionofindustrialscale.
2.Themiddleclasscontinuestogrowandit’spossibleforhigherpenetrationrateoftheindustry
Asdiamondisakindofconsumergoodswithstrongoptionalattributes,thecontinuousimprovementinthedisposableincomeofresidentsandthesteadygrowthofthemiddleclasshavelaidthefoundationforacontinuousimprovementinthepenetrationrateofthedomesticdiamondandjewelryindustry.AccordingtoDeBeersandtheWorldBank,thepercapitademandfordiamondjewelryin2021was$142intheUnitedStates,$40inJapanandonly$7inChina.Comparedwithdevelopedcountries,China'sconsumptionofdiamondjewelrystillhasmuchroomforimprovement.Ontheotherhand,accordingtotheabsoluteincomestandardoftheNationalBureauofStatistics,thereisamiddle-incomegroupofmorethan400millionpeopleinChina,whichisthelargestandmostpromisingmiddle-incomegroupintheworld.AccordingtoMGIdatafromthe"2023McKinseyChinaConsumerReport",thecompoundannualgrowthrate(CAGR)ofthenumberofurbanChinesehouseholdswithanannualincomeofmorethan160,000yuan($21,800)reached18%from2019to2021,from99millionto138million;itispredictedthatanother71millionhouseholdswillenterthisrangeby2025,showingthehugepotentialoftheChineseconsumermarket.Fromaproductstructureperspective,thecurrentdemandforjewelryinChinahasbothinvestmentandconsumptionattributes,andtheemotionalandculturalappealanddesignestheticsrequiredforjewelryarecontinuouslyincreasingasgenerationschange.In2020,theUnitedStatesaccountedfor48%ofglobaldiamondconsumption,whileChina,rankedsecond,accountedforonly13%oftheglobalmarketandlessthanone-thirdoftheUnitedStates,indicatingsignificantgrowthpotential.Intermsofconsumptionscenarios,theproliferationofdiamondjewelryforweddingsinChinaisexpectedtocontinuetoincrease.Accordingtothe"2018DiamondIndustryInsightsReport"publishedbyDeBeers,theproportionofChinesenewlywedswhopurchaseddiamondringswasonly47%in2017.However,accordingtoHUNLIJI's"2023WeddingAll-CategoryConsumptionTrendInsightsReport",diamondringsaccountfor81.3%ofthepreferredtypesofweddingjewelry,and67.3%ofcouplesoptforcustomizeddiamondrings.Withthecontinuousincreaseinthenumberofmiddle-incomeandhigh-incomefamilies,andthecontinuedincreaseinpercapitaconsumptionandmarketpenetration,thisisexpectedtofurtherdrivetherapidexpansionofthejewelryindustry.
3.Attentiononchangesinconsumerdemandsisessentialtotheindustriallong-termdevelopmentFromaconsumerperspective,Chineseconsumers'purchasingdesiresgraduallyturnstoemotionalvaluesandpersonaltasteinsteadoffunctionsorbasiclivingdemands.Theconsumptionbehaviorchangesfrombuyingmassproductstopersonalizedproductsandfromofferingstogoodsandservices,reflectingthecustomershigherinterestsinbetterqualityandpleasureandsatisfactionduringtheconsumptionjourney.Thediversificationofmaterialandspiritualconsumptionneedsandfocusonqualityfuelsthedevelopmentofjewelryconsumption.Onthesupplyside,jewelryretailersusedtocenteronpracticalvalue.However,asemotionalelementisincreasinglyimportanttotheconsumers,theyprefertobrandsthatmatchtheirvaluesandemotionalneeds.Therefore,emotionalbenefitsandpracticalbenefitsareequallycrucialforjewelrybrands.Thechangesinconsumerbehaviorindeedowetodifferentconsumptionconceptsbroughtaboutbygenerationalchange,whichisunderpinnedbychangedpopulationstructurewithfar-reachingimpactontheconsumermarket.OnMay11,2021,theresultsoftheseventhcensuswerereleasedbytheNationalBureauofStatistics,accordingtowhichthetotalpopulationofChinaiscurrently1.41178billion.Amongthem,494.38millionpeopleareaged18-35,accountingfor
35.35%ofthetotalpopulation.AccordingtoaresearchreportbyBCGandAliResearchInstitute,theconsumptionofChina'syoungergeneration(18-35yearsold)willsurpassthatoftheoldergeneration(over35yearsold)in2021,reachingUS$2.6trillion.ItisobviousthattheyoungergenerationwillbecomethemainforceofChina'sconsumermarket.Thechangesinconsumptionconceptsandbehaviorsresultingfromthegenerationalshiftwillfurtheracceleratethe
penetrationofjewelryconsumptionterminalsandbringnewgrowthopportunitiestotheconsumermarket.
4.Themarketdemandinnon-maritalrelationshipsisgrowingasexpressionofloveisconsumers’invisibleandrigidneed.Inthecontemporarynewromanticrelationship,Chinesepeopleseektoexploreandbreaktraditionalnormsandembracerealself,boostingpublicpursuitofeternalloveandemotionalexpression.Underconsumptionupgrading,consumers'demandsarebecomingmorepersonalizedandindividualized,andscenario-basedconsumptiongainspopularity.Thenewgenerationofyoungconsumersinparticularstressonspiritualsatisfaction.GiftsarepresentednotonlyinfestivalsandcommemorativedayssuchasValentine'sDay,May20andChineseValentine'sDay,butalsofortheconsumerstoexpresstheirlove.AccordingtoCSM's"ShortVideoCustomerValueResearchReport2022"andQuestMobile'ssurveydata,thepursuitofasenseofceremonyinthelifephilosophyofshortvideocustomersis66.9%.Whenitcomesto"Valentine'sDay"contentonshortvideoplatforms,"asenseofceremonyisessential,""customizedgiftsforlovedones,"and"giftsarepreciousbecausetheyaremadewithheart"havebecomehottopicsforcustomerstodiscuss.Therefore,creatingastrongeremotionalbondthroughhighlyinteractiveandceremonialexpressionshasbecomeaninevitabletrendinthedemandforjewelry.Itisexpectedthatjewelrybrandsthathaveastrongemotionalconnection,conveysustainablevaluepropositions,andrepresentabrandtonalitywillreapincreasingdemandsinnon-marriageandnon-romanticscenarios.AccordingtoAIMediadatacenter'ssurveyonthedemandforjewelry/accessoriesinChina'sweddingmarket,89.5%ofconsumerswillbuyweddingjewelryin2021,ofwhich77.7%willbuyringsand75.5%willbuynecklaces.Atthesametime,morethan67.5%ofweddingjewelryconsumershaveabudgetofover30,000yuan,morethan42.5%haveabudgetofover50,000yuan,andnearly15%ofweddingjewelryconsumershaveabudgetofover100,000yuan.Therefore,thedemandforweddingjewelry,whichismainlymadeofgoldanddiamonds,willcontinuetohaveahighbudget.
5.ExternalenvironmentacceleratesthepaceofdigitaltransformationintheindustryWiththerapiddevelopmentofdigitaltechnology,thecognitionandinterconnectionoftheconsumershaveunprecedentedlyexpanded,andthejewelryindustryhasenteredanewnormalofcomprehensivedigitaltransformation.Inparticular,thepopularityofInternetandwidespreadmobilepaymentsarenewdriversofjewelrydemands.People'sconsumptionhabits,contents,patternsandconceptsareconstantlyadjustedbythedevelopmentofdigitaltechnology.AccordingtoTmallonlinedatafromMKTINDEX,thecumulativesalesofthejewelrymarketfromJanuarytoDecember2022reached25.34billionyuan,up25.7%yearonyear.In2022,theeconomicoutlookwasweak,andvariousindustriesexperienceddifferentdegreesofdecline.However,thejewelrymarketmaintainedahighdegreeofconsumerelasticity.Newconsumptionpatternsturntwo-dimensionalconsumptionexperienceintothethree-dimensionallevel.MeanwhileInternethasbridgedthegapbetweenofflineandonlinepurchase,acceleratingthedevelopmentofthe"Internetplus"jewelryeconomy.Jewelryretailersareexploringmultiplechannelstofullyutilizeprivatedomaintrafficandforgeanewdevelopmenttrendcombiningonlinegrowth,offlineexperienceandfullchannels.Thedevelopmentofonlineandofflineintegrationwillenablejewelryretailerstounderstandandbetterreachcustomersandachievecontinuousinnovationthroughdigitaltransformation.IIThemainbusinessofDRCOduringthereportingperiod
DRCOisrequiredtocomplywiththedisclosurerequirementsfor"jewelry-relatedbusiness"and
"retailindustry"specifiedintheSelf-disciplinarySupervisionGuidelinesNo.3-IndustryInformationDisclosureofcompanieslistedontheShenzhenStockExchange.
(I)MainbusinessofDRCO
Withthecorporatemissionofenhancingjoyandbeautyoftrueloveandthevisionofthegloballeaderinthetrueloveculture,DRCOisaglobalizedpubliccompanyengaginginhigh-enddiamondsandjewelry,truelovecultureandrelatedservices.Bytailoringengagementringsforourcustomers,wefocusonbusinesssceneriesofproposal,weddingandanniversaries,soastowitnessandpropagatethetrueloveculture,anddeliverworldwideconsumerswithhigh-qualityjewelryproductsanduniqueloveculture-relatedexperienceandservicestomeettheirdesiresforeternallove.ThroughaglobalonlineandofflineDTC(Directtoconsumer)retailnetwork,DRengagementdiamondsareavailableinover200citiesacrossParisofFrance,HongKongofChinaandChinesemainland.Empoweredbyitsdifferentiatedpositioning,professionalproductdesignanduniqueserviceexperience,DRhasquicklygrownintoaleadingbrandintheworld’sengagementringmarket,andreceivedmanyauthoritativeinternationalawards,suchas"Asia'sTop500Brands"byWorldBrandLab,“BrandoftheYear”byJNAAwards,and“BestInternationalEngagementRingBrandoftheYear”byHKCT.Asoftheendofthereportingperiod,ithad688direct-salesstoresworldwide,highlyrecognizedandfavoredbyyoungconsumers.
(II)MainproductsofDRCO
Atpresent,themainproductsofDRCOincludeengagementrings,weddingringsandlovegifts.Goingforward,basedonthestrategyofsupportingcustomers’lifetimelove,DRCOwillseizemarketopportunities,andworkcontinuouslytoimprovethepowerofproductdevelopmentandserviceinnovation,inanefforttoprovideconsumerswithmorediversifiedlovesolutionsandultimatelybecomealeaderinthelovecultureecosystem.
(III)BusinessconditionsofDRCO
1.Customizedself-directedsalesmodel
Withafullyintegratedomnichannelmarketing,DRCOprovidescustomerswithaseamlessonlineandofflineshoppingexperience.Channelssuchastheofficialwebsite,miniprogram,TmallandJDflagshipstoresofferourconsumersonlineplatformstobrowseandstoreatanytime,whileofflinestoresactasphysicalexperiencechannels,takingfulladvantageoftheconvenienceandefficiencyofonlineplatformsandthephysicalexperienceofofflinechannels.Forreasonsofbrandpromotion,imagebuilding,andunifiedmanagementand
operations,DRCOischoosingafullyself-managedmodelfortheDRbrand.AllstoresaremanagedandoperatedbyDRCOitself.Thepricesofonlineandofflineproductsareuniformandmainlyofferedtocustomersthroughretailsales.Underthecustomizedmodel,consumersplaceordersandmakedownpaymentsorfullpaymentstoconfirmthepurchasethroughDRCO'sonlineandofflinestores.AfterDRCOordersproductionandreceivesfinalpayment,itarrangesfordirectdeliverytoconsumersordeliverytothestoreforconsumerpickup.Tohelpconsumersbettercommunicatethebeautifullove,DRCOalsooffersthemaseriesofvalue-addedservices,suchasalovecontract,aloveaffirmationbookandaproposalceremonysupportedbythestore.
(1)RevenuebybusinessmodelduringthereportingperiodDuringtheperiodunderreview,economicgrowthslowedandconsumerpurchasingpowerdeclined,leadingtoadropindemandforsomeconsumergoods.Asaresult,DRCO'sshort-termperformancewasunderpressure.Theunfavorablebusinessenvironmentcausedbytheeconomicdownturnintensifiedcompetitionintheindustry,whichnegativelyimpactedDRCO'ssales.Duringtheperiodunderreview,DRCOgeneratedtotalrevenueof3.68billionyuan,down20.36%year-on-year.Ofwhich,theOnlineSelf-Operated,OfflineDirect-Operated,OfflineJoint-OperatedandOtherBusinessesaccountedforrevenuesof0.40billionyuan,2.98billionyuan,0.28billionyuanand0.03billionyuan,respectively,accountingfor10.72%,80.95%,7.48%and0.85%ofDRCO'sannualrevenues.Therevenueoftheself-operatedonlinebusinessdecreasedby34.07%year-on-yearduringthereportingperiod,mainlyduetotheoptimizationofDRCO'sproductstructureandtheremovalofsomediamondringproductswithlowcaratweightatthebeginningofthereportingperiod.Thedecreaseinofflinesalesismainlyduetothedecreaseinthenumberofvisitorstoshoppingmallsandthesuspensionorreductionofstorehoursduetocooperationwithshoppingmalls.Accordingtostatistics,thetotalnumberofdaysonwhichstorehoursweresuspendedorshortenedwas9,940forallstoresduringtheyear.Theincreaseinotherbusinessrevenuewasmainlyduetotheincreaseinsalesofproductstobeprocessed,withayear-on-yeargrowthof11.85%.
Revenuebybusinessmodelduringthereportingperiod
Unit:RMB0'000
Business
model
| Businessmodel | 2022 | 2021 | YoYchangeinrevenue | YoYchangeingrossmargin | ||||
| Revenue | Operatingcost | Grossmargin | Revenue | Operatingcost | Grossmargin | |||
| OnlineSelf-Operated | 39,459.33 | 12,847.89 | 67.44% | 59,852.71 | 19,951.58 | 66.67% | -34.07% | 0.77% |
| OfflineDirect-Operated | 298,037.34 | 86,718.60 | 70.90% | 367,365.88 | 105,348.32 | 71.32% | -18.87% | -0.42% |
| OfflineJoint-Operated | 27,521.47 | 8,713.53 | 68.34% | 32,169.08 | 9,753.50 | 69.68% | -14.45% | -1.34% |
| OfflineDistribution | 0.00 | 0.00 | - | 78.50 | 62.55 | 20.32% | -100.00% | - |
| OtherBusinesses | 3,139.31 | 2,947.23 | 6.12% | 2,806.81 | 2,939.18 | -4.72% | 11.85% | 10.84% |
| Total | 368,157.45 | 111,227.25 | 69.79% | 462,272.98 | 138,055.13 | 70.14% | -20.36% | -0.35% |
(2)Storesinthereportingperiod
①ChangesinnumberofstoresDuringthereportingperiod,DRCOacceleratedthepenetrationinmajorcitieswiththefocusontier-1andtier-2cities,andactivelyestablishedpresenceincitiesnothavingbeencoveredandfurthersteppedupcoverageinkeyregionalmarketsincludingEastChina,NorthChinaandSouthwestChina.Duringthereportingperiod,DRCOopened254newstores(18inQ1,86inQ2,85inQ3and65inQ4),including51ones,or20.07%,incitieswithoutourfootprints;27storeswereclosed(4inQ1,9inQ2,4inQ3and10inQ4).Therefore,thenetincreasewas227.Asofendofthereportingperiod,DRCOhad688stores,up49.24%from461atthebeginningoftheperiod.Allofflinestoresareself-operated.Asoftheendofthereportingperiod,686storeswerelocatedin221citiesin30provinces/autonomousregions/municipalitiesdirectlyunderthecentralgovernment,and2overseasstoreswerelocatedinParisandHongKongrespectively.Domesticstoresaremainlylocatedincitiesatthethirdtierandabove,including449,orapproximate65.45%intier-1andtier-2cities,and237,orapproximate
34.55%intier-3citiesandbelow.
Changesinnumberofstoresduringthereportingperiod
Tierofcity
| Tierofcity | Classification | Openingnumber | Increase | Decrease | Netchange | Closingnumber | ||
| New | Changeinbusinessmode | Closed | Changeinbusinessmode | |||||
| Tier-1andtier-2 | Direct-operated | 275 | 151 | 2 | 16 | 1 | 136 | 411 |
| Joint-operated | 29 | 11 | 1 | 1 | 2 | 9 | 38 | |
| Subtotal | 304 | 162 | 3 | 17 | 3 | 145 | 449 | |
| Tier-3,4andbelow | Direct-operated | 143 | 87 | 1 | 10 | 3 | 75 | 218 |
| Joint-operated | 12 | 5 | 3 | 0 | 1 | 7 | 19 | |
| Subtotal | 155 | 92 | 4 | 10 | 4 | 82 | 237 | |
| Overseas | Direct-operated | 2 | - | - | - | - | - | 2 |
| Joint-operated | - | - | - | - | - | - | - | |
| Subtotal | 2 | - | - | - | - | - | 2 | |
| Total | Direct-operated | 420 | 238 | 3 | 26 | 4 | 211 | 631 |
| Joint-operated | 41 | 16 | 4 | 1 | 3 | 16 | 57 | |
| Total | 461 | 254 | 7 | 27 | 7 | 227 | 688 | |
②NewlyopenedstoresDuringthereportingperiod,DRCOopened254newself-operatedstores,anincreaseof124overthepreviousyear.Duringthereportingperiod,thenewlyopenedstoresrealizedrevenueofRMB326.87million,accountingfor8.88%ofthetotalrevenue;theirgrossprofitsreachedRMB231.42million.
Newlyopenedstores
Unit:RMB0'000
Mode
| Mode | Region | 2022 | 2021 | ||||||||
| Nu-mberofstor-es | Area(m?) | Revenue | As%oftotalrevenue | Grossprofit | Nu-mberofstor-es | Area(m?) | Revenue | As%oftotalreve-nue | Grossprofit | ||
| Joint-operated | Northeast | - | - | - | - | - | 1 | 108.00 | 130.95 | 0.03% | 95.58 |
| NorthChina | 6 | 413.00 | 1,409.48 | 0.38% | 986.49 | 1 | 68.00 | 160.26 | 0.03% | 114.01 | |
| EastChina | 8 | 436.28 | 822.41 | 0.22% | 538.26 | 9 | 656.80 | 1,425.24 | 0.31% | 1,023.17 | |
| SouthChina | 1 | 65.00 | 378.43 | 0.10% | 265.26 | - | - | - | - | - | |
| CentralChina | 1 | 31.00 | 398.99 | 0.11% | 255.46 | 1 | 64.00 | 61.57 | 0.01% | 46.01 | |
| Northwest | - | - | - | - | - | 1 | 83.00 | 780.11 | 0.17% | 575.46 | |
| Southwest | - | - | - | - | - | 1 | 140.00 | 44.76 | 0.01% | 33.06 | |
| Subtotalofjoint-operatedstores | 16 | 945.28 | 3,009.31 | 0.82% | 2,045.47 | 14 | 1,119.80 | 2,602.89 | 0.56% | 1,887.29 | |
| Direct-operated | Northeast | 17 | 1,443.78 | 2,269.53 | 0.62% | 1,590.26 | 7 | 632.81 | 933.20 | 0.20% | 680.96 |
| NorthChina | 27 | 2,639.87 | 5,281.82 | 1.43% | 3,783.43 | 9 | 620.90 | 2,653.21 | 0.57% | 1,976.36 | |
| EastChina | 84 | 7,630.04 | 9,425.75 | 2.56% | 6,703.03 | 42 | 4,029.76 | 8,950.71 | 1.94% | 6,572.57 | |
| SouthChina | 25 | 2,561.07 | 3,133.24 | 0.85% | 2,229.32 | 24 | 2,418.56 | 5,203.62 | 1.13% | 3,847.05 | |
| CentralChina | 26 | 2,629.97 | 3,324.86 | 0.90% | 2,372.48 | 12 | 1,016.67 | 2,806.66 | 0.61% | 2,082.15 | |
| Northwest | 18 | 1,535.64 | 3,107.10 | 0.84% | 2,186.87 | 8 | 895.08 | 1,582.36 | 0.34% | 1,196.57 | |
| Southwest | 41 | 4,692.06 | 3,135.16 | 0.85% | 2,231.48 | 14 | 1,268.49 | 3,003.76 | 0.65% | 2,198.78 | |
| Subtotalofdirect-operatedstores | 238 | 23,132.43 | 29,677.45 | 8.06% | 21,096.87 | 116 | 10,882.27 | 25,133.52 | 5.44% | 18,554.44 | |
| Total | 254 | 24,077.71 | 32,686.77 | 8.88% | 23,142.34 | 130 | 12,002.07 | 27,736.42 | 6.00% | 20,441.73 | |
Note:Theabovefiguresareroundedtotwodecimalplaces.Someofthefiguresareslightlydifferentintheendingsduetoroundingandarenotcalculationerrors.
③Impactofclosedstoresduringthereportingperiod
Duringthereportingperiod,DRCOoptimizedthelayoutofthestoreswhilesteadilyexpandingthemarket.Duringthereportingperiod,DRCOclosed27stores(including26self-operatedand1joint-operatedones),accountingfor3.92%ofthetotalasattheendofthereportingperiod.TheseclosedstoresearedrevenueofRMB70.22millionduringthereportingperiod.BasedontherevenueofRMB161.35millioninthesameperiodoftheprecedingyear,theimpactoftheclosedstoresonDRCO’srevenueduringthereportingperiodwasRMB-91.12million,representing-2.47%oftherevenueinthereportingperiod.
Analysisoftheimpactofclosedstoresonrevenueduringthereportingperiod
Unit:RMB0'000
Mode
| Mode | Region | Closed | Revenueduringthereportingperiod | Revenueinthesameperiodoftheprecedingyearcreatedbystoresclosedduringthereportingperiod | ImpactofclosedstoresonDRCOduringthereportingperiod | Impactofclosedstoresasa%ofrevenueduringthereportingperiod |
| Joint-operated | Southwest | 1 | 139.42 | 443.17 | -303.75 | -0.08% |
| Subtotalofjoint-operatedstores | 1 | 139.42 | 443.17 | -303.75 | -0.08% | |
| Direct-operated | Northeast | 1 | 72.75 | 746.82 | -674.07 | -0.18% |
| NorthChina | 2 | 1,207.30 | 2,117.11 | -909.81 | -0.25% | |
| EastChina | 10 | 2,267.85 | 6,570.68 | -4,302.83 | -1.17% | |
| SouthChina | 2 | 192.19 | 946.02 | -753.83 | -0.20% | |
| CentralChina | 8 | 2,098.90 | 3,816.52 | -1,717.61 | -0.47% | |
| Northwest | 2 | 912.49 | 1,106.31 | -193.82 | -0.05% | |
| Southwest | 1 | 131.47 | 387.90 | -256.43 | -0.07% | |
| Subtotalofdirect-operatedstores | 26 | 6,882.95 | 15,691.36 | -8,808.41 | -2.39% | |
| Total | 27 | 7,022.37 | 16,134.53 | -9,112.16 | -2.47% | |
Note:ImpactofclosedstoresonDRCOduringthereportingperiod=Revenueofclosedstoresduringthereportingperiod-revenueofclosedstoresinthesameperiodofprecedingyear
④Performanceanalysisforstoresduringthereportingperiod
SinceMarch2022,someofflinestoreshaveclosedorshortenedtheirbusinesshours,andthefoottrafficofshoppingmallstrafficplummeted.Duringthereportingperiod,fordirect-operatedstores,therevenueofasinglestorewasRMB5.74million,down43.75%fromthesameperiodoflastyear;thegrossprofitofasinglestorewasRMB4.07million,down43.90%fromthesameperiodoflastyear,andtheareaefficiencyofasinglestoreswasRMB63.3thousand,down45.27%fromthesameperiodoflastyear;forjoint-operatedstores,therevenueofasinglestorewasRMB5.62million,down42.38%fromthesameperiodoflastyear;thegrossprofitofasinglestorewasRMB3.84million,down43.49%fromthesameperiodoflastyear,andtheareaefficiencyofasinglestoreswasRMB82thousand,down42.63%fromthesameperiodoflastyear.
Single-storerevenueandgrossprofit
Unit:RMB0'000
| Classification | 2022 | 2021 | YoYchange,% | ||||||||||
| Aver-agenum-berofstores | Sing-le-storearea㎡ | Single-storerevenue | Single-storegrossprofit | Sing-le-storeareaeffici-ency | Aver-agenum-berofstores | Sin-gle-storearea㎡ | Single-storerevenue | Single-storegrossprofit | Sin-gle-storeareaeffici-ency | Single-storeReve-nue | Sing-le-storegrossprofit | Sing-le-storeareaeffici-ency | |
| Direct-operated | 519 | 91 | 574.25 | 407.17 | 6.33 | 361 | 88 | 1,017.63 | 725.81 | 11.56 | -43.57% | -43.90% | -45.27% |
| Joint-operated | 49 | 69 | 561.66 | 383.84 | 8.20 | 33 | 68 | 974.82 | 679.26 | 14.29 | -42.38% | -43.49% | -42.63% |
Note:Theaveragenumberofstoresreferstotheaverageofthenumberofstoresattheendofeachmonthofthereportingperiod(∑numberofshopsattheendofthemonth/numberofmonths)⑤Top10storesintermsofrevenue
Unit:RMB0'000
No.
| No. | StoreName | Openingtime | Mode | Businessarea(㎡) | Revenue | Operatingcost | Operatingprofit |
| 1 | DRStoreinXi'anSAGAInternationalShoppingMall | July28,2018 | Direct-operated | 168.00 | 2,527.44 | 782.34 | 1,107.05 |
| 2 | DRStoreinGuangzhouTianheZhengjiaPlaza | November11,2017 | Direct-operated | 266.00 | 2,332.90 | 725.78 | 731.78 |
| 3 | DRStoreinFuyangYingzhouWandaPlaza | November9,2020 | Direct-operated | 96.60 | 2,254.85 | 628.35 | 1,404.17 |
| 4 | DRStoreinChengduIFS | January17,2018 | Direct-operated | 93.00 | 2,136.94 | 675.16 | 927.43 |
| 5 | DRGuojinStoreinChangshaWuyiSquare | October2,2017 | Direct-operated | 74.00 | 1,929.80 | 589.02 | 970.04 |
| 6 | DRStoreinShenzhenYifangcheng | October20,2017 | Direct-operated | 89.00 | 1,854.89 | 599.97 | 792.63 |
| 7 | DRStoreinBeijingIKEALivat | July5,2018 | Direct-operated | 60.00 | 1,702.40 | 544.04 | 886.10 |
| 8 | DRAStoreinLanzhouCenter | June22,2021 | Joint-operated | 83.00 | 1,672.20 | 472.96 | 748.03 |
| 9 | DRStoreinFoshanWangfujingZiweigang | December30,2020 | Direct-operated | 110.00 | 1,608.19 | 502.95 | 864.58 |
| 10 | DRStoreinShenzhenLonghuaYifangcheng | October10,2021 | Direct-operated | 50.00 | 1,575.73 | 458.90 | 828.02 |
Note:Operatingprofit=revenue-operatingcosts-storeexpenses,excludingexpensessharedwiththeheadquarters.
(3)OnlinesalesduringthereportingperiodDRCOmainlycarriesoutonlinesalesbusinessthroughitsownsalesplatform(i.e.DRCO'sofficialwebsite)andthird-partysalesplatforms.In2022,onlinerevenueaccountedfor10.72%ofDRCO’stotalrevenueduringthereportingperiod,2.23percentagepointslowerthanthesameperiodoftheprecedingyear.Duringthereportingperiod,DRCO'srevenuefromonlinesaleswasRMB394.59million,down
34.07%fromthesameperiodlastyear.Specifically,therevenuefromself-ownedsalesplatformwasRMB73.28million,down27.30%fromthesameperiodlastyear;therevenuefromthird-partysalesplatformswasRMB321.32million,down35.44%fromthesameperiodlastyear.TherevenuedeclineoftheonlinebusinesswasmainlyduetotheoptimizationofDRCO'sproductstructureandtheremovalofsomeengagementdiamondringproductswithlowcaratweightatthebeginningofthereportingperiod.Therevenueofdiamondringproductswithlowcaratweightdroppedby92%.AccordingtoDRCO'srulesforpurchase,allcustomerspurchasingtheproductsviathethird-partysalesplatformshavetoregisteronDRCO'sself-ownedsalesplatform,i.e.,DRCO'sofficialwebsite.Asoftheendofthereportingperiod,thetotalnumberofregisteredcustomersonDRCO'sofficialwebsitewasabout10.66million,withabout2.27millionnewregisteredcustomersduringthereportingperiod.In2022,thepercustomertransactiononDRCO’sofficialwebsitewasaboutRMB6,300,up75%fromthesameperiodlastyear.
OnlineSales
Unit:RMB0'000
Channel
| Channel | 2022 | 2021 | YoYchange | |||||
| Salesorderamount | Revenue | As%ofonlinerevenue | Salesorderamount | Revenue | As%ofonlinerevenue | Salesorderamount | Revenue | |
| Self-ownedsalesplatform | 7,983.61 | 7,327.52 | 18.57% | 11,036.78 | 10,078.43 | 16.84% | -27.66% | -27.30% |
| Third-partysalesplatforms | 34,988.44 | 32,131.81 | 81.43% | 54,669.47 | 49,774.28 | 83.16% | -36.00% | -35.44% |
| Total | 42,972.05 | 39,459.33 | 100.00% | 65,706.25 | 59,852.71 | 100.00% | -34.60% | -34.07% |
Note1:Theself-ownedsalesplatformisDRCO'sofficialwebsite,andthethird-partysalesplatformsincludetheflagshipstoresonTmall.comandJd.com;Note2:Thesalesorderamountisthetax-inclusiveamountplacedbythecustomersduringthereportingperiod,andtheorderswhoseproductshavebeenreturnedareexcluded.
2.ConsignedproductionmodelThankstotherichindustrialchainresourcesandtherefineddivisionoflabor,DRCOadoptstheasset-lightmanagementstrategy,inwhichallcommoditiesaremanufacturedonaconsignmentbasis.Ontheonehand,DRCOmakesfulluseofexternalproductionresourcestohelpimproveoperatingefficiency.Ontheotherhand,DRCOfocusesonbrandbuilding,channelexpansion,productdevelopmentandsupplychainintegration,whichhelpstoincreaseoperatingprofits.DRCOdynamicallyadjuststheordersallocatedtosuppliersbasedonanumberofassessmentfactorsincludingcapacities,qualificationrateandoverduedeliveryrate,thusensuringthequalityandthedeliveryoftheproducts.DRCOhasalwaysattachedgreatimportancetoproductqualitythroughconstantlyimprovingtheproductqualitycontrolsystem,arrangingdedicatedpositionsorsupportiveprofessionalequipmentforqualityinspectionacrosssuchlinksasrawmaterialpurchase,consignedproductionandproductcirculation.Moreover,allproductsforterminalsalesaresubjecttotheinspectionofnationalthird-partytestinginstitutions,andareequippedwithrelevantprofessionalcertificates.
3.ProcurementmodeInordertoensurethestandardizationofrawmaterialprocurementandrawmaterialquality,DRCO'ssupplychaindepartmentisfullyresponsiblefortherawmaterialprocurement.TherawmaterialspurchasedbyDRCOaremainlydiamondsabove0.03carat,accountingformorethan96%ofallrawmaterials.DRCOformulatesandimplementsprocurementplansbasedonbusinessneeds,inventory,andshort-termmarketpricetrends.DRCO'sfinisheddiamondsaremainlysourcedfromoverseasanddomesticmarkets,andallofthemwillbecheckedbythesupplychaindepartmentbeforebeingstored.
(1)MajorprocurementsduringthereportingperiodAffectedbyfactorssuchastheglobaleconomicslowdownandthedeclineinthepurchasingpowerofconsumers,DRCO'sprocurementneedswereadjustedasthesalesdroppedonayear-on-yearbasis.Duringthereportingperiod,DRCO'stotalpurchasesofdiamondsandconsignedprocessingservicesfell.Thetotalamountofthepurchasesin2022wasRMB1.29billion,down13.21%fromayearago;tospecific,theamountofdiamondpurchaseswasRMB509.03mm,aYoYdecreaseof13.87%;theamountofthepurchasesofconsignedprocessingserviceswasRMB777.97mm,down12.77%comparedwiththesameperiodayearago.DRCO'smajorprocurementsofdiamondsandconsignedprocessingservicesareasfollows:
Majorprocurementsduringthereportingperiod
Unit:RMB0'000
Item
| Item | 2022 | 2021 | YoYchange | ||
| Purchaseamount | As%oftotalpurchases | Purchaseamount | As%oftotalpurchases | ||
| Diamond | 50,902.86 | 39.55% | 59,101.69 | 39.86% | -13.87% |
| Consignedprocessing | 77,796.66 | 60.45% | 89,185.11 | 60.14% | -12.77% |
| Total | 128,699.52 | 100.00% | 148,286.80 | 100.00% | -13.21% |
Note:Thepurchaseamountinthetableisbasedonthepriceexcludingtax.
(2)PurchasechannelsandquantitiesofdiamondsasthemainrawmaterialduringthereportingperiodDuringthereportingperiod,DRCO'sfinisheddiamondsaremainlysourcedfromoverseasanddomesticmarkets,andallofthemwerecheckedbythesupplychaindepartmentbeforebeingstored.Foroverseaspurchases,HongKongDRGROUPisresponsibleforpurchasesfromoverseassuppliers,andthenShanghaiDarry,amemberofShanghaiDiamondExchange,isinchargeofthecustomclearance.DRCOalsopurchasesfinisheddiamondsdirectlyfromdomesticdiamondsuppliersortheiraffiliates,whicharemembersoftheShanghaiDiamondExchange.Duringthereportingperiod,DRCOpurchased67,162.47caratofdiamondsastherawmaterials,downby13.83%fromayearagobecauseofthedeclineofDRCO’sbusinessresults.Purchasechannelsandquantitiesofdiamondsasthemainrawmaterialduringthereportingperiod
| Item | Unit | Purchase | 2022 | 2021 | YoYchange | ||
| Channel | Purchasequantity | As%oftotalpurchase | Purchasequantity | As%oftotalpurchase | |||
| Diamond | Carat | Domesticmarket | 52,812.15 | 78.63% | 60,722.92 | 77.91% | -13.03% |
| Overseasmarkets | 14,350.32 | 21.37% | 17,218.93 | 22.09% | -16.66% | ||
| Total | 67,162.47 | 100.00% | 77,941.85 | 100.00% | -13.83% | ||
(3)Purchasequantityforconsignedprocessingduringthereportingperiod.
Duringthereportingperiod,thepurchasequantityofDRCO'sconsignedprocessingbusinessdroppedbecauseofthedeclineofDRCO’ssalesperformance.
| Item | Unit | 2022 | 2021 | YoYchange |
| Purchasequantity | Purchasequantity | |||
| Consignedprocessing | Pieces | 616,308.00 | 773,698.00 | -20.34% |
Note:Theabovepurchasequantitydoesnotincludeproductaccessories(e.g.,earringnuts,chaintailtags).
4.InventoriesduringthereportingperiodDuringthereportingperiod,DRCO'sinventoriesconsistedofrawmaterials,workinprocess，finishedgoods,outsourcedprocessingmaterials,shippinggoods,turnovermaterials,andweremainlyrawmaterialsandfinishedgoods.Asoftheendof2022,thebalanceofDRCO'sinventorieswasRMB676.42million,theprovisionforinventorywrite-downwasRMB6.53million,andthenetbookvalueoftheinventorieswasRMB669.89mm.Theclosingbalanceoftheinventoriesduringthereportingperiod
increasedby51.45%comparedwiththebeginningbalance.Tobespecific,thebalanceoftherawmaterialinventorieswasRMB134.67mm,up31.72%fromthebeginning;thebalanceofthefinishedgoodswasRMB516.04mm,anincreaseof65.12%fromthebeginning,whichwasmainlydrivenbytheexpansionofthestoresandtheincreasingdemandsforon-shelfgoodsandnewproducts;thebalanceoftheturnovermaterialswasRMB5.18mm,up10.42%fromthebeginning;thebalanceofshippinggoodsfellby68.23%fromthebeginningbecauseofthedeclineofDRCO’ssalesperformance.Inventorybreakdownasoftheendofthereportingperiod
Unit:RMB0'000
Item
| Item | December31,2022 | December31,2021 | YoYchange | ||
| Amount | % | Amount | % | ||
| Rawmaterials | 13,467.14 | 19.91% | 10,224.33 | 22.89% | 31.72% |
| Workinprocess | 282.43 | 0.42% | 623.03 | 1.39% | -54.67% |
| Finishedgoods | 51,604.41 | 76.29% | 31,252.31 | 69.97% | 65.12% |
| Outsourcedprocessingmaterials | 1,648.25 | 2.44% | 1,713.67 | 3.84% | -3.82% |
| Shippinggoods | 120.93 | 0.18% | 380.64 | 0.85% | -68.23% |
| Turnovermaterials | 518.34 | 0.77% | 469.43 | 1.05% | 10.42% |
| Total | 67,641.50 | 100.00% | 44,663.41 | 100.00% | 51.45% |
Note:Theabovefiguresareroundedtotwodecimalplaces.Someofthefiguresareslightlydifferentintheendingsduetoroundingandarenotcalculationerrors.III.AnalysisofCoreCompetitiveness
Withoriginalaspirationofexpressionoftruelove,DRCOhasbuiltupthecompetitivenessonthestrategicpositioningofintegratingbrand,channelsandproducts.The"DR"brandrepresentstheconceptof"thesoletrueloveinonelife"andpurchaseintentionforeternallover,infusinguniqueemotionalassociationsandvaluepropositionintoengagementringsandhenceenjoyingspecialbrandadvantageintheindustry.Intheeraofnewretailing,DRCOseizestheopportunityofconsumptionandtechnologyupgradingtocreateamodern,efficientandconsumer-orientedDTC(direct-to-consumer)operationmodelthroughmobileInternet.Wealsofullyleveragevariousnewmediasuchassocialplatforms,videomedia,e-commerceplatformsandsearchenginestoconveybrandconnotationstoconsumers.Inaddition,DRCOattachesgreatimportancetoproductdesign,craftsmanshipandhighquality.Bycooperatingwithinternationallyrenowneddesigners,weconstantlyimproveproductstorealizeourphilosophyofgiftingthebestjewelrytothetruelover.
1.AdvantageoftheemotionalconnotationofthebrandDRCO'sbrandphilosophyfitsperfectlywiththepursuitofloveandfidelityinthemarriageandaffection,reflectingauniqueemotionalconnotation.DRengagementringscanbeexclusivelyboundedwiththecouplesbyuploadingtheirIDinformationtoblockchaininsteadofjustengravingnames.Suchdiamondringsarekindoftestamenttotheoneandonlytrueloveandsatisfyconsumers’emotionalneedforfidelityandlifelongloveratherthansimpleestheticpreferencesforjewelry.Inthisway,theuniqueDRengagementringsevokespecialemotionalconnotationamongcustomersandhavedifferentiationcomparedtosimilarproducts.
2.AdvantagesofbrandcommunicationThankstostrongbrandmarketingcapacities,includingcontentcreation,production,filming,servingandaccountmanagement,DRCO’sprofessionalbrandcommunicationsteamhassuccessfullytakenadvantageofnewmediaandtraffictorapidlyenhancetheinfluenceofDRbrandandsystematicallyandcontinuouslyoptimizebrandcommunication.MoreoverDRbrandboastsahostofactivefanbasetotalingover30millionfollowersfromwell-knownsocialplatformslikeWeibo,WeChat,TikTokandKuaishouby
theendof2022.Bytargetinginemotionalexpression,verticalsegmentsanddifferentiatedbrandphilosophy,ourproductsattractmany"DRfans"inthemassconsumermarket,whohighlyrecognizeourbrandvaluesandconceptoflove,andarecharacteristicinyouthfulness,highbrandidentificationandstrongself-expression.AgreatnumberoffansandconsumersspontaneouslyspreadourbrandphilosophybypostingtheirlovestoryandhighlightmomentsonWeibo,WeChatMomentsandshortvideos,resultinginaviraleffectonDRbrandpromotion.
3.OperationalAdvantageofOmnichannelDTCAstotheofflinesales,DRCOadherestoproprietaryoperationtoensureconsistentlyexcellentconsumerexperience.Withsignificantinvestmentanddevotionintoofflinechannelsoveryears,688self-ownedstoreshavebeenbuiltupworldwidebytheendof2022,whichshowhighperformanceinmanagementefficiency,profitmarginsandinventoryturnoverrate.Ontheotherhand,DRCOseizestheopportunityofconsumptionandtechnologyupgradingintheeraofnewretailingtoestablishonlinemodernandefficientbrandoperationmodelbasedoncustomersdemands.Byintegratingsocialplatforms,videomedia,e-commerceplatformsandsearchengines,weconstantlypushbrandpromotionandonlinebusiness,andcommunicatingbrandconnotation.Inaddition,DRCOTrueLoveecosystemhasbeenestablishedthroughDTCmodel,composingofthecorecustomerbase,themasscustomers,suppliersandotherpartners.It’saimedtodemonstrateidealjourneyoftrueloveandlaysolidfoundationforofferingproductsandservicesinalongruntothecorecustomerbase.
4.AdvantageofcustomizedmarketingUnliketraditionalsalesofspotgoods,thecustomizedmarketingisadoptedbyDRCO,enablingourcustomerstoselectfavoredjewelryanddefine4Csofdiamondquality(e.g.cut,color,clarity,andcarat),ringsettingmaterial,fingersize,personalizedengraving,etc.thiscustomizedmarketingcannotonlymeetthecouples’psychologicalneedforsolelove,butalsofacilitateustocontrolinventorylevel,keeplowercostsandsoundcashflow,andfinallyimprovebusinessoperatingefficiency.Asjewelryproductsaremoresensitivetofashiontrend,thecustomizedmarketingallowsDRCOtorapidlyrespondtomarketchangesandkeepupwithnewfashion.
5.AdvantageininformationsystemAttachinggreatimportancetoITsystems,DRCOdelvesintotheintegratedonlineandofflineplatformofjewelrycustomization.Yearsofeffortsinuniformizationconstructionhasresultinconvenientfront-endsystemempoweringstores,anefficientmid-endsystemforinformationcollectionandanalysistoimprovecommunicationefficiency,andarobustback-endsystemtosupportdigitalizationandoperationaltransparency.ThewholeITsystemshelpustoimprovefinancialandoperationalefficiency,enhanceinterconnectionwithcustomersandgainuniquecompetitiveadvantageinrefinedoperations,digitalpromotionanddigitalorganizationaltransformation.
6.AdvantageinproductdesignandresearchanddevelopmentWiththespiritofinnovationandcraftmanship,DRCOiscommittedtocreatinghigh-qualityproductsandbasedonuniquebranddifferentiation,positioningandphilosophy,anddeliveringmulti-dimensionalofferingsthatmergeandexpandwithemotional,fashionandbrandelements.InDRParisDesignCenter,alotofworldwidefamousjewelrymastersworktogetheratprecioustrue-lovejewelswiththeirskillfultechniqueandexceptionalinspiration.Additionally,wecontinuoustoevolveproductqualityandprocessingbydevelopingandoptimizingourpatenttechnologiesanddesigns.
IV.AnalysisofMainBusiness
1.Overview(I)OverviewofoperatingperformanceinthereportingperiodIn2022,withincreasingmarketfluctuationsanduncertaintiesinthedomesticandinternationaleconomicenvironment,thepessimisticexpectationsofresidentsontheeconomicoutlookwasspreadtotheconsumergoodsmarket,resultinginamoreintensecompetitionintheretailmarket.Consequently,thejewelryindustryexperiencedacceleratedfragmentation,andthemarketwasincreasinglydominatedbytopbrands.Inthefaceoftheever-changingbusinesscontexts,DRCOadherestothecorporatemissionof"empoweringamorebeautifullove",activelyoptimizesmarketlayoutsandexpandschannelsbyfocusingonstrategicgoalsandbusinessplans.DRCOcomprehensivelypromotesdigitaltransformation,continuestooptimizeproductmix,andtakesactivemeasurestoaddressheadwindsincludingtheglobaleconomicdownturnandconsumptiondegradation.Duringthereportingperiod,DRCOachievedrevenueofRMB3.68billion,down20.36%fromthesameperiodlastyear;netprofitattributabletoshareholdersoftheparentcompanywasRMB0.73billion,down
43.98%fromayearago.Ontheonehand,therevenuefellduetothesluggishconsumerdemands;ontheotherhand,thenetincreaseofnewstoresreached227givenDRCO’slong-termdevelopmentandbrandconstruction.Thenumberofterminalstoresgrew49.24%fromthebeginningofthereportingperiod,leadingtosoaringgrowthofthesellingexpensestoRMB1,422million,aYoYincreaseof16.76%.(II)Overviewofbusinessoperationmanagementduringthereportingperiod
(1)Enhancebrandreputationandspreadthetrueloveculturewithoriginalaspiration①DeeplycultivatebrandconceptandpositivelyimpactthesocietywithtruelovecultureDuringthereportingperiod,thebrandconceptoftruelovewontherecognitionofmanychampionathletes.ThestrivingspiritofathletesishighlyconsistentwiththephilosophyofDRbrand.Forexample,XuMengtao,WangXindi,XuJingtao,WangHao,XieZhenye,DengLinlinandotherchampionathletes
haveallchosenDR-brandeddiamondringsasDRCO’scultureof“onlyandone”highlyresemblestheirpursuitforchampionship.Therefore,championathletesaspublicfigurescanbetterunderstandthevalueofthepromisetotruelove.Theirexpressionof"oneandonlytrueloveinalifetime"viatheDRdiamondringsandtheircouragetogivetheirlovedaromanticcommitmentalsomovedcountlessnetizensandwentviralontheinternet,encouragingmorepeopletobelieveinandpursuetheonlytrueloveinalifetime.ThesecampaignsfurthercementDR'sbrandimageof"diamondringofchampions,championofdiamondrings",significantlyimprovingthebrandawarenessandreputation.
DRCOtakes“trueloveactions”topromotethereconstructionofpositiveemotionalordersinthesociety.Inordertobuildanewinteractiveplatformforclosecommunicationwithyoungpeople,the"GlobalTrueLoveClass"initiativewaslaunched,whichinvitedProfessorLiangYonganfromtheDepartmentofChineseLanguageandLiteratureofFudanUniversity,togivesixlectureson“WhatYoungPeopleNeedtoKnowAboutLove”.Thisinitiativetransmittedthevaluesof“oneandonlytrueloveinalifetime”tomoreyouths,exchangedwiththemthe“truelove”conceptoftheDRanddemonstratedthetemperatureandtheresponsibilityoftheDRbrand.Thehashtag#WhatYoungPeopleNeedtoKnowAboutLove#wasplayedfor15milliontimesontheinternet,garneringtheattractionofmanymediaoutletsincludingCCTVthatspokehighlyofthecourses.Focusingonspreadingrightemotionalvaluesandprovidingemotionalvalue,DRCOestablishesdeepinsightsintotheneedsforlove.Theblockbuster"Two-WayLove”launchedonMay20conveyedDR’sbrandconceptofcommitmenttolove,enablingcustomerstobelieveinthepoweroftrueloveagainanddeeplytouchingconsumers.TherelatedWeibohashtagwasreadformorethan500milliontimes,improvingboththebrandinfluenceandreputationamongcustomers.Inlinewiththecurrentsituationofmarriageanddatinginsociety,aswellassocialtopicssuchasthedifficultyofyoungpeopletofallinlove,DRCOandCCTVjointlyproducedawarmblockbuster"LoveisSimple",whichexplainstheconceptof“oneandonlytrueloveinalifetime”throughfouroldcouples.Ithelpedarousemorepeople'slongingforlove,sparkingtheresonancewithnetizens.Inaneraofimpatienceandconfusion,DRCOcontinuestospreadpositivelovevalues,conveyingthebrand'smissionandoriginalintentionof"empoweringamorebeautifullove",reflectingthewarmthofthebrand,publicizingthetemperatureandthebeautyoftheloveandstrengtheningyoungpeople'sconfidencein
loveandmarriage.DuringthetimewhentheLoveIsSimplewasplayed,relevanthashtagswerereadforover400million.Withitssocialmediamatrix,CCTVempoweredthebrand,andthein-depthreportsofothermediaoutletsconveythepositiveenergyofthebrand,makingthephilosophyoftheDRbrandknownbymorepeople.
②Cultivatethecoreofthebrand,innovatethecontentofshortvideosandexpandthematrixaccountsofthebrandDuringthereportingperiod,DRCOinnovatedtheproductionofshortvideos,creativelyadoptingthefirst-view,andtwo-episodemode.Withthebrand'sconceptasthecoreofthepromotion,DRCOfiguredoutanewsolutiontotheshortvideoswiththeuniqueDRstyle,attractingmorepotentialcustomers,exploringthecoreofthebrand,extendingfrombrandpowertoproductpower,andexpandingfromin-storescenestoeverydaylifescenes.Atpresent,theDRbrandhasmorethan30millionfans.Specifically,themainvideomatrixaccountattractednewfansof2.6millioninthefullyear,up160%fromayearago.Thebrandwasexposedtocustomersforover1billiontimes,aYoYincreaseof47%.Inthesecondhalfof2022,DRCO'ssetupanewteamforlivestreamingonDouyin,leadingtorapidperformancegrowth.Inthesecondhalfoftheyear,thesalesviatheDouyinplatformwentupby275%comparedfromthoseinthefirsthalfoftheyear.
(2)CreateinternationalbrandimagewithbettercustomerexperienceandstrongerbrandimpressionInordertocreateamoredifferentiatedbrandimageandvisuallyconveythebrand’svaluesof"oneandonlytrueloveinalifetime",DRCOisinspiredbytheflamingowithonlyonepartnerinitslife,takingtheromanticflamingoorangeasthebrandcolortototallyupgradesthebrand’sLOGOandreflectthepurityanduniquenessoftruelove.Inabidtopromotethenewbrandimageandenhancecustomerperception,DRCOhasestablishedsoundbrandmanagementstandards,coveringplanevision,spatialimage,employeeimage,publicitycontent,amongothers.Forthepurposeofconveyingtheuniquemissionof“empoweringamorebeautifullove”,DRCOintroducedtheservicesofcustomizedtruelovecodes.Customerscanchoosetheiruniquecommemorativenumberstobeengravedontheirdiamondringsastheirtruelovecodes,strengtheningtheconceptof“oneandonlytruelove”.Thetruelovecodecreatesanemotionalbondbetweenthebrandanditscustomers,fulfillingconsumers’needsforaspecialritualfortheirtruelove.Thisservicehasbeenwellreceivedbycustomers.
(3)VigorouslyexpandofflinesaleschannelswithsoundlayoutsandupgradeweddingatmosphereBasedonitsplansforlong-termdevelopmentandbrandbuilding,DRCOcontinuestodeepenthechannellayouts.Besidesreachingcitiesandbusinessdistrictswithoutitsfootprints,DRCOincreasesthe
densityofstoresincitiesandbusinessdistrictsthroughqualitychannels.Itfurtherdevelopspopularbusinessdistrictsandcoreprojectsincities,refinesthechannelnetworkandimprovesthequalityofchannels.Asattheendofthereportingperiod,DRCOhad688terminalstores,up49.24%fromthebeginningofthereportingperiod.Inaddition,thenetincreaseofstoresreached227duringthereportingperiod.DRCOextendeditsfootprintsto120businessdistrictsintier-1,newtier-1andtier-2citiesithasnotcoveredpreviously;openednewstoresin60TOP1projects,i.e.,leadingshoppingmalls,increasingthecoverageofTOP1projectsincitiesfrom58%to74%andthecoverageofnationalTOP100projectsfrom48%to65%.DRCOcontinuedoptimizingthelocationofthebrandsinshoppingmalls.Inadditiontothejewelryarea,DRCOalsosoughttocoverotherareasincludingboutiquearea,high-endcosmeticsareaandwomen'sclothingarea.Storesintheseareasaccountedforover25%.Duringthereportingperiod,DRCOproposeda"DreamWedding"scenariotoprovidecustomerswithexclusiveemotionalexpressionsthroughtheDRportfolio.Asoftheendofthereportingperiod,thenumberofcustomerswhopurchasedengagementandweddingproductportfoliosaccountedformorethan30%,significantlyincreasingthevalueofcustomers.Meanwhile,DRCOdeeplyexploredtheneedsofcustomersforromanticandproposalscenariosbyinnovatingandupgradingtheimagesofstores,creatingromanticatmosphere.Breakingthetraditionallayoutofjewelrystores,DRCOtakesintoaccountregionalculture,weddingcultureandfashionablepopculture,usingfloralandclearglasselementstoprovidetheultimateFrenchromanceandinnovatedifferenttypesofproposalkiosksfeaturingmodernaestheticandpremiumquality.Inthisway,DRCOcanbringoutanall-roundimmersivecustomerexperience.Duringthereportingperiod,theimagedesignandservicesofDRTrueLoveExperienceStoreswererecognizedbyauthorities,andwontheMuseCreativeAwards-SilverAwardforImmersiveExperienceandRetailSpaceDesignfromtheInternationalAwardsAssociation(IAA).
(4)ComprehensivelypromotedigitaltransformationandstrengtheninformationsecurityforprivacyprotectionDuringthereportingperiod,DRCOfocusedontheconstructionofinformationsecuritytoensurethebrandcommitmentandprotectcustomerprivacythroughtechnologicalinnovation.JoininghandswiththeChineseAcademyofSciencesfortechnicalcooperation,DRCOintegratestheinformationofthetrueloveagreementswiththeblockchaintechnologytopreventthecustomers’purchaseinformationfrombeingdeletedorrevised.Customerscanvisitthecorrespondingrecordsbythelinkageonthetrueloveagreementcertificate.Basedonthissystem,DRCOcancheckthedatainthemainbusinesssystemtoprotectthecustomerinformation.TheimmutablenatureofblockchaindataishighlycompatiblewithDRCO'sbrandphilosophy,givingcustomersabrandexperiencewithcutting-edgetechnology.DRCOactivelygetsinvolvedintodigitaltransformation.Afteryearsofdigitalconstruction,wehaveestablishedadatawarehousewithextensivecoverageandrichscenes.Wehavealsodevelopedcorrespondingbusinessintelligencetoolsformajorbusinessscenestoimprovetheoperationefficiencyofofflineandonlinesegments,identifybusinessopportunitiesforproductinnovationandpromotionalcampaigns,andobtainnear-real-timedatafeedbackthroughmultiplechannels.ThisinformationcanbequicklyusedtoguidetheR&Dandsupplyofnewproducts,andreducemanagementanddecision-makingcosts.Thegradualimprovementofthedatawarehouseenablestheprecisionofprivatedomainoperation.Bymatchingthefeedbacksofofflineshoppingguideswiththeonlinecustomerdata,DRCOestablishesaccurateandeffectivemodelsforcontentdissemination,activityplanningandinformationpush,furtherimprovingtheoperationefficiency.Duringthereportingperiod,DRCOdevelopedashoppingguidetoolforfront-lineemployeesofstorestoimprovetaskallocationandresulttracking,optimizecustomerinteractionexperienceandrefineservices.
(5)EnhancingR&DandinnovationtocreatedifferentiatedproductsKeepingupwithnewconsumertrendsandhabits,DRCOcontinuestooptimizetheproductmix,accuratelyanchortargetcustomerbase,developdifferentiatedproductsthatmeettheneedsofdifferentcustomers,andfocusonstrengtheningtheiterativerenewalanddesignextensionofitsiconicandbest-sellingproducts,therebydeepeningitsmulti-dimensionalproductportfolios.DRCOattachesgreatimportancetoandincreasesinputinproductdesignandR&Dandtechnologicalinnovation.IthasestablishedadesigncenterinParis,France,togatherworld-renownedmastersofjewelrydesign,createexquisitecraftsmanshipandwonderfulinspirationsforTrueLove'streasures.DRCO'sdesignteamactivelyparticipatedininternationaldesigncompetitions,anditsworkswereonaparwithinternationalstandardsandwererecognizedbyauthoritativeinternationaldesignorganizations.DRCO’sproductswonthe2022IDAInternationalBronzeAwardandHonorAward,theMUSEDesignGoldAward,theELTEPlatinumAwardandGoldAward,andthefirstprizeoftheGlobalAuspiciousZodiacDesignCompetition(YearoftheRabbit).
In2022,DRCO'sproductsobtained52appearancepatents,3domesticutilitymodelpatentsand2Germanutilitymodelpatents.Itintroduced260newmodels,andtheinnovativeD-shapedbuttonwiththebrandLOGOasthecoremainelementhasreceivedthecertificateofthenationalutilitymodelpatentandhasbeenappliedtotheDcollection.AsaniconicseriesoftheDRbrand’selements,TheDseriesabsorbidentifiableelementsfromDRbrandandareinspiringlydesignedintolettercombinationofIandU,meaning“YouandI”.Inthisuniqueform,UandIcloselyintertwinetoembodythemostromanticengagementandintimacybetweenthelovers.InheritingDRCO'sweddingpositioningandkeyvisual,theDseriesreflectwonderfulemotionalrelationshipandourblessings,whichcoverthewholeconsumptionchainfromemotionalresonance,visualexperiencetofinalsale.
(6)PromoteorganizationaltransformationandshapemulticulturalismTalentsarethefirstdrivingforceforcorporationinnovationanddevelopment.DRCOfocusesonthecontinuousintroductionandtrainingofhigh-leveltalents,andtheconstructionoforganizationalcapacityisvitaltodriveDRCO’ssustainabledevelopment.DRCOcontinuouslyimprovesthetalentevaluationsystem,innovatestheselectionandemploymentstandards,andestablishesamechanismtoattract,developandretainadiversifiedanddedicatedworkforce.Intermsofimprovingtheoperationandserviceexperienceofstores,DRCOstartswithcorporateculturetoincentivetalentstopursueinnovationanddrivethesustainablecorporatedevelopment.DRCOfurtherupgradesthetalenttrainingprogramandthesurvivalofthefittestmechanism,graduallyestablishingadiversified,fairandinclusivecorporateculturethatguidesemployeestogrowtogetherwithDRCO.
2.Revenueandcost
(1)Compositionofrevenue
Overallrevenue
Unit:RMB
2022
| 2022 | 2021 | YoYchange | |||
| Amount | As%ofrevenue | Amount | As%ofrevenue | ||
| Totalrevenue | 3,681,574,412.68 | 100% | 4,622,729,780.48 | 100% | -20.36% |
| Byindustry | |||||
| Jewelry | 3,650,181,354.03 | 99.15% | 4,594,661,728.12 | 99.39% | -20.56% |
| Otherbusinesses | 31,393,058.65 | 0.85% | 28,068,052.36 | 0.61% | 11.85% |
| Byproduct | |||||
| Engagementdiamondrings | 2,902,464,272.49 | 78.84% | 3,660,710,737.20 | 79.19% | -20.71% |
| Weddingdiamondrings | 713,611,440.73 | 19.38% | 866,423,450.66 | 18.74% | -17.64% |
| Otheraccessories | 34,105,640.81 | 0.93% | 67,527,540.26 | 1.46% | -49.49% |
| Otherbusinesses | 31,393,058.65 | 0.85% | 28,068,052.36 | 0.61% | 11.85% |
| Byregion | |||||
| EastChina | 1,330,407,724.72 | 36.14% | 1,658,186,858.08 | 35.87% | -19.77% |
| NorthChina | 494,723,176.92 | 13.44% | 626,975,836.41 | 13.56% | -21.09% |
SouthChina
| SouthChina | 569,475,102.89 | 15.47% | 708,009,269.57 | 15.32% | -19.57% |
| SouthwestChina | 403,596,567.80 | 10.96% | 506,501,705.18 | 10.96% | -20.32% |
| CentralChina | 385,624,889.68 | 10.47% | 510,015,932.56 | 11.03% | -24.39% |
| NorthwestChina | 254,084,920.53 | 6.90% | 309,632,557.38 | 6.70% | -17.94% |
| NortheastChina | 236,390,244.31 | 6.42% | 297,742,253.58 | 6.44% | -20.61% |
| HongKong,MacaoandTaiwan | 5,045,201.05 | 0.14% | 4,995,984.88 | 0.11% | 0.99% |
| Overseas | 2,226,584.78 | 0.06% | 669,382.84 | 0.01% | 232.63% |
| Bysalesmodel | |||||
| OnlineSelf-Operated | 394,593,297.77 | 10.72% | 598,527,076.93 | 12.95% | -34.07% |
| OfflineDirect-Operated | 2,980,373,391.95 | 80.95% | 3,673,658,793.84 | 79.47% | -18.87% |
| OfflineJoint-Operated | 275,214,664.31 | 7.48% | 321,690,821.72 | 6.96% | -14.45% |
| Offlinedistribution | 0.00 | 0.00% | 785,035.63 | 0.02% | -100.00% |
| Otherbusinesses | 31,393,058.65 | 0.85% | 28,068,052.36 | 0.61% | 11.85% |
(2)Industries,products,regions,andsalesmodelsthataccountformorethan10%ofDRCO'srevenueoroperatingprofit?Applicable□NotApplicable
Unit:RMB
| Revenue | Operatingcosts | Grossmargin | YoYchangeofrevenue | YoYchangeofoperatingcost | YoYchangeofgrossmargin | |
| Byindustry | ||||||
| Jewelry | 3,650,181,354.03 | 1,082,800,171.20 | 70.34% | -20.56% | -19.86% | -0.25% |
| Byproduct | ||||||
| Engagementdiamondrings | 2,902,464,272.49 | 818,862,367.00 | 71.79% | -20.71% | -21.95% | 0.45% |
| Weddingdiamondrings | 713,611,440.73 | 250,339,820.40 | 64.92% | -17.64% | -9.71% | -3.08% |
| Byregion | ||||||
| EastChina | 1,330,407,724.72 | 409,772,540.83 | 69.20% | -19.77% | -16.68% | -1.14% |
| NorthChina | 494,723,176.92 | 152,053,331.24 | 69.26% | -21.09% | -18.99% | -0.80% |
| SouthChina | 569,475,102.89 | 164,034,248.28 | 71.20% | -19.57% | -25.18% | 2.16% |
| SouthwestChina | 403,596,567.80 | 119,776,460.61 | 70.32% | -20.32% | -20.60% | 0.10% |
| CentralChina | 385,624,889.68 | 114,423,536.59 | 70.33% | -24.39% | -22.84% | -0.59% |
| Bysalesmodel | ||||||
| OnlineSelf-Operated | 394,593,297.77 | 128,478,886.35 | 67.44% | -34.07% | -35.60% | 0.77% |
| OfflineDirect-Operated | 2,980,373,391.95 | 867,185,969.73 | 70.90% | -18.87% | -17.68% | -0.42% |
IntheeventthatthestatisticalcaliberofDRCO'smainbusinessdataisadjustedduringthereportingperiod,DRCO'smainbusinessdataforthemostrecentyearhasbeenadjustedaccordingtothecaliberattheendofthereportingperiod
□Applicable?NotApplicable
(3)WhetherDRCO'ssalesrevenuefromphysicalgoodsismorethanthatfromservices?Yes□No
Industryclassification
| Industryclassification | Item | Unit | 2022 | 2021 | YoYchange |
| Jewelry | Sales | Pieces | 517,656 | 730,038 | -29.09% |
| Inventory | Pieces | 284,930 | 186,278 | 52.96% | |
| Procurementvolume | Pieces | 616,308 | 773,698 | -20.34% |
ExplanationofthereasonsfortheYoYchangeofover30%inrelevantdata?Applicable□NotApplicableNote1:Theabovestatisticsdonotincludeproductaccessories(e.g.,earringnuts,chaintailtags),andsalesstatisticsincludeafter-salesandmoltengoldservices.Note2:TheYoYinventoryincreaseof52.96%in2022ismainlyduetotheexpansionofthestoresandthedemandsforon-shelfgoodsandnewproducts.
(4)PerformanceofmaterialsalescontractsandpurchasecontractssignedbyDRCOasofthereportingperiod
□Applicable?NotApplicable
(5)CompositionofoperatingcostIndustryandproductclassification
Unit:RMB
| Industryclassification | Item | 2022 | 2021 | YoYchange | ||
| Amount | As%ofoperatingcost | Amount | As%ofoperatingcost | |||
| Jewelry | Operatingcost | 1,082,800,171.20 | 97.35% | 1,351,159,384.29 | 97.87% | -19.86% |
| Otherbusinesses | Operatingcost | 29,472,295.09 | 2.65% | 29,391,773.38 | 2.13% | 0.27% |
Unit:RMB
| Productclassification | Item | 2022 | 2021 | YoYchange | ||
| Amount | As%ofoperatingcost | Amount | As%ofoperatingcost | |||
| Engagementdiamondring | Operatingcost | 818,862,367.00 | 73.62% | 1,049,105,109.23 | 75.99% | -21.95% |
| Weddingdiamondring | Operatingcost | 250,339,820.40 | 22.51% | 277,267,709.67 | 20.08% | -9.71% |
| Otheraccessories | Operatingcost | 13,597,983.80 | 1.22% | 24,786,565.38 | 1.80% | -45.14% |
| Otherbusinesses | Operatingcost | 29,472,295.09 | 2.65% | 29,391,773.38 | 2.13% | 0.27% |
Note:
ThetotaloperatingcostinthereportingperiodwasRMB1.11billion,adecreaseof19.43%comparedwiththesameperiodlastyear,mainlyduetothedecreaseof20.36%inDRCO'srevenueinthereportingperiod.
(6)Whethertherewasachangeinthescopeofconsolidationduringthereportingperiod?Yes□NoDuringthereportingperiod,DRCOestablished51newsubsidiaries,whichwereincludedintheconsolidationfromthedateoftheirestablishment.Detailsareasfollows:
Companyname
| Companyname | Dateofestablishment | Shareholdingratio | Whetherconsolidatedduringthisreportingperiod |
| XiamenDRJewelry | April25,2022 | 100% | Yes |
| ShenyangDRJewelry | April26,2022 | 100% | Yes |
| TianjinDRJewelry | April27,2022 | 100% | Yes |
| ChengduDRJewelry | May6,2022 | 100% | Yes |
| KunmingDRJewelry | May9,2022 | 100% | Yes |
| ShanghaiDRJewelry | May11,2022 | 100% | Yes |
| SuzhouZhongzuanDRJewelry | May13,2022 | 100% | Yes |
| JinanDRJewelry | May13,2022 | 100% | Yes |
| ShenzhenDRJewelry | May17,2022 | 100% | Yes |
| BeijingZhongzuanDRJewelry | May17,2022 | 100% | Yes |
| SuzhouDRJewelry | May18,2022 | 100% | Yes |
| ShenyangDRJewelryAccessories | May18,2022 | 100% | Yes |
| HangzhouDRJewelry | May24,2022 | 100% | Yes |
| BeijingDRJewelry | May24,2022 | 100% | Yes |
| WuhanDRJewelry | May25,2022 | 100% | Yes |
| WuhanZhongzuanDRJewelry | May25,2022 | 100% | Yes |
| Xi'anDRJewelry | May26,2022 | 100% | Yes |
| ChengduDRTrueLoveJewelry | May27,2022 | 100% | Yes |
| NingboDRJewelry | May27,2022 | 100% | Yes |
| BeijingHuazuanDRJewelry | May31,2022 | 100% | Yes |
| ChongqingDRJewelry | June7,2022 | 100% | Yes |
| HangzhouDRTrueLoveJewelry | June7,2022 | 100% | Yes |
| HenanDRJewelry | June14,2022 | 100% | Yes |
| Xi'anDRJewelryAccessories | June15,2022 | 100% | Yes |
| ZhengzhouDRJewelry | June16,2022 | 100% | Yes |
| ShenzhenDRJewelryAccessories | June17,2022 | 100% | Yes |
| ShenzhenDRJewelryOrnament | June22,2022 | 100% | Yes |
| ChangshaDRJewelry | June24,2022 | 100% | Yes |
| ShanghaiDRJewelryAccessories | July1,2022 | 100% | Yes |
ShanghaiDRJewelrySales
| ShanghaiDRJewelrySales | July26,2022 | 100% | Yes |
| ZhoukouDRJewelry | September29,2022 | 100% | Yes |
| YiwuDRJewelry | September29,2022 | 100% | Yes |
| HezeDRJewelry | September30,2022 | 100% | Yes |
| DongguanDRJewelry | October9,2022 | 100% | Yes |
| XiningDRJewelry | October11,2022 | 100% | Yes |
| LinyiDRJewelry | October11,2022 | 100% | Yes |
| YinchuanDRJewelry | October13,2022 | 100% | Yes |
| WeifangDRJewelry | October13,2022 | 100% | Yes |
| NanchangDRJewelry | October13,2022 | 100% | Yes |
| JiningDRJewelry | October15,2022 | 100% | Yes |
| MianyangDRJewelry | October17,2022 | 100% | Yes |
| FuyangDRJewelry | October19,2022 | 100% | Yes |
| ShangqiuDRJewelry | October19,2022 | 100% | Yes |
| UrumqiDRJewelry | October26,2022 | 100% | Yes |
| HandanDRJewelry | October26,2022 | 100% | Yes |
| BaodingDRJewelry | October26,2022 | 100% | Yes |
| GuangzhouDRJewelry | October27,2022 | 100% | Yes |
| GuiyangDRJewelry | October31,2022 | 100% | Yes |
| LangfangDRJewelry | October31,2022 | 100% | Yes |
| FoshanDRJewelry | November18,2022 | 100% | Yes |
| JiaxingDRJewelry | November30,2022 | 100% | Yes |
Duringthereportingperiod,DRCOestablishedanewSub-subsidiarycompany,whichwasconsolidatedsinceitsestablishment.Detailsareasfollows:
| Companyname | Dateofestablishment | Shareholdingratio | Whetherconsolidatedduringthisreportingperiod |
| HaoduoDiamondZhizao(Shenzhen) | November16,2022 | 100% | Yes |
(7)SignificantchangesoradjustmentsinDRCO'sbusiness,productsorservicesduringthereportingperiod
□Applicable?NotApplicable
(8)KeysalescustomersandsuppliersMajorsalescustomersofDRCO
| Totalsalesamountofthetopfivecustomers(RMB) | 3,109,663.82 |
| Salestotopfivecustomersas%oftotalannualsales | 0.09% |
| Related-partysalesinthesalestotopfivecustomersas%oftotalannualsales | 0.00% |
InformationaboutTop5Customers
No.
| No. | Customername | Sales(RMB) | As%oftotalannualsales |
| 1 | Customer1 | 688,798.17 | 0.02% |
| 2 | Customer2 | 659,245.23 | 0.02% |
| 3 | Customer3 | 629,349.59 | 0.02% |
| 4 | Customer4 | 584,306.23 | 0.02% |
| 5 | Customer5 | 547,964.60 | 0.01% |
| Total | -- | 3,109,663.82 | 0.09% |
Othernotesaboutkeycustomers
□Applicable?NotApplicableKeysuppliersofDRCO
| Totalpurchaseamountoftopfivesuppliers(RMB) | 545,474,400.56 |
| Totalpurchasesfromtopfivesuppliersas%oftotalannualpurchaseamount | 42.38% |
| Related-partypurchasesinthepurchasesfromtopfivesuppliersas%oftotalannualpurchases | 0.00% |
InformationaboutTop5Suppliers
| No. | Suppliername | Purchaseamount(RMB) | As%oftotalannualpurchase |
| 1 | Supplier1 | 176,854,641.37 | 13.74% |
| 2 | Supplier2 | 130,235,231.36 | 10.12% |
| 3 | Supplier3 | 92,336,258.34 | 7.17% |
| 4 | Supplier4 | 83,516,273.09 | 6.49% |
| 5 | Supplier5 | 62,531,996.40 | 4.86% |
| Total | -- | 545,474,400.56 | 42.38% |
Othernotesaboutkeysuppliers
□Applicable?NotApplicable
3.Expenses
Unit:RMB
| 2022 | 2021 | YoYchange | Explanationofsignificantchanges | |
| Sellingexpenses | 1,422,037,537.50 | 1,217,911,552.07 | 16.76% | Thiswasmainlyduetotheincreaseinthenumberofstoresandsalesstaffduringthereportingperiod,aswellastheresultingyear-on-yeargrowthinwagesandsalaries,marketingfeesandexpensesrelatedtostoreleasing. |
| Administrativeexpenses | 164,205,877.87 | 172,830,287.87 | -4.99% | |
| Financialexpenses | 21,536,754.47 | 25,914,966.43 | -16.89% | Thiswasmainlyduetotheyear-on-yearincreaseininterestincomeduringthereportingperiod. |
| R&Dexpenditure | 17,944,132.37 | 16,822,042.92 | 6.67% |
4.R&Dexpenditure?Applicable□NotApplicable
NameofkeyR&Dproject
| NameofkeyR&Dproject | Projectpurpose | Projectprogress | Intendedgoals | ImplicationsonDRCO'sfuturedevelopment |
| Elovemid-endsystemV4.0 | Optimizeandenrichthemid-endfunctions,andadapttothechangingbusinessdevelopmentsandimproveoperationalefficiencythroughconstantupdates. | UnderR&D | FurtheroptimizeCRM,warehousemanagement,salesmanagement,commoditymanagement,operationmanagement,supplychainmanagementandothermodules. | Furtherimproveoperationalefficiency. |
| DRmini-programsalessystemV3.3 | Improvetheappointment,community,exclusivespace,gamingandcampaignfunctionstoprovidecustomerswithbetterexperienceandservice. | UnderR&D | Developaseriesofmini-programfunctionstoenablesuchfunctionalitiesascampaignpromotion,topicrelease,interactivediscussionandclientreferralsoastoimprovecustomerexperienceandstickiness. | Improvecustomerinteractionandcustomerexperiencetoincreasecustomerstickiness. |
| DRTrueLoveAmbassadorManagementSystemV3.0 | Addthecustomertagmanagementfunctiontotheoriginaltrueloveambassadormanagementsystemtoenableprecisecustomermarketingmanagement. | UnderR&D | Enableshopguidestobettercommunicatewithcustomers,understandtheirneedsandprovidetimelyservice,whilehelpingtheoperationsdepartmentoftheheadofficetomoreeffectivelymonitortheoperationofstores. | Addthecustomertagmanagementfunctiontoenableprecisecustomermarketingmanagement. |
| SAPV4.0 | Improvetheflexiblecombinationofmainstoneandauxiliarystonesofthediamondrings,refinetheprocessmanagementandalignwiththesystemsofthesuppliers. | UnderR&D | FurtherimprovethefunctionsofSAPsystem,includingautomaticdistribution,qualitymanagement,reconciliationandcoordinationwithsuppliers,systematizationofcommonreports,soastoimproveworkefficiency. | Furtherimproveautomationofbusinessoperations. |
| DatadashboardsystemV3.0 | Visualizethedatainalargedatabaseordatawarehousetoreaddataandtheirstructuralrelationshipsinamoreintuitiveway,anddisplaytheanalysisdataofthesysteminmultipledimensions. | UnderR&D | Ensuretheaccuracyofdatadisplay,thetimelinessofthedatadashboard;provideawealthofcharttools. | Quickconfigurationtoenablethedisplayofdashboardanddisplaydatafrommultipleperspectives. |
| EHR(Beisen)System | Meetthecurrentpersonnelmanagementneeds,andenablethehumanresourcemanagementinthesystem. | UnderR&D | Realizecomprehensivedigitalmanagementfromemployeerecruitment,on-boarding,managementtoresignation,soastoquicklyimprovetalentmanagementcapabilities. | Improvetheefficiencyofhumanresourcemanagementandrealizesmartdecision-making. |
| SRMProjectDevelopment | DeploySCRMsystem,builddataplatform,andmembershipmid-endsystem,enableautomatedmarketing. | UnderR&D | Completedatareportingandcollection,eventmanagement,memberprocessinganddataanalysis. | Enabledataanalysisandautomaticallygeneratemarketingstrategies |
| ConstructionoftheDiamondJewelryR&DDesignCenter | Improveproductdevelopmentanddesigncapabilitiestoaddressmarketcompetition;makemoreeffortstodesignclassicstyleproductstoenhancetheproductuniqueness;introducescarceIPstoenhancethebrandvalue. | UnderR&D | IncreaseinvestmentinR&Danddesign,expanditsin-housefull-timeR&Danddesignteam,andimproveDRCO'sindependentR&Danddesigncapabilities. | SatisfytheneedsofendconsumersandenhanceDRCO'sbrandinfluence. |
R&DStaffofDRCO
| 2022 | 2021 | Change | |
| NumberofR&Dstaff | 47 | 53 | -11.32% |
R&Dstaffas%oflaborforce
| R&Dstaffas%oflaborforce | 1.05% | 1.49% | -0.44% |
| EducationbackgroundofR&Dstaff | |||
| Bachelor’sdegree | 34 | 35 | -5.71% |
| Master’sdegree | 4 | 3 | 33.33% |
| Juniorcollege | 9 | 15 | -40.00% |
| AgedistributionofR&Dstaff | |||
| <30ys | 22 | 19 | 15.79% |
| 30-40ys | 24 | 32 | -25.00% |
| >40ys | 1 | 2 | -50.00% |
R&DexpenditureandPercentageinRevenueinLastThreeYears
| 2022 | 2021 | 2020 | |
| R&Dexpenditures(RMB) | 17,944,132.37 | 16,822,042.92 | 16,795,857.15 |
| R&Dexpendituresas%ofrevenue | 0.49% | 0.36% | 0.68% |
| CapitalizedR&Dexpenditures(RMB) | 0.00 | 0.00 | 0.00 |
| PercentageofcapitalizedR&Dexpenditure | 0.00% | 0.00% | 0.00% |
| CapitalizedR&Dexpenditureas%ofnetprofitinthecurrentperiod | 0.00% | 0.00% | 0.00% |
ReasonsandeffectofmaterialchangesinthecompositionofR&Dstaff
□Applicable?NotApplicableReasonsforthesignificantYoYchangeintheproportionofR&Dexpenditureinrevenue
□Applicable?NotApplicableReasonsandrationalityforsignificantchangeincapitalizationratioofR&Dexpenditures
□Applicable?NotApplicable
5.Cashflow
Unit:RMB
| Item | 2022 | 2021 | YoYchange |
| Subtotalofcashinflowsfromoperatingactivities | 4,047,355,144.09 | 4,956,712,277.33 | -18.35% |
| Subtotalofcashoutflowsfromoperatingactivities | 3,229,344,031.85 | 3,412,499,426.62 | -5.37% |
| Netcashflowsfromoperatingactivities | 818,011,112.24 | 1,544,212,850.71 | -47.03% |
| Subtotalofcashinflowsfrominvestingactivities | 5,412,132,131.53 | 2,361,950,371.99 | 129.14% |
| Subtotalofcashoutflowsfrominvestingactivities | 9,725,178,220.62 | 3,532,568,089.52 | 175.30% |
| Netcashflowsfrominvestingactivities | -4,313,046,089.09 | -1,170,617,717.53 | -268.44% |
| Subtotalofcashinflowfromfinancingactivities | 536,119,714.66 | 4,466,209,006.62 | -88.00% |
| Subtotalofcashoutflowsfromfinancingactivities | 1,266,121,911.18 | 277,845,213.25 | 355.69% |
| Netcashflowsfromfinancingactivities | -730,002,196.52 | 4,188,363,793.37 | -117.43% |
| Netincreaseincashandcashequivalents | -4,219,885,422.83 | 4,560,014,610.26 | -192.54% |
ExplanationofkeyfactorsforsignificantYoYchangeofrelevantdata?Applicable□NotApplicable
(1)Thedecreaseincashinflowsfromoperatingactivitieswasmainlyduetothedecreaseinsalesrevenueduringthereportingperiod.
(2)ThedecreaseincashoutflowsfromoperatingactivitieswasmainlyduetothedecreaseinboththesalerevenueandthepurchasevolumeofDRCOaswellasthedeclineofcorrespondingtaxes.
(3)Theincreaseincashinflowsfrominvestingactivitieswasmainlyduetotherecoveryoftheprincipalfromwealthmanagementproductsdueandtheincreaseinincomefromwealthmanagementproductsduringthereportingperiod.
(4)Theincreaseincashoutflowsfrominvestingactivitieswasmainlyduetotheincreaseintheprincipalpaidtowealthmanagementproductsduringthereportingperiod.
(5)ThedecreaseintheamountofcashinflowsfromfinancingactivitieswasmainlyduetoDRCO'sborrowingsforbilldiscountingduringthereportingperiodandtheproceedsraisedfromthepublicofferingofsharesinthesameperiodofthepreviousyear.
(6)Theincreaseincashoutflowsfromfinancingactivitieswasmainlyduetothedistributionofcashdividendsandtherepaymentofborrowingsforbilldiscountingduringthereportingperiod.Explanationofreasonsforthesignificantdifferencebetweenthenetcashflowfromoperatingactivitiesduringthereportingperiodandthenetprofitforthecurrentyear
□Applicable?NotApplicableV.Non-mainBusiness?Applicable□NotApplicable
Unit:RMB
Amount
| Amount | As%oftotalprofit | Reasons | Whethersustainable | |
| Investmentincome | 89,003,045.62 | 10.05% | Itismainlytheinvestmentincomefromredeemingthematurewealthmanagementproductsfrombanks. | No |
| Gains/lossesfromchangesinfairvalue | 39,294,362.36 | 4.44% | Mainlygainsonchangesinfairvalueoffinancialassetsrecognizedduringthereportingperiod. | No |
| Assetimpairment | -28,420,774.69 | -3.21% | Mainlyincludetheprovisionforinventoryimpairmentlossandimpairmentoflong-termassets. | No |
| Non-operatingincome | 1,237,090.46 | 0.14% | MainlyincludecompensationsreceivedbyDRCO. | No |
| Non-operatingexpenses | 768,433.58 | 0.09% | Mainlyincludebreachpenaltiesandoverduefines. | No |
VI.AnalysisofAssetsandLiabilities
1.Significantchangesinthecompositionofassets
Unit:RMB
| Attheendof2022 | Atthebeginningof2022 | Change | Explanationofsignificant |
inproportion
| Amount | As%oftotalassets | Amount | As%oftotalassets | inproportion | changes | |
| Cashandcashequivalents | 521,904,818.30 | 5.92% | 4,741,510,453.45 | 57.34% | -51.42% | Mainlyduetousingtheproceedsforwealthmanagementduringthereportingperiod. |
| Accountsreceivable | 84,478,911.52 | 0.96% | 174,880,676.50 | 2.11% | -1.15% | |
| Inventories | 669,886,638.00 | 7.60% | 439,973,154.82 | 5.32% | 2.28% | Mainlyduetomoresamplesdistributedasmorestoreswereopenedduringthereportingperiod. |
| Fixedassets | 14,068,805.09 | 0.16% | 6,325,614.51 | 0.08% | 0.08% | |
| Right-of-useassets | 590,506,167.36 | 6.70% | 429,297,028.76 | 5.19% | 1.51% | |
| Short-termborrowings | 433,993,449.44 | 4.92% | 4.92% | Mainlyduetoborrowingsforbilldiscountingduringthereportingperiod. | ||
| Contractliabilities | 126,705,661.82 | 1.44% | 210,146,744.15 | 2.54% | -1.10% | |
| Leaseliabilities | 276,542,164.23 | 3.14% | 215,671,484.31 | 2.61% | 0.53% |
Foreignassetsaccountforarelativelyhighproportion.
□Applicable?NotApplicable
2.Assetsandliabilitiesmeasuredatfairvalue?Applicable□NotApplicable
Unit:RMB
| Item | Openingamount | Gainsandlossesonchangesinfairvalueforthecurrentperiod | Cumulativefairvaluechangerecognizedinequity | Impairmentaccruedduringthereportingperiod | Amountofpurchaseincurrentperiod | Amountofdisposalincurrentperiod | Otherchanges | Closingamount |
| Financialassets | ||||||||
| 1.Held-for-tradingfinancialassets(excludingderivativefinancialassets) | 1,824,097,569.32 | 39,294,362.36 | 8,921,859,195.09 | 5,175,359,195.09 | 5,609,891,931.68 | |||
| Subtotaloffinancialassets | 1,824,097,569.32 | 39,294,362.36 | 8,921,859,195.09 | 5,175,359,195.09 | 5,609,891,931.68 | |||
| Total | 1,824,097,569.32 | 39,294,362.36 | 8,921,859,195.09 | 5,175,359,195.09 | 5,609,891,931.68 | |||
Financialliabilities
| Financialliabilities | 0.00 | 0.00 |
ContentsofotherchangesWhetherthereweresignificantchangesinthemajormeasurementattributesofDRCO'sassetsduringthereportingperiod.
□Yes?No
3.RestrictedrightstoassetsasoftheendofthereportingperiodAsattheendofthereportingperiod,theGroup'scashandcashequivalentswhoseuseisrestrictedtotaledRMB279,787.68(31December31,2021:nil),whichwasduetothefreezingoffundsasaresultofthedelayofbank-enterprisereconciliation,themisjudgmentofbanksorotherreasons.VII.InvestmentStatusAnalysis
1.Overallsituation?Applicable□NotApplicable
| Investmentinthereportingperiod(RMB) | Investmentinthesameperiodoflastyear(RMB) | Change |
| 9,725,178,220.62 | 3,532,568,089.52 | 175.30% |
2.Significantequityinvestmentsacquiredduringthereportingperiod
□Applicable?NotApplicable
3.Significantnon-equityinvestmentspendingduringthereportingperiod
□Applicable?NotApplicable
4.Investmentinfinancialassets
(1)Investmentinsecurities?Applicable□NotApplicable
Unit:RMB
| Securitiestype | Securitiescode | Securitiesabbreviation | Initialinvestmentcost | Accountingmeasurementmodel | Openingbookvalue | Gainsandlossesonchangesinfairvalueforthecurrentperiod | Cumulativefairvaluechangerecognizedinequity | Amountofpurchaseincurrentperiod | Amountofdisposalincurrentperiod | Gainsandlossesduringthereportingperiod | Closingbookvalue | Accountingitem | Sourceoffunds |
| Domesticandforeignstocks | 000564 | STDaji | 2,359,195.09 | Fairvaluemeasurement | 0.00 | -1,175,026.83 | -1,175,026.83 | 2,359,195.09 | 1,184,168.26 | -1,175,026.83 | 0.00 | Held-for-tradingfinancialassets | Thedebtorsettlespreviouspaymentsowed |
toCompanywithitsshares
| toCompanywithitsshares | |||||||||||
| Total | 2,359,195.09 | -- | 0.00 | -1,175,026.83 | -1,175,026.83 | 2,359,195.09 | 1,184,168.26 | -1,175,026.83 | 0.00 | -- | -- |
(2)Investmentsinderivatives
□Applicable?NotApplicableTherewerenoderivativeinvestmentsduringthereportingperiod.
5.Useofraisedfunds?Applicable□NotApplicable
(1)Overalluseofproceeds?Applicable□NotApplicable
Unit:RMB0'000
| Yearoffundraising | Methodoffundraising | Totalproceeds | Totalamountofproceedsusedinthecurrentperiod | Accumulatedamountofproceedsused | Totalamountofproceedswhoseintendedusewaschangedduringthereportingperiod | Accumulatedamountproceedswhoseintendedusewaschanged | Percentageofaccumulatedamountproceedswhoseintendedusewaschanged | Totalamountofunusedproceeds | Useanddestinationofunusedproceeds | Amountofproceedsidleformorethantwoyears |
| 2021 | Publicoffering | 444,380.28 | 149,580.29 | 149,580.29 | 0 | 0 | 0.00% | 294,799.99 | Investinintendedprojectsandreplenishworkingcapital | 0 |
| Total | -- | 444,380.28 | 149,580.29 | 149,580.29 | 0 | 0 | 0.00% | 294,799.99 | -- | 0 |
| Explanationoftheoveralluseoftheproceeds | ||||||||||
| 1.ActualamountandarrivaldateofproceedsInaccordancewiththeCSRC's"ApprovalonAgreeingtheRegistrationofDRCorporationLimitedforInitialPublicOfferingofShares(ZhengJianXuKeNo.[2021]3043)"andtheSZSE'sapproval,DRCOconductedaninitialpublicofferingof40,001,000ordinaryshares(Ashares)withanominalvalueofRMB1.00andanissuepriceofRMB116.88pershare,raisingproceedsofRMB4676,368,800.Thesponsorshipandunderwritingfees(excludingVAT)fortheIPOwereRMB217,341,600.OnDecember10,2021,thetotalproceedsofRMB4,460,725,300afterdeductingtheunderwritingfees(excludingVAT)ofRMB215,643,500wereremittedbytheunderwriterChinaSecuritiestoDRCO'sspecialaccountforproceeds.ThetotalproceedsraisedbyDRCOviatheIPOwereRMB4676,368,800,andthenetproceedswereRMB4,443,802,800afterdeductingsponsorshipandunderwritingfees(excludingVAT)ofRMB217,341,600,andotherissuancefees(excludingVAT)of | ||||||||||
RMB15,224,300(including:auditandcapitalverificationfeesofRMB4,471,300,legalcounselfeesofRMB5,422,100,informationdisclosurefeesofRMB4,018,900,issuancefeesandotherfeesofRMB1,312,100).TheadditionalregisteredcapitalreplenishedbytheIPOhasbeenverifiedbyErnst&YoungHuaMingLLP(SpecialGeneralPartnership)thatissueda"CapitalVerificationReport"(Ernst&YoungHuaMing(2021)YanZiNo.61403707_H01).
2.Amountusedinthecurrentyearandyear-endbalanceAsofDecember31,2022,theaccumulatedamountoftheproceedsusedbyDRCOwasRMB1,495,802,900,ofwhichRMB1,035,802,900wasusedtoinvestincommitteditemsandRMB460,000,000wasusedtopermanentlysupplementtheworkingcapital.AsofDecember31,2022,thebalanceofidlefunds(includingsurplusproceeds)forcashmanagementwasRMB2,895,000,000.AsofDecember31,2022,thebalanceofDRCO'sspecialaccountfortheproceedswasRMB96,893,700(includinginterestincomeandinvestmentincomeafterdeductingservicecharges).
(2)Thesituationoftheprojectoffund-raisingcommitment.?Applicable□NotApplicable
Unit:RMB0'000
RMB15,224,300(including:auditandcapitalverificationfeesofRMB4,471,300,legalcounselfeesofRMB5,422,100,informationdisclosurefeesofRMB4,018,900,issuancefeesandotherfeesofRMB1,312,100).TheadditionalregisteredcapitalreplenishedbytheIPOhasbeenverifiedbyErnst&YoungHuaMingLLP(SpecialGeneralPartnership)thatissueda"CapitalVerificationReport"(Ernst&YoungHuaMing(2021)YanZiNo.61403707_H01).
2.Amountusedinthecurrentyearandyear-endbalanceAsofDecember31,2022,theaccumulatedamountoftheproceedsusedbyDRCOwasRMB1,495,802,900,ofwhichRMB1,035,802,900wasusedtoinvestincommitteditemsandRMB460,000,000wasusedtopermanentlysupplementtheworkingcapital.AsofDecember31,2022,thebalanceofidlefunds(includingsurplusproceeds)forcashmanagementwasRMB2,895,000,000.AsofDecember31,2022,thebalanceofDRCO'sspecialaccountfortheproceedswasRMB96,893,700(includinginterestincomeandinvestmentincomeafterdeductingservicecharges).
Committedinvestmentprojectsandinvestmentareasofsurplusproceeds
| Committedinvestmentprojectsandinvestmentareasofsurplusproceeds | Whethertheprojecthasbeenchanged(includingpartlychanged) | Totalcommittedinvestmentofproceeds | Adjustedtotalinvestment(1) | Amountinvestedinthereportingperiod | Cumulativeamountinvestedasoftheendoftheperiod(2) | Investmentprogressasoftheendoftheperiod(3)=(2)/(1) | Datewhentheprojectreachesitsintendedserviceablestate | Benefitsrealizedduringthereportingperiod | Cumulativebenefitsrealizedasoftheendofthereportingperiod | Whethertheexpectedbenefitsarerealized | Whetherthefeasibilityoftheprojecthaschangedsignificantly |
| Committedinvestmentprojects | |||||||||||
| Constructionofchannelnetwork | No | 73,921.4 | 73,921.4 | 59,694.68 | 59,694.68 | 80.75% | December31,2023 | 14,115.14 | 33,332.74 | Yes | No |
| Constructionofinformationsystem | No | 11,047.45 | 11,047.45 | 4,548.69 | 4,548.69 | 41.17% | December31,2024 | Notapplicable | No | ||
| ConstructionofR&D,CreativityandDesignCenterforDiamondJewelries | No | 5,389.93 | 5,389.93 | 1,289.48 | 1,289.48 | 23.92% | December31,2025 | Notapplicable | No | ||
| Replenishingworkingcapital | No | 38,000 | 38,000 | 38,047.45 | 38,047.45 | 100.12% | December31,2023 | Notapplicable | No | ||
| Subtotalofcommittedinvestmentprojects | -- | 128,358.78 | 128,358.78 | 103,580.3 | 103,580.3 | -- | -- | 14,115.14 | 33,332.74 | -- | -- |
| Investmentareasofsurplusproceeds | |||||||||||
| Undetermineduseof | No | 222,021 | 222,021 | Notapplica | No | ||||||
surplusproceeds
| surplusproceeds | .5 | .5 | ble | ||||||||
| Replenishingworkingcapital(ifany) | -- | 94,000 | 94,000 | 46,000 | 46,000 | 48.94% | -- | -- | -- | -- | -- |
| Subtotalofinvestmentsofsurplusproceeds | -- | 316,021.5 | 316,021.5 | 46,000 | 46,000 | -- | -- | -- | -- | ||
| Total | -- | 444,380.28 | 444,380.28 | 149,580.3 | 149,580.3 | -- | -- | 14,115.14 | 33,332.74 | -- | -- |
| Describethecircumstancesandreasonswhytheplannedprogressandexpectedbenefitshavenotbeenrealizedbyproject(includingthereasonfor"notapplicable"concerning"whethertheexpectedbenefitsarerealized") | OnApril26,2023,DRCOconvenedthefifthmeetingofthesecondsessionoftheBoardofDirectorsandthefifthmeetingofthesecondsessionoftheBoardofSupervisorstoreviewtheProposalonPostponingCertainProceeds-fundedProjects.AccordinglyDRCOisapprovedtoextendthecompletiondateofthe“InformationSystemProject”andthe“R&D,CreativityandDesignCenterforDiamondJewelries”,twoproceeds-fundedprojects,withoutchangingtheimplementationentity,theimplementationmethod,theuseofproceedsandtheintendedinvestmentamount.Detailsareasfollows:1.ItisShenzhenLoveOnlyAICloudTechnologyCo.,Ltd.thatisresponsibleforthe"InformationSystemProject",whichisdesignedtotakethreeyears.Inviewoftheimpactsofsuchfactorsastheglobalmacro-economicenvironment,themarketcontextandthetechnologicalupdateduringtheimplementation,thecompanyneedstooptimizedigitalizedmanagementofthesystemconstructionandfurtherexplorethepotentialsofdigitalizationinordertoensurealeadingsystem.Therefore,itsconstructionperiodisbeyondtheschedule.Duetotheactualsituationoftheproject,thecompanyhasprudentlydeterminedtoextenditscompletiondatefromDecember31,2023toDecember31,2024.2.ItisShenzhenDarryCommercialManagementServicesthatisresponsibleforconstructingtheR&D,CreativityandDesignCenterforDiamondJewelries,whichisdesignedtotakethreeyears.Asthemarketdemandshavebeenchanging,thecompanyneedstooptimizethisnon-profitprojecttobetteralignwiththeactualrequirementsandthecorporatedevelopmentstrategy,leadingtodelayedconstructionprocess.Duetotheactualsituationoftheproject,thecompanyhasprudentlydeterminedtoextenditscompletiondatefromDecember31,2023toDecember31,2025. | ||||||||||
| Explanationofsignificantchangesinprojectfeasibility | Notapplicable | ||||||||||
| Amount,useandprogressofuseofsurplusproceeds | Applicable | ||||||||||
| 1.OnDecember30,2021,DRCOheldthe14thmeetingofthefirstsessionoftheBoardofDirectorsandthesixthmeetingofthefirstsessionoftheBoardofSupervisors;onJanuary18,2022,DRCOheldthefirstExtraordinaryGeneralMeetingin2022,reviewingandapprovingthe"ProposalonCashManagementforPartofIdleProceedsandSelf-ownedFunds.ThemeetingauthorizedDRCOtousenotmorethanRMBRMB3,500,000,000ofidleproceeds(includingsurplusproceeds)andnotmorethanRMB4,000,000,000ofitsownfundsforcashmanagementforaperiodof12monthsfromthedateofreviewandapproval.Suchfundscanbeusedonarevolvingbasiswithintheaforesaidamountandterm.AsofDecember31,2022,thebalanceofsurplusproceedsforcashmanagementwasRMB2,700,000,000.2.OnApril20,2022,DRCOheldthe15thmeetingofthefirstsessionoftheBoardofDirectorsandthe7thmeetingofthefirstsessionoftheBoardofSupervisors,whichconsideredandapprovedthe"ProposalonUsingPartoftheSurplusProceedstoPermanentlyReplenishWorkingCapital",andagreedthatDRCOmayuseRMB940,000,000ofsurplusproceedstopermanentlyreplenishtheworkingcapital,representing29.74%ofthetotalsurplusproceeds.Thisproposalwasdeliberatedandapprovedattheshareholders'meetingonMay20,2022.AsofDecember31,2022,DRCOhadtransferredRMB460,000,000fromitsspecialaccountfortheproceedstopermanentlysupplementtheworkingcapital. | |||||||||||
| Changesintheimplementationlocationofprojectsfundedbytheproceeds | Notapplicable | ||||||||||
| Adjustmentoftheimplementationmethodofprojects | Notapplicable | ||||||||||
fundedbytheproceeds
| fundedbytheproceeds | |
| Earlyinvestmentandreplacementofprojectsfundedbytheproceeds | Applicable |
| OnApril20,2022,DRCOheldthe15thmeetingofthefirstsessionoftheBoardofDirectorsandthe7thmeetingofthefirstsessionoftheBoardofSupervisors,whichconsideredandapprovedthe"ProposalontheReplacementofSelf-raisedFundsInvestedinAdvanceandPaidforIssuanceExpenseswithProceeds",andagreedthatDRCOmayusetheproceedstoreplacetheself-raisedfundsofRMB370,182,800investedinadvanceandfundsofRMB5,455,000paidforissuanceexpenses,whichtotaledRMB375,637,800.Ernst&YoungHuaMing(SpecialGeneralPartnership)issuedthe"CapitalVerificationReportonDRCorporationLimited’sInvestmentsinIntendedProjectswithSelf-ownedFunds(Ernst&YoungHuaMing(2022)ZhuanZiNo.61403707_H01).BeforeMay10,2022,DRCOsuccessivelytransferredatotalofRMB366,804,400fromitsspecialaccountforproceedsforthereplacementpurpose,includingRMB361,349,400fortheinvestmentsinadvanceandRMB5,455,000forissuanceexpenses.TheremainingRMB8,833,400wasretainedinthespecialaccount. | |
| Useidleproceedstotemporarilyreplenishworkingcapital | Notapplicable |
| Theamountandreasonsforthebalanceofproceedsafterprojectimplementation | Notapplicable |
| Useanddestinationofunusedproceeds | DRCO'sunusedproceedsareusedtopurchaseapprovedcashmanagementproductsanddepositedinaspecialaccount.AsofDecember31,2022,thebalanceofidleproceeds(includingsurplusproceeds)forcashmanagementwasRMB2,895,000,000,consistingofRMB2,700,000,000asthebalanceofthewealthmanagementproductsboughtbysurplusproceedsandRMB195,000,000asthebalanceofthewealthmanagementproductsboughtbythecapitalofthecommittedinvestmentprojects.OnDecember29,2022,DRCOheldthefourthmeetingofthesecondsessionoftheBoardofDirectorsandthefourthmeetingofthesecondsessionoftheBoardofSupervisors;onJanuary17,2023,DRCOheldthefirstExtraordinaryGeneralMeetingin2023,reviewingandapprovingthe"ProposalonCashManagementforPartofIdleProceedsandSelf-ownedFunds.ThemeetingauthorizedDRCOtousenotmorethanRMBRMB3,000,000,000ofidleproceeds(includingsurplusproceeds)andnotmorethanRMB6,000,000,000ofitsownfundsforcashmanagementforaperiodof12monthsfromthedateofreviewandapproval.Suchfundscanbeusedonarevolvingbasiswithintheaforesaidamountandterm. |
| Problemsorothercircumstancesintheuseanddisclosureofproceeds | Notapplicable |
(3)Changesinprojectsfundedbyproceeds
□Applicable?NotApplicableThereisnochangeintheprojectsfundedbyproceedsduringDRCO’sreportingperiod.VIII.Disposalofmaterialassetsandequityinterests
1.Disposalofmaterialassets
□Applicable?NotApplicableDRCOdidnotdisposeofanymaterialassetsduringthereportingperiod.
2.Disposalofmaterialequityinterests
□Applicable?NotApplicableIX.Analysisofmajorsubsidiariesandassociates?Applicable□NotApplicableInformationaboutmajorsubsidiariesandassociatesthatmayinfluenceDRCO’snetprofitby10%or
more
Unit:RMB
Company
name
| Companyname | Companytype | Mainbusiness | Registeredcapital | Totalassets | Netassets | Revenue | Operatingprofit | Netprofit |
| ShenzhenLoveOnlyAICloudTechnologyCo.,Ltd. | Subsidiary | Informationtechnologyservices,overseassalesbusiness | 25,000,000.00 | 466,343,456.87 | 392,238,972.48 | 487,783,783.08 | 282,865,653.50 | 241,981,878.92 |
| ShenzhenDarryCommercialManagementServiceCo.,Ltd. | Subsidiary | Supplychainmanagement,R&Danddesign,customizedproductservicesandrelatedsupportingservices | 10,000,000.00 | 298,898,059.13 | 82,920,736.58 | 323,798,344.09 | 258,078,451.18 | 219,594,770.93 |
| ShanghaiDarryDiamondCo.,Ltd. | Subsidiary | MemberofShanghaiDiamondExchange,purchaseofandcustomclearanceforroughdiamondsinoverseasmarkets | 5,000,000.00 | 53,019,620.05 | 32,805,003.39 | 172,182,163.84 | 9,832,659.50 | 7,374,494.62 |
| He’erCulture(Shenzhen)Co.,Ltd. | Subsidiary | Brandmarketingandpromotionservices | 10,000,000.00 | 91,414,506.88 | 48,129,839.12 | 163,150,592.94 | 127,860,358.04 | 108,765,840.41 |
Theacquisitionanddisposalofsubsidiariesduringthereportingperiod?Applicable□NotApplicable
| Companyname | Methodofacquiringanddisposingofsubsidiariesduringthereportingperiod | Impactonoveralloperationandperformance |
| XiamenDRJewelry | Fundtheestablishment | Nosignificantimpact |
| ShenyangDRJewelry | Fundtheestablishment | Nosignificantimpact |
| TianjinDRJewelry | Fundtheestablishment | Nosignificantimpact |
| ChengduDRJewelry | Fundtheestablishment | Nosignificantimpact |
| KunmingDRJewelry | Fundtheestablishment | Nosignificantimpact |
| ShanghaiDRJewelry | Fundtheestablishment | Nosignificantimpact |
| JinanDRJewelry | Fundtheestablishment | Nosignificantimpact |
| SuzhouZhongzuanDRJewelry | Fundtheestablishment | Nosignificantimpact |
| BeijingZhongzuanDRJewelry | Fundtheestablishment | Nosignificantimpact |
| ShenzhenDRJewelry | Fundtheestablishment | Nosignificantimpact |
SuzhouDRJewelry
| SuzhouDRJewelry | Fundtheestablishment | Nosignificantimpact |
| ShenyangDRJewelryAccessories | Fundtheestablishment | Nosignificantimpact |
| HangzhouDRJewelry | Fundtheestablishment | Nosignificantimpact |
| BeijingDRJewelry | Fundtheestablishment | Nosignificantimpact |
| WuhanZhongzuanDRJewelry | Fundtheestablishment | Nosignificantimpact |
| WuhanDRJewelry | Fundtheestablishment | Nosignificantimpact |
| Xi'anDRJewelry | Fundtheestablishment | Nosignificantimpact |
| ChengduDRTrueLoveJewelry | Fundtheestablishment | Nosignificantimpact |
| NingboDRJewelry | Fundtheestablishment | Nosignificantimpact |
| BeijingHuazuanDRJewelry | Fundtheestablishment | Nosignificantimpact |
| ChongqingDRJewelry | Fundtheestablishment | Nosignificantimpact |
| HangzhouDRTrueLoveJewelry | Fundtheestablishment | Nosignificantimpact |
| HenanDRJewelry | Fundtheestablishment | Nosignificantimpact |
| Xi'anDRJewelryAccessories | Fundtheestablishment | Nosignificantimpact |
| ZhengzhouDRJewelry | Fundtheestablishment | Nosignificantimpact |
| ShenzhenDRJewelryAccessories | Fundtheestablishment | Nosignificantimpact |
| ShenzhenDRJewelryOrnament | Fundtheestablishment | Nosignificantimpact |
| ChangshaDRJewelry | Fundtheestablishment | Nosignificantimpact |
| ShanghaiDRJewelryAccessories | Fundtheestablishment | Nosignificantimpact |
| ShanghaiDRJewelrySales | Fundtheestablishment | Nosignificantimpact |
| YiwuDRJewelry | Fundtheestablishment | Nosignificantimpact |
| ZhoukouDRJewelry | Fundtheestablishment | Nosignificantimpact |
| HezeDRJewelry | Fundtheestablishment | Nosignificantimpact |
| DongguanDRJewelry | Fundtheestablishment | Nosignificantimpact |
| XiningDRJewelry | Fundtheestablishment | Nosignificantimpact |
| LinyiDRJewelry | Fundtheestablishment | Nosignificantimpact |
| NanchangDRJewelry | Fundtheestablishment | Nosignificantimpact |
| WeifangDRJewelry | Fundtheestablishment | Nosignificantimpact |
| YinchuanDRJewelry | Fundtheestablishment | Nosignificantimpact |
| JiningDRJewelry | Fundtheestablishment | Nosignificantimpact |
| MianyangDRJewelry | Fundtheestablishment | Nosignificantimpact |
| ShangqiuDRJewelry | Fundtheestablishment | Nosignificantimpact |
| FuyangDRJewelry | Fundtheestablishment | Nosignificantimpact |
| UrumqiDRJewelry | Fundtheestablishment | Nosignificantimpact |
| HandanDRJewelry | Fundtheestablishment | Nosignificantimpact |
| BaodingDRJewelrySales | Fundtheestablishment | Nosignificantimpact |
| GuangzhouDRJewelry | Fundtheestablishment | Nosignificantimpact |
| GuiyangDRJewelry | Fundtheestablishment | Nosignificantimpact |
| LangfangDRJewelry | Fundtheestablishment | Nosignificantimpact |
| HaoduoDiamondZhizao(Shenzhen) | Fundtheestablishment | Nosignificantimpact |
FoshanDRJewelry
| FoshanDRJewelry | Fundtheestablishment | Nosignificantimpact |
| JiaxingDRJewelry | Fundtheestablishment | Nosignificantimpact |
Informationaboutmajorsubsidiariesandassociates
1.ThesubsidiaryLoveOnlyAIismainlyengagedininformationtechnologyservicesandoverseassalesbusinessforDRCO.Duringthereportingperiod,itachievedanetprofitofRMB241,981,878.92,down
30.89%fromthesameperiodlastyear.
2.ThesubsidiaryDarryQianhaiismainlyengagedinsupplychainmanagement,R&Danddesign,customizedproductservicesandrelatedsupportingservices.Duringthereportingperiod,itachievedanetprofitofRMB219,594,770.93,down32.00%fromthesameperiodlastyear.
3.ThesubsidiaryShanghaiDarryismainlyengagedinthepurchaseandcustomclearanceofroughdiamondsforDRCO.Duringthereportingperiod,itachievedanetprofitofRMB7,374,494.62,down
38.36%fromthesameperiodlastyear.
4.ThesubsidiaryHe’erCultureismainlyengagedinbrandmarketingandpromotionservices.Startingbusinessfrom2022,itachievedanetprofitofRMB108,765,840.41duringthereportingperiod,up73,237.68%overthesameperiodlastyear.X.StructuredentitiesunderthecontrolofDRCO
□Applicable?NotApplicable
XI.ProspectforDRCO’sfuturedevelopment
(I)DevelopmentstrategyWithamissionofenhancingjoyandbeautyoftruelove,DRCOupholdsthephilosophyof“oneandonlytrueloveinalifetime”andfocusesonthedevelopmentstrategyof“expressionoflove,multi-brandandglobalization”.Basedonwell-establishedonlineandofflinechannelnetworks,DRCOleveragesitsstrongcapabilitiesofintegratingindustrialchainresources,attractsdomesticandinternationalhigh-qualitysuppliers,R&Danddesignteams,testinginstitutionsandotherpartnerstosetupaleadingjewelrycustomizationmodelandsharpenitscompetitiveadvantages.DRCOstrivestospreadthetruelovecultureasthedevelopmentcornerstonethroughoutthecountryandeventheworld,providinghigh-qualityweddingringsandjewelryproductsaswellasuniquetrueloveculturalexperienceandservicesforglobalconsumerstomeettheirlastingneedsfortruelovelifestyle.(II)DevelopmentgoalsFocusingontheoveralldevelopmentstrategy,DRCOwillseizetheimportantopportunitiesarisingfromtherapiddevelopmentofChineseandeventheglobaljewelryindustries.Itwillfurtherincreaseitsmarketsharesthroughimprovingtheimageandinfluenceofthebrand,enhancingR&Danddesigncapabilitiesandstrengtheningitsinfluenceinhigh-endandinternationalmarkets.Meanwhile,DRCOwilldeepenitsleadershipadvantagesinthediamondringsegmentthroughexpandingchannelnetworksandbuildinginformationsystemsande-commerceplatforms,andwillfurtherexpanditsbusinessscaleandfinallybuildDRintotheworld’sNo.1brandofengagementdiamondringsthroughfurtherincreasingbusinessscale.(III)Businessdevelopmentplanfor2023Basedonitsdevelopmentstrategy,DRCOhasformulateddetailedpromotionplansfor2023inareassuchasbrandcommunication,productresearchanddevelopment,retailoperationsandorganizationalconstruction:
1.BrandcommunicationIn2023,DRCOwillcontinuefocusingonthebrandguidelinesandtheconceptoftruelovetopromoteandupgradebrandimage.Wewillpropagatethestoriesofourbrandandproducts,valuepropositionandlifestylesamongcoretargetcustomerswithhigh-qualitycontentstomaintainourrelationshipswithcustomers.Ourpositivebrandimagewillattractparticipationofsocialforces,communicatingourbrandconceptwithcustomersanddemonstratingoursociallyresponsibilities.DRCOkeepseyesonamazingmomentsofthebrandandcustomers,enrichbrandlanguage,andconveyawarmandwonderfulatmosphereoftruelovetothesocietythroughcreatingromanticscenessuchasproposalsandweddings;gaincustomers’supports,spreadthereallovestoriesofgoldenmodelsandcontinuouslyconveyapositiveviewoflove;cooperatewithprofessionalinstitutions,media,organizationsandculturalscholarstoholdheartwarmingtruelovecampaignsintheworldtobuildupbrandconfidenceandassets.In2023,DRCOwillcontinuetoimprovebrandcommunicationcontentsandtheco-creationculture:
(1)Upgradecontentdisseminationandenhancethebrandpower:
①Fromfragmentationtocontinuity,e.g.,fromoneepisodetoseveralepisodespostedontheaccount,fromasingleaccounttoanaccountIPmatrix,thusestablishingthe“DRTrueLoveUniverse”ofshortvideos;
②Fromprintmediatoamediamatrix,i.e.,expandingthemediacoveragefromonlynewmediato“printmedia+stereomedia”;
③Fromsingledimensiontomultipledimensions,thatis,fromadvertisingonlythebrandconcepttodisplayingthebrandfromvariousperspectives;
④Both“short,adaptableandfast”contentstargetingnewmediaandhigh-qualitycontentsthatcanbememorizedforlongertime;
(2)Fosterthefanculturethroughengagementwithfans:
①Co-createcontentsandco-designproductsorstoreswithfans;②Invitefanstosharetheirimportantmomentsandparticipateinbrandevents;
③Cultivatefans’ownershipandbuildaninteractionplatformforthem;
(3)Differentiatetheoperationsandoptimizetypesofcontents:
①Establishalivestreamingmatrixformutualcomplementbetweencreativelivestreamingandnormallivestreaming;
②Diversifytheadschannelsbyextendingtocommercialadvertising,comprehensivesearch,webpagesofshoppingmalls,etc.;③Refineandoptimizethecontentsforbetterandprecisepromotion.
2.ProductresearchanddevelopmentAstheconsumergroupsinthejewelryindustryaredominatedbytheyouth,theconsumerstendtodriveupgradingandrevolutionofproductdesignandsalesmodels.DRCOalwaysrespondstomarketchangeswiththeproductsfeaturingstrongaffection,uniqueemotionalexperienceandacomprehensiveservicesystem.DRCOcontinuestoinnovateanddevelopproductswithbrandidentitytoexpresslove,spread
thebrandconceptoftruelovewithqualityproducts,empowerthebrand,andmaketheproductsabridgelinkingthebrandandcustomers,therebyfurtherenhancingthebrandimage.In2023,DRCOwillfocusondifferentiationoftheproductmixandcomplementarityofproductstructures,andfurtherdeepenthestrongemotionalattributesofproductsandbranddifferentiationbystrengtheningdesignandR&Dcapabilitiesandtechnicalinnovationcapabilities.Intermsofproductmix,DRCOwilldevelopseriesofportfoliosfrommultipleperspectivesbasedoninsightsintodifferentneedsoftargetclients,andconstantlyexpandproductcategoriesandcreatetheproductseriesstructurematchingthebrandpositioninginaccordancewithdifferentpurchasescenarios.ProductR&Dwillconcentrateonthecoreconceptofbrandandproductstructures.DRParisDesignCenterextensivelyleveragesworld-famousdesignresourcestoenhanceproductdesign,graduallyforminguniqueDRbrandcharacteristicsandcompetitivedifferentiation.Forproductmarketing,DRCOwillstrivetocreateanimprovedpromotionecosystemforsingleproductandproductseriesbytakingintoaccountthebrandandthemarketfeatures.Wewillalsoenhancetheemotionalimplicationsandthecoreadvantagesofproducts,andpromotethedesignconcepttoimperceptiblyboostourbrand.
3.RetailoperationsOfflinestoresarethewindowoffront-endcustomerexperience.In2022,DRCOsetup254newstores,reachingthe2022expandinggoalofsettingupover200storesinthatyear.In2023,DRCOwillcontinuetooptimizestoreoperationsandmanagement,improvethecustomers’onsiteexperience,andprovidethemwithbettersolutionsforexpressinglove:
(1)Thebusinessdirection:whilecontinuingtocultivatethediamondringcategory,wewillcontinuetoimproveourproductsandcustomerexperienceaccordingtothecustomers’needsinvariousaffectionscenarios,suchasengagement,weddingandthememorialday,soastoallowthemtoexpresstruelove;
(2)Channellayouts:relyingontheexistingchannelnetwork,DRCOwillcontinuetorefinethechannelstructure,improvethelevelandpositioningofthechannels,optimizethevisualeffectofthestores,strengthenthecustomer'sperceptionofDRCO'sbrandpower,andbuildtheofflinestoresasbrandassets,thusenhancingthedevelopmentmomentumsofthebrand;
(3)Operationsofthestores:DRCOwillputcustomersfirsttoimprovethein-storeexperienceofcustomers,refinetheservicestandardoffront-linesalesstaff,andcreateamoreheartwarmingDR-styleexperienceandservices;
(4)Terminalorganizationmanagement:DRCOwillstrengthenthecoordinatedmanagementoverregionalpresence.TheinternalcompetitionmechanismhelpsDRCOrapidlyoftheregion,quicklyidentifytheoperationalweaknessoftheregionalcompaniesandstores.DRCOhasin-housecoachinggroupsfortimelyprofessionaldiagnosisandimprovement,helpingthemanagementoftheregionalcompaniesandstorestoimprovetheircapabilities.
4.OrganizationalconstructionDRCOiscommittedtocreatingacorporateculturethatis"people-oriented"and"customer-centric":
(1)Organizationalupgrading:DRCOestablishestheomnichannelconsumeroperationsanddeliveryteamstoenablethegrowthofthecustomerbase;
(2)Organizationalempowerment:ontheonehand,DRCOhelpsexistingretailorganizationsandthefrontendstoestablishthe"customer-centric"operationconcept;ontheotherhand,DRCOdesignscultureactivitiesbetteraligningwiththeDRstyleonthebasisofthebusinessscenarios;
(3)Talentmanagement:DRCOwillcontinuetoestablishandimprovetheinternalincentivemechanismandadheretothestrategyofdeterminingjobsandsalariesbasedonability,sothatoutstandingtalentscanreceivecompetitivecompensationinthemarket.
In2023,DRCOwillcontinuetoimprovevariousmechanismsofhumanresources,focusingonthereserveofoutstandingtalents,performance-basedincentive,andthecareerdevelopmentpathofmanagers.Basedonthestrategicdevelopmentandemployeedevelopmentneeds,DRCOwillpromotetheestablishmentofamechanism-drivenoperationmodel,whichwillformulateatrainingplanaimingatdevelopingtheorganizationalcapabilitiestosupportbusinessdevelopment,soastocontinuouslyactivatetheorganizationalvitality.(IV)Risksincorporateoperationandcountermeasures
1.EconomicandmarketvolatilityrisksDRCO'smainproductsarediamondJewelry,whicharemid-to-high-endconsumergoodsandaresubjecttoconsumptionlevelsandpurchasingintentionsofthepopulation.Suchproductsarethereforeexposedtobusinessrisksarisingfromfluctuationsintheeconomicandmarketenvironment.Inaddition,geopoliticalcrisesinrecentyearshaveledtoincreasedinternationaltradeconflicts,whichcanleadtouncertaintyinthepurchaseofroughdiamondsinoverseasmarkets.Toaddresstheserisks,DRCOwilltakeeffectivemeasuressuchasenhancingbrandcommunication,adjustingbusinessstrategiesinatimelymanner,andimprovingoperationalefficiencytocontinuetomaintaincorecompetitiveadvantagesandexpandmarketshare.Atthesametime,DRCOwillkeeppayingattentiontotheoverseasroughdiamondmarketsandtimelymakestructuralprocurementadjustments,soastoactivelyrespondtotheimpactsoffluctuationsintheupstreamsupplychain.
2.RiskofconsignedproductionAsDRCOadoptstheconsignedproductionmodel,anydelayindeliveryorsubstandardqualityoftheoutsourcedproductswilladverselyaffectDRCO'sinventorymanagement,brandreputationandevenoperatingresults.Sinceitsestablishment,DRCOhasalwaysplacedgreatimportanceonthequalityofitsproducts.Inthecourseofitsdailyoperations,DRCOwillcontinuetoexercisestrictqualitycontrolovertheprocurementofrawmaterials,consignmentprocessingandacceptanceintothewarehouse,andensurethatthefullqualitycontrolsystemiseffectivelyimplementedinallaspects.
3.RiskofdecliningbrandinfluenceAsdomesticconsumers'demandsforpersonalizedJewelryproductskeepgrowing,themarketcompetitionisbecomingincreasinglyfierce,andnewbrandsandnewbusinessconceptscontinuetoemerge.Asaresult,DRCOfacestheriskofthedeclineinbrandinfluence,whichmayhaveanegativeimpactonmarketshareexpansion,earningsgrowthandtheabilitytocontinueasagoingconcern.Inresponse,DRCOhastakenthefollowingmeasures:
(1)Increaseinvestmentinbrandmarketingandbuildingtoenhanceandexpandbrandvalueand
influence;
(2)Continuetoexpandandimprovechannelcoverage;
(3)Keepimprovingoperations,productqualityandcustomerservicesofstores;
(4)Protectintellectualpropertyrightssuchastrademarksinvolvedinthecourseofbusiness;
(5)strengtheningthedigitalizationofbusinessoperations,etc.
4.RiskofnewstoreswithlowperformanceDuetodomesticeconomicstagnationandconsumptiondowngradeinrecentyears,DRCO’sfastexpansionofnewstoresmaysufferfrompoorperformance.Tothisend,DRCOwilltakethefollowingmeasures:
(1)Slowdownexpansionofnewstoreandfocusonimprovingoperationandcoveringhigh-qualitybusinesscircles;
(2)Enhancethesustainabledevelopmentofproducts,breakthebarrierstotheincrementsandcreatemorescenariosforrepeatpurchase;
(3)Reducecostandincreaseefficiency,andpursueoveralloptimizationbyclosingorrelocatinginefficientandloss-makingstores.
5.OperationalandorganizationalmanagementrisksAsDRCO'sbusinessscaleandthenumberofproprietarystorescontinuetoincrease,DRCO'smanagementmechanism,talentpool,marketdevelopmentandcomplianceoperationswillbesubjecttohigherrequirements.IfDRCOfailstoaddressthechallengesinmanagementcapability,talentpoolandmarketexplorationduringthedevelopmentprocess,andtheorganizationalmodelandmanagementsystemarenotadjustedandimprovedinatimelymannerinlinewiththeexpansionofbusinessscale,DRCOmayfacerisksinsalesscaleandbusinessdevelopmentinthefuture.Hence,DRCOwillcontinuetoactivelyrecruitexcellenttalentsandstrengthenthetrainingofinternalmanagementandemployees;optimizeandintegrateitsbusinessstructureinstrictaccordancewiththestandardgovernancerequirementsoflistedcompanies;strengthentheconstructionoftheinternalcontrolsystem,optimizeinternalprocessesandmanagementefficiencytoimproveDRCO'soperationalmanagementandriskmitigationcapabilities.
XII.Registrationformforsurveys,communication,interviewsandotheractivitiesduringthereportingperiod?Applicable□NotApplicable
Date
| Date | Place | Method | Typeofinterviewer | Interviewer | Maindiscussioncontentsandmaterialprovided | Indexofbasicsurveyinformation |
| March2,2022 | Onlinemeeting | Telephoneconversation | Institution | Personnelfrom88institutionsincludingEssenceFundManagement,BoseraAssetManagement,WellsFargoFund | Industryprospect,marketlandscape,currentsituationandprospectofDRCO’sbusinessoperation | Fordetails,pleaserefertotherecordofinvestorrelationsactivitiesdisclosedbyDRCOonMarch3,2022onwww.cninfo.com.cn |
| April25,2022 | OnlineMeetings | Telephoneconversation | Institution | Personnelfrom139institutionsincludingEFund,HwabaoWPFundManagement,BankofCommunicationsSchroderFundManagement | 2021AnnualReportand2022Q1Reportpresentations | Fordetails,pleaserefertotherecordofinvestorrelationsactivitiesdisclosedbyDRCOonApril27,2022onwww.cninfo.com.cn |
| May6,2022 | Onlinemeeting | Other | Other | InvestorswhoparticipatedintheonlinepresentationofDRCO'sFY2021and2022Q1resultsviahttp://ir.p5w.net,aninteractionplatformforinvestorrelations | Presentationson2021AnnualReportand2022Q1Report,industryprospect,marketlandscape,andoutlook | Fordetails,pleaserefertotherecordofinvestorrelationsactivitiesdisclosedbyDRCOonMay6,2022onwww.cninfo.com.cn |
| August29,2022 | Onlinemeeting | Telephoneconversation | Institution | Personnelfrom112institutionsincludingSouthernAssetManagement,SpringsCapital,SequoiaCapital | 2022InterimReportpresentation | Fordetails,pleaserefertotherecordofinvestorrelationsactivitiesdisclosedbyDRCOonAugust31,2022onwww.cninfo.com.cn |
| September6,2022 | Onlinemeeting | Telephoneconversation | Institution | CITICSecurities,LoyalValleyCapital,ChinaSecurities,BankofCommunicationsSchroder | Industryprospect,marketlandscape,currentsituationandprospectofDRCO’sbusinessoperation | Fordetails,pleaserefertotherecordofinvestorrelationsactivitiesdisclosedbyDRCOonSeptember13,2022onwww.cninfo.com.cn |
| September7,2022 | Onlinemeeting | Telephoneconversation | Institution | LombardaChinaFundManagement,HuachuangSecurities | ||
| September9,2022 | Company’smeetingroom | Fieldsurvey | Institution | WestSecurities | ||
| September20,2022 | Onlinemeeting | Telephoneconversation | Institution | OakRidgePrivateEquityFundManagement,ChangjiangPension,WestSecurities | Industryprospect,marketlandscape,currentsituationandprospectofDRCO’sbusinessoperation | Fordetails,pleaserefertotherecordofinvestorrelationsactivitiesdisclosedbyDRCOonSeptember29,2022onwww.cninfo.com.cn |
| September22,2022 | Onlinemeeting | Telephoneconversation | Institution | CentennialInsuranceAssetManagement,GFSecurities | ||
| September27,2022 | Onlinemeeting | Telephoneconversation | Institution | ChinaAMC | ||
| September28,2022 | Company’smeetingroom | Fieldsurvey | Institution | Personnelfrom8institutionsincludingCITICSecurities,LionFund |
Management,EFundManagement
| Management,EFundManagement | ||||||
| October28,2022 | Onlinemeeting | Telephoneconversation | Institution | Personnelfrom92institutionsincludingCentennialInsurance,ChangjiangPension,andPacificInsurance | 2022Q3Reportpresentation | Fordetails,pleaserefertotherecordofinvestorrelationsactivitiesdisclosedbyDRCOonNovember1,2022onwww.cninfo.com.cn |
| November2,2022 | Company’smeetingroom | Fieldsurvey | Institution | GuolianSecurities | Industryprospect,marketlandscape,currentsituationandprospectofDRCO’sbusinessoperation | Fordetails,pleaserefertotherecordofinvestorrelationsactivitiesdisclosedbyDRCOonNovember21,2022onwww.cninfo.com.cn |
| November3,2022 | Onlinemeeting | Telephoneconversation | Institution | Personnelfrom45institutionsincludingZhonggengFundManagementandChangjiangSecurities | ||
| November4,2022 | Company’smeetingroom | Fieldsurvey | Institution | ChinaPostSecurities,JinxinFundManagement,LingzhanInvestment,WangjiInvestment | ||
| November9,2022 | Onlinemeeting | Telephoneconversation | Institution | FirstStateCindaFundManagement,KaiyuanSecurities | ||
| November10,2022 | Onlinemeeting | Telephoneconversation | Institution | NingquanAssets | ||
| November15,2022 | Onlinemeeting | Telephoneconversation | Institution | Personnelfrom22institutionsincludingHwabaoWPFundManagementandGuolianSecurities | ||
| November16,2022 | Onlinemeeting | Telephoneconversation | Institution | Personnelfrom68institutionsincludingLombardaChinaFund,ChinaUniversalAssetManagement,andCIBFund | ||
| November16,2022 | Company’smeetingroom | Fieldsurvey | Institution | GFSecurities,PurekindFundManagement,HuaixinInvestment,LianhuaHuashang | ||
| November17,2022 | Onlinemeeting | Telephoneconversation | Institution | ChinaIndustrialSecurities,QuanguoFundManagement | ||
| December7,2022 | Onlinemeeting | Telephoneconversation | Institution | GuolianSecurities,HarvestFund | Industryprospect,marketlandscape,currentsituationandprospectofDRCO’sbusinessoperation | Fordetails,pleaserefertotherecordofinvestorrelationsactivitiesdisclosedbyDRCOonDecember20,2022on |
| December8,2022 | Onlinemeeting | Telephoneconversation | Institution | GFSecurities,ChinaLifePensionCompanyLimited,GreenwoodsAsset |
www.cninfo.com.cn
| Management | www.cninfo.com.cn | |||||
| December9,2022 | Onlinemeeting | Telephoneconversation | Institution | TianfengSecurities,PerseveranceAssetManagement | ||
| December12,2022 | Onlinemeeting | Telephoneconversation | Institution | HaitongSecurities,CIBFundManagement | ||
| December12,2022 | Company’smeetingroom | Fieldsurvey | Institution | ZhongtaiSecurities,HuataiAssetManagement,ChinaPostSecurities,QianhaiKaiyuan | ||
| December13,2022 | Onlinemeeting | Telephoneconversation | Institution | GuolianSecurities,ChinaMerchantsFundManagement,GuotaiAssetManagement,JPMorganAssetManagement | ||
| December16,2022 | Onlinemeeting | Telephoneconversation | Institution | HaitongSecurities,Chang'anAssetManagement,YitongInvestment,GuangdaJinghua,YuanheAssetManagement | ||
| December29,2022 | Onlinemeeting | Telephoneconversation | Institution | WTcapital | Industryprospect,marketlandscape,currentsituationandprospectofDRCO’sbusinessoperation | Fordetails,pleaserefertotherecordofinvestorrelationsactivitiesdisclosedbyDRCOonJanuary10,2023onwww.cninfo.com.cn |
| December30,2022 | Onlinemeeting | Telephoneconversation | Institution | AIAInvestment |
PartIVCorporateGovernance
I.BasicInformationofCorporateGovernanceInaccordancewithrelevantlaws,regulationsandnormativedocumentsincludingthecompanyLawofPRC,theSecuritiesLawofPRC,theCodeofCorporateGovernanceforListedCompanies,theRulesGoverningtheListingofSharesontheChiNextMarketoftheShenzhenStockExchange,theNo.2GuidelinesforSelf-disciplinedRegulationofListedCompanies-StandardizedOperationofListedCompaniesonChiNextMarket,aswellastherequirementsoftheCSRC,DRCOconstantlyimprovesourcorporategovernancestructurethroughestablishingandrefininginternalmanagementandcontrolsystems,promotingstandardizedoperationandenhancingcorporategovernance.DuringtheReportingPeriod,thegeneralmeeting,theboardofdirectorsanditsspecialcommittees,theboardofsupervisors,theseniormanagementandtheindependentdirectorsofDRCOwelldefinedpowerandresponsibilities;thegeneralmeeting,theboardofdirectorsanditsspecialcommittees,andtheboardofsupervisorsimplementedstandardizedoperation,andtheindependentdirectorsandthesecretaryoftheboardofdirectorswerediligentintheirduties.TheactualsituationofDRCO’sgovernancecompliedwiththerequirementsofrules,regulationsandnormativedocumentsreleasedbytheregulatorsincludingCSRCandSZSE.(I)CorporategovernancesystemDuringthereportingperiod,DRCOcompletedthe"ArticlesofAssociation","RulesofProcedureoftheBoardofDirectors","RulesofProcedureoftheBoardofSupervisors","RulesofProcedureoftheGeneralMeetingofShareholders","InformationDisclosureSystem",and"InvestorRelationsManagementSystem"inaccordancewiththerequirementsofrelevantlawsandregulationsandtheactualsituationofDRCO.DRCOalsoformulatedtheRegistrationandManagementSystemsforPersonsPossessingInsiderInformationandtheManagementSystemforSubsidiaries,furtherimprovingthecorporatemanagementsystem.(II)ShareholdersandgeneralmeetingsDuringthereportingperiod,DRCOheldoneannualgeneralmeetingandtwoextraordinarygeneralmeetings,bothofwhichwereconvenedbyDRCO'sboardofdirectors.Thegeneralmeetingsofshareholderswereheldinaccordancewithrelevantlawsandregulationstoperformdutiesandensurethatallshareholdersenjoyequalrights,facilitateshareholders'participationinthegeneralmeetingasfaraspossible,andenablethemtofullyexercisetheirrightsasshareholders.Theconveningmethod,procedure,votingmethodandresolutioncontentofDRCO'sgeneralmeetingofshareholdersareinlinewiththerequirementsofrelevantlawsandregulations,normativedocuments,articlesofassociation,rulesofshareholders'meetingoflistedcompaniesandrulesofprocedureofshareholders'meeting,andshallbewitnessedbylawyersonthespotandissuelegalopinions.Theconveningandresolutionofthegeneralmeetingofshareholdersarelegalandeffective.Thereisnoviolationofrelevantlawsandregulationstoexercisefunctionsandpowers.(III)DirectorsandtheBoardofDirectorsDRCO'sboardofdirectorshas9directors,including3independentdirectors.Thenumberandcompositionoftheboardofdirectorssatisfytherequirementsofrelevantlaws,regulationsandtheArticlesofAssociation.Duringthereportingperiod,DRCOheldatotalofsixboardmeetings,allofwhichwereconvenedandheldinaccordancewiththeproceduresstipulatedintheArticlesofAssociation,theRulesofProcedureoftheBoardofDirectorsandotherrelevantlawsandregulations,votedandformedresolutionsinstrictaccordancewiththerelevantprovisions,submittedmattersrequiringconsiderationatgeneralmeetingsforconsiderationanddecisionatgeneralmeetings,effectivelyperformedthedutiesauthorizedbythegeneralmeetings,strictlyimplementedtheresolutionspassedbygeneralmeetings,diligentlyandconscientiouslycarriedoutvarioustasksandactivelysafeguardedtheinterestsofDRCO
anditsshareholders.Theindependentdirectorsindependently,objectivelyandprudentlyexpressedtheirindependentviewsonrelevantmattersoccurringduringthereportingperiod,andplayedanactiveroleinimprovingthecorporategovernancemechanismandsafeguardingthelegitimaterightsandinterestsofDRCOandallshareholders.TheBoardmeetingswereconvenedandresolutionswerepassedinalawfulandvalidmanner,withoutanybreachofrelevantlawsandregulations.(IV)SupervisorsandtheBoardofSupervisorsDRCO'sBoardofSupervisorshas3supervisorsincluding1employeerepresentative.ThenumberandcompositionoftheBoardofSupervisorsmeettherequirementsofrelevantlaws,regulationsandtheArticlesofAssociation.Duringthereportingperiod,DRCO'sBoardofSupervisorsheldsixmeetingsinaccordancewiththerequirementsofrelevantlawsandregulations.ByattendingthegeneralmeetingsandtheBoardmeetings,supervisorsexercisedstrictsupervisionoverDRCO'sstandardizedoperation,businessactivities,materialmatters,financialpositionandtheperformanceofdutiesbydirectorsandseniormanagement,effectivelysafeguardingtheinterestsofshareholders.ThemeetingsoftheBoardofSupervisorswereconvenedinalawfulandvalidmanner,andtherewasnoviolationofrelevantlawsandregulationsbythesupervisorsinexercisingtheirpowers.(V)InvestorrelationsmanagementDRCOattachesgreatimportancetoinvestorrelationsmanagementandhasestablishedtheInvestorRelationsManagementSystem.Duringthereportingperiod,DRCOcarriedoutinvestorrelationsmanagementworkthroughmultiplechannels,platformsandmeans,fullylistenedtoinvestors'suggestions,enhancedinvestors'understandingandrecognitionofDRCO,andpromotedpositiveinteractionbetweenDRCOandinvestors.DRCOdisclosedrelevantinformationinatrue,accurate,timely,fairandcompletemannertoensurethatallshareholdershavefairaccesstoinformationaboutDRCO.(VI)StakeholdersDRCOfullyrespectsandsafeguardsthelegitimaterightsandinterestsofrelevantstakeholders,strivestoachieveaharmoniousbalanceamongtheinterestsofshareholders,employeesandsociety,andcontinuestopromotethesustainableandhealthydevelopmentofDRCO.Inaccordancewithrelevantlaws,regulationsandregulatorydocumentssuchasthe"TheNo.2GuidelinesoftheShenzhenStockExchangeforSelf-DisciplineandRegulationofListedCompanies-StandardizedOperationofCompaniesListedonChiNextMarket",DRCOhasissuedthe2022AnnualSustainableDevelopmentReport,asdetailedinthe"2022SustainableDevelopmentReport"disclosedbyDRCOonwww.cninfo.com.cnon28April2023.Whetherthereisanysignificantdifferencebetweentheactualsituationofcorporategovernanceandthelaws,administrativeregulationsandtheprovisionsonthegovernanceoflistedcompaniesissuedbytheCSRC
□Yes?NoThereisnosignificantdifferencebetweentheactualsituationofcorporategovernanceandthelaws,administrativeregulationsandtheprovisionsonthegovernanceoflistedcompaniesissuedbytheCSRC.II.IndependenceofDRCOfromControllingShareholdersandActualControllersinAsset,Personnel,Finance,InstitutionandBusinessDRCOoperatesinaccordancewiththerequirementsofThecompanyLawofPRC,theSecuritiesLawandotherrelevantlawsandregulations,andtheArticlesofAssociation;andhasestablishedandimprovedthecorporategovernancestructure.Therefore,DRCOisindependentofthecontrollingshareholders,theactualcontrollersandotherenterprisescontrolledbythemintermsofassets,personnel,finance,institutionsandbusiness,andenjoysassetintegrityandindependenceofbusinessandtheabilitytooperateindependentlyinthemarket.
(I)AssetintegrityDRCOhasthebusinesssystemandrelatedassetsrelatedtotheoperation,legallyownstheownershipoforrighttousethetrademarks,patentsandnon-patentedtechnologiesrelatedtotheoperation,andhasitsownrawmaterialprocurementsystemandproductsalessystem.DRCOhasclearandcompleteownershipofitsassets,andenjoysindependentcontrolanddominationoverallassets.DRCOhasnotprovidedguaranteesforthedebtsofshareholderswithitsassets,interestsorcreditworthiness,anddoesnothaveassetsorfundsbeingillegallyoccupiedbycontrollingshareholderstothedetrimentofDRCO'sinterestsandrelianceonshareholdersandotherinstitutions.(III)PersonnelindependenceThedirectors,supervisorsandseniormanagersofDRCOareelectedinstrictaccordancewiththerelevantprovisionsofDRCOLawandtheArticlesofAssociation;thegeneralmanager,thedeputygeneralmanager,thepersoninchargeoffinance,theBoardsecretaryandotherseniormanagersofDRCOneitherholdpositionsotherthandirectorandsupervisorinDRCO’scontrollingshareholders,actualcontrollersandotherenterprisescontrolledbythem,norreceiveremunerationfromDRCO’scontrollingshareholders,actualcontrollersandotherenterprisescontrolledbythem;thefinancialpersonnelofDRCOdonotworkpart-timeintheorganizationsofcontrollingshareholdersortheactualcontrollersandotherenterprisescontrolledbythem.(III)FinancialindependenceDRCOhassetupanindependentfinancialdepartmentwithfull-timeaccountingpersonnel,andestablishedanindependentfinancialaccountingsystemandfinancialmanagementpoliciestomakefinancialdecisionsindependentlyinstrictaccordancewithaccountinglawsandregulationsincludingtheAccountingLawofthePeople'sRepublicofChina.DRCOhasastandardizedfinancialaccountingsystemandfinancialmanagementpoliciesforbranchesandsubsidiaries;DRCOdoesn’tsharebankaccountswithcontrollingshareholders,actualcontrollersandotherenterprisescontrolledbythem.(IV)InstitutionalindependenceDRCOhassetupanddefinedtheresponsibilitiesandrightsofthegeneralmeetingofshareholders,theBoardofDirectors,theBoardofSupervisorsandotherbodiesfordecision-making,operationmanagementandsupervision.andsupervision.Therefore,DRCOhasestablishedastandardizedandeffectivecorporategovernancestructure.Basedonthedevelopmentneeds,DRCOhasestablishedaseriesofinternaloperationandmanagementinstitutionsthatindependentlyexercisetherightofoperationandmanagement,andthereisnoinstitutionalmixingwiththecontrollingshareholders,theactualcontrollerandotherenterprisesundertheircontrol.(V)BusinessindependenceDRCOhasanindependentandcompleteresearchanddevelopment,design,procurementandsalesbusinesssystem,withtheabilitytodirectlyconductbusinessoperationbyitselfonthemarket.DRCO'sbusinessisindependentofthecontrollingshareholders,theactualcontrollersandotherenterprisesundertheircontrol.BetweenDRCOanditscontrollingshareholders,theactualcontrollersandotherenterprisesundertheircontrol,thereisneitherhorizontalcompetitionthathasamaterialadverseeffectontheissuer,noranyconnectedtransactionthatmateriallyimpactedtheindependenceandwasobviouslyunfair.
III.HorizontalCompetition
□Applicable?NotApplicable
IV.AnnualGeneralMeetingsandExtraordinaryGeneralMeetingsHeldduringReportingPeriod
1.Generalmeetingsofshareholdersduringthereportingperiod
Session
| Session | Typeofmeeting | Percentageofattendinginvestors | Dateofconvening | Dateofdisclosure | Resolutionofmeeting |
| TheFirstExtraordinaryGeneralMeetingofShareholdersin2022 | ExtraordinaryGeneralMeetingofShareholders | 90.24% | January18,2022 | January18,2022 | Fordetails,pleaserefertotheAnnouncementontheResolutionoftheFirstExtraordinaryGeneralMeetingofShareholdersin2022publishedonwww.cninfo.com.cn(No.2022-001) |
| 2021AnnualGeneralMeetingofShareholders | Annualgeneralmeetingofshareholders | 90.94% | May20,2022 | May20,2022 | Fordetails,pleaserefertotheAnnouncementfortheFirstGeneralMeetingofShareholdersin2022publishedonwww.cninfo.com.cn(No.2022-029) |
| TheSecondExtraordinaryGeneralMeetingofShareholdersin2022 | Extraordinarygeneralmeetingofshareholders | 87.54% | July08,2022 | July08,2022 | Fordetails,pleaserefertotheAnnouncementfortheResolutionoftheSecondExtraordinaryGeneralMeetingofYear2022postedonwww.cninfo.com.cn(No.2022-041) |
2.Preferredshareholderswhosevotingrightshavebeenrestoredrequesttoconveneanextraordinarygeneralmeetingofshareholders
□Applicable?NotApplicable
V.WeightedVotingRightArrangement
□Applicable?NotApplicableVI.CorporateGovernanceofRed-chipCompany
□Applicable?NotApplicableVII.Directors,SupervisorsandSeniorManagement
1.Basicinformation
| Name | Position | Employment | Gender | Age | Startdate | End | Numberof | Numberof | Number | Other | Number | Reasons |
status
| status | oftenure | dateoftenure | sharesheldatthebeginningoftheperiod(shares) | sharesincreasedduringthecurrentperiod(shares) | ofsharesreducedduringthecurrentperiod(shares) | increasesordecreases(shares) | ofsharesheldatendofcurrentperiod(shares) | forchangesinshares | ||||
| ZhangGuotao | Chairman,GeneralManager(President) | Incumbent | Male | 37 | July11,2019 | July7,2025 | 0 | 0 | 0 | 0 | 0 | |
| LuYiwen | Director,DeputyGeneralManager(VicePresident) | Incumbent | Female | 36 | July11,2019 | July7,2025 | 0 | 0 | 0 | 0 | 0 | |
| WeiQingxing | Director,DeputyGeneralManager(VicePresident) | Resigned | Male | 40 | July11,2019 | March31,2023 | 0 | 0 | 0 | 0 | 0 | |
| HuangShuirong | Director,DeputyGeneralManager(VicePresident),SecretaryoftheBoardandChiefFinancialOfficer | Incumbent | Male | 48 | July11,2019 | July7,2025 | 0 | 0 | 0 | 0 | 0 | |
| HuXiaoming | Director | Incumbent | Male | 42 | July11,2019 | July7,2025 | 0 | 0 | 0 | 0 | 0 | |
| ChenQisheng | Director | Incumbent | Male | 37 | March08,2021 | July7,2025 | 0 | 0 | 0 | 0 | 0 | |
| LiYang | IndependentDirector | Incumbent | Male | 40 | January15,2020 | July7,2025 | 0 | 0 | 0 | 0 | 0 | |
| LiangJun | Independent | Incumbent | Male | 45 | January | July7, | 0 | 0 | 0 | 0 | 0 |
Director
| Director | 15,2020 | 2025 | ||||||||||
| ZhongMin | IndependentDirector | Incumbent | Male | 50 | November24,2020 | July7,2025 | 0 | 0 | 0 | 0 | 0 | |
| HuangYingfeng | ChairmanoftheBoardofSupervisors | Incumbent | Female | 34 | July08,2022 | July7,2025 | 0 | 0 | 0 | 0 | 0 | |
| ShenAi | Supervisor | Incumbent | Female | 33 | July08,2022 | July7,2025 | 0 | 0 | 0 | 0 | 0 | |
| YinLuwen | EmployeeRepresentativeSupervisor | Resigned | Male | 43 | July11,2019 | April10,2023 | 0 | 0 | 0 | 0 | 0 | |
| WuWanhong | EmployeeRepresentativeSupervisor | Incumbent | Female | 29 | April10,2023 | July7,2025 | 0 | 0 | 0 | 0 | 0 | |
| ZhaoRanran | ChairmanoftheBoardofSupervisors | Resigned | Female | 33 | July11,2019 | July82022 | 0 | 0 | 0 | 0 | 0 | |
| WangTong | Supervisor | Resigned | Female | 36 | July11,2019 | July82022 | 0 | 0 | 0 | 0 | 0 | |
| LinZhenghai | ChiefFinancialOfficer | Resigned | Male | 41 | July11,2019 | July8,2022 | 0 | 0 | 0 | 0 | 0 | |
| Total | -- | -- | -- | -- | -- | -- | 0 | 0 | 0 | 0 | 0 | -- |
Whetheranydirectors,supervisorsandseniorofficersweredismissedduringthereportingperiod
□Yes?NoChangesindirectors,supervisorsandseniormanagementofDRCO?Applicable□NotApplicable
Name
| Name | Position | Type | Date | Reason |
| ZhaoRanran | ChairmanoftheBoardofSupervisors | Departedattheendofthetermofoffice | July8,2022 | Departedattheendofthetermofoffice |
| WangTong | Supervisor | Departedattheendofthetermofoffice | July8,2022 | Departedattheendofthetermofoffice |
| LinZhenghai | ChiefFinancialOfficer | Departedattheendofthetermofoffice | July8,2022 | Departedattheendofthetermofoffice |
| HuangYingfeng | ChairmanoftheBoardofSupervisors | Elected | July8,2022 | Electionofnewsession |
| ShenAi | Supervisor | Elected | July8,2022 | Electionofnewsession |
| WeiQingxing | Director,DeputyGeneralManager(VicePresident) | Resigned | March31,2023 | Resignforpersonalreasons |
| YinLuwen | EmployeeRepresentativeSupervisor | Resigned | April10,2023 | WorkAdjustment |
| WuWanhong | Employeerepresentativesupervisor | Elected | April10,2023 | Electedbytheemployeerepresentativemeeting |
2.PositionsProfessionalbackgroundandcareerexperienceofDRCO'sincumbentdirectors,supervisorsandseniormanagementandtheircurrentmajorresponsibilitiesinDRCO.
(1)ProfilesoftheBoardmembers
①Mr.ZhangGuotaoMr.ZhangGuotao,ChairmanoftheBoard,isaChinesecitizenwithoutpermanentresidencepermitoutsideChina.Bornin1985,heholdsanEMBAdegreefromCheungKongGraduateSchoolofBusinessandisthefounderofDRCO.Mr.Zhanghasreceivedawardsincludingthe"OutstandingYoungEntrepreneurAward(40yearsandbelow)"andthe"Top10LeadersofAsianBrands".HewastheexecutivedirectorandgeneralmanagerofDarryCorporation(戴瑞有限)andnowactsasDRCO’schairman,generalmanager(president),aswellastheexecutivedirector&generalmanagerofDRInvestment,QianhaiWendi,WendiDesign,WendiTechnologyandEveryYearTravelPhotography.
②Ms.LuYiwenMs.LuYiwenisthedirectorofDRCO.SheisaChinesecitizenwithoutpermanentresidencepermitoutsideChina.Bornin1987,sheholdsanEMBAdegreefromChinaEuropeInternationalBusiness
School(CEIBS).AsthefounderofDRCO,shehasreceivedawardssuchas"Forbes30Under30China","HurunChinaUnder30sToWatch"and"Top10LeadersofAsianBrands".Ms.LuwaseverthevicepresidentandsupervisorofDarryCorporation(戴瑞有限)andnowactsasthedirectoranddeputyvicegeneralmanager(vicepresident)ofDRCO,thesupervisorofDRInvestment,thesupervisorofEveryYearTravelPhotography,thesupervisorofWendiDesignandWendiTechnology.
③Mr.HuangShuirongMr.HuangShuirong,thedirectorofDRCO,isaChinesecitizenwithoutpermanentresidencepermitoutsideChina.Bornin1974,Mr.Huangreceivedhismaster’sdegreefromZhongnanUniversityofEconomicsandLaw,andheisasenioraccountant.Mr.HuangonceservedasthefinancialmanagerofGuangdong-basedJianlibaoGroup,thechieffinancialofficerofXilongChemicalCo.,Ltd.,thegeneralmanagerofthefinancialcenteratXilongChemicalCo.,Ltd.,,andthefinancialmanagerofTiandiNo.1BeverageInc.;sincejoiningDRCOin2018,hehasheldsuchpositionsasthevicepresidentandfinancialmanagerofDarryCorporation(戴瑞有限)andnowisthedirector,deputygeneralmanager(vicepresident),BoardsecretaryandfinancialmanagerofDRCO.④Mr.HuXiaomingMr.HuXiaoming,thedirectorofDRCO,isaChinesecitizenwithoutpermanentresidencepermitoutsideChina.Bornin1980,hereceivedhisbachelor’sdegreefromShenzhenUniversity.Mr.HuusedtobetheplanningmanagerofGuangzhouHimalayanAdvertisingCo.,Ltd.,theseniorbrandplanningmanagerofJiaduobao(China)BeverageCo.,Ltd.,thebranddirectorofShenzhenShengziTechnologyCo.,Ltd.,andthedeputybranddirectorofYulongComputerCommunicationTechnology(Shenzhen)Co.,Ltd.SincejoiningDRCOin2016,hehasheldsuchpositionsasthebranddirectorandstrategydirectoratthemarketcenterofDarryCorporation(戴瑞有限),andnowheactsasthedirectorandstrategyheadatDRCO.
⑤Mr.ChenQishengMr.ChenQisheng,thedirectorofDRCO,isaChinesecitizenwithoutpermanentresidencepermitoutsideChina.Bornin1986,hereceivedhisbachelor’sdegreeandholdstheCMAcertificate.HeonceworkedinChowTaiFookJewelry(Shenzhen)Co.,Ltd.,KingdeeSoftware(China)Co.,Ltd.andShenzhenJianjiaqinJewelryCo.,Ltd.SincejoiningDRCOin2015,hehaseverheldthepositionofaseniorfinancialmanagerandnowactsasthedirectorandtheresponsibleheadforbusinessandfinance.
⑥Mr.LiYangMr.LiYang,theindependentdirectorofDRCO,isaChinesecitizenwithoutpermanentresidencepermitoutsideChina.Bornin1983,hereceivedhisPhDdegreefromColumbiaUniversityandisanAssociateProfessorofCheungKongGraduateSchoolofBusiness.Since2020,hehasbeenanindependentdirectorofDRCO,aswellasanindependentdirectorof360LudashiHoldingsCo.,Ltd.,WestingareaSupplyChain(Shanghai)Co.,Ltd.andNewTianliTechnologyCo.,Ltd.
⑦Mr.LiangJunMr.LiangJun,theindependentdirectorofDRCO,isaChinesecitizenwithoutpermanentresidencepermitoutsideChina.bornin1977,hereceivedhismaster'sdegreefromRenminUniversityofChina,andtheEMBAdegreefromChinaEuropeInternationalBusinessSchool.Mr.LiangusedtobethemarketingmanagerofconsumergoodssubsidiaryunderHumanwellHealthcare,theboardsecretaryofShenzhenSinobiowayXinpengBiomedicineCo.,Ltd.,theseniorpartnerandfundmanagerofShenzhen-basedRabbitFund;hehasbeenservingastheindependentdirectorofDRCOsince2020.
⑧Mr.ZhongMin
Mr.ZhongMin,theindependentdirectorofDRCO,isaChinesecitizenwithoutpermanentresidencepermitoutsideChina.Bornin1973,hereceivedhisbachelor’sdegreefromHangzhouDianziUniversityandholdstheCPAcertificate.Mr.ZhongeverservedasaseniormanagerofShenzhenTongrenAccountingFirm,asalariedpartnerofShenzhenPengchengEnterpriseManagementConsultingCo.,Ltd.,thechieffinancialofficerofShenzhenYuezhongInvestmentHoldingsCo.,Ltd.,theindependentdirectorofGuangzhouFangbangElectronicsCo.,Ltd..HehasbeenactingastheindependentdirectorofDRCOsince2020,andalsoadirectorofShenzhenYuezhongInvestmentHoldingsCo.,Ltd.andanindependentdirectorofShenzhenXunfangTechnologyCo.,Ltd.
(2)ProfilesofthemembersoftheBoardofSupervisors①Ms.HuangYingfengMs.HuangYingfeng,ChairmanoftheBoardofSupervisors,isaChinesecitizenwithoutpermanentresidencepermitoutsideChina.Bornin1989,shereceivedhermaster'sdegreefromShenzhenUniversity.SheusedtobethescreenwriterofShenzhenAllThingsGrowthMediaCo.,Ltd.,thecontentdirectorofBeijingOctober5thFilmMediaCo.,Ltd,andthegeneralmanagerofShenzhenWeiwanDaixuTechnologyCo.,Ltd.;ShejoinedDRCOin2020andnowactsastheChairmanoftheBoardofSupervisorsandtheheadoftheOfficialAccountOperationDepartment.
②Ms.ShenAiMs.ShenAi,thesupervisorofDRCO,isaChinesecitizenwithoutpermanentresidencepermitoutsideChina.Bornin1989,shereceivedherbachelor’sdegreefromShenzhenUniversity.SincejoiningDRCOin2012,shehasheldthepositionsincludingthecopywriter,copywritermanagerandcopywriterexpertatDarryCorporation(戴瑞有限).NowsheactsasthesupervisorandUCCoperationmanageratDRCO.③Ms.WuWanhongMs.WuWanhong,theemployeerepresentativesupervisor,isaChinesecitizenwithoutpermanentresidencepermitoutsideChina.Bornin1993,shereceivedherbachelor’sdegreefromGuangzhouUniversity.SheeverworkedasanaccountantinMinhuaFurnitureManufacturing(Shenzhen)Co.,Ltd.SincejoiningDRCOin2017,Ms.Wuhasheldsuchpositionsastheretailaccountingmanagerandthesenioraccountingmanager.NowsheservesasthebusinessandfinancemanagerinDRCO.
(3)Profilesofseniormanagement
①Mr.ZhangGuotaoMr.ZhangGuotaocurrentlyservesasChairmanandGeneralManager(President).Forhisbiographies,pleaserefertothesection“ProfilesofBoardMembers”.
②Ms.LuYiwenMs.LuYiwencurrentlyservesasthedirectoranddeputygeneralmanager(vicepresident).Forherbiographies,pleaserefertothesection“ProfilesofBoardMembers”.
③Mr.HuangShuirongMr.HuangShuirongcurrentlyservesasthedirectoranddeputygeneralmanager(vicepresident).Forhisbiographies,pleaserefertothesection“ProfilesofBoardMembers”.Positionsinshareholderentity?Applicable□NotApplicable
Nameofemployee
| Nameofemployee | Nameofshareholderentity | Positionheldinshareholderentity | Startdateoftenure | EndDateoftenure | Whetherreceiveremunerationsinshareholderentity |
| ZhangGuotao | DRInvestment(Zhuhai)Co.,Ltd. | ExecutiveDirector,GeneralManager | November24,2015 | No | |
| ZhangGuotao | GongqingchengWendiNo.1InvestmentManagementPartnership(LP) | ExecutivePartner(withaproxyappointed) | December1,2017 | No | |
| ZhangGuotao | GongqingchengWendiNo.2InvestmentManagementPartnership(LP) | ExecutivePartner(withaproxyappointed) | December1,2017 | No | |
| ZhangGuotao | GongqingchengWendiNo.3InvestmentManagementPartnership(LP) | Managingpartner(withaproxyappointed) | December4,2017 | No | |
| LuYiwen | DRInvestment(Zhuhai)Co.,Ltd. | Supervisor | November24,2015 | No | |
| Descriptionofthepositionintheshareholderentity | Notapplicable | ||||
Positioninotherentity?Applicable□NotApplicable
| Nameofperson | Nameofotherentity | Positionheldinotherentity | Startdateoftenure | EndDateoftenure | Whetherreceiveremunerationsinotherentity |
| ZhangGuotao | ShenzhenQianhaiWendiManagementConsultingCo.,Ltd. | ExecutiveDirector,GeneralManager | September5,2017 | No | |
| ZhangGuotao | ZhuhaiWendiDesignConsultingCo.,Ltd. | ExecutiveDirector,Manager | July26,2021 | No | |
| ZhangGuotao | ZhuhaiWendiTechnologyCo.,Ltd. | ExecutiveDirector,Manager | July27,2021 | No | |
| ZhangGuotao | ShenzhenEveryYearTravelPhotographyCultureCo.,Ltd. | ExecutiveDirector,GeneralManager | August10,2021 | No | |
| LuYiwen | ShenzhenEveryYearTravelPhotographyCultureCo.,Ltd. | Supervisor | December13,2019 | No | |
| LuYiwen | ZhuhaiWendiTechnologyCo.,Ltd. | Supervisor | July27,2021 | No |
LuYiwen
| LuYiwen | ZhuhaiWendiDesignConsultingCo.,Ltd. | Supervisor | July26,2021 | No | |
| HuangShuirong | ShenzhenRongzhiLianchuangInvestmentEnterprise(LP) | Managingpartner | March30,2015 | No | |
| LiYang | 360LudashiHoldingsLimited | IndependentNon-ExecutiveDirector | June5,2019 | Yes | |
| LiYang | CheungKongGraduateSchoolofBusiness | AssociateProfessor | July1,2017 | Yes | |
| LiYang | WestingareaSupplyChain(Shanghai)Co.,Ltd. | IndependentDirector | February09,2022 | Yes | |
| LiYang | XintianliTechnologyCo.,Ltd. | IndependentDirector | July11,2022 | Yes | |
| ZhongMin | BeijingZhierxingCultureMediaCo.,Ltd. | Director | November14,2013 | No | |
| ZhongMin | ShenzhenYuezhongCultureGroupCo.,Ltd | Director | January16,2019 | No | |
| ZhongMin | ShenzhenYuezhongTianzeRealEstateDevelopmentCo.,Ltd. | Director | January5,2013 | No | |
| ZhongMin | ShenzhenYuezhongInvestmentHoldingCo.,Ltd. | Director | December26,2006 | Yes | |
| ZhongMin | ShenzhenBinhaiPenghuiFundManagementCo.,Ltd. | Chairman | November15,2018 | No | |
| ZhongMin | GuangzhouFangbangElectronicsCo.,Ltd. | IndependentDirector | December12,2016 | August1,2022 | Yes |
| ZhongMin | ShenzhenXunfangTechnologyCo.,Ltd. | IndependentDirector | June1,2020 | Yes | |
| WangTong | ShenzhenQianhaiWendiManagementConsultingCo.,Ltd. | Supervisor | September5,2017 | No | |
| Descriptionofpositioninotherentity | None | ||||
WhetherDRCO'scurrentandresigneddirectors,supervisorsandseniormanagementwerepenalizedbysecuritiesregulatorsinthepastthreeyears
□Applicable?NotApplicable
3.Remunerationsofdirectors,supervisorsandseniormanagement?Decision-makingprocess,basisfordeterminationandactualpaymentofremunerationsfordirectors,supervisorsandseniormanagementTheremunerationofDRCO'sdirectorsandsupervisorsisdeterminedinaccordancewiththefollowingprinciples:non-independentdirectorsdonotreceiveremunerationorallowancesfordirectorsbutarecompensatedaccordingtothespecificpositiontheyholdinDRCO;independentdirectorsreceiveallowances;supervisorsdonotreceiveremunerationorallowancesbutarecompensatedaccordingtothespecificpositiontheyholdinDRCO.TheremunerationofDRCO'sdirectors,supervisors,seniormanagementandothercorepersonnelconsistsmainlyofbasicsalary,positionbenefitsandperformance-basedincentives.TheremunerationplanfordirectorsaretobeconsideredandapprovedbytheBoardandreportedtothegeneralmeetingthroughtheBoardforconsiderationandapproval.Theremunerationplanforsupervisorsareconsideredandapprovedbythegeneralmeetings;theremunerationplanforseniormanagementisconsideredandapprovedbytheboardmeetings;theremunerationplanforothercorepersonnelwhodonotconcurrentlyserveasdirectors,supervisorsorseniormanagementisdeterminedaccordingtotheremunerationplanformulatedbyDRCO’smanagement.Duringthereportingperiod,theremunerationofDRCO'sdirectors,supervisorsandseniormanagementhasbeenpaidinfull.?Actualpaymentfortheremunerationofdirectors,supervisorsandseniormanagement
Unit:RMB0'000
Name
| Name | Position | Gender | Age | Employmentstatus | Totalpre-taxcompensationreceivedfromDRCO | WhetherreceivecompensationfromanyconnectedpartyofDRCO |
| ZhangGuotao | Chairman,GeneralManager(President) | Male | 37 | Incumbent | 407.71 | No |
| LuYiwen | Director,DeputyGeneralManager(VicePresident) | Female | 36 | Incumbent | 190.45 | No |
| WeiQingxing | Director,DeputyGeneralManager(VicePresident) | Male | 40 | Resigned | 123.41 | No |
| HuangShuirong | Director,DeputyGeneralManager(VicePresident),SecretaryoftheBoardandFinancialManager | Male | 48 | Incumbent | 194.42 | No |
| HuXiaoming | Director | Male | 42 | Incumbent | 75.12 | No |
| ChenQisheng | Director | Male | 37 | Incumbent | 88.62 | No |
| LiYang | IndependentDirector | Male | 40 | Incumbent | 8 | No |
LiangJun
| LiangJun | IndependentDirector | Male | 45 | Incumbent | 8 | No |
| ZhongMin | IndependentDirector | Male | 50 | Incumbent | 8 | No |
| HuangYingfeng | ChairmanoftheBoardofSupervisors | Female | 34 | Incumbent | 36.2 | No |
| ShenAi | Supervisor | Female | 33 | Incumbent | 23.84 | No |
| YinLuwen | Supervisor | Male | 43 | Incumbent | 35.34 | No |
| ZhaoRanran | ChairmanoftheBoardofSupervisors | Female | 33 | Resigned | 56.65 | No |
| WangTong | Supervisor | Female | 36 | Resigned | 33.17 | No |
| LinZhenghai | ChiefFinancialOfficer | Male | 41 | Resigned | 36.05 | No |
| Total | -- | -- | -- | -- | 1,324.98 | -- |
VIII.PerformanceofDutiesbyDRCODirectorsduringReportingPeriod
1.BoardofDirectorsinthereportingperiod
| Meeting | Dateofconvening | Dateofdisclosure | Resolutionofmeeting |
| 15thMeetingoftheFirstSessionofBoardofDirectors | April20,2022 | April22,2022 | Fordetails,pleaserefertotheAnnouncementfortheResolutionofthe15thMeetingoftheFirstSessionofBoardofDirectorspublishedonwww.cninfo.com.cn(No.2022-023) |
| 16thMeetingoftheFirstSessionofBoardofDirectors | June21,2022 | June23,2022 | Fordetails,pleaserefertotheAnnouncementfortheResolutionofthe16thMeetingoftheFirstSessionofBoardofDirectorspublishedonwww.cninfo.com.cn(No.2022-034) |
| FirstMeetingoftheSecondSessionofBoardofDirectors | July8,2022 | July8,2022 | Fordetails,pleaserefertotheAnnouncementfortheResolutionoftheFirstMeetingoftheSecondSessionofBoardofDirectorspublishedonwww.cninfo.com.cn(No.2022-042) |
| SecondMeetingoftheSecondSessionofBoardofDirectors | August25,2022 | August29,2022 | Fordetails,pleaserefertotheAnnouncementfortheResolutionoftheSecondMeetingoftheSecondSessionofBoardofDirectorspublishedonwww.cninfo.com.cn(No.2022-051) |
| ThirdMeetingoftheSecond | October26,2022 | October28,2022 | Fordetails,pleaserefertotheAnnouncementfortheResolutionoftheThirdMeetingoftheSecondSessionofBoardofDirectorspublishedon |
SessionofBoardofDirectors
| SessionofBoardofDirectors | www.cninfo.com.cn(No.2022-060) | ||
| FourthMeetingoftheSecondSessionofBoardofDirectors | December29,2022 | December31,2022 | Fordetails,pleaserefertotheAnnouncementfortheResolutionsoftheFourthMeetingoftheSecondSessionofBoardofDirectors(No.2022-069) |
2.AttendanceofdirectorsattheBoardmeetingsandthegeneralmeetings
| AttendanceofdirectorsattheBoardmeetingsandthegeneralmeetings | |||||||
| Nameofdirector(s) | RequiredattendanceinBoardmeetingsduringtheyear | AttendanceinBoardmeetingsinperson | AttendanceinBoardmeetingsviacommunicationequipment | Attendancebyproxy | NumberofabsencesfromBoardmeetings | Absencefromtwoconsecutivemeetingsornot | Attendanceatgeneralmeetings |
| ZhangGuotao | 6 | 6 | 0 | 0 | 0 | No | 2 |
| LuYiwen | 6 | 5 | 1 | 0 | 0 | No | 3 |
| WeiQingxing | 6 | 4 | 2 | 0 | 0 | No | 3 |
| HuangShuirong | 6 | 5 | 1 | 0 | 0 | No | 3 |
| HuXiaoming | 6 | 6 | 0 | 0 | 0 | No | 3 |
| ChenQisheng | 6 | 6 | 0 | 0 | 0 | No | 3 |
| LiYang | 6 | 0 | 6 | 0 | 0 | No | 2 |
| LiangJun | 6 | 3 | 3 | 0 | 0 | No | 3 |
| ZhongMin | 6 | 1 | 5 | 0 | 0 | No | 3 |
DescriptionofabsencefromtwoconsecutiveBoardmeetingsinpersonNotapplicable.
3.DissentofdirectorstocorporateissuesDissentofdirectorstorelevantissuesofDRCO
□Yes?No
Duringthereportingperiod,thedirectorsdidnotraiseanyobjectiontotherelevantmattersofDRCO.
4.OtherinformationondutyperformanceofdirectorsWhetherthesuggestionsofthedirectorsareadoptedornot.?Yes□NoDescriptionsonwhetherthesuggestionsofthedirectorsareadoptedornotDuringthereportingperiod,alldirectorsofDRCOperformedtheirdutiesfaithfullyanddiligently,activelyattendedtheBoardmeetingsandgeneralmeetings,anddeliberatedallproposalsinaccordancewithrelevantlaws,regulationsandnormativedocumentsincludingDRCOLaw,theSecuritiesLaw,theRulesGoverningtheListingofStocksonShenzhenStockExchange,theNo.2GuidelinesoftheShenzhenStockExchangeforSelf-DisciplineandRegulationofListedCompanies-StandardizedOperationofCompaniesListedonChiNextMarket,theArticlesofAssociation,theRulesofProcedureoftheBoardofDirectors,andtheWorkSystemforIndependentDirectors.BasedontheactualsituationofDRCO,alldirectorshavemadein-depthdiscussionsonDRCO'sbusinessactivities,financialstatus,majorissuesandothermatterstomakesuggestionsforDRCO'sbusinessdevelopment,fullyconsidertheinterestsanddemandsofminorityshareholders,enhancethescientificdecision-makingoftheboardofdirectorsinatimelymanner,andpromotethesustainableandhealthydevelopmentofDRCO/soperations.IX.SpecialCommitteesundertheBoardofDirectorsduringReportingPeriod
Nameofcommittee
| Nameofcommittee | Members | Numberofmeetingsheld | Dateofconvening | Contentsofthemeetings | Importantopinionsandsuggestions | Otherdescriptionsondutyperformance | Detailsofobjections(ifany) |
| AuditCommittee | ZhongMin,LiangJun,HuangShuirong | 3 | April19,2022 | 1.Reviewthe“Resolutiononthe2021AnnualReportandItsSummary”;2.Reviewthe"Resolutiononthe2022Q1QuarterlyResults”3.Reviewthe“Resolutiononthe2021FinancialResults;4.Reviewthe"Resolutiononthe2021InternalControlSelf-assessmentReport";5.Reviewthe“Resolutionon | TheAuditCommitteereviewedthemattersunderconsiderationinstrictaccordancewiththeArticlesofAssociation,theRulesofWorkoftheAuditCommitteeandrelevantlawsandregulations,fullycommunicatedwithDRCOandtheauditorsandunanimouslyapprovedrelevantresolutionsafterdiscussion. | 1.Communicatewiththeexternalauditorstoensurethatthefinancialstatementsgiveatrue,fairandcompleteviewoftheoverallfinancialpositionofDRCO;2.GuidetheinternalauditworkandplaytheroleoftheAuditDepartmentin"improvingcorporategovernance,addingvalueandachieving |
2011AnnualReportonDepositandUseofProceeds”
6.Reviewthe“ResolutiononRenewingEngagementofAuditInstitutionin2022”
7.Reviewthe“ResolutiononRevisingInternalAuditManagementPolicies”
8.Reviewthe“Resolutiononthe2022Q1WorkReviewand2022WorkPlanofDRCO’sAuditDepartment”
| 2011AnnualReportonDepositandUseofProceeds”6.Reviewthe“ResolutiononRenewingEngagementofAuditInstitutionin2022”7.Reviewthe“ResolutiononRevisingInternalAuditManagementPolicies”8.Reviewthe“Resolutiononthe2022Q1WorkReviewand2022WorkPlanofDRCO’sAuditDepartment” | objectives”. | ||
| August19,2022 | 1.Reviewthe“Resolutiononthe2022InterimReportandItsSummary”;2.Reviewthe“Resolutionon2022InterimReportonDepositandUseofProceeds”3.Reviewthe“Resolutiononthe2022Q2WorkofDRCO’sAuditDepartment” | TheAuditCommitteereviewedthemattersunderconsiderationinstrictaccordancewiththeArticlesofAssociation,theRulesofWorkoftheAuditCommitteeandrelevantlawsandregulations,andunanimouslyapprovedrelevantresolutionsafterdiscussionwithrelatedparties. | GuidetheinternalauditworkandplaytheroleoftheAuditDepartmentin"improvingcorporategovernance,addingvalueandachievingobjectives”. |
| October24,2022 | 1.Reviewthe"Resolutiononthe2022Q3QuarterlyResults”2.Resolutiononreviewingthe“2022Q3SpecialReportonDepositandUseofProceeds”3.Reviewthe“Resolutiononthe2022Q3WorkofDRCO’sAuditDepartment” | TheAuditCommitteereviewedthemattersunderconsiderationinstrictaccordancewiththeArticlesofAssociation,theRulesofWorkoftheAuditCommitteeandrelevantlawsandregulations,andunanimously | GuidetheinternalauditworkandplaytheroleoftheAuditDepartmentin"improvingcorporategovernance,addingvalueandachievingobjectives”. |
approvedrelevantresolutionsafterdiscussionwithrelatedparties.
| approvedrelevantresolutionsafterdiscussionwithrelatedparties. | |||||
| RemunerationandAppraisalCommittee | LiangJun,WeiQingxing,ZhongMin | 1 | April19,2022 | 1.Reviewthe“ResolutiononthePlanforRemunerationandAllowanceofDirectorsin2022”;2.Reviewthe“ResolutiononthePlanforRemunerationsofSeniorManagementin2022”; | TheRemunerationandAppraisalCommittee,instrictaccordancewiththeArticlesofAssociation,theWorkingRulesoftheRemunerationandAppraisalCommitteeandrelevantlawsandregulations,unanimouslyapprovedrelevantresolutionsafterin-depthdiscussion. |
| NominationCommittee | LiYang,LuYiwen,ZhongMin | 2 | June21,2022 | 1.Reviewthe"ResolutionontheGeneralElectionofDRCO'sBoardofDirectorsandtheNominationofCandidatesforNon-IndependentDirectorsoftheSecondSessionofBoardofDirectors";2.Reviewthe"ResolutionontheGeneralElectionofDRCO'sBoardofDirectorsandtheNominationofCandidatesforIndependentDirectorsoftheSecondSessionofBoardofDirectors"; | TheNominationCommitteeconsideredthemattersunderconsiderationinstrictaccordancewiththeArticlesofAssociation,theWorkingRulesoftheNominationCommitteeandrelevantlawsandregulations,andconductedaseriousreviewofthequalificationsofdirectorcandidates.Afterdiscussion,relevantnominationswereunanimouslyapproved. |
| July8,2022 | ReviewtheResolutionontheAppointmentofSenior | TheNominationCommitteeconsideredthemattersunder |
ManagementofDRCO
| ManagementofDRCO | considerationinstrictaccordancewiththeArticlesofAssociation,theWorkingRulesoftheNominationCommitteeandrelevantlawsandregulations,andconductedaseriousreviewofthequalificationsofseniormanagementcandidates.Afterdiscussion,relevantnominationswereunanimouslyapproved. |
X.WorkofBoardofSupervisors
WhethertheBoardforSupervisorsidentifiedanyrisktoDRCOthroughsupervisoryactivitiesduringthereportingperiod.
□Yes?NoTheBoardofSupervisorshadnoobjectiontothemattersunderitssupervisionduringthereportingperiod.XI.EmployeesofDRCO
1.Number,functionalclassificationandeducationbackgroundofemployees
NumberofcurrentemployeesoftheparentCompanyasoftheendofthereportingperiod(persons)
| NumberofcurrentemployeesoftheparentCompanyasoftheendofthereportingperiod(persons) | 3,951 |
| Numberofcurrentemployeesofmajorsubsidiariesasoftheendofthereportingperiod(persons) | 487 |
| Totalnumberofcurrentemployeesasoftheendofthereportingperiod(persons) | 4,438 |
| Totalnumberofpaidemployeesinthecurrentperiod(persons) | 4,438 |
| Numberofretiredemployeesforwhomtheparentcompanyanditsmajorsubsidiariesareresponsiblefortheretirementbenefits(persons) | 0 |
| Functionalclassification | |
| Category | Numberofpersons |
| Salespersonnel | 4,056 |
| Technicalpersonnel | 82 |
| Financialpersonnel | 68 |
| Administrativepersonnel | 232 |
| Total | 4,438 |
| Educationbackground | |
| Category | Quantity(person) |
| Master'sdegreeandabove | 43 |
| Bachelor’sdegree | 813 |
| Juniorcollegebelow | 3,582 |
| Total | 4,438 |
2.RemunerationpolicyDRCOcontinuestoimprovetheremuneration-drivenincentivemechanismtoensurethecomplianceofvariousremunerationmanagementactivities,aswellasexternalcompetitivenessandinternalfairness
andeffectiveincentives.DRCOhasaperfectsalarysystemwiththecompensationstructureandrangematchingtheranksandpositionsbytakingintoaccounttheinternalandexternalremunerationcontexts.Stickingtothestrategyofsettingpositionsandsalariesbasedonskills,DRCOofferscompetitivecompensationtotoptalents.Performance-basedincentivesforemployeesalignwithDRCO’sbusinessresults,enablingallstafftosharethebenefitsofthecorporategrowth.Theworkingenvironmentwithequalemphasisonefficiencyandfairness,Enableemployeestoworkinalovingenvironmentandlaysafoundationfortheenthusiasmandstabilityforemployeestoachieveself-fulfillment.
3.TrainingprogramConsideringstrategicbusinessgrowthandstaffdevelopment,DRCOhasarrangedcomprehensivetrainingprogramstobuildbusiness-supportingorganizationalcapabilities,whicharedesignedtoenhancemanagerialleadership,professionalismoffunctionaldepartments,professionalskillsformanagementtraineesrecruitedfromcampusesandculturalintegrationfornewcomers.
(1)VEProgramforLeadershipofExecutives:onlineandofflinecoursesareofferedimprovethe
leadershipofthemanagementteam,withthefocusonstrengtheningthemanagementteam’sabilitytoleadthetransformationandin-depthlearningforbrandbuildinganddigitalmarketing,soastosharpentheoverallleadershipoftheexecutives.
(2)TRUEProgramforProfessionalism:themarketingdepartmentisrequiredtolearnthemarketingmethodsformainstreamself-mediaplatforms,inamovetoimprovethebrandinfluenceandencouragemoreactionsfortruelove.
(3)Trainingprogramformanagementtraineesfromcampuses:theycandevelopprofessionalskillsby
takingthecoursesoneffectivecommunication,goalmanagementandstructuralthinkingtoquicklyadapttoworkplace.
(4)Trainingprogramfornewcomers:onlineandofflinecoursesareprovidedfornewemployeesinthe
functionaldepartments,enablingthemtobetterunderstandcorporateculture,brands,productsandprocesses,andfinallyfitinworkinDRCO.Trainingprogramsareconducivetoimprovetheoverallqualityandprofessionalskillsofemployees,meettheirneedsforimprovingself-capabilitiesandinturndriveDRCO’ssustainabledevelopment.
4.Laboroutsourcing?Applicable□NotApplicable
Totalworkinghoursforlabouroutsourcing
| Totalworkinghoursforlabouroutsourcing | 53,924.00 |
| Totalremunerationpaidforlabouroutsourcing(RMB) | 3,213,978.80 |
XII.ProfitDistributionPlanandPlantoConvertReservesintoShareCapital
Formulation,implementationoradjustmentofprofitdistributionpolicy,particularlycashdividendpolicy,duringthereportingperiod?Applicable□NotApplicableDRCOimplementstheprofitdistributionpolicyinstrictaccordancewiththerelevantprovisionsoftheArticlesofAssociationofDRCO.TheprofitdistributionplanduringthereportingperiodcompliedwiththeprovisionsoftheArticlesofAssociationandthereviewprocedures,fullyprotectingthelegitimaterightsandinterestsofallshareholdersofDRCO.OnMay20,2022,DRCOheldthe2021annualgeneralmeetingofshareholderstoconsiderandapprovetheResolutionontheProfitDistributionPlanfor2021.Basedonthetotalsharecapitalof400,010,000sharesasofDecember31,2021,DRCOdistributedRMB20.00incash(taxinclusive)forevery10sharestoallshareholders,amountingtoatotalcashdividendofRMB800,020,000.00(taxinclusive),Nobonusshareswereofferedandnocapitalreservewasconvertedintosharecapital.ThisprofitdistributionplanwascompletedonJune30,2022.
Specialnotesoncashdividendpolicy
| Specialnotesoncashdividendpolicy | |
| WhethercomplieswiththeprovisionsoftheArticlesofAssociationortherequirementsoftheresolutionofthegeneralmeetingofshareholders: | Yes |
| Whetherthecriteriaandproportionofdividenddistributionareclearandunambiguous | Yes |
| Whetherrelevantdecision-makingproceduresandmechanismsaresound: | Yes |
| Whetherindependentdirectorshaveperformedtheirdutiesandplayedtheirdueroles: | Yes |
| Whetherminorityshareholdershavetheopportunitytofullyexpresstheiropinionsandrequirements,andwhethertheirlegitimaterightsandinterestsarefullyprotected: | Yes |
| Ifthecashdividendpolicyisadjustedorchanged,whethertheconditionsandproceduresarecompliantandtransparent: | Notapplicable |
DRCO'sprofitdistributionplanandplantoconvertreservesintosharecapitalduringthereportingperiodareincompliancewithDRCO'sArticlesofAssociationandadministrativemeasuresfordividends?Yes□No□NotapplicableDRCO'sprofitdistributionplanandplantoconvertreservesintosharecapitalduringthereportingperiodareincompliancewithDRCO'sArticlesofAssociationProfitdistributionandcapitalizationofcapitalreservefortheyear
| Numberofbonussharestobedistributedforeverytenshares(share) | 0 |
| Amounttobedistributedforeverytenshares(RMB)(taxinclusive) | 10.00 |
| Numberofsharestobeconvertedintosharecapitalforeverytenshares(share) | 0 |
| Sharecapitalbaseindistributionproposal(shares) | 400,010,000 |
| Amountofcashdividend(RMB)(includingtax) | 400,010,000.00 |
| Amountofcashdividendinotherforms(e.g.sharerepurchase)(RMB) | 0.00 |
| Totalcashdividends(includingothermethods)(RMB) | 400,010,000.00 |
| Distributiveprofit(RMB) | 1,246,057,866.12 |
| Proportionoftotalcashdividends(includingothermethods)intotalprofitdistribution | 100.00% |
| ProposedCashDividendDistribution | |
| IfDRCOisatitsgrowthstageofthedevelopmentwithsignificantcapitalexpenditureplanned,theminimumcashdividendshouldbeatleast20%oftheprofitdistribution. | |
| Detailsoftheprofitdistributionplanortheplantoconvertreservesintosharecapital | |
| AsauditedbyErnst&YoungHuaMingLLP(SpecialGeneralPartner),DRCO'sconsolidatedstatementofincomefortheyear2022recordedanetprofitattributabletoshareholdersoftheparentcompanyofRMB729,241,946.67,includingnetprofitofRMB634,154,146.80realizedbytheparentcompany.AccordingtothecompanyLawofPRC,theArticlesofAssociationandotherrelevantprovisions,whenacompanydistributesitsafter-taxprofittaxfortheyear,10%oftheprofitshallbewithdrawnasDRCO'sstatutorysurplusreserve,andiftheaccumulatedamountofDRCO'sstatutorysurplusreserveismorethan50%ofDRCO'sregisteredcapital,nofurtherwithdrawalmaybemade.Basedontheaboveprovisions,DRCOwithdrawsthestatutorysurplusreservefundofRMB20,794,967.94in2022,AsofDecember31,2022,theaccumulatedundistributedprofitinDRCO'sconsolidatedfinancialstatementwasRMB1,739,260,233.15,andtheaccumulatedundistributedprofitoftheparentcompanywasRMB1,246,057,866.12.BasedonDRCO'soperatingresultsandprofitabilityin2022,andinlinewiththeprincipleofcontinuously | |
rewardingshareholdersandsharingtheoperatingresultsofDRCOoperationwithallshareholders,andonthepremiseofensuringDRCO'snormaloperationandlong-termdevelopment,DRCO'sprofitdistributionplanfor2022isasfollows:basedonDRCO'stotalsharecapitalof400,010,000sharesasatDecember21,2022,acashdividendofRMB10.00per10shares(includingtax)willbedistributedtoallshareholders,withthetotaldividendbeingRMB400,010,000.00(includingtax);nobonussharewillbeofferedandthecapitalreservewillnotbeconvertedintosharecapital.IfthetotalsharecapitalofDRCOchangespriortotheimplementationofthedistributionplan,DRCOwilladjustthepayoutratioinaccordancewiththeprinciplethatthetotalamountofthecashdividendsremainsunchanged.
DRCOrecordsprofitsandtheparentcompanyrecordsapositiveundistributedprofitduringthereportingperiodbutthereisnoresolutionforcashdividend
□Applicable?NotApplicable
XIII.ImplementationofShareIncentiveScheme,EmployeeStockOwnershipSchemeorOtherIncentiveMeasuresforEmployees
□Applicable?NotApplicableTherearenoshareincentiveschemes,employeestockownershipschemesorotherincentivemeasuresforemployeesduringthereportingperiod.XIV.ConstructionandImplementationofInternalControlSystemduringReportingPeriod
1.ConstructionandimplementationofinternalcontrolsystemDuringthereportingperiod,inaccordancewiththeprovisionsoftheBasicStandardforEnterpriseInternalControlanditssupportingguidanceaswellastheotherlaws,regulationsandnormativedocuments,incombinationwiththeexternalenvironment,DRCO'sownoperatingconditionsandcorporategovernancerequirements,DRCOcomprehensivelysortedoutvariousbusinessmodulesandprocesses,furtherimproveditsinternalcontrolsystemandestablishedascientific,standardized,conciseandeffectiveinternalcontrolsystem.
(1)Withregardtothecorporategovernancestructure,theBoardofDirectorsofDRCOhasestablishedtheAuditCommitteewhichisresponsibleforthecommunicating,reviewingandsupervisingDRCO'sinternalandexternalaudits,andformonitoringandassessingDRCO'sinternalcontrols;DRCOhassetuptheBoardofSupervisorstomonitortheBoardofDirectorstodevelopandimplementtheinternalcontrolsystem.DRCOhassetupanauditdepartmentasaroutineoffice,whichexercisesitsfunctionsandpowersindependentlyundertheguidanceoftheAuditCommittee.TheauditdepartmentreviewsandmonitorstheestablishmentandimplementationofDRCO'sinternalcontrolsystemandtheauthenticityandintegrityofDRCO'sfinancialinformation.
(2)Asfortheinternalcontrolsystem,DRCOhasformulatedasoundinternalcontrolsystem,whichcoversthekeybusinessmodulesinDRCO'sbusinessactivities,including:capitalactivities,procurementbusiness,assetmanagement,supplychainmanagement,salesmanagement,engineeringprojects,financialreports,comprehensivebudget,contractandsealmanagement,humanresourcesmanagement,informationsystems,significantinvestments.
(3)Intermsoftheimplementationandsupervisionofinternalcontrol,DRCOstrengthensthecompliancetrainingofemployeesandenhancestheriskpreventionawarenessofbusinessdepartments.Inordertoensuretheeffectiveoperationofinternalcontrol,DRCOhasformedanend-to-endsupervisionmodeinvolvingtheRiskDepartment,LegalAffairsDepartmentandAuditDepartment.
2.Detailsofsignificantdeficienciesininternalcontrolidentifiedduringthereportingperiod
□Yes?No
XV.ManagementandControloverSubsidiariesDuringReportingPeriod
Companyname
| Companyname | Integrationplan | Progressofintegration | Problems | Countermeasures | Workingprogress | Follow-upresolution |
| Notapplicable | Notapplicable | Notapplicable | Notapplicable | Notapplicable | Notapplicable | Notapplicable |
XVI.InternalControlSelf-AssessmentReportorInternalControlAuditReport
1.Internalcontrolself-assessmentreport
| DisclosuredateofthefulltextoftheInternalControlSelf-assessmentReport | April28,2023 | ||
| DisclosureindexofthefulltextoftheInternalControlSelf-assessmentReport | Pleaserefertothe2022InternalControlSelf-assessmentReport"publishedonwww.cninfo.com.cn | ||
| TotalassetsofentitiesincludedinthescopeofassessmentasapercentageoftotalassetsinDRCO'sconsolidatedfinancialstatements | 100.00% | ||
| RevenueofentitiesincludedinthescopeofassessmentasapercentageofrevenueinDRCO'sconsolidatedfinancialstatements | 100.00% | ||
| Criteriatoevaluatedeficiencies | |||
| Category | Financialreport | Non-financialreport | |
| Qualitativecriteria | (1)Materialweakness:correctionofmaterialerrorsinpublishedfinancialreports;failureoftheauditcommitteeandtheauditdepartmenttooverseetheinternalcontrol;findingsoffraudinvolvingdirectors,supervisorsandseniormanagementofDRCO;materialmisstatementsincurrentfinancialreportsidentifiedbytheCPAbutnotbyDRCO'sinternalcontroldepartment.(2)Significantdeficiency:failuretoselectandapplyaccountingpoliciesinaccordancewithGAAP;failuretoestablishanti-fraudproceduresandcontrolmeasures;andoneormoredeficienciesofthefinancialreporting,forwhichthetruthfulnessandaccuracy | (1)Materialweakness:ViolationoftheState’slaws,regulationsorregulatorydocuments;lackofdecision-makingproceduresorunscientificdecision-makingprocessthatresultsinmaterialerrors;lackofsystemsorsystemicfailuresofthesystemforimportantbusinesses;failuretorectifymaterialweaknessidentifiedbytheinternalcontrolassessment.(2)SignificanterrorsresultingfromdeviationsofDRCO'sdecision-makingprocessfromtheobjectives;deficienciesinsignificantbusinesspoliciesorsystems;failuretocorrectsignificantdeficienciesidentifiedinthe | |
ofthefinancialstatementscannotbereasonablyassured.
(3)Generaldeficiency:Othercontroldeficienciesrelatedtofinancialreportingthatdonotconstitutematerialweaknessorsignificantdeficiency.
| ofthefinancialstatementscannotbereasonablyassured.(3)Generaldeficiency:Othercontroldeficienciesrelatedtofinancialreportingthatdonotconstitutematerialweaknessorsignificantdeficiency. | internalcontrolassessment.(3)Generaldeficiency:InefficiencyofDRCO'sdecision-makingprocess;deficienciesingeneralbusinesspoliciesorsystems;failuretocorrectgeneraldeficienciesidentifiedintheinternalcontrolassessment. | |
| Quantitativecriteria | 1.Lossesresultingorlikelytoresultfromdeficienciesininternalcontrolaremeasuredagainstconsolidatedrevenueiftheyhaveimpactsontheincomestatement.(1)Materialweakness:Misstatement≥2%ofconsolidatedrevenue.(2)Significantdeficiency:1%≤misstatement<2%ofconsolidatedrevenue.(3)Generaldeficiency:Misstatement<1%ofconsolidatedrevenue.2.Lossesresultingorlikelytoresultfromdeficienciesininternalcontrolsaremeasuredagainsttotalconsolidatedassetsiftheyhaveimpactsontheassetmanagement.(1)Materialweakness:Misstatement≥1%ofthetotalconsolidatedassets.(2)Significantdeficiency:0.5%≤misstatement<1%ofthetotalconsolidatedassets.(3)Generaldeficiency:misstatement<0.5%ofthetotalconsolidatedassets. | Directpropertylossesresultingfromdirectorpotentialnegativeimpactsofthedeficienciesininternalcontrolaremeasuredagainstthetotalconsolidatedassets.(1)Materialweakness:directpropertylosses≥1%ofthetotalconsolidatedassets.(2)Significantdeficiency:0.5%≤directpropertylosses<1%oftotalconsolidatedassets.(3)Generaldeficiency:directpropertylosses<0.5%oftotalconsolidatedassets. |
| Numberofmaterialweaknessesinfinancialreporting(#) | 0 | |
| Numberofmaterialweaknessesinnon-financialreporting(#) | 0 | |
| Numberofsignificantdeficienciesinfinancialreporting(#) | 0 | |
| Numberofsignificantdeficienciesinnon-financialreporting(#) | 0 | |
2.InternalcontrolauditreportsorassurancereportsNotapplicable
XVII.RectificationinSelf-InspectionRequiredBySpecialCampaigntoImproveGovernanceOfListedCompanies
Notapplicable.
PartV.EnvironmentalProtectionandSocialResponsibility
I.MaterialEnvironmentalIssues
Whetherthelistedcompanyanditssubsidiariesareamongkeypollutant-dischargingentitiesannouncedbyenvironmentalprotectionauthorities
□Yes?NoAdministrativepenaltiesimposedforenvironmentalissuesduringthereportingperiod
NameofDRCOorsubsidiary
| NameofDRCOorsubsidiary | Reasonforpenalty | Violation | Penaltyresults | Impactontheproductionandoperationofthelistedcompany | Company'srectificationmeasures |
| Notapplicable | Notapplicable | Notapplicable | Notapplicable | Notapplicable | Notapplicable |
Refertootherenvironmentalinformationdisclosedbykeypollutant-dischargingentitiesNotapplicable.Measurestakentoreducecarbonemissionsduringthereportingperiodandtheireffect
□Applicable?NotApplicableReasonsfornotdisclosingotherenvironmentalinformationNotapplicable.
II.SocialResponsibility
Formoredetails,pleaserefertothe2022SustainabilityReportdisclosedbyDRCOonApril28,2023onwww.cninfo.com.cn.III.ConsolidatingandExpandingAchievementsinPovertyAlleviationWhileRevitalizingRuralAreas
Notapplicable.
PartVI.ImportantMatters
I.FulfillmentofCommitments
1.CommitmentsfulfilledduringthereportingperiodorsuspendedattheendofthereportingperiodbyDRCO'sdefactocontrollers,shareholders,relatedparties,acquirersandothercommittedparties?Applicable□NotApplicable
Reason
| Reason | Commitmentmaker | Commitmenttype | Description | Commitmenttime | Commitmentperiod | Statusoffulfillment |
| Commitmentsmadeintheacquisitionreportorequitychangereport | Notapplicable | |||||
| Commitmentsmadeduringassetrestructuring | Notapplicable | |||||
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | DRInvestment(Zhuhai)Co.,Ltd. | Commitmentstolock-up | 1.ThecompanysharesdirectlyorindirectlyheldbyDRCOpriortotheproposedofferingshallnotbetransferredorentrustedtoothers;orberepurchasedbyDRCO,foraperiodof36monthsfromthedateoflistingofDRCO'sshares.2.IftheclosingpriceofthecompanysharesislowerthantheissuepricefortwentyconsecutivetradingdayswithinsixmonthsafterthelistingofDRCO;orislessthantheissuepriceattheendofthesixmonthsafterthelisting(June15,2022,extendedincaseofnon-tradingday),thelock-upperiodwhenthecompanysharesareheldbyDRCOshallbeautomaticallyextended | December15,2021 | December15,2021toJune15,2025 | Performing |
bysixmonths(subjecttoadjustmentinaccordancewiththerelevantregulationsofCSRCandSZSEintheeventofex-rightsandex-dividendeventssuchasdividenddistribution,bonusissue,transferofshares,issueofadditionalsharesorrightsissuebyDRCOduringtheabove-mentionedperiod).
3.Incaseofanybreachoftherelevantcommitments,DRCOwillpromptlyannouncerelevantfactsandreasons,andwillpubliclyapologizetotheshareholdersandpublicinvestorsexceptofforcemajeureorotherreasonsbeyondcontrol.Anyprofitmadeasaresultofthenon-fulfillmentofthecommitmentswillbelongtoDRCO.ThecompanyshallbeheldliableforcompensatingDRCOorinvestorsinaccordancewithlawsintheeventofanylossthatiscausedtoDRCOorinvestorsasaresultofthenon-fulfillmentoftherelevantcommitment.DRCOshallhavetherighttotemporarilywithholdthecashdividends(ifany)towhichthecompanyisentitleduntiladverseimpactarisingfromthenon-fulfillmentoftherelevantcommitmentshavebeenfullyeliminated.TheabovecommitmentsshallnotbeterminatedduetothefactthatthecompanystepsdownasthecontrollingshareholderofDRCO.
| bysixmonths(subjecttoadjustmentinaccordancewiththerelevantregulationsofCSRCandSZSEintheeventofex-rightsandex-dividendeventssuchasdividenddistribution,bonusissue,transferofshares,issueofadditionalsharesorrightsissuebyDRCOduringtheabove-mentionedperiod).3.Incaseofanybreachoftherelevantcommitments,DRCOwillpromptlyannouncerelevantfactsandreasons,andwillpubliclyapologizetotheshareholdersandpublicinvestorsexceptofforcemajeureorotherreasonsbeyondcontrol.Anyprofitmadeasaresultofthenon-fulfillmentofthecommitmentswillbelongtoDRCO.ThecompanyshallbeheldliableforcompensatingDRCOorinvestorsinaccordancewithlawsintheeventofanylossthatiscausedtoDRCOorinvestorsasaresultofthenon-fulfillmentoftherelevantcommitment.DRCOshallhavetherighttotemporarilywithholdthecashdividends(ifany)towhichthecompanyisentitleduntiladverseimpactarisingfromthenon-fulfillmentoftherelevantcommitmentshavebeenfullyeliminated.TheabovecommitmentsshallnotbeterminatedduetothefactthatthecompanystepsdownasthecontrollingshareholderofDRCO. | ||||||
| Commitmentsmadeatthe | Gongqingcheng | Commitments | 1.Thecompanysharesdirectlyor | December | December15, | Performing |
timeoftheinitialpublicofferingorrefinancing
| timeoftheinitialpublicofferingorrefinancing | WendiNo.1InvestmentManagementPartnership(LP),GongqingchengWendiNo.2InvestmentManagementPartnership(LP),GongqingchengWendiNo.3InvestmentManagementPartnership(LP) | tolock-up | indirectlyheldbyDRCOpriortotheproposedofferingshallnotbetransferredorentrustedtoothers;orberepurchasedbyDRCO,foraperiodof36monthsfromthedateoflistingofDRCO'sshares.2.IftheclosingpriceofthecompanysharesislowerthantheissuepricefortwentyconsecutivetradingdayswithinsixmonthsafterthelistingofDRCO;orislessthantheissuepriceattheendofthesixmonthsafterthelisting(June15,2022,extendedincaseofnon-tradingday),thelock-upperiodwhenthecompanysharesareheldbyDRCOshallbeautomaticallyextendedbysixmonths(subjecttoadjustmentinaccordancewiththerelevantregulationsofCSRCandSZSEintheeventofex-rightsandex-dividendeventssuchasdividenddistribution,bonusissue,transferofshares,issueofadditionalsharesorrightsissuebyDRCOduringtheabove-mentionedperiod).3.Incaseofanybreachoftherelevantcommitments,DRCOwillpromptlyannouncerelevantfactsandreasons,andwillpubliclyapologizetotheshareholdersandpublicinvestorsexceptofforcemajeureorotherreasonsbeyondcontrol.Anyprofitmadeasaresultofthenon-fulfillmentofthecommitmentswillbelongtoDRCO.ThecompanyshallbeheldliableforcompensatingDRCOorinvestorsinaccordancewithlawsin | 15,2021 | 2021toJune15,2025 |
theeventofanylossthatiscausedtoDRCOorinvestorsasaresultofthenon-fulfillmentoftherelevantcommitment.
| theeventofanylossthatiscausedtoDRCOorinvestorsasaresultofthenon-fulfillmentoftherelevantcommitment. | ||||||
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | ZhangGuotaoandLuYiwen | Commitmentstolock-up | 1.ThecompanysharesdirectlyorindirectlyheldbyDRCOpriortotheproposedofferingshallnotbetransferredorentrustedtoothers;orberepurchasedbyDRCO,foraperiodof36monthsfromthedateoflistingofDRCO'sshares.2.IftheclosingpriceofthecompanysharesislowerthantheissuepricefortwentyconsecutivetradingdayswithinsixmonthsafterthelistingofDRCO;orislessthantheissuepriceattheendofthesixmonthsafterthelisting(June15,2022,extendedincaseofnon-tradingday),thelock-upperiodwhenthecompanysharesareheldbymeshallbeautomaticallyextendedbysixmonths(subjecttoadjustmentinaccordancewiththerelevantregulationsofCSRCandSZSEintheeventofex-rightsandex-dividendeventssuchasdividenddistribution,bonusissue,transferofshares,issueofadditionalsharesorrightsissuebyDRCOduringtheabove-mentionedperiod).3.IshallnottransferanyshareshelddirectlyorindirectlyinDRCOwithinsixmonthsofmyresignation;ifIresignwithinsixmonthsofDRCO'ssharesbeinglisted,Ishallnottransferanyshareshelddirectlyorindirectlyin | December15,2021 | December15,2021toJune15,2025 | Performing |
DRCOwithin18monthsofmyresignation;ifIresignbetweentheseventhandtwelfthmonthsofDRCO'ssharesbeinglisted,IshallnottransferanyshareshelddirectlyorindirectlyinDRCOwithin12monthsofmyresignation.
4.Incaseofanybreachoftherelevantcommitments,Iwillpromptlyannouncethefactsandreasonsforthebreachofcommitments,andwillpubliclyapologizetoDRCO'sshareholdersandpublicinvestorsexceptofforcemajeureorotherreasonsbeyondmycontrol.Anyprofitmadeasaresultofthenon-fulfillmentoftherelevantcommitmentswillbelongtoDRCO.IshallbeheldliableforcompensatingDRCOorinvestorsinaccordancewithlawsintheeventofanylossthatiscausedtoDRCOorinvestorsasaresultofthenon-fulfillmentoftherelevantcommitments.DRCOshallhavetherighttotemporarilywithholdthecashdividends(ifany)towhichIamentitledandsuspendthepaymentofmyremunerationorallowancesduringmyemploymentwithDRCOuntiladverseimpactarisingfromthenon-fulfillmentoftherelevantcommitmentshavebeenfullyeliminated.TheabovecommitmentshallnotterminateifIstepdownastheactualcontrollerofDRCOorifIchangemypositionorresignfromDRCO.
Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | ChinaSecurities-CMB-ChinaSecuritiesDRNo.1StrategicPlacementCollectiveAssetManagementPlan,ZhuhaiRunxinZhirongNo.1InvestmentPartnership(LP) | Commitmentstolock-up | ThesharesallottedtoChinaSecurities-CMB-ChinaSecuritiesDRNo.1StrategicPlacementCollectiveAssetManagementPlanshallbesubjecttoa12-monthlock-upperiodfromthedatewhenthestockoftheproposedinitialpublicofferingistradedontheShenzhenStockExchange.Upontheexpiryofthelock-upperiod,therelevantregulationsoftheCSRCandtheShenzhenStockExchangeonsharereductionshallapplytothesharreductionbythestrategicinvestors.ThesharesallottedtoZhuhaiRunxinZhirongNo.1InvestmentPartnership(LP)willbesubjecttoa12-monthlock-upperiodfromthedatewhenthestockoftheproposedinitialpublicofferingistradedontheShenzhenStockExchange.Upontheexpiryofthelock-upperiod,therelevantregulationsoftheCSRCandtheShenzhenStockExchangeonsharereductionshallapplytothesharreductionbythestrategicinvestors.Thesharesoftheissuerallottedinthisstrategicplacementshallnotbetransferred,entrustedtothird-partiesorrepurchasedbytheissuerforaperiodof12monthsfromthedateoftheinitialpublicofferingandlistingoftheissuer. | December15,2021 | December15,2021toDecember14,2022 | Fulfilled |
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | DRInvestment(Zhuhai)Co.,Ltd. | Commitmentstosharereduction | Incaseofreducingtheshareholdingwithintwoyearsaftertheexpiryoftheaforesaidlock-upperiod,DRCOwillexactlycomplywithrelevantregulationsoftheCSRCandtheSZSEonsharereduction,prudentlyformulateasharereductionplan;reducetheshareholdingbylaw;makeanofficialannouncementthreetradingdayspriortothereduction;andfulfillinformation | June16,2025 | June16,2025toJune15,2027 | Performing |
disclosureobligationsinatimelyandaccuratemannerinaccordancewiththerulesoftheSZSE.Thepriceforthereductiontransactionshallnotbelowerthantheissueprice(subjecttoadjustmentsinaccordancewiththerelevantregulationsofCSRCandSZSEintheeventofex-rightsandex-dividendeventssuchasdividenddistribution,bonusissue,transferofshares,issueofadditionalsharesorrightsissuebyDRCOduringtheabove-mentionedperiod).Incaseofanybreachoftherelevantcommitments,DRCOwillpromptlyannouncerelevantfactsandreasons,andwillpubliclyapologizetotheshareholdersandpublicinvestorsexceptofforcemajeureorotherreasonsbeyondcontrol.Anyprofitmadeasaresultofthenon-fulfillmentofthecommitmentswillbelongtoDRCO.ThecompanyshallbeheldliableforcompensatingDRCOorinvestorsinaccordancewithlawsintheeventofanylossthatiscausedtoDRCOorinvestorsasaresultofthenon-fulfillmentoftherelevantcommitment.DRCOshallhavetherighttotemporarilywithholdthecashdividends(ifany)towhichthecompanyisentitleduntiladverseimpactarisingfromthenon-fulfillmentoftherelevantcommitmentshavebeenfullyeliminated.Theabovecommitmentsshallnotbeterminatedduetothefactthatthecompanystepsdownasthecontrollingshareholder.
| disclosureobligationsinatimelyandaccuratemannerinaccordancewiththerulesoftheSZSE.Thepriceforthereductiontransactionshallnotbelowerthantheissueprice(subjecttoadjustmentsinaccordancewiththerelevantregulationsofCSRCandSZSEintheeventofex-rightsandex-dividendeventssuchasdividenddistribution,bonusissue,transferofshares,issueofadditionalsharesorrightsissuebyDRCOduringtheabove-mentionedperiod).Incaseofanybreachoftherelevantcommitments,DRCOwillpromptlyannouncerelevantfactsandreasons,andwillpubliclyapologizetotheshareholdersandpublicinvestorsexceptofforcemajeureorotherreasonsbeyondcontrol.Anyprofitmadeasaresultofthenon-fulfillmentofthecommitmentswillbelongtoDRCO.ThecompanyshallbeheldliableforcompensatingDRCOorinvestorsinaccordancewithlawsintheeventofanylossthatiscausedtoDRCOorinvestorsasaresultofthenon-fulfillmentoftherelevantcommitment.DRCOshallhavetherighttotemporarilywithholdthecashdividends(ifany)towhichthecompanyisentitleduntiladverseimpactarisingfromthenon-fulfillmentoftherelevantcommitmentshavebeenfullyeliminated.Theabovecommitmentsshallnotbeterminatedduetothefactthatthecompanystepsdownasthecontrollingshareholder. | ||||||
| Commitmentsmadeatthetimeoftheinitialpublic | GongqingchengWendiNo.1 | Commitmentstoshare | Incaseofreducingtheshareholdingwithintwoyearsaftertheexpiryoftheaforesaid | June16,2025 | June16,2025toJune15, | Performing |
offeringorrefinancing
| offeringorrefinancing | InvestmentManagementPartnership(LP),GongqingchengWendiNo.2InvestmentManagementPartnership(LP),GongqingchengWendiNo.3InvestmentManagementPartnership(LP) | reduction | lock-upperiod,DRCOwillexactlycomplywithrelevantregulationsoftheCSRCandtheSZSEonsharereduction,prudentlyformulateasharereductionplan;reducetheshareholdingbylaw;makeanofficialannouncementthreetradingdayspriortothereduction;andfulfillinformationdisclosureobligationsinatimelyandaccuratemannerinaccordancewiththerulesoftheSZSE.Thepriceforthereductiontransactionshallnotbelowerthantheissueprice(subjecttoadjustmentsinaccordancewiththerelevantregulationsofCSRCandSZSEintheeventofex-rightsandex-dividendeventssuchasdividenddistribution,bonusissue,transferofshares,issueofadditionalsharesorrightsissuebyDRCOduringtheabove-mentionedperiod).Incaseofanybreachoftheaforesaidcommitments,DRCOwillpromptlyannouncethefactsandreasonsforthebreachofcommitments,andwillpubliclyapologizetotheshareholdersandpublicinvestorsexceptofforcemajeureorotherreasonsbeyondcontrol.Anyprofitmadeasaresultofthenon-fulfillmentoftherelevantcommitmentswillbelongtoDRCO.ThecompanyshallbeheldliableforcompensatingDRCOorinvestorsinaccordancewithlawsintheeventofanylossthatiscausedtoDRCOorinvestorsasaresultofthenon-fulfillmentoftherelevantcommitments. | 2027 | ||
| Commitmentsmadeatthetimeoftheinitialpublic | DRCorporationLimited | Commitmentstoprofitdistribution | I.Treatmentofaccumulatedprofitsbeforetheoffering | December15,2021 | Permanentlyvalid | Performing |
offeringorrefinancing
| offeringorrefinancing | policy | AccordingtotheresolutionoftheFourthExtraordinaryGeneralMeetingofShareholdersofDRCOin2020,theaccumulatedundistributedprofitsrealizedbeforetheproposedpublicofferingofshareswillbesharedbythenewandexistingshareholdersofDRCOaftertheoffering.II.DividenddistributionpolicyafterinitialpublicofferingAccordingtotheresolutionofDRCO'sFourthExtraordinaryGeneralMeetingofShareholdersin2020,DRCO’sprofitdistributionpolicyaftertheofferingandlistingisasfollows:1.PrinciplesofprofitdistributionDRCOimplementsacontinuousandstableprofitdistributionpolicythatattachesimportancetoprovidinginvestorswithareasonableandstablereturnontheirinvestmentandtakingintoaccountthelong-termandsustainabledevelopmentofDRCO.2.FormofprofitdistributionDRCOmaydistributedividendsincash,stock,oracombinationofcashandstock.DRCOwillgiveprioritytopayingdividendsincash;ifDRCOisgrowingrapidly,dividendsmaybepaidinsharesoracombinationofcashandshares.3.CashdividendpolicyInprinciple,DRCOmakesanannualcashprofitdistributioniftheconditionsforcash |
profitdistributionaremet;DRCOmaymakeaninterimcashprofitdistributionifappropriate.IfDRCO'sdistributableprofitfortheyeararepositiveandtherearenosignificantinvestmentplansormaterialcashpayments,DRCO'sannualdistributionofprofitsincashshallnotbelessthan10%ofthedistributableprofitsrealizedfortheyear.Significantinvestmentplanormaterialcashpaymentmaybeoneofthefollowingcircumstances:
(1)DRCO'sproposedexternalinvestment,acquisitionofassetsorpurchaseofequipmentoverthenexttwelvemonthsmeetsorexceeds50%ofDRCO'slatestauditednetassetsandexceedsRMB50million;
(2)DRCO'sproposedexternalinvestment,acquisitionofassetsorpurchaseofequipmentoverthenexttwelvemonthsmeetsorexceeds30%ofDRCO'slatestauditedtotalassets.
| profitdistributionaremet;DRCOmaymakeaninterimcashprofitdistributionifappropriate.IfDRCO'sdistributableprofitfortheyeararepositiveandtherearenosignificantinvestmentplansormaterialcashpayments,DRCO'sannualdistributionofprofitsincashshallnotbelessthan10%ofthedistributableprofitsrealizedfortheyear.Significantinvestmentplanormaterialcashpaymentmaybeoneofthefollowingcircumstances:(1)DRCO'sproposedexternalinvestment,acquisitionofassetsorpurchaseofequipmentoverthenexttwelvemonthsmeetsorexceeds50%ofDRCO'slatestauditednetassetsandexceedsRMB50million;(2)DRCO'sproposedexternalinvestment,acquisitionofassetsorpurchaseofequipmentoverthenexttwelvemonthsmeetsorexceeds30%ofDRCO'slatestauditedtotalassets. | ||||||
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | DRInvestment(Zhuhai)Co.,Ltd.,ZhangGuotaoandLuYiwen | Commitmentsonhorizontalcompetition,connectedtransactions,andcapitalappropriation | I.Commitmentonavoidinghorizontalcompetition1.Asofthedateofthiscommitmentletter,exceptforthecompanyanditswholly-ownedorcontrolledsubsidiaries,thecompany/Iandotherenterprises,organizationsorentitiescontrolledbythecompany/mearenotcurrentlyengaged,directlyorindirectly,inanybusinessactivitiesthatconstitutecompetitionwiththemainbusinessofthecompanyanditswholly-ownedorcontrolledsubsidiaries;2.Noengagementorassociationwith | December15,2021 | Permanentlyvalid | Performing |
others,directlyorindirectly,isallowedinanybusinesswhichisthesameas,similartoorinanywaycompetitivewiththeissuer.
3.Allofeffortsshallbemadetoensureotheraffiliatesofthecommitmentmakersnottodealinanybusinessthatisthesameas,similartoorinanywaycompetitivewiththeissuer.
4.Noinvestmentshallbepermittedinacompany,enterpriseorotherentityororganizationwhosebusinessisthesameas,similartoorinanywaycompetitivewiththeissuer.
5.Anyknow-howorbusinesssecrets,suchassaleschannelsorcustomerinformation,shallbedisclosedtoanyothercompany,enterpriseorotherentity,organizationorpersonwhosebusinessisthesameas,similartoorinanywaycompetitivewiththatoftheissuer.
6.If,inthefuture,thecompany/Igetanybusinessopportunityfromanythirdpartythatmaycompetewiththeissuerinthesamelineofbusiness,thecompany/Iwill,inaccordancewiththeprincipleofthepriorityoftheissuer,informtheissuerimmediatelyandassisttheissuertotheextentpossibleinobtainingsuchbusinessopportunity;
7.Ifthecompany/Ibreachtheabovecommitmentsandcausefinanciallosstotheissuer,thecompany/Ishallbejointlyandseverallyliableforalllossessufferedbytheissuerasaresult,andtheproceedsobtainedbyDRCO/Iasaresultofsuch
breachshallaccruetotheissuer.II.Commitmentonreducingandregulatingconnectedtransactions
1.Thecompany/IshalltrytoavoidorreducetheoccurrenceofconnectedtransactionswithDRCOandthesubsidiaryentities,andurgetheassociateparitiesofthecompanyandminetoavoidorreducetheconnectedtransactionswithDRCOandthesubsidiaryentities.
2.IfthetransactionsbetweenI/thecompanyorrelevantparitiesofmine/thecompanywithDRCOandthesubsidiaryentitiesarenecessaryandunavoidable,I/thecompanyundertakestooperateatarm'slengthinaccordancewithmarket-basedprinciplesandfairprices,andcomplywiththetransactionproceduresandinformationdisclosureobligationsinaccordancewiththerelevantlawsandregulations,regulatorydocuments,rulesofthestockexchangeandtheArticlesofAssociationofDRCO,andensurethatthelegitimaterightsandinterestsoftheissueranditsothershareholdersorstakeholdersarenotprejudicedbyconnectedtransactions.
3.IfI/thecompanyortheconnectedpartyofmine/thecompanybreachestheabovecommitment,I/thecompanyshallbeheldliableforalltheliabilitiesarisingtherefromandshallfullycompensateorindemnifyDRCOanditsshareholdersorstakeholdersforalllossescausedthereby.
4.Thiscommitmentlettershalltakeeffect
fromthedateofthesignatureofmine/thecompanyandshallexpireonthedatewhen12monthshaveelapsedsinceI/thecompanyceasetobeaffiliatedwithDRCO.
| fromthedateofthesignatureofmine/thecompanyandshallexpireonthedatewhen12monthshaveelapsedsinceI/thecompanyceasetobeaffiliatedwithDRCO. | ||||||
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | DRCorporationLimited | Commitmentstopost-IPOpricestabilization | If,withinthreeyearsafterthelistingofDRCO'sshares,theclosingpriceofDRCO(subjecttoadjustmentsinaccordancewiththerelevantregulationsofCSRCandSZSEintheeventofex-rightsandex-dividendeventssuchasdividenddistribution,bonusissue,transferofshares,issueofadditionalsharesorrightsissuebyDRCO)islowerthanDRCO'sauditednetassetvaluepershareinthemostrecentperiodfor20consecutivetradingdays(excludingthetradingdaysonwhichthetradingofDRCO'ssharesissuspendedforthewholeday,thesamebelow)notbecauseofforcemajeurefactors(hereinafterreferredtoasthe"TriggeringCondition"),DRCOanditscontrollingshareholdersaswellasdirectors(otherthanindependentdirectors)andseniormanagementundertaketoimplementthefollowingpricestabilizationmeasuresinaccordancewiththelaws,regulationsandDRCO'sArticlesofAssociationwithoutaffectingthelistingconditionofDRCO:1.WhentheTriggeringConditionismet,DRCOwillconvenetheBoardMeetingwithin10tradingdaystodiscussthesharerepurchaseproposal.Therepurchaseproposalincludes,butnotlimitedto,thenumberofsharestoberepurchased,therepurchasepricerange,thesourceoffundsfortherepurchase,theimpactofthe | December15,2021 | December15,2021toDecember14,2024 | Performing |
repurchaseonDRCO'ssharepriceandDRCO'soperation,etc.AftertheproposalispassedbytheBoardMeeting,theshareholders'meetingwillbeconvenedinaccordancewithlawstoreviewtheproposalregardingsharebuybackandpassaresolutionthereon,whichmustbeapprovedbyaleast2/3ofthevotingrightsheldbytheshareholderspresentatthemeeting.ThespecificimplementationplanwillbeannouncedafterDRCOmakesaresolutionattheBoardmeetingandthegeneralmeetinginaccordancewithlaws.
2.Afterthegeneralmeetingofshareholdersdeliberatesandapprovesthesharerepurchaseplan,DRCOwillnotifythecreditorsinaccordancewithlaws,andsubmitrelevantmaterialstothesecuritiesregulators,thestockexchangeandothercompetentdepartmentsforapprovalorfilingprocedures.Thecorrespondingsharerepurchaseplanwillbeinitiated10tradingdaysafterthecompletionofallnecessaryapproval,filing,informationdisclosureandotherrelevantprocedures.Followingthesharerepurchase,DRCO'sequitydistributionwillcontinuetocomplywiththelistingrequirements.
3.TherepurchaseperiodshallnotexceedthreemonthsfromthedateofapprovalofthefinalsharerepurchaseplanbythegeneralmeetingortheBoardofDirectors.
4.DRCOwillrepurchasetheshareswithitsownfundsatapricenothigherthanthelatestauditednetassetvaluepershare(subjecttoadjustmentsinaccordancewith
therelevantregulationsofCSRCandSZSEintheeventofex-rightsandex-dividendeventssuchasdividenddistribution,bonusissue,transferofshares,issueofadditionalsharesorrightsissuebyDRCOafterthebasedateoftheaudit),andthebuybackshallbemadebywayofcallauctiontrading,tenderofferorothermeansapprovedbythesecuritiesregulators.However,ifDRCO'ssharepricenolongermeetstheconditionsforinitiatingpricestabilizationmeasurespriortotheimplementationofthesharerepurchaseplan,DRCOmaydiscontinuetheplan.
5.ThetotalamountoffundsusedbyDRCOtorepurchasesharesshallnotexceedthetotalamountoffundsraisedfromDRCO'sinitialpublicofferingofordinarysharesinRMB(Ashares),andtheamountoffundsusedtorepurchasesharesinasinglefiscalyearshallnotexceed20%oftheauditednetprofitattributabletoshareholdersoftheparentcompanyforthepreviousfiscalyear,andthenumberofsharesrepurchasedinasinglefiscalyearshallnotexceed2%ofthetotalsharecapitalofDRCO.
6.IfDRCObreachesanyoftheforegoingcommitments,itwillpromptlydisclosethefactsandreasonsforthebreachand,exceptofforcemajeureorotherreasonsbeyondDRCO'scontrol,willapologizetoDRCO'sshareholdersandpublicinvestorsandatthesametimeproposesupplementaryoralternativecommitmentstoprotecttheinterestsofinvestorsasfar
aspossible.
| aspossible. | ||||||
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | DRInvestment(Zhuhai)Co.,Ltd. | Commitmenttopost-IPOpricestabilization | 1.WhentheTriggeringConditionforDRCOismet,thecompanywillincreaseourshareholdingsinDRCOinaccordancewithlawsandregulationsincludingtheMeasuresfortheAdministrationoftheTakeoverofListedCompaniesinanyofthefollowingcases:①TheclosingpriceoftheDRCOislowerthanitslatestnetassetvaluepershareforeachofthe10consecutivetradingdaysfromthedayafterDRCOcompletesitssharerepurchaseplan(subjecttoadjustmentsinaccordancewiththerelevantregulationsofCSRCandSZSEintheeventofex-rightsandex-dividendeventssuchasdividenddistribution,bonusissue,transferofshares,issueofadditionalsharesorrightsissuebyDRCOafterthebasedateoftheaudit).②TheTriggeringConditionisagaintriggeredwithin3monthsfromthedayafterDRCOcompletestheimplementationofitssharerepurchaseplan.③DRCOcannotimplementthesharerepurchaseplan.2.WithintwotradingdaysaftertheTriggeringConditionissatisfied,thecompanywillnotifytheBoardofDirectorsofDRCOwhichwillthenpublishanannouncementontheincreaseofourholdings.Thecompanywillcommencetheincreaseonthedayfollowingtheannouncementandshallcompletetheincreasewithin30tradingdaysafterthe | December15,2021 | December15,2021toDecember14,2024 | Performing |
relevantlegalproceduresarefulfilled.
3.Tostabilizethestockprice,thecompanywillbuysharesofDRCOthroughauctiontradingonthesecondarymarketatapriceofnothigherthanthelatestauditednetassetvaluepershare(subjecttoadjustmentsinaccordancewiththerelevantregulationsofCSRCandSZSEintheeventofex-rightsandex-dividendeventssuchasdividenddistribution,bonusissue,transferofshares,issueofadditionalsharesorrightsissuebyDRCOafterthebasedateoftheaudit).However,ifthesharepriceofDRCorporationLimitednolongermeetstheconditionsforinitiatingpricestabilizationmeasureswithinthreetradingdaysafteritdisclosesoursharepurchaseplan,thecompanymaydiscontinuetheproposedsharepurchaseplan.
4.Theamountoffundsusedbythecompanyforeverysingleholdingincreaseshallnotbelessthan10%normorethan20%oftheaccumulatedcashdividendsreceivedfromDRCOinthelastthreefiscalyears;thetotalamountoffundsusedforholdingincreasesinasinglefiscalyearshallnotexceed50%oftheaccumulatedcashdividendsreceivedfromDRCOinthemostrecentthreefiscalyears;andthenumberofsharespurchasedinasinglefiscalyearshallnotexceed2%ofthetotalsharecapitalofDRCO.Followingtheincreaseofourshareholding,theequitydistributionofDRCOwillcontinuetocomplywiththelistingrequirements.
5.Thecompanyundertakesnottoselltheadditionalshareswithinsixmonthsofcompletionoftheproposedincrease.
6.Ifthecompanybreachesanyoftheforegoingcommitments,DRCOwillpromptlydisclosethefactsandreasonsforthebreachand,exceptofforcemajeureorotherreasonsbeyondourcontrol,wewillapologizetoshareholdersandpublicinvestorsofDRCOwhohavetherighttotemporarilywithholdthecashdividends(ifany)thatthecompanyshouldenjoyuntilthecorrespondingmeasuresaretakenandimplementedascommitted.TheabovecommitmentsshallnotbeterminatedduetothefactthatthecompanysteppeddownasthecontrollingshareholderofDRCO.
| 5.Thecompanyundertakesnottoselltheadditionalshareswithinsixmonthsofcompletionoftheproposedincrease.6.Ifthecompanybreachesanyoftheforegoingcommitments,DRCOwillpromptlydisclosethefactsandreasonsforthebreachand,exceptofforcemajeureorotherreasonsbeyondourcontrol,wewillapologizetoshareholdersandpublicinvestorsofDRCOwhohavetherighttotemporarilywithholdthecashdividends(ifany)thatthecompanyshouldenjoyuntilthecorrespondingmeasuresaretakenandimplementedascommitted.TheabovecommitmentsshallnotbeterminatedduetothefactthatthecompanysteppeddownasthecontrollingshareholderofDRCO. | ||||||
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | ZhangGuotao,LuYiwen,WeiQingxing,HuangShuirong,HuXiaoming,ChenQishengandLinZhenghai | Commitmenttopost-IPOpricestabilization | 1.WhentheTriggeringConditionforDRCOismet,IwillincreasemyshareholdingsinDRCOinaccordancewithlawsandregulationsincludingtheMeasuresfortheAdministrationoftheTakeoverofListedCompaniesandtheRulesontheManagementofSharesHeldbytheDirectors,SupervisorsandSeniorManagementOfficersofListedCompaniesandtheChangesThereofinanyofthefollowingcases:①Theclosingpriceforeachofthe10consecutivetradingdaysfromthedayafterthecontrollingshareholder'sshareholdingincreaseplanisimplementedislowerthanthelatestauditednetassetvaluepershare(ex-rightsandex-dividendtreatmentshall | December15,2021 | December15,2021toDecember14,2024 | Performing |
bemadeintheeventofequitydistribution,conversionofreservesintosharecapitalorrightsissueafterthebasedateoftheaudit).
②TheTriggeringConditionisagaintriggeredwithin3monthsfromthedayafterthecontrollingshareholdercompletesitsshareholdingincreaseplan.
③Thecontrollingshareholdercannotimplementthesharerepurchaseplan.
2.WithintwotradingdaysaftertheTriggeringConditionissatisfied,IwillnotifytheBoardofDirectorsofDRCOwhichwillthenpublishanannouncementonmyshareholdingincrease.Iwillcommencetheincreaseonthedayfollowingtheannouncementandshallcompletetheincreasewithin30tradingdaysaftertherelevantlegalproceduresarefulfilled.
3.Tostabilizethestockprice,IwillbuysharesofDRCOthroughauctiontradingonthesecondarymarketatapriceofnothigherthanthelatestauditednetassetvaluepershare(ex-rightsandex-dividendtreatmentshallbemadeintheeventofequitydistribution,conversionofreservesintosharecapitalorrightsissueafterthebasedateoftheaudit).However,ifthesharepriceofDRCOnolongermeetstheconditionsforinitiatingpricestabilizationmeasureswithinthreetradingdaysafterDRCOdisclosesmysharepurchaseplan,Imaydiscontinuetheproposedsharepurchaseplan.Thefundsusedforasingleincreaseinshareholdingshallnotbeless
than20%ofthetotalafter-taxremunerationreceivedfromDRCOinthepreviousyear;thefundsusedtoincreaseshareholdingsinasinglefiscalyearshallnotbemorethan50%ofthetotalafter-taxremunerationreceivedfromDRCOinthepreviousyear;andthecumulativeincreaseinshareholdinginasinglefiscalyearshallnotexceed2%oftheenlargedsharecapitalofDRCO.
4.Iundertakesnottoselltheadditionalshareswithinsixmonthsofcompletionoftheproposedincrease,andguaranteethattheincreaseinmyshareholdingshallnotcausetheshareholdingdistributionofDRCOtofailtomeetthelistingconditions.
5.IfIbreachanyoftheforegoingcommitments,DRCOwillpromptlydisclosethefactsandreasonsforthebreachand,exceptofforcemajeureorotherreasonsbeyondmycontrol,IwillapologizetoshareholdersandpublicinvestorsofDRCOwhowillceasetopaymeremunerationorallowanceswithinfivetradingdaysfromtheforegoing,andthesharesofDRCOhelddirectlyorindirectlybymeshallnotbetransferred.Meanwhile,DRCOshallhavetherighttotemporarilywithholdthecashdividends(ifany)thatIshouldenjoyuntilthecorrespondingmeasuresaretakenandimplementedascommitted.Theabovecommitmentwillnotbeterminatedduetothechangeofmypositionorresignation.
| than20%ofthetotalafter-taxremunerationreceivedfromDRCOinthepreviousyear;thefundsusedtoincreaseshareholdingsinasinglefiscalyearshallnotbemorethan50%ofthetotalafter-taxremunerationreceivedfromDRCOinthepreviousyear;andthecumulativeincreaseinshareholdinginasinglefiscalyearshallnotexceed2%oftheenlargedsharecapitalofDRCO.4.Iundertakesnottoselltheadditionalshareswithinsixmonthsofcompletionoftheproposedincrease,andguaranteethattheincreaseinmyshareholdingshallnotcausetheshareholdingdistributionofDRCOtofailtomeetthelistingconditions.5.IfIbreachanyoftheforegoingcommitments,DRCOwillpromptlydisclosethefactsandreasonsforthebreachand,exceptofforcemajeureorotherreasonsbeyondmycontrol,IwillapologizetoshareholdersandpublicinvestorsofDRCOwhowillceasetopaymeremunerationorallowanceswithinfivetradingdaysfromtheforegoing,andthesharesofDRCOhelddirectlyorindirectlybymeshallnotbetransferred.Meanwhile,DRCOshallhavetherighttotemporarilywithholdthecashdividends(ifany)thatIshouldenjoyuntilthecorrespondingmeasuresaretakenandimplementedascommitted.Theabovecommitmentwillnotbeterminatedduetothechangeofmypositionorresignation. | ||||||
| Commitmentsmadeatthe | DRInvestment(Zhuhai)Co.,Ltd., | Commitmentsto | Iftheissueranditssubsidiariesreceiveanoticeofcorrectionfromthecompetent | December | Permanently | Performing |
timeoftheinitialpublicofferingorrefinancing
| timeoftheinitialpublicofferingorrefinancing | ZhangGuotaoandLuYiwen | compensatingtheissuerforpossiblelossesduetotheleasedproperty | administrativeauthoritiesbecausethepropertiesleasedbythemhavenotbeenregisteredforleasefilinginaccordancewiththelaws,regulationsandnormativedocumentscurrentlyinforce,thecompany/Iwillactivelysupervisetheissueranditssubsidiariestomakerectificationinaccordancewiththerequirements.Intheeventthattheissueranditssubsidiariessufferfinanciallossesduetofailuretoregisterthelease,defectsinthetitleoftheleasedpropertyordefectsintherightsofthelessor,defectsinthepropertiesbuiltontheleasedcollectivelandoradministrativelyallocatedland,thecompany/Ishallagreetouseourownfundstofullycompensatetheissueanditssubsidiariessothattheydonotsufferanyfinanciallossesasaresult. | 15,2021 | valid | |
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | DRInvestment(Zhuhai)Co.,Ltd.,ZhangGuotaoandLuYiwen | Commitmenttoretroactivepaymentofsocialsecuritycontributionsandhousingprovidentfund | Intheeventthattheissueroritssubsidiariesarerequiredbythecompetentauthoritiestomakeretroactivepaymentsduetofailuretomakefullpaymentofsocialsecuritycontributionsorhousingfundinaccordancewithlaws,thecompany/Ishallbefullyliablefortheretroactivepaymentsandshallensurethattheissueroritssubsidiariesshallnotsufferanyfinanciallossasaresult. | December15,2021 | Permanentlyvalid | Performing |
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | DRCorporationLimited | Bindingmeasuresincaseoffailuretofulfillcommitments | 1.Intheeventofabreachoftherelevantcommitments,DRCOwillpromptlydisclosethefactandreasonsforthebreachand,exceptforforcemajeureorotherreasonsbeyondDRCO'scontrol,DRCOwillmakeapublicapologytoitsshareholdersandpublicinvestors; | December15,2021 | Permanentlyvalid | Performing |
2.Ifthefailuretofulfilltherelevantcommitmentscausedlossestoinvestors,DRCOshallcompensateinvestorsforlossesinaccordancewithlaws.
| 2.Ifthefailuretofulfilltherelevantcommitmentscausedlossestoinvestors,DRCOshallcompensateinvestorsforlossesinaccordancewithlaws. | ||||||
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | DRInvestment(Zhuhai)Co.,Ltd. | Bindingmeasuresincaseoffailuretofulfillcommitments | 1.Intheeventofabreachoftherelevantcommitments,thecompanywillpromptlydisclosethefactandreasonsforthebreachand,exceptforforcemajeureorotherreasonsbeyondourcontrol,thecompanywillmakeapublicapologytoDRCO’sshareholdersandpublicinvestors.2.Anyprofitmadeasaresultofthenon-fulfillmentoftherelevantcommitmentswillbelongtothecompany.ThecompanyshallbeheldliableforcompensatingDRCOorinvestorsinaccordancewithlawsintheeventofanylossthatiscausedtoDRCOorinvestorsasaresultofthenon-fulfillmentoftherelevantcommitments.3.Intheeventofabreachoftherelevantcommitments,DRCOshallbeentitledtowithholdthecashdividends(ifany)towhichthecompanyisentitleduntiltheadverseimpactarisingfromthenon-fulfillmentoftherelevantcommitmentshasbeenfullyeliminated. | December15,2021 | Permanentlyvalid | Performing |
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | ZhangGuotao,LuYiwen,WeiQingxing,HuangShuirong,HuXiaoming,ChenQisheng,YangLi,LiangJun,ZhongMin,LinZhenghai,ZhaoRanran,Yin | Bindingmeasuresincaseoffailuretofulfillcommitments | 1.Intheeventofabreachoftherelevantcommitments,Iwillpromptlydisclosethefactandreasonsforthebreachand,exceptforforcemajeureorotherreasonsbeyondmycontrol,IwillmakeapublicapologytoDRCO’sshareholdersandpublicinvestors;2.Anyprofitmadeasaresultofthenon-fulfillmentoftherelevantcommitmentswillbelongtoDRCO.Theobligatorshallbe | December15,2021 | Permanentlyvalid | Performing |
LuwenandWangTong
| LuwenandWangTong | heldliableforcompensatingDRCOorinvestorsinaccordancewithlawsintheeventofanylossthatiscausedtoDRCOorinvestorsasaresultofthenon-fulfillmentoftherelevantcommitments.3.Intheeventofabreachoftherelevantcommitments,DRCOshallbeentitledtowithholdthecashdividends(ifany)towhichIamentitledandsuspendthepaymentofmyremunerationorallowancesduringmyemploymentwithDRCOuntiltheadverseimpactarisingfromthenon-fulfillmentoftherelevantcommitmentshasbeenfullyeliminated. | |||||
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | DRCorporationLimited | CommitmentsrelatingtodisclosingshareholderinformationwhenapplyingforinitialpublicofferingandlistingontheChiNextMarket | 1.DRCOhasdisclosedtheinformationofshareholdersintheprospectusinatrue,completeandaccuratemanner;2.TherearenocasesofproxyshareholdingorfiduciaryshareholdinginDRCO'sdevelopmenthistory,andtherearenodisputesorpotentialdisputesoverequities,etc.3.Nostockholdersdirectlyorindirectlyholdsharesoftheissuer,whichisprohibitedbylawsandregulations.4.Nointermediaryparticipatingintotheofferingoritssupervisor,seniormanagementormanagerialpersonneldirectlyorindirectlyholdsharesoftheissuer.5.DRCOdoesnothaveanyimpropertransferofbenefitswiththeissuer'sequity.6.IfDRCObreachestheabovecommitments,itwillbeliableforalllegal | December15,2021 | Permanentlyvalid | Performing |
consequencesarisingtherefrom.
| consequencesarisingtherefrom. | ||||||
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | ZhangGuotaoandLuYiwen | Sharereductioncommitment | Aftertheexpiryofthelock-upcommitment,IwilldeclareannuallytoDRCOthesharesIhaveowneddirectlyorindirectlyinDRCOandanychangesthereinduringmytenureasadirector,supervisororseniormanagerofDRCO.Thesharestransferredeachyearwillnotexceed25%ofthetotalnumberofsharesIholddirectlyorindirectlyinDRCO.Incaseofreducingtheshareholdingwithintwoyearsaftertheexpiryofthelock-upperiod,IwillexactlycomplywiththerelevantregulationsoftheCSRCandtheSZSEonshareholdingreduction,prudentlyformulateashareholdingreductionplan,reducetheshareholdingthroughlawfulmeans,andmakeanannouncementthroughDRCOthreetradingdayspriortothereduction,andfulfillinformationdisclosureobligationsinatimelyandaccuratemannerinaccordancewiththerulesoftheSZSE.Thereductionpriceshallnotbelowerthantheissueprice(subjecttoadjustmentsinaccordancewiththerelevantregulationsofCSRCandSZSEintheeventofex-rightsandex-dividendeventssuchasdividenddistribution,bonusissue,transferofshares,issueofadditionalsharesorrightsissuebyDRCOduringtheabove-mentionedperiod).Incaseofanybreachoftherelevantcommitments,Iwillpromptlyannouncethefactsandreasonsforthebreachofcommitments,andwillpubliclyapologizetoDRCO'sshareholdersandpublicinvestors | June16,2025 | June16,2025toJune15,2027 | Performing |
exceptofforcemajeureorotherreasonsbeyondmycontrol.Anyprofitmadeasaresultofthenon-fulfillmentoftherelevantcommitmentswillbelongtoDRCO.IshallbeheldliableforcompensatingDRCOorinvestorsinaccordancewithlawsintheeventofanylossthatiscausedtoDRCOorinvestorsasaresultofthenon-fulfillmentoftherelevantcommitments.DRCOshallhavetherighttotemporarilywithholdthecashdividends(ifany)towhichIamentitledandsuspendthepaymentofmyremunerationorallowancesduringmyemploymentwithDRCOuntiladverseimpactarisingfromthenon-fulfillmentoftherelevantcommitmentshavebeenfullyeliminated.
| exceptofforcemajeureorotherreasonsbeyondmycontrol.Anyprofitmadeasaresultofthenon-fulfillmentoftherelevantcommitmentswillbelongtoDRCO.IshallbeheldliableforcompensatingDRCOorinvestorsinaccordancewithlawsintheeventofanylossthatiscausedtoDRCOorinvestorsasaresultofthenon-fulfillmentoftherelevantcommitments.DRCOshallhavetherighttotemporarilywithholdthecashdividends(ifany)towhichIamentitledandsuspendthepaymentofmyremunerationorallowancesduringmyemploymentwithDRCOuntiladverseimpactarisingfromthenon-fulfillmentoftherelevantcommitmentshavebeenfullyeliminated. | ||||||
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | DRCorporationLimited | Sharerepurchasecommitment | If,asaresultofafalserecord,misleadingstatementormaterialomissionintheprospectusforDRCO'sproposedofferingandlisting,whichconstitutesamaterialandsubstantialeffectonthedeterminationofwhetherDRCOcomplieswiththeofferingconditionsasrequiredbylaws,within10workingdaysfromthedatesuchillegalfactsaredeterminedbytheCSRC,thestockexchangeoracompetentauthoritysuchasajudicialauthority,DRCOwillinitiatethesharerepurchaseprocedureinaccordancewithlawstorepurchaseallthenewsharesintheinitialpublicoffering.TherepurchasepriceshallbenolessthantheissuepriceofDRCO'ssharesplusinterestondepositswithbanksforthesameperiodfromtheissueofthesharestothetimeofrepurchase(theabovepricewillbeadjustedaccordinglyintheeventofex- | December15,2021 | Permanentlyvalid | Performing |
dividendorex-rightsactionssuchasdividendpayment,bonusissue,conversionofreservesintosharecapital,issuanceofadditionalsharesorrightsissueafterthelistingofDRCO).
| dividendorex-rightsactionssuchasdividendpayment,bonusissue,conversionofreservesintosharecapital,issuanceofadditionalsharesorrightsissueafterthelistingofDRCO). | ||||||
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | DRInvestment(Zhuhai)Co.,Ltd.,ZhangGuotaoandLuYiwen | Sharerepurchasecommitment | If,asaresultofafalserecord,misleadingstatementormaterialomissionintheprospectusforDRCO'sproposedofferingandlisting,whichconstitutesamaterialandsubstantialeffectonthedeterminationofwhetherDRCOcomplieswiththeofferingconditionsasrequiredbylaws,within10workingdaysfromthedatesuchillegalfactsaredeterminedbytheCSRC,thestockexchangeoracompetentauthoritysuchasajudicialauthority,thecompany/Iwillinitiatethesharebuybackprocedureinaccordancewithlawstobuybackallrestrictedshareshavingbeentransferred,andtheconsiderationforsuchbuybackwillnotbelowerthantheissuepriceofDRCOplustheinterestondepositswithbanksforthesameperiodfromthetimeofstockissuancetothetimeofbuyback(subjecttoadjustmentinaccordancewiththerelevantregulationsofCSRCandSZSEintheeventofex-rightsandex-dividendeventssuchasdividenddistribution,bonusissue,transferofshares,issueofadditionalsharesorrightsissuebyDRCOduringtheabove-mentionedperiod).Atthesametime,thecompany/IwillurgeDRCOtorepurchaseallofitsnewsharesissuedduringtheIPO. | December15,2021 | Permanentlyvalid | Performing |
| Commitmentsmadeatthetimeoftheinitialpublic | DRCorporationLimited,DRInvestment | Commitmentstosharerepurchasein | 1.Thecompany/Iundertakeandguaranteethatthereisnofraudintheproposed | December15,2021 | Permanentlyvalid | Performing |
offeringorrefinancing
| offeringorrefinancing | (Zhuhai)Co.,Ltd.,ZhangGuotaoandLuYiwen | caseoffraudulentofferingandlisting | offeringandlistingofDRCO;2.IfDRCOdoesnotmeetthelistingconditions,butfraudulentlyobtainstheissuanceregistrationandhasbeenlisted,thecompany/IwilltakesharerepurchaseprocesstobuybackallnewstockspubliclyissuedbyDRCOwithin5daysafterconfirmedbycompetentauthoritieslikeCSRC. | |||
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | DRCorporationLimited | Measuresforandcommitmentstocoverdilutedimmediatereturns | Theproposedpublicofferingmayleadtodilutionofinvestors'immediatereturns.InordertofurtherimplementtherelevantprovisionsoftheOpinionsoftheGeneralOfficeoftheStateCouncilonFurtherStrengtheningtheProtectionoftheLegitimateRightsandInterestsofSmallandMedium-sizedInvestorsintheCapitalMarket(GuoBanFa[2013]No.110),optimizetheinvestmentreturnmechanismandsafeguardthelegitimaterightsandinterestsofsmallandmedium-sizedinvestors,DRCOintendstotakefollowingmeasurestoenhanceDRCO'sprofitabilityandstrengthenDRCO'sabilitytosustainreturns:1.StrengthenthemainbusinessandimprovingDRCO'ssustainableprofitability:DRCOismainlyengagedinbrandoperation,customizedsales,R&Danddesignofjewelry,andcustomizeshigh-qualitydiamond-inlaidjewelrysuchasengagementandweddingrings.Toconsolidateitscorebusiness,DRCOwilltakeadvantageoftherapiddevelopmentofChina'sjewelryindustry.Throughtheproposedpublicofferingandlisting,DRCO | December15,2021 | Permanentlyvalid | Performing |
willenhanceitsbrandimageandinfluence,expanditsmarketingnetwork,strengthenitsinformationsystemsandimproveitscreativedesignabilityofdiamondjewelry.DRCOwillconsolidateitsindustryleadershipandsharpenitssustainableprofitabilitybyenhancingitscorecompetitivenessintermsofbrandstrength,capitalstrength,marketingnetworkcoverageandproductdesigncapability.
2.Acceleratetheinvestmentprogressofproceeds-fundedprojects,improvetheefficiencyofcapitalutilization,andstrivetoachievetheexpectedreturnsfromtheprojectssoonaspossibleTheproceeds-fundedprojectsincludemarketingnetworkconstruction,informationsystemconstruction,theR&Dandcreativedesigncenterfordiamondjewelryandworkingcapitalreplenishment,allofwhicharerelatedtoDRCO'smainbusiness.DRCOwillspeeduptheconstructionprogressoftheseprojectsandimprovethecapitalutilizationtoenhanceitsprofitabilityassoonaspossible.Meanwhile,theuseoftheproceedswillbestrictlymanagedtoensurethesmoothprogressoftheproceeds-fundedprojects.TheseprojectswillhelpDRCOfurtherenhanceitsmarketcompetitiveness,consolidateitsexistingsaleschanneladvantagesandR&Danddesigncapabilities,increaseexpandthemarketshareofitsmainbusiness,andincreasethereturnforshareholders.
3.Increasetheefficiencyofdaily
operations,reduceoperatingcosts,andimprovebusinessperformanceDRCOwillfurtherreduceitsoperatingcoststhroughreasonablemeans,andimproveinternalcontrol,operatingefficiencyandprofitability.Atthesametime,DRCOwillstrivetoimprovethehumanresourcesmanagementandthesupportingcompensationsystemtomotivateemployeesatalllevels,continuetoattracttoptalentsandstrengthentalenttraining,optimizethetalentpoolsandreducetheriskofbraindrain,hencelayingasolidfoundationforitsrapiddevelopment.
4.Refinetheprofitdistributionpolicy,andoptimizethereturnoninvestmentmechanismInordertoestablishacontinuous,stableandscientificmechanismforinvestorsregardingthereturnoninvestmentandtoensurethecontinuityandstabilityoftheprofitdistributionpolicythroughthesystematicinstitutionalarrangements,DRCOhas,inaccordancewiththerelevantrequirements,clarifiedthespecificconditions,ratioandformofprofitdistribution,improvedthedecision-makingproceduresandmechanismforprofitdistributionaswellastheprinciplesforadjustingtheprofitdistributionpolicy.DRCOwilldistributeprofitsinstrictaccordancewiththeArticlesofAssociationandotherregulations,formulateandimplementacontinuousandstablecashdividendplan,andfurtherimprovetheprofit
distributionsystem,especiallythecashdividendpolicywherenecessary,refinetheinvestorreturnmechanism,andeffectivelysafeguardthelegitimaterightsandinterestsofinvestorsandimprovethemechanismforprotectingtherightsandinterestsofminorityinvestors.
5.FurtherimprovingtheprotectionsystemforminorityinvestorsDRCOhasformulatedaseriesofsystemssuchastheInvestorRelationsManagementSystemandtheInformationDisclosureManagementSystemtofullyprotecttherightsofminorityinvestorstobeinformedandtoparticipateindecision-making,andsuchinstitutionalarrangementsensuretheirrightstoaccessthecorporateinformation,choosemanagementofficersandparticipateinmajordecisions.DRCOundertakestofurtherimprovetherelevantsystemsforprotectingminorityprotectorsinaccordancewiththeimplementationrulesorrequirementsissuedbyregulatoryauthoritiesincludingtheCSRCandthestockexchangeaswellasthecommonpracticesoflistedpeers.Theabove-mentionedmeasuresaredesignedtonotonlyensuretheeffectiveuseofthefundsraisedbyDRCOandbutalsopreventtheriskofdilutingtheimmediatereturnbytheproposedoffering,whichareconducivetosharpeningDRCO'scorecompetitivenessandsustainableprofitability,increasingitsfutureearningsandenhancingthereturn
forshareholders.However,duetotheobjectiveexistenceofinternalandexternalrisksfacedbyDRCO,theimplementationoftheabovemeasuresdoesnotrepresentaguaranteeoffutureprofitsmadebyDRCO.
| forshareholders.However,duetotheobjectiveexistenceofinternalandexternalrisksfacedbyDRCO,theimplementationoftheabovemeasuresdoesnotrepresentaguaranteeoffutureprofitsmadebyDRCO. | ||||||
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | DRInvestment(Zhuhai)Co.,Ltd.,ZhangGuotaoandLuYiwen | Commitmentstorecoveringdilutedimmediatereturns | 1.Thecompany/Ishallnotabusethepositionasacontrollingshareholder/actualcontroller,shallnotinterferewiththeoperationandmanagementactivitiesofDRCObeyondauthority,andshallnotencroachontheinterestsofDRCO.2.Thecompany/IwillactivelyurgeDRCOtoeffectivelyimplementtherelevantmeasurestorecovertheimmediatereturn.3.AftertheCSRCortheSZSEhasissuedseparateopinionsandimplementationrulesonmeasuresandcommitmentstocoverdilutedimmediatereturns,iftherelevantrulesofDRCOandthecommitmentsofthecompany/mearenotinlinewithsuchrules,thecompany/IundertaketopromptlymakeadditionalcommitmentsinaccordancewiththerulesoftheCSRCortheSZSEandactivelyurgeDRCOtomakenewcommitmentstosatisfytherequirementsoftheCSRCortheSZSE;4.Ifthecompany/IbreachtheabovecommitmentsandcauselossestoDRCOorinvestors,thecompany/IwillbeartheresponsibilitytocompensateDRCOorinvestorsinaccordancewithlaws. | December15,2021 | Permanentlyvalid | Performing |
| Commitmentsmadeatthetimeoftheinitialpublic | ZhangGuotao,LuYiwen,Wei | Commitmentstocover | 1.Ineithertransmitbenefitstootherentitiesorindividualswithoutcompensation | December | Permanently | Performing |
offeringorrefinancing
| offeringorrefinancing | Qingxing,HuangShuirong,HuXiaoming,ChenQisheng,LiYang,LiangJun,ZhongMinandLinZhenghai | dilutedimmediatereturns | oronunfairterms,norinanyotherwayharmtheinterestsofDRCO.2.Iexerciserestraintindutyconsumption.3.IshallnotuseDRCO'sassetstoengageininvestmentandconsumptionactivitiesunrelatedtotheperformanceofmyduties.4.IwillactivelypromotetheimprovementofDRCO'sremunerationsystemtomakeitbettercomplywiththerequirementsofcoveringdilutedimmediatereturns;IwillsupporttheBoardofDirectorsorRemunerationCommitteeofDRCOinformulating,amendingandsupplementingDRCO'sremunerationsysteminlinewiththeimplementationofDRCO'smeasurestorecoverthereturns.5.WhenpromotingDRCO'sshareincentivescheme(ifany),IwillactivelypromotethelinkbetweentheexercisetermsoftheshareincentiveandtheimplementationofDRCO'smeasurestorecoverthereturn.6.AftertheCSRCortheSZSEhasissuedseparateopinionsandimplementationrulesonmeasuresandcommitmentstocoverdilutedimmediatereturns,ifmycommitmentsarenotinlinewithsuchrules,IundertaketopromptlymakeadditionalcommitmentsinaccordancewiththerulesoftheCSRCortheSZSEtosatisfytherequirementsoftheCSRCortheSZSE;7.IfIbreachtheabovecommitmentsandcauselossestoDRCOorinvestors,Iwill | 15,2021 | valid |
beartheresponsibilitytocompensateDRCOorinvestorsinaccordancewithlaws.
| beartheresponsibilitytocompensateDRCOorinvestorsinaccordancewithlaws. | ||||||
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | DRCorporationLimited | Commitmentstoundertakingliabilityforcompensationinaccordancewithlaws | 1.TheprospectusforDRCO'sinitialpublicofferingandlistingontheChiNextMarketdoesnotcontainanyfalserecords,misleadingstatementsormaterialomissions,andDRCOshallbejointlyandseverallyliablefortheauthenticity,accuracyandcompletenessoftheinformationthereof.2.Ifaninvestorsufferslossinsecuritiestradingasaresultofafalsestatement,misleadingstatementormaterialomissioninDRCO'sprospectus,DRCOshallcompensatetheinvestorforthelossinaccordancewithlaws;3.Intheeventofabreachoftherelevantcommitments,DRCOwillpromptlydisclosethefactandreasonsforthebreachand,exceptforforcemajeureorotherreasonsbeyondDRCO'scontrol,DRCOwillmakeapublicapologytoitsshareholdersandpublicinvestors.Iflossesarecausedtoinvestors,compensationwillbemadeinaccordancewithlaws.Meanwhile,DRCOwillmaketimelyrectificationinaccordancewiththerequirementsoftheCSRCorthestockexchange. | December15,2021 | Permanentlyvalid | Performing |
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | DRInvestment(Zhuhai)Co.,Ltd.,ZhangGuotaoandLuYiwen | Commitmentstoundertakingliabilityforcompensationinaccordancewithlaws | 1.TheprospectusforDRCO'sinitialpublicofferingandlistingontheChiNextMarketdoesnotcontainanyfalserecords,misleadingstatementsormaterialomissions,andthecompany/Ishallbejointlyandseverallyliablefortheauthenticity,accuracyandcompletenessof | December15,2021 | Permanentlyvalid | Performing |
theinformationthereof.
2.Ifaninvestorsufferslossinsecuritiestradingasaresultofafalsestatement,misleadingstatementormaterialomissioninDRCO'sprospectus,thecompany/Ishallcompensatetheinvestorforthelossinaccordancewithlaws;
3.Incaseofanybreachoftheforesaidcommitments,DRCOwillpromptlydisclosethefactsandreasonsforthebreachand,exceptofforcemajeureorotherreasonsbeyondourcontrol,thecompanywillapologizetoshareholdersandpublicinvestorsofDRCOwhoshallhavetherighttotemporarilywithholdthecashdividends(ifany)towhichthecompanyisentitleduntilsuchtimeasadverseimpactarisingfromthenon-fulfillmentoftherelevantcommitmentshavebeenfullyeliminated.
| theinformationthereof.2.Ifaninvestorsufferslossinsecuritiestradingasaresultofafalsestatement,misleadingstatementormaterialomissioninDRCO'sprospectus,thecompany/Ishallcompensatetheinvestorforthelossinaccordancewithlaws;3.Incaseofanybreachoftheforesaidcommitments,DRCOwillpromptlydisclosethefactsandreasonsforthebreachand,exceptofforcemajeureorotherreasonsbeyondourcontrol,thecompanywillapologizetoshareholdersandpublicinvestorsofDRCOwhoshallhavetherighttotemporarilywithholdthecashdividends(ifany)towhichthecompanyisentitleduntilsuchtimeasadverseimpactarisingfromthenon-fulfillmentoftherelevantcommitmentshavebeenfullyeliminated. | ||||||
| Commitmentsmadeatthetimeoftheinitialpublicofferingorrefinancing | ZhangGuotao,LuYiwen,WeiQingxing,HuangShuirong,HuXiaoming,ChenQisheng,YangLi,LiangJun,ZhongMin,LinZhenghai,ZhaoRanran,YinLuwenandWangTong | Commitmentstoassumeliabilityforcompensationinaccordancewithlaws | 1.TheprospectusforDRCO'sinitialpublicofferingandlistingontheChiNextMarketdoesnotcontainanyfalserecords,misleadingstatementsormaterialomissions,andIshallbejointlyandseverallyliablefortheauthenticity,accuracyandcompletenessoftheinformationthereof.2.Ifaninvestorsufferslossinsecuritiestradingasaresultofafalsestatement,misleadingstatementormaterialomissioninDRCO'sprospectus,Ishallcompensatetheinvestorforthelossinaccordancewithlaws.3.Incaseofanybreachoftherelevantcommitments,DRCOwillpromptly | December15,2021 | Permanentlyvalid | Performing |
announcethefactsandreasonsforthebreachofcommitments,andwillpubliclyapologizetoDRCO'sothershareholdersandpublicinvestorsexceptofforcemajeureorotherreasonsbeyondmycontrol.DRCOshallhavetherighttotemporarilywithholdthecashdividends(ifany)towhichIamentitledandsuspendthepaymentofmyremunerationorallowancesduringmyemploymentwithDRCOuntilsuchtimeasadverseimpactarisingfromthenon-fulfillmentoftherelevantcommitmentshavebeenfullyeliminated.
| announcethefactsandreasonsforthebreachofcommitments,andwillpubliclyapologizetoDRCO'sothershareholdersandpublicinvestorsexceptofforcemajeureorotherreasonsbeyondmycontrol.DRCOshallhavetherighttotemporarilywithholdthecashdividends(ifany)towhichIamentitledandsuspendthepaymentofmyremunerationorallowancesduringmyemploymentwithDRCOuntilsuchtimeasadverseimpactarisingfromthenon-fulfillmentoftherelevantcommitmentshavebeenfullyeliminated. | ||||
| Commitmentstoequityincentive | Notapplicable | |||
| OthercommitmentstominorityshareholdersofDRCO | Notapplicable | |||
| Othercommitments | Notapplicable | |||
| Whetherthecommitmentisfulfilledontime | Yes | |||
| Detailsofspecificreasonsandnextstepsforanyoutstandingdelayedcommitment | Notapplicable | |||
2.IfthereisaprofitforecastforDRCO'sassetsorprojectsandthereportingperiodisstillwithintheprofitforecastperiod,DRCOprovidesanexplanationoftheassetsorprojectsmeetingtheoriginalprofitforecastandthereasonsthereof
□Applicable?NotApplicable
II.WhethertheControllingShareholdersandOtherAssociatesofDRCOHaveMisappropriatedDRCO’sFundsforNon-BusinessPurpose
□Applicable?NotApplicableNocontrollingshareholdersandotherassociatesofDRCOhavemisappropriatedDRCO’sfundsfornon-businesspurpose.III.WhetherExternalGuaranteesAreProvidedinViolationofProvisions
□Applicable?NotApplicableDuringthereportingperiod,DRCOdidn’tprovideexternalguaranteesinviolationofprovisions.
IV.StatementsoftheBoardofDirectorsonLatest"Non-standardAuditReport"
□Applicable?NotApplicableV.StatementsoftheBoardofDirectors,theBoardofSupervisorsandtheIndependentDirectors(ifany)onthe"Non-standardAuditReport"IssuedbytheAccountingFirmfortheReportingPeriod
□Applicable?NotApplicableVI.StatementsoftheBoardofDirectorsonAnyChangeinAccountingPoliciesandAccountingEstimatesorAnyCorrectionofSignificantAccountingErrorsduringReportingPeriod
□Applicable?NotApplicable
VII.StatementsonChangesinScopeofConsolidatedFinancialStatementsComparedwithFinancialReportforthePrecedingYear?Applicable□NotApplicableDuringthereportingperiod,DRCOestablished51newsubsidiariesandonesub-subsidiarycompany,whichwereincludedinthescopeofconsolidationfromthedateofestablishment.Thedetailsareasfollows:
Companyname
| Companyname | Dateofestablishment | Whetherincludedintothescopeofconsolidation |
| XiamenDRJewelry | April25,2022 | Yes |
| ShenyangDRJewelry | April26,2022 | Yes |
| TianjinDRJewelry | April27,2022 | Yes |
| ChengduDRJewelry | May6,2022 | Yes |
| KunmingDRJewelry | May9,2022 | Yes |
| ShanghaiDRJewelry | May11,2022 | Yes |
SuzhouZhongzuanDRJewelry
| SuzhouZhongzuanDRJewelry | May13,2022 | Yes |
| JinanDRJewelry | May13,2022 | Yes |
| ShenzhenDRJewelry | May17,2022 | Yes |
| BeijingZhongzuanDRJewelry | May17,2022 | Yes |
| SuzhouDRJewelry | May18,2022 | Yes |
| ShenyangDRJewelryAccessories | May18,2022 | Yes |
| HangzhouDRJewelry | May24,2022 | Yes |
| BeijingDRJewelry | May24,2022 | Yes |
| WuhanDRJewelry | May25,2022 | Yes |
| WuhanZhongzuanDRJewelry | May25,2022 | Yes |
| Xi'anDRJewelry | May26,2022 | Yes |
| ChengduDRTrueLoveJewelry | May27,2022 | Yes |
| NingboDRJewelry | May27,2022 | Yes |
| BeijingHuazuanDRJewelry | May31,2022 | Yes |
| ChongqingDRJewelry | June7,2022 | Yes |
| HangzhouDRTrueLoveJewelry | June7,2022 | Yes |
| HenanDRJewelry | June14,2022 | Yes |
| Xi'anDRJewelryAccessories | June15,2022 | Yes |
| ZhengzhouDRJewelry | June16,2022 | Yes |
| ShenzhenDRJewelryAccessories | June17,2022 | Yes |
| ShenzhenDRJewelryOrnament | June22,2022 | Yes |
| ChangshaDRJewelry | June24,2022 | Yes |
| ShanghaiDRJewelryAccessories | July1,2022 | Yes |
| ShanghaiDRJewelrySales | July26,2022 | Yes |
| ZhoukouDRJewelry | September29,2022 | Yes |
| YiwuDRJewelry | September29,2022 | Yes |
| HezeDRJewelry | September30,2022 | Yes |
| DongguanDRJewelry | October9,2022 | Yes |
| XiningDRJewelry | October11,2022 | Yes |
| LinyiDRJewelry | October11,2022 | Yes |
| YinchuanDRJewelry | October13,2022 | Yes |
| WeifangDRJewelry | October13,2022 | Yes |
| NanchangDRJewelry | October13,2022 | Yes |
| JiningDRJewelry | October15,2022 | Yes |
MianyangDRJewelry
| MianyangDRJewelry | October17,2022 | Yes |
| FuyangDRJewelry | October19,2022 | Yes |
| ShangqiuDRJewelry | October19,2022 | Yes |
| UrumqiDRJewelry | October26,2022 | Yes |
| HandanDRJewelry | October26,2022 | Yes |
| BaodingDRJewelry | October26,2022 | Yes |
| GuangzhouDRJewelry | October27,2022 | Yes |
| GuiyangDRJewelry | October31,2022 | Yes |
| LangfangDRJewelry | October31,2022 | Yes |
| HaoduoDiamondZhizao(Shenzhen) | November16,2022 | Yes |
| FoshanDRJewelry | November18,2022 | Yes |
| JiaxingDRJewelry | November30,2022 | Yes |
Note:Alloftheabovearesubsidiaries,exceptforHaoduoDiamondZhizao(Shenzhen).
VIII.AppointmentandDismissalofAccountingFirms
Currentlyappointed
| Nameofdomesticaccountingfirm | Ernst&YoungHuaMingLLP(SpecialGeneralPartnership) |
| Remunerationofdomesticaccountingfirm(RMB0'000) | 235 |
| Numberofconsecutiveyearsofauditbydomesticaccountingfirm | 6years |
| Nameofcertifiedpublicaccountantsofdomesticaccountingfirm | LiaoWenjia,ChenHuijin |
| Numberofcontinuousyearsofauditservicesbycertifiedpublicaccountantsofdomesticaccountingfirm | 6years,1year |
Whethertochangetheaccountingfirm
□Yes?NoAppointmentofaccountingfirmforinternalcontrolaudit,financialadviserorsponsor
□Applicable?NotApplicableIX.RiskofDelistingafterDisclosureofAnnualReport
□Applicable?NotApplicableX.MattersRelatingtoBankruptcyandReorganization
□Applicable?NotApplicableNobankruptcyandreorganization-relatedmattersoccurredduringthereportingperiod.
XI.MaterialLitigationsandArbitrations?Applicable□NotApplicable
Basicinformationonlitigation
(arbitration)
| Basicinformationonlitigation(arbitration) | Amountinvolved(RMB0'000) | Whetherestimatedliabilitiesareformed | Progressoflitigation(arbitration) | Rulingresultsandimpacts | Enforcementofjudgment | Dateofdisclosure | Indexforinquiry |
| Therewere60casesthatdon'tmeetthecriteriafordisclosureofmateriallitigation(arbitration)andinwhichDRCOistheplaintiff/claimant,including56claimsbroughtbyDRCOforinfringementofintellectualpropertyrights. | 657.04 | No | Asoftheendofthereportingperiod,29oftheaforementionedcaseshadbeenclosedand31werepending. | Noimpact | Casesclosedattheendofthereportingperiodwereexecutedinaccordancewiththejudgments/rulingsorsettlementandmediationprograms. | Notapplicable | |
| Thereareninecasesthatdon'tmeetthecriteriafordisclosureofmateriallitigation(arbitration)andinwhichDRCOisthedefendant/respondent. | 57.97 | No | Bytheendofthereportingperiod,theninecasesmentionedabovehadbeenclosed. | Noimpact | Casesclosedattheendofthereportingperiodwereexecutedinaccordancewiththejudgments/rulingsorsettlementandmediationprograms. | Notapplicable |
XII.PunishmentandRectification
□Applicable?NotApplicableTherewerenosignificantpunishmentorrectificationsduringthereportingperiod.
XIII.IntegrityofDRCOandItsControllingShareholdersandActualControllers
□Applicable?NotApplicable
XIV.MaterialConnectedTransactions
1.Connectedtransactionsrelatedtodailyoperation
□Applicable?NotApplicable
Therewerenoconnectedtransactionsrelatedtodailyoperationduringthereportingperiod.
2.Connectedtransactionsrelatedtotheacquisitionordisposalofassetsorequityinterests
□Applicable?NotApplicableTherewerenoconnectedtransactionsrelatedtotheacquisitionordisposalofassetsorequityinterestsduringthereportingperiod.
3.Connectedtransactionsrelatingtocommonexternalinvestments
□Applicable?NotApplicableTherewerenoconnectedtransactionsrelatingtocommonexternalinvestmentsduringthereportingperiod.
4.Relatedcreditor’srightanddebttransactions
□Applicable?NotApplicableTherewerenorelatedcreditor’srightanddebttransactionsduringthereportingperiod.
5.Transactionswithfinancialcompanieswithconnectedrelationship
□Applicable?NotApplicableTherewerenodeposits,loans,creditfacilitiesorotherfinancialoperationsbetweenDRCOandconnectedpartiesorfinancialcompanieswithconnectedrelationships.
6.TransactionsbetweenfinancialcompaniescontrolledbyDRCOandconnectedparties
□Applicable?NotApplicableTherewerenodeposits,loans,creditfacilitiesorotherfinancialoperationsbetweenfinancialcompaniescontrolledbyDRCOandconnectedpartiesofDRCO.
7.Othermaterialconnectedtransactions
□Applicable?NotApplicableTherewerenoothermaterialconnectedtransactionsduringthereportingperiod.
XV.ContractsofSignificanceandTheirExecution
1.Trust,contractingandleasingmatters
(1)Trust
□Applicable?NotApplicableTherewasnotrustduringthereportingperiod.
(2)Contracting
□Applicable?NotApplicableTherewasnocontractingduringthereportingperiod.
(3)Leasing?Applicable□NotApplicableDescriptionofleasingmattersTheofflineself-operatedstoresofDRCOareallleasedexternally,andthedepreciationofright-of-useassetsandrentalsnotincludedinthemeasurementofleaseliabilitiesarisingfromtheleasingofsuchstoresduringtheperiodamountedtoRMB379.75million,representing52.08%ofthenetprofitattributabletoshareholdersoftheparentcompanyfortheperiod.Projectswhosegains/lossesattributabletoDRCOaccountformorethan10%ofDRCO'stotalprofitforthereportingperiod
□Applicable?NotApplicableTherewerenoprojectswhosegains/lossesattributabletoDRCOaccountformorethan10%ofDRCO'stotalprofitforthereportingperiod.
2.Materialguarantees?Applicable□NotApplicable
Unit:RMB0'000
ExternalguaranteesprovidedbyDRCOanditssubsidiaries(excludingguaranteesforsubsidiaries)
| ExternalguaranteesprovidedbyDRCOanditssubsidiaries(excludingguaranteesforsubsidiaries) | ||||||||||
| Debtor | Dateofdisclosureofannouncementonguaranteeamount | Guaranteeamount | Actualoccurrencedate | Actualamountofguarantee | Typeofguarantee | Collateral(ifany) | Counter-guarantee(ifany) | Guaranteeperiod | Whetherfulfilled | Whetheritisaguaranteeforarelatedparty |
| DRCO'sguaranteeforsubsidiaries | ||||||||||
| Debtor | Dateofdisclosureofannouncementonguaranteeamount | Guaranteeamount | Actualoccurrencedate | Actualamountofguarantee | Typeofguarantee | Collateral(ifany) | Counter-guarantee(ifany) | Guaranteeperiod | Whetherfulfilled | Whetheraguaranteeforaconnectedparty |
| DRGroupCompanyLimited | 4,950 | 0 | Jointandseveralliability | No | No | 36months | No | No | ||
| HaoduoDiamond(Shenzhen) | April22,2022 | 20,000 | October26,2022 | 10,000 | Jointandseveralliability | No | No | 36months | No | No |
| BeijingDRJewelry | August29,2022 | 700 | 0 | Jointandseveralliability | No | No | No | No | ||
| BeijingHuazuanDRJewelry | August29,2022 | 350 | September1,2022 | 169.96 | Jointandseveralliability | No | No | 7months | No | No |
| BeijingZhongzuanDRJewelry | August29,2022 | 500 | 0 | Jointandseveralliability | No | No | No | No | ||
| ChengduDR | August29,2022 | 1,000 | 0 | Jointand | No | No | No | No | ||
TrueLoveJewelry
| TrueLoveJewelry | severalliability | |||||||||
| ChengduDRJewelry | August29,2022 | 700 | 412.35 | Jointandseveralliability | No | No | 45months | No | No | |
| HangzhouDRTrueLoveJewelry | August29,2022 | 1,000 | 0 | Jointandseveralliability | No | No | No | No | ||
| HangzhouDRJewelry | August29,2022 | 550 | October1,2022 | 162.74 | Jointandseveralliability | No | No | 12months | No | No |
| JinanDRJewelry | August29,2022 | 500 | September1,2022 | 396.49 | Jointandseveralliability | No | No | 31months | No | No |
| KunmingDRJewelry | August29,2022 | 500 | 0 | Jointandseveralliability | No | No | No | No | ||
| NingboDRJewelry | August29,2022 | 1,200 | October29,2022 | 173.36 | Jointandseveralliability | No | No | 44months | No | No |
| ShanghaiDRJewelrySales | August29,2022 | 600 | 0 | Jointandseveralliability | No | No | No | No | ||
| ShanghaiDRJewelryAccessories | August29,2022 | 500 | 0 | Jointandseveralliability | No | No | No | No | ||
| ShanghaiDRJewelry | August29,2022 | 450 | October1,2022 | 237.37 | Jointandseveralliability | No | No | 41months | No | No |
| ShenzhenDRJewelry | August29,2022 | 400 | 0 | Jointandseveral | No | No | No | No |
Ornament
| Ornament | liability | |||||||||
| ShenzhenDRJewelryAccessories | August29,2022 | 400 | 0 | Jointandseveralliability | No | No | No | No | ||
| ShenyangDRJewelryAccessories | August29,2022 | 450 | September1,2022 | 196.68 | Jointandseveralliability | No | No | 21months | No | No |
| ShenyangDRJewelry | August29,2022 | 400 | 0 | Jointandseveralliability | No | No | No | No | ||
| SuzhouDRJewelry | August29,2022 | 450 | 0 | Jointandseveralliability | No | No | No | No | ||
| SuzhouZhongzuanDRJewelry | August29,2022 | 550 | 404.87 | Jointandseveralliability | No | No | 51months | No | No | |
| TianjinDRJewelry | August29,2022 | 750 | December1,2022 | 319.64 | Jointandseveralliability | No | No | 17months | No | No |
| WuhanDRJewelry | August29,2022 | 250 | 0 | Jointandseveralliability | No | No | No | No | ||
| WuhanZhongzuanDRJewelry | August29,2022 | 100 | 0 | Jointandseveralliability | No | No | No | No | ||
| Xi'anDRJewelryAccessories | August29,2022 | 450 | October1,2022 | 161.14 | Jointandseveralliability | No | No | 35months | No | No |
| Xi'anDRJewelry | August29,2022 | 100 | 0 | Jointandseveralliability | No | No | No | No |
ChangshaDRJewelry
| ChangshaDRJewelry | August29,2022 | 900 | September1,2022 | 894.06 | Jointandseveralliability | No | No | 45months | No | No |
| ChangshaDRJewelry | August29,2022 | 100 | December1,2022 | 85.25 | Jointandseveralliability | No | No | 31months | No | No |
| HenanDRJewelry | August29,2022 | 300 | 0 | Jointandseveralliability | No | No | No | No | ||
| ZhengzhouDRJewelry | August29,2022 | 350 | 0 | Jointandseveralliability | No | No | No | No | ||
| ChongqingDRJewelry | August29,2022 | 500 | September1,2022 | 431.92 | Jointandseveralliability | No | No | 21months | No | No |
| ShenzhenDRJewelry | October28,2022 | 200 | 64.64 | Jointandseveralliability | No | No | 7months | No | No | |
| ChongqingDarryJewelry | October28,2022 | 530 | 476.66 | Jointandseveralliability | No | No | 40months | No | No | |
| YiwuDRJewelry | October28,2022 | 250 | 0 | Jointandseveralliability | No | No | No | No | ||
| ZhoukouDRJewelry | October28,2022 | 50 | 0 | Jointandseveralliability | No | No | No | No | ||
| XiningDRJewelry | October28,2022 | 100 | 0 | Jointandseveralliability | No | No | No | No | ||
| HezeDR | October28,2022 | 100 | 0 | Jointandseveral | No | No | No | No |
Jewelry
| Jewelry | liability | |||||||||
| DongguanDRJewelry | October28,2022 | 200 | 0 | Jointandseveralliability | No | No | No | No | ||
| NanchangDRJewelry | October28,2022 | 180 | 0 | Jointandseveralliability | No | No | No | No | ||
| YinchuanDRJewelry | October28,2022 | 160 | 0 | Jointandseveralliability | No | No | No | No | ||
| WeifangDRJewelry | October28,2022 | 300 | 0 | Jointandseveralliability | No | No | No | No | ||
| MianyangDRJewelry | October28,2022 | 140 | 0 | Jointandseveralliability | No | No | No | No | ||
| ShenzhenDRJewelryOrnament | October28,2022 | 140 | 0 | Jointandseveralliability | No | No | No | No | ||
| ShenyangDRJewelry | October28,2022 | 150 | 0 | Jointandseveralliability | No | No | No | No | ||
| JiningDRJewelry | October28,2022 | 50 | 0 | Jointandseveralliability | No | No | No | No | ||
| LinyiDRJewelry | October28,2022 | 230 | 0 | Jointandseveralliability | No | No | No | No | ||
| FuyangDRJewelry | October28,2022 | 120 | 0 | Jointandseveralliability | No | No | No | No |
ShangqiuDRJewelry
| ShangqiuDRJewelry | October28,2022 | 100 | 0 | Jointandseveralliability | No | No | No | No | ||
| GuangzhouDRJewelry | December31,2022 | 1,180 | 0 | Jointandseveralliability | No | No | No | No | ||
| HandanDRJewelry | December31,2022 | 120 | 0 | Jointandseveralliability | No | No | No | No | ||
| LangfangDRJewelry | December31,2022 | 150 | 0 | Jointandseveralliability | No | No | No | No | ||
| UrumqiDRJewelry | December31,2022 | 100 | 0 | Jointandseveralliability | No | No | No | No | ||
| BaodingDRJewelrySales | December31,2022 | 88 | 0 | Jointandseveralliability | No | No | No | No | ||
| GuiyangDRJewelry | December31,2022 | 162 | 0 | Jointandseveralliability | No | No | No | No | ||
| FoshanDRJewelry | December31,2022 | 100 | 0 | Jointandseveralliability | No | No | No | No | ||
| JiaxingDRJewelry | December31,2022 | 100 | 0 | Jointandseveralliability | No | No | No | No | ||
| Totalguaranteeamountapprovedforsubsidiariesduringthereportingperiod(B1) | 40,000 | Totalactualguaranteeamountforsubsidiariesduringthereportingperiod(B2) | 14,587.13 | |||||||
| Totalguaranteeamountapprovedforsubsidiariesasattheendofthereportingperiod | 44,950 | Balanceoftotalactualguaranteeamountforsubsidiariesasattheendofthereportingperiod | 14,587.13 | |||||||
(B3)
| (B3) | (B4) | |||||||||
| Guaranteesbysubsidiariesforsubsidiaries | ||||||||||
| Debtor | Dateofdisclosureofannouncementonguaranteeamount | Guaranteeamount | Actualoccurrencedate | Actualamountofguarantee | Typeofguarantee | Collateral(ifany) | Counter-guarantee(ifany) | Guaranteeperiod | Whetherfulfilled | Whetheraguaranteeforaconnectedparty |
| TotalguaranteeamountofDRCO(i.e.,thesumofthefirstthreeitems) | ||||||||||
| Totalamountofapprovedguaranteeduringthereportingperiod(A1+B1+C1) | 40,000 | Totalactualguaranteeamountincurredduringthereportingperiod(A2+B2+C2) | 14,587.13 | |||||||
| Totalguaranteeamountapprovedasattheendofthereportingperiod(A3+B3+C3) | 44,950 | Balanceoftotalactualguaranteeamountasattheendofthereportingperiod(A4+B4+C4) | 14,587.13 | |||||||
| Totalactualguaranteeamount(i.e.,A4+B4+C4)asapercentageofDRCO'snetassets | 2.14% | |||||||||
| Amongthem: | ||||||||||
Descriptionoftheuseofcompositeguarantee
3.Entrustedcashandassetsundermanagement
(1)Entrustedwealthmanagement?Applicable□NotApplicableOverviewofentrustedwealthmanagementduringthereportingperiod
Unit:RMB0'000
| Specifictype | Sourceoffundsforentrustedwealthmanagement. | Entrustedwealthmanagementamount | Outstandingbalance | Amountoverdueandnotrecovered | Provisionforimpairmentofwealthmanagementamountoverdueandnotrecovered |
| Wealthmanagementproductsofbanks | Fundsraised | 349,100 | 289,500 | 0 | 0 |
Wealthmanagementproductsofbanks
| Wealthmanagementproductsofbanks | Proprietaryfunds | 301,117.95 | 301,117.95 | 0 | 0 |
| Wealthmanagementproductsofsecuritiesbrokers | Proprietaryfunds | 50,100 | 50,100 | 0 | 0 |
| Total | 700,317.95 | 640,717.95 | 0 | 0 | |
Detailsofhigh-riskentrustedwealthmanagementproductsfeaturinglargeamount,lowsafetyandilliquidity
□Applicable?NotApplicableEntrustedwealthmanagementnotexpectedtorecovertheprincipal,orothercircumstancesthatmayleadtoimpairment
□Applicable?NotApplicable
(2)Entrustedloans
□Applicable?NotApplicableTherewerenoentrustedloansduringthereportingperiod.
4.Othercontractsofsignificance
□Applicable?NotApplicableTherewerenoothercontractsofsignificanceduringthereportingperiod.
XVI.OtherImportantMatters
□Applicable?NotApplicableTherewerenoothersignificantmattersthatneedtobeexplainedduringthereportingperiod.
XVII.SignificantMattersofDRCO'sSubsidiaries
□Applicable?NotApplicable
PartVII.ChangesinSharesandInformationofShareholdersI.ChangesinShares
1.Changesinshares
Unit:Shares
Beforethischange
| Beforethischange | Increaseordecreasefromthechange(+,-) | Afterthischange | |||||||
| Quantity | Percentage | Issueofnewshares | Bonusshare | Conversionofreserves | Other | Subtotal | Quantity | Percentage | |
| 1.Sharessubjecttosellingrestrictions | 365,824,503 | 91.45% | -5,824,503 | -5,824,503 | 360,000,000 | 90.00% | |||
| 1.Sharesheldbythestate | |||||||||
| 2.Sharesheldbystate-ownedlegalpersons | 2,574,603 | 0.64% | -2,574,603 | -2,574,603 | 0 | 0.00% | |||
| 3.Sharesheldbyotherdomesticentities | 363,239,838 | 90.81% | -3,239,838 | -3,239,838 | 360,000,000 | 90.00% | |||
| Including:sharesheldbydomesticlegalpersons | 363,236,573 | 90.81% | -3,236,573 | -3,236,573 | 360,000,000 | 90.00% | |||
| Sharesheldbydomesticnaturalpersons | 3,265 | 0.00% | -3,265 | -3,265 | 0 | 0.00% | |||
| 4.Sharesheldbyforeigninvestors | 10,062 | 0.00% | -10,062 | -10,062 | 0 | 0.00% | |||
| Including:Sharesheldbyoverseaslegalpersons | 10,062 | 0.00% | -10,062 | -10,062 | 0 | 0.00% | |||
| Sharesheldbyoverseasnaturalpersons | |||||||||
| 2.Sharesnotsubjectto | 34,185,497 | 8.55% | 5,824,503 | 5,824,503 | 40,010,000 | 10.00% | |||
sellingrestrictions
| sellingrestrictions | |||||||
| 1.RMB-denominatedordinaryshares | 34,185,497 | 8.55% | 5,824,503 | 5,824,503 | 40,010,000 | 10.00% | |
| 2.Foreignshareslisteddomestically | |||||||
| 3.Foreignshareslistedoverseas | |||||||
| 4.Other | |||||||
| III.Totalshares | 400,010,000 | 100.00% | 0 | 0 | 400,010,000 | 100.00% |
Reasonsforchangesinshares?Applicable□NotApplicable
(1)Duringtheinitialpublicoffering,DRCOplaced2,278,816restrictedsharestoofflineinvestors,whichaccountedfor0.5697%ofDRCO’stotalsharecapitalandweresubjecttoa6-monthlock-upperiod.TheserestrictedshareswerealreadyreleasedonJune15,2022.Fordetails,pleaserefertothe"SuggestiveAnnouncementontheReleaseofRestrictedSharesPlacedtoOfflineInvestorsduringInitialPublicOffering"(AnnouncementNo.2022-032)publishedbyDRCOonJune13,2022onwww.cninfo.com.cn.
(2)Duringtheinitialpublicoffering,DRCOplaced3,545,687restrictedsharestostrategicinvestors,whichaccountedfor0.8864%ofDRCO’stotalsharecapitalandweresubjecttoa12-monthlock-upperiod.TheserestrictedshareswerealreadyreleasedonDecember15,2022.Fordetails,pleaserefertothe"SuggestiveAnnouncementontheReleaseofRestrictedSharesPlacedtoStrategicInvestorsduringInitialPublicOffering"(AnnouncementNo.2022-067)publishedbyDRCOonDecember13,2022onwww.cninfo.com.cn.Approvalofchangesinshares
□Applicable?NotApplicableTransferofchangesinshares
□Applicable?NotApplicableImpactofchangesinsharesonfinancialindicatorssuchasbasicanddilutedearningspershareandnetassetvaluepershareattributabletoDRCO'sholdersofordinarysharesforthemostrecentyearandthemostrecentperiod
□Applicable?NotApplicableOtherdisclosuredeemednecessarybyDRCOorrequiredbysecuritiesregulatoryauthorities
□Applicable?NotApplicable
2.Changesinrestrictedshares?Applicable□NotApplicable
Unit:shares
Nameofshareholder
| Nameofshareholder | Numberofrestrictedsharesatthebeginningoftheperiod | Increaseinthenumberofrestrictedsharesduringtheperiod | Numberofrestrictedsharesreleasedduringtheperiod | Numberofrestrictedsharesatendofperiod | Reasonforsellingrestriction | Dateofrelease |
| DRInvestment(Zhuhai)Co.,Ltd. | 342,000,000 | 342,000,000 | Pre-IPOshares | June16,2025 | ||
| GongqingchengWendiNo.1InvestmentManagementPartnership(LP) | 7,200,000 | 7,200,000 | Pre-IPOshares | June16,2025 | ||
| GongqingchengWendiNo.2InvestmentManagementPartnership(LP) | 7,200,000 | 7,200,000 | Pre-IPOshares | June16,2025 | ||
| GongqingchengWendiNo.3InvestmentManagementPartnership(LP) | 3,600,000 | 3,600,000 | Pre-IPOshares | June16,2025 | ||
| ChinaSecurities-CMB-ChinaSecuritiesDRNo.1StrategicPlacementCollectiveAssetManagementPlan | 978,952 | 978,952 | 0 | Restrictedsharesforstrategicinvestors | December15,2022 | |
| ZhuhaiRunxinZhirongNo.1InvestmentPartnership(LP) | 2,566,735 | 2,566,735 | 0 | Restrictedsharesforstrategicinvestors | December15,2022 | |
| Restrictedsharesplacedtoofflineinvestorsduringinitialpublicoffering | 2,278,816 | 2,278,816 | 0 | Restrictedsharesplacedtoofflineinvestorsduringinitialpublicoffering | June15,2022 |
Total
| Total | 365,824,503 | 0 | 5,824,503 | 360,000,000 | -- | -- |
II.IssuanceandListingofSecurities
1.Issuanceofsecurities(excludingpreferredshares)duringthereportingperiod
□Applicable?NotApplicable
2.ChangesinthetotalnumberofsharesandshareholderstructureofDRCO,andchangesintheassetandliabilitystructureofDRCO
□Applicable?NotApplicable
3.Existinginternalemployeeshares
□Applicable?NotApplicable
III.ShareholdersandActualControllers
1.Numberofshareholdersandtheirshareholdings
Unit:shares
| Totalnumberofholdersofordinarysharesasoftheendofthereportingperiod | 13,735 | Totalnumberofholdersofordinarysharesasoftheendofthepreviousmonthprecedingthedateofpublicationoftheannualreport | 13,785 | Totalnumberofholdersofpreferredshares(ifany)whosevotingrightswererestoredattheendofthereportingperiod(seeNote9) | 0 | Totalnumberofholdersofpreferredshares(ifany)whosevotingrightswererestoredattheendofthepreviousmonthprecedingthedateof | 0 | Totalnumberofshareholdersholdingspecialvotingshares(ifany) | 0 |
publicationoftheannualreport(seeNote9)
| publicationoftheannualreport(seeNote9) | ||||||||
| Shareholdingsofshareholdersholding5%ormoreorofthetop10shareholders | ||||||||
| Nameofshareholder | Natureofshareholder | Shareholdingratio | Numberofsharesheldattheendofthereportingperiod | Increase/decreaseduringthereportingperiod | Numberofsharesheldsubjecttosellingrestrictions | Numberofsharesheldnotsubjecttosellingrestrictions | Pledged,markedorfrozen | |
| Sharestatus | Quantity | |||||||
| DRInvestment(Zhuhai)Co.,Ltd. | Domesticnon-state-ownedlegalperson | 85.50% | 342,000,000 | 0 | 342,000,000 | 0 | ||
| GongqingchengWendiNo.1InvestmentManagementPartnership(LP) | Domesticnon-state-ownedlegalperson | 1.80% | 7,200,000 | 0 | 7,200,000 | 0 | ||
| GongqingchengWendiNo.2InvestmentManagementPartnership(LP) | Domesticnon-state-ownedlegalperson | 1.80% | 7,200,000 | 0 | 7,200,000 | 0 | ||
| GongqingchengWendiNo.3InvestmentManagementPartnership(LP) | Domesticnon-state-ownedlegalperson | 0.90% | 3,600,000 | 0 | 3,600,000 | 0 | ||
| ZhuhaiRunxinZhirongNo.1 | State-ownedlegal | 0.60% | 2,401,735 | -165,000 | 0 | 2,401,735 | ||
InvestmentPartnership(LP)
| InvestmentPartnership(LP) | person | |||||
| BankofChina-GuotaiJiangyuanSelectedFlexibleConfigurationHybridSecuritiesInvestmentFund | Other | 0.24% | 957,546 | 956,754 | 0 | 957,546 |
| ChinaSecurities-CMB-ChinaSecuritiesDRNo.1StrategicPlacementCollectiveAssetManagementPlan | Other | 0.20% | 806,452 | -172,500 | 0 | 806,452 |
| ChinaConstructionBank-HuabaoEco-ChinaHybridSecuritiesInvestmentFund | Other | 0.17% | 688,567 | 642,253 | 0 | 688,567 |
| ChinaAMC-SocialSecurityFund422Portfolio | Other | 0.13% | 527,032 | 527,032 | 0 | 527,032 |
| CentennialLifeInsuranceCo.,Ltd.-Traditional | Other | 0.11% | 450,927 | 450,927 | 0 | 450,927 |
InsuranceProducts
| InsuranceProducts | |||||
| AnyStrategicinvestororgenerallegalpersonbecomesoneoftop10shareholderasaresultoftheplacementofnewshares(ifany)(seeNote4) | ZhuhaiRunxinZhirongNo.1InvestmentPartnership(LP)hasbecomeoneofDRCO’stop10shareholdersasDRCOplaced2,566,735sharesthatwerelockedupfromDecember15,2021toDecember14,2022.TheseshareswerereleasedandtradedonthemarketfromDecember15,2022.ChinaSecurities-CMB-ChinaSecuritiesDRNo.1StrategicPlacementCollectiveAssetManagementPlanisaspecialassetmanagementplanthroughwhichDRCO’sseniormanagementandcoreemployeestookpartinthestrategicallotmentofDRCO’sinitialpublicoffering.Asaresult,thisassetmanagementplanbecameoneofDRCO’stop10shareholdersafterDRCOplaced978,952sharesthatwerelockedupfromDecember15,2021toDecember14,2022.TheseshareswerereleasedandtradedonthemarketfromDecember15,2022. | ||||
| Relationshiporactinginconcertamongtheaforesaidshareholders | ZhangGuotaoandLuYiwen,theactualcontrollersofDRCO,holda100%stakeinDRInvestment(Zhuhai).DRInvestment(Zhuhai),GongqingchengWendiNo.1InvestmentManagementPartnership(LP),GongqingchengWendiNo.2InvestmentManagementPartnership(LP)andGongqingchengWendiNo.3InvestmentManagementPartnership(LP)arealltheenterprisescontrolledbyZhangGuotao,DRCO’sactualcontroller.Otherthanthat,DRCOisnotawareofanyconnectedrelationshipamongtheaforesaidshareholders,norisDRCOawareofanypartiesactinginconcert. | ||||
| Whethertheabove-mentionedshareholdersexercisevotingrightsviaaproxyorasaproxy,orwaivetheirvotingrights | Notapplicable. | ||||
| Whethertop10shareholdershavespecialaccountsforsharerepurchase(ifany)(seeNote10) | Notapplicable. | ||||
| Shareholdingsofthetop10shareholdersofunrestrictedshares | |||||
| Nameofshareholder | Numberofunrestrictedsharesheldattheendofthereportingperiod | Typeofshares | |||
| Typeofshares | Quantity | ||||
| ZhuhaiRunxinZhirongNo.1InvestmentPartnership(LP) | 2,401,735 | RMB-denominatedordinaryshares | 2,401,735 | ||
| BankofChina-GuotaiJiangyuanSelectedFlexibleConfigurationHybrid | 957,546 | RMB-denominated | 957,546 | ||
SecuritiesInvestmentFund
| SecuritiesInvestmentFund | ordinaryshares | ||
| ThesharesallottedtoChinaSecurities-CMB-ChinaSecuritiesDRNo.1StrategicPlacementCollectiveAssetManagementPlan | 806,452 | RMB-denominatedordinaryshares | 806,452 |
| ChinaConstructionBank-HuabaoEco-ChinaHybridSecuritiesInvestmentFund | 688,567 | RMB-denominatedordinaryshares | 688,567 |
| ChinaAMC-SocialSecurityFund422Portfolio | 527,032 | RMB-denominatedordinaryshares | 527,032 |
| CentennialLifeInsuranceCo.,Ltd.-TraditionalInsuranceProducts | 450,927 | RMB-denominatedordinaryshares | 450,927 |
| BankofChina-GuotaiZhiyuanAdvantageHybridSecuritiesInvestmentFund | 428,303 | RMB-denominatedordinaryshares | 428,303 |
| ChinaConstructionBank-HuabaoEvent-drivenHybridSecuritiesInvestmentFund | 401,557 | RMB-denominatedordinaryshares | 401,557 |
| ChinaMerchantsXinnuoLifeInsurance-Traditional | 400,509 | RMB-denominatedordinaryshares | 400,509 |
| BankofCommunications-ZhonghaiQualityGrowthSecuritiesInvestmentFund | 398,544 | RMB-denominatedordinaryshares | 398,544 |
| Relationshiporactinginconcertamongthetop10shareholdersofunrestrictedtradableshares,andbetweenthetop10shareholdersofunrestrictedtradablesharesandthetop10shareholders | DRCOisnotawareofanyconnectedrelationshipamongtheaforesaidtop10shareholdersofunrestrictedshares,orbetweenthetop10shareholdersofunrestrictedsharesandthetop10shareholders,norisDRCOawareofanypartiesactinginconcert. | ||
| Descriptionofshareholdersinvolvedinmarginfinancingandsecuritieslending(ifany)(seeNote5) | No. | ||
DoesDRCOhaveweightedvotingrightarrangement
□Applicable?NotApplicableWhetherDRCO'stop10holdersofordinarysharesandtop10holdersofunrestrictedordinarysharesengagedinanyrepurchaseagreement-basedtransactionduringthereportingperiod.
□Yes?No
DRCO'stop10holdersofordinarysharesandtop10holdersofunrestrictedordinarysharesdidnotengageinanyrepurchaseagreement-basedtransactionduringthereportingperiod.
2.ControllingshareholdersofDRCONatureofcontrollingshareholder:naturalpersonTypeofcontrollingshareholder:legalperson
Nameofcontrollingshareholder
| Nameofcontrollingshareholder | Legalrepresentative/personinchargeoftheentity | Dateofestablishment | Organizationcode | Mainbusiness |
| DRInvestment(Zhuhai)Co.,Ltd. | ZhangGuotao | November24,2015 | 914403003587652274 | Generalitems:investmentactivitieswithownfunds;businessmanagementconsulting;informationconsultingservices(excludinglicensinginformationconsultingservices);marketingplanning;corporateimageplanning;non-residentialrealestateleasing. |
| Shareholdingsofotherdomesticandforeignlistedcompaniescontrolledandparticipatedinbythecontrollingshareholdersduringthereportingperiod | Notapplicable. | |||
Changesinthecontrollingshareholderduringthereportingperiod
□Applicable?NotApplicableTherewasnochangeinthecontrollingshareholderofDRCOduringthereportingperiod.
3.DRCO'sactualcontrolleranditspartiesactinginconcertNatureofactualcontroller:domesticnaturalpersonTypeofactualcontroller:naturalperson
Nameofactual
controller
| Nameofactualcontroller | Relationshipwithactualcontroller | Nationality | Whetherpossesstherightofabodeinothercountriesorregions |
| ZhangGuotao | Himself | China | No |
| LuYiwen | Herself | China | No |
| Mainoccupationandposition | ZhangGuotaoiscurrentlytheChairmanandGeneralManager(President)ofDRCO,andLuYiweniscurrentlytheDirectorandDeputyGeneralManager(VicePresident)ofDRCO. | ||
| Domesticandforeignlistedcompaniesheldduringthepast10years | Notapplicable. | ||
Changeinactualcontrollersduringthereportingperiod
□Applicable?NotApplicableTherewasnochangeintheactualcontrollerofDRCOduringthereportingperiod.OwnershipandcontrollingrelationshipbetweenDRCOandcontrollingshareholder
| 张国涛 | ZhangGuotao |
| 卢依雯 | LuYiwen |
| 深圳前海温迪管理咨询有限公司 | ShenzhenQianhaiWendiManagementConsultingCo.,Ltd. |
| 迪阿投资(珠海)有限公司 | DRInvestment(Zhuhai)Co.,Ltd. |
| 共青城温迪壹号投资管理合伙企业(有限合伙) | GongqingchengWendiNo.1InvestmentManagementPartnership(LP) |
| 共青城温迪贰号投资管理合伙企业(有限合伙) | GongqingchengWendiNo.2InvestmentManagementPartnership(LP) |
共青城温迪叄号投资管理合伙企业(有限合伙)
| 共青城温迪叄号投资管理合伙企业(有限合伙) | GongqingchengWendiNo.3InvestmentManagementPartnership(LP) |
| 迪阿股份有限公司 | DRCorporationLimited |
| 注：上图为截止2022年12月31日的控制关系图 | Note:ThecontrollingrelationshipasofDecember31,2022 |
TheactualcontrollercontrolsDRCOthroughtrustorotherassetmanagementmeans
□Applicable?NotApplicable
4.ThecumulativesharespledgedbythecontrollingshareholderorthelargestshareholderofDRCOanditspartiesactinginconcertaccountsfor80%oftheshareholdingstheyholdinDRCO
□Applicable?NotApplicable
5.Otherlegal-personshareholdersholdingmorethan10%ofDRCO’sshares
□Applicable?NotApplicable
6.Reductionofrestrictedsharesbycontrollingshareholders,actualcontrollers,restructuringpartiesandothercommitmententities
□Applicable?NotApplicableIV.ImplementationofShareRepurchaseduringReportingPeriodProgressofthesharerepurchases
□Applicable?NotApplicableProgressofthereductionofsharerepurchasedsharesbymeansofcallauctiontrading
□Applicable?NotApplicable
PartVIII.InformationaboutPreferredShares
□Applicable?NotApplicableTherearenopreferredsharesduringthereportingperiod.
PartIX.InformationaboutBonds
□Applicable?NotApplicable
PartX.FinancialStatement
I.Auditor’sreport
Auditor’sopinion
| Auditor’sopinion | Unqualifiedopinion |
| Dateofsigning | April26,2023 |
| Auditor | Ernst&YoungHuaMingLLP |
| Reportdocumentnumber | Ernst&YoungHuaMing(2023)ShenZiNo.61403707_H01 |
| ChineseCertifiedPublicAccountant | LiaoWenjiaChenHuijin |
TotheboardofdirectorsofDRCorporationLimited(I)Opinion
WehaveauditedthefinancialstatementsofDRCorporationLimited(the“Company”),whichcomprisetheconsolidatedandcompanybalancesheetsasat31December2022,andtheconsolidatedandcompanyincomestatements,theconsolidatedandcompanystatementsofchangesinequityandtheconsolidatedandcompanystatementsofcashflowsfortheyearthenended,andnotestothefinancialstatements.Inouropinion,theaccompanyingfinancialstatementspresentfairly,inallmaterialrespects,theconsolidatedandtheCompany’sfinancialpositionasat31December2022,andtheconsolidatedandtheCompany’sfinancialperformanceandcashflowsfortheyearthenendedinaccordancewithAccountingStandardsforBusinessEnterprises(“ASBEs”).(II)Basisforopinion
WeconductedourauditinaccordancewithChinaStandardsonAuditing(“CSAs”).OurresponsibilitiesunderthosestandardsarefurtherdescribedintheAuditor’sresponsibilitiesfortheauditofthefinancialstatementssectionofourreport.WeareindependentoftheCompanyinaccordancewithChinaCodeofEthicsforCertifiedPublicAccountants(the“Code”),andwehavefulfilledourotherethicalresponsibilitiesinaccordancewiththeCode.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.(III)KeyAuditMatters
Keyauditmattersarethosemattersthat,inourprofessionaljudgment,wereofmostsignificanceinourauditofthefinancialstatementsofthecurrentperiod.Thesematterswereaddressedinthecontextofourauditofthefinancialstatementsasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.Foreachmatterbelow,ourdescriptionofhowourauditaddressedthematterisprovidedinthatcontext.
(III)KeyAuditMatters(continued)
Wehavefulfilledtheresponsibilitiesdescribedinthe“Auditor’sresponsibilitiesfortheauditofthefinancialstatements”sectionofourreport,includinginrelationtothesematters.Accordingly,ourauditincludedtheperformanceofproceduresdesignedtorespondtoourassessmentoftherisksofmaterialmisstatementofthefinancialstatements.Theresultsofourauditprocedures,includingtheproceduresperformedtoaddressthemattersbelow,providethebasisforourauditopinionontheaccompanyingfinancialstatements.
KeyAuditMatters:
| KeyAuditMatters: | Howourauditaddressedthematter: |
| Revenuerecognition | |
| Fortheyearended31December2022,theconsolidatedrevenueofDRCorporationLimitedanditssubsidiaries(hereinaftercollectivelyreferredtoasthe"Group")wasRMB36.82billion.TheGroup'scurrentbusinessmodelmainlyincludes:retaildirectlytotheendconsumersthroughofflinedirect-operatedstores,e-commerceplatformsandofflinejoint-operatedstores.AndtheGrouprecognisedrevenuewhentheendcustomersreceivedgoods.Thetotalamountofrevenueismaterialtothewholefinancialstatementsandthereisahudgevolumeofrevenuetransactions.Andthereisaninherentriskthatmanagementmaymanipulaterevenuetoachievespecificpurpose.Therefore,revenuerecognitionisidentifiedasakeyauditmatter.FurtherdisclosurereferstoNoteV.27RevenuefromcontractswithcustomersandNotesVII.32Revenue. | Ourproceduresinrelationtorevenuerecognitionmainlyincluded:1)Obtaininganunderstandingoftheaccountingpoliciesofrevenuerecognitionandreviewingmainsalescontracttermstoassesstheappropriatenessofrevenuerecognitionpolicies;2)Obtaininganunderstandingofthetransactionprocessofrevenuerecognitionandtestingtherelevantcontrolsrelatingtotheprocessforrevenuerecognition;3)Performingtestsofdetailsandinspectingcustomers’orders,ordersfromcustomers,receiptrecords,expressdeliveryrecords,bankslipsandinvoices,etc.;4)Performingconfirmationproceduresforaccountreceivables;5)Obtaininganunderstandingofthesettlementmethodbetweenthecompanyandcustomers,inspectingthecorrespondencebetweencashreceiptsandreceivablesorcontractliabilities,andverifyingthebankstatements;6)Performingrevenuecut-offproceduresandinspectingtheoutboundbillandexpressdeliveryrecordswiththevouchers,andcheckwhetheritbelongstothesameaccountingperiod;7)Performingtheanalyticalreviewprocedures,includinganalysisofmonthlyrevenuetrendandanalysisofrevenuetrendsfordifferenttypesofproducts.,etc. |
(III)KeyAuditMatters(continued)
KeyAuditMatters:
| KeyAuditMatters: | Howourauditaddressedthematter: |
| Existenceofinventoryandvaluationofnetrealizablevalue | |
| Asat31December2022,thecarryingamountoftheGroup'sinventorywasRMB676million(netofallowanceforinventoriesofRMB6.53million).Atthebalancesheetdate,inventoriesarestatedatthelowerofcostandnetrealisablevalue.Theinventoriesarewrittendownbelowcosttonetrealisablevalueandthewrite-downisrecognisedinprofitorlossifthecostishigherthanthenetrealisablevalue.Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusinesslesstheestimatedcostsofcompletion,theestimatedcostsnecessarytomakethesaleandrelevanttaxes,whichinvolvessignificantmanagementestimation.Furthermore,theunitpriceofinventoryishighandthereisahigherinherentriskofeasytheftanddifficulttodistinguishauthenticity.Therefore,theexistenceofinventoryandvaluationofnetrealizablevalueisregardedasakeyauditmatter.FurtherdisclosurereferstoNoteV.12Inventories,V.31SignificantAccountingJudgmentsandEstimatesandNotesVII.6Inventories. | Ourproceduresinrelationtoexistenceofinventoryandvaluationofnetrealizablevaluemainlyincluded:1)Obtaininganunderstandingoftheprocessesofinventoryprocurement,stocktakeandinventoryprovisionandtestingtherelevantcontrolsrelatingtotheprocesses;2)Attendingtheannualphysicalinventorycount,inspectingtheCompany'sphysicalinventorycountplanandobservingwhethertheplanwasimplementedproperly;3)Performingstocktakingprocedureonasamplebasis,checkingthequantityandweightoftheinventories,inspectingthecertificatesoftheinventorisandverifyingthecertificatenumberonthewebsiteoftheappraisaldepartment;4)Comparingtheestimatedsellingpriceusedinthenetrealizablevaluewiththerecentpriceinthemarket,comparingestimatedsellingexpensesandrelatedtaxeswiththeactualsellingexpensesandtaxexpensestoassesstheappropriateness;5)Retrospectivelycomparingprovisionforwritten-downofinventoriesinprioryearanditsmovementsincurrentyear,andobtainingthelistofdefectiveandobsoleteproductstoevaluatethereasonablenessoftheprovision. |
(IV)OtherInformation
ThemanagementoftheCompanyisresponsibleforotherInformation.TheotherinformationcomprisestheinformationincludedintheAnnualReport,otherthantheconsolidatedfinancialstatementsandourauditor'sreportthereon.Ouropinionontheconsolidatedfinancialstatementsdoesnotcovertheotherinformationandwedonotexpressanyformofassuranceconclusionthereon.Inconnectionwithourauditofthefinancialstatements,ourresponsibilityistoreadtheotherinformationand,indoingso,considerwhetherotherinformationismateriallyinconsistentwiththeconsolidatedfinancialstatementsorourknowledgeobtainedintheauditorotherwiseappearstobemateriallymisstated.If,basedontheworkwehaveperformed,weconcludethatthereisamaterialmisstatementofthisotherinformation,wearerequiredtoreportthefact.Wehavenothingtoreportinthisregard.(V)Responsibilitiesofthemanagementandthosechargedwithgovernanceforthe
financialstatementsThemanagementoftheCompanyisresponsibleforthepreparationandfairpresentationofthefinancialstatementsinaccordancewithASBEs,andfordesigning,implementingandmaintainingsuchinternalcontrolasthemanagementdeterminesisnecessarytoenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.Inpreparingthefinancialstatements,themanagementisresponsibleforassessingtheCompany’sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisofaccounting,unlessthemanagementeitherintendstoliquidatetheCompanyortoceaseoperationsorhasnorealisticalternativebuttodoso.ThosechargedwithgovernanceareresponsibleforoverseeingtheCompany’sfinancialreportingprocess.(VI)Auditor’sresponsibilitiesfortheauditofthefinancialstatements
Ourobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsasawholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditor’sreportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewithCSAswillalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandaregenerallyconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstatements.
(VI)Auditor’sresponsibilitiesfortheauditofthefinancialstatements(continued)
AspartofanauditinaccordancewithCSAs,weexerciseprofessionaljudgementandmaintainprofessionalscepticismthroughouttheaudit.Wealso:
（1）Identifyandassesstherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror,designandperformauditproceduresresponsivetothoserisks,andobtainauditevidencethatissufficientandappropriatetoprovideabasisforouropinion.Theriskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol.
（
）Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessofinternalcontrol.
（3）Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesandrelateddisclosuresmadebythemanagement.
（4）Concludeontheappropriatenessofthemanagement’suseofthegoingconcernbasisofaccountingand,basedontheauditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtontheCompany’sabilitytocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,wearerequiredtodrawattentioninourauditor’sreporttotherelateddisclosuresinthefinancialstatementsor,ifsuchdisclosuresareinadequate,tomodifyouropinion.Ourconclusionsarebasedontheauditevidenceobtaineduptothedateofourauditor’sreport.However,futureeventsorconditionsmaycausetheCompanytoceasetocontinueasagoingconcern.
（5）Evaluatetheoverallpresentation,structureandcontentofthefinancialstatements,includingthedisclosures,andwhetherthefinancialstatementsrepresenttheunderlyingtransactionsandeventsinamannerthatachievesfairpresentation.
（6）ObtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentitiesorbusinessactivitieswithintheCompanytoexpressanopiniononthefinancialstatements.Weareresponsibleforthedirection,supervisionandperformanceofthegroupaudit.Weremainsolelyresponsibleforourauditopinion.
(VI)Auditor’sresponsibilitiesfortheauditofthefinancialstatements(continued)Wecommunicatewiththosechargedwithgovernanceregarding,amongothermatters,
theplannedscopeandtimingoftheauditandsignificantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit.Wealsoprovidethosechargedwithgovernancewithastatementthatwehavecompliedwithrelevantethicalrequirementsregardingindependence,andtocommunicatewiththemallrelationshipsandothermattersthatmayreasonablybethoughttobearonourindependence,andwhereapplicable,relatedsafeguards.Fromthematterscommunicatedwiththosechargedwithgovernance,wedeterminethosemattersthatwereofmostsignificanceintheauditofthefinancialstatementsofthecurrentperiodandarethereforethekeyauditmatters.Wedescribethesemattersinourauditor'sreportunlesslaworregulationprecludespublicdisclosureaboutthematterorwhen,inextremelyrarecircumstances,wedeterminethatamattershouldnotbecommunicatedinourreportbecausetheadverseconsequencesofdoingsowouldreasonablybeexpectedtooutweighthepublicinterestbenefitsofsuchcommunication.
Ernst&YoungHuaMingLLP
| Ernst&YoungHuaMingLLP | ChineseCertifiedPublicAccountant:LiaoWenjia(EngagamentPartner) |
| ChineseCertifiedPublicAccountant:ChenHuijin | |
| Beijing,thePeople’sRepublicofChina | 26April2023 |
II.FinancialstatementsThenotestofinancialstatementsareexpressedinRMBYuan(I)ConsolidatedbalancesheetPreparer:DRCorporationLimited
31December2022
Currency:RMBYuan
Account
| Account | 31December2022 | 31December2021 |
Currentassets
| Currentassets | ||
| Currencyfunds | 521,904,818.30 | 4,741,510,453.45 |
| Financialassetsheldfortrading | 5,609,891,931.68 | 1,824,097,569.32 |
| Accountsreceivable | 84,478,911.52 | 174,880,676.50 |
| Prepayments | 74,226,434.15 | 60,177,173.86 |
| Otherreceivables | 8,184,551.61 | 10,279,311.35 |
| Inventories | 669,886,638.00 | 439,973,154.82 |
| Currentportionofnon-currentassets | 106,967,867.16 | 192,823,541.46 |
| Othercurrentassets | 73,454,925.61 | 7,149,060.31 |
Totalcurrentassets
| Totalcurrentassets | 7,148,996,078.03 | 7,450,890,941.07 |
Non-currentassets
| Non-currentassets | ||
| Debtinvestments | 794,553,996.36 | 218,585,379.05 |
| Fixedassets | 14,068,805.09 | 6,325,614.51 |
| Right-of-useassets | 590,506,167.36 | 429,297,028.76 |
| Intangibleassets | 4,262,597.76 | 5,879,992.23 |
| Long-termprepaidexpenses | 169,750,383.92 | 93,552,123.84 |
| Deferredtaxassets | 8,191,216.36 | 4,765,789.39 |
| Othernon-currentassets | 85,419,135.39 | 59,887,281.39 |
Totalnon-currentassets
| Totalnon-currentassets | 1,666,752,302.24 | 818,293,209.17 |
Totalassets
| Totalassets | 8,815,748,380.27 | 8,269,184,150.24 |
31December2021
| 31December2021 | 31December2021 |
Currentliabilities
| Currentliabilities | ||
| Short-termborrowings | 433,993,449.44 | - |
| Notespayable | 466,527,730.97 | 341,669,947.83 |
| Accountspayable | 86,880,869.77 | 113,777,232.26 |
| Contractliabilities | 126,705,661.82 | 210,146,744.15 |
| Employeebenefitspayable | 68,736,988.33 | 73,334,819.63 |
| Taxpayables | 59,885,139.66 | 121,838,351.39 |
| Otherpayables | 102,563,944.81 | 72,156,628.68 |
| Currentportionofnon-currentliabilities | 351,516,900.54 | 215,037,794.03 |
| Othercurrentliabilities | 13,670,511.44 | 21,980,739.83 |
Totalcurrentliabilities
| Totalcurrentliabilities | 1,710,481,196.78 | 1,169,942,257.80 |
Non-currentliabilities
| Non-currentliabilities | ||
| Leaseliabilities | 276,542,164.23 | 215,671,484.31 |
| Provisions | 16,925,816.91 | 12,388,588.98 |
| Deferredincometaxliabilities | 8,752,998.39 | 4,606,117.98 |
Totalnon-currentliabilities
| Totalnon-currentliabilities | 302,220,979.53 | 232,666,191.27 |
Totalliabilities
| Totalliabilities | 2,012,702,176.31 | 1,402,608,449.07 |
Equity
| Equity | ||
| Sharecapital | 400,010,000.00 | 400,010,000.00 |
| Capitalreserves | 4,459,777,716.81 | 4,459,216,399.61 |
| Accumulatedothercomprehensiveincome | 3,993,254.00 | (2,693,984.92) |
| Surplusreserves | 200,005,000.00 | 179,210,032.06 |
| Retainedearnings | 1,739,260,233.15 | 1,830,833,254.42 |
Totalequityattributabletoshareholdersoftheparent
| Totalequityattributabletoshareholdersoftheparent | 6,803,046,203.96 | 6,866,575,701.17 |
Totalshareholders’equity
| Totalshareholders’equity | 6,803,046,203.96 | 6,866,575,701.17 |
Totalliabilitiesandshareholders’equity
| Totalliabilitiesandshareholders’equity | 8,815,748,380.27 | 8,269,184,150.24 |
Legalrepresentative:ZhangGuotaoFinancialcontroller:HuangShuirongAccountingsupervisor:HuangShuirong
(II)Companybalancesheet
Currency:RMBYuan
Account
| Account | 31December2022 | 31December2021 |
Currentassets
| Currentassets | ||
| Currencyfunds | 219,622,694.30 | 4,643,894,952.31 |
| Financialassetsheldfortrading | 5,223,419,915.33 | 1,560,924,654.25 |
| Accountsreceivable | 84,598,028.47 | 217,326,141.49 |
| Prepayments | 66,437,718.07 | 55,601,722.43 |
| Otherreceivables | 270,167,536.46 | 234,208,768.92 |
| Including:Dividendreceivables | 131,000,000.00 | 200,000,000.00 |
| Inventories | 668,791,848.75 | 432,072,513.48 |
| Currentportionofnon-currentassets | 105,561,584.41 | 138,094,463.09 |
| Othercurrentassets | 47,317,542.08 | 5,376,992.08 |
Totalcurrentassets
| Totalcurrentassets | 6,685,916,867.87 | 7,287,500,208.05 |
Non-currentassets
| Non-currentassets | ||
| Debtinvestments | 650,014,736.30 | 218,585,379.05 |
| Long-termequityinvestments | 207,935,477.77 | 65,435,477.77 |
| Fixedassets | 10,265,370.22 | 3,852,092.63 |
| Right-of-useassets | 535,960,869.57 | 410,760,027.49 |
| Intangibleassets | 829,361.80 | 1,593,381.81 |
| Long-termprepaidexpenses | 163,000,773.79 | 92,937,620.58 |
| Deferredtaxassets | 5,365,472.60 | 2,920,318.50 |
| Othernon-currentassets | 81,537,896.29 | 56,839,315.20 |
Totalnon-currentassets
| Totalnon-currentassets | 1,654,909,958.34 | 852,923,613.03 |
Totalassets
| Totalassets | 8,340,826,826.21 | 8,140,423,821.08 |
31December2022
| 31December2022 | 31December2021 |
Currentliabilities
| Currentliabilities | ||
| Notespayable | 857,478,959.01 | 341,669,947.83 |
| Accountspayable | 273,460,934.14 | 387,374,488.91 |
| Contractliabilities | 122,481,130.76 | 207,625,421.20 |
| Employeebenefitspayable | 54,833,838.35 | 59,756,341.73 |
| Taxandsurchargespayables | 18,231,870.82 | 84,564,180.48 |
| Otherpayables | 102,895,296.16 | 145,014,657.71 |
| Currentportionofnon-currentliabilities | 311,609,516.04 | 208,660,151.45 |
| Othercurrentliabilities | 13,211,410.16 | 21,817,780.17 |
Totalcurrentliabilities
| Totalcurrentliabilities | 1,754,202,955.44 | 1,456,482,969.48 |
Non-currentliabilities
| Non-currentliabilities | ||
| Leaseliabilities | 255,560,231.06 | 196,766,214.31 |
| Provisions | 16,816,666.91 | 12,290,088.98 |
| Deferredtaxliabilities | 8,396,162.20 | 3,729,201.71 |
Totalnon-currentliabilities
| Totalnon-currentliabilities | 280,773,060.17 | 212,785,505.00 |
Totalliabilities
| Totalliabilities | 2,034,976,015.61 | 1,669,268,474.48 |
Equity
| Equity | ||
| Sharecapital | 400,010,000.00 | 400,010,000.00 |
| Capitalreserves | 4,459,777,944.48 | 4,459,216,627.28 |
| Surplusreserve | 200,005,000.00 | 179,210,032.06 |
| Retainedearnings | 1,246,057,866.12 | 1,432,718,687.26 |
Totalshareholders’equity
| Totalshareholders’equity | 6,305,850,810.60 | 6,471,155,346.60 |
Totalliabilitiesandshareholders’equity
| Totalliabilitiesandshareholders’equity | 8,340,826,826.21 | 8,140,423,821.08 |
(III)Consolidatedincomestatement
Currency:RMBYuan
2022
| 2022 | 2021 |
TotalRevenue
| TotalRevenue | 3,681,574,412.68 | 4,622,729,780.48 |
| Including:Revenue | 3,681,574,412.68 | 4,622,729,780.48 |
| TotalCosts | 2,939,356,663.12 | 3,069,217,618.02 |
| Including:Costofsales | 1,112,272,466.29 | 1,380,551,157.67 |
| Taxesandsurcharges | 201,359,894.62 | 255,187,611.06 |
| Sellingexpenses | 1,422,037,537.50 | 1,217,911,552.07 |
| Administrativeexpenses | 164,205,877.87 | 172,830,287.87 |
| Researchanddevelopmentexpenses | 17,944,132.37 | 16,822,042.92 |
| Financeexpenses | 21,536,754.47 | 25,914,966.43 |
| Including:Interestexpenses | 23,830,354.96 | 12,331,582.92 |
| Interestincome | 21,912,750.27 | 7,845,026.93 |
| Add:Otherincome | 39,777,673.00 | 33,062,670.73 |
| Investmentincome(lossisexpressedwithnegativevalue) | 89,003,045.62 | 41,629,744.15 |
| Fairvaluegains(lossisexpressedwithnegativevalue) | 39,294,362.36 | 17,567,673.68 |
| Creditimpairmentlosses(lossisexpressedwithnegativevalue) | 1,793,479.08 | (2,379,194.21) |
| Impairmentlosses(lossisexpressedwithnegativevalue) | (28,420,774.69) | (10,153,366.31) |
| Gains/(loss)ondisposalofassets | 1,244,949.25 | (732,715.39) |
Operatingprofits
| Operatingprofits | 884,910,484.18 | 1,632,506,975.11 |
| Add:Non-operatingincome | 1,237,090.46 | 1,158,823.31 |
| Less:Non-operatingexpenses | 768,433.58 | 2,057,244.49 |
Profitbeforetax
| Profitbeforetax | 885,379,141.06 | 1,631,608,553.93 |
| Less:Incometaxexpenses | 156,137,194.39 | 329,850,761.92 |
Profit
| Profit | 729,241,946.67 | 1,301,757,792.01 |
Classifiedbycontinuityofoperation
| Classifiedbycontinuityofoperation | ||
| Profitfromcontinuingoperations | 729,241,946.67 | 1,301,757,792.01 |
Classifiedbyownership
| Classifiedbyownership | ||
| Profitattributabletoshareholdersoftheparentcompany | 729,241,946.67 | 1,301,768,398.86 |
| Lossattributabletonon-controllinginterests | - | (10,606.85) |
2022
| 2022 | 2021 |
Othercomprehensiveincome/(loss),netoftax
| Othercomprehensiveincome/(loss),netoftax | 6,687,238.92 | (1,439,296.79) |
Othercomprehensiveincome/(loss),netoftaxattributabletoownersoftheparent
| Othercomprehensiveincome/(loss),netoftaxattributabletoownersoftheparent | 6,687,238.92 | (1,439,296.79) |
Othercomprehensiveincomethatmaybereclassifiedtoprofitorloss
| Othercomprehensiveincomethatmaybereclassifiedtoprofitorloss | 6,687,238.92 | (1,439,296.79) |
| Exchangedifferencesontranslationofforeigncurrencyfinancialstatements | 6,687,238.92 | (1,439,296.79) |
Totalcomprehensiveincome
| Totalcomprehensiveincome | 735,929,185.59 | 1,300,318,495.22 |
| Totalcomprehensiveincomeattributabletoshareholdersoftheparentcompany | 735,929,185.59 | 1,300,329,102.07 |
| Totalcomprehensiveincomeattributabletonon-controllinginterests | - | (10,606.85) |
Earningspershare
| Earningspershare | ||
| Basicearningspershare | 1.82 | 3.62 |
| Dilutedearningspershare | 1.82 | 3.62 |
Legalrepresentative:ZhangGuotaoFinancialcontroller:HuangShuirongAccountingsupervisor:HuangShuirong
(IV)Companyincomestatement
Currency:RMBYuan
2022
| 2022 | 2021 |
Revenue
| Revenue | 3,534,932,354.30 | 4,417,870,859.56 |
| Less:Costofsales | 1,092,567,667.81 | 1,386,106,265.88 |
| Taxesandsurcharges | 194,895,366.29 | 248,207,290.51 |
| Sellingexpenses | 1,515,688,864.56 | 1,153,400,250.19 |
| Administrativeexpenses | 624,911,561.61 | 825,777,804.26 |
| Researchanddevelopmentexpenses | 71,920.44 | 144,727.20 |
| Financeexpenses | 17,360,792.79 | 25,400,867.38 |
| Including:Interestexpenses | 19,305,582.75 | 11,705,018.34 |
| Interestincome | 19,773,708.70 | 7,616,647.67 |
| Add:Otherincome | 22,208,183.65 | 8,530,733.48 |
| Investmentincome(lossisexpressedwithnegativevalue) | 560,828,577.30 | 531,078,472.73 |
| Fairvaluegains(lossisexpressedwithnegativevalue) | 40,995,261.08 | 15,952,456.41 |
| Creditimpairmentlosses(lossisexpressedwithnegativevalue) | 1,836,341.83 | (2,379,194.21) |
| Impairmentlossesofassets(lossisexpressedwithnegativevalue) | (28,017,790.85) | (4,741,845.92) |
| Gains/(Loss)ondisposalofnon-currentassets | 1,276,888.55 | (732,715.39) |
Operatingprofit
| Operatingprofit | 688,563,642.36 | 1,326,541,561.24 |
| Add:Non-operatingincome | 1,150,898.78 | 531,648.31 |
| Less:Non-operatingexpenses | 627,988.18 | 2,053,634.32 |
Profitbeforeincometaxes
| Profitbeforeincometaxes | 689,086,552.96 | 1,325,019,575.23 |
| Less:Incometaxexpenses | 54,932,406.16 | 208,271,624.63 |
Profit
| Profit | 634,154,146.80 | 1,116,747,950.60 |
| Profitfromcontinuingoperations | 634,154,146.80 | 1,116,747,950.60 |
Totalcomprehensiveincome
| Totalcomprehensiveincome | 634,154,146.80 | 1,116,747,950.60 |
(v)Consolidatedstatementofcashflows
Currency:RMBYuan
2022
| 2022 | 2021 |
I.CASHFLOWSFROMOPERATINGACTIVITIES
I.CASHFLOWSFROMOPERATINGACTIVITIESCashreceiptsfromthesaleofgoodsandthe
renderingofservices
| Cashreceiptsfromthesaleofgoodsandtherenderingofservices | 3,968,278,134.60 | 4,909,484,433.62 |
| Receiptsoftaxandsurchargesrefunds | 16,421,754.59 | 21,840,823.43 |
| Othercashreceiptsrelatingtooperatingactivities: | 62,655,254.90 | 25,387,020.28 |
Totalcashinflowsfromoperatingactivities
| Totalcashinflowsfromoperatingactivities | 4,047,355,144.09 | 4,956,712,277.33 |
Cashpaymentsforgoodsandservices
| Cashpaymentsforgoodsandservices | 1,406,475,658.87 | 1,525,942,725.15 |
| Cashpaymentstoandonbehalfofemployees | 573,104,253.10 | 457,826,157.72 |
| Paymentsofalltypestaxesandsurcharges | 621,952,499.15 | 800,925,900.53 |
| Othercashpaymentsrelatingtooperatingactivities | 627,811,620.73 | 627,804,643.22 |
Totalcashoutflowsfromoperatingactivities
| Totalcashoutflowsfromoperatingactivities | 3,229,344,031.85 | 3,412,499,426.62 |
Netcashflowsfromoperatingactivities
| Netcashflowsfromoperatingactivities | 818,011,112.24 | 1,544,212,850.71 |
II.CASHFLOWSFROMINVESTINGACTIVITIES
II.CASHFLOWSFROMINVESTINGACTIVITIESCashreceiptsfromreturnsofinvestments
| Cashreceiptsfromreturnsofinvestments | 5,328,462,790.68 | 2,331,900,000.00 |
| Cashreceiptsfromreturnsoninvestments | 83,386,608.45 | 29,563,244.92 |
| Netcashreceiptsfromdisposaloffixedassetsandotherlong-termassets | 282,732.40 | 487,127.07 |
Totalcashinflowsfrominvestingactivities
| Totalcashinflowsfrominvestingactivities | 5,412,132,131.53 | 2,361,950,371.99 |
Cashpaymentstoacquirefixedassets,
intangibleassetsandotherlong-termassets
| Cashpaymentstoacquirefixedassets,intangibleassetsandotherlong-termassets | 155,426,398.41 | 103,755,422.85 |
| Cashpaymentsforinvestments | 9,569,751,822.21 | 3,428,812,666.67 |
Totalcashoutflowsfrominvestingactivities
| Totalcashoutflowsfrominvestingactivities | 9,725,178,220.62 | 3,532,568,089.52 |
Netcashflowsfrominvestingactivities
| Netcashflowsfrominvestingactivities | (4,313,046,089.09) | (1,170,617,717.53) |
2022
| 2022 | 2021 |
III.CASHFLOWSFROMFINANCING
ACTIVITIES
III.CASHFLOWSFROMFINANCING
ACTIVITIESCashproceedsfrominvestmentsbyothers
| Cashproceedsfrominvestmentsbyothers | - | 4,460,725,283.02 |
| Cashreceiptsfromborrowings | 525,418,991.66 | - |
| Othercashreceiptsrelatingtofinancingactivities | 10,700,723.00 | 5,483,723.60 |
Totalcashinflowsfromfinancingactivities
| Totalcashinflowsfromfinancingactivities | 536,119,714.66 | 4,466,209,006.62 |
Cashrepaymentsfordebts
| Cashrepaymentsfordebts | 94,320,809.11 | - |
| Cashpaymentsfordistributionofdividendsorprofitandinterestexpenses | 800,397,477.89 | - |
| Othercashpaymentsrelatingtofinancingactivities | 371,403,624.18 | 277,845,213.25 |
Totalcashoutflowsfromfinancingactivities
| Totalcashoutflowsfromfinancingactivities | 1,266,121,911.18 | 277,845,213.25 |
Netcashflowsfromfinancingactivities
| Netcashflowsfromfinancingactivities | (730,002,196.52) | 4,188,363,793.37 |
IV.EFFECTOFEXCHANGERATECHANGES
ON
CASHANDCASHEQUIVALENTS
| IV.EFFECTOFEXCHANGERATECHANGESONCASHANDCASHEQUIVALENTS | 5,151,750.54 | (1,944,316.29) |
V.NETINCREASEINCASHANDCASH
EQUIVALENTS
| V.NETINCREASEINCASHANDCASHEQUIVALENTS | (4,219,885,422.83) | 4,560,014,610.26 |
Add:Cashandcashequivalentsatbeginning
ofyear
| Add:Cashandcashequivalentsatbeginningofyear | 4,741,510,453.45 | 181,495,843.19 |
VI.CASHANDCASHEQUIVALENTS
ATENDOFYEAR
| VI.CASHANDCASHEQUIVALENTSATENDOFYEAR | 521,625,030.62 | 4,741,510,453.45 |
(VI)Companystatementofcashflows
Currency:RMBYuan
2022
| 2022 | 2021 | |
| I.CASHFLOWSFROMOPERATINGACTIVITIES | ||
| Cashreceiptsfromthesaleofgoodsandtherenderingofservices | 3,991,469,167.77 | 4,898,129,642.04 |
| Receiptsoftaxandsurchargesrefunds | 56,556.06 | - |
| Othercashreceiptsrelatingtooperatingactivities: | 265,606,344.91 | 46,238,064.27 |
Totalcashinflowsfromoperatingactivities
| Totalcashinflowsfromoperatingactivities | 4,257,132,068.74 | 4,944,367,706.31 |
Cashpaymentsforgoodsandservices
| Cashpaymentsforgoodsandservices | 1,495,604,940.61 | 1,523,908,136.40 |
| Cashpaymentstoandonbehalfofemployees | 484,718,641.12 | 396,345,267.90 |
| Paymentsofalltypesoftaxesandsurcharges | 474,368,886.96 | 634,431,986.90 |
| Othercashpaymentsrelatingtooperatingactivities | 1,405,354,651.27 | 1,247,967,092.93 |
Totalcashoutflowsfromoperatingactivities
| Totalcashoutflowsfromoperatingactivities | 3,860,047,119.96 | 3,802,652,484.13 |
Netcashflowsfromoperatingactivities
| Netcashflowsfromoperatingactivities | 397,084,948.78 | 1,141,715,222.18 |
II.CASHFLOWSFROMINVESTINGACTIVITIES
| II.CASHFLOWSFROMINVESTINGACTIVITIES | ||
| Cashreceiptsfromreturnsofinvestments | 4,888,931,144.07 | 1,854,000,000.00 |
| Cashreceiptsfromreturnsoninvestments | 622,149,442.68 | 390,847,204.33 |
| Netcashreceivedfromdisposaloffixedassetsandotherlong-termtassets | 282,732.40 | 487,127.07 |
Totalcashinflowsfrominvestingactivities
| Totalcashinflowsfrominvestingactivities | 5,511,363,319.15 | 2,245,334,331.40 |
Cashpaymentstoacquirefixedassets,intangibleassetsandotherlong-termassets
| Cashpaymentstoacquirefixedassets,intangibleassetsandotherlong-termassets | 150,904,158.20 | 92,542,519.51 |
| Cashpaymentsforinvestments | 9,041,789,749.98 | 2,948,048,144.44 |
Totalcashoutflowsfrominvestingactivities
| Totalcashoutflowsfrominvestingactivities | 9,192,693,908.18 | 3,040,590,663.95 |
Netcashflowsfrominvestingactivities
| Netcashflowsfrominvestingactivities | (3,681,330,589.03) | (795,256,332.55) |
2022
| 2022 | 2021 |
III.CASHFLOWSFROMFINANCINGACTIVITIES
III.CASHFLOWSFROMFINANCINGACTIVITIESCashproceedsfrominvestmentsbyothers
| Cashproceedsfrominvestmentsbyothers | - | 4,460,725,283.02 |
| Othercashreceiptsrelatingtofinancingactivities | 10,700,723.00 | 5,483,723.60 |
Totalcashinflowsfromfinancing
activities
| Totalcashinflowsfromfinancingactivities | 10,700,723.00 | 4,466,209,006.62 |
Cashpaymentsfordistributionof
dividendsorprofitandinterestexpenses
| Cashpaymentsfordistributionofdividendsorprofitandinterestexpenses | 800,020,000.00 | - |
| Othercashpaymentsrelatingtofinancingactivities | 350,987,128.44 | 271,106,564.48 |
Totalcashoutflowsfromfinancingactivities
| Totalcashoutflowsfromfinancingactivities | 1,151,007,128.44 | 271,106,564.48 |
Netcashflowsfromfinancingactivities
| Netcashflowsfromfinancingactivities | (1,140,306,405.44) | 4,195,102,442.14 |
IV.EFFECTOFEXCHANGERATECHANGESONCASHANDCASHEQUIVALENTS
| IV.EFFECTOFEXCHANGERATECHANGESONCASHANDCASHEQUIVALENTS | - | (115.68) |
V.NetIncreaseinCashandCashEquivalents
| V.NetIncreaseinCashandCashEquivalents | (4,424,552,045.69) | 4,541,561,216.09 |
Add:Cashandcashequivalentsatbeginningofyear
| Add:Cashandcashequivalentsatbeginningofyear | 4,643,894,952.31 | 102,333,736.22 |
VI.Closingbalanceofcashandcashequivalents
| VI.Closingbalanceofcashandcashequivalents | 219,342,906.62 | 4,643,894,952.31 |
(VII)ConsolidatedstatementofchangesinequityYearended31December2022
Currency:RMBYuan
AttributabletoshareholdersoftheCompany
| AttributabletoshareholdersoftheCompany | Minorityinterests | Totalshareholders’equity | ||||||||||||
| Sharecapital | Capitalreserves | Othercomprehensiveincome | Surplusreserve | Retainedearnings | Subtotal | |||||||||
I.
| I. | Balanceatendofprioryearandbeginningofyear | 400,010,000.00 | 4,459,216,399.61 | (2,693,984.92) | 179,210,032.06 | 1,830,833,254.42 | 6,866,575,701.17 | - | 6,866,575,701.17 |
II.
| II. | Changesfortheyear |
1.
| 1. | 1Totalcomprehensiveincome | - | - | 6,687,238.92 | - | 729,241,946.67 | 735,929,185.59 | - | 735,929,185.59 |
2.
| 2. | (IOwners’contributionsandreductionincapital | |||||||||||||||
| (1) | Amountofshare-basedpaymentsrecognisedinequity | - | 561,317.20 | - | - | - | 561,317.20 | - | 561,317.20 |
3.
| 3. | PProfitdistribution | |||||||||||||||
| (1) | Appropriationtosurplusreserve | - | - | - | 20,794,967.94 | (20,794,967.94) | - | - | - | |||||||
| (2) | Distributiontoshareholders | - | - | - | - | (800,020,000.00) | (800,020,000.00) | - | (800,020,000.00) |
III.
| III. | Balanceatendofyear | 400,010,000.00 | 4,459,777,716.81 | 3,993,254.00 | 200,005,000.00 | 1,739,260,233.15 | 6,803,046,203.96 | - | 6,803,046,203.96 |
Yearended31December2021
Currency:RMBYuan
AttributabletoshareholdersoftheCompany
| AttributabletoshareholdersoftheCompany | Minorityinterests | Totalshareholders’equity | ||||||||||||
| Sharecapital | Capitalreserves | Othercomprehensiveincome | Surplusreserves | Retainedearnings | Subtotal | |||||||||
I.
| I. | Balanceatendofprioryearandbeginningofyear | 360,000,000.00 | 51,332,087.41 | (1,254,688.13) | 67,535,237.00 | 640,739,650.62 | 1,118,352,286.90 | 45,856.95 | 1,118,398,143.85 |
II.
| II. | Changesfortheyear |
1.
| 1. | 1.Totalcomprehensiveincome | - | - | (1,439,296.79) | - | 1,301,768,398.86 | 1,300,329,102.07 | (10,606.85) | 1,300,318,495.22 |
2.
| 2. | (IOwners’contributionsandreductionincapital | |||||||||||||||
| (1) | Capitalcontributionsbyowners | 40,010,000.00 | 4,403,792,844.63 | - | - | - | 4,443,802,844.63 | (35,250.10) | 4,443,767,594.53 | |||||||
| (2) | Amountofshare-basedpaymentsrecognisedinequity | - | 4,091,695.24 | - | - | - | 4,091,695.24 | - | 4,091,695.24 |
3.
| 3. | PProfitdistribution | |||||||||||||||
| (1) | Appropriationtosurplusreserve | - | - | - | 111,674,795.06 | (111,674,795.06) | - | - | - |
4.
| 4. | Transferwithinequity | |||||||||||||||
| (1) | Acquirenon-controllinginterests | - | (227.67) | - | - | - | (227.67) | - | (227.67) |
III.
| III. | Balanceatendofyear | 400,010,000.00 | 4,459,216,399.61 | (2,693,984.92) | 179,210,032.06 | 1,830,833,254.42 | 6,866,575,701.17 | - | 6,866,575,701.17 |
(VIII)Companystatementofchangesinshareholders’equityYearended31December2022
Currency:RMBYuan
Sharecapital
| Sharecapital | Capitalreserves | Surplusreserves | Retainedearnings | Totalshareholders’equity |
I.
| I. | Balanceatendofprioryearandbeginningofyear | 400,010,000.00 | 4,459,216,627.28 | 179,210,032.06 | 1,432,718,687.26 | 6,471,155,346.60 |
II.
| II. | Changesfortheyear |
1.
| 1. | 1Totalcomprehensiveincome | - | - | - | 634,154,146.80 | 634,154,146.80 |
(1)
| (1) | Amountofshare-basedpaymentsrecognisedinequity | - | 561,317.20 | - | - | 561,317.20 |
2.
| 2. | Profitdistribution | |||||||||
| (1) | Appropriationtosurplusreserve | - | - | 20,794,967.94 | (20,794,967.94) | - | ||||
| (2) | Distributiontoshareholders | - | - | - | (800,020,000.00) | (800,020,000.00) |
III.
| III. | Balanceatendofyear | 400,010,000.00 | 4,459,777,944.48 | 200,005,000.00 | 1,246,057,866.12 | 6,305,850,810.60 |
Yearended31December2021
Currency:RMBYuan
Sharecapital
| Sharecapital | Capitalreserves | Surplusreserves | Retainedearnings | Totalshareholders’equity |
I.
| I. | Balanceatendofprioryearandbeginningofyear | 360,000,000.00 | 51,332,087.41 | 67,535,237.00 | 427,645,531.72 | 906,512,856.13 |
II.
| II. | Changesfortheyear |
1.
| 1. | 1Totalcomprehensiveincome | - | - | - | 1,116,747,950.60 | 1,116,747,950.60 |
2.
| 2. | Owners’contributionsandreductionsincapital | |||||||||
| (1) | Shareholders’contributionsandreductionincapital | 40,010,000.00 | 4,403,792,844.63 | - | - | 4,443,802,844.63 | ||||
| (2) | Amountofshare-basedpaymentsrecognisedinequity | - | 4,091,695.24 | - | - | 4,091,695.24 |
3.
| 3. | Profitdistribution | |||||||||
| (1) | Appropriationtosurplusreserve | - | - | 111,674,795.06 | (111,674,795.06) | - |
III.
| III. | Balanceatendofyear | 400,010,000.00 | 4,459,216,627.28 | 179,210,032.06 | 1,432,718,687.26 | 6,471,155,346.60 |
III.GeneralinformationDRCorporationLimited(the“Company”)isalimitedliabilitycompanyregisteredinShenzhen,GuangdongProvinceofthePeople’sRepublicofChina.TheCompanywasestablisedonApril8,2010withatermofperpetualoperation.TheCompanyisregisteredinRoom306,WingBuildingofLuohuInvestmentHoldingBuilding,No.112Qingshuihe1stRoad,QingshuiheCommunity,QingshuiheStreet,LuohuDistrict,Shenzhen.TheCompanywasestablishedbyZhangGuotaoandJinChongwhocontributedacapitalofRMB15,300andRMB14,700withproportionofcontributionofof51%and49%respectively.TheadditionofcapitalhasbeenverifiedbyShenzhenZhengshengAccountingFirmthatissueda"CapitalVerificationReport"(Shenzhengsheng(Internal)YanZi[2010]No.376).ThelegalrepresentativeisZhangGuotao,andthebusinessscopeismarketingplanning.Thecompanyobtainedthenamepre-approvalnotice(No.2583011[2010])fromShenzhenAdministrationForMarketRegulationandtheapprovednamewasShenzhenYinsaiteEnterpriseManagementConsultingCo.,Ltd.Accordingtotheresolutionoftheshareholders'meetingonJuly11,2011,JinChongtransferredhis49%equityinteresttoLuYiwen.OnJuly20,2011,theshareholders'meetingofShenzhenYinsaiteEnterpriseManagementConsultingCo.,Ltd.madearesolutiontoapprovethechangeoftheCompany'snameto"ShenzhenDarryJewelryCo.,Ltd.."("DarryCorporation"),andthebusinessscopewaschangedto"purchaseandsaleofjewelry,diamonds,platinum,gold,silverandrelatedaccessories,cosmetics,perfumes,leatherproducts,clothing,shoesandhats;domestictrade;importandexportofgoodsandtechnology."OnJuly28,2011,theCompanycompletedthecorrespondingindustrialandcommercialchangeregistrationprocessatShenzhenAdministrationForMarketRegulationfortheequitytransferandthechangeoftheCompany'snameandbusinessscope.Accordingtotheresolutionoftheshareholders'meetingonSeptember5,2011,theCompanyappliedtoShenzhenAdministrationForMarketRegulationonSeptember6,2011forapprovalofincreasingtheregisteredcapitalfromRMB30,000toRMB1million,andthenewregisteredcapitalwasRMB970,000,ofwhichZhangGuotaosubscribedandpaidRMB494,700,LuYiwensubscribedandpaidRMB475,300.TheproportionofcontributionofZhangGuotaoandLuYiwenwere51%and49%respectively.TheadditionofcapitalhasbeenverifiedbyErnst&YoungHuaMingLLPthatissueda“CapitalVerificationReport”(Ernst&YoungHuaMing(2020)YanZiNo.61403707_H01).Accordingtotheresolutionoftheshareholders'meetingonDecember1,2014,theCompanyappliedtoShenzhenAdministrationForMarketRegulationonDecember10,2014forapprovalofincreasingtheregisteredcapitalfromRMB1milliontoRMB100million,ofwhichZhangGuotaosubscribedRMB50.49millionandLuYiwensubscribedRMB48.51million.OnApril1,2015,April2,2015andJune8,2015,ZhangGuotaopaidcapitalcontributionsofRMB5million,RMB5millionandRMB20millionrespectively,andthepaidincapitaloftheCompanyaftertheseseriesofcapitalcontributionwasRMB31million,andtheproportionofsubscribedcapitalofZhangGuotaoandLuYiwenremainedunchange.PursuanttotheCompany’schangedecisiononDecember18,2015,ZhangGuotaoandLuYiwentransferredtheir51%and49%equityinterestintheCompanytoDRInvestment(Zhuhai)Co.,Ltd.("DRInvestment"),andonJanuary29,2016andNovember7,2016,DRInvestmentpaidcapitalcontributionsofRMB18millionandRMB51million,respectively,andthepaidincapitaloftheCompanyaftertheseseriesofcapitalcontributionwasRMB100million.TheadditionofcapitalhasbeenverifiedbyErnst&YoungHuaMingLLPthatissueda“CapitalVerificationReport”(Ernst&YoungHuaMing(2020)YanZiNo.61403707_H02).
III.Generalinformation(continuted)Accordingtotheresolutionoftheshareholders'meetingonNovember22,2017,DRInvestmenttransferredits5%equityinterestintheCompanytoGongqingchengWendiNo.1InvestmentManagementPartnership(LP)("WendiNo.1"),GongqingchengWendiNo.2InvestmentManagementPartnership(LP)("WendiNo.2")andGongqingchengWendiNo.3InvestmentManagementPartnership(LP)("WendiNo.3")respectively.OnNovember24,2017,theaboveequitytransferwascompletedandthethreelimitedpartnershipsheld2%,2%and1%oftheequityinterestsoftheCompanyrespectively.Accordingtotheresolutionoftheshareholders'meetingoftheCompanyonJune19,2019,theCompanychangedfromalimitedcompanytoacorporationlimitedcompanybasedontheauditednetassets.TheCompany’snamechangedfromShenzhenDarryJewelryCo.,Ltd.toDRCorporationLimitedandtheshareholdingratioofeachshareholderbeforeandafterthechangeremainedunchanged.AsofFebruary28,2019,theadjustednetassetsofthelimitedcompanywereRMB396,540,157.74,ofwhichRMB360,000,000.00wasconvertedinto360,000,000.00ordinarysharesofthecorporationlimitedcompany.TheregisteredsharecapitalwaschangedtoRMB360,000,000.00,withaparvalueofRMB1pershare.TheportionofnetassetsexceedingthesharecapitalofRMB36,540,157.74wasaccountedas"capitalreserve"andsharedbyallshareholders.InaccordancewiththeapprovaloftheListingCommitteeoftheGrowthEnterpriseMarketoftheShenzhenStockExchangeandtheCSRC's"ApprovalonAgreeingtheRegistrationofDRCorporationLimitedforInitialPublicOfferingofShares(ZhengJianXuKeNo.[2021]3043)"onSeptember16,2021,theCompanyconductedaninitialpublicofferingof40,001,000ordinaryshares(Ashares)withanissuepriceofRMB116.88pershare.TheadditionalregisteredcapitalfromtheIPOhasbeenverifiedbyErnst&YoungHuaMingLLPthatissueda"CapitalVerificationReport"(Ernst&YoungHuaMing(2021)YanZiNo.61403707_H01)..TheCompanywaslistedontheShenzhenStockExchangeonDecember15,2021.TheparentandultimateparentcompanyoftheGroupisDRInvestment(Zhuhai)Co.,Ltd.,whichisincorporatedinthePeople’sRepublicofChina.Thefinancialstatementswereapprovedbyboardofdirectorson26April2023.Thescopeofconsolidationintheconsolidatedfinancialstatementsisdeterminedonthebasisofcontrol.SeeNoteVIIIforchangesinthecurrentyear.
IV.Basisofpreparationofthefinancialstatements
(I)BasicofpreparationThesefinancialstatementshavebeenpreparedinaccordancewithAccountingStandardsforBusinessEnterprises-BasicStandardandspecificaccountingstandards,implementationguidance,interpretationsandotherrelevantprovisionsissuedsubsequentlybytheMinistryofFinance(the“MOF”)(collectivelyreferredtoas“ASBEs”).
(II)GoingconcernThefinancialstatementshavebeenpreparedonagoingconcernbasis.V.SignificantaccountingpoliciesandaccountingestimatesTheGrouphasformulatedspecificaccountingpoliciesandaccountingestimatesbasedonthecharacteristicsofactualoperation,whicharemainlyreflectedinimpairmentallowanceforaccountsreceivable,inventoryvaluationmethod,amortizationoflong-termprepaidexpenses,depreciationofright-of-useassets,impairmentoflong-termassets,revenuerecognitionandmeasurement,etc.
1.StatementofcompliancewithAccountingStandardsforBusinessEnterprisesThefinancialstatementspresenttrulyandcompletelythefinancialpositionsoftheGroupandtheCompanyasat31December2022,andthefinancialperformanceandthecashflowsfortheyearthenendedinaccordancewithAccountingStandardsforBusinessEnterprises.
2.AccountingyearTheGrouphasadoptedthecalendaryearasitsaccountingyear,from1Januaryto31December.
3.BusinessCycleTheGrouphasadoptedanormaloperatingcycleof12monthsasthecriterionforclassifyingtheliquidityofitsassetsandliabilities.
4.FunctionalcurrencyTheCompany’sfunctionalandpresentationcurrencyisRenminbi(“RMB”).ThecurrencyunitisRMBYuanunlessotherwisestated.EachsubsidiaryoftheGroupdeterminesitsownfunctionalcurrencybasedontheprimaryeconomicenvironmentinwhichitoperates.Inpreparationofthefinancialstatements,theirfunctionalcurrenciesaretranslatedintoRMB.
V.Significantaccountingpoliciesandaccountingestimates(continued)
5.BusinesscombinationsBusinesscombinationsareclassifiedintobusinesscombinationsinvolvingentitiesundercommoncontrolandbusinesscombinationsnotinvolvingentitiesundercommoncontrol.(I)BusinesscombinationsinvolvingentitiesundercommoncontrolAbusinesscombinationinvolvingentitiesundercommoncontrolisabusinesscombinationinwhichallofthecombiningentitiesareultimatelycontrolledbythesamepartyorpartiesbothbeforeandafterthecombination,andthatcontrolisnottransitory.Theassetsandliabilities(includinggoodwillarisingfromtheultimatecontrollingparty’sacquisitionoftheentitybeingabsorbed)thatareobtainedbytheabsorbingentityinabusinesscombinationinvolvingentitiesundercommoncontrolshallbemeasuredonthebasisoftheircarryingamountsinthefinancialstatementsoftheultimatecontrollingpartyatthecombinationdate.Thedifferencebetweenthecarryingamountofthenetassetsobtainedandthecarryingamountoftheconsiderationpaidforthecombination(ortheaggregatefacevalueofsharesissuedasconsideration)shallbeadjustedtothecapitalpremiumundercapitalreserves.Ifthecapitalpremiumisnotsufficienttoabsorbthedifference,anyexcessshallbeadjustedagainstretainedearnings.(II)BusinesscombinationsnotinvolvingentitiesundercommoncontrolAbusinesscombinationnotinvolvingentitiesundercommoncontrolisabusinesscombinationinwhichallofthecombiningentitiesarenotultimatelycontrolledbythesamepartyorpartiesbeforeandafterthecombination.Theacquirershallmeasuretheacquiree’sidentifiableassets,liabilitiesandcontingentliabilitiesacquiredinthebusinesscombinationattheirfairvaluesontheacquisitiondate.
V.Significantaccountingpoliciesandaccountingestimates(continued)
5.Businesscombinations(continued)(II)Businesscombinationsnotinvolvingentitiesundercommoncontrol(continued)Goodwillisinitiallyrecognizedandmeasuredatcost,beingtheexcessoftheaggregateofthefairvalueoftheconsiderationtransferred(orthefairvalueoftheequitysecuritiesissued)andanyfairvalueoftheGroup’spreviouslyheldequityinterestintheacquireeovertheGroup’sinterestinthefairvalueoftheacquiree’snetidentifiableassets.Afterinitialrecognition,goodwillismeasuredatcostlessanyaccumulatedimpairmentlosses.Wheretheaggregateofthefairvalueoftheconsiderationtransferred(orthefairvalueoftheequitysecuritiesissued)andanyfairvalueoftheGroup’spreviouslyheldequityinterestintheacquireeislowerthantheGroup’sinterestinthefairvalueoftheacquiree’snetidentifiableassets,theGroupreassessesthemeasurementofthefairvalueoftheacquiree’sidentifiableassets,liabilitiesandcontingentliabilitiesandthefairvalueoftheconsiderationtransferred(orthefairvalueoftheequitysecuritiesissued),togetherwiththefairvalueoftheGroup’spreviouslyheldequityinterestintheacquiree.Ifafterthatreassessment,theaggregateofthefairvalueoftheconsiderationtransferred(orthefairvalueoftheequitysecuritiesissued)andtheGroup’spreviouslyheldequityinterestintheacquireeisstilllowerthantheGroup’sinterestinthefairvalueoftheacquiree’snetidentifiableassets,theGrouprecognizestheremainingdifferenceinprofitorloss.
6.ConsolidatedfinancialstatementsThescopeoftheconsolidatedfinancialstatements,whichincludethefinancialstatementsoftheCompanyandallofitssubsidiaries,isdeterminedonthebasisofcontrol.AsubsidiaryisanentitythatiscontrolledbytheCompany(suchasanenterprise,adeemedseparateentity,orastructuredentitycontrolledbytheCompany).Inthepreparationoftheconsolidatedfinancialstatements,thefinancialstatementsofsubsidiariesarepreparedforthesameaccountingyearastheCompany,usingconsistentaccountingpolicies.Allintra-groupassetsandliabilities,equity,income,expensesandcashflowsrelatingtotransactionsbetweenmembersoftheGroupareeliminatedinfullonconsolidation.Whentheamountoflossfortheperiodattributabletotheminorityshareholdersofasubsidiaryexceedstheminorityshareholders'portionoftheopeningbalanceofshareholdersequityofthesubsidiary,theexcessamountsarestillallocatedagainstminorityinterests.Forsubsidiariesacquiredthroughbusinesscombinationsnotinvolvingentitiesundercommoncontrol,thefinancialperformanceandcashflowsoftheacquireeshallbeconsolidatedfromthedateonwhichtheGroupobtainscontrol,andcontinuetobeconsolidateduntilthedatesuchcontrolceases.Whilepreparingtheconsolidatedfinancialstatements,theGroupshalladjustthesubsidiary’sfinancialstatements,onthebasisofthefairvaluesoftheidentifiableassets,liabilitiesandcontingentliabilitiesrecognizedontheacquisitiondate.Forsubsidiariesacquiredthroughbusinesscombinationsinvolvingentitiesundercommoncontrol,thefinancialperformanceandcashflowsoftheentitybeingabsorbedshallbeconsolidatedfromthebeginningoftheperiodinwhichthecombinationoccurs.Whilepreparingthecomparativefinancialstatements,adjustmentsaremadetorelateditemsinthefinancialstatementsforthepriorperiodasifthereportingentityafterthecombinationhasbeeninexistencesincethedatetheultimatecontrollingpartyfirstobtainedthecontrol.
V.Significantaccountingpoliciesandaccountingestimates(continued)
6.Consolidatedfinancialstatements(continued)TheGroupreassesseswhetherornotitcontrolsaninvesteeifanychangeinfactsandcircumstancesindicatesthattherearechangestooneormoreofthethreeelementsofcontrol.
7.CashandcashequivalentsCashcomprisestheGroup’scashonhandandbankdepositsthatcanbereadilywithdrawnondemand.Cashequivalentsareshort-term,highlyliquidinvestmentsthatarereadilyconvertibleintoknownamountsofcash,andaresubjecttoaninsignificantriskofchangesinvalue.
8.ForeigncurrencytransactionsandforeigncurrencytranslationTheGrouptranslatesforeigncurrencytransactionsintoitsfunctionalcurrency.Foreigncurrencytransactionsareinitiallyrecorded,oninitialrecognitioninthefunctionalcurrencyusingthespotexchangeratesprevailingatthedatesoftransactions/averageexchangeratesfortheperiodinwhichthetransactionsoccur/weightedaverageexchangeratesfortheperiodinwhichthetransactionsoccur.Monetaryitemsdenominatedinforeigncurrenciesaretranslatedatthespotexchangeratesrulingatthebalancesheetdate.Differencesarisingonsettlementortranslationofmonetaryitemsarerecognisedinprofitorloss,withtheexceptionofthoserelatingtoforeigncurrencyborrowingsspecificallyfortheconstructionandacquisitionofqualifyingassets,whicharecapitalisedinaccordancewiththeguidanceforcapitalisationofborrowingcosts.Non-monetaryitemsthataremeasuredintermsofhistoricalcostinaforeigncurrencyaretranslatedusingtheexchangeratesatthedatesoftheinitialtransactions,andtheamountdenominatedinthefunctionalcurrencyisnotchanged.Non-monetaryitemsmeasuredatfairvalueinaforeigncurrencyaretranslatedusingtheexchangeratesatthedatewhenthefairvaluewasmeasured.Theresultingexchangedifferencesarerecognisedinprofitorlossorothercomprehensiveincomedependingonthenatureofthenon-monetaryitems.
V.Significantaccountingpoliciesandaccountingestimates(continued)
8.Foreigncurrencytransactionsandforeigncurrencytranslation(continued)Forforeignoperations,theGrouptranslatestheirfunctionalcurrencyamountsintoRMBwhenpreparingthefinancialstatementsasfollows:asatthebalancesheetdate,theassetsandliabilitiesaretranslatedusingthespotexchangerateatthebalancesheetdate;andequityitemsotherthan“unappropriatedprofit”aretranslatedatthespotexchangeratesatthedatesoftransactions;revenueandexpenseitemsinprofitorlossaretranslatedusingtheaverageexchangeratesfortheperiodduringwhichthetransactionsoccur.Theresultingexchangedifferencesarerecognizedinothercomprehensiveincome.Ondisposalofaforeignoperation,thecomponentofothercomprehensiveincomerelatingtothatparticularforeignoperationisrecognizedinprofitorloss.Ifthedisposalonlyinvolvesaportionofaparticularforeignoperation,thecomponentofothercomprehensiveincomerelatingtothatparticularforeignoperationisrecognizedinprofitorlossonapro-ratabasis.Foreigncurrencycashflowsandthecashflowsofforeignsubsidiariesaretranslatedusingthespotexchangeratesprevailingonthedatesofcashflows.Theeffectofexchangeratechangesoncashisseparatelypresentedasanadjustmentiteminthestatementofcashflows.
9.FinancialinstrumentsAfinancialinstrumentisanycontractthatgivesrisetoafinancialassetofoneentityandafinancialliabilityorequityinstrumentofanotherentity.(I)RecognitionandderecognitionTheGrouprecognizesafinancialassetorafinancialliabilitywhenitbecomesapartytothecontractualprovisionsofafinancialinstrument.Afinancialasset(or,whereapplicable,apartofafinancialassetorpartofagroupofsimilarfinancialassets)isprimarilyderecognised(i.e.,removedfromtheGroup’sconsolidatedbalancesheet)when:
(1)therightstoreceivecashflowsfromthefinancialassethaveexpired;or
(2)theGrouphastransferreditsrightstoreceivecashflowsfromthefinancialasset,orhasassumedanobligationtopaythereceivedcashflowsinfullwithoutmaterialdelaytoathirdpartyundera“pass-through”arrangement;andeither(a)hastransferredsubstantiallyalltherisksandrewardsofthefinancialasset,or(b)hasneithertransferrednorretainedsubstantiallyalltherisksandrewardsoftheasset,buthastransferredcontrolofthefinancialasset.Afinancialliabilityisderecognisedwhentheobligationundertheliabilityisdischargedorcancelled,orexpires.Whenanexistingfinancialliabilityisreplacedbyanotherfromthesamelenderonsubstantiallydifferentterms,orthetermsofanexistingliabilityaresubstantiallymodified,suchanexchangeormodificationistreatedasaderecognitionoftheoriginalliabilityandarecognitionofanewliability,andthedifferencebetweentherespectivecarryingamountsisrecognisedinprofitorloss.
V.Significantaccountingpoliciesandaccountingestimates(continued)
9.Financialinstruments(continued)Regularwaypurchasesandsalesoffinancialassetsarerecognisedandderecognisedusingtradedateaccounting.Regularwaypurchasesorsalesarepurchasesorsalesoffinancialassetsthatrequiredeliverywithintheperiodgenerallyestablishedbyregulationorconventioninthemarketplace.ThetradedateisthedatethattheGroupcommittedtopurchaseorsellafinancialasset.(II)ClassificationandmeasurementoffinancialassetsTheGroup'sfinancialassetsareclassifiedatinitialrecognitionintofinancialassetsatfairvaluethroughprofitorlossandfinancialassetsatamortisedcost,basedontheGroup'sbusinessmodelformanagingfinancialassetsbyenterprisesandthecontractualcashflowcharacteristicsofthefinancialassets.Financialassetsaremeasuredatfairvalueoninitialrecognition,butaccountsreceivableornotesreceivablearisingfromthesaleofgoodsorrenderingofservicesthatdonotcontainsignificantfinancingcomponentsorforwhichtheGrouphasappliedthepracticalexpedientofnotadjustingtheeffectofasignificantfinancingcomponentduewithinoneyear,areinitiallymeasuredatthetransactionprice.Forfinancialassetsatfairvaluethroughprofitorloss,relevanttransactioncostsaredirectlyrecognisedinprofitorloss,andtransactioncostsrelatingtootherfinancialassetsareincludedintheinitialrecognitionamounts.Thesubsequentmeasurementoffinancialassetsdependsontheirclassificationasfollows:
DebtinvestmentsmeasuredatamortisedcostTheGroupmeasuresfinancialassetsatamortisedcostifbothofthefollowingconditionsaremet:thefinancialassetisheldwithinabusinessmodelwiththeobjectivetoholdfinancialassetsinordertocollectcontractualcashflows;thecontractualtermsofthefinancialassetgiveriseonspecifieddatestocashflowsthataresolelypaymentsofprincipalandinterestontheprincipalamountoutstanding.Interestincomeofsuchfinancialassetsisrecognisedusingtheeffectiveinterestmethod.Gainsandlossesarerecognisedincurrentprofitorlosswhentheassetisderecognised,modifiedorimpaired.FinancialassetsatfairvaluethroughprofitorlossThefinancialassetsotherthantheabovefinancialassetsmeasuredatamortisedcostandfinancialassetsatfairvaluethroughothercomprehensiveincomeareclassifiedasfinancialassetsatfairvaluethroughprofitorloss.Suchfinancialassetsaresubsequentlymeasuredatfairvaluewithnetchangesinfairvaluerecognisedinprofitorloss
V.Significantaccountingpoliciesandaccountingestimates(continued)
9.Financialinstruments(continued)(III)ClassificationandmeasurementoffinancialliabilitiesTheGroup’sfinancialliabilitiesare,oninitialrecognition,classifiedintootherfinancialliabilities.Transactioncostsrelatingtootherfinancialliabilitiesareincludedintheinitialrecognitionamounts.Thesubsequentmeasurementoffinancialliabilitiesdependsontheirclassificationasfollows:
FinancialliabilitiesmeasuredatamortizedcostAfterinitialrecognition,suchfinancialliabilitiesaremeasuredatamortisedcostusingtheeffectiveinterestmethod.(IV)ImpairmentoffinancialinstrumentsBasedonexpectedcreditlosses,theGroupundertakesimpairmenttreatmentandrecogniseslossprovisionsforfinancialassetsmeasuredatamortisedcost.CreditlossesrepresentthedifferencebetweenallcontractualcashflowsreceivablebytheGroupunderacontractandallcashflowsexpectedtobecollected,discountedattheoriginaleffectiveinterestrate,beingthepresentvalueoftheentirecashshortfall.Ofthisamount,financialassetspurchasedororiginatedbytheGroupthatarecreditimpairedshouldbediscountedatthecredit-adjustedeffectiveinterestrateofthefinancialassets.Fortradereceivablesthatdonotcontainasignificantfinancingcomponent,theGroupappliesthesimplifiedapproachtorecognizealossallowancebasedonlifetimeECLs.Forfinancialassetsotherthanabovemeasuredbythesimplifiedapproach,theGroupevaluatesateachbalancesheetdatewhetherthecreditriskhassignificantincreasedsinceinitialrecognition.Ifthecreditriskhasnotsignificantlyincreasedsinceinitialrecognition(stage1),theGroupshallmeasurelossprovisionsbasedontheamountofexpectedcreditlossesforthenext12monthsandcalculateinterestincomeaccordingtothebookvalueandeffectiveinterestrate;ifthecreditriskhassignificantlyincreasedsinceinitialrecognitionbutarenotcredit-impaired(stage2),theGroupshallmeasurelossprovisionsbasedontheamountofexpectedcreditlossesfortheentirelifetimeandcalculateinterestincomeaccordingtothebookvalueandeffectiveinterestrate;ifthecreditimpairmenthasoccurredafterinitialrecognition(stage3),theGroupshallmeasurelossprovisionsbasedontheamountofexpectedcreditlossesfortheentirelifetimeandcalculateinterestincomeattheamortisedcostandeffectiveinterestrate.Atthebalancesheetdate,iftheGrouponlyhasfinancialinstrumentswithlowercreditrisk,theGroupassumesthatthecreditriskofthefinancialinstrumenthasnotincreasedsignificantlysinceinitialrecognition.TheGroupevaluatestheexpectedcreditlossesoffinancialinstrumentsonanindividualandportfoliobasis.TheGrouptakesintoaccountthecreditriskcharacteristicsofdifferentcustomersandevaluatestheexpectedcreditlossesofrelevantfinancialinstrumentsonthebasisoftheagingportfolio.FortheGroup'sdisclosureofthecriteriafordeterminingthesignificantincreaseincreditriskandthedefinitionofassetsthathaveincurredcreditimpairment,pleaserefertoNoteX.
V.Significantaccountingpoliciesandaccountingestimates(continued)
9.Financialinstruments(continued)TheGroupdirectlyreducesthecarryingamountoffinancialassetswhentheGroupnolongerreasonablyexpectsthatthecontractualcashflowofsuchfinancialassetsmaybefullyorpartiallyrecoverable.(V)OffsettingoffinancialinstrumentsFinancialassetsandfinancialliabilitiesareoffsetandthenetamountisreportedinthebalancesheetifthereisacurrentlyenforceablelegalrighttooffsettherecognizedamountsandthereisanintentiontosettleonanetbasis,ortorealizetheassetsandsettletheliabilitiessimultaneously.(VI)TransfersoffinancialassetsAfinancialassetisderecognizedwhentheGrouphastransferredsubstantiallyalltherisksandrewardsoftheassettothetransferee.AfinancialassetisnotderecognizedwhentheGroupretainssubstantiallyalltherisksandrewardsofthefinancialasset.WhentheGrouphasneithertransferrednorretainedsubstantiallyalltherisksandrewardsofthefinancialasset,iteither(i)derecognizesthefinancialassetandrecognizestheassetsandliabilitiescreatedinthetransferwhenithasnotretainedcontroloftheasset;or(ii)continuestorecognizethetransferredassettotheextentoftheGroup'scontinuinginvolvement,inwhichcase,theGroupalsorecognizesanassociatedliability.TheCompanycomplieswiththedisclosurerequirementsofthe"JewelleryRelatedBusiness"inthe"Self-regulatoryGuidelinesforListedCompaniesonShenzhenStockExchangeNo.3-DisclosureofIndustryInformation”.
10.TradereceivablesThemethodofdeterminingexpectedcreditlossesontradereceivablesandrelatedaccountingtreatmentcanbereferredtothepoliciesrelatingtofinancialinstruments.
11.OtherreceivablesThemethodofdeterminingexpectedcreditlossesonotherreceivablesandtheaccountingtreatmentcanbereferredtotheaccountingpoliciesregardingfinancialinstruments.
V.Significantaccountingpoliciesandaccountingestimates(continued)
12.InventoriesTheCompanyisrequiredtocomplywiththedisclosurerequirementsforjewelry-relatedbusinessspecifiedintheSelf-disciplinarySupervisionGuidelinesNo.3forCompaniesListedonShenzhenStockExchange-IndustryInformationDisclosure..TheCompanyisrequiredtocomplywiththedisclosurerequirementsforretailindustryspecifiedintheSelf-disciplinarySupervisionGuidelinesNo.3forCompaniesListedonShenzhenStockExchange-IndustryInformationDisclosure.Inventoryincludesrawmaterials,workinprocess,finishedproducts,turnovermaterials,shippedcommoditiesandcommissionedprocessingmaterials.Inventoriesareinitiallycarriedatcost.Costofinventoriescomprisesallcostsofpurchase,manufacutureoverheadandothercost.Turnovermaterialsincludelowvalueconsumablesandpackingmaterials,whichareamortisedusingtheimmediatewrite-offmethod.Theperpetualinventorysystemismaintainedforthestocksystem.Atthebalancesheetdate,inventoriesarestatedatthelowerofcostandnetrealisablevalue.Theinventoriesarewrittendownbelowcosttonetrealisablevalueandthewrite-downisrecognisedinprofitorlossifthecostishigherthanthenetrealisablevalue.Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusinesslesstheestimatedcostsofcompletion,theestimatedcostsnecessarytomakethesaleandrelevanttaxes.Inventoriesarewrittendownitembyitem.
13.ContractassetsTheGrouppresentscontractassetsorcontractliabilitiesinthebalancesheetbasedontherelationshipbetweenthefulfilmentofperformanceobligationsandpaymentsfromcustomers.TheGrouppresentscontractassetsandcontractliabilitiesunderthesamecontractonanetbasisafteroffsettingthemagainsteachother.AcontractassetistherighttoconsiderationinexchangeforgoodsorservicesthattheGrouphastransferredtoacustomer,andthatrightisconditionedonsomethingotherthanthepassageoftime.Themethodofdeterminingexpectedcreditlossesoncontractassetsandtheaccountingtreatmentcanbereferredtothepoliciesrelatingtofinancialinstruments.
14.DebtinvestmentsThemethodofdeterminingexpectedcreditlossesondebtinvestmentsandtheaccountingtreatmentcanbereferredtotherelevantpoliciesonfinancialinstruments.
V.Significantaccountingpoliciesandaccountingestimates(continued)
15.Long-termequityinvestmentsLong-termequityinvestmentsincludeequityinvestmentsinsubsidiaries.Thelong-termequityinvestmentthatthecompanycancontroltheinvesteeisaccountedbycostmethodinindividualfinancialstatementsofthecompany.Controlisthepowerovertheinvestee,exposureorrightstovariablereturnsfromitsinvolvementwiththeinvestee,andtheabilitytouseitspowerovertheinvesteetoaffectthenumberoftheinvestor'sreturns.Underthecostmethod,along-termequityinvestmentismeasuredatitsinitialinvestmentcost.Whenadditionalinvestmentismadeortheinvestmentisrecouped,thecostofthelong-termequityinvestmentisadjustedaccordingly.Cashdividendsorprofitdistributionsdeclaredbytheinvesteearerecognizedasinvestmentincomeinprofitorloss.Ondisposalofalong-termequityinvestment,thedifferencebetweenthecarryingamountandtheactualacquisitionpriceisrecognizedinprofitorlossfortheperiod.
16.Fixedassets(I)RecognitionAfixedassetisrecognisedonlywhenitisprobablethateconomicbenefitsassociatedwiththeassetwillflowtotheGroupandthecostoftheassetcanbemeasuredreliably.Subsequentexpendituresincurredforafixedassetthatmeetstherecognitioncriteriashallbeincludedinthecostofthefixedasset,andthecarryingamountofthecomponentofthefixedassetthatisreplacedshallbederecognised.Otherwise,suchexpendituresarerecognisedinprofitorlossasincurred.Fixedassetsareinitiallymeasuredatcost.Thecostofapurchasedfixedassetcomprisesthepurchaseprice,relevanttaxesandanydirectlyattributableexpenditureforbringingtheassettoitsworkingconditionforitsintendeduse.TheGroupreviewstheusefullifeandestimatednetresidualvalueofafixedassetandthedepreciationmethodappliedatleastateachyearend,andmakesadjustmentsifnecessary.(II)Depreciationmethod
Category
| Category | Depreciationmethod | Usefullife | Estimatednetresidualvaluerate(%) | Annualdepreciationrate(%) |
Transportationfacilities
| Transportationfacilities | Straight-linemethod | 4years | 5.00 | 23.75 |
| Officeequipmentandotherfacilities | Straight-linemethod | 3to5years | 5.00 | 19.00-31.67 |
V.Significantaccountingpoliciesandaccountingestimates(continued)
17.BorrowingcostsTheborrowingcoststhataredirectlyattributabletotheacquisition,constructionorproductionofaqualifyingassetarecapitalised.Theamountsofotherborrowingcostsincurredarerecognisedasanexpenseintheperiodinwhichtheyareincurred.Qualifyingassetsareassets(fixedassets,investmentproperties,inventories,etc.)thatnecessarilytakeasubstantialperiodoftimeofacquisition,constructionorproductiontogetreadyfortheirintendeduseorsale.Thecapitalisationofborrowingcostscommencesonlywhenallofthefollowingconditionsaresatisfied:
(1)expendituresfortheassethavebeenincurred;
(2)borrowingcostshavebeenincurred;and
(3)activitiesthatarenecessarytoacquire,constructorproducetheassetforitsintended
useorsalehavebeenundertaken.Capitalisationofborrowingcostsceaseswhenthequalifyingassetbeingacquired,constructedorproducedgetsreadyforitsintendeduseorsale.Anyborrowingcostssubsequentlyincurredarerecognisedinprofitorloss.Duringthecapitalisationperiod,theamountofinteresteligibleforcapitalisationforeachaccountingperiodshallbedeterminedasfollows:
(1)wherefundsareborrowedspecificallyforthepurposeofobtainingaqualifyingasset,
theamountofinteresteligibleforcapitalisationistheactualinterestcostsincurredonthatborrowingfortheperiodlessanybankinterestearnedfromdepositingtheborrowedfundsbeforebeingusedontheassetoranyinvestmentincomeonthetemporaryinvestmentofthosefunds;or
(2)wherefundsareborrowedgenerallyforthepurposeofobtainingaqualifyingasset,theamountofinteresteligibleforcapitalisationisdeterminedbyapplyingaweightedaverageinterestrateonthegeneralborrowingstotheweightedaverageoftheexcessofthecumulativeexpendituresontheassetovertheexpendituresontheassetfundedbythespecificborrowings.Capitalisationofborrowingcostsissuspendedduringperiodsinwhichtheacquisition,constructionorproductionofaqualifyingassetissuspendedabnormallybyactivitiesotherthanthosenecessarytogettheassetreadyforitsintendeduseorsale,whenthesuspensionisforacontinuousperiodofmorethan3months.Borrowingcostsincurredduringtheseperiodsarerecognisedasanexpenseinprofitorlossuntiltheacquisition,constructionorproductionisresumed.
V.Significantaccountingpoliciesandaccountingestimates(continued)
18.Right-of-useassetsTheGroup'sright-of-useassetsconsistprimarilyofbuildingsandstructures.Atthecommencementdateoftheleaseterm,theGrouprecognizesitsrighttousetheleasedassetduringtheleasetermasaright-of-useassetandisinitiallymeasuredatcost.Right-of-useassetcostsinclude:theinitialmeasuredamountoftheleaseliability;Theamountofleasepaymentspaidonorbeforethestartdateoftheleaseperiod,ifthereisaleaseincentive,deducttheamountrelatedtotheleaseincentivealreadyenjoyed;initialdirectcostsincurredbythelessee;Thecostsexpectedofthelesseetoincurtodismantleandremovetheleasedassets,restorethepremiseswheretheleasedassetsarelocated,orrestoretheleasedassetstothestateagreedinthetermsofthelease.IftheGroupremeasurestheleaseliabilityduetochangesintheamountofleasepayments,thecarryingamountoftheright-of-useassetswillbeadjustedaccordingly.WheretheGroupremeasuresaleaseliabilityasaresultofchangesinleasepayments,thecarryingamountoftheright-of-useassetisadjustedaccordingly.Theright-of-useassetsaredepreciatedonastraight-linebasissubsequentlybytheGroup.IftheGroupisreasonablycertainthattheownershipoftheunderlyingassetwillbetransferredtotheGroupattheendoftheleaseterm,theGroupdepreciatestheassetfromthecommencementdatetotheendoftheusefullifeoftheasset.Otherwise,theGroupdepreciatestheassetsfromthecommencementdatetotheearlieroftheendoftheusefullifeoftheassetortheendoftheleaseterm.
19.Intangibleassets(I)Valuationmethods,usefullives,impairmentAnintangibleassetshallberecognisedonlywhenitisprobablethattheeconomicbenefitsassociatedwiththeassetwillflowtotheGroupprobablyandthecostoftheassetcanbemeasuredreliably.TheusefullifeofanintangibleassetisdeterminedonthebasisoftheperiodforwhichitwillprovideeconomicbenefitstotheGroup.AnintangibleassetisregardedashavinganindefiniteusefullifewhenthereisnounforeseeablelimittotheperiodoverwhichtheassetisexpectedtogenerateeconomicbenefitsfortheGroup.Anintangibleassetwithafiniteusefullifeisamortisedusingthestraight-linemethodoveritsusefullife.Foranintangibleassetwithafiniteusefullife,theGroupreviewstheusefullifeandamortisationmethodatleastateachyearendandmakesadjustmentifnecessary.TheintangibleassetsoftheGrouparemainlysoftwarewiththeusefullivesfrom1to5years
V.Significantaccountingpoliciesandaccountingestimates(continued)
19.Intangibleassets(continued)(II)AccountingpolicyforinternalresearchanddevelopmentexpenditureTheGroupclassifiestheexpendituresonaninternalresearchanddevelopmentprojectintoexpenditureontheresearchphaseandexpenditureonthedevelopmentphase.Expenditureontheresearchphaseisrecognisedinprofitorlossasincurred.ExpendituronthedevelopmentphaseiscapitalizedonlywhentheGroupcandemonstrateallofthefollowing:(i)thetechnicalfeasibilityofcompletingtheintangibleassetsothatitwillbeavailableforuseorsale;(ii)theintentiontocompletetheintangibleassetanduseorsellit;(iii)howtheintangibleassetwillgenerateprobableeconomicbenefits(amongotherthings,theGroupcandemonstratetheexistenceofamarketfortheoutputoftheintangibleassetortheintangibleassetitselfor,ifitistobeusedinternally,theusefulnessoftheintangibleasset);(iv)theavailabilityofadequatetechnical,financialandotherresourcestocompletethedevelopmentandtheabilitytouseorselltheintangibleasset;and(v)theabilitytomeasurereliablytheexpenditureattributabletotheintangibleassetduringthedevelopmentphase.Expenditureonthedevelopmentphasewhichdoesnotmeettheseabovecriteriaisrecognisedinprofitorlosswhenincurred.
20.ImpairmentofassetsTheGroupdeterminestheimpairmentofassets,otherthantheimpairmentofinventories,deferredtaxassetsandfinancialassets,usingthefollowingmethods:
TheGroupassessesatthebalancesheetdatewhetherthereisanyindicationthatanassetmaybeimpaired.Ifanyindicationexiststhatanassetmaybeimpaired,theGroupestimatestherecoverableamountoftheassetandperformsimpairmenttesting.Therecoverableamountofanassetisthehigherofitsfairvaluelesscoststosellandthepresentvalueofthefuturecashflowsexpectedtobederivedfromtheasset.TheGroupestimatestherecoverableamountonanindividualbasisunlessitisnotpossibletoestimatetherecoverableamountoftheindividualasset,inwhichcasetherecoverableamountisdeterminedfortheassetgrouptowhichtheassetbelongs.Identificationofanassetgroupisbasedonwhethermajorcashinflowsgeneratedbytheassetgrouparelargelyindependentofthecashinflowsfromotherassetsorassetgroups.Whentherecoverableamountofanassetorassetgroupislessthanitscarryingamount,thecarryingamountisreducedtotherecoverableamountbytheGroup.Thereductioninthecarryingamountistreatedasanimpairmentlossandrecognisedinprofitorloss.Aprovisionforimpairmentlossoftheassetisrecognisedaccordingly.Oncetheaboveimpairmentlossisrecognised,itcannotbereversedinsubsequentaccountingperiods.
V.Significantaccountingpoliciesandaccountingestimates(continued)
21.Long-termprepaidexpensesLong-termprepaidexpensesareamortisedusingthestraight-linemethodasfollows:
Category
| Category | Amortisationperiod |
Leaseholdimprovements
| Leaseholdimprovements | 1to5years |
| Others | 1to3years |
22.ContractliabilitiesAcontractliabilityistheobligationtotransfergoodsorservicestoacustomerforwhichtheCompanyhasreceivedconsiderationoranamountofconsiderationisduefromthecustomer,suchasanamountofconsiderationthatanentityhasreceivedbeforethetransferofthepromisedgoodsorservices.
23.Employeebenefits(I)Short-termemployeebenefitsDuringanaccountingperiodwhenemployeesrenderservicestotheentity,theamountofshort-termemployeebenefitsactuallyincurredshouldberecognisedasaliabilityandberecognisedinprofitorlossforthecurrentperiodorincostofrelatedassets.(II)Post-employmentbenefits(definedcontributionplan)TheemployeesoftheGroupparticipateinapensionschemeandunemploymentinsurancemanagedbythelocalgovernments,andthecorrespondingexpensesshallbeincludedinthecostofrelatedassetsorprofitorloss.(III)TerminationbenefitsTheGroupprovidesterminationbenefitstoemployeesandrecognisesanemployeebenefitsliabilityforterminationbenefits,withacorrespondingchargetoprofitorloss,attheearlierofwhentheGroupcannolongerwithdrawtheofferofthosebenefitsresultingfromanemploymentterminationplanoracurtailmentproposalandwhentheGrouprecognisecostsinvolvingthepaymentofterminationbenefits.
V.Significantaccountingpoliciesandaccountingestimates(continued)
24.LeaseliabilitiesAtthecommencementdateofthelease,theGrouprecognizesthepresentvalueoftheunpaidleasepaymentsasaleaseliability.Leasepaymentsincludefixedandsubstantialfixedpaymentsnetofleaseincentives,variableleasepaymentsdependingonindexorratio,amountsexpectedtobepayablebasedontheresidualvalueoftheguarantee,andtheexercisepriceofthepurchaseoptionortheamounttoberequiredtoexercisetheterminationoption,providedthattheGroupreasonablydeterminesthattheoptionorthetermoftheleasereflectstheGroup'sexerciseoftheoptiontoterminatethelease.Incalculatingthepresentvalueofleasepayments,theGroupusestheimpliedinterestrateoftheleaseasthediscountrate;Iftheinterestrateincludedintheleasecannotbedetermined,theinterestrateofthelessee'sincrementalborrowingshallbeusedasthediscountrate.TheGroupcalculatestheinterestexpenseoftheleaseliabilityduringeachperiodoftheleaseterminaccordancewiththeconstantperiodicrateofinterestandrecognizesitinprofitandlossforthecurrentperiod,exceptotherwisestipulatedinthecostofrelatedassets.Variableleasepaymentsthatarenotincludedinthemeasurementoftheleaseliabilitiesarerecognisedinprofitorlossasincurred,exceptthoseinthecostsoftherelatedassetasrequired.Afterthecommencementdateofthelease,theGroupincreasesthecarryingamountoftheleaseliabilitywhenitrecognizesinterestandreducesthecarryingamountoftheleaseliabilitywhenitpaystheleasepayment.Afteraleasetermcommences,whenthereisachangeintheamountofin-substancefixedleasepayments,achangeintheamountsexpectedtobepayableunderaresidualvalueguarantee,achangeinfutureleasepaymentsresultingfromachangeinanindexorarateusedtodeterminethosepayments,achangeinassessmentofanoptiontopurchasetheunderlyingasset,reneworterminatethelease,orchangeintheactualexerciseofanoption,theGroupremeasuresthecarryingamountoftheleaseliabilitybydiscountingtherevisedleasepayments.
25.ProvisionsAnobligationrelatedtoacontingencyshallberecognisedbytheGroupasaprovisionwhenallofthefollowingconditionsaresatisfied,exceptforcontingentconsiderationsandcontingentliabilitiesassumedinabusinesscombinationnotinvolvingentitiesundercommoncontrol:
(1)theobligationisapresentobligationoftheGroup;
(2)itisprobablethatanoutflowofeconomicbenefitsfromtheGroupwillberequiredtosettle
theobligation;and
(3)areliableestimatecanbemadeoftheamountoftheobligation.Aprovisionisinitiallymeasuredatthebestestimateoftheexpenditurerequiredtosettletherelatedpresentobligation,takingintoaccountfactorspertainingtoacontingencysuchastherisks,uncertaintiesandtimevalueofmoneyasawhole.Provisionsarereviewedateachbalancesheetdate.Wherethereisclearevidencethatthecarryingamountofaprovisiondoesnotreflectthecurrentbestestimate,thecarryingamountisadjustedtothecurrentbestestimate.
V.Significantaccountingpoliciesandaccountingestimates(continued)
26.Share-basedpaymentsAshare-basedpaymentisclassifiedaseitheranequity-settledshare-basedpaymentoracash-settledshare-basedpayment.Anequity-settledshare-basedpaymentisatransactioninwhichtheGroupreceivesservicesandusessharesorotherequityinstrumentsasconsiderationforsettlement.Anequity-settledshare-basedpaymentinexchangeforservicesreceivedfromemployeesismeasuredatthefairvalueoftheequityinstrumentsgrantedtotheemployees.Ifsuchequity-settledshare-basedpaymentcouldvestimmediately,relatedcostsorexpensesatanamountequaltothefairvalueonthegrantdatearerecognized,withacorrespondingincreaseincapitalreserves;ifsuchequity-settledshare-basedpaymentcouldnotvestuntilthecompletionofservicesforavestingperiod,oruntiltheachievementofaspecifiedperformancecondition,theGroupateachbalancesheetdateduringthevestingperiodrecognizestheservicesreceivedforthecurrentperiodasrelatedcostsandexpenses,withacorrespondingincreaseincapitalreserves,atanamountequaltothefairvalueoftheequityinstrumentsatthegrantdate,basedonthebestestimateofthenumberofequityinstrumentsexpectedtovest.Thefairvalueofequityinstrumentsisdeterminedbasedonanassessmentbyathird-partyindependentassetappraiser,asdescribedinNoteXIII.Forawardsthatdonotultimatelyvestbecausenon-marketperformanceand/orserviceconditionshavenotbeenmet,noexpenseisrecognized.Whereawardsincludeamarketornon-vestingcondition,thetransactionsaretreatedasvestingirrespectiveofwhetherthemarketornon-vestingconditionissatisfied,providedthatallotherperformanceand/orserviceconditionsaresatisfied.Wherethetermsofanequity-settledshare-basedawardaremodified,asaminimumanexpenseisrecognizedasifthetermshadnotbeenmodified.Inaddition,anexpenseisrecognizedforanymodificationthatincreasesthetotalfairvalueoftheshare-basedpayments,orisotherwisebeneficialtotheemployeeasmeasuredatthedateofmodification.Whereanequity-settledshare-basedawardiscancelled,itistreatedasifithadvestedonthedateofcancellation,andanyexpensenotyetrecognizedfortheawardisrecognizedimmediately.Ifanemployeeorotherpartiescanchoosewhethertomeetanon-vestingcondition,theGrouptreatstheemployee’sorotherparties'failuretomeetthatnon-vestingconditionduringthevestingperiodasacancellation.However,ifanewawardissubstitutedforthecancelledaward,andisdesignatedasareplacementonthedatethatitisgranted,thecancelledandnewawardsaretreatedasiftheywereamodificationoftheoriginalaward.Thecostofcash-settledtransactionsismeasuredatthefairvalueoftheliabilitywhichisdeterminedonthebasisofsharesorotherequityinstrumentsoftheGroup.
27.RevenuefromcontractswithcustomersTheCompanyisrequiredtocomplywiththedisclosurerequirementsforretailindustryspecifiedintheSelf-disciplinarySupervisionGuidelinesNo.3forCompaniesListedonShenzhenStockExchange-IndustryInformationDisclosure.
V.Significantaccountingpoliciesandaccountingestimates(continued)
27.Revenuefromcontractswithcustomers(continued)TheCompanyisrequiredtocomplywiththedisclosurerequirementsforjewelry-relatedbusinessspecifiedintheSelf-disciplinarySupervisionGuidelinesNo.3forCompaniesListedonShenzhenStockExchange-IndustryInformationDisclosure..TheGrouprecognisesrevenuewhenithasfulfilleditsperformanceobligationsunderthecontract,thatis,whenthecustomerobtainscontroloftherelevantgoodsorservices.Theacquisitionofcontroloftherelevantgoodsorservicesisdefinedastheabilitytodominatetheuseofthegoodsortheprovisionoftheservicesandtoderivesubstantiallyalltheeconomicbenefitstherefrom.ContractsforthesaleofgoodsAcontractforthesaleofgoodsbetweentheGroupandthecustomerusuallyonlyincludestheperformanceobligationtotransferthegoods.TheGroupgenerallyrecognizesrevenueatthepointintheperformanceofeachindividualperformanceobligationtakingintoaccountacombinationoftheacquisitionofthecurrentrighttoreceivethegoods,thetransferofsignificantrisksandrewardsofownershipofgoods,thetransferoflegaltitletogoods,thetransferofphysicalpossessionofgoods,andthecustomer'sacceptanceofgoods.TheGroupmainlyadoptstheself-operatedmodelforsales,whichsellsgoodstocustomersinretailformandrecognizesrevenuewhencustomersreceivethem.SaleswitharightofreturnForsaleswitharightofreturn,theGrouprecognizestherevenueintheamountofconsiderationtowhichtheGroupexpectstobeentitledinexchangefortransferringcontrolofthegoodstothecustomer,andrecognizestheamountexpectedtoberefundedasaresultofthesalesreturnasarefundliability.Atthesametime,anassetrecognizedforanentity’srighttorecovergoodsfromacustomeronsettlingarefundliabilityismeasuredbyreferencetothecarryingamountofthegoodslessanyexpectedcoststorecoverthegoods(includingpotentialdecreasesinthevalueofthereturnedgoods),thatis,right-of-returnassets,andrecognizedcostofsalesbasedonthecarryingamountofthetransferredgoodsatthetimeoftransferofthegoodslessthenetamountoftheassetcostabove.Ateachbalancesheetdate,theGroupre-estimatethefuturesalesreturnandremeasurestheassetsandliabilitiesabove.
V.Significantaccountingpoliciesandaccountingestimates(continued)
27.Revenuefromcontractswithcustomers(continued)WarrantiesTheGroupprovidesawarrantyinconnectionwiththesaleofagoodinaccordancewiththecontractandtherelevantlawsandregulations,etc.TheGroupaccountsforassurance-typequalityassuranceinordertoassurecustomersthatthegoodssoldmeettheestablishedstandards,inaccordancewithNote3and19.Forservice-typequalityassurancethatprovidesaseparateserviceinadditiontotheestablishedstandardsforassuringthecustomerthatthegoodssoldmeettheestablishedstandards,theGroupapportionspartofthetransactionpricetotheservice-typequalityassuranceinproportiontotherelativeproportionoftheseparatesellingpricefortheprovisionofthequalityassuranceofgoodsandservices,andrecognizesrevenuewhenthecustomeracquirescontroloftheservice.Whenassessingwhetheraservice-typewarrantyprovidesacustomerwithaseparateserviceinadditiontotheassurancethatthegoodcomplieswithagreed-uponspecifications,theGroupconsiderswhetherthewarrantyisrequiredbylaw,thelengthofthewarrantycoverageperiodandthenatureofthetasksthattheGrouppromisestoperform,etc.Principal/agentUndertheOfflineJoint-Operatedbusinessmodel,cooperativeshoppingmallsprovidestoresorcounterstotheGroupforthesaleofgoods,andtheshoppingmallsreceiveacommissionaccordingtoacertainpercentageoftheturnover.TheGroupundertakesprimaryresponsibilityforthetransferofgoodstocustomers,isentitledtodeterminethetransactionprice,andbearstheinventoryrisk.ThereforetheGroupisaprincipalandrecognizesrevenuebasedonthetotalconsiderationreceivedorreceivablewhencustomersreceivethegoods.AdditionalpurchaseoptionincludedwiththecustomerWhereanadditionalpurchaseoptionisattachedtothecustomer,theGroupevaluatestheoptiontoprovideamaterialrighttothecustomerwhenthecustomeracquirescontroloftherelevantgoods.Revenueisrecognizedonthebasisoftheamountofconsiderationexpectedtobeentitledtobereceivedasaresultofthetransferofgoodstothecustomer,andrevenueisapportionedtoeachindividualperformanceobligationbasedontherelativeproportiontotheindividualsellingpricesofthegoodscommittedtotheindividualperformanceobligations.
V.Significantaccountingpoliciesandaccountingestimates(continued)
28.GovernmentgrantsGovernmentgrantsarerecognisedwhenallattachingconditionswillbecompliedwithandthegrantswillbereceived.Ifagovernmentgrantisintheformofatransferofamonetaryasset,itismeasuredattheamountreceivedorreceivable.Ifagovernmentgrantisintheformofatransferofanon-monetaryasset,itismeasureatfairvalue;iffairvalueisnotreliablydeterminable,itismeasuredatanominalamount.Ifgovernmentdocumentsstipulatethatitisusedforthepurchase,construction,orotherformsoflong-termassets,itshallberegardedasgovernmentgrantsrelatedtoassets;Ifthegovernmentdocumentsarenotclear,thejudgmentshallbebasedonthebasicconditionsthatmustbemettoobtainthegovernmentgrant.Ifthebasicconditionsaretoformlong-termassetsthroughpurchase,constructionorothermeans,itshallberegardedasgovernmentgrantsrelatedtoassets,andotherwiseitshallberegardedasgovernmentgrantsrelatedtoincome..Agovernmentgrantrelatedtoincomeisaccountedforasfollows:(i)ifthegrantisacompensationforrelatedexpensesorlossestobeincurredinsubsequentperiods,thegrantisrecognisedasdeferredincome,andreleasedinprofitorlossoroffsetagainstrelatedexpensesovertheperiodsinwhichtherelatedcostsarerecognised;or(ii)ifthegrantisacompensationforrelatedexpensesorlossesalreadyincurred,itisrecognisedimmediatelyinprofitorlossoroffsetagainstrelevantexpenses.Agovernmentgrantrelatingtoanassetshallbeoffsetagainstthecarryingamountsofrelevantassets,orrecognisedasdeferredincomeandamortisedinprofitorlossovertheusefullifeoftherelatedassetbyannualinstalmentsinasystematicandrationalway(however,agovernmentgrantmeasuredatanominalamountisrecogniseddirectlyinprofitorloss).Wheretheassetsaresold,transferred,retiredordamagedbeforetheendoftheirusefullives,therestoftheremainingdeferredincomeisreleasedtoprofitorlossfortheperiodinwhichtherelevantassetsaredisposedof.
V.Significantaccountingpoliciesandaccountingestimates(continued)
29.DeferredtaxDeferredtaxisprovidedusingthebalancesheetliabilitymethod,onalltemporarydifferencesatthebalancesheetdatebetweenthetaxbasesofassetsandliabilitiesandtheircarryingamounts,andtemporarydifferencesbetweenthetaxbasesandthecarryingamountsoftheitems,whichhaveataxbaseaccordingtorelatedtaxlawsbutarenotrecognisedasassetsandliabilities.Deferredtaxliabilitiesarerecognisedforalltaxabletemporarydifferences,except:
(1)whenthetaxabletemporarydifferencearisesfromtheinitialrecognitionofgoodwill,oranassetorliabilityinatransactionthatisnotabusinesscombinationand,atthetimeoftransaction,affectsneitheraccountingprofitnortaxableprofitorloss;and
(2)inrespectoftaxabletemporarydifferencesassociatedwithinvestmentsinsubsidiaries,associatesandjointventures,whenthetimingofthereversalofthetemporarydifferencescanbecontrolledanditisprobablethatthetemporarydifferenceswillnotbereversedintheforeseeablefuture.Deferredtaxassetsarerecognisedforalldeductibletemporarydifferences,andthecarryforwardofunusedtaxlossesandanyunusedtaxcredits.Deferredtaxassetsarerecognisedtotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferences,thecarryforwardofunusedtaxlossesandunusedtaxcreditscanbeutilised,except:
(1)whenthedeductibletemporarydifferencearisesfromtheinitialrecognitionofanassetorliabilityinatransactionthatisnotabusinesscombinationand,atthetimeofthetransaction,affectsneithertheaccountingprofitnortaxableprofitorloss;and
(2)inrespectofthedeductibletemporarydifferencesassociatedwithinvestmentsin
subsidiaries,associatesandjointventures,deferredtaxassetsareonlyrecognisedtotheextentthatitisprobablethatthetemporarydifferenceswillbereversedintheforeseeablefutureandtaxableprofitwillbeavailableagainstwhichthetemporarydifferencescanbeutilisedinthefuture.Atthebalancesheetdate,deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplytotheperiodwhentheassetisrealisedortheliabilityissettled,inaccordancewiththerequirementsoftaxlaws.ThemeasurementofdeferredtaxassetsanddeferredtaxliabilitiesreflectsthetaxconsequencesthatwouldfollowfromthemannerinwhichtheGroupexpects,atthebalancesheetdate,torecovertheassetsorsettletheliabilities.Thecarryingamountofdeferredtaxassetsisreviewedatthebalancesheetdateandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitwillbeavailableinfutureperiodstoallowthebenefitofdeferredtaxassetstobeutilised.Unrecogniseddeferredtaxassetsarereassessedatthebalancesheetdateandarerecognisedtotheextentthatithasbecomeprobablethatsufficienttaxableprofitwillbeavailabletoallowallorpartofthedeferredtaxassetstoberecovered.
V.Significantaccountingpoliciesandaccountingestimates(continued)
29.Deferredtax(continued)DeferredtaxassetsanddeferredtaxliabilitiesareoffsetifandonlyiftheGrouphasalegallyenforceablerighttosetoffcurrenttaxassetsandcurrenttaxliabilities,andthedeferredtaxassetsanddeferredtaxliabilitiesrelatetoincometaxesleviedbythesametaxationauthorityoneitherthesametaxableentityordifferenttaxableentitieswhichintendeithertosettlecurrenttaxassetsandliabilitiesonanetbasis,ortorealisetheassetsandsettletheliabilitiessimultaneously,ineachfutureperiodinwhichsignificantamountsofdeferredtaxassetsorliabilitiesareexpectedtoberecovered.
30.Leases
(1)AccountingtreatmentforoperatingleaseAtinceptionofacontract,theGroupassesseswhetherthecontractis,orcontains,alease.Ifapartyofthecontractconveystherighttocontroltheuseofanidentifiedassetoridentifiedassetsforaperiodoftimeinexchangeforconsideration,thecontractshallbealeasecontractorcontainslease.AslesseeTheGroup'srecognitionofright-of-useassetsandleaseliabilitiesforleasesisshowninNoteV.18andV.24..Short-termleasesandleasesoflow-valueassetsTheGroupconsidersaleasethat,atthecommencementdateofthelease,hasaleasetermof12monthsorless,anddoesnotcontainanypurchaseoptionasashort-termlease;andaleaseforwhichthevalueoftheindividualunderlyingassetisnotmorethanRMB40,000orUSD5000whenitisnewasaleaseoflow-valueassets.IftheGroupsubleasesanasset,orexpectstosubleaseanasset,theheadleasedoesnotqualifyasaleaseofalow-valueasset.TheGrouphaschosentorecognizeright-of-useassetsandleaseliabilitiesforbothshort-termleasesandlow-valueassetleases.SeeNoteV.18andV.24fordetails.
V.Significantaccountingpoliciesandaccountingestimates(continued)
31.OtherSignificantaccountingpoliciesandaccountingestimatesThepreparationofthefinancialstatementsrequiresmanagementtomakejudgements,estimatesandassumptionsthataffectthereportedamountsofrevenue,expenses,assetsandliabilities,andtheiraccompanyingdisclosures,andthedisclosureofcontingentliabilitiesatthebalancesheetdate.Uncertaintyabouttheseassumptionsandestimatescouldresultinoutcomesthatcouldrequireamaterialadjustmenttothecarryingamountsoftheassetsorliabilitiesaffectedinthefuture.JudgementsIntheprocessofapplyingtheGroup’saccountingpolicies,managementhasmadethefollowingjudgmentswhichhavethemostsignificanteffectontheamountsrecognisedintheconsolidatedfinancialstatements:
BusinessmodelTheclassificationoffinancialassetsatinitialrecognitionisdependensontheGroup’sbusinessmodelformanagingfinancialassets.FactorsconsideredbytheGroupinjudgingthebusinessmodelincludeenterpriseevaluation,themethodofreportingtheresultsoffinancialassetstokeymanagementmembers,therisksaffectingtheresultsoffinancialassetsandthemethodformanagingsuchrisks,aswellastheformofremunerationreceivedbythemanagementpersonnelofthebusinessesconcerned.Inassessingwhetherthebusinessmodelisaimedatreceivingcontractualcashflows,theGroupisrequiredtoanalyseandexercisejudgementinrespectofthereasons,timing,frequencyandvaluesofanydisposalspriortomaturityofthefinancialassets.
V.Significantaccountingpoliciesandaccountingestimates(continued)
31.OtherSignificantaccountingpoliciesandaccountingestimates(continued)Judgements(continued)Whetheracontractis,orcontains,aleaseTheGroupenteredintoaserviceagreementunderOfflineJoint-Operatedbusinessmodel.TheGroupbelievesthat,basedontheagreement,thereisanidentifiedassetandtheGroupcontrolstherighttousetheassetduringtheleaseperiod.Therefore,theserviceagreementcontainsaleaseandtheGrouptreatsisasalease.EstimationuncertaintyThekeyassumptionsconcerningthefutureandotherkeysourcesofestimationuncertaintyatthebalancesheetdate,whichhaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthefutureaccountingperiods,aredescribedbelow.ImpairmentoffinancialinstrumentsTheGroupusestheexpectedcreditlossmodeltoassesstheimpairmentoffinancialinstruments.Theapplicationoftheexpectedcreditlossmodelrequiressignificantjudgementsandestimatesandconsiderationofallreasonableandsupportableinformation,includingforward-lookinginformation.Whenmakingsuchjudgementsandestimates,theGroupinferstheexpectedchangesinthedebtor'screditriskbasedonhistoricalrepaymentdatacombinedwitheconomicpolicies,macroeconomicindicators,industryrisksandotherfactors.Differentestimatesmayaffecttheimpairmentprovision,andtheamountofimpairmentprovisionmademaynotequaltotheactualamountofimpairmentlossinthefuture.Impairmentofnon-currentassetsotherthanfinancialassetsTheGroupassesseswhetherthereareanyindicationsofimpairmentforallnon-currentassetsotherthanfinancialassetsatthebalancesheetdate.Othernon-currentassetsotherthanfinancialassetsaretestedforimpairmentwhenthereareindicationsthatthecarryingamountsmaynotberecoverable.Animpairmentexistswhenthecarryingamountofanassetorassetgroupexceedsitsrecoverableamount,whichisthehigherofitsfairvaluelesscostsofdisposalandthepresentvalueofthefuturecashflowsexpectedtobederivedfromit.Thecalculationofthefairvaluelesscostsofdisposalisbasedonavailabledatafrombindingsalestransactionsinanarm’slengthtransactionofsimilarassetsorobservablemarketpriceslessincrementalcostsfordisposingoftheassets.Whenthecalculationsofthepresentvalueofthefuturecashflowsexpectedtobederivedfromanassetorassetgroupareundertaken,managementmustestimatetheexpectedfuturecashflowsfromtheassetorassetgroupandchooseasuitablediscountrateinordertocalculatethepresentvalueofthosecashflows.FurtherdetailsareincludedinNoteVII.42。
V.Significantaccountingpoliciesandaccountingestimates(continued)
31.OtherSignificantaccountingpoliciesandaccountingestimates(continued)Estimationuncertainty(continued)DeferredtaxassetsDeferredtaxassetsarerecognisedforallunusedtaxlossestotheextentthatitisprobablethatsufficienttaxableprofitwillbeavailableagainstwhichthelossescanbeutilised.Significantmanagementjudgementisrequiredtodeterminetheamountofdeferredtaxassetsthatcanberecognised,baseduponthelikelytimingandleveloffuturetaxableprofitstogetherwithfuturetaxplanningstrategies.VariableconsiderationinvolvingsalesreturnsTheGroupmakesreasonableestimateofagroupofcontractswithsimilarcharacteristicsaccordingtothehistoricalsalesdata,thecurrentsalessituation,aswellascustomerchanges,marketchangesandotherrelevantinformation.TheestimatedreturnratemaynotbeequaltotheactualreturnrateinthefutureandtheGroupreassessesthereturnrateateachbalancesheetdateanddeterminesaccountingbasedonthereassessedreturnrate.InventoryprovisiondeterminedonnetrealisablevalueInaccordancewiththeinventoryaccountingpolicy,theGroupmeasuresthelowerofcostandnetrealizablevalue,andmakesprovisionforinventorypricedeclinewhenthecostishigherthanthenetrealizablevalue.TheGrouprestimatesateachbalancesheetdatewhetherthenetrealizablevalueofindividualinventoryitemsislowerthanthecostofinventory.FairvalueofwealthmanagementproductsandstructureddepositsThefairvaluemeasurementofnon-principalprotectedfloatingincomewealthmanagementproductsandstructureddepositslinkedtothespotexchangerateofEURtoUSDrequirestheGrouptoestimateprojectedfuturecashflows,creditriskvolatilityanddiscountrates,andisthereforeuncertain.ProvisionsforstorerecoveryAsthelessee,theGroupundertakestheobligationtorestoretheleasedassetstothestateagreedintheleasetermsinaccordancetheleasecontract.Themanagementestimatesprovsionsarisingfromthefullfillmentofrecoveryobligationsbasedonindustryconditionsandhistoricalexperience.Atthebalancesheetdate,managementreviewsthecarryingamountoftheprovisionsandmakesappropriateadjustmentstoreflectthecurrentbestestimates.Share-basedpaymentsBasedonfairvalueatthegrantdate,theGroupmakesthebestestimateofthenumberofexercisableequityinstrumentsbasedonsubsequentinformationavailableatthelatestavailablesubsequentinformationatfairvalueatthegrantdate,andincludestheservicesacquiredinthecurrentperiodintherelevantcostsorexpenses.ManagementmustestimatetheGroup'sprojectedfuturecashflowstoassessthefairvalueoftheequityinstrumentsgrantdateandestimatethenumberofvestigableequityinstruments.
V.Significantaccountingpoliciesandaccountingestimates(continued)
31.OtherSignificantaccountingpoliciesandaccountingestimates(continued)Estimationuncertainty(continued)Lessee’sincrementalborrowingrateIftheinterestrateimplicitintheleasecannotbereadilydetermined,theGroupmeasurestheleaseliabilityatthepresentvalueoftheleasepaymentsdiscountedusingthelessee’sincrementalborrowingrate.Accordingtotheeconomicenvironment,theGrouptakestheobservableinterestrateasthereferencebasisfordeterminingtheincrementalborrowingrate,thenadjuststheobservableinterestratebasedonitsowncircumstances,underlyingassets,leasetermsandamountsofleaseliabilitiestodeterminetheapplicableincrementalborrowingrate.
32.ChangesinsignificantaccountingpoliciesandaccountingestimatesN/AVI.Taxes
1.Majorcategoriesoftaxesandtaxrates
Category
| Category | Basis | Taxrate |
| Valueaddedtax | Generaltaxpayerscalculateoutputtaxat6%,13%or20%oftheirtaxableincomeandpayVATonthedifferenceafterdeductingtheallowableinputVATdeductionforthecurrentperiod.Small-scaletaxpayersarechargedatalevyrateof3%. | 3%,6%,13%,20% |
| Excisetax | Salesrevenueofgoldandsilverjewellerysoldattheretailstage. | 5% |
| Urbanmaintenanceandconstructiontax | Turnovertaxesactuallypaid. | 5%,7% |
| Corporateincometax | Taxableincome | 16.5%,25%,28% |
| Educationsurcharge | Turnovertaxesactuallypaid. | 3% |
| Localeducationsurcharge | Turnovertaxesactuallypaid. | 2% |
VI.Taxes(continued)
1.Majorcategoriesoftaxesandtaxrates(continued)Disclosureofinformationontaxpayerswithdifferentcorporateincometaxrates
Nameoftaxpayers
| Nameoftaxpayers | Incometaxrate |
DRCorporationLimited
| DRCorporationLimited | 25% |
| ShanghaiDarryDiamondCo.,Ltd | 25% |
| CoupleOnly(Shenzhen)JewelryCo.,Ltd | 20% |
| He’erCulture(Shenzhen)Co.,Ltd | 15% |
| ShenzhenDarryCommercialManagementServicesCo.,Ltd | 15% |
| ChongqingDarryJewelryCo.,Ltd | 20% |
| ShenzhenLoveOnlyAICloudTechnologyCo.,Ltd | 15% |
| HaoduoDiamond(Shenzhen)Co.,Ltd | 25% |
| HaoduoDiamondZhizao(Shenzhen)Co.,Ltd | 20% |
| DRGroupCompanyLimited | 16.5% |
| DARRYJEWELRY(HK)LIMITED | 16.5% |
| CoupleOnlyJewelryHongKongCompanyLimited | 16.5% |
| DRJewelry | 28% |
| XiamenDRJewelryCo.,Ltd | 20% |
| ShenyangDRJewelryCo.,Ltd | 20% |
| TianjinDRJewelryCo.,Ltd | 20% |
| ChengduDRJewelryCo.,Ltd | 20% |
| KunmingDRJewelryCo.,Ltd | 20% |
| ShanghaiDRJewelryCo.,Ltd | 20% |
| SuzhouZhongzuanDRJewelryCo.,Ltd | 20% |
| JinanDRJewelryCo.,Ltd | 20% |
| ShenzhenDRJewelryCo.,Ltd | 20% |
| BeijingZhongzuanDRJewelryCo.,Ltd | 20% |
| SuzhouDRJewelryCo.,Ltd | 20% |
| ShenyangDRJewelryAccessoriesCo.,Ltd | 20% |
| HangzhouDRJewelryCo.,Ltd | 20% |
| BeijingDRJewelryCo.,Ltd | 20% |
| WuhanDRJewelryCo.,Ltd | 20% |
| WuhanZhongzuanDRJewelryCo.,Ltd | 20% |
| Xi’anDRJewelryCo.,Ltd | 20% |
| ChengduDRTrueLoveJewelryCo.,Ltd | 20% |
| NingboDRJewelryCo.,Ltd | 20% |
| BeijingHuazuanDRJewelryCo.,Ltd | 20% |
| ChongqingDRJewelryCo.,Ltd | 20% |
| HangzhouDRTrueLoveJewelryCo.,Ltd | 20% |
| HenanDRJewelryCo.,Ltd | 20% |
| Xi’anDRJewelryandAccessoriesCo.,Ltd | 20% |
| ZhengzhouDRJewelryCo.,Ltd | 20% |
| ShenzhenDRJewelryAccessoriesCo.,Ltd | 20% |
| ShenzhenDRJewelryOrnamentCo.,Ltd | 20% |
| ChangshaDRJewelryCo.,Ltd | 20% |
| ShanghaiDRJewelryAccessoriesCo.,Ltd | 20% |
| ShanghaiDRJewelrySalesCo.,Ltd | 20% |
| ZhoukouDRJewelryCo.,Ltd | 20% |
| YiwuDRJewelryCo.,Ltd | 20% |
| HezeDRJewelryCo.,Ltd | 20% |
| DongguanDRJewelryCo.,Ltd | 20% |
| XiningDRJewelryCo.,Ltd | 20% |
| LinyiDRJewelryCo.,Ltd | 20% |
| YinchuanDRJewelryCo.,Ltd | 20% |
| WeifangDRJewelryCo.,Ltd | 20% |
| NanchangDRJewelryCo.,Ltd | 20% |
| JiningDRJewelryCo.,Ltd | 20% |
| MianyangDRJewelryCo.,Ltd | 20% |
| FuyangDRJewelryCo.,Ltd | 20% |
| ShangqiuDRJewelryCo.,Ltd | 20% |
| UrumqiDRJewelryCo.,Ltd | 20% |
| HandanJewelryCo.,Ltd | 20% |
VI.Taxes(continued)
1.Majorcategoriesoftaxesandtaxrates(continued)
2.Taxbenefits(I)IncometaxbenefitsAccordingtotheNoticeoftheMinistryofFinanceandtheStateAdministrationofTaxationonExtendingthePreferentialPoliciesforEnterpriseIncomeTaxintheShenzhenQianhaiShenzhen-HongKongModernServiceIndustryCooperationZone(CaiShui[2021]No.30),fromJanuary1,2021toDecember31,2025,theenterpriseincometaxpolicyoftheShenzhenQianhaiShenzhen-HongKongModernServiceIndustryCooperationZonewillbecontinued,andeligibleenterpriseslocatedintheQianhaiShenzhen-HongKongModernServiceIndustryCooperationZonewillbesubjecttoenterpriseincometaxatareducedrateof15%.ShenzhenDarryCommercialManagementServiceCo.,Ltd.andHe’erCulture(Shenzhen)Co.,Ltd.,subsidiariesoftheCompany,areestablishedintheQianhaiShenzhen-HongKongModernServiceIndustryCooperationZone,andwillbesubjecttocorporateincometaxatareducedrateof15%in2022.AccordingtotheprovisionsoftheEnterpriseIncomeTaxLawofthePeople'sRepublicofChina,ShenzhenLoveOnlyAICloudTechnologyCo.,Ltd.(hereinafterreferredtoas"LoveOnlyAI"),asubsidiaryoftheCompany,obtainedthequalificationofhigh-techenterpriseonDecember11,2020,whichisvalidforthreeyears,andcanenjoyapreferentialincometaxrateof15%forhigh-techenterprisesfrom2020to2022.In2022,wewilllevycorporateincometaxatarateof15%.InaccordancewiththeInlandRevenue(InlandRevenueDepartment)2018(No.3)OrdinancepromulgatedbytheInlandRevenueDepartmentoftheGovernmentoftheHongKongSpecialAdministrativeRegionon29March2018,thetwo-tieredprofitstaxsystemhasbeenimplementedwitheffectfrom1April2018,andtheincometaxrateofDRGroupCompanyLimited,asubsidiaryoftheCompany,hasbeenreducedto8.25%forthefirstHKd2millionprofitin2022,andprofitsthereafterwillcontinuetobetaxedat16.5%.AccordingtotheAnnouncementoftheStateAdministrationofTaxationoftheMinistryofFinanceontheImplementationofthePreferentialIncomeTaxPolicyforSmallandMicroEnterprisesandIndividualIndustrialandCommercialEnterprises(No.12of2021),fromJanuary1,2021toDecember31,2022,theannualtaxableincomeofsmallandmicro-profitenterprisesdoesnotexceedRMB1million,onthebasisofthepreferentialpoliciesstipulatedinArticle2oftheNoticeoftheStateAdministrationofTaxationoftheMinistryofFinanceontheImplementationoftheInclusiveTaxReductionandReductionPolicyforSmallandMicroEnterprises(CaiShui[2019]No.13),Corporateincometaxwillbereducedbyhalf.SomesubsidiariesoftheCompanywillmeettheconditionsofsmallandmicro-profitenterprisesin2022andapplythecorrespondingpreferentialpoliciesontheirown.
Nameoftaxableentity
| Nameoftaxableentity | Incometaxrate |
BaodingDRJewelrySalesCo.,Ltd
| BaodingDRJewelrySalesCo.,Ltd | 20% |
| GuangzhouDRJewelryCo.,Ltd | 20% |
| GuiyangDRJewelryCo.,Ltd | 20% |
| LangfangDRJewelryCo.,Ltd | 20% |
| FoshanDRJewelryCo.,Ltd | 20% |
| JiaxingDRJewelryCo.,Ltd | 20% |
VI.Taxes(continued)
2.Taxbenefits(continued)(II)VATtaxbenefitsAccordingtotheNoticeoftheGeneralAdministrationofCustomsoftheMinistryofFinanceandtheStateAdministrationofTaxationonAdjustingtheRelevantTaxPoliciesoftheDiamondandShanghaiDiamondExchange(CaiShui[2006]No.65),polisheddiamondsimportedthroughthecustomsdeclarationofthecompetentcustomsoftheDiamondExchangeshallbeleviedandrefundedimmediatelyiftheactualVATburdenexceeds4%attheimportstage.ShanghaiDarryDiamondCo.,Ltd.(hereinafterreferredtoas"ShanghaiDarry"),asubsidiaryoftheCompany,hasthemembershipoftheShanghaiDiamondExchangeandenjoysthetaxtreatmentofimmediaterefundforthepartoftheactualVATburdenintheimportprocessexceeding4%.InaccordancewiththeprovisionsofAnnouncementNo.7of2021oftheMinistryofFinanceandtheStateAdministrationofTaxation,theMinistryofFinanceandtheStateAdministrationofTaxationannouncedthepreferentialtaxpoliciesstipulatedinNo.13of2020,andtheimplementationperiodwasextendedtoDecember31,2021.Amongthem,fromApril1,2021toDecember31,2021,small-scaleVATtaxpayersinHubeiProvincewillapplythetaxablesalesincomeatarateof3%,minusthe1%levyrate;Foritemssubjecttoa3%pre-levyrate,theprepaymentVATatapre-levyrateof1%willbereduced.AccordingtotheprovisionsofAnnouncementNo.15of2022oftheStateAdministrationofTaxationoftheMinistryofFinance,theimplementationperiodofthepreferentialtaxpoliciesstipulatedinArticle1oftheAnnouncementNo.7of2021oftheStateAdministrationofTaxationoftheMinistryofFinancehasbeenextendedtoMarch31,2022.Somebranchesofthecompanyaresmall-scaletaxpayersandmeettheabovestandards,andwillapplythecorrespondingpreferentialpoliciesin2022.AccordingtotheAnnouncementoftheStateAdministrationofTaxationontheExemptionofSmall-scaleTaxpayersfromVATCollectionandAdministration(SATAnnouncementNo.5[2021]),small-scaletaxpayerswhoengageinVATtaxablesalesandtheirtotalmonthlysalesdonotexceedRMB150,000(orRMB450,000ifonequarterisataxperiod).AccordingtotheAnnouncementoftheStateAdministrationofTaxationoftheMinistryofFinanceonVATExemptionforSmall-scaleVATTaxpayers(AnnouncementNo.15of2022oftheStateAdministrationofTaxationoftheMinistryofFinance),fromApril1,2022toDecember31,2022,small-scaleVATtaxpayersareexemptfromVATontaxablesalesincomeatarateof3%.SomeoftheCompany'sbranchesaresmall-scaletaxpayersandmeettheabovestandards,andwillbeexemptfromVATin2022.
VI.Taxes(continued)
2.Taxbenefits(continued)(III)AdditionaltaxincentivesAccordingtotheAnnouncementoftheStateAdministrationofTaxationoftheMinistryofFinanceonFurtherImplementingthe"SixTaxesandTwoFees"ReductionandReductionPolicyforSmallandMicroEnterprises(AnnouncementNo.10of2022oftheStateAdministrationofTaxationoftheMinistryofFinance),thepeople'sgovernmentsofprovinces,autonomousregionsandmunicipalitiesdirectlyundertheCentralGovernmentcandeterminethatsmall-scaletaxtaxpayersofvalue-addedtax,smallandmicro-profitenterprisesandindividualindustrialandcommercialenterprisesmayreduceresourcetax,urbanmaintenanceandconstructiontax,realestatetax,urbanlandusetax,stamptax(excludingsecuritiestransactionstamptax),farmlandoccupationtax,educationsurcharge,andlocaleducationsurchargewithina50%taxamountrange.In2022,someoftheCompany'sbranchesaresmallandmicro-profitenterprises,andsomeoftheCompany'sbranchesaresmall-scaletaxpayersandmeettheabovestandards,socorrespondingpreferentialpoliciesforreductionandexemptionwillbeapplied.AccordingtotheCircularoftheStateAdministrationofTaxationoftheMinistryofFinanceonExpandingtheScopeofExemptionforRelevantGovernmentFunds(CaiShui[2016]No.12),thescopeofeducationfeesurcharge,localeducationsurchargeandwaterconservancyconstructionfundwillbeexemptedbytheobligorwhosemonthlysalesorturnovercurrentlytaxedmonthlydoesnotexceedRMB30,000(quarterlysalesorturnoverthatpaysquarterlytaxdoesnotexceedRMB90,000).ExtendedtopayerswhosemonthlysalesorturnoverformonthlytaxdoesnotexceedRMB100,000(quarterlysalesorturnoverforquarterlytaxdoesnotexceedRMB300,000).SomebranchesoftheCompanymeettheabovestandardsandwillbeexemptedfromeducationsurcharge,localeducationsurchargeandwaterconservancyconstructionfundsin2022.
VII.Notestokeyitemsoftheconsolidatedfinancialstatements
1.Currencyfunds
Currency:RMBYuan
Closingbalance
| Closingbalance | Openingbalance |
Cashonhand
| Cashonhand | 391,749.23 | 260,691.68 | ||
| Cashatbanks | 513,078,584.94 | 4,737,174,517.72 | ||
| Others(Note1) | 8,434,484.13 | 4,075,244.05 |
Total
| Total | 521,904,818.30 | 4,741,510,453.45 | ||
| Including:Offshorecurrencyfunds | 4,313,836.35 | 4,687,559.73 | ||
| Totalamountwithrestrictionsonuseduetomortgage,pledgeorfreeze | 279,787.68 | - |
Notes:
(1)TheGroup'sothercurrenyfundsmainlyincludedaccountbalancesonthird-partypaymentplatformssuchasWeChatpayandAlipay.
(2)Asat31December2022,theGroup’srestrictedcurrencyfundstotalledRMB279,787.68(31December2021:nil),whichwasrestricedduetothefailuretoprovidebank-enterprisereconciliationresultsorbank'smisjudgment.
(3)Asat31December2022,theGrouphadnofundsheldoffshorewithrepatriationrestrictions.
2.Financialassetsheldfortrading
Currency:RMBYuan
| Closingbalance | Openingbalance |
Financialassetsatfairvaluethroughprofit
orloss
| Financialassetsatfairvaluethroughprofitorloss | 5,609,891,931.68 | 1,824,097,569.32 | |
| StructuredDeposits(Note1) | 330,189,591.78 | 50,004,109.59 | |
| Wealthmanagementproducts(Note2） | 5,279,702,339.90 | 1,774,093,459.73 |
Total
| Total | 5,609,891,931.68 | 1,824,097,569.32 |
Notes:
(1)Thestructureddepositsarecapitalprotectedfloatingincomebankstructureddepositinvestmentslinkedtothe7-dayinterbankrepofixedrateandthespotexchangerateoftheeuroagainsttheUSdollar.
(2)Thewealthmanagementproductsarecapitalprotectedandnon-capitalprotectedfloatingincomewealthmanagementproducts.
VII.Notestokeyitemsoftheconsolidatedfinancialstatements(continued)
3.Accountsreceivable(I)Accountsreceivableandprovisionsaredisclosedbycategoryasfollows：
Currency:RMBYuan
Category
| Category | Closingbalance | Openingbalance | ||||||||
| Grosscarryingamount | Provision | Carryingamount | Grosscarryingamount | Provision | Carryingamount | |||||
| Amount | Percentage(%) | Amount | Provisionratio(%) | Amount | Percentage(%) | Amount | Provisionratio(%) | |||
| Impairmentallowancewhichisindividuallyassessed | 1,476,671.46 | 1.65 | 1,476,671.46 | 100 | - | 1,750,141.69 | 0.95 | 1,695,434.95 | 96.87 | 54,706.74 |
| Including: | ||||||||||
| MallA | 1,476,671.46 | 1.65 | 1,476,671.46 | 100 | - | 1,576,671.46 | 0.86 | 1,576,671.46 | 100 | - |
| MallB | - | - | - | - | - | 173,470.23 | 0.09 | 118,763.49 | 68.46 | 54,706.74 |
| Impairmentallowancewhichisassessedbythecombinationofcreditriskcharacteristics | 88,050,351.57 | 98.35 | 3,571,440.05 | 5.46 | 84,478,911.52 | 181,875,610.67 | 99.05 | 7,049,640.91 | 5.39 | 174,825,969.76 |
| Including: | ||||||||||
| AccountsreceivablefromPOSmachinesande-commerceplatforms | 22,630,287.88 | 25.28 | - | - | 22,630,287.88 | 51,090,898.25 | 27.82 | - | 0 | 51,090,898.25 |
| Accountsreceivablefromthemall | 65,420,063.69 | 73.07 | 3,571,440.05 | 5.46 | 61,848,623.64 | 130,784,712.42 | 71.23 | 7,049,640.91 | 5.39 | 123,735,071.51 |
Total
| Total | 89,527,023.03 | 100.00 | 5,048,111.51 | 5.64 | 84,478,911.52 | 183,625,752.36 | 100 | 8,745,075.86 | 3.87 | 174,880,676.50 |
Impairmentallowancewhichisindividuallyassessed:1,476,671.46
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
3.Accountsreceivable(continued)
Currency:RMBYuan
Name
| Name | Closingbalance | |||||||
| GrossCarryingamount | Expectedcreditloss | Expectedcreditlossratio(%) | Reasonsforprovision | |||||
MallA
| MallA | 1,476,671.46 | 1,476,671.46 | 100.00 | Themallhasbeeninarrearsforalongtimeandisexpectedtobeunabletorecoverthemoney. |
Total
| Total | 1,476,671.46 | 1,476,671.46 |
Impairmentallowancewhichisassessedbythecombinationofcreditriskcharacteristics：
3,571,440.05
Currency:RMBYuan
| Name | Closingbalance | ||
| Grosscarryingamount | Expectedcreditloss | Expectedcreditlossratio(%) | |
AccountsreceivablefromPOSmachinesande-commerceplatforms
| AccountsreceivablefromPOSmachinesande-commerceplatforms | 22,630,287.88 | - | - |
| Accountsreceivablefromshoppingmalls | 65,420,063.69 | 3,571,440.05 | 5.46 |
Total
| Total | 88,050,351.57 | 3,571,440.05 |
Anaginganalysisofaccountsreceivableisasfollows:
Currency:RMBYuan
| Aging | Grosscarryingamount |
Within1year
| Within1year | 87,167,396.78 |
| 1to2years | 2,359,626.25 |
Total
| Total | 89,527,023.03 |
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
3.Accountsreceivable(continued)(II)Themovementsinimpairmentallowanceforaccountsreceivableareasfollows:
Currency:RMBYuan
Category
| Category | Openingbalance | Changeduringtheperiod | Closingbalance | ||||||||
| Provision | Recoveryorreversal | Write-offs | Others | ||||||||
| Receivablesfrommalls | 8,745,075.86 | 3,523,852.25 | 7,220,816.60 | - | - | 5,048,111.51 | |||||
Total
| Total | 8,745,075.86 | 3,523,852.25 | 7,220,816.60 | - | - | 5,048,111.51 |
Asat31December2022,thetop5accountsreceivablebyamountwereasfollows:
Currency:RMBYuan
| Name | Grosscarryingamount | Percentagefortotalaccountsreceivable(%) | Impairmentallowance |
| No.1 | 6,736,028.18 | 7.52 | - |
| No.2 | 5,255,656.37 | 5.87 | - |
| No.3 | 3,398,156.16 | 3.80 | 185,513.59 |
| No.4 | 3,103,513.74 | 3.47 | - |
| No.5 | 2,970,154.16 | 3.32 | - |
Total
| Total | 21,463,508.61 | 23.98 | 185,513.59 |
4.PrepaymentsAnaginganalysisofprepaymentsisasfollows:
Currency:RMBYuan
| Aging | Closingbalance | Openingbalance | ||
| Grosscarryingamount | Percentage(%) | Grosscarryingamount | Percentage(%) | |
Within1
year
| Within1year | 74,104,582.84 | 99.84 | 59,675,367.95 | 99.17 |
| 1to2years | 121,851.31 | 0.16 | 501,805.91 | 0.83 |
Total
| Total | 74,226,434.15 | 100.00 | 60,177,173.86 | 100.00 |
Asat31December2022,theGrouphadnomaterialprepaymentswithanagingofmorethan
1year(2021:nil）.
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
4.Prepayments(continued)Asat31December2022,thetop5prepaymentsbyamountsareasfollows:
Currency:RMBYuan
Name
| Name | Grosscarryingamount | Percentagefortotalprepayments（%） | Remarks |
| No.1 | 15,891,971.10 | 21.41 | Businesspromotionfees |
| No.2 | 4,501,071.45 | 6.06 | Businesspromotionfees |
| No.3 | 3,683,835.67 | 4.96 | Businesspromotionfees |
| No.4 | 2,190,191.35 | 2.95 | GoodsPayments |
| No.5 | 1,879,111.75 | 2.53 | Businesspromotionfees |
Total
| Total | 28,146,181.32 | 37.91 |
5.Otherreceivables
Currency:RMBYuan
| Closingbalance | Openingbalance |
Otherreceivables
| Otherreceivables | 8,184,551.61 | 10,279,311.35 |
Total
| Total | 8,184,551.61 | 10,279,311.35 |
(I)Otherreceivables
1)Thecategoryofotherreceivablesbynatureisasfollows:
Currency:RMBYuan
| Nature | Closingbalance | Openingbalance |
Socialinsurancesandhousingfundborneby
employees
| Socialinsurancesandhousingfundbornebyemployees | 5,805,962.39 | 4,144,173.18 | ||
| Temporaryloansforemployees | 1,365,064.13 | 1,042,294.95 | ||
| Others | 2,918,525.09 | 5,092,843.22 |
Total
| Total | 10,089,551.61 | 10,279,311.34 |
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
5.Otherreceivables(continued)
2)Changesintheimpairmentallowanceinotherreceivablesbasedonexpectedcreditlossesoverthenext12monthsareasfollows:
Currency:RMBYuan
Stage1
| Stage1 | Stage2 | Stage3 | Total | |||
| 12-monthexpectedcreditlosses | Lifetimeexpectedcreditlosses | Credit-impairedfinancialassets(Lifetimeexpectedcreditlosses) |
Openingbalance
| Openingbalance | - | - | - | - | |||
| Accrual | - | - | 1,905,000.00 | 1,905,000.00 |
Closingbalance
| Closingbalance | - | - | 1,905,000.00 | 1,905,000.00 |
Anaginganalysisofotherreceivablesisasfollows:
Currency:RMBYuan
| Aging | Grosscarryingamount |
Within1year
| Within1year | 8,184,551.61 |
| 1to2years | 1,905,000.00 |
Total
| Total | 10,089,551.61 |
3)Themovementsinimpairmentallowanceforotherreceivablesareasfollows:
Currency:RMBYuan
| Category | Openingbalance | Changeduringtheperiod | Closingbalance | ||||||||
| Provision | Reversal | Write-offs | Others | ||||||||
| Impairmentallowanceforotherreceivables | - | 1,905,000.00 | - | - | - | 1,905,000.00 | |||||
Total
| Total | - | 1,905,000.00 | - | - | - | 1,905,000.00 |
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
5.Otherreceivables(continued)
4)Asat31December2022,thetop5otherreceivablesbyamountareasfollows:
Currency:RMBYuan
Name
| Name | Nature | Closingbalance | Aging | Percentageofotherreceivables(%) | Impairmentallowance |
No.1
| No.1 | Paymentsforfixedassets | 1,905,000.00 | Over1years | 18.88 | 1,905,000.00 | |||||
| No.2 | Temporaryloansforemployees | 519,603.72 | Within1year | 5.15 | - | |||||
| No.3 | Temporaryloansforemployees | 210,000.00 | Within1year | 2.08 | - | |||||
| No.4 | Temporaryloansforemployees | 200,000.00 | Within1year | 1.98 | - | |||||
| No.5 | Temporaryloansforemployees | 199,445.04 | Within1year | 1.98 | - |
Total
| Total | 3,034,048.76 | 30.07 | 1,905,000.00 |
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
6.InventoriesWhetherthecompanyisrequiredtocomplywiththedisclosurerequirementsoftherealestateindustryNo
(1)Thecategoryofinventoriesbynatureisasfollows:
Currency:RMBYuan
Category
| Category | Closingbalance | Openingbalance | ||||||||||
| Grosscarryingamount | Provision | Carryingamount | Grosscarryingamount | Provision | Carryingamount | |||||||
Rawmaterials
| Rawmaterials | 134,671,437.41 | - | 134,671,437.41 | 102,243,341.98 | - | 102,243,341.98 | ||||||
| Finishedgoods | 516,044,105.23 | 6,528,401.70 | 509,515,703.53 | 312,523,116.54 | 6,660,967.36 | 305,862,149.18 | ||||||
| Turnovermaterials | 5,183,351.50 | - | 5,183,351.50 | 4,694,252.13 | - | 4,694,252.13 | ||||||
| ShippingGoods | 1,209,323.01 | - | 1,209,323.01 | 3,806,404.24 | - | 3,806,404.24 | ||||||
| Outsourcedprocessingmaterials | 16,482,477.19 | - | 16,482,477.19 | 17,136,689.29 | - | 17,136,689.29 | ||||||
| Workinprocess | 2,824,345.36 | - | 2,824,345.36 | 6,230,318.00 | - | 6,230,318.00 |
Total
| Total | 676,415,039.70 | 6,528,401.70 | 669,886,638.00 | 446,634,122.18 | 6,660,967.36 | 439,973,154.82 |
TheCompanyisrequiredtocomplywiththedisclosurerequirementsfor"jewelry-relatedbusiness"specifiedintheSelf-disciplinarySupervisionGuidelinesNo.3-IndustryInformationDisclosureofcompanieslistedontheShenzhenStockExchange.
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
6.Inventories(continued)
CarryingAmountofinventorybycategoriesasatyear-end
Currency:RMB0’000
Items
| Items | Carryingamountasatyear-end | Total | |||||
| Workinprocess | FinishedGoods | OutsourcedProcessingMaterials | RawMaterial | TurnoverMaterial | ShippingGoods | ||
| KGoldJewelry | 232.19 | 48,581.88 | 45.35 | - | - | 110.39 | 48,969.81 |
| PlatinumJewelry | 38.41 | 2,057.39 | 2.87 | - | - | 10.55 | 2,109.21 |
| GoldJewelry | - | 892.20 | 8.90 | - | - | - | 901.09 |
| Diamond | - | - | 1,576.17 | 13,467.14 | - | - | 15,043.31 |
| TurnoverMaterial | - | - | - | - | 518.34 | - | 518.34 |
| Others | 11.84 | 72.95 | 14.96 | - | - | - | 99.75 |
Total
| Total | 282.44 | 51,604.42 | 1,648.25 | 13,467.14 | 518.34 | 120.94 | 67,641.51 |
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
6.Inventories(continued)
(2)Thechangesinprovisionforinventoriesandprovisionforimpairmentofcontractperformancecostsareasfollows:
2022
Currency:RMBYuan
Openingbalance
| Openingbalance | Increase | Decrease | Closingbalance | |||||||
| Provision | Others | ReversalorWrite-off | Others | |||||||
| Finishedgoods | 6,660,967.36 | 6,245,162.69 | - | 6,377,728.35 | - | 6,528,401.70 | ||||
Total
| Total | 6,660,967.36 | 6,245,162.69 | - | 6,377,728.35 | - | 6,528,401.70 |
Noinventorywithrestrictionasat31December2022(31December2021:Nil).Netrealizablevalueofinventoryisthenetvalueoftheestimatedsellingpriceofinventorylessfurtherprocessingcostsandestimatedsellingexpensesandrelatedtaxes.Thereasonfortheprovisionforresoldinventoryisthatthefinishedproducthasbeensoldordisposedofasacorrespondingresoldinventorydecline
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
7.Currentportionofnon-currentassets
Currency:RMBYuan
Closingbalance
| Closingbalance | Openingbalance |
Debtinvestmentsduewithinoneyear
| Debtinvestmentsduewithinoneyear | 66,085,379.00 | 161,632,035.74 | ||
| Deposits | 41,240,679.30 | 31,549,696.86 | ||
| 107,326,058.30 | 193,181,732.60 |
Less：Provisions
| Less：Provisions | 358,191.14 | 358,191.14 |
Total
| Total | 106,967,867.16 | 192,823,541.46 |
Notes:
Asat31December2022,theGroup'slarge-sumcertificatesofdepositduewithinoneyearwereRMB66,085,379.00,withamaturitydateofApril2023andadepositinterestrateof
3.80%.Asat31December2022,theGroup'stenancydepositduewithinoneyearwasRMB41,240,679.30.Asat31December2022,thedepositfortheprovisionforbaddebtswasadepositowedbyshoppingmallsandindividuallandlordstostoresthathadbeenretired,andtheGroupdidnotexpecttobeabletorecovertheamount,andthesingleamountwasnotmaterial.
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
8.Othercurrentassets
Currency:RMBYuan
Closingbalance
| Closingbalance | Openingbalance |
Right-of-returnassets
| Right-of-returnassets | 272,853.07 | 779,762.70 | ||
| Wealthmanagementproducts | 31,378,714.16 | - | ||
| Prepaidincometax | 23,359,776.18 | - | ||
| VATtaxcredit | 14,808,790.02 | - | ||
| Deferredexpenses | 3,318,077.34 | 1,125,752.23 | ||
| Valueaddedtaxesrecoverableandtobecertified | 316,714.84 | 2,815,346.92 | ||
| Newmaterialsamples | - | 2,428,198.46 |
Total
| Total | 73,454,925.61 | 7,149,060.31 |
9.Debtinvestments
Currency:RMBYuan
| Closingbalance | Openingbalance | ||||
| Outstandingbalance | Provisionforimpairment | Carryingamount | Outstandingbalance | Provisionforimpairment | Carryingamount |
Large-sumcertificatesofdepositwithatermofoveroneyear
| Large-sumcertificatesofdepositwithatermofoveroneyear | 794,553,996.36 | - | 794,553,996.36 | 218,585,379.05 | - | 218,585,379.05 |
Total
| Total | 794,553,996.36 | - | 794,553,996.36 | 218,585,379.05 | - | 218,585,379.05 |
Notes:
Thedebtinvestmentasat31December2022wasalargedepositcertificatepurchasedbytheGroupwithamaturityperiodofmorethanoneyear,withamaturitydateofFebruary2024toOctober2027andadepositinterestrateof3.30%-4.05%(31December2021:amaturitydateofApril2023toFebruary2024,andadepositinterestrateof3.65%-3.80%).
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
10.Fixedassets
Currency:RMBYuan
Closingbalance
| Closingbalance | Openingbalance |
Fixedassets
| Fixedassets | 14,068,805.09 | 6,325,614.51 | |
| Disposaloffixedassets | - | - |
Total
| Total | 14,068,805.09 | 6,325,614.51 |
(1)Fixedassets
Currency:RMBYuan
| Transportationfacilities | Officeequipmentandotherfacilities | Total |
Cost
| Cost | |||||
| Openingbalance | 2,623,519.41 | 11,001,307.64 | 13,624,827.05 | ||
| Purchases | 3,085,947.43 | 8,696,052.19 | 11,781,999.62 | ||
| Exchangedifferencesontranslationofforeigncurrencyfinancialstatements | - | 5,476.23 | 5,476.23 | ||
| Disposalsorretirements | (651,578.46) | (371,637.97) | (1,023,216.43) |
Closingbalance
| Closingbalance | 5,057,888.38 | 19,331,198.09 | 24,389,086.47 |
Accumulateddepreciation
| Accumulateddepreciation | |||||
| Openingbalance | 2,357,181.05 | 4,942,031.49 | 7,299,212.54 | ||
| Provision | 584,300.16 | 3,389,851.48 | 3,974,151.64 | ||
| Exchangedifferencesontranslationofforeigncurrencyfinancialstatements | - | 5,003.43 | 5,003.43 | ||
| Disposalsorretirements | (618,999.54) | (339,086.69) | (958,086.23) |
Closingbalance
| Closingbalance | 2,322,481.67 | 7,997,799.71 | 10,320,281.38 |
Provisionforimpairment
| Provisionforimpairment | |||||
| Openingbalance | - | - | - | ||
| Provision | - | - | - | ||
| Disposalsorretirements | - | - | - |
Closingbalance
| Closingbalance | - | - | - |
Carryingamount
| Carryingamount | |||||
| Atendofyear | 2,735,406.71 | 11,333,398.38 | 14,068,805.09 |
Atbeginningofyear
| Atbeginningofyear | 266,338.36 | 6,059,276.15 | 6,325,614.51 |
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
11.Right-of-useassets
Currency:RMBYuan
Buildings
| Buildings | Total |
Cost
| Cost | ||||
| Openingbalance | 685,380,285.48 | 685,380,285.48 | ||
| Addition | 540,488,065.90 | 540,488,065.90 | ||
| Disposals | (176,038,243.89) | (176,038,243.89) | ||
| Exchangedifferencesontranslationofforeigncurrencyfinancialstatements | 505,499.87 | 505,499.87 |
Closingbalance
| Closingbalance | 1,050,335,607.36 | 1,050,335,607.36 |
Accumulateddepreciation
| Accumulateddepreciation | ||||
| Openingbalance | 250,955,103.46 | 250,955,103.46 | ||
| Provision | 355,607,929.93 | 355,607,929.93 | ||
| Disposals | (170,718,457.79) | (170,718,457.79) | ||
| Exchangedifferencesontranslationofforeigncurrencyfinancialstatements | 209,410.07 | 209,410.07 |
Closingbalance
| Closingbalance | 436,053,985.67 | 436,053,985.67 |
Provisionforimpairment
| Provisionforimpairment | ||||
| Openingbalance | 5,128,153.26 | 5,128,153.26 | ||
| Provision | 18,502,968.10 | 18,502,968.10 | ||
| Write-off | - | - | ||
| Exchangedifferencesontranslationofforeigncurrencyfinancialstatements | 144,332.97 | 144,332.97 |
Closingbalance
| Closingbalance | 23,775,454.33 | 23,775,454.33 |
Carryingamount
| Carryingamount | ||||
| Atendofyear | 590,506,167.36 | 590,506,167.36 |
Atbeginningofyear
| Atbeginningofyear | 429,297,028.76 | 429,297,028.76 |
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
12.Intangibleassets2022
Currency:RMBYuan
Software
| Software | Total | ||
| Cost | |||
| Openingbalance | 12,257,291.78 | 12,257,291.78 | |
| Purchases | 1,323,456.05 | 1,323,456.05 | |
| Disposals | - | - |
Closingbalance
| Closingbalance | 13,580,747.83 | 13,580,747.83 |
Accumulatedamortization
| Accumulatedamortization | |||
| Openingbalance | 6,377,299.55 | 6,377,299.55 | |
| Provision | 2,940,850.52 | 2,940,850.52 | |
| Disposals | - | - |
Closingbalance
| Closingbalance | 9,318,150.07 | 9,318,150.07 |
Carryingamount
| Carryingamount | |||
| Atendofyear | 4,262,597.76 | 4,262,597.76 |
Atbeginningofyear
| Atbeginningofyear | 5,879,992.23 | 5,879,992.23 |
Asat31December2022,theGrouphadnorestrictedintangibleassetsorintangibleassetsformedthroughinternalresearchanddevelopment(31December2021:nil).
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
13.Long-termprepaidexpenses
Currency:RMBYuan
Openingbalance
| Openingbalance | Increase | Disposalsduringtheyear | Amortisation | Write-off | Foreigncurrencystatementtranslationdifferences | Closingbalance |
Leaseholdimprovements
| Leaseholdimprovements | 93,552,123.84 | 173,768,151.57 | - | 91,898,732.79 | 5,680,172.80 | 9,014.10 | 169,750,383.92 |
Total
| Total | 93,552,123.84 | 173,768,151.57 | - | 91,898,732.79 | 5,680,172.80 | 9,014.10 | 169,750,383.92 |
Notes:
(1)TheGroupestimatesitsrecoverableamountonasingle-storebasis,basedonthepresentvalueoftheprojectedfuturecashflowsoftheassetgroup.
(2)TheGrouphasrecognizedanimpairmentlossofRMB5,680,172.80inlong-termamortizationexpensesin2022,whichisduetothecarryingamountofstoresshowingsignsofimpairmentin2022beinglowerthantherecoverableamount(impairmentlossonlong-termamortizationexpensesnotrecognizedin2021).Duetotheterminationoftheleasecontractofthestoreforwhichimpairmentlosseswerecharged,thelong-termamortizationallowancewaswrittenoffonDecember31,2022ofRMB234,466.15(December31,2021:RMB1,262,966.43).
(3)TheIncreaseofRMB173,777,165.67includestheincreaseincurrentperiodofRMB173,768,151.57andexchangedifferencesontranslationofforeigncurrencyfinancialstatementsofRMB9,014.10.
（）
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
14.Deferredtaxassets/liabilities
(1)Deferredtaxassetsbeforeoffsetting:
Currency:RMBYuan
Closingbalance
| Closingbalance | Openingbalance | |||||
| Deductibletemporarydifferences | Deferredtaxassets | Deductibletemporarydifferences | Deferredtaxassets | |||
Deferredtaxassets
| Deferredtaxassets | |||||||
| Provisionforassetimpairment | 40,067,827.14 | 10,003,234.08 | 18,099,129.45 | 4,524,782.36 | |||
| Unrealizedprofitoninter-companytransactions- | 7,326,359.23 | 1,831,589.81 | 7,375,844.89 | 1,843,961.22 | |||
| Deductiblelosses | 7,400,282.50 | 895,178.30 | - | - | |||
| Provisionforstorerestorationobligations | 8,561,231.41 | 2,140,307.85 | 6,230,598.44 | 1,557,649.61 | |||
| Differencebetweentaxandaccountingofleaseliability | 582,115,033.63 | 144,045,844.11 | 423,456,841.05 | 104,072,670.89 | |||
| Differencebetweenthedepreciationofthefixedassetandtheexemption | - | - | 6,912.09 | 1,140.49 |
Total
| Total | 645,470,733.91 | 158,916,154.15 | 455,169,325.92 | 112,000,204.57 |
(2)Deferredtaxliabilitiesbeforeoffsetting:
| Closingbalance | Openingbalance | |||||
| Taxabletemporarydifferences | Deferredtaxliabilities | Deductibletemporarydifferences | Deferredtaxliabilities | |||
Deferredtaxliabilities
| Deferredtaxliabilities | |||||||
| Changesinfairvalueoffinancialassets | 62,891,931.68 | 15,568,533.63 | 23,597,569.32 | 5,582,100.82 | |||
| Accruedinterestoncertificatesofdeposit | 21,709,575.40 | 5,402,625.35 | 13,823,397.31 | 3,241,637.00 | |||
| Differencebetweentaxandaccountingofright-of-useassets | 560,020,830.90 | 138,506,777.20 | 419,416,484.21 | 103,016,795.34 |
Total
| Total | 644,622,337.98 | 159,477,936.18 | 456,837,450.84 | 111,840,533.16 |
(3)Deferredtaxassetsandliabilitiesareshowninthenetamountafteroffsetting:
Currency:RMBYuan
| 31December2022 | 31December2021 | |||||
| Offsetamount | Closingbalanceafteroffsetting | Offsetamount | Closingbalanceafteroffsetting | |||
Deferredtaxassets
| Deferredtaxassets | 150,724,937.79 | 8,191,216.36 | 107,234,415.18 | 4,765,789.39 |
Deferredtaxliabilities
| Deferredtaxliabilities | 150,724,937.79 | 8,752,998.39 | 107,234,415.18 | 4,606,117.98 |
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
14.Deferredtaxassets/liabilities(continued)
(4)Deductibletemporarydifferencesandtaxlossesforwhichnodeferredtaxassetswererecognizedareasfollows:
Currency:RMBYuan
Closingbalance
| Closingbalance | Openingbalance |
Unrecognizedprovision
| Unrecognizedprovision | 10,423,943.75 | 10,266,912.85 |
| Deductiblelosses | 31,521,098.68 | 28,298,391.60 |
41,945,042.43
| 41,945,042.43 | 38,565,304.45 |
(5)Deductibletemporarydifferencesanddeductiblelossesonunrecognizeddeferredtaxassetswilldueinthefollowingyears:
Currency:RMBYuan
| Closingbalance | Openingbalance |
2022
| 2022 | - | 236,104.91 |
| 2023 | - | 389,762.49 |
| 2024 | 100,839.02 | 260,861.41 |
| 2025 | 1,930,613.69 | 2,417,901.16 |
| 2026 | 2,500,649.53 | 2,649,363.35 |
| 2027 | 2,508,965.13 | - |
| Infinity | 24,480,031.31 | 22,344,398.28 |
Total
| Total | 31,521,098.68 | 28,298,391.60 |
Astherelevantcompaniesthatincurredtheabovelossesareexpectedtohavealowprobabilityofmakingprofitsinthefutureandthereisnoprofitsufficienttooffsetthelosses,theGrouphasnotrecognizeddeferredtaxassetsforthetaxlossesincurredbytheaboverelatedcompanies.Amongthem,DRJewelry,asubsidiaryestablishedinFrance,incurredacumulativelossofRMB24,480,031.31onDecember31,2022(thecumulativelossincurredonDecember31,2021wasRMB22,344,398.28),whichcanbemadeupindefinitelyinthefuture.TheGroupcalculatesandrecognizesdeferredtaxassetsarisingfromdeductibletemporarydifferencesattheapplicabletaxratefortheperiodinwhichtheassetisexpectedtoberecoveredortheliabilityisliquidated,uptothetaxableincomethatislikelytobeacquiredinfutureperiodstooffsetdeductibletemporarydifferencesanddeductiblelosses.
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
15.Othernon-currentassets
Currency:RMBYuan
Closingbalance
| Closingbalance | Openingbalance |
Deposit
| Deposit | 85,069,135.39 | 56,507,281.39 | ||
| Employeeborrowing | 350,000.00 | 1,440,000.00 | ||
| Prepaymentforfixedassets | - | 1,940,000.00 |
Total
| Total | 85,419,135.39 | 59,887,281.39 |
Othernon-currentassetsaremainlyemployeeborrowings,depositandprepaymentforfixedassets.Asat31December2022,employeeborrowingsinothernon-currentassetswereall4.35%perannum,unsecuredforatermof2to5years(2021:employeeborrowingswereall4.35%perannum,unsecuredwithatermof2to5years).Asat31December2022,theGroupassessedtheexpectedcreditlossratioasextremelylowbasedonhistoricallossratesandforward-lookingmacroeconomicdata.
16.Short-termborrowings
Currency:RMBYuan
| Closingbalance | Openingbalance |
Discountedborrowingonbills
| Discountedborrowingonbills | 433,993,449.44 | - |
Total
| Total | 433,993,449.44 | - |
Theshort-termborrowingrefertotheamountofbankacceptancebillsissuedbetweenaffiliatedcompanieswithinthescopeofconsolidationthathavebeendiscountedbutnotyetmaturedattheendoftheyear.
17.Billspayable
Currency:RMBYuan
| Closingbalance | Openingbalance |
Bankacceptancebills
| Bankacceptancebills | 466,527,730.97 | 341,669,947.83 |
Total
| Total | 466,527,730.97 | 341,669,947.83 |
Asat31December2022,theGrouphadnooutstandingnotespayable(31December2021:
nil).
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
18.Accountspayable
Currency:RMBYuan
Closingbalance
| Closingbalance | Openingbalance |
Tradepayables
| Tradepayables | 86,880,869.77 | 113,777,232.26 |
Total
| Total | 86,880,869.77 | 113,777,232.26 |
Tradepayablesareinterest-freeandnormallysettledwithinfourmonths.Agingover1year:
Currency:RMBYuan
| Closingbalance | Reasons |
Over1years
| Over1years | 3,419,773.88 |
Total
| Total | 3,419,773.88 |
19.Contractliabilities
Currency:RMBYuan
| Closingbalance | Openingbalance |
Receiptinadvanceoforderpayment
| Receiptinadvanceoforderpayment | 126,705,661.82 | 210,146,744.15 |
Total
| Total | 126,705,661.82 | 210,146,744.15 |
ContractliabilitiesaremainlyreceiptsinadvancecollectedbytheGroupfromcustomersbeforefulfillingtheirperformanceobligations.RevenuerelatedtothecontractwillberecognizedwhentheGroupfulfillsitsperformanceobligations.Normally,whentheGroupreceivesanadvancepaymentfromaclient,itwillgenerallymeetitsperformanceobligationsandrecognizerevenuewithin30days.
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
20.Employeebenefitspayable
(1)Employeebenefitspayableareasfollows:
Currency:RMBYuan
Openingbalance
| Openingbalance | Increase | Decrease | Closingbalance |
Short-termemployeebenefits
| Short-termemployeebenefits | 73,334,819.63 | 505,256,765.17 | 509,854,596.47 | 68,736,988.33 | ||||
| Definedcontributionplan | - | 58,804,380.67 | 58,804,380.67 | - | ||||
| Terminationbenefits | - | 4,445,275.96 | 4,445,275.96 | - |
Total
| Total | 73,334,819.63 | 568,506,421.80 | 573,104,253.10 | 68,736,988.33 |
(2)Short-termemployeebenefitsareasfollows:
Currency:RMBYuan
| Openingbalance | Increase | Decrease | Closingbalance |
Salaries,bonuses,allowancesandsubsidies
| Salaries,bonuses,allowancesandsubsidies | 70,794,851.52 | 437,160,111.38 | 442,561,933.67 | 65,393,029.23 | ||||
| Staffwelfare | 2,348,431.09 | 13,602,343.12 | 12,795,924.32 | 3,154,849.89 | ||||
| Socialsecuritycontributions | - | 30,387,703.90 | 30,387,703.90 | - | ||||
| Including:Medicalinsurancepremiums | - | 28,399,550.34 | 28,399,550.34 | - | ||||
| Workinjuryinsurancepremium | - | 1,138,602.69 | 1,138,602.69 | - | ||||
| Maternityinsurancepremium | - | 849,550.87 | 849,550.87 | - | ||||
| Housingfunds | - | 19,935,758.46 | 19,935,758.46 | - | ||||
| Unionrunningcostsandemployeeeducationcosts | 191,537.02 | 4,170,848.31 | 4,173,276.12 | 189,109.21 |
Total
| Total | 73,334,819.63 | 505,256,765.17 | 509,854,596.47 | 68,736,988.33 |
(3)Definedcontributionplanareasfollows:
Currency:RMBYuan
| Openingbalance | Increase | Decrease | Closingbalance |
Basicpensioninsurance
| Basicpensioninsurance | - | 57,196,194.14 | 57,196,194.14 | - | ||
| Unemploymentinsurancepremium | - | 1,608,186.53 | 1,608,186.53 | - |
Total
| Total | - | 58,804,380.67 | 58,804,380.67 | - |
Asat31December2022,theGrouphadnoarrearsinthenatureofremunerationpayabletoemployees(31December2021:nil).
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
21.Taxespayable
Currency:RMBYuan
Closingbalance
| Closingbalance | Openingbalance |
Valueaddedtax
| Valueaddedtax | 8,465,825.13 | 18,941,835.49 | ||
| Excisetax | 14,173,620.72 | 24,517,100.56 | ||
| Corporateincometax | 34,164,857.66 | 72,022,712.43 | ||
| Individualincometaxwithheld | 780,127.00 | 1,723,936.44 | ||
| Urbanmaintenanceandconstructiontax | 1,347,723.05 | 2,678,004.36 | ||
| Educationsurcharge | 549,380.64 | 1,159,104.98 | ||
| Localeducationsurcharge | 362,786.55 | 769,269.72 | ||
| Others | 40,818.91 | 26,387.41 |
Total
| Total | 59,885,139.66 | 121,838,351.39 |
22.Otherpayables
Currency:RMBYuan
| Closingbalance | Openingbalance |
Otherpayables
| Otherpayables | 102,563,944.81 | 72,156,628.68 |
Total
| Total | 102,563,944.81 | 72,156,628.68 |
Currency:RMBYuan
| Closingbalance | Openingbalance |
Rentandpropertymanagementfeesaccrued
| Rentandpropertymanagementfeesaccrued | 11,248,679.47 | 13,898,288.72 | ||
| Renovationexpensesaccrued | 63,140,256.23 | 20,224,879.32 | ||
| Advertisementexpensesaccrued | 11,515,571.63 | 17,644,937.59 | ||
| Otherexpensesaccrued | 9,961,766.20 | 16,120,560.13 | ||
| Deposit | 1,639,911.88 | 717,671.65 | ||
| Dealerpledgeddeposit | - | 272,361.13 | ||
| Others | 5,057,759.40 | 3,277,930.14 |
Total
| Total | 102,563,944.81 | 72,156,628.68 |
Asat31December2022,therewerenosignificantotherpayablesolderthan1year(31December2021:nil).
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
23.Currentportionofnon-currentliabilities
Currency:RMBYuan
Closingbalance
| Closingbalance | Openingbalance |
Leaseliabilitiesduewithin1year
| Leaseliabilitiesduewithin1year | 351,516,900.54 | 215,037,794.03 |
Total
| Total | 351,516,900.54 | 215,037,794.03 |
24.Othercurrentliabilities
Currency:RMBYuan
| Closingbalance | Openingbalance |
OutputVATtobetransferred
| OutputVATtobetransferred | 13,670,511.44 | 21,980,739.83 |
Total
| Total | 13,670,511.44 | 21,980,739.83 |
Witheffectfrom1January2020,theGrouphasappliedthenewrevenuestandardtoshowtheoutputVATportionoftheadvancereceiptsastheamountofVATtoberesoldtax.
25.Leaseliabilities
Currency:RMBYuan
| 2022 | 2021 |
Leasepaymentspayable
| Leasepaymentspayable | 276,542,164.23 | 215,671,484.31 |
Total
| Total | 276,542,164.23 | 215,671,484.31 |
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
26.Accruedliabilities
Currency:RMBYuan
Closingbalance
| Closingbalance | Openingbalance | Reasons |
Provisionforreturns
| Provisionforreturns | 921,567.41 | 1,901,930.48 | Provisionforreturnsismadeforsalesofgoodswithsalesreturnconditions.TheGroupmakesprovisionforreturnsbasedonhistoricalexperiencedataandsales. |
| Storerestorationobligations | 16,004,249.50 | 10,486,658.50 | ShoprestorationobligationsrepresentcoststhattheGroup,asthelessee,expectstoincurundertheleaseagreementtorestoretheleasedassetstotheconditionagreedunderthetermsofthelease.TheGroupestimatesrestorationcostsbasedonindustryconditionsandhistoricalexperience. |
Total
| Total | 16,925,816.91 | 12,388,588.98 |
27.Sharecapital
Currency:RMBYuan
| Openingbalance | Movementsduringtheyear | Closingbalance | |
| Newsharesissued | |||
| Sharecapital | 400,010,000.00 | - | 400,010,000.00 |
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
28.Capitalreserves
Currency:RMBYuan
Openingbalance
| Openingbalance | Increase | Decrease | Closingbalance |
Sharepremium
| Sharepremium | 4,403,792,844.63 | - | - | 4,403,792,844.63 | ||
| Othercapitalreserves | (227.67) | - | - | (227.67) | ||
| Share-basedpaymentsincludedinthecapitalreserve | 25,782,801.77 | 561,317.20 | - | 26,344,118.97 | ||
| Shareholdingsystemtransformation | 29,640,980.88 | - | - | 29,640,980.88 |
Total
| Total | 4,459,216,399.61 | 561,317.20 | - | 4,459,777,716.81 |
29.OthercomprehensiveincomeAccumulatedbalanceofothercomprehensiveincomeattributabletoownersoftheparentintheconsolidatedbalancesheet:
Currency:RMBYuan
| Openingbalance | Increase/decrease | Closingbalance |
Exchangedifferencesontranslationofforeigncurrencyfinancialstatements
| Exchangedifferencesontranslationofforeigncurrencyfinancialstatements | (2,693,984.92) | 6,687,238.92 | 3,993,254.00 |
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
30.Surplusreserves
Currency:RMBYuan
Openingbalance
| Openingbalance | Increase | Decrease | Closingbalance |
Statutorysurplus
reserves
| Statutorysurplusreserves | 179,210,032.06 | 20,794,967.94 | - | 200,005,000.00 |
Total
| Total | 179,210,032.06 | 20,794,967.94 | - | 200,005,000.00 |
AccordingtotheprovisionsoftheCompanyLawandtheCompany’sArticlesofAssociation,theCompanyappropriates10%oftheprofittothestatutorysurplusreserves.Wheretheaccumulatedamountofthesurplusreservesreaches50%ormoreoftheCompany’sregisteredcapital,furtherappropriationisnotrequired.
31.Unappropriatedprofit
Currency:RMBYuan
| 2022 | 2021 |
Balanceatendoftheprioryear
| Balanceatendoftheprioryear | 1,830,833,254.42 | 640,739,650.62 | ||
| Netprofitattributabletoshareholdersoftheparentcompany | 729,241,946.67 | 1,301,768,398.86 | ||
| Less:Appropriationtostatutorysurplusreserves | 20,794,967.94 | 111,674,795.06 | ||
| Distributiontoshareholders | 800,020,000.00 | - |
Balanceatendofthecurrentyear
| Balanceatendofthecurrentyear | 1,739,260,233.15 | 1,830,833,254.42 |
Note:
1)Nobalanceadjustmentofunappropriatedprofitatthebeginningoftheperiodwasmadeinrelatedtotheapplicationofnewaccountingstangdardsandotherrelevantregulations.
2)Nobalanceadjustmentofunappropriatedprofitatthebeginningoftheperiodwasmadeinrelatedtochangesinaccountingpolicies.
3)Nobalanceadjustmentofunappropriatedprofitatthebeginningoftheperiodwasmadeinrelatedtosignificantaccountingerrorcorrection.
4)Nobalanceadjustmentofunappropriatedprofitatthebeginningoftheperiodwasmadeinrelatedtochangesinscopeofbusinesscombinationunderthesamecontrol.
5)Nobalanceadjustmentofunappropriatedprofitatthebeginningoftheperiodwasmadeinrelatedtootheradjustments.
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
32.Revenue
Currency:RMBYuan
2022
| 2022 | 2021 | |||
| Revenue | Cost | Revenue | Cost | |
Primary
business
| Primarybusiness | 3,650,181,354.03 | 1,082,800,171.20 | 4,594,661,728.12 | 1,351,159,384.29 | |
| Otherbusiness | 31,393,058.65 | 29,472,295.09 | 28,068,052.36 | 29,391,773.38 |
Total
| Total | 3,681,574,412.68 | 1,112,272,466.29 | 4,622,729,780.48 | 1,380,551,157.67 |
Disaggregationofrevenuefromcontractswithcustomersisasfollows:
Currency:RMBYuan
| Reportingsegments | Segment | Total |
Typeofmajorproducts:
| Typeofmajorproducts: | 3,681,574,412.68 | 3,681,574,412.68 |
| Engagementdiamondrings | 2,902,464,272.49 | 2,902,464,272.49 |
| Weddingdiamondrings | 713,611,440.73 | 713,611,440.73 |
| Otheraccessories | 34,105,640.81 | 34,105,640.81 |
| Otherbusinesses | 31,393,058.65 | 31,393,058.65 |
Area:
| Area: | 3,681,574,412.68 | 3,681,574,412.68 |
| Mainland | 3,674,302,626.84 | 3,674,302,626.84 |
| Overseas | 7,271,785.84 | 7,271,785.84 |
Timeofincomerecognition
| Timeofincomerecognition | 3,681,574,412.68 | 3,681,574,412.68 |
| Incomerecognizedatapointintime | 3,681,574,412.68 | 3,681,574,412.68 |
Saleschannel
| Saleschannel | 3,681,574,412.68 | 3,681,574,412.68 |
| Self-operatedbusiness | 3,681,574,412.68 | 3,681,574,412.68 |
Total
| Total | 3,681,574,412.68 | 3,681,574,412.68 |
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)InformationabouttheGroup’sperformanceobligationsissummarizedbelow:
Undertheself-operatedbusiness,thecustomercompletesthefulfillmentobligationwhenreceivingthegoods.Undernormalcircumstances,forstoresdirectlyoperated,thegoodsaredeliveredwithin30daysafterreceivingthecontractprice;Formallassociatesande-commerce,thecontractpriceisusuallyreceivedwithin15-60daysafterdelivery.Thecustomerhastherighttoreturntheproductwithin15daysafterreceivingit,soitisnecessarytoestimatethereturnratebasedonthehistoricalsalessituationandcalculatetheprovisionforreturn,whichisdetailedinNoteVII.26.TheamountofrevenuecorrespondingtoperformanceobligationsthathavebeencontractedforbutnotyetperformedornotyetcompletedattheendofthereportingperiodisRMB126,705,661.82.
33.Taxesandsurcharges
Currency:RMBYuan
2022
| 2022 | 2021 |
Excisetax
| Excisetax | 161,139,856.39 | 203,753,443.40 | ||
| Urbanmaintenanceandconstructiontax | 21,999,220.70 | 28,155,573.23 | ||
| Educationsurcharge | 9,396,015.92 | 12,142,841.53 | ||
| Resourcetax | - | - | ||
| Propertytax | - | - | ||
| Landusetax | - | - | ||
| Vehicleusetax | 240.00 | 3,965.00 | ||
| Stamptax | 2,556,251.77 | 3,036,410.62 | ||
| Localeducationsurcharge | 6,264,009.84 | 8,095,227.28 | ||
| Others | 4,300.00 | 150.00 |
Total
| Total | 201,359,894.62 | 255,187,611.06 |
34.Sellingexpenses
Currency:RMBYuan
| 2022 | 2021 |
Wagesandsalaries
| Wagesandsalaries | 474,286,451.10 | 388,931,056.98 | ||
| Marketingandprofessionalserviceexpenses | 342,192,475.64 | 331,584,427.26 | ||
| Depreciationandamortization | 433,607,701.53 | 296,660,541.66 | ||
| Rentsexcludedintheleaseliabilities | 37,374,018.79 | 80,853,973.32 | ||
| Propertymanagementandutilityexpenses | 57,143,404.37 | 40,621,864.37 | ||
| Platformcommissions | 19,859,964.05 | 31,772,382.68 | ||
| Administrativeexpenses | 26,456,827.29 | 18,307,182.94 | ||
| Travelingexpenses | 9,990,373.37 | 8,160,359.06 | ||
| Packagingexpenses | 3,421,251.49 | 6,124,592.74 | ||
| Courierexpenses | 3,204,581.15 | 4,026,001.70 | ||
| Others | 14,500,488.72 | 10,869,169.36 |
Total
| Total | 1,422,037,537.50 | 1,217,911,552.07 |
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
35.Administrativeexpenses
Currency:RMBYuan
2022
| 2022 | 2021 |
Wagesandsalaries
| Wagesandsalaries | 79,373,604.27 | 74,199,564.90 |
| Inputtaxnotdeductibleforintra-grouptransactions | 34,246,969.57 | 54,886,573.93 |
| Depreciationandamortization | 20,269,089.25 | 16,639,125.45 |
| Professionalagencyserviceexpenses | 12,916,862.65 | 8,568,620.05 |
| Officeexpenses | 5,786,187.86 | 5,839,457.67 |
| Rent,propertymanagementandutilityexpenses | 4,008,808.69 | 3,661,626.55 |
| Travelingexpenses | 2,344,355.77 | 1,386,931.20 |
| Share-basedpaymentexpenses | 561,317.20 | 4,091,695.24 |
| Others | 4,698,682.61 | 3,556,692.88 |
Total
| Total | 164,205,877.87 | 172,830,287.87 |
36.Researchanddevelopmentexpenses
Currency:RMBYuan
| 2022 | 2021 |
Wagesandsalaries
| Wagesandsalaries | 14,846,366.43 | 13,585,335.70 | ||
| Commissioneddevelopmentserviceexpenses | 2,294,282.27 | 500,000.00 | ||
| Softwareexpenses | - | 1,999,140.78 | ||
| Depreciationandamortization | 544,874.10 | 536,909.52 | ||
| Others | 258,609.57 | 200,656.92 |
Total
| Total | 17,944,132.37 | 16,822,042.92 |
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
37.Financeexpenses
Currency:RMBYuan
2022
| 2022 | 2021 |
Interestexpenses
| Interestexpenses | 23,830,354.96 | 12,331,582.92 | ||
| Less:Interestincome | 21,912,750.27 | 7,845,026.93 | ||
| Foreignexchangedifferences | 1,548,872.47 | (718,861.97) | ||
| Bankcharges | 18,070,277.31 | 22,147,272.41 |
Total
| Total | 21,536,754.47 | 25,914,966.43 |
38.Otherincome
Currency:RMBYuan
| 2022 | 2021 |
Governmentgrantsrelatedtoroutineactivities
| Governmentgrantsrelatedtoroutineactivities | 23,433,558.47 | 11,022,474.28 | ||
| VATleviedandrefunded(Note1) | 15,833,085.31 | 21,586,542.12 | ||
| Taxbenefits(Note2) | 162,770.75 | 150,631.39 | ||
| Others | 348,258.47 | 303,022.94 |
Total
| Total | 39,777,673.00 | 33,062,670.73 |
Note1:AccordingtotheNoticeoftheGeneralAdministrationofCustomsoftheMinistryofFinanceandtheStateAdministrationofTaxationonAdjustingtheRelevantTaxPoliciesoftheDiamondandShanghaiDiamondExchange(CaiShui[2006]No.65),polisheddiamondsimportedthroughthecustomsdeclarationofthecompetentcustomsoftheDiamondExchangeshallbeleviedandrefundedimmediatelyiftheactualVATburdenexceeds4%attheimportstage.ShanghaiDarry,asubsidiaryoftheCompany,hasthemembershipoftheShanghaiDiamondExchangeandenjoysthetaxtreatmentofimmediaterefundforthepartoftheactualVATburdenintheimportprocessexceeding4%.Note2:AccordingtotheAnnouncementoftheStateAdministrationofTaxationontheExemptionofSmall-scaleTaxpayersfromVATCollectionandAdministration(SATAnnouncementNo.5[2021]),small-scaletaxpayerswhoengageinVATtaxablesalesandtheirtotalmonthlysalesdonotexceedRMB150,000(orRMB450,000ifonequarterisataxperiod).Someofthecompany'sbranchesaresmall-scaletaxpayersandmeettheabovestandards,andwillbeexemptfromVATin2022.
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
39.Investmentincome
Currency:RMBYuan
2022
| 2022 | 2021 |
Investmentincomeearnedduringtheholdingperiodofdebt
investment
| Investmentincomeearnedduringtheholdingperiodofdebtinvestment | 17,693,148.47 | 12,670,534.30 | ||
| Investmentincomereceivedfromdisposalofheld-for-tradingfinancialassets | 71,309,897.15 | 28,959,209.85 |
Total
| Total | 89,003,045.62 | 41,629,744.15 |
40.Gainsfromchangesinfairvalue
Currency:RMBYuan
| 2022 | 2021 |
Financialassetsheldfortrading
| Financialassetsheldfortrading | 39,294,362.36 | 17,567,673.68 |
Total
| Total | 39,294,362.36 | 17,567,673.68 |
41.Creditimpairmentlosses
Currency:RMBYuan
| 2022 | 2021 |
Impairmentlossforotherreceivables
| Impairmentlossforotherreceivables | (1,905,000.00) | - | ||
| Impairmentlossforaccountsreceivable | 3,698,479.08 | (2,021,003.07) | ||
| Impairmentlossfornon-currentassetsduewithinoneyear | - | (358,191.14) |
Total
| Total | 1,793,479.08 | (2,379,194.21) |
42.Impairmentlossesofassets
Currency:RMBYuan
| 2022 | 2021 |
Impairmentlossforinventories
| Impairmentlossforinventories | (4,237,633.79) | (4,741,845.92) | |
| Impairmentlossforotherassets | (24,183,140.90) | (5,411,520.39) |
Total
| Total | (28,420,774.69) | (10,153,366.31) |
In2022,RMB-24,183,140.90impairmentlossforotherassetsincludesimpairmentlossof
RMB-5,680,172.80long-termamortizationexpenseandRMB-18,502,968.10impairmentlossofright-of-useassets;In2021,RMB-5,411,520.39impairmentlossforotherassetsistheimpairmentlossofright-of-useassets.
43.Gains/lossondisposalofnon-currentassets
Currency:RMBYuan
| 2022 | 2021 |
Gainorlossondisposaloffixedassets
| Gainorlossondisposaloffixedassets | 1,244,949.25 | (732,715.39) |
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
44.Non-operatingincome
Currency:RMBYuan
2022
| 2022 | 2021 |
Indemnity
| Indemnity | 1,166,242.21 | 1,132,491.79 | |
| Others | 70,848.25 | 26,331.52 |
Total
| Total | 1,237,090.46 | 1,158,823.31 |
45.Non-operatingexpenses
Currency:RMBYuan
| 2022 | 2021 |
Liquidateddamagesandlatefees
| Liquidateddamagesandlatefees | 582,566.17 | 1,506,155.30 | |
| Others | 185,867.41 | 551,089.19 |
Total
| Total | 768,433.58 | 2,057,244.49 |
46.Incometaxexpenses
Currency:RMBYuan
| 2022 | 2021 |
Currenttax
| Currenttax | 155,414,780.78 | 325,543,518.22 | ||
| Deferredtax | 722,413.61 | 4,307,243.70 |
Total
| Total | 156,137,194.39 | 329,850,761.92 |
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
46.Incometaxexpenses(continued)Thereconciliationbetweenincometaxexpensesandprofit/(loss)beforeincometaxisasfollows:
Currency:RMBYuan
2022
2022Profit/(loss)beforeincometax
| Profit/(loss)beforeincometax | 885,379,141.06 |
Taxattheapplicabletaxrate
| Taxattheapplicabletaxrate | 221,344,785.34 | |
| Effectofdifferenttaxratesforsomesubsidiaries | (66,104,852.38) | |
| Adjustmentstocurrenttaxinrespectofpriorperiods | 2,011,256.23 | |
| Effectofnon-taxableincome | - | |
| Expensesnotdeductiblefortax | 654,459.45 | |
| Taxlossesutilizedfrompreviousperiods | (286,039.12) | |
| Unrecogniseddeductibletemporarydifferencesandtaxlosses | 558,840.92 | |
| R&Dexpensesaresuper-deducted | (2,041,246.37) | |
| Effectonopeningdeferredtaxofchangeinthetaxrate | (9.68) |
TaxchargeattheGroup’seffectivetaxrate
| TaxchargeattheGroup’seffectivetaxrate | 156,137,194.39 |
Note:TheincometaxoftheGrouphasbeenprovidedattheapplicablerateontheestimated
assessabletaxableprofitsarisinginMainlandChina.Incometaxesonprofitsassessableelsewherehavebeencalculatedattheratesoftaxprevailinginthecountries/jurisdictionsinwhichtheGroupoperates,inaccordancewithexistinglaws,interpretationsandpractices.
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
47.Othercomprehensiveincome
RefertoVII29
48.NotestocashflowstatementSupplementtocashflowstatement
Currency:RMBYuan
2022
| 2022 | 2021 |
(1)Proceedsrelatingtootheroperatingactivities:
(1)Proceedsrelatingtootheroperatingactivities:
Repossessionofstorerenovationandotherdeposits
| Repossessionofstorerenovationandotherdeposits | 8,835,864.26 | 4,356,081.61 | ||
| Recoverplatformcommissionrebates | 4,325,330.25 | - | ||
| Bankinterestincome | 20,667,425.02 | 9,056,564.18 | ||
| Governmentgrants | 23,433,558.47 | 11,022,474.28 | ||
| Others | 5,393,076.90 | 951,900.21 |
Total
| Total | 62,655,254.90 | 25,387,020.28 |
(2)Othercashpaymentsrelatingtooperatingactivities:
(2)Othercashpaymentsrelatingtooperatingactivities:
Paymentofrent,propertymanagementandutilityexpenses
| Paymentofrent,propertymanagementandutilityexpenses | 82,717,265.80 | 98,502,665.53 | ||
| Paymentofmarketingexpenses | 352,347,629.80 | 339,435,974.58 | ||
| Paymentofofficeandtravelexpenses | 44,110,164.16 | 36,153,786.85 | ||
| Pamentofcourierexpenses | 10,942,674.44 | 15,050,352.27 | ||
| Paymentofpackagingexpenses | 37,612,628.87 | 29,979,883.57 | ||
| Paymentofcardfee | 18,070,277.46 | 22,147,272.40 | ||
| Paymentofrenovationandotherdeposits | 10,025,830.66 | 1,255,299.95 | ||
| Paymentofconsultationandtesting | 44,946,232.79 | 23,899,809.76 | ||
| Paymentofcommissionstoe-commerceplatforms | 21,387,218.80 | 33,867,656.49 | ||
| Others | 5,651,697.95 | 27,511,941.82 |
Total
| Total | 627,811,620.73 | 627,804,643.22 |
(3)Proceedsrelatingtootherinvestingactivities
(3)ProceedsrelatingtootherinvestingactivitiesWithholdingandpayingdividendtax
| Withholdingandpayingdividendtax | - | - |
Total
| Total | - | - |
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
48.Notestocashflowstatement(continued)Supplementtocashflowstatement(continued)
Currency:RMBYuan
2022
| 2022 | 2021 |
(4)Proceedsrelatingtootherinvestingactivities
(4)ProceedsrelatingtootherinvestingactivitiesWithholdingandpayingdividendtax
| Withholdingandpayingdividendtax | - | - |
Total
| Total | - | - |
Currency:RMBYuan
(5)Proceedsrelatingtoother
financingactivitiesReturnedrentaldeposit
| Returnedrentaldeposit | 5,435,963.01 | 5,483,723.60 | ||
| Withholdingandpayingdividendtax | 5,264,759.99 | - |
Total
| Total | 10,700,723.00 | 5,483,723.60 |
(6)Othercashpaymentsrelating
tofinancingactivities
(6)Othercashpaymentsrelating
tofinancingactivitiesPaymentoflistingservicefee
| Paymentoflistingservicefee | - | 6,354,514.54 | ||
| Paymentoffixedrent | 335,781,536.76 | 241,234,928.05 | ||
| Rentaldepositpaid | 30,357,327.43 | 30,220,292.89 | ||
| Paymentsmadefortheacquisitionofminoritystakesinsubsidiaries | - | 35,477.77 | ||
| Withholdingandpayingdividendtax | 5,264,759.99 | - |
Total
| Total | 371,403,624.18 | 277,845,213.25 |
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
49.NotestocashflowstatementSupplementtocashflowstatement(continued)
(1)Reconciliationofprofit/(loss)tocashflowsfromoperatingactivities:
Currency:RMBYuan
2022
| 2022 | 2021 |
Profit
| Profit | 729,241,946.67 | 1,301,757,792.01 | ||
| Add:Impairmentlossesonassets | 28,420,774.69 | 10,153,366.31 | ||
| Depreciationoffixedassets | 3,974,151.64 | 1,977,535.10 | ||
| Depreciationofright-of-useassets | 355,607,929.93 | 252,130,105.39 | ||
| Amortisationofintangibleassets | 2,940,850.52 | 2,352,628.02 | ||
| Amortisationoflong-termprepaidexpenses | 91,898,732.79 | 57,376,308.12 | ||
| Lossondisposaloffixedassets,intangibleassetsandotherlong-termassetsandlossofretirementoffixedassets | (1,244,949.25) | 732,715.39 | ||
| Lossondisposaloffixedassets | - | - | ||
| Gains/lossesfromchangesinfairvalue | (39,294,362.36) | (17,567,673.68) | ||
| Financeexpenses | 24,133,902.03 | 12,824,258.20 | ||
| Investmentincome | (89,003,045.62) | (41,629,744.15) | ||
| Decrease/(increase)indeferredtaxassets | (3,425,426.97) | 271,076.73 | ||
| Increaseindeferredtaxliabilities | 4,146,880.41 | 4,037,714.27 | ||
| Increaseininventories | (229,917,478.98) | (147,587,357.77) | ||
| Increaseinoperatingreceivables | 861,877.87 | (35,773,305.98) | ||
| Increaseinoperatingpayables | (63,635,737.18) | 132,985,401.31 | ||
| Others | 3,305,066.05 | 10,172,031.44 |
Netcashflowsfromoperatingactivities
| Netcashflowsfromoperatingactivities | 818,011,112.24 | 1,544,212,850.71 |
Closingbalanceofcash
| Closingbalanceofcash | 521,625,030.62 | 4,741,510,453.45 | ||
| Less:Openingbalanceofcash | 4,741,510,453.45 | 181,495,843.19 |
Netincreaseincashandcashequivalents
| Netincreaseincashandcashequivalents | (4,219,885,422.83) | 4,560,014,610.26 |
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
49.Notestocashflowstatement(continued)
(2)Cashandcashequivalents
Currency:RMBYuan
2022
| 2022 | 2021 |
Cash
| Cash | 521,625,030.62 | 4,741,510,453.45 | ||
| Including:Cashonhand | 391,749.23 | 260,691.68 | ||
| Bankdepositsondemand | 512,798,797.26 | 4,737,174,517.72 | ||
| Othercurrencyfundsondemand | 8,434,484.13 | 4,075,244.05 |
Cashandcashequivalentsatendofyear
| Cashandcashequivalentsatendofyear | 521,625,030.62 | 4,741,510,453.45 |
Including:restrictedcashandcashequivalentsheldbyparentsandsubsidiaries--
50.Foreigncurrencymonetaryitems
Currency:RMBYuan
| Documentcurrency | ChangeinUSDrate | TranslatedintoRMB |
Currencyfunds
| Currencyfunds | ||||||
| USD | 6,754,306.75 | 6.9646 | 47,041,044.79 | |||
| EUR | 245,311.60 | 7.4229 | 1,820,923.48 | |||
| HKD | 472,553.50 | 0.8933 | 422,132.04 |
Accountsreceivable
| Accountsreceivable | ||||||
| USD | 586.47 | 6.9646 | 4,084.53 | |||
| HKD | 902,861.47 | 0.8933 | 806,526.15 |
Accountspayable
| Accountspayable | ||||||
| USD | 56,794.80 | 6.9646 | 395,553.06 | |||
| HKD | 263,156.96 | 0.8933 | 235,078.11 |
Otherpayables
| Otherpayables | ||||||
| HKD | 222,747.36 | 0.8933 | 198,980.22 | |||
| EUR | 67,151.88 | 7.4229 | 498,461.69 |
Note:Foreigncurrencymonetaryitemsrefertonon-RMBmonetaryitems.
VII.NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS(continued)
51.GovernmentgrantsGovernmentgrantsrelatedtoroutineactivities:
Currency:RMBYuan
Relatedtoasset/income
| Relatedtoasset/income | Amount | Program | Amountrecognizedincurrentperiod | ||
| Relatedtoincome | 10,000,000.00 | ShenzhenMunicipalBureauofCommerce2022ConsumptionPromotionSupportProgramRetailSales(Turnover)GrowthIncentiveProgram | 10,000,000.00 | ||
| Relatedtoincome | 3,500,000.00 | ShenzhenBureauofIndustryandInformationTechnologyQualityBrandDoubleEnhancementProjectSupportProgram | 3,500,000.00 | ||
| Relatedtoincome | 3,000,000.00 | Shenzhenfashionindustrysupport | 3,000,000.00 | ||
| Relatedtoincome | 1,500,000.00 | Privateandsmallandmedium-sizedenterprisesinnovationdevelopmentcultivationsupportprogram | 1,500,000.00 | ||
| Relatedtoincome | 1,402,600.00 | Shenzhenheadquartersenterprisesupport | 1,402,600.00 | ||
| Relatedtoincome | 1,123,642.91 | Subsidiesforpoststabilisation | 1,123,642.91 | ||
| Relatedtoincome | 634,293.65 | Retentionallowance | 634,293.65 | ||
| Relatedtoincome | 500,000.00 | ReliefPolicy-Retailenterprisestoopene-commercestoressubsidyprogram | 500,000.00 | ||
| Relatedtoincome | 305,000.00 | SpecialfundsupportforindustrialtransformationandupgradinginLuohuDistrict | 305,000.00 | ||
| Relatedtoincome | 300,000.00 | Specialfundsforindustrialdevelopment | 300,000.00 | ||
| Relatedtoincome | 228,007.26 | Individualtaxrefund | 228,007.26 | ||
| Relatedtoincome | 200,000.00 | High-techenterprisesarecultivatedintostorage | 200,000.00 | ||
| Relatedtoincome | 200,000.00 | LuohuDistrict,ShenzhenCityforhelpenterprisesbenefitthepeopletobailout"tenmeasures" | 200,000.00 | ||
| Relatedtoincome | 164,500.00 | Jobexpansionsubsidies | 164,500.00 | ||
| Relatedtoincome | 324,916.64 | Employmentsubsidies | 324,916.64 | ||
| Relatedtoincome | 50,000.00 | ReliefPolicy-Accommodationandcateringandwholesaleandretailenterprisessubsidyprogram | 50,000.00 | ||
| Relatedtoincome | 598.01 | Others | 598.01 |
VIII.ChangesinscopeofconsolidationChangesinscopeofconsolidationcausedbyotherreasonsDuringthereportingperiod,thefollowingimportantnewsubsidiarieswereestablished:
Name
| Name | Thepurposeoftheestabilishment | Thewaytochangescopesofconsolidation | Impactonoverallperformance |
XiamenDRJewelryCo.,Ltd
| XiamenDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| ShenyangDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| TianjinDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| ChengduDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| KunmingDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| ShanghaiDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| SuzhouZhongzuanDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| JinanDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| ShenzhenDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| BeijingZhongzuanDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| SuzhouDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| ShenyangDRJewelryAccessoriesCo.,Ltd. | Businessneeds | Newin2022 | Notsignificant |
| HangzhouDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| BeijingDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| WuhanDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| WuhanZhongzuanDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| Xi’anDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| ChengduDRTrueLoveJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| NingboDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| BeijingHuazuanDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| ChongqingDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| HangzhouDRTrueLoveJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| HenanDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| Xi’anDRJewelryandAccessoriesCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| ZhengzhouDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| ShenzhenDRJewelryHeadwareCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| ShenzhenDRJewelryandAccessoriesCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| ChangshaDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| ShanghaiDRJewelryheadwareCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| ShanghaiDRJewelrySalesCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| ZhoukouDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| YiwuDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| HezeDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| DongguanDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| XiningDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| LinyiDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| YinchuanDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| WeifangDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| NanchangDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| JiningDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| MianyangDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| FuyangDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| ShangqiuDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| UrumqiDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| HandanDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| BaodingDRJewelrySalesCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| GuangzhouDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| GuiyangDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| LangfangDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| HaoduoDiamondZhizao(Shenzhen)Co.,Ltd. | Businessneeds | Newin2022 | Notsignificant |
| FoshanDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
| JiaxingDRJewelryCo.,Ltd | Businessneeds | Newin2022 | Notsignificant |
Alloftheabovearesubsidiaries,exceptfortheabove-mentionedHaoduoDiamondZhizao(Shenzhen)Co.,Ltd.issub-subsidiary.
IX.Equityinotherentities
1.Equityinsubsidiaries
(1)ThesubsidiariesacquiredbytheGroupthroughestablishmentareasfollows:
Nameofthesubsidiary
| Nameofthesubsidiary | Placeofincorporation | Natureofbusiness | Ownershipinterest(%) | Modeofacquisition | ||||||
| Direct | Indirect | |||||||||
| DRGroupCompanyLimited | HongKong | StoresalesinHongKongandoverseasloosestoneprocurement | - | 100 | Setup | |||||
| ShanghaiDarryDiamondCo.,Ltd | Shanghai | MemberofShanghaiDiamondExchange,responsiblefortheprocurementandcustomsdeclarationofoverseasloosestone | 100 | - | Setup | |||||
| ChongqingDarryJewelryCo.,Ltd | Chongqing | StoresalesinChongqing | 100 | - | Setup | |||||
| ShenzhenLoveOnlyAICloudTechnologyCo.,Ltd. | Shenzhen | InformationTechnologyServices&Brandoperationservices | 100 | - | Setup | |||||
| CoupleOnly(Shenzhen)JewelryCo.,Ltd. | Shenzhen | Sub-brandcultivation | 100 | - | Setup | |||||
| ShenzhenDarryCommercialManagementServiceCo.,Ltd | Shenzhen | Supplychainmanagement,R&Ddesign,customizedproductservicesandrelatedsupportingservices | 100 | - | Setup | |||||
| DARRYJEWELRY(HK)LIMITED | HongKong | Sub-brandcultivation | - | 100 | Setup | |||||
| CoupleOnlyJewelryHongKongCompanyLimited | HongKong | Sub-brandcultivation | - | 100 | Setup | |||||
| DRJewelry | France | RegionalsalesinFrance | - | 100 | Setup | |||||
| He’erCulture(Shenzhen)Co.,Ltd | Shenzhen | Sub-brandcultivation,Creativeplanningservices | 100 | - | Setup | |||||
| HaoduoDiamond(Shenzhen)Co.,Ltd | Shenzhen | Responsiblefordomesticbarestoneprocurement | 100 | - | Setup | |||||
| XiamenDRJewelryCo.,Ltd | Xiamen | StoresalesinXiamen | 100 | - | Newlysetup | |||||
| ShenyangDRJewelryCo.,Ltd | Shenyang | StoresalesinShenyang | 100 | - | Newlysetup | |||||
| TianjinDRJewelryCo.,Ltd | Tianjin | StoresalesinTianjin | 100 | - | Newlysetup | |||||
| ChengduDRJewelryCo.,Ltd | Chengdu | StoresalesinChengdu | 100 | - | Newlysetup | |||||
| KunmingDRJewelryCo.,Ltd | Kunming | StoresalesinKunming | 100 | - | Newlysetup | |||||
| ShanghaiDRJewelryCo.,Ltd | Shanghai | StoresalesinShanghai | 100 | - | Newlysetup | |||||
IX.Equityinotherentities(continued)
1.Equityinsubsidiaries(continued)
Nameofthesubsidiary
| Nameofthesubsidiary | Placeofincorporation | Natureofbusiness | Ownershipinterest(%) | Modeofacquisition | ||||
| Direct | Indirect | |||||||
| SuzhouZhongzuanDRJewelryCo.,Ltd | Suzhou | StoresalesinSuzhou | 100 | - | Newlysetup | |||
| JinanDRJewelryCo.,Ltd | Jinan | StoresalesinJinan | 100 | - | Newlysetup | |||
| ShenzhenDRJewelryCo.,Ltd | Shenzhen | StoresalesinShenzhen | 100 | - | Newlysetup | |||
| BeijingZhongzuanDRJewelryCo.,Ltd | Beijing | StoresalesinBeijing | 100 | - | Newlysetup | |||
| SuzhouDRJewelryCo.,Ltd | Suzhou | StoresalesinSuzhou | 100 | - | Newlysetup | |||
| ShenyangDRJewelryAccessoriesCo.,Ltd. | Shenyang | StoresalesinShenyang | 100 | - | Newlysetup | |||
| HangzhouDRJewelryCo.,Ltd | Hangzhou | StoresalesinHangzhou | 100 | - | Newlysetup | |||
| BeijingDRJewelryCo.,Ltd | Beijing | StoresalesinBeijing | 100 | - | Newlysetup | |||
| WuhanDRJewelryCo.,Ltd | Wuhan | StoresalesinWuhan | 100 | - | Newlysetup | |||
| WuhanZhongzuanDRJewelryCo.,Ltd | Wuhan | StoresalesinWuhan | 100 | - | Newlysetup | |||
| Xi’anDRJewelryCo.,Ltd | Xi’an | StoresalesinXi'an | 100 | - | Newlysetup | |||
| ChengduDRTrueLoveJewelryCo.,Ltd | Chengdu | StoresalesinChengdu | 100 | - | Newlysetup | |||
| NingboDRJewelryCo.,Ltd | Ningbo | StoresalesinNingbo | 100 | - | Newlysetup | |||
| BeijingHuazuanDRJewelryCo.,Ltd | Beijing | StoresalesinBeijing | 100 | - | Newlysetup | |||
| ChongqingDRJewelryCo.,Ltd | Chongqing | StoresalesinChongqing | 100 | - | Newlysetup | |||
| HangzhouDRTrueLoveJewelryCo.,Ltd | Hangzhou | StoresalesinHangzhou | 100 | - | Newlysetup | |||
| HenanDRJewelryCo.,Ltd | Henan | StoresalesinHenan | 100 | - | Newlysetup | |||
| Xi’anDRJewelryandAccessoriesCo.,Ltd | Xi’an | StoresalesinXi’an | 100 | - | Newlysetup | |||
| ZhengzhouDRJewelryCo.,Ltd | Zhengzhou | StoresalesinZhengzhou | 100 | - | Newlysetup | |||
| ShenzhenDRJewelryAccessoriesCo.,Ltd | Shenzhen | StoresalesinShenzhen | 100 | - | Newlysetup | |||
| ShenzhenDRJewelryOrnamentCo.,Ltd | Shenzhen | StoresalesinShenzhen | 100 | - | Newlysetup | |||
| ChangshaDRJewelryCo.,Ltd | Changsha | StoresalesinChangsha | 100 | - | Newlysetup | |||
| ShanghaiDRJewelryheadwareCo.,Ltd | Shanghai | StoresalesinShanghai | 100 | - | Newlysetup | |||
| ShanghaiDRJewelrySalesCo.,Ltd | Shanghai | StoresalesinShanghai | 100 | - | Newlysetup | |||
| ZhoukouDRJewelryCo.,Ltd | Zhoukou | StoresalesinZhoukou | 100 | - | Newlysetup | |||
| YiwuDRJewelryCo.,Ltd | Yiwu | StoresalesinYiwu | 100 | - | Newlysetup | |||
| HezeDRJewelryCo.,Ltd | Heze | StoresalesinHeze | 100 | - | Newlysetup | |||
| DongguanDRJewelryCo.,Ltd | Dongguan | StoresalesinDongguan | 100 | - | Newlysetup | |||
| XiningDRJewelryCo.,Ltd | Xining | StoresalesinXining | 100 | Newlysetup | ||||
| LinyiDRJewelryCo.,Ltd | Linyi | StoresalesinLinyi | 100 | Newlysetup | ||||
| YinchuanDRJewelryCo.,Ltd | Yinchuan | StoresalesinYinchuan | 100 | - | Newlysetup | |||
| WeifangDRJewelryCo.,Ltd | Weifang | StoresalesinWeifang | 100 | - | Newlysetup | |||
| NanchangDRJewelryCo.,Ltd | Nanchang | StoresalesinNanchang | 100 | - | Newlysetup | |||
| JiningDRJewelryCo.,Ltd | Jining | StoresalesinJining | 100 | - | Newlysetup | |||
| MianyangDRJewelryCo.,Ltd | Mianyang | StoresalesinMianyang | 100 | - | Newlysetup | |||
| FuyangDRJewelryCo.,Ltd | Fuyang | StoresalesinFuyang | 100 | - | Newlysetup | |||
| ShangqiuDRJewelryCo.,Ltd | Shangqiu | StoresalesinShangqiu | 100 | - | Newlysetup | |||
| UrumqiDRJewelryCo.,Ltd | urumchi | StoresalesinUrumqi | 100 | - | Newlysetup | |||
| HandanDRJewelryCo.,Ltd | Handan | StoresalesinHandan | 100 | - | Newlysetup | |||
| BaodingDRJewelrySalesCo.,Ltd | Baoding | StoresalesinBaoding | 100 | - | Newlysetup | |||
| GuangzhouDRJewelryCo.,Ltd | Guangzhou | SoldinstoresinGuangzhou | 100 | - | Newlysetup | |||
| GuiyangDRJewelryCo.,Ltd | Guiyang | SoldinstoresinGuiyang | 100 | - | Newlysetup | |||
| LangfangDRJewelryCo.,Ltd | Langfang | StoresalesinLangfang | 100 | - | Newlysetup | |||
| HaoduoDiamondZhizao(Shenzhen)Co.,Ltd. | Shenzhen | Roughdiamondcutproduction | - | 100 | Newlysetup | |||
| FoshanDRJewelryCo.,Ltd | Foshan | SoldinstoresinFoshan | 100 | - | Newlysetup | |||
| JiaxingDRJewelryCo.,Ltd | Jiaxing | StoresalesinJiaxing | 100 | - | Newlysetup | |||
X.FINANCIALINSTRUMENTSANDRELATEDRISKS
1.FinancialinstrumentsbycategoryCarryingamountsofvariousfinancialinstrumentsatthebalancesheetdateareasfollows:
2022Financialassets
Financialassetsat
fairvaluethroughprofitorloss
| Financialassetsatfairvaluethroughprofitorloss | Financialassetsatamortisedcost | Total | ||
| RequiredbytheStandards |
Currencyfunds
| Currencyfunds | - | 521,904,818.30 | 521,904,818.30 | ||
| Accountsreceivable | - | 84,478,911.52 | 84,478,911.52 | ||
| Otherreceivables | - | 2,378,589.22 | 2,378,589.22 | ||
| Financialassetsheldfortrading | 5,609,891,931.68 | - | 5,609,891,931.68 | ||
| Othercurrentassets | - | 31,378,714.16 | 31,378,714.16 | ||
| Debtinvestments | - | 794,553,996.36 | 794,553,996.36 | ||
| Currentportionofnon-currentassets | - | 106,967,867.16 | 106,967,867.16 | ||
| Othernon-currentassets | - | 85,419,135.39 | 85,419,135.39 |
Total
| Total | 5,609,891,931.68 | 1,627,082,032.11 | 7,236,973,963.79 |
Financialliabilities
Financialassetsat
amortisedcostShort-termborrowings
| Short-termborrowings | 433,993,449.44 |
| Notespayable | 466,527,730.97 |
| Accountspayable | 86,880,869.77 |
| Otherpayables | 102,563,944.81 |
| Provisions | 16,004,249.50 |
Total
| Total | 1,105,970,244.49 |
X.FINANCIALINSTRUMENTSANDRELATEDRISKS(continued)
1.Financialinstrumentsbycategory(continued)Carryingamountsofeachcategoryoffinancialinstrumentsatthebalancesheetdateareasfollows:
2021Financialassets
Financialassetsatfairvaluethroughprofitorloss
| Financialassetsatfairvaluethroughprofitorloss | Financialassetsatamortisedcost | Total | ||
| RequiredbytheStandards |
Currencyfunds
| Currencyfunds | - | 4,741,510,453.45 | 4,741,510,453.45 | ||
| Accountsreceivable | - | 174,880,676.50 | 174,880,676.50 | ||
| Otherreceivables | - | 6,135,138.17 | 6,135,138.17 | ||
| Financialassetsheldfortrading | 1,824,097,569.32 | - | 1,824,097,569.32 | ||
| Debtinvestments | - | 218,585,379.05 | 218,585,379.05 | ||
| Currentportionofnon-currentassets | - | 192,823,541.46 | 192,823,541.46 | ||
| Othernon-currentassets | - | 57,947,281.39 | 57,947,281.39 |
Total
| Total | 1,824,097,569.32 | 5,391,882,470.02 | 7,215,980,039.34 |
Financialliabilities
Financialassetsatamortised
costNotespayable
| Notespayable | 341,669,947.83 |
| Accountspayable | 113,777,232.26 |
| Otherpayables | 72,156,628.68 |
| Provisions | 10,486,658.50 |
Total
| Total | 538,090,467.27 |
X.FINANCIALINSTRUMENTSANDRELATEDRISKS(continued)
2.RisksoffinancialinstrumentsTheGroupisexposedtovariousfinancialinstrumentrisksinitsday-to-dayactivities,mainlyincludingcreditrisk,liquidityriskandmarketrisk(includingexchangeraterisk).TheGroup'sprincipalfinancialinstrumentsincludemonetaryfunds,accountsreceivable,otherreceivables,tradingfinancialassets,debtinvestments,othercurrentandnon-currentassetsandshort-termborrowings,notespayableandaccountspayable,otherpayablesandprojectedliabilities.RisksassociatedwiththesefinancialinstrumentsandpoliciesoftheriskmanagementtoloweringtherisksoftheGrouparesummarisedbelow.TheBoardisresponsibleforplanningandestablishingtheGroup'sriskmanagementstructure,formulatingtheGroup'sriskmanagementpoliciesandrelevantguidelinesandoverseeingtheimplementationofriskmanagementmeasures.TheGrouphasdevelopedriskmanagementpoliciestoidentifyandanalysetheriskstowhichtheGroupisexposed,whichclearlydefinespecificrisksandcovermanyaspectssuchasmarketrisk,creditriskandliquidityriskmanagement.TheGroupregularlyevaluateschangesinthemarketenvironmentandbusinessactivitiesoftheGrouptodecidewhethertoupdateitsriskmanagementpoliciesandsystems.RiskmanagementoftheGroupiscarriedoutbytheRiskManagementCommitteeinaccordancewiththepoliciesapprovedbytheBoard.TheRiskManagementCommitteeidentifies,evaluatesandmitigatesrelevantrisksthroughclosecooperationwithotherbusinessunitsoftheGroup.TheGroup'sinternalauditdepartmentconductsregularauditsofriskmanagementcontrolsandproceduresandreportstheresultstotheGroup'sAuditCommittee.TheGroupdiversifiestheriskoffinancialinstrumentsthroughappropriatediversificationofinvesmentandbusinessportfolio,andreducestheriskofconcentrationonspecificcounterpartiesbyformulatingappropriateriskmanagementpolicies.CreditriskTheGrouptradesonlywithrecognisedandcreditworthythirdparties.AccordingtotheGroup'spolicy,allcustomerswhorequirecredittransactionsarerequiredtoconductacreditreview.Inaddition,theGroupcontinuouslymonitorsthebalanceofaccountsreceivabletoensurethattheGroupdoesnotfacesignificantbaddebtrisks.Thesefinancialinstrumentshavelowcreditriskbecausethecounterpartiesofmonetaryfundsandtradablefinancialassetsarereputablebankswithhighcreditratings.OtherfinancialassetsoftheGroupincludeaccountsreceivableandotherreceivableswhosecreditriskderivesfromcounterpartydefaultsandwhosemaximumexposureisequaltothecarryingamountoftheseinstruments.SincetheGrouptradesonlywithrecognisedandcreditworthythirdparties,thereisnorequirementforcollateral.Creditriskiscentrallymanagedbyindustry.Asat31December2022,theGrouphadaspecificcreditriskconcentrationand73.07%oftheGroup'saccountsreceivable(31December2021:71.23%)werecollectedbytheshoppingmalls.
X.FINANCIALINSTRUMENTSANDRELATEDRISKS(continued)
2.Risksoffinancialinstruments(continued)Creditrisk(continued)DeterminationofsignificantincreaseincreditriskAteachbalancesheetdate,theGroupassesseswhetherthecreditriskontherelevantfinancialinstrumentshasincreasedsignificantlysinceinitialrecognition.Whendeterminingwhetherthecreditriskofafinancialassethasincreasedsignificantlysinceinitialrecognition,theGroupconsidersreasonableandsupportableinformationthatisrelevantandavailablewithoutunduecostoreffort,includingqualitativeandquantitativeanalysisbasedonhistoricaldataoftheGroup,externalcreditriskratingsandforward-lookinginformation.Basedonasinglefinancialinstrumentorportfoliooffinancialassetswithsimilarcreditriskcharacteristics,theGroupdeterminesexpectedchangesindefaultriskwithinthedurationoffinancialinstrumentsthroughcomparingthedefaultriskoccuratthebalancesheetdatewiththeoneoccuratthedateofinitialrecognition.TheGroupdeterminesthatthecreditriskoffinancialinstrumentshassignificantlyincreasedwhenoneormoreofthefollowingquantitativeorqualitativecriteriabelowaremet:
（1）Quantitativecriteriaaremainlytheprobabilityofdefaultfortheremainingdurationofthe
reportingdateincreasingbymorethanacertainpercentagesinceinitialrecognition;
（
）Qualitativecriteriaaremainlythesignificantdetrimentalchangesintheborrower’s
operatingorfinancialconditions,andearlywarningcustomerlists,etc.Definitionofcredit-impairedfinancialassetsInassessingwhetherafinancialassetiscredit-impaired,theGroupconsidersbothquantitativeandqualitativeindicatorsandadoptsthestandardofdeterminationinlinewithinternalcreditriskmanagementgoaloftherelevantfinancialinstruments.TheGroupassesseswhetherafinancialassetiscredit-impairedbyconsideringthefollowingfactors:
（
）significantfinancialdifficultyoftheborrowerorissuer;
（2）abreachofcontract,suchasadefaultordelinquencyininterestorprincipalpayments;
（3）thelender(s)oftheborrower,foreconomicorcontractualreasonsrelatingtotheborrower’sfinancialdifficulty,havinggrantedtotheborroweraconcession(s)thatthelender(s)wouldnototherwiseconsider;
（
）itisprobablethattheborrowerwillenterbankruptcyorotherfinancialreorganisation;
（5）thedisappearanceofanactivemarketforasecuritybecauseoffinancialdifficultiesoftheissuerorborrower;or
（6）Financialassetspurchasedorsourcedatlargediscountsindicatingcreditlosseshaveoccurred.Theimpairmentoffinancialassetsmaynotbenecessarilyduetoasinglediscreteevent,hecombinedeffectsofmultipleeventsmayresultinfinancialassetsbeingcredit-impaired.
X.FINANCIALINSTRUMENTSANDRELATEDRISKS(continued)
2.Risksoffinancialinstruments(continued)LiquidityriskTheGroupmonitorsitsriskofshortageoffundsusingarecurringliquidityplanningtool.Thistoolconsidersboththematurityofthefinancialinstrumentsandprojectedcashflowsfromoperations.Asat31December2022,theGrouphadnodebtmaturingformorethan1year(31December2021:nil).ThetablesbelowsummarisethematurityprofileoftheCompany’sfinancialliabilitiesbasedoncontractualundiscountedcashflows:
Financialliabilitiesandleaseliabilities2022
Within1year
| Within1year | 1-3years | 3to5years | Over5years | Total | |
| Short-termborrowings | 433,993,449.44 | - | - | - | 433,993,449.44 |
| Notespayable | 466,527,730.97 | - | - | - | 466,527,730.97 |
| Accountspayable | 86,880,869.77 | - | - | - | 86,880,869.77 |
| Otherpayables | 102,563,944.81 | - | - | - | 102,563,944.81 |
| Provisions | 7,025,902.00 | 5,636,047.50 | 2,263,200.00 | 1,079,100.00 | 16,004,249.50 |
| Currentportionofnon-currentliabilities | 351,516,900.54 | - | - | - | 351,516,900.54 |
| Leaseliabilities | - | 256,890,726.07 | 17,947,797.81 | 1,703,640.35 | 276,542,164.23 |
Total
| Total | 1,448,508,797.53 | 262,526,773.57 | 20,210,997.81 | 2,782,740.35 | 1,734,029,309.26 |
2021
| Within1year | 1-3years | 3to5years | Over5years | Total | |
| Notespayable | 341,669,947.83 | - | - | - | 341,669,947.83 |
| Accountspayable | 113,777,232.26 | - | - | - | 113,777,232.26 |
| Otherpayables | 72,156,628.68 | - | - | - | 72,156,628.68 |
| Provisions | 4,233,064.50 | 3,221,544.00 | 2,278,200.00 | 753,850.00 | 10,486,658.50 |
| Currentportionofnon-currentliabilities | 224,036,789.74 | - | - | - | 224,036,789.74 |
| Leaseliabilities | - | 208,742,353.74 | 18,546,887.65 | 117,954.70 | 227,407,196.09 |
Total
| Total | 755,873,663.01 | 211,963,897.74 | 20,825,087.65 | 871,804.70 | 989,534,453.10 |
X.FINANCIALINSTRUMENTSANDRELATEDRISKS(continued)
2.Risksoffinancialinstruments(continued)MarketriskCurrencyriskTheGroupisexposedtotransactionalexchangerateriskresultingfromsalesorpurchasesmadebybusinessunitsincurrenciesotherthantheirbasecurrency.InFY2022,approximately0.18%(2021:0.12%)oftheGroup'ssalesweredenominatedincurrenciesotherthanthebasicaccountingcurrencyoftheoperatingunitsinwhichthesalesoccurred,whileapproximately0.22%(2021:0.14%)ofthecostwasdenominatedincurrenciesotherthanthebasiccurrencyofaccountoftheoperatingunits.TheGroupdoesnotengageinforeignexchangehedging.Thetablebelowpresentsasensitivityanalysisofexchangeraterisk,reflectingtheimpactthatareasonablypossiblechangeintheexchangeratesoftheUSD,EURandHKDwouldhaveonnetincomeorloss(duetochangesinthefairvalueofmonetaryassetsandmonetaryliabilities)andothercomprehensiveincome,netoftax,assumingallothervariablesremainconstant.2022
ChangeinUSDrate
| ChangeinUSDrate | Netprofit/loss | Netothercomprehensiveincomeaftertax | Totalshareholders’equity | |||
| Increase/(decrease) | Increase/(decrease) | Increase/(decrease) | Increase/(decrease) |
IfRMBweakensagainst
USD
| IfRMBweakensagainstUSD | 3% | 1,233,808.76 | - | 1,233,808.76 | |||
| IfRMBstrengthensagainstUSD | (3%) | (1,233,808.76) | - | (1,233,808.76) |
2021
| ChangeinUSDrate | Netprofit/loss | Netothercomprehensiveincomeaftertax | Totalshareholders’equity | |||
| Increase/(decrease) | Increase/(decrease) | Increase/(decrease) | Increase/(decrease) |
IfRMBweakensagainst
USD
| IfRMBweakensagainstUSD | 3% | 2,043,987.72 | - | 2,043,987.72 | |||
| IfRMBstrengthensagainstUSD | (3%) | (2,043,987.72) | - | (2,043,987.72) |
X.FINANCIALINSTRUMENTSANDRELATEDRISKS(continued)
3.CapitalmanagementTheprimaryobjectivesoftheGroup’scapitalmanagementaretosafeguardtheGroup’sabilitytocontinueasagoingconcernandtomaintainhealthycapitalratiosinordertosupportitsbusinessandmaximiseshareholders’value.TheGroupmanagesandadjustsitscapitalstructureinresponsetochangesintheeconomicsituationandtheriskcharacteristicsoftheunderlyingassets.Tomaintainoradjustthecapitalstructure,theGroupmayadjustthedividendpaymenttoshareholders,repurchasesharesorissuenewshares.TheGroupisnotboundbyanyexternallyimposedcapitalrequirements.In2022and2021,thecapitalmanagementobjectives,policiesorproceduresremainunchanged.TheGroupmonitorscapitalusingthedebt-to-assetratio,whichistotalliabilitiesdividedbytotalassets.ItistheGroup'spolicytomaintainareasonablegearingratio.TheGroup’sdebt-to-assetratioattheendofthereportingperiodwasasfollows:
2022
| 2022 | 2021 |
Totalassets
| Totalassets | 8,815,748,380.27 | 8,269,184,150.24 |
Totalliabilities
| Totalliabilities | 2,012,702,176.31 | 1,402,608,449.07 |
Debt-to-assetratio
| Debt-to-assetratio | 22.83% | 16.96% |
XI.Fairvalue
1.Assetsandliabilitiesmeasuredatfairvalue2022
RMB
Closingbalance
| Closingbalance | ||||||
| FairvaluemeasurementswithinLevel1 | FairvaluemeasurementswithinLevel2 | FairvaluemeasurementswithinLevel3 | Total | |||
Recurringfairvaluemeasurements
| Recurringfairvaluemeasurements | ||||||||
| Financialassetsheldfortradingtrading | 5,609,891,931.68 | - | 5,609,891,931.68 | |||||
| Financialassetsatfairvaluethroughprofitorloss | - | 5,609,891,931.68 | - | 5,609,891,931.68 | ||||
| Non-recurringfairvaluemeasurements | - | - | - | - |
2.Basisofdetermingthemarketpricesofrecurringandnon-recurringmeasurementswithinLevel1Norecurringandnon-recurringmeasurementswithinLevel1attheendofthereportingperiod.
3.Qualitativeandquantitativeinformationonthevaluationtechniquesusedandsignificantparametersinrecurringandnon-recurringmeasurementswithinLevel2.
Financialassetsatfairvaluethroughprofitorlossarebankfinancialproductswithfairvaluedeterminedusingexpectedfuturecashflowsexpectedtobeavailableinthemarketanddiscountedataninterestratedeterminedbasedonthebestestimateoftheexpectedlevelofrisk.
4.Qualitativeandquantitativeinformationonthevaluationtechniquesusedandsignificantparametersinrecurringandnon-recurringmeasurementswithinLevel3Norecurringandnon-recurringmeasurementswithinLevel3attheendofthereportingperiod.
5.ReconciliationinformationbetweenopeningandclosingcarryingvaluesandsensitivityanalysisofunobservableparametersinrecurringmeasurementswithinLevel3.
N/A
6.Foritemsmeasuredatfairvalueonarecurringbasis,disclosetheamountsofanytransfersbetweendifferentlevelsofthefairvaluehierarchy,thereasonsforthosetransfersandthepolicyfordeterminingwhentransfersbetweenlevelsaredeemedtohaveoccurred.
Notransfersbetweendifferentlevelsoccurredduringthereportingperiod.
XI.Fairvalue(continued)
7.ChangesinvaluationtechniquesthatoccurredduringtheperiodandthereasonsforthechangesNovaluationtechniquesoccurredduringthereportingperiod.
8.FairvalueoffinancialassetsandfinancialliabilitiesthatarenotmeasuredatfairvalueTheCompanyhasassesseditscashandcashequivalents,accountsreceivable,otherreceivables,othercurrentassets,notespayable,accountspayableandotherpayablesandthefairvalueisinlinewiththecarryingvalueduetotheshortremainingperiod.XII.Relatedpartyrelationshipsandtransactions
1.Parent
Nameoftheparent
| Nameoftheparent | Placeofincorporation | Natureofbusiness | Registeredcapital | ProportionofownershipinterestintheCompany(%) | ProportionofvotingpowerintheCompany(%) |
DRInvestment(Zhuhai)Co..,Ltd.
| DRInvestment(Zhuhai)Co..,Ltd. | Zhuhai | Businessmanagementconsulting,businessinformationconsulting,investmentmanagement,etc | RMB50,000,000.00 | 85.50% | 85.50% |
Note:
Theparent"ShenzhenDRInvestmentCo.,Ltd."changeditsnametothecurrent"DRInvestment(Zhuhai)Co.,Ltd."inJanuary2022.TheultimatecontrollingpartyoftheCompanyisMr.ZhangGuotaoandMrs.LuYiwen.
2.SubsidiaryInformationaboutthesubsidiariesoftheCompanyisdisclosedinNoteIX.1.
3.Otherrelatedparties
| Name | Relatedpartyrelationships |
LuYiwen
| LuYiwen | TheactualcontrolleroftheCompany |
| ZhangGuotao | TheactualcontrolleroftheCompany |
| ShenzhenEveryYearTravelPhotographyCultureCo.,Ltd. | Awholly-ownedsubsidiaryofDRInvestment,theCompany'scontrollingshareholder;AnenterpriseindirectlycontrolledbytheactualcontrollersZhangGuotaoandLuYiwen |
| Director,generalmanagerandotherseniormanagementofthecompany | KeymanagementpersonneloftheCompany |
XII.Relatedpartyrelationshipsandtransactions(continued)
4.MajortransactionsbetweentheGroupanditsrelatedparties
（1）Salesofgoods/provisionofservicestorelatedparties
RMB
Relatedparties
| Relatedparties | TransactionsbetweentheGroupanditsrelatedparties | Amountforcurrentperiod | Amountforpriorperiod |
ShenzhenEveryYearTravelPhotographyCultureCo.,Ltd.
| ShenzhenEveryYearTravelPhotographyCultureCo.,Ltd. | Provisionofservices | - | 42,131.61 |
Note:
InFebruary2020,theCompanyenteredintoacooperationframeworkagreementwithShenzhenEveryYearTravelPhotographyCultureCo.,Ltd.stipulatingthattheCompanywillintroduce,guideandcoordinateuserswithtravelphotographyneedstoEveryYearTravelPhotographyandbecomeitseffectiveusers,andtheservicefeeandreferralfeeshallbepaidtotheCompanyattheagreedpriceeveryyear.
（2）LeasesbyRelatedPartiesAslessee
RMB
| Lessor | Typeofleasedassets | Simplificationofrentalexpensesforshort-termleasesandlow-valueassetleases(ifapplicable) | Variableleasepaymentsnotincludedinthemeasurementofleaseliabilities(ifapplicable) | Rentalpayment | Interestexpenseonleaseliabilitiesincurred | Increaseinright-of-useasset | |||||
| Amountforcurrentperiod | Amountforpriorperiod | Amountforcurrentperiod | Amountforpriorperiod | Amountforcurrentperiod | Amountforpriorperiod | Amountforcurrentperiod | Amountforpriorperiod | Amountforcurrentperiod | Amountforpriorperiod | ||
| DRInvestment(Zhuhai)Co.,Ltd. | Operatingleases | - | - | - | - | 84,046.00 | 252,138.00 | 2,070.30 | 25,441.72 | - | 929,427.02 |
Note:
InDecember2019,ShenzhenDarryCommercialManagementServicesCo.,Ltd.enteredintoanoperatingleaseagreementwithDRInvestment(Zhuhai)Co.,Ltd.(formerlyknownasShenzhenDRInvestmentCo.,Ltd.)atthemarketprice,withatotalleasecostofRMB1,539,077.98,theoriginalleaseperiodwasfrom13December2019to31December2022,therentwaspaidonschedule,andtheleasedassetwasterminatedearlyon28February2022.
（3）Otherrelatedpartytransactions
RMB
| Amountforcurrentperiod | Amountforpriorperiod |
Compensationofkeymanagementpersonnel
| Compensationofkeymanagementpersonnel | 13,606,393.29 | 16,525,196.79 | ||
| Include:share-basedpaymentexpenses | 356,652.33 | 1,625,241.26 |
XIII.Share-basedpayment
1.Summary
RMB
Equityinstrumentsgrantedincurrentperiod
| Equityinstrumentsgrantedincurrentperiod | - | |
| Totalequityinstrumentsexercisedincurrentperiod | - | |
| Totalequityinstrumentswhichbecameinvalidincurrentperiod | 43,200.00 | |
| RangeofexercisepricesofstockoptionsissuedandoutstandingbytheCompanyattheendoftheperiodandtheremainingtermofthecontract | TheexercisepriceoftheCompany'soutstandingstockoptionsattheendoftheperiodwas$1.67pershare,witharemainingcontractualtermof0-1.89 | |
| RangeofexercisepricesofotherequityinstrumentissuedandoutstandingbytheCompanyattheendoftheperiodandtheremainingtermofthecontract | None |
（
）FirstshareoptionincentiveschemeOnJanuary18,2017,theCompanyapprovedthe"ShenzhenDarryJewelryCo.,Ltd.EquityIncentivescheme"(the"Incentivescheme")througharesolutionoftheshareholders'meeting,andtheCompany'sfirstshareoptionincentiveschemegrantedtheCompanythenumberofrestrictedsharesto15incentiverecipientsthroughtheGongqingchengWendiNo.1InvestmentManagementPartnership(LimitedPartnership),theGongqingchengWendiNo.2InvestmentManagementPartnership(LimitedPartnership)andtheGongqingchengWendiNo.3InvestmentManagementPartnership(LimitedPartnership)1,150,000shares(aftertheCompany’sconversionintoajointstockcompany,thenumberofrestrictedsharesbecame4,140,000shares).Subsequently,theCompanysignedanequitygrantnoticewiththeincentiverecipientsonNovember20,2017,andthetermsandconditionsoftheagreementbetweentheenterpriseandtheemployeesonthesharepaymenthavebeenagreed,sothegrantpriceisRMB1.67pershare(whichhasbeenadjustedinproportiontothenumberofsharesaftertheCompany’sconversionintoajointstockcompany)withNovember20,2017asthegrantdate.GongqingchengWendiNo.1InvestmentManagementPartnership(LimitedPartnership),GongqingchengWendiNo.2InvestmentManagementPartnership(LimitedPartnership)andGongqingchengWendiNo.3InvestmentManagementPartnership(LimitedPartnership)setrestrictiveconditions,thatis,onthelisteddateofthecompany,theincentiveshareheldbytheincentiverecipientscanmeetthefeasiblerightsconditionsstipulatedintheincentivescheme,andtheCompany'ssharesheldbytheincentiverecipientsshallnotbetransferredwithinoneyearfromthedateoflistingontheShenzhenStockExchange.Share-basedpaymentexpensesforrestrictedstockgrantedundertheinitialshareoptionincentiveschemewerefullyrecognizedin2021.
XIII.Share-basedpayment(Continued)Share-basedpaymentplan(continued)
（2）Secondshareoptionincentivescheme
OnNovember20,2019,theCompanyapprovedthe"DRCorporationLimitedShareOptionIncentivescheme"throughtheresolutionofthesecondextraordinarygeneralmeetingofshareholdersin2019,andtheCompany'ssecondshareoptionincentiveschemegranted2,412,000restrictedsharesoftheCompanyto12incentiverecipientsthroughtheGongqingchengWendiNo.1InvestmentManagementPartnership(LimitedPartnership)andtheGongqingchengWendiNo.2InvestmentManagementPartnership(LimitedPartnership),withNovember20,2019asthegrantdate.ThegrantpriceisRMB1.67pershare.GongqingchengWendiNo.1InvestmentManagementPartnership(LimitedPartnership)andKomsomolskWendiNo.2InvestmentManagementPartnership(LimitedPartnership)setrestrictiveconditions,thatis,after5yearsfromthegrantdate,theincentiveshareheldbytheincentiverecipientscanmeetthefeasiblerightconditionsstipulatedintheincentivescheme,andtheCompany'ssharesheldbytheincentiverecipientscannotbetransferredwithinthreeyearsfromthedateoflistingontheShenzhenStockExchange.ThesecondequityincentiveschemeonNovember20,2019alsostipulatesthatthisincentiveschemeisapplicabletotherecipientsofthefirstequityincentivescheme.Thischangeextendstheserviceperiodofthefirstshareoptionincentiverecipients,whichisnotconducivetothechangeofincentiverecipients,sotheCompanystillrecognizesshare-basedpaymentexpensesforthefirstincentiveschemeinaccordancewiththefeasibleconditionsbeforetheamendment.（
）Modificationofthesecondshareoptionincentiveschemeandnewlygrantedrestrictedstock
OnMarch11,2020,theCompanypassedtheresolutionofthesecondextraordinarygeneralmeetingofshareholdersin2020,approvingtheamendmentofthesecondshareoptionincentivescheme"DRCorporationLimitedEquityIncentiveScheme",whichaddedthatinthecaseoftheincentiverecipientsleavingtheCompanywithin5yearsandtheCompanyhasbeenlisted,theincentiveshareheldbytheincentiverecipientsvestingafteryearsofservicesincethegrantdatemeetsthefeasiblerightconditions.Subjecttothefactthattheconditionsforlistingwithin5yearsoftheCompanycanbemet,theamendmentactsasanumberofseparateshare-basedpaymentschemes,recognizingshare-basedpaymentexpensesduringtheirrespectivevestingperiods.Atthesametime,pursuanttotherevisedsecondequityincentivescheme,theGroupgranted810,000newrestrictedsharestotwoincentiverecipientsthroughGongqingchengWendiNo.1InvestmentManagementPartnership(LimitedPartnership)onMarch11,2020atagrantpriceofRMB1.67pershare.OnApril6,2022,oneincentiverecipientoftheoriginalsecondshareoptionincentiveschemeleftthecompany,andtherecognizedshare-basedpaymentexpenseofRMB199,566.87wasreversedin2022.BasedonthefairvalueofrestrictedstockatthetimeofgrantandtheestimatedexercisedateandturnoverrateassessedbythevaluationfirmengagedbytheCompanyaccordingtotheincomemethod,thetotalshare-basedpaymentexpensesrecognizedforthesecondshareoptionincentiveschemein2022andthenewlygrantedrestrictedstockareRMB561,317.20(2021:RMB2,144,727.27).
XIII.Share-basedpayment(Continued)
2.Equity-settledshare-basedpayments
RMB
Methodologyfordeterminingthefairvalueofequityinstrumentsatthedateofgrant
| Methodologyfordeterminingthefairvalueofequityinstrumentsatthedateofgrant | Thefairvalueofrestrictedsharesatthegrantdatewasassessedbythehiredappraisalagencyaccordingtotheincomemethod. |
| Basisfordeterminingthenumberofexercisableequityinstruments | Ateachbalancesheetdateduringthevestingperiod,thenumberofequityinstrumentsexpectedtobecomeexercisableismodifiedwiththebestestimatesbasedonsubsequentinformationsuchasthelatestavailablechangesinthenumberofexercisableemployees. |
| Reasonsformaterialdifferencesbetweenthecurrentandpriorperiodestimates | Nil |
| Accumulatedamountchargedtocapitalreserveforequity-settledshare-basedpayments | 26,344,118.97 |
| Totalexpenserecognisedforequity-settledshare-basedpaymentsduringtheperiod | 561,317.20 |
3.Cash-settledshare-basedpaymentsN/AXIV.CommitmentsandContingencies
1.SignificantcommitmentsAsatthedateofapprovalofthisfinancialstatement,theGrouphadnosignificantcommitments.
2.Contingencies
(1)MaterialcontingenciesexistingasatthebalancesheetdateAsatthedateofapprovalofthisfinancialstatement,theGrouphadnocontingenciesrequiredtobedisclosed.
(2)TostatethattheCompanyhasnomaterialcontingencythatneedstobedisclosedtheGrouphadnocontingenciesrequiredtobedisclosed.
XV.OTHERSIGNIFICANTEVENTS
1.SegmentreportingNone.
2.OperatingsegmentsThemanagementoftheGroupconsiderstheinternalorganizationalstructure,managementrequirementsandinternalreportingsystemandotheraspectstobelievethatthebusinessesofthecompaniesintheGrouphaveobvioussimilarities,allofwhichareinthejewelryretailindustry.ManagementregularlyreviewstheGroup'soverallfinancialstatementsforresourceallocationandperformanceevaluation,andasaresult,accordingtoAccountingStandardforBusinessEnterprisesNo.35-SegmentReporting,theGroup'soperationsconstituteasingleoperatingsegmentandnosegmentreportinginformationisprepared.
3.OtherinformationInformationonproductsandservicesIncomefromexternaltransactions
RMB
2022
| 2022 | 2021 |
Engagementdiamondrings
| Engagementdiamondrings | 2,902,464,272.49 | 3,660,710,737.20 | ||
| Weddingdiamondrings | 713,611,440.73 | 866,423,450.66 | ||
| Otheraccessories | 34,105,640.81 | 67,527,540.26 | ||
| Otherbusiness | 31,393,058.65 | 28,068,052.36 |
3,681,574,412.68
| 3,681,574,412.68 | 4,622,729,780.48 |
GeographicinformationTheGroup'sgeographicaldivisionisrelativelyconcentrated,and99.80%oftheexternaltransactionincomewasattributabletotheChinesemainlandregionin2022(2021:99.88%);AsatDecember31,2022,99.83%ofnon-currentassetswereattributabletotheChinesemainlandregion(December31,2021:99.79%).InformationaboutmajorcustomersTheGroup'scustomersarerelativelyfragmentedandthereisnosinglecustomerwithmorethan10%oftheGroup'stransactionvolume.
XV.OTHERSIGNIFICANTEVENTS(continued)LeaseAslessee
RMB
2022
| 2022 | 2021 |
Interestexpensesonleaseliabilities
| Interestexpensesonleaseliabilities | 21,536,754.47 | 12,331,582.92 |
Variableleasepaymentsnotincludedinthemeasurementofleaseliabilities
| Variableleasepaymentsnotincludedinthemeasurementofleaseliabilities | 37,374,018.79 | 54,219,174.61 | ||
| Cashoutflowsforfixedleasepayments | 335,781,536.76 | 241,234,928.05 |
Totalcashoutflowforleases
| Totalcashoutflowforleases | 394,692,310.02 | 295,454,102.66 |
TheGrouphasleasecontractsforvariousitemsofbuildings,usedinitsoperations,andleasesareusuallyfor1to5years.LeasecontractsusuallystipulatethattheGroupcannotsubleasetheleasedassets,andsomeleasecontractsrequiretheGroup'sfinancialindicatorstobemaintainedatacertainlevel.Thereareseveralleasecontractsthatincludeextensionandterminationoptionsandvariableleasepayments.Referto“Potentialfuturecashoutflowsnotincludedinthemeasurementofleaseliabilities”fortheimpactofclausesrelatingtovariableleasepaymentsonfuturepotentialcashoutflows.PotentialfuturecashoutflowsnotincludedinthemeasurementofleaseliabilitiesTheGroup'spotentialfuturecashoutflowsnotincludedinthemeasurementofleaseliabilitiesaremainlyderivedfromvariableleasepayments,exposuretoleasesthathavebeencommittedbutnotyetcommenced.VariableleasepaymentsSomeofthepropertyleaseswithintheCompanycontainvariableleasepaymentclausesthatarelinkedtosalesgeneratedfromtheunderlyingstore.Theseclausesareused,whenpossible,inordertomatchleasepaymentswithstoresgeneratinghighercashflows.Asat31December2022,theleasingstatusoftheGroup'spremisesandbuildingswasasfollows:
RMB
| Numberofshopsandoffices(pcs) | Fixedpayments | Variablepayments | Totalpayments | |
| Fixedpaymentsonly | 374 | 154,088,002.68 | - | 154,088,002.68 |
| Variablepayments | 335 | 181,693,534.08 | 37,374,018.79 | 219,067,552.87 |
Total
| Total | 709 | 335,781,536.76 | 37,374,018.79 | 373,155,555.55 |
XIII.OTHERSIGNIFICANTEVENTS(continued)Lease(continued)Potentialfuturecashoutflowsnotincludedinthemeasurementofleaseliabilities(continued)IfthesalesofalltheGroup'sstoresincreaseby5%,thetotalleasepaymentsareexpectedtoincreaseby0.70%;IfthesalesofalltheGroup'sstoresdecreaseby5%,thetotalleasepaymentisexpectedtodecreaseby0.65%LeasesthathavebeenpromisedbutnotyetcommencedTheexpectedfutureannualcashoutflowsforleasestowhichtheGroupiscommittedbutwhichhavenotyetcommencedareasfollows:
RMB
2022
| 2022 | 2021 |
Within1year,inclusive
| Within1year,inclusive | 7,807,604.75 | 7,347,963.22 | ||
| 1to2years,inclusive | 11,664,137.21 | 11,134,918.23 | ||
| 2to3years,inclusive | 9,947,015.73 | 8,473,927.77 | ||
| Over3years | 3,088,983.25 | 2,411,270.00 |
32,507,740.94
| 32,507,740.94 | 29,368,079.22 |
OtherinformationrelatingtoleasesForright-of-useassets,refertonotesV.11.
XVI.NOTESTOFINANCIALSTATEMENTSOFTHECOMPANY
1.AccountsreceivableAccountsreceivablearedisclosedbycategoryasfollows：
RMB
Closingbalance
| Closingbalance | Openingbalance | |||||||||
| Outstandingbalance | Impairmentallowance | Carryingamount | Outstandingbalance | Impairmentallowance | Carryingamount | |||||
| Amount | Percentage | Amount | Provisionratio | Amount | Percentage | Amount | Provisionratio | |||
| Impairmentallowancewhichisindividuallyassessed | 1,476,671.46 | 1.65% | 1,476,671.46 | 100.00% | - | 1,750,141.69 | 0.77% | 1,695,434.95 | 96.87% | 54,706.74 |
| Including: | ||||||||||
| MallA | 1,476,671.46 | 1.65% | 1,476,671.46 | 100.00% | 0.00 | 1,576,671.46 | 0.86% | 1,576,671.46 | 100.00% | 0.00 |
| MallB | 173,470.23 | 0.09% | 118,763.49 | 68.46% | 54,706.74 | |||||
| Impairmentallowancebasedoncreditriskcharacteristics | 88,125,091.04 | 98.35% | 3,527,062.57 | 5.46% | 84,598,028.47 | 224,321,075.66 | 99.23% | 7,049,640.91 | 217,271,434.75 | |
| Including: | ||||||||||
| Accountsreceivablefromsubsidiaries | 2,071,189.38 | 2.31% | - | - | 2,071,189.38 | 43,257,717.26 | 19.13% | - | - | 43,257,717.26 |
| AccountsreceivablefromPOSmachinesande-commerceplatforms | 21,471,639.56 | 23.96% | - | - | 21,471,639.56 | 50,278,645.98 | 22.25% | - | - | 50,278,645.98 |
| Accountsreceivablefromthemall | 64,582,262.10 | 72.08% | 3,527,062.57 | 5.46% | 61,055,199.53 | 130,784,712.42 | 57.85% | 7,049,640.91 | 5.39% | 123,735,071.51 |
89,601,762.50
| 89,601,762.50 | 100.00% | 5,003,734.03 | 5.58% | 84,598,028.47 | 226,071,217.35 | 100.00% | 8,745,075.86 | 3.87% | 217,326,141.49 |
XIV.NOTESTOFINANCIALSTATEMENTSOFTHECOMPANY(continued)
1.Accountsreceivable(continued)Impairmentallowancewhichisindividuallyassessed:1,476,671.46
RMB
Outstandingbalance
| Outstandingbalance | Impairmentallowance | Expectedcreditlossrate | Reasonsforprovision |
MallA
| MallA | 1,476,671.46 | 1,476,671.46 | 100.00% | Themallhasbeeninarrearsforalongtimeandisexpectedtobeunabletorecoverthemoney. |
| Total | 1,476,671.46 | 1,476,671.46 |
Impairmentallowancebasedoncreditriskcharacteristics:3,527,062.57
RMB
| Closingbalance | ||
| CarryingamountOutstandingbalance | Impairmentallowance | Expectedcreditlossratio(%) |
Receivablefrommalls
| Receivablefrommalls | 64,582,262.10 | 3,527,062.57 | 5.46 |
| Total | 64,582,262.10 | 3,527,062.57 |
Anaginganalysisofaccountsreceivableisasfollows:
RMB
CarryingamountWithin1year
| Within1year | 87,242,136.25 | |
| 1to2years | 2,359,626.25 | |
| 89,601,762.50 |
XIV.NOTESTOFINANCIALSTATEMENTSOFTHECOMPANY(continued)
1.Accountsreceivable(continued)Themovementsofimpairmentallowanceforaccountsreceivableareasfollows:
RMB
Openingbalance
| Openingbalance | Changeduringtheperiod | Closingbalance | |||||||||
| Provision | Reversal | Write-offs | Ohters | ||||||||
| Receivablesfrommalls | 8,745,075.86 | 3,479,474.77 | 7,220,816.60 | - | - | 5,003,734.03 | |||||
| Total | 8,745,075.86 | 3,479,474.77 | 7,220,816.60 | - | - | 5,003,734.03 | |||||
Asat31December2022,thetop5accountsreceivablesbyamountareasfollows:
RMB
| Name | Amount | Percentageoftotalaccountsreceivable | ProvisionforbaddebtsAmount |
NO.1
| NO.1 | 6,711,333.60 | 7.49% | - |
| NO.2 | 5,255,656.37 | 5.87% | - |
| NO.3 | 3,398,156.16 | 3.79% | 185,513.59 |
| NO.4 | 3,096,751.05 | 3.46% | - |
| NO.5 | 2,970,154.16 | 3.31% | - |
Total
| Total | 21,432,051.34 | 23.92% | 185,513.59 |
2.Otherreceivables
RMB
| Closingbalance | Openingbalance |
Dividendsreceivable
| Dividendsreceivable | 131,000,000.00 | 200,000,000.00 | ||
| Otherreceivables | 139,167,536.46 | 34,208,768.92 |
Total
| Total | 270,167,536.46 | 234,208,768.92 |
Dividendsreceivable
RMB
| Closingbalance | Openingbalance |
ShenzhenDarryCommercialManagementServiceCo.,Ltd.
| ShenzhenDarryCommercialManagementServiceCo.,Ltd. | 100,000,000.00 | 100,000,000.00 | ||
| He’erCulture(Shenzhen)Co.,Ltd. | 31,000,000.00 | - | ||
| ShenzhenLoveOnlyAICloudTechnologyCo.,Ltd. | - | 100,000,000.00 |
131,000,000.00
| 131,000,000.00 | 200,000,000.00 |
XIV.NOTESTOFINANCIALSTATEMENTSOFTHECOMPANY(continued)
2.Otherreceivables(continued)
1)Thecategoryofotherreceivablesbynatureisasfollows:
RMB
Closingbalance
| Closingbalance | Openingbalance |
Paymentsreceivablefromsubsidiaries
| Paymentsreceivablefromsubsidiaries | 132,210,236.41 | 24,973,131.19 | ||
| Socialinsurancesandhousingfundbornebyemployees | 4,697,357.08 | 3,514,162.46 | ||
| Temporaryloansforemployees | 1,337,667.07 | 700,050.62 | ||
| Others | 2,827,275.90 | 5,021,424.65 | ||
| Total | 141,072,536.46 | 34,208,768.92 |
2)Impairmentallowanceforotherreceivablesisasfollows:
RMB
| Stage1 | Stage2 | Stage3 | Total | ||
| Impairmentallowance | 12-monthexpectedcreditlosses | Lifetimeexpectedcreditlosses | Credit-impairedfinancialassets(Lifetimeexpectedcreditlosses) |
Openingbalance
| Openingbalance | - | - | - | - | |
| Accrual | - | - | 1,905,000.00 | 1,905,000.00 |
Closingbalance
| Closingbalance | - | - | 1,905,000.00 | 1,905,000.00 |
Anaginganalysisofotherreceivablesisasfollows:
RMB
CarryingValueWithin1year
| Within1year | 139,167,536.46 | |
| 1to2years | 1,905,000.00 | |
| 141,072,536.46 |
Themovementsinimpairmentallowanceforotherreceivablesisasfollows:
RMB
| Openingbalance | Provision | Recoveryorreversal | Write-off | Closingbalance |
Impairmentallowanceforotherreceivables
| Impairmentallowanceforotherreceivables | - | 1,905,000.00 | - | - | 1,905,000.00 | |||||
| Total | - | 1,905,000.00 | - | - | 1,905,000.00 |
XIV.NOTESTOFINANCIALSTATEMENTSOFTHECOMPANY(continued)
2.Otherreceivables(continued)Asat31December2022,thetop5otherreceivablesbyamountareasfollows:
RMB
Nature
| Nature | Closingbalance | YuanCurrency:RMBAging | Percentageoftotalotherreceivables(%） | Closingbalanceofimpairmentallowance |
No.1
| No.1 | Accountsreceivablefromsubsidiaries | 91,099,947.31 | Within1year | 64.58 | - | ||||
| No.2 | Accountsreceivablefromsubsidiaries | 30,780,537.10 | Within1year | 21.82 | - | ||||
| No.3 | Accountsreceivablefromsubsidiaries | 6,668,221.83 | Within1year | 4.73 | - | ||||
| No.4 | Accountsreceivablefromsubsidiaries | 1,042,726.80 | Within1year | 0.74 | - | ||||
| No.5 | Accountsreceivablefromsubsidiaries | 982,200.75 | Within1year | 0.70 | - |
130,573,633.79
| 130,573,633.79 | 92.57 | - |
XIV.NOTESTOFINANCIALSTATEMENTSOFTHECOMPANY(continued)
3.Long-termequityinvestments
RMB
Closingbalance
| Closingbalance | Openingbalance | ||||||||||
| Carryingamount | Impairmentallowance | Carryingvalue | Carryingamount | Impairmentallowance | Carryingvalue | ||||||
| Subsidiaries | 207,935,477.77 | 207,935,477.77 | 65,435,477.77 | 65,435,477.77 | |||||||
| Total | 207,935,477.77 | 207,935,477.77 | 65,435,477.77 | 65,435,477.77 | |||||||
（1）Subsidiaries
RMB
| Investee | Closingbalanceofprioryear | Increase/decreaseduringtheperiod | Closingbalanceoftheyear | Closingbalanceofimpairmentallowancet | |||
| Additions | Decrease | Impairmentallowance | Others | ||||
ShanghaiDarryDiamondCo.,Ltd.
| ShanghaiDarryDiamondCo.,Ltd. | 5,000,000.00 | - | - | - | - | 5,000,000.00 | - |
| ChongqingDarryJewelryCo.,Ltd.(Note1) | 500,000.00 | 3,500,000.00 | - | - | - | 4,000,000.00 | - |
| ShenzhenLoveOnlyAICloudTechnologyCo.,Ltd. | 25,000,000.00 | - | - | - | - | 25,000,000.00 | - |
| CoupleOnly(Shenzhen)JewelryCo.,Ltd. | 5,000,000.00 | - | - | - | - | 5,000,000.00 | - |
| ShenzhenDarryCommercialManagementServiceCo.,Ltd | 10,000,000.00 | - | - | - | - | 10,000,000.00 | - |
| He’erCulture(Shenzhen)Co.,Ltd | 9,935,477.77 | - | - | - | - | 9,935,477.77 | - |
| HaoduoDiamond(Shenzhen)Co.,Ltd.(Note1) | 10,000,000.00 | 50,000,000.00 | - | - | - | 60,000,000.00 | - |
| 43othersalessubsidiaries(Note2) | - | 89,000,000.00 | - | - | - | 89,000,000.00 | - |
65,435,477.77
| 65,435,477.77 | 142,500,000.00 | - | - | - | 207,935,477.77 | - |
Note1:Thenewlong-termequityinvestmentin2022iscausedbytheCompany'scapitalincreaseinChongqingDarryandHaoduoDiamonds.Note2:Theother43salessubsidiarieswereestablishedin2022.
XIV.NOTESTOFINANCIALSTATEMENTSOFTHECOMPANY(continued)
4.Revenue
RMB
Amountforcurrentperiod
| Amountforcurrentperiod | Amountforpriorperiod | |||||
| Revenue | Cost | Revenue | Cost | |||
Primarybusiness
| Primarybusiness | 3,504,011,054.08 | 1,059,821,992.30 | 4,389,965,960.24 | 1,356,727,891.03 | |||
| Otherbusiness | 30,921,300.22 | 32,745,675.51 | 27,904,899.32 | 29,378,374.85 |
3,534,932,354.30
| 3,534,932,354.30 | 1,092,567,667.81 | 4,417,870,859.56 | 1,386,106,265.88 |
Informationrelatingtoperformanceobligations:
Undertheself-operatedmodel,theperformanceobligationiscompletedwhenthecustomerreceivesthegoods.Typicallyfordirectstoreoperations,goodsaredeliveredwithin30daysofreceiptofthecontractprice;forassociatedstoresincooperationwithshoppingmallsande-commerceplatforms,thecontractpriceistypicallyreceivedwithin15-60daysofdeliveryofthegoods.Customersareentitledtoreturnmerchandisewithin15daysofreceiptandthereforeareturnrateisestimatedandaprovisionforreturnsisrequiredbasedonhistoricalsales.ProvisionforreturnsmadeattheendoftheyearisdetailedinnoteVII.26.Informationrelatingtothetransactionpriceapportionedtotheremainingperformanceobligation:
TheamountofrevenuecorrespondingtoperformanceobligationsthathavebeencontractedforbutnotyetperformedornotyetcompletedattheendofthereportingperiodisRMB122,481,130.76.
5.Investmentincome
RMB
| 2022 | 2021 |
Investmentincomeearnedduringtheholdingperiodofdebtinvestment
| Investmentincomeearnedduringtheholdingperiodofdebtinvestment | 15,561,771.33 | 10,422,712.36 | ||
| Investmentincomeearnedduringtheholdingperiodoffinancialassetsclassifiedasheldforsale | 65,266,805.97 | 20,655,760.37 | ||
| Dividendearningsfromsubsidiaries | 480,000,000.00 | 500,000,000.00 |
Total
| Total | 560,828,577.30 | 531,078,472.73 |
XVII.SUPPLEMENTARYINFORMATION
1.Breakdownofnon-recurringprofitorloss
RMB
Item
| Item | Amount | Description |
Gainonthedisposalofnon-currentassets
| Gainonthedisposalofnon-currentassets | 1,244,949.25 | |||
| Taxrefundsorreductionswithultraviresapprovalorwithoutofficialapprovaldocumentsoroccurredcontingently | 162,770.75 | |||
| Governmentgrants(exceptforgovernmentgrantswhicharecloselyrelatedtonormalbusinessoperationsoftheCompany,incompliancewithnationalpoliciesandregulations,andconformwiththeamountorquantitiesatcertainstandardsonanongoingbasis)chargedtogainsorlossesfortheperiod | 23,433,558.47 | |||
| Gain/lossfromfair-valuechangearisingfromtradingfinancialassetsandtradingfinancialliabilitiesheldandinvestmentgainfromdisposaloftradingfinancialassetsandtradingfinancialliabilities,otherthaneffectivevalueprotectionhedgesrelatingtotheCompany’sordinarycourseofbusiness(Note1); | 128,297,407.98 | Gains/lossesfromchangesinfairvalueoffinancialassetsheldfortradingandinvestmentincomearisingfromfinancialproductsduringthereportingperiod. | ||
| Othernon-operatingincomesorexpensesotherthantheabove | 468,656.88 |
Less:Incometaxeffect
| Less:Incometaxeffect | 37,612,337.30 |
Total
| Total | 115,995,006.03 |
Detailsofotherincomeandlossitemsthatmeetthedefinitionofnon-recurringincomeandloss:
TheCompanyhadnootherspecificcircumstancesthatmeetthedefinitionofnon-recurringincomeandlossitems.Thenon-recurringprofitandlossitemslistedinExplanatoryAnnouncementNo.1onInformationDisclosurebyCompaniesOfferingSecuritiestothePublic–Non-RecurringProfitorLossaredefinedasregularprofitandlossitems:
| Amount | Reason |
VATrefunduponcollectionfortheactualtaxburdenondiamondimportsexceeding4%
| VATrefunduponcollectionfortheactualtaxburdenondiamondimportsexceeding4% | 15,833,085.31 | Governmentgrantsthatcomplywithnationalpoliciesandcontinuetoenjoyinaccordancewithcertainstandardquotasorquantities |
XVII.SUPPLEMENTARYINFORMATION(continued)
2.Returnonnetassetsandearningspershare
Profitforthereportingperiod
| Profitforthereportingperiod | Weightedaverageofreturnonnetassets | Earningspershare | ||||
| Basic | Diluted | |||||
Netprofitattributabletoordinaryshareholdersoftheparentcompany
| Netprofitattributabletoordinaryshareholdersoftheparentcompany | 10.68% | 1.82 | 1.82 | |||
| Netprofitafternon-recurringprofitorlossattributabletoordinaryshareholdersoftheparentcompany | 8.98% | 1.53 | 1.53 |