Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Infore Environment Technology Group Co., Ltd.
Annual Report 2020
Make a Cleaner World, Build a Better Future
April 2021
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), the Supervisory Committee as well as the
directors, supervisors and senior management of Infore Environment Technology Group Co.,
Ltd. (hereinafter referred to as the “Company”) hereby guarantee that the contents of this
Report are true, accurate and complete and free of any misrepresentations, misleading
statements and material omissions, and collectively and individually accept legal
responsibility for such contents.
Ma Gang, the Company’s legal representative, Lu Anfeng, the Company’s Chief
Financial Officer, and Wu Shanshan, the Head of the Company’s Accounting Department
(equivalent to Financial Manager) hereby guarantee that the financial statements carried in
this Report are truthful, accurate and complete.
All the directors of the Company attended in person the board meeting for the approval
of this Report.
Any forward-looking statements such as plans for the future in this Report shall not be
considered as promises to investors. And investors are reminded to exercise caution when
making investment decisions.
The Board has approved a final dividend plan as follows: based on the total share capital
(minus the shares in the Company’s repurchase account) at the date of record for the 2020
final dividend plan, a cash dividend of RMB1.2 (tax inclusive) per 10 shares is planned to be
distributed to the shareholders, with no bonus issue from either profit or capital reserves.
This Report has been prepared in Chinese and translated into English. Should there be
any discrepancies or misunderstandings between the two versions, the Chinese version shall
prevail.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Table of Contents
Part I Important Notes, Table of Contents and Definitions ........................................................... 2
Part II Corporate Information and Key Financial Information ................................................... 5
Part III Business Summary ............................................................................................................. 13
Part IV Management Discussion and Analysis.............................................................................. 21
Part V Significant Events ................................................................................................................ 52
Part VI Share Changes and Shareholder Information ................................................................. 86
Part VII Preference Shares ............................................................................................................. 97
Part VIII Convertible Corporate Bonds ........................................................................................ 98
Part IX Directors, Supervisors, Senior Management and Staff ................................................ 100
Part X Corporate Governance ...................................................................................................... 107
Part XI Corporate Bonds .............................................................................................................. 114
Part XII Financial Statements ...................................................................................................... 122
Part XIII Documents Available for Reference ............................................................................. 264
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Definitions
Term Definition
Infore Environment, or the “Company” Infore Environment Technology Group Co., Ltd.
Zoomlion Environmental Changsha Zoomlion Environmental Industry Co., Ltd.
Greenlander Shenzhen Greenlander Environmental Protection Co., Ltd.
Infore Technology Guangdong Infore Technology Co., Ltd.
CSRC China Securities Regulatory Commission
SZSE, or the “Stock Exchange” Shenzhen Stock Exchange
General Meeting General Meeting of Infore Environment Technology Group Co., Ltd.
Board of Directors Board of Directors of Infore Environment Technology Group Co., Ltd.
Supervisory Committee Supervisory Committee of Infore Environment Technology Group Co., Ltd.
Company Law Company Law of the People’s Republic of China
Securities Law Securities Law of the People’s Republic of China
Articles of Association Articles of Association of Infore Environment Technology Group Co., Ltd.
PPP Public-private partnership, a funding model for a public infrastructure project
Build-operate-transfer, a form wherein a private enterprise participates in
BOT
infrastructure construction and provides public services to the society
Engineering procurement construction, in which the contractor is responsible for
EPC the whole procedure or several stages of a construction project such as design,
procurement, construction, and trial operation based on contractual agreements.
Reporting Period The period from 1 January 2020 to 31 December 2020
Expressed in the Chinese currency of Renminbi, expressed in tens of thousands
RMB, RMB’0,000
of Renminbi
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Part II Corporate Information and Key Financial Information
I Corporate Information
Stock name Infore Environment Stock code 000967
Stock exchange Shenzhen Stock Exchange
Company name in Chinese 盈峰环境科技集团股份有限公司
Abbr. 盈峰环境科技集团
Company name in English (if
Infore Environment Technology Group Co., Ltd.
any)
Legal representative Ma Gang
1818 Renmin West Road, Dongguan Street, Shangyu District, Shaoxing City, Zhejiang Province,
Registered address
China
Zip code 312300
23/F, Infore Center, 7-8 Yixin Road, Xincheng District, Beijiao Town, Shunde District, Foshan City,
Office address
Guangdong Province, China
Zip code 528300
Company website www.inforeenviro.com
Email address inforeenviro@infore.com
II Contact Information
Board Secretary Securities Representative
Name JinTaotao Wang Fei
23/F, Infore Center, 7-8 Yixin Road, 23/F, Infore Center, 7-8 Yixin Road,
Xincheng District, Beijiao Town, Shunde Xincheng District, Beijiao Town, Shunde
Office address
District, Foshan City, Guangdong District, Foshan City, Guangdong
Province, China Province, China
Tel. 0757-26335291 0757-26335291
Fax 0757-26330783 0757-26330783
Email address wangyf@infore.com wangyf@infore.com
III Media for Information Disclosure and Place where this Report is Lodged
Newspapers designated by the Company for China Securities Journal, Shanghai Securities News, Securities Times, and
information disclosure Securities Daily
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Website designated by the CSRC for publication of
http://www.cninfo.com.cn
this Report
The Securities Department, 23/F, Infore Center, 7-8 Yixin Road, Xincheng
Place where this Report is lodged District, Beijiao Town, Shunde District, Foshan City, Guangdong Province,
China
IV Change to Company Registered Information
Organization code 913300006096799222
Since it went public in 2000, the Company has changed its business scope five times.
Business scope on 18 November 1993: Research, development, and production of
ventilators, and air-cooled, water-cooled, and air conditioning equipment, refrigeration
and quick-freezing equipment, mold, and power-generating machines. Operation of
export businesses (refer to the approval document of the Ministry of Foreign Trade and
Economic Cooperation for details); on 2 July 2002, "metal and plastic steel composites
pipe and profile" was included in the Company's business scope; on November 14,
2003, "undertaking environmental engineering" was included in the business scope; On
29 February 2016, due to the strategic transformation, the Company's business scope
was changed to: R&D, maintenance, and operation services of environmental
monitoring instruments, development, consulting, and services of environmental
management technologies, operation services of environmental management facilities,
design and construction of environmental engineering, environmental protection
engineering, municipal engineering, and water conservancy and other water-related
projects, development and services of technologies for water pollution control, water
treatment, and ecological restoration, R&D, sales, and relevant technology consultation
Change to the principal activities of the services of communication products, network products, mechatronic products,
Company since its listing (if any) automatic control products, buildings, and intelligent community products, as well as
software products, design, development, investment, operation management, and
technical consulting services of relevant supporting facilities for the disposal and
recycle of municipal waste and solid waste, sales of ventilators and air-cooled,
water-cooled, and air conditioning equipment, operation of import and export
businesses, industrial investment, investment management, asset management, and
investment consultation; On 18 May 2016, "operation of import and export businesses,
industrial investment, investment management, and asset management" were excluded
from the Company's business scope; on 28 June 2019, the Company's business scope
was changed to: R&D, manufacturing, sales, technology consultation, maintenance,
and operation services of sanitation equipment, special type of working robots, new
energy vehicles, environmental monitoring equipment, special equipment for
environmental protection, and automobile charging equipment and parts, equipment
leasing, design, operation management, technological development and services of
relevant supporting facilities for the disposal and recycle of municipal waste and solid
waste, design, construction, operation management, technological development and
services of environmental engineering, municipal engineering, landscape engineering,
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
electric power engineering, water conservancy and other water-related projects, water
pollution control projects, air pollution control projects, and soil remediation projects,
commercial cleaning, collection, transportation, and treatment services (based on the
license) of urban solid waste, development, consultation, and services of environmental
protection, IoT, and Internet technologies, R&D and sales of software, sales of
ventilators and air-cooled, water-cooled, and air conditioning equipment, engagement
in import and export businesses, and investment consultation.
1. In 2000, the Company went public, and its largest shareholder was Zhejiang Fan &
Air-cooled Equipment Company.
2. On 23 February 2006, Zhejiang Shangfeng Industry Group Co., Ltd., the former
controlling shareholder of the Company, and Media Group Co., Ltd., a shareholder,
transferred their stocks of 9,575,027 shares and 24,897,984 shares to Guangdong Infore
Group Co., Ltd. respectively. Therefore, Guangdong Infore Group Co., Ltd. became the
largest shareholder of the Company.
3. On 5 August 2008, the Company's controlling shareholder, Guangdong Infore Group
Co., Ltd. changed its name to "Guangdong Infore Holding Investment Group Co.,
Every change of controlling shareholder
Ltd.".
since incorporation (if any)
4. On 30 September 2010, Guangdong Infore Holding Investment Group Co., Ltd.
changed its name to "Infore Holding Investment Group Co., Ltd.", which was the
controlling shareholder of the Company.
5. On 4 January 2019, based on the private placement of new shares for purchasing
assets, the Company issued 1,017,997,382 shares to Ningbo Infore Asset Management
Co., Ltd. to acquire the 51% equity of Zoomlion Environmental held by it. The
Company's largest shareholder has been changed to Ningbo Infore Asset Management
Co., Ltd. As at the end of the Reporting Period, the Company's controlling shareholder
was Ningbo Infore Asset Management Co., Ltd.
V Other Information
The independent auditor hired by the Company:
Name of the independent auditor Pan-China Certified Public Accountants LLP
28/F, Block B, China Resources Building, 1366 Qianjiang Road, Jianggan District, Hangzhou
Office address
City, Zhejiang Province, China
Accountants writing signatures Bian Shanshan and Cao Cuijuan
The independent sponsor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
√ Applicable □ Not applicable
Name of sponsor Office address Representative Period of supervision
Room 2501, 575 Wusong Road,
Huaxing Securities Co., Ltd. Li Zeming and Zheng Zaoshun 2020-2021
Hongkou District, Shanghai
The independent financial advisor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
√ Applicable □ Not applicable
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Name of financial advisor Office address Representative Period of supervision
GF Securities Tower, 26
GF Securities Co., Ltd. Machang Road, Tianhe District, Yuan Fengzhou and Yin Yue 2018-2020
Guangzhou
VI Key Financial Information
Indicate whether there is any retrospectively restated datum in the table below.
□ Yes √ No
2020-over-2019
2020 2019 2018
change (%)
Operating revenue (RMB) 14,332,025,075.40 12,695,858,666.40 12.89% 13,044,761,115.49
Net profit attributable to the listed
1,386,476,099.73 1,361,453,754.17 1.84% 928,577,765.32
company’s shareholders (RMB)
Net profit attributable to the listed
company’s shareholders before
1,432,219,046.72 1,252,134,237.70 14.38% 319,411,269.58
exceptional gains and losses
(RMB)
Net cash generated from/used in
1,688,714,091.75 1,484,750,054.02 13.74% -1,150,744,895.07
operating activities (RMB)
Basic earnings per share
0.44 0.43 2.33% 0.41
(RMB/share)
Diluted earnings per share
0.44 0.43 2.33% 0.41
(RMB/share)
Weighted average return on equity
8.62% 9.05% -0.43% 7.62%
(%)
Change of 31
December 2020 over
31 December 2020 31 December 2019 31 December 2018
31 December 2019
(%)
Total assets (RMB) 30,110,536,990.88 24,854,667,694.94 21.15% 24,461,293,934.13
Equity attributable to the listed
16,920,214,085.42 15,514,697,715.97 9.06% 14,471,811,680.32
company’s shareholders (RMB)
Indicate whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional gains and
losses was negative for the last three accounting years, and the latest independent auditor’s report indicated that there was uncertainty
about the Company’s ability to continue as a going concern.
□ Yes √ No
Indicate whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional gains and
losses was negative.
□ Yes √ No
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
VII Accounting Data Differences under China’s Accounting Standards for Business
Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign
Accounting Standards
1. Net Profit and Equity under CAS and IFRS
□ Applicable √ Not applicable
No difference for the Reporting Period.
2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No difference for the Reporting Period.
VIII Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 2,199,341,508.70 3,420,092,351.48 3,835,286,466.43 4,877,304,748.79
Net profit attributable to the listed
147,734,732.90 378,964,794.02 371,118,285.78 488,658,287.03
company’s shareholders
Net profit attributable to the listed
company’s shareholders before 189,096,408.24 358,028,986.55 363,826,725.52 521,266,926.41
exceptional gains and losses
Net cash generated from/used in
-144,580,287.91 -140,597,577.65 397,179,806.32 1,576,712,150.99
operating activities
Indicate whether any of the quarterly financial data in the table above or their summations differs materially from what have been
disclosed in the Company’s quarterly or interim reports.
□ Yes √ No
IX Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item 2020 2019 2018 Note
Gains of
RMB488,224.46 on
Gain or loss on disposal of non-current the disposal of
assets (inclusive of impairment allowance -42,036,810.26 -60,892,199.11 7,668,560.36 long-term equity
write-offs) investments, gains of
RMB-1,787,925.37 on
the disposal of fixed
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
assets, gains of
RMB-11,767,441.22
on the retirement of
fixed assets, and gains
of
RMB-28,969,668.13
on the retirement of
intangible assets
Tax rebates, reductions and exemptions
given with ultra vires approval or in lack of 621,422.30 1,728,888.91 --
official approval documents
Government grants through profit or loss
(exclusive of government grants given in the
Company’s ordinary course of business at 42,047,479.15 104,385,272.35 20,368,085.62 --
fixed quotas or amounts as per the
government’s uniform standards)
RMB4,578,541.63 of
Lianjiang Greenlander
New Energy Co., Ltd.,
RMB2,012,499.98 of
Guangdong Liangke
Environmental
Protection
Engineering Co., Ltd.,
RMB1,328,771.30 of
Shantou
ZhonglianRuikang
Environmental Health
Capital occupation charges on non-financial Service Co., Ltd.,
enterprises that are recognized in profit or 22,117,071.89 19,799,364.06 4,582,264.18 RMB264,600.00 of
loss Jilin Xinyu
Environmental
Protection
Engineering Co., Ltd.,
RMB162,543.33 of
Guangdong Tianshu
New Energy
Technology Co., Ltd.,
and RMB20,252.48 of
Shantou Chaoyang
ZhonglianRuikang
Environmental Health
Service Co., Ltd. The
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
value-added tax
amount excluding
those incurred from
the above-mentioned
borrowing and lending
stood at
RMB178,515.17 and
the amortization of
installment receipt of
the transfer funds of
Universtar Science &
Technology
(Shenzhen) Co., Lt.
has generated a
finance income of
RMB13,928,378.34.
Returns of
RMB23,771,715.03
Gain or loss on assets entrusted to other
23,771,715.03 4,556,023.27 6,859,065.89 on investments in
entities for investment or management
wealth management
products
Restructuring costs in staff arrangement,
-- -- -26,087,060.31 --
integration, etc.
Current profit or loss on subsidiaries
obtained in business combinations involving
-- -- 864,922,410.13 --
entities under common control from the
period-beginning to combination dates, net
Changes of
RMB-89,949,855.53
in the fair value of
held-for-trading
Gain or loss on fair-value changes on financial assets, gains
held-for-trading and derivative financial of RMB5,117,398.33
assets and liabilities & income from disposal on the ineffective
of held-for-trading and derivative financial portion of closed
-90,608,285.06 24,337,671.43 160,990,725.00
assets and liabilities and other debt hedges, gains of
investments (exclusive of the effective RMB-5,769,445.94 on
portion of hedges that arise in the the fair value changes
Company’s ordinary course of business) of the ineffective
portion of open
hedges, and futures
transaction costs of
RMB-6,381.92
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Reversed portions of impairment allowances
for receivables and contract assets which are 140,000.00 390,000.00 --
tested individually for impairment
Non-operating income and expense other
-7,514,468.68 -467,259.49 19,341,734.66 --
than the above
Performance
commitment
Other gains and losses that meet the compensation from
839,195.26 24,676,400.00 22,611,600.00
definition of exceptional gain/loss Tengine Innovation
(Beijing) Instruments
Inc.
Less: Income tax effects -8,391,224.21 6,566,767.92 45,211,244.61 --
Non-controlling interests effects (net of tax) 3,371,490.83 648,988.12 428,998,534.09 --
Total -45,742,946.99 109,319,516.47 609,166,495.74 --
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss
Items:
√ Applicable □ Not applicable
Item Amount involved (RMB) Reason
Government grants continuously given in the Company’s ordinary
Value-added tax rebates 28,804,978.15 course of business at fixed quotas or amounts as per the government’s
policies or regulations
Government grants continuously given in the Company’s ordinary
Subsidy for sludge disposal 2,816,166.83 course of business at fixed quotas or amounts as per the government’s
policies or regulations
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Part III Business Summary
I Principal Activities of the Company in the Reporting Period
1. Main business fields
Infore Environment is a leading environmental sanitation investor and operator in China. With "smart environmental sanitation"
as its core business strategy, the Company employs a flexible and competitive business model, based on its smart environmental
sanitation equipment such as new energy equipment and self-driving equipment, and its proprietary cloud-based smart sanitation
platform empowered by IoT, big data and other advanced technologies. The Company provides its customers with full lifecycle IoT
integrated application solutions and smart platform operation services, from cleaning and disinfection in urban and rural areas,
domestic waste sorting, collection, transportation and disposal of solid waste, sanitation personnel management, collection and
transportation of food waste, to muck transportation supervision, leachate treatment and smart city construction.
In 2020, the Company has gained a significant momentum in the environmental sanitation service industry, moving up to No.1
by market share in terms of the five-year annualized contract value and the total new contract value. Also, in 2020, it ranked first in
sales of sanitation equipment for the 20th consecutive year in China.
2. Main business and products
In terms of intelligent equipment, by virtue of its scientific research strengths, leading capabilities of producing and
manufacturing environmental equipment and a well-established nation-wide sales network, the Company has established a
comprehensive product portfolio of environmental sanitation equipment to provide its customers with a wide range of equipment
solutions including a variety of environmental sanitation and cleaning equipment, waste collection and transportation equipment, new
energy and clean energy environmental sanitation equipment with more than 400 product models. With leading capabilities of
researching and developing smart equipment, the Company has a range of products covering 5G environmental sanitation robots,
autonomous environmental sanitation vehicles, intelligent small environmental sanitation robots, new energy environmental
sanitation equipment, waste collection and transportation equipment, separate station equipment and environmental sanitation and
cleaning equipment.
Smart Cloud Platform, independently developed by the Company with an investment of more than RMB100 million, is a
leading big data platform serving across the whole industrial chain in the domestic environmental sanitation industry. With advanced
underlying technologies such as 5G, AI, big data, cloud computing and edge computing, and immersive thinking R&D strategy
integrated into the platform, the Company has developed core technologies including IoT integrated application, data
communication, video command and control, safe driving tests, IoT hardware and software compatible technology and big data
application. Therefore, the Company is able to offer technological solutions such as market-oriented operation solution, industrial
application solution and connected integrated solution to management of environmental sanitation service. With 14 software
copyrights related to smart environmental sanitation, the platform has been included in the Top Ten Innovative Cases in China's
Smart Environmental Sanitation in 2018, Pilot and Demonstration Industrial Internet Platform of MIIT in Key Industries in 2019 and
Plan for Building of Provincial Industrial Internet Platform of Hunan Province in 2020. At present, by dint of the platform, the
Company has built and operated over 110 smart environmental sanitation projects in many cities and provinces in China.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
With respect to smart service, through intelligent hardware and the IoT technology, the Company is able to continuously gather
and analyze data generated from all aspects such as R&D of environmental sanitation equipment, production and manufacturing,
operation and management, and after-sales service, across the whole industrial chain of "smart sorting, smart environmental
sanitation, smart environment, new energy and autonomous driving", allowing the Company to implement a highly efficient
management model for operation and maintenance service and remote monitoring, which features seamless connection between front
and back offices on all fronts in terms of personnel, vehicles, items and events involved in environmental sanitation operation
service. In this way, the Company has managed to improve city management capabilities and public service capabilities of the
government from management to service and from governance to operation.
3. The Company's main position in the industry
(1) With respect to environmental sanitation service, the Company ranked first in terms of the annual contract value and the total
new contract value in 2020
According to the statistics of Environmental Compass, the Company witnessed a rapid growth in its market share in the
competitive landscape of the environmental sanitation service industry, ranking top 1 in 2020 in terms of the new contract value and
the new annual contract value in China. In 2020, the Company recorded revenue of RMB1,969 million from environmental sanitation
service, and signed a total of 59 new contracts of environmental sanitation service projects in 19 provinces in China, adding
RMB1,248 million new annual contract value to the total contract value of RMB12,574 million. As at the end of the Reporting
Period, Infore Environment operated 118 environmental sanitation service projects in total, with an annualized contract value of
RMB2,831 million and an accumulative contract value of RMB37 billion. Its projects in hand were mainly PPP projects and
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
medium- and long-term market-oriented projects, indicating prominent capabilities of sustainable operation. During the period of
2016-2020, the Company’s environmental sanitation service business recorded total contract value of RMB1,237 million, RMB5,561
million, RMB8,711 million, RMB9,720 million and RMB12,574 million respectively, and annual service value of RMB55 million,
RMB305 million, RMB429 million, RMB855 million and RMB1,248 million respectively, representing a year-on-year growth rate
of annual income from environmental sanitation service of 454.54%, 40.66%, 99.30% and 45.96% respectively from 2017 to 2020.
With increasing competitiveness in the industry, the Company has developed a unique smart environmental sanitation system.
(2) The Company ranked first in sales of environmental sanitation equipment in 2020
According to the statistics of compulsory traffic accident liability insurance for motor vehicles from the China Banking and
Insurance Regulatory Commission ("the CBIRC"), in 2020, the Company ranked first in sales of environmental sanitation equipment
for the 20th consecutive year. In 2020, the Company recorded sales of environmental sanitation equipment of RMB8,355 million, a
year-on-year increase of 18.78%, and it sold a total of 19,199 pieces of equipment, a year-on-year increase of 11.39%. Among them,
it sold 10,643 pieces of medium- and high-end products, a year-on-year increase of 0.59%, representing the largest market share of
29.79%; it also sold 1,367 new energy products, a year-on-year increase of 42.69%, representing the largest market share of 27.85%.
According to the statistics of compulsory traffic accident liability insurance for motor vehicles from the CBIRC, as at 31
December 2020, a total of 113,867 environmental sanitation vehicles were sold in China, a year-on-year increase of 4,089 or 3.72%,
wherein 35,721 medium- and high-end operating vehicles were sold, a year-on-year increase of 499 or 1.42%.
4. Technology accumulation and innovation
(1) Accumulation of R&D strengths
The Company’s R&D team of environmental sanitation equipment came from a background of national scientific research
institutes, and “innovation genes” have been embedded in each member of the team. The Company declared 73 patents, including 47
patents of invention. As at the end of the Reporting Period, it had as many as 810 independent patents, including 355 patents of
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
invention, 390 utility models and 65 patents for design. The Company ranked first in terms of the number of technical patents and
patents of invention in the industry, took the lead in formulating multiple national, industrial and local standards, and had established
provincial research centers. It was granted the honorary title of "Top Ten Enterprises of Intellectual Property Rights in Hunan
Province", the China Machinery Industry Science and Technology Award, the Science and Technology Progress Award by Hunan
Province and the China Award for Science and Technology in Construction. Besides, the Company was granted the first drive test
license for autonomous driving in environmental sanitation by the government. It was also included on the list of the key enterprises
for China's new-generation AI industry innovation issued by the Ministry of Industry and Information Technology ("the MIIT"),
indicating that the Company was among top AI research teams in China and became a "national team" of innovation in the smart
robot industry in terms of environmental sanitation.
(2) Could platform innovation
Smart Cloud Platform, independently developed by the Company, is a leading big data platform serving across the whole
industrial chain in the domestic environmental sanitation industry. With advanced underlying technologies such as big data, cloud
computing, IoT, mobile Internet and AI integrated into the platform, the Company has developed core technologies including IoT
integrated application, data communication, video command and control, safe driving tests, IoT hardware and software compatible
technology and big data application. With the integration of environmental sanitation equipment and service operation, the platform
is able to achieve real-time connection of personnel, vehicles, items and events involved in environmental sanitation service, as well
as standardized, digitalized and intelligentized operation and management. In smart governance, the Company established a digital
operation and management system for plants, stations and equipment based on the cloud platform, achieving intelligent and safe
operation requiring less manual labor and energy consumption, and striving to develop competitive advantages in smart
environmental governance. In terms of application of intelligent control platforms, through application integration of four systems,
the Company achieved full lifecycle real-time monitoring of equipment products. Besides, based on AI, 5G, edge computing and big
data, it continuously boosted product innovation and industrial upgrading. In industrial Internet big data, the Company adopted
real-time online IoT big data technology for its intelligent product application to learn about equipment status before its customers
did. By doing so, it established a new model for active after-sales service, reduced the fault rate of equipment, and improved
customer satisfaction. At present, the platform has provided intelligent services for more than 50,000 products of customers across
the country. In the future, the Company will continue to apply digital technologies and create innovative intelligent equipment and
smart service. Moreover, through in-depth integration into smart city development, it will continuously boost application of smart
corporate cloud platforms to become a leader and enabler in digital transformation of the environmental sanitation industry by dint of
intelligence.
(3) Leader in new energy
The Company began to research, develop and manufacture new energy environmental sanitation equipment in 2007, and
successfully introduced the first battery-electric sweeping machine in China in July 2008, which was used for cleaning during Beijing
Olympic Games in 2008. Based on the experience in professional R&D of environmental sanitation vehicles for more than three
decades, and committed effort in R&D of new energy sanitation vehicles for more than ten years, Infore Environment has managed
to offer the most comprehensive and diversified product portfolio in the new energy sanitation vehicles industry in China, with 144
vehicle models and more than 40 types, covering cleaning, rinsing, waste collection and transportation and municipal vehicles. Key
features of the Company's new energy products include, 1) Safety: its new energy products are equipped with six layers of protection
to ensure safety; 2)Leadership in technology: its new energy products have "six-in-one" controllers and industry-leading new
technologies; 3)Reliability: the Company has formed an alliance with domestically renowned commercial vehicle companies to build
the most reliable new energy environmental sanitation vehicles;4)Efficiency: thanks to the optimal match of high-torque permanent
magnet synchronous motors + AMT gearboxes + universal drive axles + electric drives, energy consumption dropped by 15% year on
year; 5)Pertaining to high standards: the Company has strictly controlled quality of its new energy products in the whole process via
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
its quality control system including over 500 vehicle inspections and 24 road tests; 6)Timely service: the Company's engineers can
set out within 30 minutes once receiving customer requests and complete general fault handling within 24 hours across the country.
(4) Forerunner in intelligent robots
By virtue of Zoomlion Environmental's industry-leading position and R&D capabilities in terms of environmental protection
equipment over the years, the Company launched a product mix of intelligent small environmental sanitation robots, which have
integrated advanced technologies such as 5G, artificial intelligence, machine vision technology, full-scene image recognition and
green new energy power. In this way, it made breakthroughs in the traditional operation model in which manual labor was the main
method supported by equipment in areas such as streets and alleys. It also increased the mechanical rate of environmental sanitation
at a faster pace, and improved ecological, social and economic benefits. For each type of robots, there are two versions available,
namely, the standard version and the robot version. Therefore, machines can be seamlessly switched between autonomous driving
and manual driving, 5G communication models can be installed, and the Car Caretaker - Palm Environmental Sanitation APP of
Infore Zoomlion can be used to achieve remote supervision and smart operation for intelligent management of operation equipment,
refined management of the operation process and quantitative management of operation materials. The Company is focused on the
development of industrial robots, service robots, specialized robots, automatic systems and related industrial chains, and has got a
head start and a competitive advantage in smart environmental sanitation and smart city management industries. The Company’s self
developed smart sanitation robot crews have been successfully deployed in projects in Orange Isle Scenic Spot in Changsha City,
Hunan Province and Futian District, Shenzhen City.
Other businesses of the Company mainly include environmental monitoring and solid waste disposal, electric materials and
ventilation machinery manufacturing.
The Company’s environmental monitoring business covers smoke, air quality, haze, water quality, water conservation, soil and
dust, and provides one-stop comprehensive environmental services for environmental protection, water conservation and water
service and smart cities. Product sales are the main source of revenue, with operation and maintenance services contributing the rest.
The Company's solid waste disposal business mainly engages in the businesses of domestic waste-to-energy, domestic waste
landfilling, food waste recycling and industrial parks of solid waste recycling. With waste-to-energy projects as the core, the
industrial parks of solid waste recycling are equipped with treatment facilities of domestic waste disposal, hazardous waste disposal,
sludge treatment, food waste treatment, sewage treatment, construction wastewater treatment, ecological restoration of landfills,
leachate treatment and fly ash disposal. By coordinating these businesses, the Company is able to provide a one-stop solution for
solid waste treatment and recycling through Build-Operate-Transfer (BOT) business model.
In terms of electric materials, the Company mainly engages in electromagnetic wire processing, whose products include wires at
multiple temperature levels such as copper wires, aluminum wires, round wires, flat wires, enameled wires, paper-wrapped wires and
silk-covered wires. These products are widely used in electric motors and appliances such as automobile motors, refrigeration
compressors, explosion-proof motors, electronic coils, electric tools, ultra-high voltage transmission and distribution equipment, rail
transportation and wind power generation equipment. The Company has adopted a direct selling model by limiting its production of
electromagnetic wires to its market ability.
With respect to ventilation machinery manufacturing, the Company's products mainly include fans, mufflers, dampers,
refrigeration equipment, magnetic levitation fans, nuclear grade valve blowers and blowers, and its business scope includes nuclear
power, subways, tunnels, rail transportation, industrial and civil construction. It has adopted a direct selling model supported by
agency sales for its fans.
For further analysis on the industry, please refer to “Discussion and Analysis on the Future Development of the Company” in
“Part IV Management Discussion and Analysis”.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
II Significant Changes in Major Assets
1. Significant Changes in Major Assets
Major assets Main reason for significant changes
Profits or losses were recognized, using the equity method, on the equity interests held in
Guangdong Shunkong Environmental Investment Co., Ltd. (Shunkong Environmental),
Equity assets
Tengine Innovation (Beijing) Instruments Inc. (Tengine Innovation), etc. in the current
period
Transfer of newly purchased equipment and the related construction and installation
Fixed assets projects, as well as the completed Shunde Environmental Protection Industrial Park, into
fixed assets
Intangible assets Transfer to intangible assets associated with completed BOT
Increase in the investment in the sanitation service PPP project of Zoomlion
Construction in progress
Environmental
2. Major Assets Overseas
□ Applicable √ Not applicable
III Core Competitiveness Analysis
1. Leading advantages in environmental sanitation equipment
As a leader in China's environmental sanitation equipment, the Company has state-of-the-art core technologies and a
comprehensive product line of environmental protection equipment in the industry. In terms of R&D, the Company has mastered
industry-leading technologies in new energy environmental sanitation equipment, intelligent robots of environmental sanitation and
autonomous environmental sanitation vehicles, and has been granted the first drive test license in environmental sanitation by the
government. The world’s first smart sanitation robot crew was developed by the Company and has been successfully deployed in
Orange Isle Scenic Spot, a national 5A scenic area in Changsha City, Hunan Province, and the 5G autonomous robot crew for
environmental sanitation has come into service in the university town in the same city. In terms of products, the Company has
established a comprehensive product line of environmental protection equipment including approximately 400 models, thus allowing
the Company to meet various demands in main application scenarios across the country. Regarding market position, the Company
has ranked the first in sales in the domestic market for 20 consecutive years. According to the data of China Automotive Technology
and Research Center, the Company had a market share of 29.79% in terms of medium- and high-end products, and a market share of
27.85% in terms of new energy products, far ahead of other market competitors. Pertaining to brand, as one of the forerunners in
environmental sanitation equipment, the Company has made achievements by developing the first wet and dry vacuum sweeper
truck, the first full-hydraulic mini road sweeper, the first tunnel cleaning vehicle, the first pure electric road sweeper and the first
natural gas-powered cleaning vehicle in China. Therefore, the Company has accumulated abundant experiences in the environmental
sanitation industry and made a strong brand impact as the No. 1 brand in the industry.
2. Edges in intelligent management and rapid growth of environmental sanitation service
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
With respect to smart service of environmental sanitation, the Company has invested in and operated flexible business models.
Based on advanced underlying technologies such as 5G, IoT, AI, big data, cloud computing and edge computing, the Company has
developed brand-new smart, refined, mechanized and economical environmental sanitation business models, facilitating the whole
industrial chain of "smart sorting, smart environmental sanitation, smart environment, new energy and autonomous driving", and
providing accurate and efficient full-time operation and maintenance service and remote monitoring and management model which
features seamless connection between front and back offices on all fronts in terms of personnel, vehicles, items and events involved
in environmental sanitation operation service. Given the above efforts and achievements, the Company has been included in the Top
Ten Innovative Cases in China's Smart Environmental Sanitation in 2018, Pilot and Demonstration Industrial Internet Platform of
MIIT in Key Industries in 2019 and Plan for Building of Provincial Industrial Internet Platform of Hunan Province in 2020. The
Company is equipped with strong leading technological advantages in intelligent operation of environmental sanitation service.
According to the statistics of Environmental Compass, during the period of 2016-2020, the Company has recorded a total contract
value in environmental sanitation service of RMB1,237 million, RMB5,561 million, RMB8,711 million, RMB9,720 million and
RMB12,574 million respectively, and an annual service value of RMB55 million, RMB305 million, RMB429 million, RMB855
million and RMB1,248 million respectively, representing a growth rate of the annual income from environmental sanitation service
of 454.54%, 40.66%, 99.30% and 45.96% respectively from 2017 to 2020. In 2020, the Company ranked first in terms of new annual
environmental sanitation service contracts in China, up three places year on year. In terms of environmental sanitation service, with
increasing competitiveness in the industry, the Company has developed a unique smart environmental sanitation system.
3. Advantages in the sound marketing network
With its mature sales and service network for environmental sanitation equipment as well as excellent industry experience, the
Company has established a business marketing network all over the country, including 300 operation centers and nearly 1,000
environmental governance operation service projects in 31 provinces, cities and autonomous regions. Environmental sanitation
service projects vary from city to city, and thus require localization and customization. As governments at all levels have paid more
attention to environmental sanitation, sanitation service providers require higher professional operation experience and long-term
follow-up services in order to maintain current cooperation while obtaining new projects. Therefore, the development of a highly
specialized marketing network is needed for sanitation services to explore commercial opportunities in each region, improve service
and delivery quality, and eventually obtain business contracts.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
4. Edges in capital and funds
With a sound financial status, good reputation and abundant financing channels, the Company can provide strong funding
support for its business development and improve its sustainable operation capabilities, through equity financing and debt financing
such as bank loans, corporate bonds (or green bonds), medium-term notes and short-term commercial papers. Meanwhile, the
Company has accumulated abundant experience in industrial acquisition, integration and capital operation, as well as strong
resources to support itself by multiple means. In addition, the capital strengths and good reputation of the controlling shareholder can
offer a solid support to the Company's development.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Part IV Management Discussion and Analysis
I Overview
In 2020, in the face of the severe external situation caused by the coronavirus pandemic, Infore Environment stuck to its
development strategies and the annual business plan, seized the industry momentum, focused on its core "5115" strategy, and
proactively promoted the development of its smart environmental sanitation business relying on its competitive strengths in
environmental sanitation equipment. Thus, the Company has remained an industry leader, by forming its unique smart environmental
sanitation system with "intelligent equipment, smart service and Smart Cloud Platform" as its strategic focuses. During the Reporting
Period, the Company witnessed a rapid growth in environmental sanitation service and continued leadership in environmental
sanitation equipment.
In 2020, the Board of Directors of the Company fully grasped the national economic situation and the development trend of the
environmental protection industry, and implemented a business-focused strategy to focus the Company's main business on smart
environmental sanitation, in which the Company has core competitive advantages, and the proportion of the Company's main business
of smart environmental sanitation rose to 72.03%. The Company has gradually adjusted the non-core businesses by business structure
optimization, asset divestiture and spin-off and listing, thus revitalizing the existing resources and inefficient assets, improving the
asset management capacity and operational quality, and underpinning the Company's high-quality sustainable development.
For 2020, the Company recorded operating revenue of RMB14,332.0251 million, up 12.89% year on year; and a net profit
attributable to the shareholders of the Company of RMB1,386.4761 million, up 1.84% year on year.
For 2020, Zoomlion Environmental recorded operating revenue of RMB10,135.6730 million, up 24.01% year on year; a net
profit of RMB1,436.5164 million, up 8.71% year on year; and a net profit attributable to the shareholders of the Company before
exceptional gains and losses of RMB1,409.4124 million. Its audited net profit attributable to the shareholders of the Company before
exceptional gains and losses totaled RMB3,778 million for the period from 2018 to 2020, higher than the promised amount by
RMB56 million, which means that the interests of the Listed Company and minority investors are well protected.
1. Continuously rapid growth of environmental sanitation service
Since the beginning of 2020, the coronavirus pandemic has impacted the environmental sanitation service industry. From
January to March, the market stagnated. Amid the pandemic, there were both crisis and opportunities. As one of the heroes in harm's
way, practitioners of environmental sanitation have led the public to reflect and hold that it is imperative that we strengthen modern
equipment and high-tech application to change the weak position of the traditional environmental sanitation service industry. At the
early stage, Infore Environment gained presence in smart environmental sanitation in a targeted manner, and seized opportunities for
"intelligent equipment, smart service and Smart Cloud Platform", resulting in preliminary benefits during the Reporting Period.
According to the statistics of Environmental Compass, in 2020, the Company ranked No.1in the new contract value and the new
annual contract value in China. In 2020, the Company recorded operating revenue of RMB1,969 million from environmental
sanitation service, and signed a total of 59 new contracts of environmental sanitation service projects in 19 provinces in China,
adding RMB1,248 million new annual contract values to the total contract value of RMB12,574 million. As at the end of the
Reporting Period, Infore Environment operated 118 environmental sanitation service projects in total, and had contracts worth
RMB2,831 million in hand and an accumulative contract value of RMB37 billion. Its projects in hand were mainly PPP projects and
medium- and long-term market-oriented projects, indicating prominent capabilities of sustainable operation. During the period of
2016-2020, the Company saw an increase in the total contract value in terms of environmental sanitation service of RMB1,237
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
million, RMB5,561 million, RMB8,711 million, RMB9,720 million and RMB12,574 million, and recorded annual service value of
RMB55 million, RMB305 million, RMB429 million, RMB855 million and RMB1,248 million respectively. During the period of
2017-2020, the Company witnessed a growth rate of the annual income from environmental sanitation service of 454.54%, 40.66%,
99.30% and 45.96% respectively. With rapid improvement of competitiveness in the industry, the Company has developed a unique
smart environmental sanitation system. During the Reporting Period, by virtue of Bao'an Project, the Company not only set a record
in the industry in terms of volume, but also ranked first place in multiple achievements such as application of new energy
environmental sanitation equipment, application of information-based management technologies and AI. It changed city management
standards, and fostered internationally-benchmarked public service capabilities of Shenzhen.
2. Continuously leading environmental sanitation equipment
Due to the impact of COVID-19, there was a downturn in bidding of environmental sanitation equipment. After the pandemic
eased, the industry started to recover in May. Amid the pandemic, the Company strengthened Internet applications, launched "cloud
models" including online product release, publicity and promotion, and displayed new products by visiting customers across the
country. Through promotion with the "cloud + offline" models, it boosted growth of market demand, and brought new technologies
and products to its customers so that they could learn about new products without traveling afar. Moreover, the Company injected
vitality into the market, motivated enterprises, activated capacity, and thus made great achievements and earned a good recognition
among customers.
According to the statistics of compulsory traffic accident liability insurance for motor vehicles of the CBIRC, in 2020, the
Company ranked first in sales of environmental sanitation equipment for the 20th consecutive year. In 2020, the Company recorded
sales of environmental sanitation equipment of RMB8,355 million, a year-on-year increase of 18.78%, and it sold a total of 19,199
pieces of equipment, a year-on-year increase of 11.39%. Among them, it sold 10,643 pieces of medium- and high-end products, a
year-on-year increase of 0.59%, with the largest market share of 29.79%; it also sold 1,367 new energy products, a year-on-year
increase of 42.69%, with the largest market share of 27.85%.
3. Continuously leading the new energy environmental sanitation equipment
In 2020, the Company sold 1,367 new energy environmental sanitation vehicles, a year-on-year increase of 42.69%, accounting
for a market share of 27.85% and ranking first. It also sold 860 all-electric environmental sanitation vehicles, representing an increase
of 32.10% in the sales volume, accounting for a market share of 23.06% and ranking first. During the Reporting Period, the Company
developed and launched the first hydrogen fuel-powered multifunctional dust suppression vehicle.
4. Improvement of quality and efficiency and continuous optimization of net cash generated from operating activities
During the Reporting Period, with the key task of "achieving high-quality development", centering on production and operation
links, the Company explored multiple methods for improving its asset operation capabilities to reduce existing assets and control
incremental assets. It conducted financing leasing, abandoned high-risk orders, strengthened the mechanism for classification,
grading and responsibility regarding contract risks, enhanced reflow of corporate sales income, and accelerated operation turnover
efficiency to improve net cash generated from operating activities. As at the end of the Reporting Period in 2020, the Company
recorded net cash generated from operating activities of RMB1.669 billion, representing a year-on-year increase of 13.74% from
RMB1.485 billion in the previous year. Increase in net cash generated from operating activities of the Company led to improvement
of operation quality ultimately. The Company improved quality and efficiency and supported its high-quality sustainable
development.
5. Issuance of convertible bonds and consolidation of industrial development basis
During the Reporting Period, the Company issued convertible corporate bonds of RMB1,476 million to raise funds for building
a comprehensive allocation center for smart environmental sanitation. Upon completion, through integration of high-quality
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
traditional environmental sanitation equipment, new energy and new technology environmental sanitation equipment, Smart Cloud
Platform with leading technologies and professional training for practitioners of environmental sanitation, the project will provide the
Company's environmental sanitation service with more high-quality cloud platform with informatization, IoT and big data as the
core. It will help continuously improve the data capabilities of the Company's environmental sanitation service, optimize the
management capabilities of environmental sanitation service, and establish a professional brand of operation and management of
environmental sanitation service. This project emphasizes Infore Environment's resource integration capabilities in environmental
sanitation to build a more professional and modern brand for environmental sanitation service.
6. Positive fulfillment of the social responsibility and shouldering the corporate responsibility
After the outbreak of COVID-19, Infore Environment attached great importance to it and set up an emergency working group at
the first time to respond to various emergencies.
On 23 January, the central government imposed a lockdown in Wuhan. On 24 January, Infore Environment launched an
emergency action to support Wuhan, and actively contacted with relevant departments of Wuhan. Knowing that there were many
people entering and leaving hospitals in Wuhan, which hampered the disinfection and might endanger relevant staff, Infore
Environment decided to donate 15 cleaning and disinfection vehicles and 15 tons of disinfectant to the Wuhan Urban Management
Committee on the same day. On 25 January, Infore Environment urgently deployed equipment and materials and arranged for
professional technical engineers and management personnel back to the workshop to ensure the completion of the vehicle
modification. On 27 January, through the concerted efforts of all staff, all 15 cleaning and disinfection vehicles were prepared and
sent to Wuhan, accompanied by 15 tons of disinfectant.
During the fight against the pandemic, Infore Environment actively donated money and materials, with a total value of nearly
RMB10 million. It was honored by the All-China Federation of Industry and Commerce as an “Outstanding Representative of Private
Enterprises in the Fight against the COVID-19 Pandemic”. In addition to supporting Wuhan, the Company also provided emergency
support to Zhengzhou Qiboshan Hospital for 2 sets of water quality monitoring stations for pollution sources, and donated medical
wastewater monitoring equipment to Huanggang Infectious Disease Hospital, actively undertaking corporate social responsibility. At
the same time, in accordance with the government's requirements, Infore Environment made every effort to resume work and
production, actively coordinating all resources to organize production, and timely delivery of a number of fog cannon trucks,
cleaning and disinfection vehicles, cleaning trucks, rubbish trucks and other large sanitation equipment across the country. While the
society had reached a crucial juncture between fighting against the pandemic in prevention and control, and achieving high-quality
development, Infore Environment has always been working with all sectors of the society to overcome difficulties.
II Core Business Analysis
1. Overview
See “I Overview” above.
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
2020 2019
Change (%)
Operating revenue As a % of total Operating revenue As a % of total
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
operating revenue operating revenue
(%) (%)
Total 14,332,025,075.40 100% 12,695,858,666.40 100% 12.89%
By operating division
Smart environmental
10,323,422,172.13 72.03% 8,034,877,719.43 63.29% 28.48%
sanitation
Others 4,008,602,903.27 27.97% 4,660,980,946.97 36.71% -14.00%
By product category
Traditional
environmental 7,452,381,951.97 52.00% 6,146,996,844.09 48.42% 21.24%
sanitation equipment
New-energy
environmental 902,172,174.16 6.29% 886,400,216.94 6.98% 1.78%
sanitation equipment
Environmental
1,968,868,046.00 13.74% 1,001,480,658.40 7.89% 96.60%
sanitation services
Others 4,008,602,903.27 27.97% 4,660,980,946.97 36.71% -14.00%
By operating segment
Domestic 14,276,021,772.44 99.61% 12,640,299,972.80 99.56% 12.94%
Overseas 56,003,302.96 0.39% 55,558,693.60 0.44% 0.80%
(2) Operating Division, Product Category or Operating Segment Contributing over 10% of Operating
Revenue or Operating Profit
√ Applicable □ Not applicable
Unit: RMB
YoY change in YoY change in
Gross profit YoY change in
Operating revenue Cost of sales operating revenue gross profit
margin cost of sales (%)
(%) margin (%)
By operating division
Smart
environmental 10,323,422,172.13 7,494,987,200.17 27.40% 28.48% 35.97% -4.00%
sanitation
Others 4,008,602,903.27 3,271,301,758.83 18.39% -14.00% -15.63% 1.58%
By product category
Traditional
environmental 7,452,381,951.97 5,422,933,163.68 27.23% 21.24% 27.98% -3.84%
sanitation
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
equipment
New-energy
environmental
902,172,174.16 553,314,420.62 38.67% 1.78% 3.92% -1.26%
sanitation
equipment
Environmental
sanitation 1,968,868,046.00 1,518,739,615.87 22.86% 96.60% 104.59% -3.02%
services
Others 4,008,602,903.27 3,271,301,758.83 18.39% -14.00% -15.63% 1.58%
By operating segment
Domestic 14,276,021,772.44 10,715,099,244.25 24.94% 12.94% 14.73% -1.17%
Overseas 56,003,302.96 51,189,714.75 8.60% 0.80% 2.84% -1.81%
Core business data restated according to the changed methods of measurement that occurred in the Reporting Period:
□ Applicable √ Not applicable
(3) Whether Revenue from Physical Sales Is Higher than Service Revenue
√ Yes □ No
Operating division Item Unit 2020 2019 Change (%)
Sales volume Unit 24,233 20,217 19.86%
Environmental
Output Unit 24,515 20,015 22.48%
sanitation equipment
Inventory Unit 2,122 1,840 15.33%
Sales volume Ton 54,767 60,932 -10.12%
Electric materials Output Ton 54,602 60,774 -10.16%
Inventory Ton 1,870 2,035 -8.11%
Sales volume Unit 150,694 123,694 21.83%
Ventilation
Output Unit 149,019 125,068 19.15%
machinery
Inventory Unit 3,417 5,092 -32.89%
Any over 30% YoY movements in the data above and why:
√ Applicable □ Not applicable
The inventory of ventilation machinery as at the end of the current year decreased 32.89% compared to the end of last year, primarily
driven by a decrease in the number of products with a low unit value.
(4) Execution Progress of Major Signed Sales Contracts in the Reporting Period
□ Applicable √ Not applicable
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
(5) Breakdown of Cost of Sales
By operating division
Unit: RMB
2020 2019
Operating
Item As a % of total As a % of total Change (%)
division Cost of sales Cost of sales
cost of sales (%) cost of sales (%)
Smart
environmental Raw materials 6,641,092,791.72 88.77% 5,307,778,765.76 96.28% 25.12%
sanitation
Smart
environmental Labor costs 343,174,808.02 4.59% 79,211,526.55 1.44% 333.24%
sanitation
Smart
environmental Depreciation 104,388,340.95 1.40% 20,132,469.93 0.37% 418.51%
sanitation
Energy resources
Smart
including water,
environmental 66,597,774.16 0.89% 9,119,691.94 0.17% 630.26%
electricity, and
sanitation
steam
Smart Other
environmental manufacturing 325,178,262.77 4.35% 95,795,127.03 1.74% 239.45%
sanitation costs
Others Raw materials 2,870,104,855.95 88.56% 3,549,155,655.58 92.03% -19.13%
Others Labor costs 97,432,062.90 3.01% 94,467,394.48 2.45% 3.14%
Others Depreciation 127,190,822.18 3.93% 57,679,325.43 1.50% 120.51%
Energy resources
including water,
Others 47,866,336.76 1.48% 79,859,131.84 2.07% -40.06%
electricity, and
steam
Other
Others manufacturing 97,771,335.08 3.02% 75,211,551.74 1.95% 30.00%
costs
Note:
Labor costs, depreciation, consumption of energy resources including water, electricity, and steam, as well as other manufacturing
costs rose significantly year on year, primarily because revenue from sanitation service increased in the current period, resulting in a
corresponding increase in supporting facilities, labor costs, and labor outsourcing costs.
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
√ Yes □ No
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
1. Entities Newly Included in the Consolidated Financial Statements
How the interest
Time of interest The Company’s capital The Company’s
Name of entity in the entity was
obtaining contribution interest (%)
obtained
Changde Zelian Environmental Service Co., Incorporation 2020.03 46,695,300.00 90.00
Ltd.
Xiantao Yinglian Environmental Protection Incorporation 2020.04 1,000,000.00 100.00
Technology Co., Ltd.
Shenzhen Yinglian Environmental Industry Incorporation 2020.10 2,000,000.00 100.00
Co., Ltd.
Shenzhen Bao’an Yinglian Urban Service Incorporation 2020.05 109,142,740.00 70.00
Co., Ltd.
Binchuan Zhongying Environmental Service Incorporation 2020.06 927,333.00 92.73
Co., Ltd.
Tangyin Yinglian Environmental Service Incorporation 2020.07 5,760,000.00 100.00
Co., Ltd.
Yangbi Zhongying Environmental Service Incorporation 2020.07 704,682.00 70.47
Co., Ltd.
Shaoyang Zhongfeng Environmental Incorporation 2020.06 10,000,000.00 100.00
Industry Co., Ltd.
Foshan Shunde Yinghe Urban Incorporation 2020.07 1,000,000.00 100.00
Environmental Service Co., Ltd.
Rongcheng Yinglian Urban Environmental Incorporation 2020.07 21,000,000.00 100.00
Service Co., Ltd.
Xi’an Yinglian Urban Environmental Incorporation 2020.07 2,000,000.00 100.00
Service Co., Ltd.
Yongshun Zhongfeng Jingtou Incorporation 2020.07 10,246,725.00 75.00
Environmental Technology Co., Ltd.
Xianghe Yinglian Environmental Protection Incorporation 2020.05 10,000,000.00 100.00
Technology Co., Ltd.
Lanling Zoomlion Environmental Service Incorporation 2020.12 2,000,000.00 100.00
Co., Ltd.
Yuncheng Zhongying Urban Environmental Incorporation 2020.12 1,000,000.00 100.00
Service Co., Ltd.
Foshan Yingshun Urban Environmental Incorporation 2020.11 7,000,000.00 70.00
Service Co., Ltd.
Anshan Yinglian Urban Environmental Incorporation 2020.10 10,000,000.00 100.00
Sanitation Management Co., Ltd.
Foshan Yingtong Electric Material Co., Ltd. Incorporation 2020.10 350,000,000.00 100.00
Donglan Yinglian Urban Environmental Incorporation 2020.01 [Note] 100.00
Service Co., Ltd.
Baise Yinglian Urban Environmental Incorporation 2020.01 [Note] 100.00
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Service Co., Ltd.
Infore Zoomlion (Tianjin) Environmental Incorporation 2020.12 [Note] 100.00
Technology Co., Ltd.
Tongbai Tongying Environmental Sanitation Incorporation 2020.11 [Note] 100.00
Development Co., Ltd.
Guangdong Xingzhou Water Treatment Incorporation 2020.09 [Note] 100.00
Technology Co., Ltd.
Anhua Yingsheng Environmental Sanitation Incorporation 2020.04 [Note] 100.00
Service Co., Ltd.
Foshan Shunde Zhongying Urban Incorporation 2020.12 [Note] 100.00
Environmental Management Co., Ltd.
Qixian Tongying Environmental Sanitation Incorporation 2020.11 [Note] 100.00
Service Co., Ltd.
Lai’an Zhongfeng Environmental Incorporation 2020.07 [Note] 100.00
Technology Co., Ltd.
Zhaoyuan Jincheng Environmental Incorporation 2020.07 [Note] 100.00
Sanitation Management Service Co., Ltd.
Ji’an Zhongfeng Environmental Technology Incorporation 2020.09 [Note] 100.00
Co., Ltd.
Heze Yingsheng Environmental Sanitation Incorporation 2020.10 [Note] 100.00
Service Co., Ltd.
Luannan Yinglian Environmental Incorporation 2020.11 [Note] 100.00
Management Co., Ltd.
Guangxi Guiping Yinghe Environmental Incorporation 2020.11 [Note] 100.00
Sanitation Management Co., Ltd.
Shennongjia Forestry District Yinghe Incorporation 2020.11 [Note] 100.00
Environmental Sanitation Management Co.,
Ltd.
Chongqing Zhongying Environmental Incorporation 2020.12 [Note] 100.00
Sanitation Service Co., Ltd.
Renshou Yinglian Urban and Rural Incorporation 2020.12 [Note] 100.00
Sanitation Service Co., Ltd.
Liucheng Yinglian Environmental Incorporation 2020.12 [Note] 100.00
Sanitation Management Co., Ltd.
Shengzhou Yinghe Environmental Incorporation 2020.10 [Note] 100.00
Sanitation Management Co., Ltd.
Shengzhou Zoomlion Environmental Incorporation 2020.11 [Note] 100.00
Engineering Co., Ltd.
Foshan Liansheng Environmental Sanitation Incorporation 2020.09 [Note] 100.00
Service Co., Ltd.
Heping Hesheng Environmental Sanitation Incorporation 2020.08 [Note] 100.00
Service Co., Ltd.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Foshan Shunde Lianying Environmental Incorporation 2020.10 [Note] 100.00
Development Co., Ltd.
Suqian Lianying Urban Service Co., Ltd. Incorporation 2020.11 [Note] 100.00
Shouxian Liansheng Environmental Incorporation 2020.12 [Note] 100.00
Sanitation Management Co., Ltd.
Zaozhuang Zhongying Urban Incorporation 2020.02 [Note] 100.00
Environmental Service Co., Ltd.
[Note]: As of 31 December 2020, the Company has not yet paid in the capital contributions to these entities.
2. Entities Newly Excluded from the Consolidated Financial Statements
Net profit from the
How the interest in the Net assets at the date of beginning of the current
Name of entity Time of interest disposal
entity was disposed of disposal period to the disposal
date
Leiyang Zhongfeng De-registration December 2020 0 2,071,976.28
Environmental Industry Co.,
Ltd.
Shenzhen Infore Environment De-registration August 2020 0 118,157.09
Network Technology Co., Ltd.
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable √ Not applicable
(8) Major Customers and Suppliers
Major customers:
Total sales to top five customers (RMB) 1,207,911,520.82
Total sales to top five customers as a % of total sales of
8.43%
the Reporting Period (%)
Total sales to related parties among top five customers as
7.01%
a % of total sales of the Reporting Period (%)
Top five customers:
Sales revenue contributed for
No. Customer As a % of total sales revenue (%)
the Reporting Period (RMB)
1 Customer A 318,593,711.38 2.23%
2 Customer B 254,151,014.66 1.77%
3 Customer C 242,552,390.47 1.69%
4 Customer D 201,878,188.07 1.41%
5 Customer E 190,736,216.24 1.33%
29
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Total -- 1,207,911,520.82 8.43%
Other information about major customers:
□ Applicable √ Not applicable
Major suppliers:
Total purchases from top five suppliers (RMB) 2,819,265,985.89
Total purchases from top five suppliers as a % of total
31.13%
purchases of the Reporting Period (%)
Total purchases from related parties among top five
suppliers as a % of total purchases of the Reporting 0.00%
Period (%)
Top five suppliers:
Purchase in the Reporting
No. Supplier As a % of total purchases (%)
Period (RMB)
1 Supplier A 1,526,789,831.86 16.86%
2 Supplier B 427,478,302.52 4.72%
3 Supplier C 295,563,961.16 3.26%
4 Supplier D 287,050,379.99 3.17%
5 Supplier E 282,383,510.37 3.12%
Total -- 2,819,265,985.90 31.13%
Other information about major suppliers:
□ Applicable √ Not applicable
3. Expenses
Unit: RMB
2020 2019 Change (%) Reason for any significant change
Selling expense 801,289,013.51 917,261,553.74 -12.64% --
Increase in employee remunerations,
intermediary consulting expenditures
Administrative expense 536,466,686.12 391,834,512.74 36.91% and other administrative expenses as a
result of growth in the Company’s
business
Increase in interest expense, as well as
Finance costs 66,121,331.59 53,955,504.01 22.55% a decrease in cash discount income and
financing income in the current period
R&D expense 254,677,332.19 245,637,610.35 3.68% Increase in R&D investments
30
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
4. R&D Investments
√ Applicable □ Not applicable
The Company continued to promote technological innovation, process reform and product development. The total R&D investments
amounted to RMB264 million in the Reporting Period, accounting for 1.56% of the audited net assets as at the end of the Reporting
Period, and 1.84% of the operating revenue.
Particulars about R&D investments:
2020 2019 Change (%)
Number of R&D personnel 1,356 1,286 5.44%
R&D personnel as a % of total
15.54% 17.99% -2.45%
employees
R&D investments (RMB) 264,110,819.71 245,637,610.35 7.52%
R&D investments as a % of
1.84% 1.93% -0.09%
operating revenue
Capitalized R&D investments
9,433,487.52 27,560,044.93 -65.77%
(RMB)
Capitalized R&D investments
as a % of total R&D 3.57% 11.22% -7.65%
investments
Reasons for any significant YoY change in the percentage of R&D investments in operating revenue:
□ Applicable √ Not applicable
Reason for any sharp variation in the percentage of capitalized R&D investments and rationale:
□ Applicable √ Not applicable
5. Cash Flows
Unit: RMB
Item 2020 2019 Change (%)
Subtotal of cash generated from
15,584,916,372.80 13,800,108,466.88 12.93%
operating activities
Subtotal of cash used in
13,896,202,281.05 12,315,358,412.86 12.84%
operating activities
Net cash generated from/used in
1,688,714,091.75 1,484,750,054.02 13.74%
operating activities
Subtotal of cash generated from
5,451,867,664.79 5,111,910,988.96 6.65%
investing activities
Subtotal of cash used in
6,335,579,681.05 6,075,274,324.63 4.28%
investing activities
Net cash generated from/used in
-883,712,016.26 -963,363,335.67 8.27%
investing activities
31
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Subtotal of cash generated from
5,922,067,481.72 3,188,986,842.48 85.70%
financing activities
Subtotal of cash used in
4,680,215,496.91 2,814,654,695.61 66.28%
financing activities
Net cash generated from/used in
1,241,851,984.81 374,332,146.87 231.75%
financing activities
Net increase in cash and cash
2,046,145,151.54 891,714,315.91 129.46%
equivalents
Explanation of why any of the data above varies significantly on a year-on-year basis:
√ Applicable □ Not applicable
1) Cash generated from financing activities increased 85.70% year on year, primarily driven by the issuance of convertible corporate
bonds in the Reporting Period.
2) Cash used in financing activities increased 66.28% year on year, primarily driven by a greater amount of bank borrowings repaid
upon maturity.
Explanation of why the net cash generated from/used in operating activities varies significantly from the net profit of the Reporting
Period:
□ Applicable √ Not applicable
III Analysis of Non-Core Businesses
√ Applicable □ Not applicable
Unit: RMB
As a % of gross
Amount Primary source/reason Recurrent or not
profit
RMB41,578,662.81 is the
Return on investment returns on long-term equity
Return on recognized using the equity investments calculated using
78,328,670.09 4.78%
investment method, and returns on the equity method, which is
wealth management products recurrent. And the other
portion is not recurrent.
Gain/loss on
changes in fair -95,719,301.47 -5.85% -- Not
value
Asset impairment
-82,478,500.15 -5.04% -- Not
loss
Non-operating
9,844,019.69 0.60% -- Not
income
Non-operating
58,229,724.05 3.56% -- Not
expense
32
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
IV Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Indicate whether the Company has adopted the new accounting standards governing revenue and leases since 2020 and restated the
beginning amounts of relevant financial statement line items in the year.
Applicable.
Unit: RMB
31 December 2020 1 January 2020 Change in
As a % of As a % of percentag Reason for any significant change
Amount Amount
total assets total assets e (%)
Monetary assets 5,904,127,970.85 19.61% 3,160,767,624.40 12.72% 6.89% --
Accounts
5,564,834,864.04 18.48% 4,912,568,006.30 19.77% -1.29% --
receivable
Inventories 1,305,177,407.85 4.33% 1,145,000,730.01 4.61% -0.28% --
Investment
2,009,006.98 0.01% 568,026.39 0.00% 0.01% --
property
Long-term equity
318,243,332.69 1.06% 303,292,231.01 1.22% -0.16% --
investments
Fixed assets 1,640,546,747.67 5.45% 994,681,585.66 4.00% 1.45% --
Construction in
1,782,529,087.95 5.92% 1,550,462,442.48 6.24% -0.32% --
progress
Short-term
1,657,905,376.55 5.51% 1,606,673,817.48 6.46% -0.95% --
borrowings
Long-term
765,643,457.78 2.54% 643,843,170.78 2.59% -0.05% --
borrowings
Bonds payable 1,199,466,109.60 3.98% 3.98% --
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Impairme
Cumulative
Gain/loss on nt
fair-value Purchased in
fair-value allowanc Sold in the Other Closing
Item Opening amount changes the current
changes in the e for the current period changes amount
recognized period
current period current
in equity
period
Financial
assets
33
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
1.
Held-for-tradi
ng financial
assets 127,192,985
217,138,046.28 -89,949,855.53 4,794.36
(exclusive of .11
derivative
financial
assets)
2. Derivative
financial 51,100.00 -3,205,100.27 4,793,300.00 0.00 814,549.73 824,750.00
assets
3. Other debt
0.00
investments
4.
Investments
26,070,000.
in other 26,070,000.00
00
equity
instruments
Subtotal of
154,087,735
financial 243,259,146.28 -93,154,955.80 0.00 0.00 4,798,094.36 0.00 814,549.73
.11
assets
Total of the 154,087,735
243,259,146.28 -93,154,955.80 0.00 0.00 4,798,094.36 0.00 814,549.73
above .11
Financial
866,300.00 -2,564,345.67 0.00 2,622,150.00 1,804.33 810,300.00
liabilities
Particulars about other changes:
Other changes in derivative financial assets and financial liabilities were changes in the fair value of a hedged item—copper in stock.
Indicate whether any significant change occurred to the measurement attributes of the major assets in the Reporting Period.
□ Yes √ No
3. Assets to which the Company’s Rights Were Restricted as at the Period-End
Unit: RMB
Item Closing carrying amount Reason for restriction
Security deposits, frozen and
preserved amount in legal
Monetary assets 1,246,301,871.62
procedures, and amount in escrow
account
Accounts receivable 103,965,922.09 In pledge
Receivables financing 306,145,249.74 In pledge
Long-term receivables and current portion of 49,160,385.66 Factoring with the right of recourse
34
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
non-current liabilities
Fixed assets 551,470,379.29 As collateral
Investment property 51,185.99 As collateral
Intangible assets 236,472,755.88 As collateral
100% equity interests of Funan Greenlander In pledge
58,236,923.40
Environmental Protection Co., Ltd.
100% equity interests of Shouxian Greenlander New In pledge
80,691,695.44
Energy Co., Ltd.
100% equity interests of Xiantao Greenlander In pledge
204,935,012.39
Environmental Protection Power Co., Ltd.
25% equity interests in Lianjiang Greenlander New Frozen and preserved in legal
23,149,733.54
Energy Co., Ltd. procedures
Total 2,860,581,115.04 --
V Investments Made
1. Total Investment Amount
□ Applicable √ Not applicable
2. Significant Equity Investments Acquired in the Reporting Period
□ Applicable √ Not applicable
3. Significant Non-Equity Investments of which the Acquisition Was Uncompleted in the Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
Unit: RMB
Gain/los Cumulat
s on ive
fair-valu fair-valu Purchas Sold in Gain/los
Initial Measure Opening Closing
Security Security Security e e ed in the the s in the Accountin Funding
investm ment carrying carrying
type code name changes changes current current current g title source
ent cost method amount amount
in the recogniz period period period
current ed in
period equity
35
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Domesti
Held-for-tr
cally/ Original
3,019,5 Fair 215,250 -89,182, -89,182, 126,067 ading
overseas 600340 CFLD contribut
00.00 value ,000.00 500.00 500.00 ,500.00 financial
listed ion
assets
stock
Domesti Purchase
Held-for-tr
cally/ d from
1,662,2 Fair 1,888,0 -770,75 -770,75 1,117,29 ading
overseas 002161 Invengo the
99.72 value 46.28 3.07 3.07 3.21 financial
listed secondar
assets
stock y market
Domesti Purchase
Held-for-tr
cally/ d from
Xidame 2,095.8 Fair 2,095.8 3,017.5 ading
overseas 605155 0.00 921.69 0.00 921.69 the
n 3 value 3 2 financial
listed secondar
assets
stock y market
Domesti Purchase
Held-for-tr
cally/ d from
Yiming 2,698.5 Fair 2,475.8 2,698.5 2,475.8 5,174.3 ading
overseas 605179 0.00 0.00 the
Food 3 value 5 3 5 8 financial
listed secondar
assets
stock y market
4,686,5 217,138 -89,949, 4,794.3 -89,949, 127,192
Total -- 0.00 0.00 -- --
94.08 ,046.28 855.53 6 855.53 ,985.11
Disclosure date of the
board announcement
23 April 2018
approving the securities
investments
Disclosure date of the
general meeting
announcement approving 16 May 2018
the securities investments
(if any)
(2) Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Use of Raised Funds
√ Applicable □ Not applicable
36
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
(1) Overall Use of Raised Funds
√ Applicable □ Not applicable
Unit: RMB’0,000
Raised
Total
Total funds
raised
raised Proportion that
Total raised funds Total Total
funds of total Use and have
funds that with accumulativ raised
Year for Method of Total that have accumulativ ownership been
have been altered e raised funds that
fund-raisin fund-raisin raised been e raised change of left
used purposes funds with have not
g g funds used in funds with unused raised unuse
accumulativel during altered been used
the altered funds d for
y the purposes yet
current purposes over
Reportin
period two
g Period
years
The Proposal
on Using
Some Idle
Raised Funds
to Replenish
Working
Capital was
deliberated
and approved
at the 9th
Extraordinar
y Meeting of
the 9th Board
of Directors
Public 145,733.6 17,463.3 128,270.2
2020 17,463.39 0 0 0.00% and the 10th 0
offering 2 9 3
Extraordinar
y Meeting of
the 9th Board
of Directors
held by the
Company on
4 December
2020,
allowing the
Company to
use restricted
raised funds
of no more
than RMB1
37
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
billion for
temporary
replenishmen
t of working
capital,
which shall
be used for
the
production
and operation
related to the
Company's
main
businesses
with a term
of no more
than 12
months as of
the date
when the
Proposal was
deliberated
and approved
by the Board
of Directors.
145,733.6 17,463.3 128,270.2
Total -- 17,463.39 0 0 0.00% -- 0
2 9 3
Explanation of the overall use of raised funds
Upon approval by the Document ZH.J.X.K. [2020] No. 2219 of the China Securities Regulatory Commission (CSRC) and with
the consent of the Shenzhen Stock Exchange (SZSE), the lead underwriter of the Company, Huaxing Securities Co., Ltd. (formerly
known as “Huajing Securities”, hereinafter referred to as Huaxing Securities) issued 14,761,896 convertible corporate bonds
(hereinafter referred to as CB) to the public with the offering price of RMB100, each having a par value of RMB100, totaling
RMB1,476,189,600.00. Specifically, priority allotment of 9,405,386 CB was issued to original shareholders of the Company,
accounting for 63.71% of the total amount of this public offering; 5,304,730 CB was issued to public investors through online
channels, accounting for 35.94% of the total amount of this public offering; 51,780 CB was to be underwritten by the lead
underwriter, accounting for 0.35% of the total amount of this public offering. Funds raised in this offering had been remitted to the
Company's raised fund supervision account by the lead underwriter Huaxing Securities on 10 November 2020, and the amount
actually received after deducting RMB15,238,100 of underwriting and sponsorship fees (tax-exclusive) was RMB1,460,951,500.
After deducting RMB3,615,300 (tax-exclusive) of external fees that were directly related to CB such as online offering expenses,
printing fee for the prospectus, fees of the reporting accountant, counsel fee, credit rating fee, information disclosure expenses, and
issuance commission fee, the net raised funds of the Company from this offering were RMB1,457,336,200. The availability of the
above-mentioned raised funds has been verified by Pan-China Certified Public Accountants LLP in its Capital Verification Report
(T.J.Y. [2020] No.490).
38
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
(2) Committed Projects of Raised Funds
√ Applicable □ Not applicable
Unit: RMB’0,000
Whether Investment Date Whether
Committed The Accumulative Benefits Whether
projects Total progress when the there are
investment Adjusted investment investment recorded the
have been committed as at the projects material
projects and total amount amount as at during estimated
altered investment end of the are ready changes
investment of investment during the the end of the the benefits
(including with raised Reporting for their in the
excessive amount (1) Reporting Reporting Reporting are
partial funds Period intended project
raised funds Period Period (2) Period reached
alternation) (3)-(2)/(1) use feasibility
Committed investment projects
The project of
the
comprehensive 31
intelligent No 129,638.49 129,638.49 1,368.26 1,368.26 1.06% December N/A No
sanitation 2022
allocation
center
Replenishment 31
of working No 16,095.13 16,095.13 16,095.13 16,095.13 100.00% December N/A No
capital 2020
Subtotal of
committed
-- 145,733.62 145,733.62 17,463.39 17,463.39 -- -- -- --
investment
projects
Investment of excessive raised funds
N/A
Repayment of
bank loans (if -- 0 0 0 0 0.00% -- -- -- --
any)
Replenishment
of working -- 0 0 0 0 0.00% -- -- -- --
capital (if any)
Subtotal of
investment of
-- 0 0 0 0 -- -- 0 -- --
excessive
raised funds
Total -- 145,733.62 145,733.62 17,463.39 17,463.39 -- -- 0 -- --
Cases and
None
reasons for
39
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
failing to reach
the planned
progress or
predicted
return (by
specific
projects)
Explanations of
the material
changes in the None
project
feasibility
Amount, use,
and use
progress of N/A
excessive
raised funds
Implementation
of location
changes in the
N/A
investment
projects with
the raised funds
Implementation
of method
adjustments to
N/A
the investment
projects with
the raised funds
Early
investment and
placement
concerning the N/A
investment
projects with
the raised funds
Temporary Applicable
replenishment The Proposal on Using Some Idle Raised Funds to Replenish Working Capital was deliberated and approved at the
of working 9th Extraordinary Meeting of the 9th Board of Directors and the 10th Extraordinary Meeting of the 9th Board of
capital with the Directors held by the Company on 4 December 2020, allowing the Company to use restricted raised funds of no
idle raised more than RMB1 billion for temporary replenishment of working capital, which shall be used for the production and
funds operation related to the Company's main businesses with a term of no more than 12 months as of the date when the
40
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Proposal was deliberated and approved by the Board of Directors. As at 31 December 2020, the balance of the idle
raised funds used by the Company for temporary replenishment of working capital was RMB1,000,000,000.
Surplus raised
funds for
project
N/A
implementation
and reasons for
the surplus
The Proposal on Using Some Idle Raised Funds to Replenish Working Capital was deliberated and approved at the
9th Extraordinary Meeting of the 9th Board of Directors and the 10th Extraordinary Meeting of the 9th Board of
Use and Directors held by the Company on 4 December 2020, allowing the Company to use raised funds of no more than
ownership RMB1 billion for temporary replenishment of working capital, which shall be used for the production and operation
change of related to the Company's main businesses with a term of no more than 12 months as of the date when being
unused raised deliberated and approved by the Board of Directors. As at 31 December 2020, the balance of the idle raised funds
funds used by the Company for temporary replenishment of working capital was RMB1,000,000,000. Other unused raised
funds of RMB284,509,100 were still retained on the special account of raised funds in the form of demand deposits
at banks for the purpose of continuous construction of corresponding fund-raising projects.
Problems in the
use of raised
funds and None
disclosure, or
other cases
(3) Altered Projects of Raised Funds
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VI Sale of Major Assets and Equity Investments
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Investments
□ Applicable √ Not applicable
VII Principal Subsidiaries and Joint Stock Companies
√ Applicable □ Not applicable
Principal subsidiaries and joint stock companies with an over 10% effect on the consolidated net profit:
41
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Unit: RMB
Relationship Principal Registered Operating Operating
Name with the activities Total assets Net assets Net profit
capital revenue profit
Company
Changsha
Zoomlion
Intelligent RMB2,351.5 14,748,699,7 6,813,202,91 10,135,672,9 1,701,177,612. 1,436,516,377
Environment Subsidiary
sanitation 298 million 93.30 9.41 62.73 90 .48
al Industry
Co., Ltd.
Shenzhen
Environment
Greenlander
monitoring and RMB150 1,741,873,02 38,592,327.4 181,203,208.
Environment Subsidiary 2,913,858.34 1,458,573.11
treatment of million 8.13 2 46
al Protection
solid waste
Co., Ltd.
Guangdong Environment
Infore monitoring and RMB110 789,035,728. 101,177,283. 211,026,157.
Subsidiary 16,676,579.49 22,011,639.68
Technology treatment of million 95 36 11
Co., Ltd. solid waste
Foshan
Infore Environment
Environment monitoring and 595,470,908. 163,408,762. 156,482,090.
Subsidiary RMB100,000 62,080,036.62 55,592,595.40
Water treatment of 92 29 72
Treatment solid waste
Co., Ltd.
Foshan
Manufacturing
Yingtong
of electric RMB350 1,275,456,50 552,633,962. 2,541,740,19
Electric Subsidiary 48,813,200.25 33,222,086.94
materials and million 8.41 43 0.79
Material Co.,
others
Ltd.
Subsidiaries acquired or disposed of in the Reporting Period:
√ Applicable □ Not applicable
Name Way of acquisition or disposal Effects on the overall operations and performance
Donglan Yinglian Urban Environmental
Incorporation Positive effects on the Company’s business
Service Co., Ltd.
Baise Yinglian Urban Environmental Service
Incorporation Positive effects on the Company’s business
Co., Ltd.
Zaozhuang Zhongying Urban Environmental
Incorporation Positive effects on the Company’s business
Service Co., Ltd.
Changde Zelian Environmental Service Co.,
Incorporation Positive effects on the Company’s business
Ltd.
XiantaoYinglian Environmental Protection Incorporation Positive effects on the Company’s business
42
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Technology Co., Ltd.
Xianghe Yinglian Environmental Protection
Incorporation Positive effects on the Company’s business
Technology Co., Ltd.
Binchuan Zhongying Environmental Service
Incorporation Positive effects on the Company’s business
Co., Ltd.
Shenzhen Bao’an Yinglian Urban Service
Incorporation Positive effects on the Company’s business
Co., Ltd.
Foshan Shunde Yinghe Urban Environmental
Incorporation Positive effects on the Company’s business
Service Co., Ltd.
Foshan Liansheng Environmental Sanitation
Incorporation Positive effects on the Company’s business
Service Co., Ltd.
Shaoyang Zhongfeng Environmental Industry
Incorporation Positive effects on the Company’s business
Co., Ltd.
Tangyin Yinglian Environmental Service Co.,
Incorporation Positive effects on the Company’s business
Ltd.
Xi’an Yinglian Urban Environmental Service
Incorporation Positive effects on the Company’s business
Co., Ltd.
Yangbi Zhongying Environmental Service
Incorporation Positive effects on the Company’s business
Co., Ltd.
Rongcheng Yinglian Urban Environmental
Incorporation Positive effects on the Company’s business
Service Co., Ltd.
Lai’an Zhongfeng Environmental Technology
Incorporation Positive effects on the Company’s business
Co., Ltd.
Zhaoyuan Jincheng Environmental Sanitation
Incorporation Positive effects on the Company’s business
Management Service Co., Ltd.
Ji’an Zhongfeng Environmental Technology
Incorporation Positive effects on the Company’s business
Co., Ltd.
Heping Hesheng Environmental Sanitation
Incorporation Positive effects on the Company’s business
Service Co., Ltd.
Yongshun Zhongfeng Jingtou
Incorporation Positive effects on the Company’s business
Environmental Technology Co., Ltd.
Foshan Shunde Lianying Environmental
Incorporation Positive effects on the Company’s business
Development Co., Ltd.
Shouxian Liansheng Environmental
Incorporation Positive effects on the Company’s business
Sanitation Management Co., Ltd.
Foshan Shunde Zhongying Urban
Incorporation Positive effects on the Company’s business
Environmental Management Co., Ltd.
Suqian Lianying Urban Service Co., Ltd. Incorporation Positive effects on the Company’s business
Anshan Yinglian Urban Environmental
Incorporation Positive effects on the Company’s business
Sanitation Management Co., Ltd.
Liucheng Yinglian Environmental Sanitation
Incorporation Positive effects on the Company’s business
Management Co., Ltd.
Chongqing Zhongying Environmental Incorporation Positive effects on the Company’s business
43
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Sanitation Service Co., Ltd.
Renshou Yinglian Urban and Rural Sanitation
Incorporation Positive effects on the Company’s business
Service Co., Ltd.
Infore Zoomlion (Tianjin) Environmental
Incorporation Positive effects on the Company’s business
Technology Co., Ltd.
Yuncheng Zhongying Urban Environmental
Incorporation Positive effects on the Company’s business
Service Co., Ltd.
Lanling Zoomlion Environmental Service
Incorporation Positive effects on the Company’s business
Co., Ltd.
Tongbai Tongying Environmental Sanitation
Incorporation Positive effects on the Company’s business
Development Co., Ltd.
Shennongjia Forestry District Yinghe
Environmental Sanitation Management Co., Incorporation Positive effects on the Company’s business
Ltd.
Shengzhou Zoomlion Environmental
Incorporation Positive effects on the Company’s business
Engineering Co., Ltd.
Shengzhou Yinghe Environmental Sanitation
Incorporation Positive effects on the Company’s business
Management Co., Ltd.
Guangxi Guiping Yinghe Environmental
Incorporation Positive effects on the Company’s business
Sanitation Management Co., Ltd.
Heze Yingsheng Environmental Sanitation
Incorporation Positive effects on the Company’s business
Service Co., Ltd.
Shenzhen Yinglian Environmental Industry
Incorporation Positive effects on the Company’s business
Co., Ltd.
Foshan Yingshun Urban Environmental
Incorporation Positive effects on the Company’s business
Service Co., Ltd.
Guangdong Xingzhou Water Treatment
Incorporation Positive effects on the Company’s business
Technology Co., Ltd.
Foshan Yingtong Electric Material Co., Ltd. Incorporation Positive effects on the Company’s business
Qixian Tongying Environmental Sanitation
Incorporation Positive effects on the Company’s business
Service Co., Ltd.
Anhua Yingsheng Environmental Sanitation
Incorporation Positive effects on the Company’s business
Service Co., Ltd.
Shenzhen Infore Environment Network Asset optimization, with no significant impact on
De-registration
Technology Co., Ltd. the Company’s operations and performance
Leiyang Zhongfeng Environmental Industry Asset optimization, with no significant impact on
De-registration
Co., Ltd. the Company’s operations and performance
Other information on principal subsidiaries and joint stock companies:
VIII Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
44
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
IX Prospects
(I) Industry Development and Trend
1. National policies will promote the development of the sanitation industry
According to the New Energy Vehicle Industry Development Plan (2021-2035), from 2021, new energy vehicles (NEVs) should
account for no less than 80% of the vehicles newly added and replaced in public transport areas such as national ecological
civilization pilot zone and key regions for prevention and control of atmospheric pollution.
The State Council has issued the Guidelines on Carrying out the Patriotic Public Health Campaign in a Deep-going Way to
perfect public health facilities, improve the living environments for urban and rural residents, and promote the comprehensive
management of environmental hygiene in urban and rural areas; enhance social health management, make coordinated efforts to
promote the building of a healthy China, and vigorously boost the construction of health cities and towns.
The Fifth Plenary Session of the 19th CPC Central Committee raised clear requirements for "drawing up an action plan for
carbon emissions to peak by 2030", putting forward specific objectives, indicators, main ways, and policy suggestions for the plan to
make it practical and feasible and can be continued and carried forward in the future. Many local governments clearly stated that they
would take solid steps toward the goals of achieving peak carbon emissions and carbon neutrality, develop action plans for carbon
emissions to peak by 2030, optimize the industrial and energy structures, promote the clean and efficient use of coal, and make a
major push to the development of new energy resources.
According to the Several Opinions on Further Promoting the Classification of Domestic Waste, China aims to take another five
years or so to establish a fundamentally complete system of laws and regulations for domestic waste classification; cities at the
prefecture level and above shall establish a system for domestic waste sorting, separate collection, classified transportation, and
sorting treatment according to local conditions. Residents shall generally cultivate household waste sorting habits; the recycling rate
of domestic garbage in cities across the country should exceed 35%.
The Guiding Opinions on Building a Modern Environmental Governance System require that key environmental protection
technologies and products shall be enhanced, the demonstration and application of first (set of) technical equipment for
environmental protection shall be advanced, and the quality of technical equipment for the environmental protection industry shall be
expeditiously improved.
2. The demands for sanitation services will keep increasing
As a part of public services, sanitation services' income comes from the government's fiscal expenditure as inflexible items and
is less affected by macroeconomic regulation. Therefore, sanitation services are featured by sustainability and stability.
(1) Urbanization has led to increasing service demands
With the constant development of urbanization, the construction of urban roads will directly increase road cleaning space, urban
housing, community construction, and urban green space, and thus give rise to higher demands for sanitation equipment and cleaning
services in cities and towns. In addition, public sanitation is a necessary guarantee condition for cities in different provinces to
engage in a series of urban upgrading and construction as "national civilized cities", "national health cities", "national environmental
protection exemplary cities", "national ecological garden cities", etc. According to the statistical data released by Ministry of Housing
and Urban-Rural Development, from 2010 to 2018, China's road cleaning space in cities and counties increased from 6,257 million
square meters to 11,249 million square meters, with the overall road cleaning space increasing by nearly 80%. Meanwhile, the
domestic waste generated in cities and counties increased from 221 million tons to 295 million tons, with the overall domestic waste
increasing by 33%. In the context of urbanization, to ensure the roads, residential districts, and municipal gardens in cities and towns
45
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
are clean, and maintain the normal transportation and treatment of domestic waste, cities and towns are continuously raising demands
for sanitation services.
(2) The rural sanitation market is gradually developing with the onset of building "beautiful villages"
For a long time, not enough attention has been paid to the waste produced in China's rural areas. In most rural areas, the
construction of waste disposal facilities is rare, with an extremely unsound treatment mechanism for rural waste. The 13th Five-Year
Plan for National Integrated Rural Environment Management specified that by 2020, additional 130,000 incorporated villages would
have completed the integrated environmental management, adding the number of such villages up to over one third of the total
incorporated villages across the country, and more than 4.5 million pieces/sets garbage collection, transportation, and treatment
facilities would have been established. The 13th Five-Year Plan for Ecological & Environmental Protection released by the State
Council in November 2016 also clarified that China would speed up the construction of waste treatment facilities in counties and
realize the full coverage of waste treatment facilities in cities and towns by the end of 2020.
In the era of building "beautiful villages" and boosting urban and rural sanitation integration, projects like promotion by all
counties and comprehensive management have emerged continuously and the rural sanitation market will enter a new stage for
further rapid market expansion. In the further, with great potential, the rural sanitation market will be able to provide a broad market
and large room for improvement for the sanitation service industry and even the whole sanitation market.
(3) With the continuous advancement of waste sorting, the market demands will be increasing constantly
In September 2020, President Xi Jinping chaired the meeting of the Central Commission for Comprehensively Deepening
Reform, at which the Several Opinions on Further Promoting the Classification of Domestic Waste were deliberated and passed. With
the accelerated promotion of waste sorting policies, since the traditional collection and transportation facilities cannot satisfy the
demands for classified collection and transportation and the four treatment procedures including delivery, collection, transportation,
and treatment of domestic waste will be divided into four steps, the traditional collection and transportation system for domestic
waste will be completely changed. Accordingly, as demands to upgrade traditional practices and sanitation technologies and
equipment keeps rising, plus the investment demand for intelligent system improvement, the market demands will be constantly
increasing.
(4) Under the influence of the goal of carbon neutrality, the process of sanitation equipment using new energy resources will be
further accelerated
According to the relevant policies that have been successively issued by local governments, in principle, the updated sanitation
vehicles should be mainly based on new energy resources. In the future, it is expected that the procurement of new energy sanitation
vehicles will be on the rise, which will further accelerate the process of sanitation equipment using new energy resources for years to
come. In November 2020, the New Energy Vehicle Industry Development Plan (2021-2035) was issued, requiring that new energy
vehicles (NEVs) should account for no less than 80% of the vehicles newly added and replaced in key regions and public areas. Since
2012, China has worked out the guiding policy on accelerating fostering the new energy vehicle industry and issued several
important documents successively for implementation. In addition, after going through a gestation period, the promotion of new
energy sanitation vehicles has now entered a period of explosive growth.
(5) The enhanced mechanization rate will drive the growth in the incremental volume of sanitation equipment in the market
The improvement in the mechanization rate in the sanitation industry can reduce the cost of the sanitation work and reduce the
financial burdens on the government and enterprises. With the increasing expansion of road cleaning space in China's urban and rural
areas, the mechanization rate in the sanitation industry will gradually rise. According to the statistical communique on urban and
rural construction prepared by Ministry of Housing and Urban-Rural Development, at the end of 2018, the mechanical cleaning space
of the road in cities across the country reached 5,986 million square meters, with a mechanical cleaning rate of 68.85%; the
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
mechanical cleaning space of the road in counties across the country reached 1,628 million square meters, with a mechanical
cleaning rate of 63.70%. However, compared with cities in advanced countries whose mechanical sanitation rates usually reach 80%,
there is still a large space for the improvement of mechanization rate in the sanitation industry in China. In the future, in the context
of the increasingly higher labor cost, the mechanical sanitation work will become the main development direction for China's
sanitation market and cover miscellaneous segments such as road sweeping, guardrail cleaning, and waste collection and
transportation.
(6) The aging trend in China will expand the sanitation equipment market
The frequent adjustments made by China in terms of minimum wages in different countries have largely influenced the
operating costs of sanitation service enterprises. The defects including high operating costs and low working efficiency in the
traditional manual sanitation service model have increased the business pressure on sanitation operation enterprises. In addition,
according to the prediction made by the China National Committee on Aging, China's elderly population will reach 248 million by
2020, indicating that the percentage of the elderly population has reached 17.17%. The trend will aggravate the shortage of labor
force in the field of sanitation services. Meanwhile, with the diversification of employment selections, the number of young and
middle-aged workers that are willing to engage in sanitation work continues to decline day by day. Therefore, improving the
mechanical sanitation rate and expanding the use scope of sanitation equipment not only are the real needs in the context of the
shortage of labor force in the market but also are the requirements for the development of the urban sanitation level.
(7) Technological progress has caused breakthroughs in the industry
The rapid development of 5G and AI technologies has broadened the industry boundary and brought about infinite possibilities
for industry reform. Intelligent, manpower saving, and even unmanned operation will be the general trend while small intelligent
equipment and smart services will be the new spotlights, bringing about new factors and growth points for the industry.
(II) Competitive landscape in the industry
At this stage, due to the marketization of the environmental sanitation service, a large number of enterprises have engaged in
this industry. According to the Annual Report on Sanitation Bidding Market released by the Yi Biao Tong Sanitation Data Center,
there were currently about 10,000 relatively active sanitation enterprises nationwide. In the future, under the trends of mid- and
high-end mechanization, intelligent sanitation operation, sanitation services integration and wide-area sanitation market, the
sanitation market will put forward higher requirements for enterprises in the sanitation industry in terms of technical strength,
marketing strength, R&D strength and financial strength. Therefore, with the continuous enhancement of sanitation industry access,
survival barriers, Chinese sanitation market concentration will also continue to improve in the future. Enterprises with weak financial
strength, small scale, low technology and inefficient management will be gradually replaced, while enterprises with large scale,
strong financial strength, leading technology, diversified business model and standardized operation will become the mainstream of
the industry.
Industry-leading intelligent management
The Company chose flexible business model for investment and operation in its "smart environmental sanitation" service,
relying on the leading technology, brand, marketing network, and management advantages of sanitation equipment, etc., to develop a
smart environmental sanitation system with its own characteristics, including a unified system of smart equipment, smart platform,
and smart environmental sanitation. Taking into account the continuous technological changes and application innovations of
sanitation IoT, cloud platform development, the core of intelligent operation of sanitation services was to continuously upgrade its
products and operation platform in accordance with the changes in frontier technology. The Company has accumulated rich industry
experience in sanitation services, and has accumulated a strong foundation of research and development strength in the intelligent
management. The Company's self-developed products, such as smart environmental sanitation cloud platform, smart sorting
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
platform, smart environment platform and new energy autonomous driving platform, met the main needs of the market to upgrade
from "cleaners" to "urban housekeepers", and provided integrated IoT application solutions of full lifecycle and platform operation
services for customers in the fields of new energy autonomous driving, domestic waste sorting, waste collection and transfer, road
cleaning, sanitation personnel management, kitchen waste collection and transportation, sludge transportation supervision, leachate
treatment and smart city construction.
Industry-leading sanitation equipment
The sanitation equipment required for environmental sanitation services is a technological and capital-intensive industry. As new
technologies and application updates of the industry are accelerating, the Company must keep up with industry development for
technological improvement and innovation and enhance knowledge reserves and updates to adapt to the changing competitive
environment so that the company can meet market demands. After years of continuous technological innovation, Infore Environment
has established product series with diversified categories and specifications in the field of environmental sanitation equipment, which
involve a wide range of disciplines, strong comprehensiveness across different sectors, integrating hydromechanics, mechanical
engineering, aerodynamics, environmental engineering, material science and other professional knowledge. The Company is a
high-tech enterprise with industry-leading R&D capacity, and has taken the lead in formulating a number of national, industry and
local standards. Therefore, with its strong R&D capacity, technical advantages and industry-leading position, the Company's
comprehensive sanitation resources allocation center can continuously provide high-quality environmental sanitation equipment for
sanitation service projects.
In addition, the Company enjoys the largest share of environmental sanitation equipment business in China, covering a total of
more than 400 product models including intelligent sanitation robot, autonomous sanitation vehicle, sanitizer, cleaning sweeper,
high-pressure sewer flushing vehicle, compression refuse collector, waste transfer truck, kitchen refuse truck, refuse station
equipment, waste sorting equipment, municipal garden equipment, snow and ice removal equipment, leachate and wastewater
treatment equipment. These equipment can fully meet the personalized requirements and product mix demands of downstream
customer segments with high quality.
Well-established marketing network
Sanitation service projects are highly regional and customized; as governments at all levels have attached more importance to
environmental health, sanitation service projects require higher professional operation experience and long-term follow-up services
to maintain current cooperation while obtaining new projects. Therefore, the development of a highly specialized marketing network
is needed for sanitation services to explore commercial opportunities in each region, improve service and delivery quality, and obtain
business opportunities. Benefiting from its first-mover advantage in the field of environmental sanitation equipment, the Company
has established a business marketing network covering all provinces, cities, and autonomous regions (except for Hong Kong, Macao
and Taiwan) in China. It has actively expanded its investment and operation of sanitation service projects over the past few years
with its mature sales and service network for environmental sanitation equipment as well as excellent industry experience.
In summary, as market concentration continues to increase, the Company will rely on its absolute advantage in environmental
sanitation equipment, and fully leverage its strong R&D capacity and technical foundation, wide-range marketing network,
well-known industry brand image, mature sanitation integration model and other core competitive advantages to adapt to and even
lead the development of the sanitation industry. Driven by the aforementioned core competitive advantages, the Company's market
share will continue to increase, and it will become a leading enterprise in the sanitation industry.
(III) Work and business plan for 2021
In 2020, centering on the development strategy and annual business plan, the Company focused on core strategic business,
stripped and split off non-core businesses, actively promoted smart environmental sanitation, environmental monitoring and solid
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
waste treatment, and soundly completed the business plan for 2020. The business target set at the beginning of the year was for the
Company to achieve RMB35 billion in the planned cumulative contract amount of its smart environmental sanitation services and
RMB1.5 billion in its annual operating revenue; the actual planned cumulative contract amount of the Company's smart
environmental sanitation services reached RMB37 billion while its annual operating revenue recorded RMB1,969 million,
completing the business target.
The business target for 2021: The Company will reach RMB50 billion in the planned cumulative contract amount of its smart
environmental sanitation services and RMB2.8 billion in its annual operating revenue; the planned cumulative contract amount of the
Company's smart environmental sanitation services from 2020 to 2024 will reach RMB100 billion while its annual operating revenue
reaches RMB10 billion.
Since smart environmental sanitation service is the Company's strategic core business, the Company will continue to increase
resource input and strive to become one of the best enterprises in the industry.
In 2021, the Company will continue to focus on its core business - smart environmental sanitation, adhere to the business
strategy of leading technology and leading product, steadily reinforce its leading advantages in environmental sanitation equipment
as well as environmental sanitation services featuring intellectualization, the Internet of Things and network, and maintain its
industry-leading position.
(IV) Plan for the use of funds
Since 2021 is a key phase for its rapid development, the Company has a large demand for funds and will establish a fund
supply/demand plan competent for its development. The Company will make full use of its own funds, optimize its financial
structure while enhancing the management of accounts receivable, provide strong capital guarantee for its business development, and
control financial risks. The sources of funds mainly include the optimization and combination of funds raised through various
channels such as the issuance of commercial paper and medium-term note, cash flow from operating activities, and bank loans.
(V) Main risk factors that may cast adverse impacts on the realization of the Company's future development strategies and
business objectives
1. Policy risk
As the state attaches more importance to environmental protection and environmental governance, unprecedented development
opportunities will also appear in the environmental protection industry, but such industry is also highly dependent on national
industrial policies since it is typically policy-driven. The adjustment of macroeconomic policies, tax policies, environmental
protection industry policies and environmental management policies will affect the Company's business performance.
Countermeasures: The Company will pay close attention to the changes in national macroeconomic policies, step up its study
and analysis of industry policies, increase the scientific decision-making level of management personnel, and improve its ability to
fend off policy risks.
2. Operation and control risk
As the Company continuously expands its business scale, enriches its business types, broadens its markets and develops more
subsidiaries, its asset scale, personnel scale and organization scale are also undergoing rapid expansion, causing its organizational
structure and management system to become more complex. Although the Company has formed a complete set of management
policies for internal control and improved it annually, , the difficulties and risks in the management and control are still increasing
due to the differences in industry attributes, geographic distribution, cultural characteristics and corporate culture of its branch
institutions.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Countermeasures: While strengthening the building of its talent team, the Company will place emphasis on developing its
management and risk control systems, further improve its operation and management systems as well as business procedures,
continue to enhance refined management, and strengthen the risk control and cultural development of subordinate enterprises.
3. Risk of intensified market competition
The environmental sanitation industry is an emerging comprehensive industry at its early marketization stage in China with low
organizational level and concentration. However, it is currently going through rapid growth. More upstream and downstream
enterprises as well as new enterprises in other fields are entering the industry, and market competition will continue to intensify,
which brings the risk that the Company's market share may decline in the future.
Countermeasures: The Company will continue to adhere to the technology-driven development strategy and ensure its
technology-leading position in the industry to consolidate its industry-leading position.
The contents herein involving plans and result forecasts shall not constitute the Company's commitment to any investors and
relevant persons. All investors and relevant persons shall remain adequately aware of risks.
X Communications with the Investment Community such as Researches, Inquiries and
Interviews
1. During the Reporting Period
√ Applicable □ Not applicable
Way of Type of the
Main discussions and materials Index to the relevant
Date Place communicatio communication
provided by the Company information
n party
Company
Learned about the Company’s
15 January 2020 Conference By phone Individual -
operations
Room
Company Learned about the current
18 March 2020 Conference By phone Individual market condition for the -
Room Company
The log sheet of investor
relations activities
Learned about the Company’s disclosed by the Company
7 May 2020 Shenzhen By visit Institution
primary operations on
www.cninfo.com.cndated 9
May 2020
The log sheet of investor
Company relations activities
Learned about the Company’s
27 May 2020 Conference By phone Institution disclosed by the Company
operations
Room on www.cninfo.com.cn
dated 28 May 2020
Foshan City in The log sheet of investor
2 July 2020 By visit Institution Learned about the Company’s
Guangdong relations activities
50
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Province, and operations disclosed by the Company
Changsha City on www.cninfo.com.cn
in Hunan dated 2 July 2020
Province
The log sheet of investor
Foshan City in relations activities
25 August 2020 Guangdong By visit Institution Operating results briefing disclosed by the Company
Province on www.cninfo.com.cn
dated 26 August 2020
The log sheet of investor
Changsha City relations activities
Learned about the Company’s
28 October 2020 in Hunan By visit Institution disclosed by the Company
operations
Province on www.cninfo.com.cn
dated 28 October 2020
Company
Learned about the Company’s
18 November 2020 Conference By phone Individual -
operations
Room
Company
Learned about the Company’s
29 December 2020 Conference By phone Individual -
operations
Room
Times of communications 9
Number of institutions communicated with 5
Number of individuals communicated with 4
Number of other communication parties 0
Tip-offs or leakages of substantial confidential
None
information
51
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Part V Significant Events
I Profit Distributions to Ordinary Shareholders (in the Form of Cash and/or Stock)
The profit distribution policy for ordinary shareholders, especially the formulation, implementation and amendments to the cash
dividend policy, in the Reporting Period:
√ Applicable □ Not applicable
According to the Articles of Association, while satisfying the conditions of cash dividend and ensuring the Company's normal
operation and long-term development, the Company shall in principle pay cash dividend once a year. The Board of Directors may
propose interim cash dividends depending on the Company's profit status, cash flow status, development stage and capital
requirements. The Company shall maintain continuity and stability of the profit distribution policy. When the conditions for cash
dividends are met, the cumulative profit distributed in cash in the recent three years shall not be less than 30% of the average annual
distributable profit recorded in the recent three years.
During the Reporting Period, the Company distributed profit in strict accordance with the provisions of the Articles of
Association and fully protected the legitimate rights and interests of small and medium investors. Independent directors have voiced
their opinions on the annual profit distribution plan of the Company.
Special statement about the cash dividend policy
In compliance with the Company’s Articles of Association and
Yes
resolution of general meeting
Specific and clear dividend standard and ratio Yes
Complete decision-making procedure and mechanism Yes
Independent directors faithfully performed their duties and
Yes
played their due role
Non-controlling shareholders are able to fully express their
opinion and desire and their legal rights and interests are fully Yes
protected
In case of adjusting or changing the cash dividend policy, the
conditions and procedures involved are in compliance with Yes
applicable regulations and transparent
The profit distributions to ordinary shareholders, either in the form of cash or stock, in the past three years (including the Reporting
Period) are summarized as follows:
1. 2020: According to the 2020 Final Dividend Plan approved at the 13th Meeting of the 9th Board of Directors on 22 April 2021,
based on the total share capital (minus the shares in the Company’s repurchase account) at the date of record for the 2020 Final
Dividend Plan, a cash dividend of RMB1.20 (tax inclusive) per 10 shares is planned to be distributed to the shareholders.
2. 2019: According to the 2019 Final Dividend Plan approved at the 4th Meeting of the 9th Board of Directors on 23 April 2020,
based on the total share capital (minus the shares in the Company’s repurchase account) at the date of record for the 2019 Final
Dividend Plan, a cash dividend of RMB1.10 (tax inclusive) per 10 shares is planned to be distributed to the shareholders.
3. 2018: According to the 2018 Final Dividend Plan approved at the 27 th Meeting of the 8th Board of Directors on 17 April 2019,
a cash dividend of RMB1.00 (tax inclusive) per 10 shares is planned to be distributed to the shareholders. The total cash dividend
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
payout amounted to RMB316,306,214.60, and the retained earnings of RMB606,780,499.66 were carried forward for future
distribution.
Cash dividends for ordinary shareholders in the past three years (including the Reporting Period):
Unit: RMB
Net profit
attributable to
Total cash
ordinary Cash dividends
Cash dividends dividends
shareholders of the A as % of B in other forms C as % of B A+C as % of B
Year (tax inclusive) (including
listed company in (%) (like share (%) (%)
(A) those in other
consolidated repurchase) (C)
forms) (A+C)
statements for the
year (B)
2020 379,569,641.52 1,386,476,099.73 27.38% 8,920,597.83 0.64% 388,490,239.35 28.02%
2019 347,936,836.06 1,361,453,754.17 25.56% 99,993,196.00 7.34% 447,930,032.06 32.90%
2018 316,306,214.60 928,577,765.32 34.06% 0.00 0.00% 316,306,214.60 34.06%
Indicate whether the Company fails to put forward a cash dividend proposal for the ordinary shareholders despite the facts that the
Company has made profits in the Reporting Period and the profits of the Company distributable to the ordinary shareholders are
positive.
□ Applicable √ Not applicable
II Final Dividend Plan for the Reporting Period
√ Applicable □ Not applicable
Bonus issue from profit (share/10 shares) 0
Cash dividend/10 shares (RMB) (tax inclusive) 1.2
Share base (share) 3,163,080,346.00
Cash dividends (RMB) (tax inclusive) 379,569,641.52
Cash dividends in other forms (such as share
8,920,597.83
repurchase) (RMB)
Total cash dividends (including those in other
388,490,239.35
forms) (RMB)
Distributable profit (RMB) 502,505,012.72
Total cash dividends (including those in other
28.02%
forms)as a % of total distributable profit
Cash dividend policy
Other
Cash and/or stock dividend plan in detail
53
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
The 2020 Final Dividend Plan: based on the total share capital (minus the shares in the Company’s repurchase account) at the
date of record for the 2020 Final Dividend Plan, a cash dividend of RMB1.20 (tax inclusive) per 10 shares is planned to be
distributed to the shareholders, with no bonus issue from either profit or capital reserves.
The distributable profit stood at RMB1,001,411,231.44 as at the end of 2019. With a net profit of RMB-150,969,382.66 and
RMB0 set aside as surplus reserves for 2020, the distributable profit stood at RMB502,505,012.72 as at the end of 2020. Where
there is no share repurchase before the implementation of the 2020 final dividend plan, the total share capital for the 2020 final
dividend plan at the date of record would be the existing share capital of 3,163,080,346 shares. And according to the 2020 final
dividend plan, a cash dividend of RMB1.20 (tax inclusive) per 10 shares would be distributed to the shareholders. The total cash
dividend payout would amount to RMB379,569,641.52, and the retained earnings would be RMB122,935,371.20. Where any share
repurchase occurs before the implementation of the 2020 final dividend plan, the repurchased shares will be excluded from the total
share capital for the 2020 final dividend plan, and the total cash dividend payout will be reduced accordingly.
54
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
III Performance of Undertakings
1. Undertakings of relevant parties such as the actual controller, shareholders, related parties, buyers of the Company and the Company that had been
completed during the Reporting Period and that had not been fully completely as of the end of the Reporting Period
√ Applicable □Not applicable
Date of Term of Fulfillment of
Cause of undertakings Parties of undertakings Types of undertakings Contents of undertakings
undertakings undertakings undertakings
Undertakings related to reform of
-- -- -- -- -- --
shareholder structure
Undertakings made in acquisition
-- -- -- -- -- --
report of change of equity report
The undertaking has
Yuemin Investment Yinglian,
been performed and
Hongchuang Investment, Ningbo Undertaking related to Zoomlion Environmental made an undertaking that
31 December the person making
Liantai, Ningbo Infore; Ningbo performance and compensation the cumulative net profit in in 2018, 2019 and 2020 15 August 2018
2020 the undertaking has
Yingtai, Ningbo Zhongfeng, arrangement shall not be less than RMB3,722 million.
strictly observed the
Shanghai Junhe, Zoomlion
above undertaking.
It is in normal
Undertaking on not to relinquish I undertake not to relinquish the actual control right progress of
Undertakings made in asset Actual controller He Jianfeng the control right of the listed of the listed company within 60 months from the 3 January 2019 60 months fulfillment, without
reorganization company date of completion of this transaction. breach of
undertaking.
If the proportion of the shares of the listed company The undertaking has
held by me and the enterprises under my control been performed and
Undertaking on restrictions on increases, the shares of the listed company held by the person making
Actual controller He Jianfeng 3 January 2019 12 months
sale of shares me before this transaction will not be transferred the undertaking has
externally within 12 months after the completion of strictly observed the
this transaction. above undertaking.
Ningbo Infore Asset Management Undertaking on restrictions on 1. The shares of the listed company acquired from 3 January 2019 42 months It is in normal
55
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Co., Ltd. sale of shares this transaction shall not be transferred within 36 progress of
months from the closing date of issuance. 2. Within fulfillment, without
6 months from the completion of this transaction, in breach of
case the closing price of the listed company's stock undertaking.
is lower than its issue price for 20 consecutive
trading days, or the closing price by the end of the
sixth month from the completion of this transaction
is lower than the issue price, the lock-up period of
Ningbo Infore holding shares in the listed company
shall automatically extend for at least 6 months.
It is in normal
The shares of the listed company acquired from this progress of
Counterparties Ningbo Yingtai, Undertaking on restrictions on
transaction shall not be transferred within 36 3 January 2019 36 months fulfillment, without
Ningbo Zhongfeng, Ningbo Liantai sale of shares
months from the closing date of issuance. breach of
undertaking.
The undertaking has
The shares of the listed company acquired from this been performed and
Hongchuang Investment, Lvlian Undertaking on restrictions on transaction shall be locked up upon completion of the person making
3 January 2019 12 months
Junhe, Zoomlion sale of shares issuance and shall not be transferred within 12 the undertaking has
months from the date of completion of issuance. strictly observed the
above undertaking.
1. The shares of the listed company acquired from
this transaction shall be locked up upon completion The undertaking has
of issuance and shall not be transferred within 12 been performed and
Undertaking on restrictions on months from the date of completion of issuance. 2. the person making
Yuemin Investment Yinglian 3 January 2019 12 months
sale of shares The property shares held by Yuemin Investment the undertaking has
Yinglian shall not be transferred, sold or withdrawn strictly observed the
within 12 months from the closing date of issuance above undertaking.
of shares of the listed company in this transaction.
Actual controller He Jianfeng, Undertaking on avoiding Undertaking on avoiding horizontal competition, 15 August 2018 Permanent It is in normal
56
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Ningbo Infore, Infore Holding horizontal competition, regulating regulating and reducing related-party transactions progress of
and reducing related-party and independence of listed companies fulfillment, without
transactions and independence of breach of
listed companies undertaking.
It is in normal
Ningbo Infore, Hongchuang Undertaking on avoiding
progress of
Investment, Zoomlion, Ningbo horizontal competition, regulating Undertaking on avoiding horizontal competition,
15 August 2018 Permanent fulfillment, without
Yingtai, Ningbo Zhongfeng, Ningbo and reducing related-party regulating and reducing related-party transactions
breach of
Liantai transactions
undertaking.
Core personnel such as the general manager of the
It is in normal
Company (the specific list of main management
progress of
Ningbo Yingtai, Ningbo Zhongfeng, Undertaking related to the term of personnel and other core personnel shall be verified 27 November
36 months fulfillment, without
Ningbo Liantai employment and non-competition and confirmed by Infore Environment) shall still 2018
breach of
work in the target company for at least 36 months
undertaking.
from the closing date of the underlying shares.
It has not been
normally fulfilled.
From 2016 to 2019,
The accumulative total net profit recorded by
the audited net
Lianjiang Greenlander New Energy Co. Ltd.,
profit (whichever
Xiantao Greenlander Environmental Protection
lower before and
Power Co., Ltd., Funan Greenlander Environmental
after exceptional
Greenlander Investment Holding Undertaking related to Protection Energy Co., Ltd. and Shouxian
14 October 2015 48 months gains and losses are
Co. Ltd. and Zheng Weixian performance Greenlander New Energy Co., Ltd. from 2016 to
deducted shall
2019 shall not be less than RMB120 million
prevail) was
(whichever lower before and after exceptional gains
RMB2,156,500,
and losses are deducted shall be basis of calculation
-RMB24,424,500,
of the net profit).
-RMB19,192,800
and -RMB625,700,
respectively; the
57
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
accumulative net
profit was
-RMB42,086,600,
-RMB162,086,600
less than the
performance
undertaken. The
undertaking on net
profit from 2016 to
2019 was
completed.
It has not been
normally fulfilled.
From 2016 to 2019, the newly signed waste The newly signed
incineration power generation BOT agreements projects by
(subject to the signing of franchise agreement) Greenlander
Greenlander Investment Holding signed by Greenlander Environmental Protection Environmental
Undertaking related to projects 14 October 2015 48 months
Co. Ltd. and Zheng Weixian shall specify a total daily disposal capacity of not Protection from
less than 6,500 tons (a single project shall have a 2016 to 2019 totaled
daily disposal capacity of not less than 500 tons, of 1,400 tons, 5,100
which at least one shall be more than 2,000 tons). tons less than the
projects it undertook
to complete.
Jiujiang Company must start construction and
obtain approval before 31 December 2020. If it fails 48 months
Greenlander Investment Holding Undertaking on project to start construction or the construction is recovered from 31 It has not been
14 October 2015
Co. Ltd. and Zheng Weixian construction by the government, it shall compensate the listed December normally fulfilled.
company at a consideration of no less than RMB5 2020
million.
Undertakings made in IPO or Infore Holding Group Co., Ltd. Undertakings related to the The company did not reduce the shares held in the 14 March 2017 Six months The undertaking has
58
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
refinancing private placement of shares in issuer from 23 January 2016 to the date of issuance after the been performed and
2016 of this Letter of Undertaking; the company will not completion of the person making
reduce the shares held in the issuer or make any this private the undertaking has
plan to reduce the shares held in the issuer within placement strictly observed the
six months from the date of issuance of the Letter of above undertaking.
Undertaking to the completion of the private
placement. And the company has no plans to
relinquish the control right of the issuer by directly
or indirectly reducing the shares held in the issuer.
The company and the enterprises or related parties
controlled by the company will not violate the
provisions of Article 17 in the Measures for
Administration of Securities Issuing and Until the The undertaking has
Underwriting (Revised in 2015) and other relevant completion of been performed and
Undertakings related to the
laws and regulations, nor have they or will they this private the person making
Infore Holding Group Co., Ltd. private placement of shares in 14 March 2017
provide financial support or compensation, directly placement of the undertaking has
2016
or indirectly, to Mr. He Jianfeng and Mr. She shares by the strictly observed the
Changguang as subscription objects in the future; Company above undertaking.
nor have they or will they provide financial support
or compensation, directly or indirectly, to other
issuing objects in this private placement.
The company's assets and credit standing are in Until the The undertaking has
good condition, and the company does not have any completion of been performed and
Undertakings related to the
breach of contract, due outstanding debts or major this private the person making
Infore Holding Group Co., Ltd. private placement of shares in 14 March 2017
pending litigation, arbitration and other placement of the undertaking has
2016
circumstances affecting the company's holding of shares by the strictly observed the
controlling interest in the issuer. Company above undertaking.
The shares subscribed for this time shall not be It is in normal
Undertaking on restrictions on
He Jianfeng transferred within 36 months from the closing date 3 January 2018 36 months progress of
sale of shares
of this issuance. fulfillment, without
59
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
breach of
undertaking.
It is in normal
The subscribed shares shall not be transferred progress of
Undertaking on restrictions on
She Changguang within 36 months from the closing date of this 3 January 2018 36 months fulfillment, without
sale of shares
issuance. breach of
undertaking.
The undertaking has
From 16 March 2020 to 31 December 2020, the been performed and
Zoomlion Heavy Industry Science
Undertaking not to reduce Company will not reduce the Company's 31 December the person making
& Technology Development Co., 16 March 2020
holding-shares holding-shares, including the portion during the 2020 the undertaking has
Ltd.
undertaking period strictly observed the
above undertaking.
Undertakings related to equity
-- -- -- -- -- --
incentives
Undertakings made to minority
-- -- -- -- -- --
shareholders of the Company
Whether the undertakings were
No
timely performed
When not performing the The main cause is that the progress of project construction was slower than expected. To safeguard the rights and interests of the Company and protect the interests of shareholders,
undertakings timely, the Company the Company applied to Foshan Intermediate People's Court for the asset preservation of Greenlander Investment Holding Co., Ltd., Zheng Weixian and Ren Zhe on 5 November
shall specify specific reasons for 2018. The court froze the 30% stake of Greenlander Investment Holding Co., Ltd. in Shenzhen Greenlander Environmental Protection Co., Ltd. as well as Zheng Weixian's deposits
not performing the undertakings of RMB9,816.09. On 21 August 2020, the Company received a counterclaim filed by Greenlander Investment Holding Co., Ltd. and Zheng Weixian with the court. On 24 August
timely and work plan in the next 2020 and 24 September 2020, the court held two hearings on the case, and on 13 January 2021, the court issued a judgment of first instance. Now Greenlander Investment Holding
stage Co., Ltd. and Zheng Weixian have filed an appeal, but the Company has not received the notice of the second trial.
60
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
2. When there were profit forecast of assets or projects of the Company and the reporting period is covered
by the period of profit forecast, the Company shall specify whether the assets or projects reached the
original forecast and reasons for it
√ Applicable □Not applicable
Forecast Actual Reasons for
Date of Index of
Name of profit performance in performance in not achieving
Forecast Forecast original original
forecast of assets the current the current the expected
starting time ending time forecast forecast
or projects period period benefit (if
disclosure disclosure
(RMB’0,000) (RMB’0,000) applicable)
The expected
Zoomlion 31 December 10 August www.cninfo.co
1 January 2018 372,200 377,836.49 benefit is
Environmental 2020 2018 m.cn
achieved
Undertakings made by the shareholders and counterparties of the Company during the reporting of the operating performance of the
year:
√ Applicable □Not applicable
According to the Agreement on Profit Forecast Compensation and the Profit Forecast Compensation Supplemental Agreement I
signed by the Company and the original eight shareholders of Zoomlion Environmental, the original eight shareholders of Zoomlion
Environmental undertake that the cumulative net profit before exceptional gains and losses of Zoomlion Environmental from 2018 to
2020 shall not be less than RMB3,722 million.
Completion of undertaking related to performance and its impact on goodwill impairment test:
There is not impact.
IV Occupation of the Company’s Capital by the Controlling Shareholder or Its Related
Parties for Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
V Explanations Given by the Board of Directors, the Supervisory Committee and the
Independent Directors (if any) Regarding the Independent Auditor's “Modified Opinion” on
the Financial Statements of the Reporting Period
□ Applicable √ Not applicable
VI YoY Changes to Accounting Policies, Estimates and Methods
√ Applicable □ Not applicable
1. The Company has adopted, since 1 January 2020, the revised version of the Accounting Standard No. 14 for Business
Enterprises—Revenue (hereinafter, the “New Revenue Standard”) issued by the Ministry of Finance. Pursuant to the transitional
requirements, the Company did not restate the comparable information, but retrospectively restated the opening retained earnings and
other relevant financial statement line items of the Reporting Period according to the cumulative effects on the first adoption date of
61
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
the New Revenue Standard.
The major effects of the adoption of the New Revenue Standard on the financial statements on 1 January 2020:
Balance sheet
Item 31 December 2019 Effect of the New Revenue 1 January 2020
Standard
Accounts receivable 5,163,050,940.07 -250,482,933.77 4,912,568,006.30
Contract assets 197,287,015.51 197,287,015.51
Current portion of non-current assets 760,845,984.28 2,872,896.31 763,718,880.59
Long-term receivables 1,152,179,083.21 -1,299,273.03 1,150,879,810.18
Other non-current assets 44,360,378.52 51,622,294.98 95,982,673.50
Advances from customers 170,610,799.52 -170,610,799.52
Contract liabilities 150,983,008.42 150,983,008.42
Other current liabiltiies 29,507,607.98 29,507,607.98
Deferred income 50,399,106.23 -9,879,816.88 40,519,289.35
2. The Company has adopted, since 1 January 2020, the Explanation No. 13 of the Accounting Standards for Business
Enterprises issued in 2019 by the Ministry of Finance. The prospective application method is adopted for the said change to the
accounting policies.
VII Retrospective Restatements due to Correction of Material Accounting Errors in the
Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII YoY Changes to the Scope of the Consolidated Financial Statements
√ Applicable □ Not applicable
1. Entities Newly Included in the Consolidated Financial Statements
How the interest
Time of interest The Company’s
Name of entity in the entity was Contribution
obtaining interest
obtained
Donglan Yinglian Urban Environmental Service Co., Incorporation January 2020 【Note】 100.00%
Ltd.
Baise Yinglian Urban Environmental Service Co., Incorporation January 2020 【Note】 100.00%
Ltd.
Zaozhuang Zhongying Urban Environmental Service Incorporation Febuary 2020 【Note】 100.00%
Co., Ltd.
Changde Zelian Environmental Service Co., Ltd. Incorporation March 2020 46,695,300.00 90.00%
XiantaoYinglian Environmental Protection Incorporation April 2020 1,000,000.00 100.00%
Technology Co., Ltd.
Xianghe Yinglian Environmental Protection Incorporation May 2020 10,000,000.00 100.00%
62
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Technology Co., Ltd.
Binchuan Zhongying Environmental Service Co., Ltd. Incorporation June 2020 927,333.00 92.73%
Shenzhen Bao’an Yinglian Urban Service Co., Ltd. Incorporation May 2020 109,142,740.00 70.00%
Foshan Shunde Yinghe Urban Environmental Service Incorporation July 2020 1,000,000.00 100.00%
Co., Ltd.
Foshan Liansheng Environmental Sanitation Service Incorporation September 2020 【Note】 100.00%
Co., Ltd.
Shaoyang Zhongfeng Environmental Industry Co., Incorporation June 2020 10,000,000.00 100.00%
Ltd.
Tangyin Yinglian Environmental Service Co., Ltd. Incorporation July 2020 5,760,000.00 100.00%
Xi’an Yinglian Urban Environmental Service Co., Incorporation July 2020 2,000,000.00 100.00%
Ltd.
Yangbi Zhongying Environmental Service Co., Ltd. Incorporation July 2020 704,682.00 70.47%
Rongcheng Yinglian Urban Environmental Service Incorporation July 2020 21,000,000.00 100.00%
Co., Ltd.
Lai’an Zhongfeng Environmental Technology Co., Incorporation July 2020 【Note】 100.00%
Ltd.
Zhaoyuan Jincheng Environmental Sanitation Incorporation July 2020 【Note】 100.00%
Management Service Co., Ltd.
Ji’an Zhongfeng Environmental Technology Co., Ltd. Incorporation September 2020 【Note】 100.00%
Heping Hesheng Environmental Sanitation Service Incorporation August 2020 【Note】 100.00%
Co., Ltd.
Yongshun Zhongfeng Jingtou Environmental Incorporation July 2020 10,246,725.00 75.00%
Technology Co., Ltd.
Foshan Shunde Lianying Environmental Development Incorporation October 2020 【Note】 100.00%
Co., Ltd.
Shouxian Liansheng Environmental Sanitation Incorporation December 2020 【Note】 100.00%
Management Co., Ltd.
Foshan Shunde Zhongying Urban Environmental Incorporation December 2020 【Note】 100.00%
Management Co., Ltd.
Suqian Lianying Urban Service Co., Ltd. Incorporation November 2020 【Note】 100.00%
Anshan Yinglian Urban Environmental Sanitation Incorporation October 2020 10,000,000.00 100.00%
Management Co., Ltd.
Liucheng Yinglian Environmental Sanitation Incorporation December 2020 【Note】 100.00%
Management Co., Ltd.
Chongqing Zhongying Environmental Sanitation Incorporation December 2020 【Note】 100.00%
Service Co., Ltd.
Renshou Yinglian Urban and Rural Sanitation Service Incorporation December 2020 【Note】 100.00%
Co., Ltd.
Infore Zoomlion (Tianjin) Environmental Technology Incorporation December 2020 【Note】 100.00%
Co., Ltd.
63
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Yuncheng Zhongying Urban Environmental Service Incorporation December 2020 1,000,000.00 100.00%
Co., Ltd.
Lanling Zoomlion Environmental Service Co., Ltd. Incorporation December 2020 2,000,000.00 100.00%
Tongbai Tongying Environmental Sanitation Incorporation November 2020 【Note】 100.00%
Development Co., Ltd.
Shennongjia Forestry District Yinghe Environmental Incorporation November 2020 【Note】 100.00%
Sanitation Management Co., Ltd.
Shengzhou Yinghe Environmental Sanitation Incorporation October 2020 【Note】 100.00%
Management Co., Ltd.
Shengzhou Zoomlion Environmental Engineering Co., Incorporation November 2020 【Note】 100.00%
Ltd.
Guangxi Guiping Yinghe Environmental Sanitation Incorporation November 2020 【Note】 100.00%
Management Co., Ltd.
Heze Yingsheng Environmental Sanitation Service Incorporation October 2020 【Note】 100.00%
Co., Ltd.
Shenzhen Yinglian Environmental Industry Co., Ltd. Incorporation October 2020 2,000,000.00 100.00%
Foshan Yingshun Urban Environmental Service Co., Incorporation November 2020 7,000,000.00 70.00%
Ltd.
Guangdong Xingzhou Water Treatment Technology Incorporation September 2020 【Note】 100.00%
Co., Ltd.
Foshan Yingtong Electric Material Co., Ltd. Incorporation October 2020 350,000,000.00 100.00%
Anhua Yingsheng Environmental Sanitation Service Incorporation April 2020 【Note】 100.00%
Co., Ltd.
[Note]: As of 31 December 2020, the Company has not yet paid in the capital contributions to these entities.
2. Entities Newly Excluded from the Consolidated Financial Statements
Net profit from the
How the interest in the Net assets at the date of beginning of the current
Name of entity Time of interest disposal
entity was disposed of disposal period to the disposal
date
Leiyang Zhongfeng De-registration December 2020 0 2,071,976.28
Environmental Industry Co.,
Ltd.
Shenzhen Infore Environment De-registration August 2020 0 118,157.09
Network Technology Co., Ltd.
IX Engagement and Disengagement of Independent Auditor
Current independent auditor:
Name of the domestic independent auditor Pan-China Certified Public Accountants LLP
The Company’s payment to the domestic independent auditor
260
(RMB’0,000)
64
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
How many consecutive years the domestic independent auditor
19
has provided audit service for the Company
Names of the certified public accountants from the domestic
Bian Shanshan and Cao Cuijuan
independent auditor writing signatures on the auditor’s report
How many consecutive years the certified public accountants
2 years and 1 year respectively
have provided audit service for the Company
Indicate whether the independent auditor was changed for the Reporting Period.
□ Yes √ No
Independent auditor, financial advisor or sponsor hired for the audit of internal control:
√ Applicable □ Not applicable
During the Reporting Period, Pan-China Certified Public Accountants LLP was appointed as the independent auditor for the
financial audit and the internal control audit, and GF Securities Co., Ltd. and Huaxing Securities Co., Ltd. were appointed as the
independent financial advisor and the sponsor, respectively.
X Possibility of Delisting after the Disclosure of this Report
□ Applicable √ Not applicable
XI Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII Significant Legal Matters
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Other lawsuits that were not qualified as a significant lawsuit that requires disclosure primarily included purchase and sales contract
disputes, with the total amount involved being approximately RMB299 million, which are not expected to incur any provision of a
large amount.
XIII Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIV Credit Quality of the Company as well as Its Controlling Shareholder and Actual
Controller
√ Applicable □ Not applicable
During the Reporting Period, the Company as well as its controlling shareholder and actual controller were of a good credit quality,
with no such cases as refusing to execute any effective court decision, failing to repay any mature debt that was of a large amount,
etc.
65
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
XV The Company's Implementation of Stock Incentive Plan and Employee Stock Ownership
Plan or Other Employee Incentive Measures
√ Applicable □Not applicable
Overview of the First Stock Incentive Plan:
1. On 25 April 2020, the Company disclosed the Announcement on Cancellation of Part of the Expired and Unexercised Stock
Options in the Stock Incentive Plan, canceling 3,021,177 stock options that had been granted but not yet exercised for the third exercise
schedule of the first stock incentive plan. On 23 April 2020, the Company convened the 4th Meeting of the 9th Board of Directors.
Upon discussion, the Meeting passed the Proposal on Canceling Part of the Expired and Unexercised Stock Options in the Stock
Incentive Plan. According to the Company's Stock Option Incentive Plan (Draft), as the stock options of 40 incentive objects had not
been exercised at the end of the third exercise schedule of the Company's first stock option incentive plan, the Board of Directors agreed
to cancel the above-mentioned 3,021,177 stock options that had been granted but not yet been exercised for the third exercise schedule
during which the stock options were granted, in accordance with the applicable provisions. After the cancellation, the first stock option
incentive plan will be fully implemented.
For more information, please refer to the announcement published on 25 April 2020 on the media of information disclosure
specified by the Company and the cninfo website (http://www.cninfo.com.cn).
Overview of the Second Stock Incentive Plan:
1. On 23 April 2020, the Company convened the 4th Meeting of the 9th Board of Directors and the 3rd Meeting of the 9th
Supervisory Committee. Upon discussion, the Meetings passed the Proposal on Canceling Part of the Expired and Unexercised Stock
Options in the Stock Incentive Plan, Proposal on the Adjustment of Incentive Objects and Quantity of Stock Options to Be Exercised in
the Second and Third Stock Option Incentive Plans and Proposal on Matters Related to the Exercise in the Second Exercise Schedule of
the Second Stock Option Incentive Plan.
(1) According to the Company's Second Stock Option Incentive Plan (Draft), as the stock options of 81 incentive objects have
not been exercised at the end of the first exercise schedule of the Company's second stock option incentive plan, the Board of
Directors agreed to cancel the said 5,475,000 stock options that had been granted but not yet exercised for the first exercise schedule
during which the second-phase stock options were granted, in accordance with the applicable provisions. As a result of the
cancellation, number of options under the Company's Second Stock Option Incentive Plan will be reduced to 12,775,000.
(2) For reasons such as the resignation of 35 incentive objects and the fact that they are no longer working in the Company or
the holding subsidiary of the Company, they are deemed by the Company's Board of Directors to be no longer fit for the incentive
objects. According to the Second Stock Option Incentive Plan (Draft), their 4.62 million stock options for the second and third
exercise schedules were cancelled. After the above adjustments, the number of stock options granted in the second stock option
incentive plan was adjusted from 81 to 46, and the number of unlocked stock options granted was adjusted from 12,775,000 to
8,155,000.
2. On 20 August 2020, the Company convened the 6th Meeting of the 9th Board of Directors and the 5th Meeting of the 9th
Supervisory Committee. Upon discussion, the Meetings passed the Proposal on Adjustment to the Exercise Prices of the Second and
Third Stock Option Incentive Plans. The Company's 2019 annual equity distribution was completed on 10 July 2020. In accordance
with requirements in the Company's Second Stock Option Incentive Plan (Draft) on the adjustment to exercise price of stock option,
exercise price of the stock option will be adjusted accordingly in the event that the Company changes its capital reserves into additional
share capital, distributes stock dividends or stock split, share reduction, dividend payment or allotment of shares occurs during the
validity period of the stock option. After the completion of the equity allocation, the exercise price of the second stock option incentive
plan will be adjusted from RMB9.26 per share to RMB9.15 per share.
3. As at 11 March 2021, when the second exercise schedule of the Company's second stock option incentive plan ended, a total of
18,200 stock options had been partially exercised by 46 incentive subjects, leaving 3,476,800 stock options unexercised. The Company
will cancel the 3,476,800 stock options that have been granted and have not yet exercised during the second exercise schedule of the
66
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
second stock option incentive plan, in accordance with the applicable laws and regulations.
For more information, please refer to announcements published on 25 April 2020, 21 August 2020 and 23 April 2021 on the
media of information disclosure specified by the Company and the cninfo website (http://www.cninfo.com.cn).
Overview of the Third Stock Incentive Plan:
1. On 23 April 2020, the Company convened the 4th Meeting of the 9th Board of Directors and the 3rd Meeting of the 9th
Supervisory Committee. Upon discussion, the Meetings passed the Proposal on the Adjustment of Incentive Objects and Quantity of
Stock Options to Be Exercised in the Second and Third Stock Option Incentive Plans. Five employees resigned out of personal reasons
and were no longer deemed fit to be the incentive objects by the Board of Directors. In accordance with the Second Stock Option
Incentive Plan (Draft), a total of 1.28 million stock options for the first, second and third exercise schedules were cancelled. After the
above adjustments, the number of incentive objects of the third stock option incentive plan was adjusted from 249 to 244, and the
number of unlocked stock options granted was adjusted from 65.09 million to 63.81 million.
Upon discussion, the Meetings also passed the Proposal on Failure to Meet the Exercise Conditions for the First Exercise
Schedule of the Third Stock Option Incentive Plan and Cancellation of Part of the Stock Options. As the performance of the
Company did not meet the exercise conditions for the first exercise schedule of the third stock option incentive plan, the 19,143,000
stock options that had been granted but not yet exercised for the first exercise schedule could not be exercised. According to the
Company's Third Stock Option Incentive Plan (Draft), since the performance of the Company did not meet the exercise conditions
for the first exercise schedule of the third stock option incentive plan, the Board of Directors agreed to cancel the said 19,143,000
stock options that had been granted but not yet exercised for the first exercise schedule of the third stock option incentive plan. After
the cancellation, number of options under the Company's Third Stock Option Incentive Plan will be reduced to 44,667,000.
2. On 20 August 2020, the Company convened the 6th Meeting of the 9th Board of Directors and the 5th Meeting of the 9th
Supervisory Committee. Upon discussion, the Meetings passed the Proposal on Adjustment to the Exercise Prices of the Second and
Third Stock Option Incentive Plans. The Company's 2019 annual equity distribution was completed on 10 July 2020. In accordance
with requirements in the Company's Third Stock Option Incentive Plan (Draft) on the adjustment to exercise price of stock option,
exercise price of the stock option will be adjusted accordingly in the event that the Company changes its capital reserves into additional
capital stock, distributes stock dividends or stock split, share reduction, dividend payment or allotment of shares occurs during the
validity period of the stock option. After the completion of the equity allocation, the exercise price of the third stock option incentive
plan will be adjusted from RMB6.45 per share to RMB6.34 per share.
Upon discussion, the Meetings also passed the Proposal on Revising the Performance Assessment Indicators of the Third Stock
Option Incentive Plan, agreeing to revise the exercise conditions for the second and third exercise schedules of the third stock option
incentive plan on the performance assessment of the Company.
3. As at 31 December 2020, the exercise time of the second exercise schedule of the third stock option incentive plan had not yet
come, and the stock options had not yet been exercised for the second exercise schedule of the Company's third stock option incentive
plan.
For more information, please refer to the announcements published on 25 April 2020 and 21 August 2020 on the media of
information disclosure specified by the Company and the cninfo website (http://www.cninfo.com.cn).
Overview of the First Employee Stock Ownership Plan (ESOP):
1. The Company held the 31st Temporary Meeting of the 8th Board of Directors on 29 January 2021 and the 3rd Extraordinary
General Meeting of 2019 on 12 November 2019. Upon discussion, the Meetings passed the Proposal on the First Employee Stock
Ownership Plan (Draft) and Its Summary, Proposal on Formulating the Management Measures for the Employee Stock Ownership Plan
and Proposal on Requesting the General Meeting to Authorize the Board of Directors to Handle Matters Concerning the Company's
Employee Stock Ownership Plan.
2. The Company, according to the Information Disclosure Guidelines for Listed Companies of the Shenzhen Stock Exchange No.
4 -- Employee Stock Ownership Plan issued by the Shenzhen Stock Exchange on 3 November 2019, the Company supplemented and
updated the First Employee Stock Ownership Plan (Draft) and its summary. For more information, please refer to the announcement
67
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
published on 9 November 2019 on the media of information disclosure specified by the Company and the cninfo website
(http://www.cninfo.com.cn).
3. As at 31 December 2020, the Company's first ESOP had completed the share purchase stage. The Company's special securities
account related to the first ESOP held a total of 36,211,560 shares of the Company, accounting for 1.14% of the Company's current total
share capital. The average transaction price was RMB6.31 per share, and the total transaction amount was RMB228,329,645.02.
Specifically, a total of 20,885,352 shares of the Company were purchased via the secondary market, accounting for 0.66% of the
Company's current total share capital. The average transaction price was RMB6.22 per share, and the transaction amount was
RMB129,935,389.66. A total of 15,326,208 shares were transferred through the transferee company's repurchase special securities
account, accounting for 0.48% of the Company's existing total share capital. The transaction price was RMB6.42 per share, and the
transaction amount was RMB98,394,255.36. For more information, please refer to the announcement published on 13 May 2020 on the
media of information disclosure specified by the Company and the cninfo website (http://www.cninfo.com.cn).
XVI Significant Related-Party Transactions
1. Continuing Related-Party Transactions
√ Applicable □ Not applicable
As a % Obtaina
of total ble
Approv Index
Relation value of Over market
Total ed Method to
ship Type of Specific Pricing Transact all the price for
Related value transacti of Disclos disclose
with the transacti transacti principl ion transacti approve transacti
party (RMB’0 on line settleme ure date d
Compan on on e price ons of d line or ons of
,000) (RMB’0 nt informa
y the not the
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nature nature
A
compan
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Midea controll
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and its of the price 94 2020
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Industry han-5% or labor or labor -- 195,300 Not ual -- ninfo.c
price 73 2020
Science sharehol services services provisio om.cn
and der of ns
68
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Technolo the
gy Co., Compan
Ltd. and y
its
subsidiari
es
183,555
Total -- -- -- 345,300 -- -- -- -- --
.67
Large-amount sales return in detail N/A
Give the actual situation in the
Reporting Period (if any) where an
estimate had been made for the total
N/A
value of continuing related-party
transactions by type to occur in the
Reporting Period
Reason for any significant difference
between the transaction price and the N/A
market reference price (if applicable)
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Related-Party Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Amounts Due to and from Related Parties
√ Applicable □ Not applicable
Indicate whether there were any amounts due to or from related parties for non-operating purposes.
□ Yes √ No
No such cases in the Reporting Period.
5. Other Significant Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
XVII Significant Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
√ Applicable □ Not applicable
Description of leases
In accordance with the Property Lease Contract signed between the Company and the related party Foshan Shunde Yinghai
Investment Co., Ltd., the Company leased the 23rd floor of Yingfeng Business Building at 8 Yixin Road, Junlan Community, Beijiao
Town, Shunde District, Foshan City, of the construction area of 1,578.68m2, to the latter as the office space. The annual rent payable
in 2020 was RMB1,258,900, and the actual payment was RMB1,258,900, which was paid in full as of 31 December 2020.
Items that brought about profits or losses to the Company accounting for more than 10% of the gross profit of the Company during
the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Significant Guarantees
√ Applicable □ Not applicable
(1) Particulars about Guarantees
Unit: RMB'0,000
Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries)
Disclosure
Guarante
date of the
Actual Having e for a
guarantee Line of Actual Type of Term of
Obligor guarantee expired related
line guarantee occurrence date guarantee guarantee
amount or not party or
announcem
not
ent
25 April
Accredited buyer 20,000 4,615.54 Joint-liability Joint-liability Not Not
2020
70
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Total approved line for such Total actual amount of such
guarantees in Reporting Period 20,000 guarantees in Reporting 4,615.54
(A1) Period (A2)
Total approved line for such Total actual balance of such
guarantees at end of Reporting 20,000 guarantees at end of 4,615.54
Period (A3) Reporting Period (A4)
Guarantees provided by the Company for its subsidiaries
Disclosure
Guarante
date of the
Actual Having e for a
guarantee Line of Actual Type of Term of
Obligor guarantee expired or related
line guarantee occurrence date guarantee guarantee
amount not party or
announcem
not
ent
Liaoning Donggong 25 April
25,000 28 December 16,000 Joint-liability 3 years No Yes
Magnet Wire Co., Ltd. 2020
Zhejiang Shangfeng
13 November
Special BL Ower 12,407.33 Joint-liability 2 years No Yes
2020
Industrial Co., Ltd.
Zhejiang Shangfeng
25 April 1 December
Special BL Ower 70,000 29,996.18 Joint-liability 1 year No Yes
2020 2020
Industrial Co., Ltd.
Zhejiang Shangfeng
29 December
Special BL Ower 11,343.45 Joint-liability 2 years No Yes
2020
Industrial Co., Ltd.
Zhejiang Shangfeng
Special BL Ower 25 October 2019 4,198.82 Joint-liability 2 years No Yes
Industrial Co., Ltd.
Zhejiang Shangfeng
21 August
Special BL Ower 20,000 17 August 2020 2,000 Joint-liability 1 year No Yes
2020
Industrial Co., Ltd.
Zhejiang Shangfeng
Special BL Ower 17 August 2020 4,500 Joint-liability 2 years No Yes
Industrial Co., Ltd.
Maoming Infore
26
Environment Water
December 15,000 30 March 2018 11,102.83 Joint-liability 15 years No Yes
Treatment Technology
2017
Co., Ltd.
Shenzhen Greenlander
2 February
Environmental 13,000 25 August 2016 7,865 Joint-liability 8 years No Yes
2016
Protection Co., Ltd.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Shenzhen Greenlander
27 October 15 November
Environmental 12,000 6,840 Joint-liability 8 years No Yes
2016 2016
Protection Co., Ltd.
Shenzhen Greenlander
10 August 17 December
Environmental 25,000 17,280 Joint-liability 10 years No Yes
2019 2019
Protection Co., Ltd.
Shenzhen Greenlander
25 April
Environmental 20,500 15 June 2020 13,000 Joint-liability 15 years No Yes
2020
Protection Co., Ltd.
Shenzhen Greenlander
21 August
Environmental 29,200 25 October 2020 8,000 Joint-liability 15 years No Yes
2020
Protection Co., Ltd.
GuangDong Wellkey 12
Electric Material Co., December 2,000 31 March 2020 2,000 Joint-liability 1 year No Yes
Ltd. 2018
GuangDong Wellkey
25 April
Electric Material Co., 14,000 17 June 2020 3,000 Joint-liability 1 year No Yes
2020
Ltd.
GuangDong Wellkey
21 August
Electric Material Co., 18,000
2020
Ltd.
Anhui Wellkey
Electric Material Co., 17 June 2020 3,000 Joint-liability 1 year No Yes
Ltd.
Anhui Wellkey
Electric Material Co., 17 June 2020 3,000 Joint-liability 1 year No Yes
Ltd. 25 April
12,000
Anhui Wellkey 2020
Electric Material Co., 25 March 2020 2,000 Joint-liability 1 year No Yes
Ltd.
Anhui Wellkey
Electric Material Co., 17 June 2020 1,000 Joint-liability 1 year No No
Ltd.
26
Guangdong Infore 26 December
December 15,000 13,923.02 Joint-liability 5 years No Yes
Technology Co., Ltd. 2018
2017
Guangdong Infore
1 March 2020 2,000 Joint-liability 1 year No Yes
Technology Co., Ltd. 25 April
15,000
Guangdong Infore 2020
17 June 2020 197.41 Joint-liability 1 year No Yes
Technology Co., Ltd.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Guangdong Infore
20 May 2020 723.96 Joint-liability 1 year No Yes
Technology Co., Ltd.
Changsha Zoomlion
Changgao 24 October
10,000 25 March 2020 9,000 Joint-liability 5 years No Yes
Environmental 2019
Industry Co., Ltd.
Loudi Zoomlion
Huabao
25 April
Environmental 2,000 -- -- -- N/A -- Yes
2020
Protection Technology
Co., Ltd.
Renshou Infore
Zoomlion Urban 25 April
4,800 -- -- -- N/A -- Yes
Environmental 2020
Service Co., Ltd.
Jishan Yinglian Urban
25 April
Environmental 1,000 -- -- -- N/A -- Yes
2020
Service Co., Ltd.
Shenzhen Yinglian
25 April
Urban Environmental 8,800 -- -- -- N/A -- Yes
2020
Service Co., Ltd.
Balinyouqi Xingzhou
25 April
Environmental Water 5,000 -- -- -- N/A -- Yes
2020
Co., Ltd.
Guangdong Infore
25 April
Environmental 28,000 -- -- -- N/A -- Yes
2020
Investment Co., Ltd.
Changde Zelian
25 April
Environmental 11,900 -- -- -- N/A -- Yes
2020
Service Co., Ltd.
Shenzhen Bao’an
21 August
Yinglian Urban 38,000 -- -- -- N/A -- Yes
2020
Service Co., Ltd.
Other majority-owned 25 April
8,000 -- -- -- N/A -- Yes
subsidiaries 2020
Total approved line for such Total actual amount of such
guarantees in the Reporting Period 333,200 guarantees in the Reporting 184,378
(B1) Period (B2)
Total approved line for such Total actual balance of such
423,200 184,378
guarantees at the end of the guarantees at the end of the
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Reporting Period (B3) Reporting Period (B4)
Guarantees provided between subsidiaries
Disclosure
Guarante
date of the
Actual Having e for a
guarantee Line of Actual Type of Term of
Obligor guarantee expired related
line guarantee occurrence date guarantee guarantee
amount or not party or
announcem
not
ent
Total guarantee amount (total of the three kinds of guarantees above)
Total actual guarantee
Total guarantee line approved in
353,200 amount in the Reporting 188,993.54
the Reporting Period (A1+B1+C1)
Period (A2+B2+C2)
Total actual guarantee
Total approved guarantee line at
balance at the end of the
the end of the Reporting Period 443,200 188,993.54
Reporting Period
(A3+B3+C3)
(A4+B4+C4)
Total actual guarantee amount (A4+B4+C4) as % of the
11.17%
Company’s net assets
Of which:
(2) Irregularities in Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Cash Entrusted to Other Entities for Management
(1) Cash Entrusted for Wealth Management
√ Applicable □ Not applicable
Overview of wealth management entrustments in the Reporting Period:
Unit: RMB’0,000
Unrecovered overdue
Type Funding source Amount Undue amount
amount
Bank’s wealth
Self-funded 145,150 0 0
management product
Total 145,150 0 0
High-risk wealth management transactions with a significant single amount or with low security, low liquidity and no principal
protection:
□ Applicable √ Not applicable
Wealth management transactions where the principal is expectedly irrecoverable or impairment may be incurred:
74
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
□ Applicable √ Not applicable
(2) Entrusted Loans
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Significant Contracts Arising in the Ordinary Course of Business
□ Applicable √ Not applicable
5. Other Significant Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVIII Social Responsibilities
1. Performance of Social Responsibilities
The Company has been attaching great importance to its social responsibilities, actively performing its duty as a corporate
citizen, assuming social responsibilities, committed to creating value for customers, creating opportunities for employees, creating
returns for shareholders and creating wealth for the society, and contributing to the harmonious economic and social development,
natural environment and balanced use of resources. It has also been assuming corresponding responsibilities for employees,
customers, suppliers and other stakeholders, and promoting the comprehensive and coordinated development of itself and all
stakeholders in the society.
During the Reporting Period, the Company continued to thoroughly implement the scientific concept of development and
actively fulfill its social responsibilities, and was committed to developing itself and keeping creating values for and protecting the
rights and interests of shareholders. It also fully respected the legitimate rights and interests of employees, customers, suppliers and
other stakeholders, carried out active cooperation with all parties, enhanced communication and exchanges, and achieved mutual
benefits for shareholders, employees, upstream and downstream partners and all social parties. The Company's fulfillment of social
responsibilities in 2020 is as follows:
1. Protection of the rights and interests of investors and creditors
The Company adhered to honest and law-abiding management, implemented standardized internal management, and paid
shareholders with stable business performance. It kept improving the quality of information disclosure, treated all investors fairly and
protected shareholders' right to know through timely, true, accurate and full information disclosure, and kept improving corporate
governance and standardized operations to protect shareholders' rights and interests, ensure all legitimate rights and interests of
shareholders as stipulated by laws, regulations and rules, and safeguard the interests of creditors.
The Company established and improved the internal system for a sound corporate environment of self-development,
self-restriction, self-regulation and self-control. It also provided hotlines and fax and email addresses for investors to maintain close
communication and interaction with investors in multiple channels such as the investor interaction platform of Shenzhen Stock
Exchange. Through general meetings, investor exchanges and phone calls, the Company maintained adequate communication and
information exchange with investors.
2. Protection of the rights and interests of employees
75
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
The Company has always insisted on the people-oriented management philosophy, and regarded employees as its most valuable
resources and wealth. It adhered to harmonious labor relations and strictly abode by the Labor Law. Sound labor and employment
management policies, systematic and scientific salary systems, performance appraisal systems, reward, punishment and incentive
systems were established in the Company and its subsidiaries to ensure that the employees enjoy labor rights and fulfill labor
obligations according to law based on such management policies. The Company gave top priority to safeguarding the legitimate
rights and interests of employees, and strictly implemented the social security system.
In addition to further improving the existing talent cultivation system, the Company offered diversified training and a larger
learning platform for employees of different levels and positions to improve employees' self-value while enhancing the Company's
comprehensive competitiveness.
Upholding the value that "employees are our business partners.", the Company intends to realize and safeguard the interests of
all employees with its work, built the company-employee community of shared interests, protected the rights and interests of
employees, promoted value realization and all-around development of employees, improved the corporate cohesion, and realized
synchronous growth between the Company and employees.
3. Protection of the rights and interests of suppliers, customers and consumers
"Customers are the ones on whom our livelihood depends." The Company adhered to the business philosophy of "market first,
customer first", saw customers as its most valuable assets, took customer satisfaction as the yardstick for its performance, valued the
win-win relationship with customers, and abode by integrity and was committed to providing customers with premium services.
The Company has always been attaching great importance to the protection of the legitimate rights and interests of suppliers,
partners and consumers. While maintaining sound production and operation, the Company shared information with customers and
suppliers in various ways to enhance technical exchange and progress, create an environment of honest, harmonious and fair
cooperation and promote common development.
4. Environmental protection and sustainable development
The Company has been emphasizing environmental protection and sustainable development.
During the reporting period, the Company provided services in the fields of smart service, environmental monitoring and solid
waste treatment following the state's policy requirements for environmental protection and environmental governance, and
contributed to environmental protection with practical actions by producing great environmental and social benefits in addition to
economic benefits. In project construction and operation, the Company strictly abode by local laws and regulations on environmental
protection and constantly took pollution control and environmental protection measures, which were recognized by owners and local
governments. In daily operation and management, the Company adhered to energy conservation, emission reduction and
consumption reduction in specific works, and advocated all employees to save electricity, paper and water as much as possible.
Besides, it promoted digital network tools such as the collaborative office system and the financial management information system
to share resources and realize remote and paperless office while improving work efficiency.
5. Public relations and social welfare activities
Since its establishment, the Company has been strictly abiding by laws and regulations when pursuing profits and development,
and actively practicing and assuming social responsibilities.
After the outbreak of COVID-19 at the beginning of 2020, the Company immediately organized the emergency working group
to aid Wuhan, Hubei, and allocated equipment and supplies, actively cooperated with local governments in disinfection and waste
clearing. It donated 15 disinfection vehicles and 15 tons of disinfectants to Wuhan City Management Committee during the Spring
Festival. To fulfill its social responsibilities and contribute to epidemic prevention and control, the Company continued to donate
medical masks, disinfection liquid, medical wastewater monitoring equipment and waste masks collection buckets to many places in
China. In the face of the menacing epidemic, the Company responded quickly, shouldered social responsibilities to the best of its
ability, and overcame difficulties and fought the epidemic with all sectors of society, aiming for a win in the battle against
COVID-19 with the people of the whole country.
The development of a company and its active commitment to social responsibilities are complementary and inseparable. The
76
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
society and economy were in complicated and grave difficulties in 2020, and the Company was facing great challenges in
development. By fully cooperating with all related parties and through joint efforts of its employees, the Company achieved good
results in all businesses. We hereby would like to express our gratitude to all our departments, customers, suppliers and investors and
people from all walks of life for their strong support to us.
In 2021, the Company will continue to stay true to its original mission and forge ahead, and continue to speed up technical
innovation, improve customer service and customer satisfaction, and create more value for shareholders. It will attach importance to
customer and investor relationship management, adhere to people-orientation, effectively protect the rights and interests of
employees, and provide employees with more room for career development. Furthermore, while maintaining the sustainable
development of its major business, the Company will, as always, promote and improve the assumption of social responsibilities,
actively undertake social responsibilities and humbly accept the supervision from all sectors of society, and strengthen
communication and exchanges with all stakeholders, devote itself to self-development, and insist on paying back the society with its
own strength.
2. Measures Taken for Targeted Poverty Alleviation
The Company did not carry out any work for targeted poverty alleviation in the Reporting Period, and has no such plans for now.
3. Relevant Information on Environmental Protection
Indicate whether the listed company and its subsidiaries fell into major pollutant-discharge enterprises and institutions published by
national environmental protection authorities.
√ Yes □ No
Names of main Pollutant Total
Number of Distribution Total
Name of company pollutants and Way of Discharge discharge approved Excessive
discharge of discharge discharge
or subsidiary characteristic discharge concentration standards discharge discharge
outlets outlets volume
pollutants abode by volume
Foshan Shunde
District
Huaqingyuan Water
Environmental
Protection Co., Ltd.
(phases I and II Beijiang
sewage station by Continuous River trunk GB18918-
COD 1 9.6mg/L 389.11t 1606t/a Naught
the gate), Foshan discharge stream 2002
Shunde Yuanrun waterway
Water
Environmental
Protection Co., Ltd.
(phase III sewage
station by the gate)
Foshan Shunde Beijiang
Continuous GB18918-
District Ammonia-nitrogen 1 River trunk 0.27mg/L 10.94t 200.75t/a Naught
discharge 2002
Huaqingyuan Water stream
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Environmental waterway
Protection Co., Ltd.
(phases I and II
sewage station by
the gate), Foshan
Shunde Yuanrun
Water
Environmental
Protection Co., Ltd.
(phase III sewage
station by the gate)
Foshan Shunde
District
Huaqingyuan Water
Environmental
Protection Co., Ltd.
(phases I and II Beijiang
sewage station by Continuous River trunk GB18918-
Total phosphorus 1 0.32mg/L 12.96t 20.075t/a Naught
the gate), Foshan discharge stream 2002
Shunde Yuanrun waterway
Water
Environmental
Protection Co., Ltd.
(phase III sewage
station by the gate)
Foshan Shunde
District
Huaqingyuan Water
Environmental
Protection Co., Ltd.
(phases I and II Beijiang
sewage station by Continuous River trunk GB18918-
Total nitrogen 1 5.86mg/L 237.50t 602.25t/a Naught
the gate), Foshan discharge stream 2002
Shunde Yuanrun waterway
Water
Environmental
Protection Co., Ltd.
(phase III sewage
station by the gate)
Funan Greenlander
North side
Environmental 80m GB18485-
Exhaust/smoke 1 of the main 1.6mg/Nm 1.105t 14.6t/a Naught
Protection Energy chimney 2014
building
Co., Ltd.
78
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Funan Greenlander
North side
Environmental 80m GB18485-
Exhaust/SO2 1 of the main 31mg/Nm 20.213t 100t/a Naught
Protection Energy chimney 2014
building
Co., Ltd.
Funan Greenlander
North side
Environmental 80m GB18485-
Exhaust/NOx 1 of the main 148mg/Nm 96.351t 96.72t/a Naught
Protection Energy chimney 2014
building
Co., Ltd.
Funan Greenlander
North side
Environmental 80m GB18485-
Exhaust/HCl 1 of the main 33mg/Nm 21.405t -- Naught
Protection Energy chimney 2014
building
Co., Ltd.
Funan Greenlander
North side
Environmental 80m GB18485-
Exhaust/CO 1 of the main 3mg/Nm 2.045t -- Naught
Protection Energy chimney 2014
building
Co., Ltd.
Funan Greenlander
North side
Environmental 80m GB18485-
Exhaust/Pb 1 of the main 0.002mg/Nm 1.3017kg -- Naught
Protection Energy chimney 2014
building
Co., Ltd.
Funan Greenlander
North side
Environmental 80m 0.00005mg/N GB18485-
Exhaust/Cd 1 of the main 0.032kg -- Naught
Protection Energy chimney m 2014
building
Co., Ltd.
Funan Greenlander
North side
Environmental 80m 0.0038mg/Nm GB18485-
Exhaust/Hg 1 of the main 2.47kg -- Naught
Protection Energy chimney 2014
building
Co., Ltd.
Funan Greenlander
North side
Environmental 80m 0.025ng-TEQ/ GB18485- 0.016g-TE
Exhaust/dioxin 1 of the main -- Naught
Protection Energy chimney m 2014 Q/a
building
Co., Ltd.
Shouxian West side of
80m GB18485-
Greenlander New Exhaust/smoke 1 the main 2.5mg/Nm 0.89t 0.89t/a Naught
chimney 2014
Energy Co., Ltd. building
Shouxian West side of
80m GB18485-
Greenlander New Exhaust/SO2 1 the main 48mg/Nm 29.143t 70t/a Naught
chimney 2014
Energy Co., Ltd. building
Shouxian West side of
80m GB18485-
Greenlander New Exhaust/NOx 1 the main 206mg/Nm 141.945t 144t/a Naught
chimney 2014
Energy Co., Ltd. building
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Shouxian West side of
80m GB18485-
Greenlander New Exhaust/HCl 1 the main 42mg/Nm 22.464t -- Naught
chimney 2014
Energy Co., Ltd. building
Shouxian West side of
80m GB18485-
Greenlander New Exhaust/CO 1 the main 1mg/Nm 4.98t -- Naught
chimney 2014
Energy Co., Ltd. building
Shouxian West side of
80m GB18485-
Greenlander New Exhaust/Pb 1 the main 0.118mg/m 5.392kg -- Naught
chimney 2014
Energy Co., Ltd. building
Shouxian West side of
80m 0.000182mg/ GB18485-
Greenlander New Exhaust/Cd 1 the main 0.0425kg -- Naught
chimney m 2014
Energy Co., Ltd. building
Shouxian West side of
80m GB18485-
Greenlander New Exhaust/Hg 1 the main ND 2.06kg -- Naught
chimney 2014
Energy Co., Ltd. building
Shouxian West side of
80m 0.018ngTEQ/ GB18485- 0.013g-TE
Greenlander New Exhaust/dioxin 1 the main -- Naught
chimney m 2014 Q/a
Energy Co., Ltd. building
Xiantao
Greenlander
West side of
Environmental 80m GB18485-
Exhaust/smoke 1 the main 0.86mg/Nm 0.32t -- Naught
Protection Power chimney 2014
building
Co., Ltd. (1#
furnace)
Xiantao
Greenlander
West side of
Environmental 80m GB18485-
Exhaust/SO2 1 the main 12.83mg/Nm 7.17t 58t/a Naught
Protection Power chimney 2014
building
Co., Ltd. (1#
furnace)
Xiantao
Greenlander
West side of
Environmental 80m 180.38mg/Nm GB18485-
Exhaust/NOx 1 the main 105.09t 148.85t/a Naught
Protection Power chimney 2014
building
Co., Ltd. (1#
furnace)
Xiantao
Greenlander West side of
80m GB18485-
Environmental Exhaust/HCl 1 the main 16.01mg/Nm 9.83t -- Naught
chimney 2014
Protection Power building
Co., Ltd. (1#
80
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
furnace)
Xiantao
Greenlander
West side of
Environmental 80m GB18485-
Exhaust/CO 1 the main 10.97mg/Nm 4.05t -- Naught
Protection Power chimney 2014
building
Co., Ltd. (1#
furnace)
Xiantao
Greenlander
West side of
Environmental 80m GB18485-
Exhaust/Pb 1 the main 0.006mg/Nm 5.04kg -- Naught
Protection Power chimney 2014
building
Co., Ltd. (1#
furnace)
Xiantao
Greenlander
West side of
Environmental 80m 0.00005mg/N GB18485-
Exhaust/Cd 1 the main 0.042kg -- Naught
Protection Power chimney m 2014
building
Co., Ltd. (1#
furnace)
Xiantao
Greenlander
West side of
Environmental 80m 0.0004mg/Nm GB18485-
Exhaust/Hg 1 the main 0.035kg -- Naught
Protection Power chimney 2014
building
Co., Ltd. (1#
furnace)
Xiantao
Greenlander
West side of
Environmental 80m 0.021ng-TEQ/ GB18485- 0.022g-TE
Exhaust/dioxin 1 the main -- Naught
Protection Power chimney m 2014 Q/a
building
Co., Ltd. (1#
furnace)
Xiantao
Greenlander
West side of
Environmental 80m GB18485-
Exhaust/smoke 1 the main 1.12mg/Nm 0.36t -- Naught
Protection Power chimney 2014
building
Co., Ltd. (2#
furnace)
Xiantao
Greenlander West side of
80m GB18485-
Environmental Exhaust/SO2 1 the main 25.24mg/Nm 10.95t 58t/a Naught
chimney 2014
Protection Power building
Co., Ltd. (2#
81
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
furnace)
Xiantao
Greenlander
West side of
Environmental 80m 179.64mg/Nm GB18485-
Exhaust/NOx 1 the main 76.48t 148.85t/a Naught
Protection Power chimney 2014
building
Co., Ltd. (2#
furnace)
Xiantao
Greenlander
West side of
Environmental 80m GB18485-
Exhaust/HCl 1 the main 14.16mg/Nm 6.10t -- Naught
Protection Power chimney 2014
building
Co., Ltd. (2#
furnace)
Xiantao
Greenlander
West side of
Environmental 80m GB18485-
Exhaust/CO 1 the main 31.93mg/Nm 5.01t -- Naught
Protection Power chimney 2014
building
Co., Ltd. (2#
furnace)
Xiantao
Greenlander
West side of
Environmental 80m GB18485-
Exhaust/Pb 1 the main 0.007mg/Nm 5.56kg -- Naught
Protection Power chimney 2014
building
Co., Ltd. (2#
furnace)
Xiantao
Greenlander
West side of
Environmental 80m 0.00007mg/N GB18485-
Exhaust/Cd 1 the main 0.0548kg -- Naught
Protection Power chimney m 2014
building
Co., Ltd. (2#
furnace)
Xiantao
Greenlander
West side of
Environmental 80m 0.0025mg/Nm GB18485-
Exhaust/Hg 1 the main 2.02kg -- Naught
Protection Power chimney 2014
building
Co., Ltd. (2#
furnace)
Xiantao
Greenlander West side of
80m 0.010ng-TEQ/ GB18485- 0.012g-TE
Environmental Exhaust/dioxin 1 the main -- Naught
chimney m 2014 Q/a
Protection Power building
Co., Ltd. (2#
82
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
furnace)
Discharge
outlets of
kitchen
wastes and
sludges were
Ammonia:
set at the
Xiantao Yinghe 0.06mg/Nm
Ammonia, hydrogen end of the GB14554-
Environmental Centralized 2 hydrogen None -- Naught
sulfide deodorizatio 93
Protection Co., Ltd. sulfide:
n system,
1.5mg/Nm
and exhausts
were
discharged
through the
chimney
Discharge
outlets of
kitchen
biogas
combustion
Smoke: Smoke:
were set at
20mg/Nm 0.241t;
Xiantao Yinghe the end of
SO2: GB13271- SO2:
Environmental Smoke, SO2, NOX Centralized 1 the None Naught
50mg/Nm 2014 0.467t;
Protection Co., Ltd. combustion
NOX: NOX:
system, and
200mg/Nm 1.809t
exhausts
were
discharged
through the
chimney
Sewage
discharge
outlets were
set at the
end of the COD:
COD:
Xiantao Yinghe sewage 4.2627t;
COD, 500mg/L; GB8978-1
Environmental Centralized 1 treatment None ammonia- Naught
ammonia-nitrogen ammonia-nitro 996
Protection Co., Ltd. facility, and nitrogen:
gen: no limit
sewage was 0.427t
discharged
to Chengxi
Sewage
Plant after
83
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
centralized
treatment
Construction and operation of pollution prevention and control facilities:
The Company, in strict accordance with the Environmental Protection Law of the People's Republic of China, Law of the
People's Republic of China on Prevention and Control of Air Pollution, Law of the People's Republic of China on Prevention and
Control of Environmental Pollution Caused by Solid Waste, and Law of the People's Republic of China on Prevention and Control of
Water Pollution and the administrative requirement of simultaneous design, construction and application of main works and water
conservation measures, designed and constructed pollution prevention and control facilities and main works simultaneously and
carried out acceptance inspections and put them into use simultaneously. The Company ran its water treatment projects with mature
and reliable production process, and recorded in full daily sampling and operation, with stable operation throughout the year. The
Company also ran its domestic waste incineration power generation projects with the most mature and stable process in the industry,
and input sufficient environmental consumables in them, with stable operation throughout the year. As required, all key pollutant
discharge projects of the Company were equipped with online monitoring devices at the outlets, with monitoring data directly sent to
the national environmental platform. All the projects were supervised by environmental protection authorities of the state, with all
emissions in 2020 meeting the requirements.
Assessment on the environmental impact of construction projects and other administrative licenses of environmental protection:
The Company has been running all its key pollutant discharge projects according to laws and regulations for many years. During
the construction period, EIA was carried out for these projects in accordance with the Environmental Protection Law of the People's
Republic of China and Law of the People's Republic of China on Environmental Impact Assessment, and EIA documents were
approved by environmental authorities. Besides, the Company obtained approval from environmental authorities before pilot
production, had its environmental protection measures for completed project construction accepted during pilot production, and
designed, constructed and put into use simultaneously the supporting environmental protection facilities and the main works.
Contingency plan for environmental emergencies:
The Company commissioned a professional third-party organization to develop a contingency plan for environmental
emergencies for each of its key pollutant discharge projects, which was approved and filed for record. In 2020, it carried out regular
training and drills among its employees in different projects according to the requirements and contents of the contingency plans to
enable them to timely and accurately deal with environmental pollution emergencies. In 2020, no major environmental risk incidents
occurred in any of the projects.
Environmental self-monitoring plan:
The Company developed the 2020 Environmental Self-monitoring Plan for each of its key pollutant discharge projects, and filed
them with local ecological and environmental protection authorities. It also commissioned a professional third-party inspection
institution to carry out regular environmental monitoring of the pollutants discharged by the projects.
Other environmental information to be disclosed:
The Company disclosed the environmental information of each of its key pollutant discharge projects on the government's
environmental information disclosure platform on a regular basis according to the requirements of local environmental authorities.
Other information related to environmental protection:
N/A.
XIX Other Significant Events
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
XX Significant Events of Subsidiaries
√ Applicable □Not applicable
1. On 10 January 2020, the Company held the 2nd Extraordinary Meeting of the 9th Board of Directors and deliberated and
approved the Proposal on Accepting the Transfer of Partial Equity of the Holding Subsidiary and Waiving the Preemptive Right and
Related-party Transactions. It was approved to accept the transfer of 5.20% of the equity of Zhejiang Shangfeng Special BL Ower
Industrial. Co. Ltd. (the "Shangfeng") and waive the preemptive right to purchase 17.90% of the equity of Shangfeng. The overall
valuation of Shangfeng was RMB350 million. After this transaction, the Company held 60.20% of the equity of Shangfeng, and
Shangfeng was still a holding subsidiary of the Company, causing no change to the scope of the consolidated statement, no significant
impact on the Company's financial status and operating results, and no damage to the interests of the Company and the general
shareholders, especially the small and medium shareholders. For details, please refer to relevant announcements published on 11
January 2020 by the Company on the media of disclosure specified by CSRC and SZSE and the cninfo website (www.cninfo.com.cn).
2. On 20 November 2020, the Company held the 9th Extraordinary Meeting of the 9th Board of Directors and the 8th
Extraordinary Meeting of the 9th Supervisory Committee, and deliberated and approved the Proposal of the Company's Plan for Public
Listed Transfer of Controlling Interest of Subsidiary. It was approved to plan to transfer 51% to 100% of the controlling interest of the
wholly-owned subsidiary Foshan Yingtong Electric Material Co., Ltd. (the "Foshan Yingtong"), with the reserve price of the first
listing no lower than RMB492,507,300, the value of the net assets of 100% of the equity (the final transfer price was calculated by
multiplying RMB492,507,300 by the ratio of the equity to be transferred and bid on the premise that the ratio of the equity to be
transferred and bid is no less than 51%). The Company was also approved to lower the listing price if it gets no intended transferee in
the first listing, provided that each lowering shall not exceed 20% of the last listing price.
On 29 January 2021, the Company held the 11th Extraordinary Meeting of the 9th Board of Directors and the 10th Extraordinary
Meeting of the 9th Supervisory Committee, and deliberated and approved the Proposal on Public Listed Transfer of 51% of the
Controlling Right of Subsidiary. It was approved to transfer 51% of the controlling interest of the wholly-owned subsidiary Foshan
Yingtong to Guangdong Yinghe Corporate Management Co., Ltd. (Guangdong Yinghe) at RMB255 million by means of public listing
and bidding.
On 17 March the Company disclosed the Announcement on Completion of Public Listed Transfer of 51% of Equity of Subsidiary
on the media of information disclosure specified by CSRC and SZSE and the cninfo website (www.cninfo.com.cn), upon which the
Company had gone through the procedures for transfer and registration of the 51% equity of Foshan Yingtong of this public listed
transfer. After the transfer, the Company held 49% of the equity of Foshan Yingtong. As of the date of the announcement, the Company
had received RMB131 million of the transaction price paid by Guangdong Yinghe, and the remaining RMB124 million is to be paid
according to the transfer agreement. After the transaction, Foshan Yingtong will become a joint-stock subsidiary of the Company, and
will be excluded from the consolidated statement of the Company.
For details, please refer to relevant announcements published by the Company on the media of disclosure specified by CSRC and
SZSE and the cninfo website (www.cninfo.com.cn) on 21 November 2020, 30 January 2021, and 17 March 2021.
85
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Part VI Share Changes and Shareholder Information
I. Share Changes
1. Share Changes
Unit: share
Before Increase/decrease in the current period (+/-) After
Shares as
Shares as
dividend
dividend
Percentag New converted Percentag
Shares converted Other Subtotal Shares
e (%) issues from e (%)
from
capital
profit
reserves
2,017,305, -858,948, -858,948, 1,158,356
1. Restricted shares 63.78% 0 0 0 36.62%
260 616 616 ,644
1.1 Shares held by the state 0 0.00% 0 0 0 0 0 0 0.00%
1.2 Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
state-owned corporations
1.3 Shares held by other 2,017,305, -858,948, -858,948, 1,158,356
63.78% 0 0 0 36.62%
domestic investors 260 616 616 ,644
Including: Shares held 1,996,073, -858,311, -858,311, 1,137,761
63.11% 0 0 0 35.97%
by domestic corporations 294 516 516 ,778
Shares held 21,231,96 20,594,86
0.67% 0 0 0 -637,100 -637,100 0.65%
by domestic individuals 6 6
1.4 Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
overseas investors
Including: Shares held
0 0.00% 0 0 0 0 0 0 0.00%
by overseas corporations
Shares held
0 0.00% 0 0 0 0 0 0 0.00%
by overseas individuals
1,145,756, 858,948,6 858,948,6 2,004,705
2. Unrestricted shares 36.22% 0 0 0 63.38%
886 16 16 ,502
2.1 RMB-denominated 1,145,756, 858,948,6 858,948,6 2,004,705
36.22% 0 0 0 63.38%
ordinary shares 886 16 16 ,502
2.2 Domestically listed
0 0.00% 0 0 0 0 0 0 0.00%
foreign shares
2.3 Overseas listed foreign 0 0.00% 0 0 0 0 0 0 0.00%
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
shares
2.4 Others 0 0.00% 0 0 0 0 0 0 0.00%
3,163,062, 3,163,062
3. Total shares 100.00% 0 0 0 0 0 100.00%
146 ,146
Reasons for share changes:
√ Applicable □ Not applicable
1. The Company disclosed the Reminder on the Unlocking of Restricted Shares in Major Asset Restructuring on
www.cninfo.com.cn dated 11 January 2020. The shares issued in the private placement for asset purchase became publicly tradable
on the Shenzhen Stock Exchange on 4 January 2019. The shares were placed with eight entities including Ningbo Infore Asset
Management Co., Ltd., Zoomlion Heavy Industry Science And Technology Co., Ltd., Hongchuang (Shenzhen) Investment Center
(L.P.), Guangzhou Yuemin Investment Yinglian Investment Partnership (L.P.) and Shanghai Lvlian Junhe Industry Buyout Equity
Investment Fund Partnership (L.P.). On 14 January 2020, a total of 858,311,516 shares (27.14% of the Company’s total shares)
placed with four of the aforesaid shareholders, namely, Zoomlion Heavy Industry Science And Technology Co., Ltd., Hongchuang
(Shenzhen) Investment Center (L.P.), Guangzhou Yuemin Investment Yinglian Investment Partnership (L.P.) and Shanghai Lvlian
Junhe Industry Buyout Equity Investment Fund Partnership (L.P.), became publicly tradable upon the expiration of a 12-month
lockup.
2. As prescribed, 100% of the 637,100shares held by former Vice President and Board Secretary Mr. Liu Kaiming were
unlocked upon the expiration of a 6-month lockup starting from his resignation.
Approval of share changes:
□ Applicable √ Not applicable
Transfer of share ownership:
□ Applicable √ Not applicable
Progress on any share repurchases:
√ Applicable □ Not applicable
The Proposal on the Share Repurchase Plan was approved at the 3rd Extraordinary Meeting of the 9th Board of Directors on 13
April 2020, and the Share Repurchase Report was disclosed on 17 April 2020. The Company decided to carry out a share repurchase
through centralized bidding in a self-funded manner, and the repurchased shares would be used for equity incentive and employee
stock ownership plans or reducing the registered capital according to law. The total amount used for the repurchase would be no
lower than RMB200 million (inclusive) and no more than RMB400 million (inclusive), the repurchase price would not exceed
RMB8.00/share (inclusive), and the repurchase period would be no more than 12 months starting from the approval of the share
repurchase plan by the Board of Directors.
The 2019 Final Dividend Plan was approved at the 2019 Annual General Meeting on 15 May 2020. Based on the total share
capital of 3,163,062,146shares (minus the 0 share in the Company’s repurchase account) at the date of record for the 2019 final
dividend plan, a cash dividend of RMB1.10 (tax inclusive) per 10 shares was distributed to the shareholders, with no bonus issue
from either profit or capital reserves. The said plan was implemented on 10 July 2020. According to the Share Repurchase Report, a
distribution of cash dividends occurred within the repurchase period. According to the applicable regulations of the CSRC and the
Shenzhen Stock Exchange, the upper limit of the share repurchase was accordingly adjusted to RMB7.89/share (inclusive) upon the
completion of the profit distribution.
The Proposal on the Termination of Share Repurchase was approved at the 12th Extraordinary Meeting of the 9th Board of
Directors on 8 April 2021. It was agreed that the Company had fewer opportunities to repurchase shares because the share price was
always higher than the upper limit of the repurchase price, multiple sensitive periods were involved during the repurchase period, etc.
Considering that the share price was still continuously higher than the upper limit of the repurchase price, the Company decided to
87
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
terminate the share repurchase upon deliberation.
As of the date of this Report, a total of 7,634,138 shares (approximately 0.24% of the Company’s existing total share capital)
have been repurchased by way of centralized bidding. The highest transaction price was RMB7.89/share, the lowest transaction price
was RMB7.77/share, and the total transaction amount was RMB59,855,050.85 (exclusive of transaction costs).
For further information, please refer to the relevant announcements disclosed by the Company on the media designated by the
CSRC and the Shenzhen Stock Exchange for information disclosure and http://www.cninfo.com.cn dated 14 April 2020, 17 April
2020, 25 September 2020, 9 October 2020, 3 November 2020, 3 December 2020, 5 January 2021, 2 February 2021, 2 March 2021, 3
April 2021 and 9 April 2021.
Progress on reducing the repurchased shares by way of centralized bidding:
□ Applicable √ Not applicable
Effects of share changes on the basic earnings per share, diluted earnings per share, equity per share attributable to the Company’s
ordinary shareholders and other financial indicators of the prior year and the prior accounting period, respectively:
□ Applicable √ Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
√ Applicable □ Not applicable
Unit: share
Increase in
Opening restricted shares Unlocked in the Closing restricted Reason for Date of
Shareholder
restricted shares in the current current period shares restriction unlocking
period
Ningbo Infore Restricted shares
Asset Management 1,017,997,382 0 0 1,017,997,382 in a private 4 July 2022
Co., Ltd. placement
Zoomlion Heavy
Restricted shares
Industry Science
399,214,659 0 399,214,659 0 in a private 14 January 2020
And Technology
placement
Co., Ltd.
Hongchuang
Restricted shares
(Shenzhen)
310,423,813 0 310,423,813 0 in a private 14 January 2020
Investment Center
placement
(L.P.)
Guangzhou
Yuemin
Restricted shares
Investment
79,842,931 0 79,842,931 0 in a private 14 January 2020
Yinglian
placement
Investment
Partnership (L.P.)
Shanghai Junhe 68,830,113 0 68,830,113 0 Restricted shares 14 January 2020
88
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Licheng in a private
Investment placement
Management
Center (L.P.)－
Shanghai Lvlian
Junhe Industry
Buyout Equity
Investment Fund
Partnership (L.P.)
Ningbo Yingtai
Investment Restricted shares
Partnership 40,913,514 0 0 40,913,514 in a private 4 January 2022
(Limited placement
Partnership)
Ningbo Zhongfeng
Investment Restricted shares
Partnership 40,141,033 0 0 40,141,033 in a private 4 January 2022
(Limited placement
Partnership)
Ningbo Liantai
Investment Restricted shares
Partnership 38,709,849 0 0 38,709,849 in a private 4 January 2022
(Limited placement
Partnership)
Restricted shares
He Jianfeng 11,723,329 0 0 11,723,329 in a private 8 January 2021
placement
Restricted shares
She Changguang 7,033,997 0 0 7,033,997 in a private 8 January 2021
placement
25% of the total
Locked-up shares
shareholdings are
Others 2,474,640 0 637,100 1,837,540 of senior
unlocked
management
annually
Total 2,017,305,260 0 858,948,616 1,158,356,644 -- --
II Issuance and Listing of Securities
1. Securities (Exclusive of Preference Shares) Issued in the Reporting Period
√ Applicable □ Not applicable
Name of Issue date Issue price Issued Listing date Number Termination Index to Disclosure
89
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
stock and its (or interest number approved for date of disclosed date
derivative rate) public trading transaction information
securities
Type: stock
Type: convertible corporate bonds, convertible corporate bonds with warrants, corporate bonds
Announceme
nt No.
2020-102 on
the Listing of
Convertible
Infore
4 November 2 December Corporate 1 December
Convertible RMB100 14,761,896 14,761,896 --
2020 2020 Bonds 2020
Bonds
Offered to the
Public
disclosed
onwww.cninf
o.com.cn
Type: other derivative securities
Particulars about the securities (exclusive of preference shares) issued in the Reporting Period:
On 10 September 2020, the Company received the Reply on the Approval of the Public Offering of Convertible Corporate
Bonds by Infore Environment Technology Group Co., Ltd. (CSRC Permit [2020] No. 2219) issued by the CSRC. As such, the
Company was approved to carry out a public offering of convertible corporate bonds in the total par value of RMB1,476,189,600,
with a term of six years. On 4 November 2020, the Company carried out the public offering of 14,761,896 convertible corporate
bonds at the par value of RMB100 each, with the total par value being RMB1,476,189,600. For further information, please refer to
the Announcement No. 2020-083 on the Receipt of the CSRC Approval Reply to the Application for a Public Offering of Convertible
Corporate Bonds and the Announcement No. 2020-102 on the Listing of Convertible Corporate Bonds Offered to the Public
disclosed on www.cninfo.com.cn dated 18 September 2020 and 1 December 2020, respectively.
2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures
□ Applicable √ Not applicable
3. Existing Staff-Held Shares
□ Applicable √ Not applicable
III Shareholders and Actual Controller
1. Shareholders and Their Shareholdings at the Period-End
Unit: share
Number of 28,040 Number of 36,015 Number of 0 Number of 0
90
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
ordinary ordinary preference preference
shareholders at shareholders at shareholders with shareholders with
the period-end the month-end resumed voting resumed voting
prior to the rights at the rights at the
disclosure of this period-end (if any) month-end prior
Report (see note 8) to the disclosure
of this Report (if
any) (see note 8)
5% or greater shareholders or top 10 shareholders
Sharehol Increase/dec Shares in pledge or frozen
Total shares
Name of Nature of ding rease in the Restricted Unrestricted
held at the
shareholder shareholder percenta Reporting shares held shares held Status Shares
period-end
ge Period
Ningbo Infore Domestic
Asset Management non-state-owne 32.18% 1,017,997,382 0 1,017,997,382 0 In pledge 610,798,429
Co., Ltd. d corporation
Zoomlion Heavy
Domestic
Industry Science
non-state-owne 12.62% 399,214,659 0 0 399,214,659 -- --
And Technology
d corporation
Co., Ltd.
Domestic
Infore Holding
non-state-owne 11.37% 359,609,756 0 0 359,609,756 In pledge 258,617,365
Group Co., Ltd.
d corporation
Hongchuang
Domestic
(Shenzhen)
non-state-owne 9.81% 310,423,813 0 0 310,423,813 -- --
Investment Center
d corporation
(L.P.)
Domestic
He Jianfeng 2.01% 63,514,690 0 11,723,329 51,791,361 In pledge 62,952,175
individual
Zara Green Hong Overseas
1.73% 54,778,335 -54,778,335 0 54,778,335 In pledge 54,778,335
Kong Limited corporation
Ningbo Yingtai
Investment Domestic
Partnership non-state-owne 1.29% 40,913,514 0 40,913,514 0 -- --
(Limited d corporation
Partnership)
Ningbo Zhongfeng
Investment Domestic
Partnership non-state-owne 1.27% 40,141,033 0 40,141,033 0 -- --
(Limited d corporation
Partnership)
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Ningbo Liantai
Investment Domestic
Partnership non-state-owne 1.22% 38,709,849 0 38,709,849 0 -- --
(Limited d corporation
Partnership)
Infore
Environment
Technology Group
Co., Ltd.－The Other 1.14% 36,211,560 26,891,753 0 36,211,560 -- --
First Employee
Stock Ownership
Plan
Strategic investor or general
corporation becoming a top-10
N/A
shareholder in a rights issue (if any)
(see note 3)
Ningbo Infore Asset Management Co., Ltd. and Infore Holding Group Co., Ltd. share the same
actual controller—Mr. He Jianfeng, and they act in concert. Apart from that, the Company is not
Related or acting-in-concert parties
aware of any related or acting-in-concert parties (as defined in the Methods for the
among the shareholders above
Administration of Information Disclosure Regarding Changes in Shareholdings in Listed
Companies) among the other shareholders above.
Shareholders above
entrusting/entrusted with or waiving N/A
voting rights
Top 10 unrestricted shareholders
Unrestricted shares Shares by type
Name of shareholder
held at the period-end Class Shares
Zoomlion Heavy Industry Science And Technology
399,214,659 RMB-denominated ordinary stock 399,214,659
Co., Ltd.
Infore Holding Group Co., Ltd. 359,609,756 RMB-denominated ordinary stock 359,609,756
Hongchuang (Shenzhen) Investment Center (L.P.) 310,423,813 RMB-denominated ordinary stock 310,423,813
Zara Green Hong Kong Limited 54,778,335 RMB-denominated ordinary stock 54,778,335
He Jianfeng 51,791,361 RMB-denominated ordinary stock 51,791,361
Infore Environment Technology Group Co., Ltd.－
36,211,560 RMB-denominated ordinary stock 36,211,560
The First Employee Stock Ownership Plan
Shanghai Junhe Licheng Investment Management
Center (L.P.)－Shanghai Lvlian Junhe Industry 34,415,113 RMB-denominated ordinary stock 34,415,113
Buyout Equity Investment Fund Partnership (L.P.)
New China Life Insurance Company Ltd.－Dividend
33,807,208 RMB-denominated ordinary stock 33,807,208
－Individual Dividend-018L-FH002S.Z.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Chen Liyuan 31,018,000 RMB-denominated ordinary stock 31,018,000
Guangdong Hengjian Capital Management Co., Ltd. 26,783,347 RMB-denominated ordinary stock 26,783,347
Mr. He Jianfeng is the actual controller of Infore Holding Group Co., Ltd.
Related or acting-in-concert parties among top 10
Apart from that, the Company is not aware of any related or acting-in-concert
unrestricted public shareholders, as well as between
parties (as defined in the Methods for the Administration of Information
top 10 unrestricted public shareholders and top 10
Disclosure Regarding Changes in Shareholdings in Listed Companies) among
shareholders
the other public shareholders above.
Top 10 ordinary shareholders involved in securities
None
margin trading (if any) (see note 4)
Indicate whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company conducted
any promissory repo during the Reporting Period.
□ Yes √ No
No such cases in the Reporting Period.
2. Controlling Shareholder
Nature of the controlling shareholder: controlled by an individual
Type of the controlling shareholder: corporation
Legal
Name of the controlling Date of
representative/person- Organization code Principal activities
shareholder incorporation
in-charge
Asset management, industrial
investment, and investment
management. (The Company shall not
engage in financial businesses such as
absorbing deposits, financing
guarantee, wealth management agency
Ningbo Infore Asset business, and raising (financing) funds
Wei Ting 2 May 2017 91330206MA290L5J3L
Management Co., Ltd. from the public without the approval of
regulators like financial regulators)
(business activities subject to approval
in accordance with laws shall not be
carried out until approval from
competent authorities has been
obtained.).
Interests held in other
domestically and
overseas listed Not applicable
companies in the
Reporting Period
Change of the controlling shareholder in the Reporting Period:
93
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Actual Controller and Acting-in-Concert Parties
Nature of the actual controller: domestic individual
Type of the actual controller: individual
Relationship with the
Name of the actual controller Nationality Residency in other countries or regions or not
actual controller
Actual controller
He Jianfeng Chinese Yes
himself
Main occupations and positions Chairman of the Board and President of Infore Holding Group Co., Ltd.
Controlling interests in other
domestically and overseas listed Not applicable
companies in the past 10 years
Change of the actual controller in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Ownership and control relationship between the actual controller and the Company:
Indicate whether the actual controller controls the Company via trust or other ways of asset management.
□ Applicable √ Not applicable
4. Other 10% or Greater Corporate Shareholders
√ Applicable □ Not applicable
Legal
Name of corporate Date of
representative/person- Registered capital Principal activities
shareholder incorporation
in-charge
Zoomlion Heavy Industry Zhan Chunxin 31 August 1999 7,808,536,633 Development, production, and sales of
94
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Science And Technology engineering machines, agricultural
Co., Ltd. machines, sanitation machines, crane
trucks and exclusive chassis, fire engines
and exclusive chassis, high-altitude
operation machines, other machinery
equipment, metal and non-metal
materials, and new high-tech products of
optical-electro-mechanical integration
and provision of leasing and after-sale
technical services; sales of building and
decorative materials, vehicles for
engineering and metal materials,
chemical materials, and chemical
products (excluding hazardous chemicals
and monitoring products); operation of
commodity and technology import and
export businesses; investment in real
estate with self-owned assets (The
Company shall not engage in national
financial regulation and financial credit
businesses such as absorbing deposits,
fund-raising and collection, entrusted
loans, and issuing notes and loans). Sales
of second-hand vehicles; disassembly
and recovery of disused machinery
equipment. (Business activities subject to
approval in accordance with laws shall
not be carried out until approval from
competent authorities has been
obtained.)
Investment in various industries,
investment management, investment
consultation, and asset management;
enterprise management and enterprise
consulting services; computer
information services and software
Infore Holding Group Co., services; film product and planning
He Jianfeng 19 April 2002 4,000,000,000
Ltd. (based on validated licenses); advertising
planning and production; appraisal and
consultancy services of artwork
(excluding ivory and ivory products) and
collectibles; planning of culture and art
exhibitions; sales of maternal and baby
products and clothing; supply and
95
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
marketing of domestic business and
goods except the above items; business
information consulting services; import
and export of commodities or
technologies (excluding the import and
export of commodities and technologies
that are prohibited by the state or involve
administrative review and approval) ;
R&D, manufacturing, sales and
equipment leasing of sanitation
equipment, robots, new energy vehicles,
and environmental monitoring
equipment; cleaning, collection,
recycling, transportation, and treatment
services of urban domestic waste;
undertaking environmental engineering
and water pollution control projects;
R&D, manufacturing and sales of
ventilators, and air-cooled, water-cooled,
and air conditioning equipment; R&D,
manufacturing, and sales of new
materials, equipment, and products.
(Production and manufacturing projects
shall be operated by the Company's
subsidiaries) (Business activities subject
to approval in accordance with laws shall
not be carried out until approval from
competent authorities has been obtained)
5. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller,
Reorganizer and Other Commitment Makers
□ Applicable √ Not applicable
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Part VII Preference Shares
□ Applicable √ Not applicable
No preference shares in the Reporting Period.
97
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Part VIII Convertible Corporate Bonds
√ Applicable □ Not applicable
I Previous Price Adjustments for Conversion of Bonds into Shares
With the approval granted by the China Securities Regulatory Commission under Document ZH.J.X.K. [2020] No. 2219, the
Company on 4 November 2020 publicly issued 14,761,896 convertible corporate bonds, each with a par value of RMB100, and the
total issue amount was RMB1,476,189,600. The initial conversion price of this tranche of convertible bonds is RMB8.31 per share. If
the Company distributes bonus shares, increases share capital, issues new shares (excluding the increase in share capital as a result of
the conversion of this tranche of convertible bonds), issues shares or distributes cash dividends, the conversion price will be adjusted
accordingly in accordance with applicable laws and regulations.
II Cumulative Conversion of Bonds into Shares
□ Applicable √ Not applicable
III Information on Top Ten Convertible Bond Holders
Unit: Share
Amount of
Number of
Nature of convertible bonds Share of convertible
convertible bonds
No. Name of convertible bond folder convertible bond held as at the end of bonds held as at the end
held as at the end of
holder the Reporting Period of the Reporting Period
the Reporting Period
(RMB)
Industrial and Commercial Bank of
1 China Limited -- Aegon-Industrial Other 480,485 48,048,500.00 3.25%
Hengyi Bond Investment Fund
Industrial and Commercial Bank of
China Limited -- CUAM
2 Other 466,992 46,699,200.00 3.16%
Convertible Bond Securities
Investment Fund
State-owned
3 Sealand Securities Co., Ltd. 326,366 32,636,600.00 2.21%
corporation
Agricultural Bank of China Limited
-- China Southern Xiyuan
4 Other 269,602 26,960,200.00 1.83%
Convertible Bond Securities
Investment Fund
CNPC Enterprise Annuity Program
5 Other 256,417 25,641,700.00 1.74%
-- Industrial and Commercial Bank
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
of China Limited
State-owned
6 China Galaxy Securities Co., Ltd. 229,994 22,999,400.00 1.56%
corporation
State-owned
7 Huatai Securities Co., Ltd. 229,991 22,999,100.00 1.56%
corporation
National Social Security Fund 205
8 Other 207,000 20,700,000.00 1.40%
Portfolio
National Social Security Fund 201
9 Other 200,770 20,077,000.00 1.36%
Portfolio
Domestic
ICBC Credit Suisse Investment
10 non-state-owned 199,991 19,999,100.00 1.35%
Management Co., Ltd.
corporation
IV Significant Changes in Profitability, Assets and Credit Standing of Guarantors
□ Applicable √ Not applicable
V The Company's Liabilities as at the End of the Reporting Period, Credit Standing Changes
and Cash Arrangements for Debt Repayment For the Coming Year
1. Principal financial indicators of the Company
Item 2020 2019 Changes
Liability/asset ratio 42.64% 35.88% 6.77%
Interest cover (times) 12.49 12.40 0.09
Loan repayment ratio 100% 100% 0.00%
Interest payment ratio 100% 100% 0.00%
2. Credit rating of convertible bonds
During the Reporting Period, China Chengxin Credit Rating Group assigned rating to convertible corporate bonds issued by the
Company and issued the Credit Rating Report on 2020 Public Offering of Convertible Corporate Bonds of Infore Environment
Technology Group Co., Ltd. (X.P.W.H. [2020] No. 1498D). According to the rating report, the Company's corporate credit rating
was AA+ and bond credit rating was AA+, with a stable outlook. For details, see the Credit Rating Report on 2020 Public Offering of
Convertible Corporate Bonds disclosed by the Company on 2 November 2020 on the cninfo website (www.cninfo.com.cn).
3. Financial arrangements for debt repayment in the coming year
The primary sources of funds for the Company to pay the principal and interest of convertible bonds in the future are as follows: (1)
The Company seeks endogenous growth by strengthening financial management and increasing the net cash inflow from operating
activities and net profit; (2) The Company has good credit standing and a reasonable asset structure and can obtain financing from
banks and other channels to reasonably arrange for redemption funds.
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Part IX Directors, Supervisors, Senior Management and Staff
I Changes in the Shareholdings of Directors, Supervisors and Senior Management
Increase Decrease
Opening Other Closing
in the in the
Office Incumbent/ Start of End of sharehold increase/d sharehold
Name Gender Age current current
title Former tenure tenure ing ecrease ing
period period
(share) (share) (share)
(share) (share)
Chairman
of the 4 26
Ma Gang Board Incumbent Male 42 December December 1,654,600 0 0 0 1,654,600
and 2014 2022
President
Kuang 30 26
Guangxio Director Incumbent Male 42 January December 0 0 0 0 0
ng 2019 2022
30 26
Shen Ke Director Incumbent Male 50 January December 0 0 0 0 0
2019 2022
Director 30 26
Chen
and Vice Incumbent Male 49 January December 0 0 0 0 0
Peiliang
President 2019 2022
Independ 14 26
Shi
ent Incumbent Male 46 Novembe December 0 0 0 0 0
Shuiping
Director r 2016 2022
Independ 26 26
Zhang Yu ent Incumbent Male 43 December December 0 0 0 0 0
Director 2019 2022
Independ 26 26
Li
ent Incumbent Male 44 December December 0 0 0 0 0
Ruidong
Director 2019 2022
Chairman
of the
14 26
Jiao Superviso
Incumbent Male 40 Novembe December 308,692 0 0 0 308,692
Wanjiang ry
r 2016 2022
Committe
e
Liu Kan Superviso Incumbent Male 37 26 26 0 0 0 0 0
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r December December
2019 2022
Employee 14 26
Lin
superviso Incumbent Female 36 Novembe December 0 0 0 0 0
Meiling
r r 2016 2022
Vice
President 8 26
Lu
and Chief Incumbent Male 43 Novembe December 486,762 0 0 0 486,762
Anfeng
Financial r 2013 2022
Officer
Vice
President 26 26
JinTaotao and Incumbent Male 38 December December 0 0 0 0 0
Board 2019 2022
Secretary
Total -- -- -- -- -- -- 2,450,054 0 0 0 2,450,054
II Changes of Directors, Supervisors and Senior Management
□ Applicable √ Not applicable
III Biographical Information
Professional backgrounds, major work experience and current posts in the Company of the incumbent directors, supervisors and
senior management:
1. Mr. Ma Gang, born in 1979, with a master's degree, is Chairman of the eighth and ninth Board of Directors of Infore
Environment. Starting from December 2014, he serves as President of the Company. He joined Midea Group in June 2001, and
successively held the positions of R&D Engineer, branch salesman and Regional Director at Midea Rice Cooker Division, Domestic
Sales General Manager at Midea Small Domestic Appliance Division, President of China Marketing Headquarters of Midea Daily
Home Electric Appliance Group, Vice President and Domestic Sales General Manager at Midea Small Domestic Appliance Division,
Vice President of Midea Small Domestic Appliance Division and General Manager at Midea Water Material Entity, and Deputy
Director at Midea Domestic Market Department.
2. Mr. Kuang Guangxiong, born in 1979, with a master's degree, is PRC Certified Public Accountant and international accountant,
in addition to Director of the eighth and ninth Board of Directors of Infore Environment. He has been Vice President of Infore Group
since October 2018. From July 2002 to October 2018, he successively held the positions of Financial Manager at Midea Daily Home
Electric Appliance Group, Financial Manager at Midea subsidiary in the US, the Financial Director at Midea Kitchen Appliances
Division, Financial Director at Midea Commercial Air Conditioner Division, and Financial Director at Midea-KUKA Joint Venture in
China.
3. Mr. Shen Ke, born in 1971, with a master's degree, is Director of the eighth and ninth Board of Directors of Infore Environment.
Since January 2019, he has served as Chief Investment Officer at Zoomlion Heavy Industry Science And Technology Co., Ltd. From
July 2003 to January 2019, he successively held the positions of Deputy Manager and Head of Investment Development Department,
Deputy General Manager of Investment & Financing Management Department, and Board Secretary of Zoomlion Heavy Industry
Science And Technology Co., Ltd.
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4. Mr. Chen Peiliang, born in 1972, with a bachelor's degree, is Director of the eighth and ninth Board of Directors of Infore
Environment. He has been General Manager of Changsha Zoomlion Environmental Industry Co., Ltd. since September 2013. He
served as General Manager of Hunan Zoomlion International Trade Co., Ltd. from July 2002 to May 2010, Executive Deputy General
Manager of the Concrete Machinery Division of Zoomlion Heavy Industry Science And Technology Co., Ltd. from May 2010 to
September 2013, and Assistant to President and Vice President of Zoomlion Heavy Industry Science And Technology Co., Ltd. from
September 2006 to July 2016.
5. Mr. Zhang Yu, born in 1978, has a doctorate. He serves as Associate Professor at China Europe International Business School
from 2015, and held the position of Assistant Professor at University of California, Irvine from 2008 to 2015.
6. Mr. Li Ruidong, born in 1977, is a bachelor's degree holder. He has been President and Editor-in-chief at the China Environment
magazine since November 2013. He served as Assistant to General Manager of Environmental Protection Magazine Co., Ltd. from
February 2012 to November 2013, and Director of the Office of Environmental Protection from March 2008 to January 2012.
7. Mr. Shi Shuiping, born in 1975, has a doctorate and is Certified Anti-Fraud Professional and Independent Director of the eighth
and ninth Board of Directors of Infore Environment. Since October 2010, he has Professor and Graduate Students’ Supervisor at
School of Management, Jinan University. It is also Visiting Scholar at Boston University and City University of Hong Kong, Senior
Member of Accounting Society of China, Senior Member of China Audit Society, Director at Guangdong Audit Society, Executive
Director at Guangzhou Audit Society, and Expert Member of Guangdong Enterprise Institute for Internal Controls.
8. Mr. Lu Anfeng, born in 1978, with a master's degree, is PRC Certified Public Accountant and Certified Tax Agent. Since
September 2012, he has served as Vice President and Chief Financial Officer of the Company. He held the positions of Senior Financial
Manager at PCI Technology Group Co., Ltd., Audit Manager at Mayland Group, and Certified Public Accountant at Guangzhou
Branch of Shenzhen Dahua Tiancheng Accounting Firm.
9. Mr. JinTaotao, born in 1983, is a master's degree holder. He is Vice President and Board Secretary of the Company. He held the
positions of Engineer at the Environmental Planning Institute of the former Ministry of Environmental Protection from September 2005
to April 2016, Vice President at Infore Environment Technology Group Co., Ltd from May 2016 to June 2019, and Board Secretary at
Stariver Environmental Technology Co., Ltd from July 2019 to November 2019. Mr. Jin Tao joined the qualification training of
Shenzhen Stock Exchange for board secretaries in November 2019 and obtained the qualification certificate for Board Secretary.
10. Mr. Jiao Wanjiang, born in 1981, holds a master's degree. He is currently General Manager of the Business Department of
Infore Environment Technology Group Co., Ltd. He successively served as Head of the Operation Management Department and
General Manager of the Solid Waste Treatment Department of Infore Environment. He joined Midea in July 2005. He successively
held the positions of Domestic Sales Branch Manager, Senior Product Planning Manager at Headquarters and Head of Brand &
Marketing Department of Guangdong Midea Consumer Electric Manufacturing Co., Ltd.
11. Mr. Liu Kan, born in 1984, is a bachelor's degree holder. He has worked in the Company since February 2016, and is currently
Director of the Operation Management Department of Zoomlion Environmental. He served as General Manager at Infore Network
Technology Co., Ltd. from 2017 to November 2019, Director of the Operation Management Department of Universtar Science &
Technology (Shenzhen) Co., Ltd. from 2016 to 2017, and Rice Cooker Product Planning Manager at Midea Small Domestic Appliance
Shenzhen Branch and Midea Small Domestic Appliance Division from 2006 to 2015.
12. Ms. Lin Meiling, born in 1985, has a bachelor's degree. She is currently Director of Human Resources at Infore Environment
Technology Group Co., Ltd. From 2010 to now, she is responsible for the administration and human resources affairs of the Company.
Offices held concurrently in shareholding entities:
√ Applicable □ Not applicable
Remuneration or
Office held in
Name Shareholding entity Start of tenure End of tenure allowance from the
the entity
entity or not
Ma Gang Infore Holding Group Co., Ltd. Director 16 March 2018 -- Not
Kuang Infore Holding Group Co., Ltd. Director and 1 October 2018 -- Yes
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Guangxiong Vice
President
Chief
Zoomlion Heavy Industry Science And
Shen Ke Investment 1 July 2003 -- Yes
Technology Co., Ltd.
Officer
Mr. Ma Gang concurrently served as a Director of Infore Holding Group Co., Ltd.
Mr. Kuang Guangxiong concurrently served as a Director and Vice President of Infore Holding Group Co., Ltd.
Note
Mr. Shen Ke concurrently served as the Chief Investment Officer of Zoomlion Heavy Industry Science And
Technology Co., Ltd.
Offices held concurrently in other entities:
√ Applicable □ Not applicable
Remuneration or
Office held in
Name Other entity Start of tenure End of tenure allowance from
the entity
the entity or not
Bichamp Cutting Technology (Hunan) Co.,
Shen Ke Director 5 July 2014 -- Not
Ltd.
Associate
Zhang Yu China Europe International Business School 1 July 2015 -- Yes
professor
President and
1 November
Li Ruidong The China Environment magazine Editor-in-Chi -- Yes
2013
ef
Associate
Professor and
Master
Shi Shuiping Jinan University 1 January 2010 -- Yes
Supervisor of
the Faculty of
Management
Mr. Shen Ke concurrently served as a Director of Bichamp Cutting Technology (Hunan) Co., Ltd.
Mr. Zhang Yu concurrently served as an Associate Professor of China Europe International Business School.
Note Mr. Li Ruidong concurrently served as the President and Editor-in-Chief of The China Environment magazine.
Mr. Shi Shuiping concurrently served as an Associate Professor and Master Supervisor of the Faculty of
Management of Jinan University.
Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors and senior
management as well as those who left in the Reporting Period:
□ Applicable √ Not applicable
IV Remuneration of Directors, Supervisors and Senior Management
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and senior
management:
The remunerations of the directors, supervisors and senior management of the Company strictly comply with the Rules of
Procedure of the Board of Directors, the Rules of Procedure of the Supervisory Committee and the Articles of Association of the
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Company, as well as the relevant provisions of the Company Law. The remunerations of the Company's directors, supervisors and
senior management shall be determined on the basis of reasonable remuneration in the market and according to the Company's
performance appraisal results. The actual remuneration of the directors of the Company is paid on an annual basis. The actual
remuneration of senior management is partly on a monthly basis, and the part linked to the Company's performance is paid at the end
of the year.
Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RMB'0,000
Total before-tax
Remuneration
Incumbent/Forme remuneration
Name Office title Gender Age from any related
r from the
party or not
Company
Chairman of the
Ma Gang Board and Male 42 Incumbent 228.51 Not
President
Kuang
Director Male 42 Incumbent 0 Yes
Guangxiong
Shen Ke Director Male 50 Incumbent 0 Yes
Director and Vice
Chen Peiliang Male 49 Incumbent 624.91 Not
President
Independent
Shi Shuiping Male 46 Incumbent 10 Not
Director
Independent
Zhang Yu Male 43 Incumbent 10 Not
Director
Independent
Li Ruidong Male 44 Incumbent 10 Not
Director
Chairman of the
Jiao Wanjiang Supervisory Male 40 Incumbent 59.93 Not
Committee
Liu Kan Supervisor Male 37 Incumbent 67.96 Not
Employee
Lin Meiling Female 36 Incumbent 12.8 Not
Supervisor
Vice President
Lu Anfeng and Chief Male 43 Incumbent 77.8 Not
Financial Officer
Vice President
JinTaotao and Board Male 38 Incumbent 74.87 Not
Secretary
Total -- -- -- -- 1,176.78 --
Equity incentives granted to directors and senior management in the Reporting Period:
□ Applicable √ Not applicable
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
V Employees
1. Number, Functions and Educational Backgrounds of Employees
Number of in-service employees of the Company 86
Number of in-service employees of principal subsidiaries 8,639
Total number of in-service employees 8,725
Total number of paid employees in the Reporting Period 8,725
Number of retirees to whom the Company or its major
0
subsidiaries need to pay retirement pensions
Functions
Function Employees
Production 4,681
Sales 656
Technical 1,356
Financial 206
Administrative 1,826
Total 8,725
Educational backgrounds
Educational background Employees
Doctoral degree 6
Master’s degree 373
Bachelor’s degree 2,369
Junior college 2,113
Below junior college 3,864
Total 8,725
2. Remuneration Policy
The Company adopts a fair remuneration system including positive incentives. It follows the performance-oriented principle and
promotes competent personnel. The remuneration of employees is paid on time according to the remuneration policy of the
Company. The fixed remuneration of employees is determined by the Company according to the position value and individual
performance, and the floating salary of employees is determined according to the Company's and individual performance. The
Company swings the weight of salary payment towards technical professionals to ensure that the income level of core talent is
competitive in the market. The employee remuneration policy will be dynamically adjusted according to regional conditions, talent
supply, staff turnover, degree of changes in the industry environment and the corporate payment capacity.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
3. Training Plans
In adherence to the people-oriented principle, the Company is committed to building a team of highly skilled personnel. It has
established a multi-level talent training system ("Fenglin Program-Yingfeng Training Camp-Tanfeng training Camp-Panfeng
Training Camp) and a multi-purpose professional training system covering all employees from fresh graduates to senior executives.
In addition, according to the actual situation, the Company has built an online learning platform called "Infore Environment Cool
College" and constantly rolled out more and better courses, providing convenience and institutional guarantee for employees to study
and enhance their competence anytime and anywhere. The Company exercises special management over training expenses and offers
offline training programs according to the actual job needs of employees at different levels, including programs for management
team members, newbies, professionals, and ordinary employees. It adheres to the learning concept of integrating knowledge with
practice, with special attention to the selection and training of internal lecturers and development of training programs.
4. Labor Outsourcing
√ Applicable □ Not applicable
Total hours of labor outsourced 16,972,100
Total payment for labor outsourcing (RMB) 199,879,123.30
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Part X Corporate Governance
I General Information of Corporate Governance
1. The Company continuously perfects its corporate governance structure in strict accordance with the requirements of the
Company Law, the Securities Law and the relevant laws and regulations of the China Securities Regulatory Commission. The Board of
Directors has four special committees, namely, Strategy Committee, Audit Committee, Nomination Committee, and Remuneration
&Appraisal Committee, dedicated to providing advice and recommendations to make Board of Directors' deliberation and
decision-making professional and efficient.
2. The Company convenes Annual General Meeting in strict accordance with the relevant provisions of the Rules for Shareholders'
General Meeting of Listed Companies, Articles of Association, and Rules of Procedure of General Meeting of the Company. The Board
of Directors, which is the decision-making body of the Company, conscientiously implements the resolutions of General Meetings. The
Supervisory Committee exercises its supervisory function and powers in strict accordance with the regulations, and it supervises the
financial affairs of the Company as well duty performance and actions of directors and senior managers, thus safeguarding the
legitimate rights and interests of the Company and all shareholders. The Management of the Company strictly implements the
resolutions of the General Meetings and the Board of Directors and executes decisions. All functional departments and holding
subsidiaries of the Company are responsible for the day-to-day operations.
3. During the Reporting Period, in order to standardize its insider information management, ensure confidentiality of insider
information and effective registration and management of insider information, effectively prevent securities violations such as insider
trading, maintain the fairness of information disclosure, and protect the legitimate rights and interests of investors, the Company
promptly, truthfully and fully recorded the stages of consultation, demonstration, discussion, establishment, and reporting,
transmission, preparation, examination, resolution, and disclosure of inside information before disclosure as well as the content, time,
place, basis, method and other related information and files containing insider information that all insider personnel know, and file with
the relevant regulatory authorities to strictly prevent the occurrence of insider trading, pursuant to the laws and regulations such as the
Securities Law, the Management Measures for Information Disclosure by Listed Companies, CSRC Provisions on the Establishment of
Registration Management System for Insider Information by Listed Companies, as well as the relevant provisions of the Articles of
Association, Information Disclosure Management Policy and the Policy on Internal Reporting of Significant Matters of the Company.
4. The Company discloses information strictly in accordance with the provisions of the Company Law, the Securities Law, the
Stock Listing Rules of the Shenzhen Stock Exchange and other relevant laws, regulations and normative documents, as well as the
Information Disclosure Management Policy, to ensure that it makes true, accurate, complete, timely and fair information disclosure to
increase the openness and transparency of its operations. The Company has received no disciplinary actions such as criticism and
reprimand from the Shenzhen Stock Exchange for issues relating to information disclosure. During the Reporting Period, there were no
governance irregularities such as provision of undisclosed information to the controlling shareholder and the actual controller.
5. During the Reporting Period, material events occurred in the Company, but there was no change in the stock price arising from
leakage of inside information. As part of its next steps, the Company will constantly improve corporate governance structure, further
standardize corporate operations, and raise the level of corporate governance pursuant to relevant laws and regulations as well as the
requirements of the Shenzhen Stock Exchange.
Indicate whether there is any material incompliance with the regulatory documents issued by the CSRC governing the governance of
listed companies.
□ Yes √ No
No such cases in the Reporting Period.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
II Independence of the Company from the Controlling Shareholder on Businesses, Personnel,
Assets, Structure, and Finance
The Company is completely independent of the controlling shareholder in terms of businesses, structure, personnel, finance, and
assets and has fully independent businesses and operation. Details are as follows:
(1) Business independence: The Company's businesses are independent of the controlling shareholder, and the controlling
shareholder and its affiliates are not engaged in any businesses in competition with the Company.
(2) Personnel separation: The personnel of the Company are independent of the controlling shareholder, and the President, Chief
Financial Officer, Board Secretary and other senior management of the Company do not hold positions other than directors in the
controlling shareholder and its affiliates, the financial officers of the Company does not have a part-time job in related companies.
The Company has put in place independent policies on labor, personnel and remuneration management and established an
independent labor and personnel management department. Thus, its labor, personnel and remuneration management is completely
independent.
(3) Integrity of assets: The Company owns independent and complete assets and has independent production, supply and
marketing systems, and there is no horizontal competition between the Company and its controlling shareholder in the manufacturing
and operation of the same products.
(4) Organizational independence: The Company is organizationally complete, and there is no superior-subordinate relationship
between its controlling shareholder and functional departments thereof and the Company and functional departments thereof. The
Company's Board of Directors, Supervisory Committee and other internal institutions operate completely independently.
(5) Financial separation: The Company's finance is entirely independent, with an independent financial department. It has also
established an independent accounting system and financial accounting management system responsible for independent accounting,
independent opening of bank accounts, and independent tax payment.
III Horizontal Competition
□ Applicable √ Not applicable
IV Annual and Extraordinary General Meetings Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
Investor Index to disclosed
Meeting Type Date of the meeting Disclosure date
participation ratio information
Announcement No.
2020-047 disclosed
The 2019 Annual Annual General
62.19% 15 May 2020 16 May 2020 on
General Meeting Meeting
http://www.cninfo.co
m.cn
Announcement No.
The First
2020-082 disclosed
Extraordinary Extraordinary
51.22% 10 September 2020 11 September 2020 on
General Meeting of General Meeting
http://www.cninfo.co
2020
m.cn
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
2. Extraordinary General Meetings Convened at the Request of Preference Shareholders with Resumed
Voting Rights
□ Applicable √ Not applicable
V Performance of Duty by Independent Directors in the Reporting Period
1. Attendance of Independent Directors at Board Meetings and General Meetings
Attendance of independent directors at board meetings and general meetings
Total number The
Board
of board Board Board independent
Board meetings
meetings the meetings meetings the director failed General
Independent meetings attended by
independent attended independent to attend two meetings
director attended on way of
director was through a director failed consecutive attended
site telecommunica
eligible to proxy to attend board meetings
tion
attend or not
Shi Shuiping 9 7 2 0 0 Not 2
Zhang Yu 9 8 1 0 0 Not 2
Li Ruidong 9 7 2 0 0 Not 2
Explanation of why any independent director failed to attend two consecutive board meetings:
2. Objections Raised by Independent Directors on Matters of the Company
Indicate whether any independent directors raised any objections on any matter of the Company.
□ Yes √ No
No such cases in the Reporting Period.
3. Other Information about the Performance of Duty by Independent Directors
Indicate whether any suggestions from independent directors were adopted by the Company.
√ Yes □ No
Explanation on adoption/rejection of recommendations of independent director of the Company
During the Reporting Period, the independent director of the Company strictly complied with the requirements of the Stock
Listing Rules of the Shenzhen Stock Exchange, Articles of Association and Work Policy for Independent Director of the Company,
diligently and earnestly performed his duties, performed his duties independently, objectively and impartially, and conducted on-site
investigation to understanding matters at on-site meetings of the Board of Directors and Annual Meeting. He kept in regular contact
with the directors, the Board Secretary, Chief Financial Officer and other relevant staff to understand the day-to-day production and
operations of the Company, seriously reviewed the proposals of the Board of Directors, and reviewed matters concerning
related-party transactions beforehand, and issued independent opinions on material matters of the Company as per regulations.
Furthermore, he paid attention to the reports published on newspapers, the Internet and media agencies in relation to the Company to
keep abreast of the operations of the Company. The independent director put forward relevant recommendations on the investment
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
decisions of the Company. For example, he suggested that the Company should make more investments in intelligent and automatic
technologies while keeping all risks under control.
VI Performance of Duty by Specialized Committees under the Board in the Reporting Period
(I) Duty performance of the Audit Committee of the Board of Directors: During the Reporting Period, the Audit Committee
gave full play to the role of audits and actively promoted the standardization of corporate governance. During the Reporting Period,
the Audit Committee primarily completed the following tasks:
(1) During the audit on the 2019 Annual Report of the Company, the Audit Committee carefully reviewed the Company's
financial statements and internal controls, actively communicated with the accounting firm responsible for annual audit of the
Company, discussed and determined the audit arrangements, and repeatedly urged the accounting firm to organize the audit activities
in strict accordance with the audit plan to ensure the smooth completion of the audit on the 2019 Annual Report.
(2) The Audit Committee reviewed, approved and submitted the accounting firm re-engagement proposal to the Board of
Directors, recommended that Pan-China Certified Public Accounts LLP should be re-engaged to be responsible for the Company's
2020 annual audit, including the audits on 2020 Annual Report and internal controls.
(3) In the related-party transaction supervision and internal control assessment for the Reporting Period, the Audit Committee
conducted a meticulous review of the related-party transactions that occurred in the Company in 2020. It guided and supervised the
standard implementation and assessment of the Company's internal control and advanced the development of the Company's internal
controls.
(II) Duty performance of the Remuneration & Appraisal Committee of the Board of Directors: The Remuneration & Appraisal
Committee, in accordance with relevant laws and regulations, earnestly performed its duties, formulated and reviewed the
remuneration policies and schemes for the Company's directors, supervisors and senior management, and guided the Board of
Directors to improve the Company's remuneration policy. It concluded that the remunerations of the Company's directors,
supervisors and senior management were in line with the relevant remuneration policies of the Company as well as the Company's
business performance and individual performance. The Remuneration & Appraisal Committee reviewed the Company's stock option
incentive plan, the eligibility of its beneficiaries for exercising the rights, related adjustment items, etc.
(III) Duty performance the Nomination Committee of the Board of Directors: During the Reporting Period, the Nomination
Committee of the Board of Directors carried out its work pursuant to the relevant regulations of the CSRC and the Shenzhen Stock
Exchange, as well as the principle of diligence and due diligence. According to the business activities of the Company during the
Reporting Period, it carefully supervised the post qualifications and duty performance of each director, supervisor and senior
manager. During the Reporting Period, the directors, supervisors and senior management of the Company were not found to have
violated the Company Law, the Articles of Association of the Company, etc.
(IV) Duty performance of the Strategy Committee of the Board of Directors: The Strategy Committee of the Board of Directors
participated in the meetings of the Management on acceptance of partial shares of the holding subsidiary, wavier of the preemption
rights and related-party transactions, repurchase scheme for the Company's shares, discussion and issuance of convertible bonds of
the Company, and spin-off listing of subsidiary, in accordance with the relevant legal provisions such as the Code of Corporate
Governance of Listed Companies, the Articles of Association of the Company and other relevant laws and regulations. Also, it
listened to the reports of the Management on the relevant plans, jointly analyzed the feasibility of various issues, and offered
professional opinions and recommendations.
VII Performance of Duty by the Supervisory Committee
Indicate whether the Supervisory Committee found any risk to the Company during its supervision in the Reporting Period.
□ Yes √ No
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
No such cases in the Reporting Period.
VIII Appraisal of and Incentive for Senior Management
The Company adopts a remuneration policy comprised of basic annual salary and annual performance-based bonus for senior
management. It determines and specific assessment, reward and punishment measures according to the overall development strategy
and business objectives of the Company at the beginning of the year, and distribute corresponding performance rewards at the end of
the year according to the completion of business objectives.
IX Internal Control
1. Details of material internal control deficiencies identified during the Reporting Period
□ Yes √ No
2. Internal control self-assessment report
Date of full disclosure of the internal
23 April 2021
control assessment report
Index of full disclosure of the internal For details, see the 2020 Internal Control self-Assessment Report disclosed on
control assessment report http://www.cninfo.com.cn
Ratio of the total assets of the
organizations included in the assessment to 100.00%
the Company's consolidated total assets
Ratio of the revenue of the organizations
included in the assessment to the 100.00%
Company's consolidated revenue
Deficiency identification criteria
Category Financial report Non-financial report
(1) Significant deficiencies: 1) Anti-fraud (1) Material deficiencies: 1) Violations of
procedures and controls; 2) Internal control State laws and regulations, e.g.,
over unconventional or unsystematic environmental pollution, serious damage
transactions; 3) Internal control over the to local ecological environment, failure
selection and application of accounting to report or disclose information as
policies against GAAP; 4) Internal control regulations; 2) Loss of more than 30% of
over the final financial reporting procedures. middle and senior managers and senior
Qualitative criteria
(2) Material deficiencies: 1) Fraud technical personnel without timely
committed by directors, supervisors and replenishment, affecting the normal
senior managers; 2) Correction of corporate operations of the Company; 3) Failure to
financial report published or reported; 3) take timely and active response measures
Material misstatement in the current for frequent negative media reports,
financial report identified by certified public which involve a wide range of subjects,
accountant, which is not identified in the leading to a significant negative impact
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
course of running of internal control; 4) on the Company; 4) Failure to remedy
Ineffective supervision over internal control internal control assessment findings,
by the Audit Committee and internal audit especially material or significant
agency; 5) Lack of post qualification or deficiencies; absence of policy control or
incompetence of principal financial officer; systematic failure of critical businesses;
6) Ineffective compliance supervision, and 5) Unreasonable decision-making
violations of regulations, which may have a procedures, e.g., decision-making
significant impact on the reliability of mistakes, resulting in unsuccessful
financial reporting; 7) The Management's M&A; 6) Losses seen by the Company in
failure to correct significant deficiency after consecutive years for reasons apart from
a reasonable period of the deficiency being policy reasons, posing challenges to
reported to the Management. sustainable operations; 7) Lack of
internal controls in subsidiaries, leading
to poor management. (2) Significant
deficiencies: 1) Fraud committed by
middle managers; 2) Negative reports
published by influential media agency in
that year; 3) Failure to remedy general
deficiencies identified in the prior year
without reasonable explanation; 4)
Incompetency of some managers or
operators. Circumstances, including but
not limited to the following, may be
recognized as internal control "general
deficiencies": Fraud committed by
general employees; failure to remedy
general deficiencies identified in the
prior year with reasonable explanation.
(1) Material deficiencies: 1) The potentially
misstated amount in the profit statement is
greater than 1% of the consolidated revenue
of the Company's in the most recent financial
year or 5% of the total pre-tax profit; 2) The
potentially misstated amount in the balance
General deficiency: Less than RMB5
sheet is greater than 1% of the consolidated
million; Significant deficiency: RMB5
total assets of the Company in the most
Quantitative criteria million (including RMB5
recent financial year.
million)-RMB10 million; Material
(2) Significant deficiencies: 1) The
deficiency: RMB10 million and above.
potentially misstated amount is greater than
0.5% of the Company's consolidated revenue
or 3% of the total pre-tax profit in the
income statement but less than 1% of the
Company's consolidated revenue or 5% of
the total pre-tax profit in the most recent
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financial year; 2) The potentially misstated
amount is greater than 0.5% but less than 1%
of the consolidated total assets of the
Company in the most recent financial year.
(3) General deficiencies: 1) The potentially
misstated amount in the income statement is
less than 0.5% of the consolidated revenue
of the Company' in the most recent financial
year or 3% of the total pre-tax profit; 2) The
potentially misstated amount in the balance
sheet is less than 0.5% of the consolidated
total assets of the Company' in the most
recent financial year.
Number of material deficiencies in financial
0
reports
Number of material deficiencies in
0
non-financial reports
Number of significant deficiencies in
0
financial reports
Number of significant deficiencies in
0
non-financial reports
X Independent Auditor’s Report on Internal Control
√ Applicable □ Not applicable
Opinion paragraph in the independent auditor’s report on internal control
Infore Environment Technology Group Co., Ltd. maintained, in all material respects, effective internal control over financial
reporting as of 31 December 2020, based on the Basic Rules on Enterprise Internal Control and other applicable rules.
Independent auditor’s report on
Disclosed
internal control disclosed or not
Disclosure date 23 April 2021
Index to the disclosed report PCCPA Auditor’s Report [2021] No. 3832
Type of the auditor’s opinion Unmodified unqualified opinion
Material weaknesses in internal
control not related to financial None
reporting
Indicate whether any modified opinion is expressed in the independent auditor’s report on the Company’s internal control.
□ Yes √ No
Indicate whether the independent auditor’s report on the Company’s internal control is consistent with the internal control
self-evaluation report issued by the Company’s Board of Directors.
√ Yes □ No
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Part XI Corporate Bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were outstanding before the date of this
Report’s approval or were due but could not be redeemed in full?
No.
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Part XII Financial Statements
I Independent Auditor’s Report
Type of the independent auditor’s opinion Unmodified unqualified opinion
Date of signing the independent auditor’s report 22 April 2021
Name of the independent auditor Pan-China Certified Public Accountants LLP
Number of the independent auditor’s report PCCPAAR [2021] No. 4208
Name of the certified public accountants Bian Shanshan and Cao Cuijuan
Auditor’s Report
To the Shareholders of Infore Environment Technology Group Co., Ltd.:
I. Audit Opinion
We have audited the accompanying financial statements of Infore Environment Technology Group Co., Ltd. (the “Company”), which
comprise the consolidated and parent company balance sheets as at December 31, 2020, the consolidated and parent company income
statements, the consolidated and parent company cash flow statements, and the consolidated and parent company statements of
changes in equity for the year then ended, as well as notes to financial statements.
In our opinion, the attached financial statements present fairly, in all material respects, the financial position of the Company as at
December 31, 2020, and of its financial performance and its cash flows for the year then ended in accordance with China Accounting
Standards for Business Enterprises.
II. Basis for Audit Opinion
We conducted our audit in accordance with China Standards on Auditing. Our responsibilities under those standards are further
described in the Certified Public Accountant’s Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the Company in accordance with the China Code of Ethics for Certified Public Accountants, and we have fulfilled
other ethical responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and
in forming our opinion thereon, and we do not express a separate opinion on these matters.
(I) Revenue recognition
1. Key audit matters
Please refer to section III (XXVI) and section V (II) 1 of notes to the financial statements for details.
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The Company is mainly engaged in manufacturing of sanitation vehicles and equipment, electromagnetic wire, ventilation equipment,
environmental monitoring instruments, and construction and operation of environmental protection engineering as well as other
industries, and adopts different recognition methods for revenue from each industry and product service. In 2020, the operating
revenue amounted to 14,332,025,075.40 yuan, increasing by 12.89% compared with that in previous year amounting to
12,695,858,666.40 yuan.
Sales of sanitation vehicles and equipment, electromagnetic wire and ventilation equipment are performance obligations satisfied at a
point in time. Revenue is recognized when the Company has delivered goods to the designated address as agreed by contract and
such delivered goods have been verified for acceptance by customers, and the Company has collected the payments or has obtained
the right to the payments, and related economic benefits are highly probable to flow to the Company. The environment and sanitation
comprehensive management projects are performance obligations satisfied over time. Revenue is recognized at the percentage of
completion of the performance obligation based on the completion status confirmed by the project supervisor.
As operating revenue is one of the key performance indicators of the Company, the authenticity, accuracy and completeness of
revenue recognition have a significant impact on the Company’s profit, we have identified revenue recognition as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for revenue recognition are as follows:
(1) We obtained understandings of key internal controls related to revenue recognition, assessed the design of these controls,
determined whether they had been executed, and tested the effectiveness of the operation;
(2) We checked sale contracts and construction contracts with clients, obtained understandings of main contractual terms or
conditions, and assessed whether the revenue recognition method conformed to China Accounting Standards for Business
Enterprises;
(3) We performed analysis procedure on operating revenue and gross margin by month, product, client, project, etc., so as to identify
whether there are significant or abnormal fluctuations and find out the reason of fluctuations;
(4) For revenue recognition, we checked supporting documents related to revenue recognition by sampling method, including sales
contracts, orders, sales invoices, delivery lists, delivery orders, shipping documents, client acceptance receipts, progress confirmation
sheets, construction acceptance and supervision reports, etc.;
(5) We selected significant engineering contracts, checked the documents including cost budget, purchase contracts, subcontract
agreements and others on which the expected total cost was based, and evaluated the reasonableness of the expected total cost
estimated by the Management;
(6) We performed confirmation procedure or on-site visit procedure on significant clients and projects to confirm the sales amounts in
the current period, the balances of transactions and the performance of the contracts;
(7) We performed cut-off tests on the operating revenue recognized around the balance sheet date, and assessed whether the operating
revenue was recognized in the appropriate period; and
(8) We checked whether information related to operating revenue had been presented appropriately in the financial statements.
(II) Impairment of accounts receivable and long-term receivables (including those due within one year)
1. Key audit matters
Please refer to section III (X) and section V (I) 4, 10 and 12 of notes to the financial statements for details.
As of December 31, 2020, the book balance of accounts receivable amounted to 5,979,099,528.01 yuan, with provision for bad debts
of 414,264,663.97 yuan, and the carrying amount amounted to 5,564,834,864.04 yuan; the book balance of long-term receivables
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
(including those due within one year) amounted to 2,557.32 million yuan, with provision for bad debts of 152.83 million yuan, and
the carrying amount amounted to 2,221.29 million yuan.
Based on credit risk features of accounts receivable, the Company’s management (the “Management”) measures the provision for bad
debts at the amount of lifetime expected credit losses, either on an individual basis or on a collective basis. For accounts receivable
with expected credit losses measured on an individual basis, the Management estimates the expected cash flows, so as to identify the
provision for bad debts to be accrued, based on a comprehensive consideration of information with reasonableness and evidence,
which is related to the past events, the current situation and the forecast of future economic conditions. For accounts receivable with
expected credit losses measured on a collective basis, the Management classifies portfolios on the basis of ages, adjusts them based
on historical credit risk loss experience and forward-looking estimations, prepares the comparison table of ages of accounts
receivable, so as to calculate the provision for bad debts to be accrued.
As the amount of accounts receivable is significant and the impairment involves significant judgment of the Management, we have
identified impairment of accounts receivable as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for impairment of accounts receivable and long-term receivables (including those due within one year) are
as follows:
(1) We obtained understandings of key internal controls related to accounts receivable and long-term receivables (including those due
within one year), assessed the design of these controls, determined whether they had been executed, and tested the effectiveness of
their operation;
(2) We reviewed accounts receivable and long-term receivables (including those due within one year) with provision for bad debts
made in previous periods for their subsequent write-off or reversal, and assessed the accuracy of historical estimations made by the
Management;
(3) We reviewed the consideration of the Management on credit risk assessment of accounts receivable and long-term receivables
(including those due within one year) and objective evidences, and assessed whether the credit risk features of accounts receivable
had been appropriately identified by the Management;
(4) For accounts receivable and long-term receivables (including those due within one year) with expected credit losses measured on
a collective basis, we assessed the reasonableness of portfolio classification on the basis of credit risk features; we assessed the
reasonableness of the comparison table of ages and expected credit loss rate of accounts receivable and long-term receivables
(including those due within one year) prepared by the Management based on the historical credit loss experience of portfolios with
similar credit risk features and forward-looking estimations; we tested the accuracy and completeness of data used by the
Management (including ages) and whether the calculation of provision for bad debts was accurate;
(5) We checked the subsequent collection of accounts receivable and long-term receivables (including those due within one year) and
assessed the reasonableness of provision for bad debts made by the Management; and
(6) We checked whether information related to impairment of accounts receivable and long-term receivables (including those due
within one year) had been presented appropriately in the financial statements.
(III) Impairment of goodwill
1. Key audit matters
Please refer to section III (XX) and section V (I) 20 of the notes to the financial statements for details.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
As of December 31, 2020, the book balance of goodwill amounted to 6,224,243,094.37 yuan, with provision for bad debts of
53,434,058.51 yuan, and the carrying amount amounted to 6,170,809,035.86 yuan, accounting for 20.49% of total assets. Both the
carrying amount and the proportion are relatively large.
The Management will perform impairment test on goodwill arising from business combination together with related asset groups or
asset group portfolios at the end of each period, and the recoverable amount of related asset groups or asset group portfolios is
determined based on the present value of estimated future cash flows. Key assumptions adopted in the impairment test include:
revenue growth rate in detailed forecast period, growth rate for stable income, profit margin, pre-tax discount rate, etc.
As the amount of goodwill is significant and impairment test involves significant judgment of the Management, we have identified
impairment of goodwill as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for impairment of goodwill are as follows:
(1) We obtained understandings of key internal controls related to impairment of goodwill, assessed the design of these controls,
determined whether they had been executed, and tested the effectiveness of their operation;
(2) We reviewed the present value of future cash flows estimated by the Management in previous years and the actual operating
results, and assessed the accuracy of the Management’s historical estimations;
(3) We obtained understandings of and assessed the competency, professional quality and objectivity of external appraisers engaged
by the Management;
(4) We assessed the reasonableness and consistency of impairment test method adopted by the Management;
(5) We assessed the reasonableness of key assumptions used in impairment test and reviewed whether relevant assumptions were
consistent with overall economy environment, industry condition, management situation, historical experience, operation plan,
approved budget, meeting summary and other assumptions related to the financial statements used by the Management;
(6) We reviewed the sensitivity analysis on key assumptions performed by the Management, assessed the effect of changes in key
assumptions on impairment test result, and identified signs of possible management bias in choosing key assumptions;
(7) We tested the accuracy, completeness and relativity of data used in the impairment test and reviewed the internal consistency of
related information in the impairment test;
(8) We tested whether the calculation of present value of estimated future cash flows was accurate; and
(9) We checked whether information related to impairment of goodwill had been presented appropriately in the financial statements.
(IV) Related party transactions and identification
1. Key audit matters
Please refer to section X of the notes to the financial statements for details.
Due to the complex relationship between the Company’s ultimate controller 何剑锋 (He Jianfeng) and its controlling shareholder
盈峰控股集团有限公司 (Infore Holding Group Co., Ltd.), a large number of affiliated entities of the Company’s major shareholder
中联重科股份有限公司 (Zoomlion Heavy Industry Co., Ltd.*), and various types of related party transactions, which may exist a
risk that related party relationships and transactions are not fully disclosed in the notes to the financial statements, we have identified
the completeness of disclosure on related party relationships and transactions as a key audit matter.
2. Responsive audit procedures
The English names are for identification purpose only.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Our main audit procedures for related party transactions and identification are as follows:
(1) We assessed and tested the internal controls related to the identification and disclosure of related party relationships and
transactions. Internal controls included regularly reviewing the list of related parties by the Management, performing related party
reconciliations on a regular basis and following up on discrepancies, and collecting annual statistics on related party transactions and
making a public announcement;
(2) We obtained the list of related party relationships compiled by the Management, and checked it with the related party
relationships listed in the sub-ledger and information obtained from other publicly available sources;
(3) We checked significant sales, purchases and other contracts to identify whether there are undisclosed related party relationships
and transactions;
(4) We obtained the current account schedule provided by the Management, checked the reconciliation results of amounts and
balances of related party transactions to confirm the completeness of the transactions, and checked the original vouchers of
corresponding transactions to confirm the authenticity of the transactions;
(5) We performed confirmation procedures to verify the amounts and balances of related party transactions by sampling method; and
(6) We checked whether related party information and transactions had been disclosed in the financial statements.
IV. Other Information
The Management is responsible for the other information. The other information comprises the information included in the
Company’s annual report, but does not include the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion
thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required
to report that fact. We have nothing to report in this regard.
V. Responsibilities of the Management and Those Charged with Governance for the Financial Statements
The Management is responsible for preparing and presenting fairly the financial statements in accordance with China Accounting
Standards for Business Enterprises, as well as designing, implementing and maintaining internal control relevant to the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Management is responsible for assessing the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
VI. Certified Public Accountant’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
level of assurance, but is not a guarantee that an audit conducted in accordance with China Standards on Auditing will always detect
a material misstatement when it exists. Misstatement can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
We exercise professional judgment and maintain professional skepticism throughout the audit performed in accordance with China
Standards on Auditing. We also:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(II) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances.
(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by the Management.
(IV) Conclude on the appropriateness of the Management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention
in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Company to cease to continue as a going concern.
(V) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial statements represent
the underlying transactions and events in a manner that achieves fair presentation.
(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within
the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of
the group audit. We remain sole responsibility for our audit opinion.
We communicate with those charged with governance regarding the planned audit scope, time schedule and significant audit findings,
including any deficiencies in internal control of concern that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in
the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Pan-China Certified Public Accountants LLP Chinese Certified Public Accountant: Bian Shanshan
(Engagement Partner)
Hangzhou China Chinese Certified Public Accountant: Cao Cuijuan
Date of Report: April 22, 2021
The auditor’s report and the accompanying financial statements are English translations of the Chinese auditor’s report and
statutory financial statements prepared under accounting principles and practices generally accepted in the People’s Republic of
China. These financial statements are not intended to present the financial position and results of operations and cash flows in
accordance with accounting principles and practices generally accepted in other countries and jurisdictions. In case the English
version does not conform to the Chinese version, the Chinese version prevails.
128
Infore Environment Technology Group Co., Ltd.Annual Report 2020
Infore Environment Technology Group Co., Ltd.
Consolidated balance sheet as at December 31, 2020
(Expressed in Renminbi Yuan)
Note
Assets Closing balance December 31, 2019
No.
Current assets:
Cash and bank balances 1 5,904,127,970.85 3,160,767,624.40
Settlement funds
Loans to other banks
Held-for-trading financial assets 2 128,017,735.11 217,189,146.28
Derivative financial assets
Notes receivable 3 64,663,544.98 40,493,712.20
Accounts receivable 4 5,564,834,864.04 5,163,050,940.07
Receivables financing 5 520,429,874.86 683,999,481.60
Advances paid 6 137,769,198.53 71,052,084.75
Premiums receivable
Reinsurance accounts receivable
Reinsurance reserve receivable
Other receivables 7 257,670,998.28 224,865,915.72
Financial assets under reverse repo
Inventories 8 1,305,177,407.85 1,145,000,730.01
Contract assets 9 170,840,655.62
Assets classified as held for sale
Non-current assets due within one year 10 1,157,997,329.53 760,845,984.28
Other current assets 11 524,859,055.94 331,614,554.91
Total current assets 15,736,388,635.59 11,798,880,174.22
Non-current assets:
Loans and advances paid
Debt investments
Other debt investments
Long-term receivables 12 1,063,292,418.65 1,152,179,083.21
Long-term equity investments 13 318,243,332.69 303,292,231.01
Other equity instrument investments 14 26,070,000.00 26,070,000.00
Other non-current financial assets
Investment property 15 2,009,006.98 568,026.39
Fixed assets 16 1,640,546,747.67 994,681,585.66
Construction in progress 17 1,782,529,087.95 1,550,462,442.48
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 18 3,163,935,814.41 2,686,210,546.90
Development expenditures 19 4,449,066.69 7,861,260.14
Goodwill 20 6,170,809,035.86 6,196,214,398.16
Long-term prepayments 21 12,703,802.65 16,109,938.88
Deferred tax assets 22 95,270,882.31 77,777,629.37
Other non-current assets 23 94,289,159.43 44,360,378.52
Total non-current assets 14,374,148,355.29 13,055,787,520.72
Total assets 30,110,536,990.88 24,854,667,694.94
Company’s legal representative： Company’s Chief Financial Officer: Head of the Company’s Accounting
Ma Gang Lu Anfeng Department: Wu Shanshan
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Infore Environment Technology Group Co., Ltd.
Consolidated balance sheet as at December 31, 2020 (continued)
(Expressed in Renminbi Yuan)
Note
Liabilities & Equity Closing balance December 31, 2019
No.
Current liabilities:
Short-term borrowings 24 1,657,905,376.55 1,606,673,817.48
Central bank loans
Loans from other banks
Held-for-trading financial liabilities 25 810,300.00 866,300.00
Derivative financial liabilities
Notes payable 26 3,853,175,394.09 2,941,694,181.14
Accounts payable 27 3,404,825,085.03 2,486,177,851.99
Advances received 28 170,610,799.52
Contract liabilities 29 181,051,683.90
Financial liabilities under repo
Absorbing deposit and interbank deposit
Deposit for agency security transaction
Deposit for agency security underwriting
Employee benefits payable 30 321,861,989.64 225,112,437.87
Taxes and rates payable 31 372,514,942.66 192,120,056.48
Other payables 32 443,477,082.48 374,873,715.69
Handling fee and commission payable
Reinsurance accounts payable
Liabilities classified as held for sale
Non-current liabilities due within one year 33 150,862,201.57 86,554,242.52
Other current liabilities 34 55,106,039.73
Total current liabilities 10,441,590,095.65 8,084,683,402.69
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 35 765,643,457.78 643,843,170.78
Bonds payable 36 1,199,466,109.60
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables 37 255,735,814.91 188,400,523.49
Long-term employee benefits payable
Provisions 38 1,461,553.82
Deferred income 39 96,734,819.84 50,399,106.23
Deferred tax liabilities 22 78,884,957.38 120,043,177.41
Other non-current liabilities
Total non-current liabilities 2,397,926,713.33 1,002,685,977.91
Total liabilities 12,839,516,808.98 9,087,369,380.60
Equity:
Share capital 40 3,163,062,146.00 3,163,062,146.00
Other equity instruments 41 266,939,831.65
Including: Preferred shares
Perpetual bonds
Capital reserve 42 9,707,741,876.49 9,698,117,762.75
Less: Treasury shares 43 8,920,597.83 99,993,195.75
Other comprehensive income 44 479,437.51
Special reserve 45
Surplus reserve 46 232,701,943.56 232,701,943.56
General risk reserve
Undistributed profit 47 3,558,688,885.55 2,520,329,621.90
Total equity attributable to the parent company 16,920,214,085.42 15,514,697,715.97
Non-controlling interest 350,806,096.48 252,600,598.37
Total equity 17,271,020,181.90 15,767,298,314.34
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Total liabilities & equity 30,110,536,990.88 24,854,667,694.94
Company’s legal representative： Company’s Chief Financial Officer: Head of the Company’s Accounting
Ma Gang Lu Anfeng Department: Wu Shanshan
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Infore Environment Technology Group Co., Ltd.
Parent company balance sheet as at December 31, 2020
(Expressed in Renminbi Yuan)
Note
Assets Closing balance December 31, 2019
No.
Current assets:
Cash and bank balances 1,279,695,772.57 414,150,578.04
Held-for-trading financial assets 126,075,691.90 215,250,000.00
Derivative financial assets
Notes receivable
Accounts receivable
Receivables financing 528,356,236.97 151,020,990.77
Advances paid
Other receivables 1 3,095,331,754.24 2,542,917,115.03
Inventories
Contract assets
Assets classified as held for sale
Non-current assets due within one year 337,148,608.96 181,784,542.01
Other current assets
Total current assets 5,366,608,064.64 3,505,123,225.85
Non-current assets:
Debt investments
Other debt investments
Long-term receivables 355,122,722.70
Long-term equity investments 2 16,694,341,699.36 16,637,081,190.34
Other equity instrument investments 26,070,000.00 26,070,000.00
Other non-current financial assets
Investment property
Fixed assets
Construction in progress
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 3,395,200.95 4,974,866.68
Development expenditures
Goodwill
Long-term prepayments 1,155,903.84 2,583,187.08
Deferred tax assets
Other non-current assets
Total non-current assets 16,724,962,804.15 17,025,831,966.80
Total assets 22,091,570,868.79 20,530,955,192.65
Company’s legal representative： Company’s Chief Financial Officer: Head of the Company’s Accounting
Ma Gang Lu Anfeng Department: Wu Shanshan
132
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Infore Environment Technology Group Co., Ltd.
Parent company balance sheet as at December 31, 2020 (continued)
(Expressed in Renminbi Yuan)
Note
Liabilities & Equity Closing balance December 31, 2019
No.
Current liabilities:
Short-term borrowings 600,733,518.18 337,975,971.15
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 3,899,667.53 7,029,961.20
Advances received
Contract liabilities
Employee benefits payable 8,700,968.00 2,204,822.27
Taxes and rates payable 12,475,208.42 11,019,711.54
Other payables 753,207,113.25 514,074,773.76
Liabilities classified as held for sale
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 1,379,016,475.38 872,305,239.92
Non-current liabilities:
Long-term borrowings
Bonds payable 1,199,466,109.60
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables 3,000,000.00 3,000,000.00
Long-term employee benefits payable
Provisions 218,598.02
Deferred income 350,000.00 296,000.00
Deferred tax liabilities 30,762,849.39 46,963,875.00
Other non-current liabilities
Total non-current liabilities 1,233,797,557.01 50,259,875.00
Total liabilities 2,612,814,032.39 922,565,114.92
Equity:
Share capital 3,163,062,146.00 3,163,062,146.00
Other equity instruments 266,939,831.65
Including: Preferred shares
Perpetual bonds
Capital reserve 15,356,688,889.72 15,345,428,341.90
Less: Treasury shares 8,920,597.83 99,993,195.75
Other comprehensive income
Special reserve
Surplus reserve 198,481,554.14 198,481,554.14
Undistributed profit 502,505,012.72 1,001,411,231.44
Total equity 19,478,756,836.40 19,608,390,077.73
Total liabilities & equity 22,091,570,868.79 20,530,955,192.65
Company’s legal representative： Company’s Chief Financial Officer: Head of the Company’s Accounting
Ma Gang Lu Anfeng Department: Wu Shanshan
133
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Infore Environment Technology Group Co., Ltd.
Consolidated income statement for the year ended December 31, 2020
(Expressed in Renminbi Yuan)
Note Current period Preceding period
Items
No. cumulative comparative
I. Total operating revenue 1 14,332,025,075.40 12,695,858,666.40
Including: Operating revenue 1 14,332,025,075.40 12,695,858,666.40
Interest income
Premium earned
Revenue from handling charges and commission
II. Total operating cost 12,499,304,152.40 11,069,345,626.71
Including: Operating cost 1 10,766,288,959.00 9,389,456,412.74
Interest expenses
Handling charges and commission expenditures
Surrender value
Net payment of insurance claims
Net provision of insurance policy reserve
Premium bonus expenditures
Reinsurance expenses
Taxes and surcharges 2 74,460,829.99 71,200,033.13
Selling expenses 3 801,289,013.51 917,261,553.74
Administrative expenses 4 536,466,686.12 391,834,512.74
R&D expenses 5 254,677,332.19 245,637,610.35
Financial expenses 6 66,121,331.59 53,955,504.01
Including: Interest expenses 127,630,040.16 99,893,189.87
Interest income 49,689,471.88 26,182,679.84
Add: Other income 7 74,276,327.83 135,919,040.42
Investment income (or less: losses) 8 78,328,670.09 158,539,294.34
Including: Investment income from associates and joint ventures 41,578,662.81 33,697,177.55
Gains from derecognition of financial assets at amortized cost
Gains on foreign exchange (or less: losses)
Gains on net exposure to hedging risk (or less: losses)
Gains on changes in fair value (or less: losses) 9 -95,719,301.47 22,408,443.66
Credit impairment loss 10 -119,562,421.08 -111,054,884.67
Assets impairment loss 11 -82,478,500.15 -40,642,899.39
Gains on asset disposal (or less: losses) 12 -1,787,925.37 -2,966,334.79
III. Operating profit (or less: losses) 1,685,777,772.85 1,788,715,699.26
Add: Non-operating revenue 13 9,844,019.69 12,335,161.18
Less: Non-operating expenditures 14 58,229,724.05 163,245,079.19
IV. Profit before tax (or less: total loss) 1,637,392,068.49 1,637,805,781.25
Less: Income tax expenses 15 207,571,413.76 246,239,615.82
V. Net profit (or less: net loss) 1,429,820,654.73 1,391,566,165.43
(I) Categorized by the continuity of operations
1. Net profit from continuing operations (or less: net loss) 1,429,820,654.73 1,391,566,165.43
2. Net profit from discontinued operations (or less: net loss)
(II) Categorized by the portion of equity ownership
1. Net profit attributable to owners of parent company (or less: net loss) 1,386,476,099.73 1,361,453,754.17
2. Net profit attributable to non-controlling shareholders (or less: net loss) 43,344,555.00 30,112,411.26
VI. Other comprehensive income after tax 16 -479,437.51 1,558,587.50
Items attributable to the owners of the parent company -479,437.51 1,377,025.00
(I) Not to be reclassified subsequently to profit or loss
1. Changes in remeasurement on the net defined benefit plan
2. Items under equity method that will not be reclassified to profit or loss
3. Changes in fair value of other equity instrument investments
4. Changes in fair value of own credit risk
5. Others
(II) To be reclassified subsequently to profit or loss -479,437.51 1,377,025.00
1. Items under equity method that may be reclassified to profit or loss
134
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
2. Changes in fair value of other debt investments
3. Profit or loss from reclassification of financial assets into other
comprehensive income
4. Provision for credit impairment of other debt investments
5. Cash flow hedging reserve -479,437.51 1,377,025.00
6. Translation reserve
7. Others
Items attributable to non-controlling shareholders 181,562.50
VII. Total comprehensive income 1,429,341,217.22 1,393,124,752.93
Items attributable to the owners of the parent company 1,385,996,662.22 1,362,830,779.17
Items attributable to non-controlling shareholders 43,344,555.00 30,293,973.76
VIII. Earnings per share (EPS):
(I) Basic EPS (yuan per share) 0.44 0.43
(II) Diluted EPS (yuan per share) 0.44 0.43
Company’s legal representative： Company’s Chief Financial Officer: Head of the Company’s Accounting
Ma Gang Lu Anfeng Department: Wu Shanshan
135
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Infore Environment Technology Group Co., Ltd.
Parent company income statement for the year ended December 31, 2020
(Expressed in Renminbi Yuan)
Note Current period Preceding period
Items
No. cumulative comparative
I. Operating revenue 1 7,213,284.07 33,915,501.26
Less: Operating cost 1 4,157,985.26 28,584,116.83
Taxes and surcharges 182,314.26 5,874,151.83
Selling expenses 369,570.87 2,529,102.21
Administrative expenses 39,475,371.54 30,060,667.94
R&D expenses
Financial expenses -26,807,548.72 -62,072,926.77
Including: Interest expenses 39,786,911.13 13,591,427.20
Interest income 52,733,916.01 53,003,430.82
Add: Other income 46,200.00 5,031,000.00
Investment income (or less: losses) 2 -51,519,175.85 231,319,838.67
Including: Investment income from associates and joint ventures 30,182,747.26 24,371,021.87
Gains from derecognition of financial assets at amortized cost
Gains on net exposure to hedging risk (or less: losses)
Gains on changes in fair value (or less: losses) -89,179,102.46 24,375,000.00
Credit impairment loss -9,948,732.66 -3,417,654.17
Assets impairment loss
Gains on asset disposal (or less: losses)
II. Operating profit (or less: losses) -160,765,220.11 286,248,573.72
Add: Non-operating revenue 4,001.38 419.21
Less: Non-operating expenditures 6,251,989.16 100,000.00
III. Profit before tax (or less: total loss) -167,013,207.89 286,148,992.93
Less: Income tax expenses -16,043,825.23
IV. Net profit (or less: net loss) -150,969,382.66 286,148,992.93
(I) Net profit from continuing operations (or less: net loss) -150,969,382.66 286,148,992.93
(II) Net profit from discontinued operations (or less: net loss)
V. Other comprehensive income after tax
(I) Not to be reclassified subsequently to profit or loss
1. Changes in remeasurement on the net defined benefit plan
2. Items under equity method that will not be reclassified to profit or loss
3. Changes in fair value of other equity instrument investments
4. Changes in fair value of own credit risk
5. Others
(II) To be reclassified subsequently to profit or loss
1. Items under equity method that may be reclassified to profit or loss
2. Changes in fair value of other debt investments
3. Profit or loss from reclassification of financial assets into other
comprehensive income
4. Provision for credit impairment of other debt investments
5. Cash flow hedging reserve
6. Translation reserve
7. Others
VI. Total comprehensive income -150,969,382.66 286,148,992.93
VII. Earnings per share (EPS):
(I) Basic EPS (yuan per share)
(II) Diluted EPS (yuan per share)
Company’s legal representative： Company’s Chief Financial Officer: Head of the Company’s Accounting
Ma Gang Lu Anfeng Department: Wu Shanshan
136
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Infore Environment Technology Group Co., Ltd.
Consolidated cash flow statement for the year ended December 31, 2020
(Expressed in Renminbi Yuan)
Note Current period Preceding period
Items
No. cumulative comparative
I. Cash flows from operating activities:
Cash receipts from sale of goods or rendering of services 14,388,470,951.18 12,887,175,130.38
Net increase of client deposit and interbank deposit
Net increase of central bank loans
Net increase of loans from other financial institutions
Cash receipts from original insurance contract premium
Net cash receipts from reinsurance
Net increase of policy-holder deposit and investment
Cash receipts from interest, handling charges and commission
Net increase of loans from others
Net increase of repurchase
Net cash receipts from agency security transaction
Receipts of tax refund 42,951,350.75 31,686,156.47
Other cash receipts related to operating activities 1 1,153,494,070.87 881,247,180.03
Subtotal of cash inflows from operating activities 15,584,916,372.80 13,800,108,466.88
Cash payments for goods purchased and services received 9,435,508,509.89 8,905,268,694.35
Net increase of loans and advances to clients
Net increase of central bank deposit and interbank deposit
Cash payments for insurance indemnities of original insurance contracts
Net increase of loans to others
Cash payments for interest, handling charges and commission
Cash payments for policy bonus
Cash paid to and on behalf of employees 1,060,641,117.62 838,624,632.82
Cash payments for taxes and rates 617,586,885.55 839,766,913.35
Other cash payments related to operating activities 2 2,782,465,767.99 1,731,698,172.34
Subtotal of cash outflows from operating activities 13,896,202,281.05 12,315,358,412.86
Net cash flows from operating activities 1,688,714,091.75 1,484,750,054.02
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments 25,375,775.54 1,495,138.38
Cash receipts from investment income 47,958,881.63 23,794,593.10
Net cash receipts from the disposal of fixed assets, intangible assets and other
4,912,554.51 8,674,586.32
long-term assets
Net cash receipts from the disposal of subsidiaries & other business units 213,687,034.09 8,017,154.08
Other cash receipts related to investing activities 3 5,159,933,419.02 5,069,929,517.08
Subtotal of cash inflows from investing activities 5,451,867,664.79 5,111,910,988.96
Cash payments for the acquisition of fixed assets, intangible assets and other
1,291,812,173.08 1,256,740,258.91
long-term assets
Cash payments for investments 7,639,195.26 30,863,232.45
Net increase of pledged borrowings
Net cash payments for the acquisition of subsidiaries & other business units
Other cash payments related to investing activities 4 5,036,128,312.71 4,787,670,833.27
Subtotal of cash outflows from investing activities 6,335,579,681.05 6,075,274,324.63
Net cash flows from investing activities -883,712,016.26 -963,363,335.67
III. Cash flows from financing activities:
Cash receipts from absorbing investments 64,992,660.00 174,941,340.00
Including: Cash received by subsidiaries from non-controlling shareholders as
64,992,660.00 174,941,340.00
investments
Cash receipts from borrowings 5,849,194,821.72 2,753,857,571.44
137
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Note Current period Preceding period
Items
No. cumulative comparative
Other cash receipts related to financing activities 5 7,880,000.00 260,187,931.04
Subtotal of cash inflows from financing activities 5,922,067,481.72 3,188,986,842.48
Cash payments for the repayment of borrowings 4,153,395,539.94 2,227,333,573.58
Cash payments for distribution of dividends or profits and for interest expenses 488,778,125.98 422,951,642.23
Including: Cash paid by subsidiaries to non-controlling shareholders as
dividend or profit
Other cash payments related to financing activities 6 38,041,830.99 164,369,479.80
Subtotal of cash outflows from financing activities 4,680,215,496.91 2,814,654,695.61
Net cash flows from financing activities 1,241,851,984.81 374,332,146.87
IV. Effect of foreign exchange rate changes on cash & cash equivalents -708,908.76 -4,004,549.31
V. Net increase in cash and cash equivalents 2,046,145,151.54 891,714,315.91
Add: Opening balance of cash and cash equivalents 2,611,680,947.69 1,719,966,631.78
VI. Closing balance of cash and cash equivalents 4,657,826,099.23 2,611,680,947.69
Company’s legal representative： Company’s Chief Financial Officer: Head of the Company’s Accounting
Ma Gang Lu Anfeng Department: Wu Shanshan
138
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Infore Environment Technology Group Co., Ltd.
Parent company cash flow statement for the year ended December 31, 2020
(Expressed in Renminbi Yuan)
Preceding period
Items Current period cumulative
comparative
I. Cash flows from operating activities:
Cash receipts from sale of goods and rendering of services 8,741,951.34 17,998,824.68
Receipts of tax refund
Other cash receipts related to operating activities 532,435,143.45 652,476,441.77
Subtotal of cash inflows from operating activities 541,177,094.79 670,475,266.45
Cash payments for goods purchased and services received 8,712,307.61 33,189,961.15
Cash paid to and on behalf of employees 9,702,646.88 7,109,509.51
Cash payments for taxes and rates 339,945.08 29,230,723.56
Other cash payments related to operating activities 1,244,340,931.04 1,091,355,390.42
Subtotal of cash outflows from operating activities 1,263,095,830.61 1,160,885,584.63
Net cash flows from operating activities -721,918,735.82 -490,410,318.18
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments 513,687,034.09 1,164,337,014.74
Cash receipts from investment income 95,158,453.24 219,484,322.89
Net cash receipts from the disposal of fixed assets, intangible assets and other
long-term assets
Net cash receipts from the disposal of subsidiaries & other business units
Other cash receipts related to investing activities 4,883,758,860.22 5,599,051,756.93
Subtotal of cash inflows from investing activities 5,492,604,347.55 6,982,873,094.56
Cash payments for the acquisition of fixed assets, intangible assets and other
1,135,853.50 3,099,961.65
long-term assets
Cash payments for investments 427,739,035.26 164,640,000.00
Net cash payments for the acquisition of subsidiaries & other business units
Other cash payments related to investing activities 4,870,251,731.64 5,916,147,547.23
Subtotal of cash outflows from investing activities 5,299,126,620.40 6,083,887,508.88
Net cash flows from investing activities 193,477,727.15 898,985,585.68
III. Cash flows from financing activities:
Cash receipts from absorbing investments
Cash receipts from borrowings 2,497,336,184.17 348,000,000.00
Other cash receipts related to financing activities 6,100,000.00 152,370,003.00
Subtotal of cash inflows from financing activities 2,503,436,184.17 500,370,003.00
Cash payments for the repayment of borrowings 777,500,000.00 299,600,000.00
Cash payments for distribution of dividends or profits and for interest
375,434,276.64 329,014,228.83
expenses
Other cash payments related to financing activities 8,920,597.83 159,993,195.75
Subtotal of cash outflows from financing activities 1,161,854,874.47 788,607,424.58
Net cash flows from financing activities 1,341,581,309.70 -288,237,421.58
IV. Effect of foreign exchange rate changes on cash and cash equivalents
V. Net increase in cash and cash equivalents 813,140,301.03 120,337,845.92
Add: Opening balance of cash and cash equivalents 400,848,473.92 280,510,628.00
VI. Closing balance of cash and cash equivalents 1,213,988,774.95 400,848,473.92
Company’s legal representative： Company’s Chief Financial Officer: Head of the Company’s Accounting
Ma Gang Lu Anfeng Department: Wu Shanshan
139
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Infore Environment Technology Group Co., Ltd.
Consolidated statement of changes in equity for the year ended December 31, 2020
(Expressed in Renminbi Yuan)
Current period cumulative
Equity attributable to parent company
Other equity instruments Less: Other General Non-c
Special Surplus Undistributed g in
Share capital Preferred Perpetua Capital reserve Treasury comprehensi risk
Others reserve reserve profit
shares l bonds shares ve income reserve
3,163,062,146. 9,698,117,762. 99,993,195.7 232,701,943. 2,520,329,621. 252,6
r year 479,437.51
00 75 5 56 90
f accounting
eriod
er common
of current 3,163,062,146. 9,698,117,762. 99,993,195.7 232,701,943. 2,520,329,621. 252,6
479,437.51
00 75 5 56 90
(or less: 266,939,831.6 -91,072,597. 1,038,359,263.
9,624,113.74 -479,437.51 98,20
5 92 65
1,386,476,099.
ome -479,437.51 43,34
73
withdrawn by 266,939,831.6 -91,072,597.
9,624,113.74 54,86
5 92
ed by
8,920,597.83 61,69
lders of 266,939,831.6
5
ayment
11,260,547.81 76
-99,993,195.
-1,636,434.07 -7,60
75
-348,116,836.0
8
reserve
risk reserve
-348,116,836.0
o owners
8
hin equity
e to capital
ve to capital
osses
it plan
nings
ome carried
period 8,699,413.98
-8,699,413.9
riod
8
3,163,062,146. 266,939,831.6 9,707,741,876. 232,701,943. 3,558,688,885. 350,8
rrent period 8,920,597.83
00 5 49 56 55
tive： Company’s Chief Financial Officer: Head of the Company’s Accounting Depart
Lu Anfeng
140
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Infore Environment Technology Group Co., Ltd.
Consolidated statement of changes in equity for the year ended December 31, 2020 (continued)
(Expressed in Renminbi Yuan)
Preceding period comparative
Equity attributable to parent company
Other equity instruments Less: Other General Non-
Surplus Undistributed gi
Share capital Preferred Perpetua Capital reserve Treasury comprehensive Special reserve risk
Others reserve profit
shares l bonds shares income reserve
3,163,062,146. 9,601,763,095. 189,997,881.7 1,376,994,519. 160,
or year 139,994,037.51
00 92 7 12
of accounting
-140,891,625.00 14,089,162.50 126,802,462.50
period
der common
g of current 3,163,062,146. 9,601,763,095. 204,087,044.2 1,503,796,981. 160,
-897,587.49
00 92 7 62
(or less: 99,993,195.7 1,016,532,640.
96,354,666.83 1,377,025.00 28,614,899.29 92,2
5 28
1,361,453,754.
come 1,377,025.00 30,2
17
withdrawn by 99,993,195.7
96,354,666.83 71,4
5
ted by 99,993,195.7 109,
5
olders of
payment
1,196,651.67 30
95,158,015.16 -38,0
-344,921,113.8
28,614,899.29 -9,45
9
reserve 28,614,899.29 -28,614,899.29
risk reserve
-316,306,214.6
o owners -9,45
0
hin equity
ve to capital
ve to capital
losses
fit plan
nings
come carried
period 8,203,248.10
eriod -8,203,248.10
3,163,062,146. 9,698,117,762. 99,993,195.7 232,701,943.5 2,520,329,621. 252,
urrent period 479,437.51
00 75 5 6 90
tive： Company’s Chief Financial Officer: Head of the Company’s Accounting Departm
Lu Anfeng
141
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Infore Environment Technology Group Co., Ltd.
Parent company statement of changes in equity for the year ended December 31, 2020
(Expressed in Renminbi Yuan)
Current period cumulative
Other equity instruments
Items Less: Other
Special Surplus Undistributed
Share capital Preferred Perpetu Capital reserve Treasury comprehensi
al Others reserve reserve profit
shares shares ve income
bonds
3,163,062,146. 15,345,428,341. 99,993,195.7 198,481,554.1 1,001,411,231.
end of prior year
00 90 5 4 44
e changes of accounting
ion of prior period
3,163,062,146. 15,345,428,341. 99,993,195.7 198,481,554.1 1,001,411,231.
e beginning of current year
00 90 5 4 44
266,939,831.6 -91,072,597. -498,906,218.7
od increase (or less: decrease) 11,260,547.82 -
5 92 2
-150,969,382.6
hensive income -
6
ributed or withdrawn by 266,939,831.6 -91,072,597.
11,260,547.82
5 92
es contributed by owners 8,920,597.83
buted by holders of other 266,939,831.6
nts 5
are-based payment included
11,260,547.82
-99,993,195.
75
-347,936,836.0
bution -
6
n of surplus reserve
-347,936,836.0
n of profit to owners -
6
ry-over within equity
pital reserve to capital
rplus reserve to capital
ve to cover losses
efined benefit plan carried
earnings
hensive income carried over
ngs
rve
n of current period
f current period
3,163,062,146. 266,939,831.6 15,356,688,889. 198,481,554.1 502,505,012.7
he end of current period 8,920,597.83
00 5 72 4 2
l representative： Company’s Chief Financial Officer: Head of the Company’s Accounting Department: W
Lu Anfeng
142
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Infore Environment Technology Group Co., Ltd.
Parent company statement of changes in equity for the year ended December 31, 2020 (continued)
(Expressed in Renminbi Yuan)
Preceding period comparative
Other equity instruments Less: Other
Items Special Surplus Undistributed
Share capital Preferred Perpetua Capital reserve Treasury comprehensive
Others reserve reserve profit
shares l bonds shares income
3,163,062,146. 15,344,231,690. 140,891,625.0 155,377,168.9 923,086,714.2 1
e end of prior year
00 23 0 5 6
ve changes of accounting -140,891,625.0 126,802,462.5
14,089,162.50
0 0
tion of prior period
3,163,062,146. 15,344,231,690. 169,466,331.4 1,049,889,176. 1
he beginning of current year
00 23 5 76
99,993,195.7
iod increase (or less: decrease) 1,196,651.67 29,015,222.69 -48,477,945.32 -1
5
286,148,992.9
ehensive income 2
3
tributed or withdrawn by 99,993,195.7
1,196,651.67
5
99,993,195.7
res contributed by owners
5
ibuted by holders of other
ents
hare-based payment included
1,196,651.67
-344,921,113.8
ribution 28,614,899.29 -3
9
n of surplus reserve 28,614,899.29 -28,614,899.29
-316,306,214.6
n of profit to owners -3
0
rry-over within equity
apital reserve to capital
urplus reserve to capital
rve to cover losses
efined benefit plan carried
d earnings
ehensive income carried over
ings
erve
n of current period
of current period
400,323.40 10,294,175.64
3,163,062,146. 15,345,428,341. 99,993,195.7 198,481,554.1 1,001,411,231. 1
the end of current period
00 90 5 4 44
al representative： Company’s Chief Financial Officer: Head of the Company’s Accounting Department: W
Lu Anfeng
143
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Infore Environment Technology Group Co., Ltd.
Notes to Financial Statements
For the year ended December 31, 2020
Monetary unit: RMB Yuan
I. Company profile
Infore Environment Technology Group Co., Ltd. (the “Company”), formerly known as 浙江上风实业股份有限
公司 (Zhejiang Shangfeng Industrial Co., Ltd.1), was registered at Zhejiang Administration for Industry and
Commerce on November 18, 1993. Under the approval of Zhejiang Share System Pilot Work Coordination Group
with document of approval numbered Zhe Gu [1993] 51, the Company was established by 浙江风机风冷设备公
司 (Zhejiang Fan Air Cooling Equipment Co., Ltd.*), the main initiator, and 上虞风机厂 (Shangyu Fan Factory*)
and 绍兴市流体工程研究所 (Shaoxing Fluid Engineering Research Institute*), the joint initiators, through
targeted fundraising. It is headquartered in Shaoxing City, Zhejiang Province. The Company currently holds a
business license with unified social credit code of 913300006096799222. As of December 31, 2020, its registered
capital is 3,163,062,146.00 yuan, a total of 3,163,062,146 shares (each with par value of 1 yuan), of which,
1,158,356,644shares are restricted outstanding shares, and 2,004,705,502 shares are unrestricted outstanding
shares. The Company’s shares were listed at Shenzhen Stock Exchange on March 30, 2000.
The Company belongs to the ecological protection and environmental management industry. The main business
activities include R&D, maintenance and operation services of environmental monitoring instruments and
environmental sanitation equipment, environmental treatment technology development, consulting and services,
operation services of environmental treatment facilities, environmental engineering, environmental protection
engineering, urban engineering, sale of ventilators, air-cooling, and water-cooling and air-conditioning equipment,
etc. The main product categories include sanitation vehicles and equipment, electrotechnical equipment industrial
products, ventilation equipment industrial products and environmental integrated industrial services.
The financial statements were approved and authorized for issue by the 13th meeting of the ninth session of the
Board of Directors dated April 22, 2021.
The Company has brought 136 subsidiaries and sub-subsidiaries including 长沙中联重科环境产业有限公司
(Changsha Zoomlion Environmental Industry Co., Ltd.*, hereinafter referred to as Zoomlion Environmental
Company), 浙江上风高科专风实业股份有限公司 (Zhejiang Shangfeng Hi-Tech Zhuanfeng Industrial Co.,
Ltd.*, hereinafter referred to as Shangfeng Industrial Company), 广东威奇电工材料有限公司 (Guangdong
Weiqi Electrical Materials Co., Ltd.*, hereinafter referred to as Guangdong Weiqi Company),广东盈峰科技有限
公司 (Guangdong Infore Technology Co., Ltd.*, hereinafter referred to as Infore Technology Company) and 深
1
The English names are for identification purpose only.
*
The English names are for identification purpose only.
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圳市绿色东方环保有限公司 (Shenzhen Green Oriental Environmental Protection Co., Ltd.*, hereinafter referred
to as Green Oriental Company)into the consolidation scope. Please refer to section VI and VII of notes to financial
statements for details.
II. Preparation basis of the financial statements
(I) Preparation basis
The financial statements have been prepared on the basis of going concern.
(II) Assessment of the ability to continue as a going concern
The Company has no events or conditions that may cast significant doubts upon the Company’s ability to continue
as a going concern within the 12 months after the balance sheet date.
III. Significant accounting policies and estimates
Important note:
The Company has set up accounting policies and estimates on transactions or events such as impairment of
financial instruments, depreciation of fixed assets, amortization of intangible assets, and revenue recognition, etc.
based on the Company’s actual production and operation features.
(I) Statement of compliance
The financial statements have been prepared in accordance with the requirements of China Accounting Standards
for Business Enterprises (CASBEs), and present truly and completely the financial position, results of operations
and cash flows of the Company.
(II) Accounting period
The accounting year of the Company runs from January 1 to December 31 under the Gregorian calendar.
(III) Operating cycle
The Company has a relatively short operating cycle for its business, an asset or a liability is classified as current if
it is expected to be realized or due within 12 months.
(IV) Functional currency
The Company’s functional currency is Renminbi (RMB) Yuan.
(V) Accounting treatments of business combination under and not under common control
1. Accounting treatment of business combination under common control
Assets and liabilities arising from business combination are measured at carrying amount of the combined party
included in the consolidated financial statements of the ultimate controlling party at the combination date.
Difference between carrying amount of the equity of the combined party included in the consolidated financial
statements of the ultimate controlling party and that of the combination consideration or total par value of shares
issued is adjusted to capital reserve, if the balance of capital reserve is insufficient to offset, any excess is adjusted
to retained earnings.
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2. Accounting treatment of business combination not under common control
When combination cost is in excess of the fair value of identifiable net assets obtained from the acquiree at the
acquisition date, the excess is recognized as goodwill; otherwise, the fair value of identifiable assets, liabilities
and contingent liabilities, and the measurement of the combination cost are reviewed, then the difference is
recognized in profit or loss.
(VI) Compilation method of consolidated financial statements
The parent company brings all its controlled subsidiaries into the consolidation scope. The consolidated financial
statements are compiled by the parent company according to “CASBE 33 – Consolidated Financial Statements”,
based on relevant information and the financial statements of the parent company and its subsidiaries.
(VII) Classification of joint arrangements and accounting treatment of joint operations
1. Joint arrangements include joint operations and joint ventures.
2. When the Company is a joint operator of a joint operation, it recognizes the following items in relation to its
interest in a joint operation:
(1) its assets, including its share of any assets held jointly;
(2) its liabilities, including its share of any liabilities incurred jointly;
(3) its revenue from the sale of its share of the output arising from the joint operation;
(4) its share of the revenue from the sales of the assets by the joint operation; and
(5) its expenses, including its share of any expenses incurred jointly.
(VIII) Recognition criteria of cash and cash equivalents
Cash as presented in cash flow statement refers to cash on hand and deposit on demand for payment. Cash
equivalents refer to short-term, highly liquid investments that can be readily converted to cash and that are subject
to an insignificant risk of changes in value.
(IX) Foreign currency translation
1. Translation of transactions denominated in foreign currency
Transactions denominated in foreign currency are translated into RMB yuan at the spot exchange rate at the
transaction date at initial recognition. At the balance sheet date, monetary items denominated in foreign currency
are translated at the spot exchange rate at the balance sheet date with difference, except for those arising from the
principal and interest of exclusive borrowings eligible for capitalization, included in profit or loss; non-cash items
carried at historical costs are translated at the spot exchange rate at the transaction date, with the RMB amounts
unchanged; non-cash items carried at fair value in foreign currency are translated at the spot exchange rate at the
date when the fair value was determined, with difference included in profit or loss or other comprehensive
income.
2. Translation of financial statements measured in foreign currency
The assets and liabilities in the balance sheet are translated into RMB at the spot rate at the balance sheet date; the
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equity items, other than undistributed profit, are translated at the spot rate at the transaction date; the revenues and
expenses in the income statement are translated into RMB at the spot exchange rate at the transaction date. The
difference arising from the aforementioned foreign currency translation is included in other comprehensive
income.
(X) Financial instruments
1. Classification of financial assets and financial liabilities
Financial assets are classified into the following three categories when initially recognized: (1) financial assets at
amortized cost; (2) financial assets at fair value through other comprehensive income; (3) financial assets at fair
value through profit or loss.
Financial liabilities are classified into the following four categories when initially recognized: (1) financial
liabilities at fair value through profit or loss; (2) financial liabilities that arise when a transfer of a financial asset
does not qualify for derecognition or when the continuing involvement approach applies; (3) financial guarantee
contracts not fall within the above categories (1) and (2), and commitments to provide a loan at a below-market
interest rate, which do not fall within the above category (1); (4) financial liabilities at amortized cost.
2. Recognition criteria, measurement method and derecognition condition of financial assets and financial
liabilities
(1) Recognition criteria and measurement method of financial assets and financial liabilities
When the Company becomes a party to a financial instrument, it is recognized as a financial asset or financial
liability. The financial assets and financial liabilities initially recognized by the Company are measured at fair
value; for the financial assets and liabilities at fair value through profit or loss, the transaction expenses thereof are
directly included in profit or loss; for other categories of financial assets and financial liabilities, the transaction
expenses thereof are included into the initially recognized amount. However, at initial recognition, for accounts
receivable that do not contain a significant financing component or contracts in which the financing components
with associated period less than one year are not considered, the Company measures at their transaction price in
accordance with “CASBE 14 – Revenues”.
(2) Subsequent measurement of financial assets
1) Financial assets measured at amortized cost
The Company measures its financial assets at the amortized costs using effective interest method. Gains or losses
on financial assets that are measured at amortized cost and are not part of hedging relationships shall be included
into profit or loss when the financial assets are derecognized, reclassified, amortized using effective interest
method or recognized with impairment loss.
2) Debt instrument investments at fair value through other comprehensive income
The Company measures its debt instrument investments at fair value. Interests, impairment gains or losses, and
gains and losses on foreign exchange that calculated using effective interest method shall be included into profit
or loss, while other gains or losses are included into other comprehensive income. Accumulated gains or losses
that initially recognized as other comprehensive income should be transferred out into profit or loss when the
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financial assets are derecognized.
3) Equity instrument investments at fair value through other comprehensive income
The Company measures its equity instrument investments at fair value. Dividends obtained (other than those as
part of investment cost recovery) shall be included into profit or loss, while other gains or losses are included into
other comprehensive income. Accumulated gains or losses that initially recognized as other comprehensive
income should be transferred out into retained earnings when the financial assets are derecognized.
4) Financial assets at fair value through profit or loss
The Company measures its financial assets at fair value. Gains or losses arising from changes in fair value
(including interests and dividends) shall be included into profit or loss, except for financial assets that are part of
hedging relationships.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities (including
derivatives that are liabilities) and financial liabilities designated as at fair value through profit or loss. The
Company measures such kind of liabilities at fair value. The amount of changes in the fair value of the financial
liabilities that are attributable to changes in the Company’s own credit risk shall be included into other
comprehensive income, unless such treatment would create or enlarge accounting mismatches in profit or loss.
Other gains or losses on those financial liabilities (including interests, changes in fair value that are attributable to
reasons other than changes in the Company’s own credit risk) shall be included into profit or loss, except for
financial liabilities that are part of hedging relationships. Accumulated gains or losses that originally recognized
as other comprehensive income should be transferred out into retained earnings when the financial liabilities are
derecognized.
2) Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the
continuing involvement approach applies
The Company measures its financial liabilities in accordance with “CASBE 23 – Transfer of Financial Assets”.
3)Financial guarantee contracts not fall within the above categories 1) and 2), and commitments to provide a loan
at a below-market interest rate, which do not fall within the above category 1)
The Company measures its financial liabilities at the higher of: a. the amount of loss allowances in accordance
with impairment requirements of financial instruments; b. the amount initially recognized less the amount of
accumulated amortization recognized in accordance with “CASBE 14 – Revenues”.
4) Financial liabilities at amortized cost
The Company measures its financial liabilities at amortized cost using effective interest method. Gains or losses
on financial liabilities that are measured at amortized cost and are not part of hedging relationships shall be
included into profit or loss when the financial liabilities are derecognized and amortized using effective interest
method.
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(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when:
a. the contractual rights to the cash flows from the financial assets expire; or
b. the financial assets have been transferred and the transfer qualifies for derecognition in accordance with
“CASBE 23 – Transfer of Financial Assets”.
2) Only when the underlying present obligations of a financial liability are relieved totally or partly may the
financial liability be derecognized accordingly.
3. Recognition criteria and measurement method of financial assets transfer
Where the Company has transferred substantially all of the risks and rewards related to the ownership of the
financial asset, it derecognizes the financial asset, and any right or liability arising from such transfer is
recognized independently as an asset or a liability. If it retained substantially all of the risks and rewards related to
the ownership of the financial asset, it continues recognizing the financial asset. Where the Company does not
transfer or retain substantially all of the risks and rewards related to the ownership of a financial asset, it is dealt
with according to the circumstances as follows respectively: (1) if the Company does not retain its control over the
financial asset, it derecognizes the financial asset, and any right or liability arising from such transfer is
recognized independently as an asset or a liability; (2) if the Company retains its control over the financial asset,
according to the extent of its continuing involvement in the transferred financial asset, it recognizes the related
financial asset and recognizes the relevant liability accordingly.
If the transfer of an entire financial asset satisfies the conditions for derecognition, the difference between the
amounts of the following two items are included in profit or loss: (1) the carrying amount of the transferred
financial asset as of the date of derecognition; (2) the sum of consideration received from the transfer of the
financial asset, and the accumulative amount of the changes of the fair value originally included in other
comprehensive income proportionate to the transferred financial asset (financial assets transferred refer to debt
instrument investments at fair value through other comprehensive income). If the transfer of financial asset
partially satisfies the conditions to derecognition, the entire carrying amount of the transferred financial asset is,
between the portion which is derecognized and the portion which is not, apportioned according to their respective
relative fair value, and the difference between the amounts of the following two items are included into profit or
loss: (1) the carrying amount of the portion which is derecognized; (2) the sum of consideration of the portion
which is derecognized, and the portion of the accumulative amount of the changes in the fair value originally
included in other comprehensive income which is corresponding to the portion which is derecognized (financial
assets transferred refer to debt instrument investments at fair value through other comprehensive income).
4. Fair value determination method of financial assets and liabilities
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value. The inputs to valuation techniques used to measure fair value are arranged in the
following hierarchy and used accordingly:
(1) Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the
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Company can access at the measurement date.
(2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active
markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than
quoted prices that are observable for the asset or liability, for example, interest rates and yield curves observable at
commonly quoted intervals; market-corroborated inputs;
(3) Level 3 inputs are unobservable inputs for the asset or liability. Level 3 inputs include interest rate that is not
observable and cannot be corroborated by observable market data at commonly quoted intervals, historical
volatility, future cash flows to be paid to fulfill the disposal obligation assumed in business combination, and
financial forecast developed using the Company’s own data, etc.
5. Impairment of financial instruments
(1) Measurement and accounting treatment
The Company, on the basis of expected credit loss, recognizes loss allowances of financial assets at amortized cost,
debt instrument investments, contract assets or leases receivable at fair value through other comprehensive income,
loan commitments other than financial liabilities at fair value through profit or loss, financial guarantee contracts
not belong to financial liabilities at fair value through profit or loss or financial liabilities that arise when a transfer
of a financial asset does not qualify for derecognition or when the continuing involvement approach applies.
Expected credit losses refer to the weighted average of credit losses with the respective risks of a default occurring
as the weights. Credit loss refers to the difference between all contractual cash flows that are due to the Company
in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls),
discounted at the original effective interest rate. Among which, purchased or originated credit-impaired financial
assets are discounted at the credit-adjusted effective interest rate.
At the balance sheet date, the Company shall only recognize the cumulative changes in the lifetime expected
credit losses since initial recognition as a loss allowance for purchased or originated credit-impaired financial
assets.
For accounts receivable and contract assets that do not contain a significant financing component or financing
components in contracts with associated period less than one year that are not considered by the Company, which
result from transactions as regulated in “CASBE 14 – Revenues”, the Company chooses simplified approach to
measure the loss allowance at an amount equal to lifetime expected credit losses.
For lease receivables, accounts receivable and contract assets that result from transactions as regulated in
“CASBE 14 – Revenues” and contain a significant financing component, the Company chooses simplified
approach to measure the loss allowance at an amount equal to lifetime expected credit losses.
For financial assets other than the above, on each balance sheet date, the Company shall assess whether the credit
risk on the financial instrument has increased significantly since initial recognition. The Company shall measure
the loss allowance for the financial instrument at an amount equal to the lifetime expected credit losses if the
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credit risk on that financial instrument has increased significantly since initial recognition; otherwise, the
Company shall measure the loss allowance for that financial instrument at an amount equal to 12-month expected
credit loss.
Considering reasonable and supportable forward-looking information, the Company compares the risk of a default
occurring on the financial instrument as at the balance sheet date with the risk of a default occurring on the
financial instrument as at the date of initial recognition, so as to assess whether the credit risk on the financial
instrument has increased significantly since initial recognition.
The Company may assume that the credit risk on a financial instrument has not increased significantly since initial
recognition if the financial instrument is determined to have relatively low credit risk at the balance sheet date.
The Company shall estimate expected credit risk and measure expected credit losses on an individual or a
collective basis. When the Company adopts the collective basis, financial instruments are grouped with similar
credit risk features.
The Company shall remeasure expected credit loss on each balance sheet date, and increased or reversed amounts
of loss allowance arising therefrom shall be included into profit or loss as impairment losses or gains. For a
financial asset measured at amortized cost, the loss allowance reduces the carrying amount of such financial asset
presented in the balance sheet; for a debt investment measured at fair value through other comprehensive income,
the loss allowance shall be recognized in other comprehensive income and shall not reduce the carrying amount of
such financial asset.
(2) Financial instruments with expected credit risk assessed and expected credit losses measured on a collective
basis
Items Basis for determination of
Method for measuring expected credit loss
portfolio
Based on historical credit loss experience,
the current situation and the forecast of
Other receivables – Portfolio grouped with
Balance due from related parties future economic conditions, the Company
balance due from related parties within the
within the consolidation scope calculates expected credit loss through
consolidation scope
exposure at default and 12-month or lifetime
expected credit loss rate.
Based on historical credit loss experience,
the current situation and the forecast of
Ages future economic conditions, the Company
Other receivables – Portfolio grouped with ages
calculates expected credit loss through
exposure at default and 12-month or lifetime
expected credit loss rate.
Based on historical credit loss experience,
the current situation and the forecast of
Long-term receivables – Portfolio grouped with
Nature of the balance future economic conditions, the Company
equity transfer payment received in
calculates expected credit loss through
installments
exposure at default and 12-month or lifetime
expected credit loss rate.
Managed by five-level classification of credit
assets of non-bank financial institutions and
Long-term receivables – Portfolio grouped with expected credit loss rates are calculated
finance lease payment/ Accounts receivable – Nature of the balance accordingly: 1.5% for pass category, 3% for
Commercial factoring payment special-mention category, 30% for
substandard category, 60% for doubtful
category, and 100% for loss category
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(3) Accounts receivable and contract assets with expected credit losses measured on a collective basis
1) Specific portfolios and method for measuring expected credit loss
Items Basis for determination of Method for measuring expected credit loss
portfolio
Based on historical credit loss experience,
the current situation and the forecast of
Bank acceptance receivable future economic conditions, the Company
Type of notes calculates expected credit loss through
exposure at default and lifetime expected
Trade acceptance receivable credit loss rate.
Based on historical credit loss experience,
the current situation and the forecast of
Accounts receivable – Portfolio grouped with
Balance due from related parties future economic conditions, the Company
balance due from related parties within the
within the consolidation scope calculates expected credit loss through
consolidation scope
exposure at default and lifetime expected
credit loss rate.
Based on historical credit loss experience,
the current situation and the forecast of
future economic conditions, the Company
Accounts receivable – Portfolio grouped with Nature of the balance prepares the comparable table between
ages
overdue days/ages and lifetime expected
credit loss rate, and calculates expected
credit loss of the portfolio.
Based on historical credit loss experience,
the current situation and the forecast of
future economic conditions, the Company
Contract assets – Portfolio grouped with ages Nature of the balance prepares the comparable table between
overdue days/ages and lifetime expected
credit loss rate, and calculates expected
credit loss of the portfolio.
For long-term receivables within the credit
period that has not reached the contractual
payment deadline, provision for bad debts is
Long-term receivables – Portfolio grouped with Nature of the balance accrued at 5% of the balance. For long-term
ages receivables that have exceeded the
contractual payment deadline and have not
yet been paid, provision for bad debts is
accrued based on the age of the balance.
2) Accounts receivable – comparison table of ages and lifetime expected credit loss rate of portfolio grouped with
ages
① Parent company and electrotechnical equipment manufacturing industry
Ages Expected credit loss rate of accounts Expected credit loss rate of other
receivable (%) receivables (%)
1-180 days (inclusive, the same hereinafter) 0 0
180 days-1 year 2 2
1-2 years 10 10
2-3 years 30 30
3-5 years 50 50
Over 5 years 80 80
② Ventilation equipment manufacturing industry and environmental integrated industry
Ages Expected credit loss rate of accounts Expected credit loss rate of other
receivable (%) receivables (%)
Within 1 year (inclusive, the same hereinafter) 5 5
1-2 years 10 10
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2-3 years 30 30
3-5 years 50 50
Over 5 years 100 100
6. Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are presented separately in the balance sheet and are not offset. However,
the Company offsets a financial asset and a financial liability and presents the net amount in the balance sheet
when, and only when, the Company: (a) currently has a legally enforceable right to set off the recognized amounts;
and (b) intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
For a transfer of a financial asset that does not qualify for derecognition, the Company does not offset the
transferred asset and the associated liability.
(XI) Inventories
1. Classification of inventories
Inventories include finished goods or goods held for sale in the ordinary course of business, work in process in the
process of production, and materials or supplies etc. to be consumed in the production process or in the rendering
of services.
2. Accounting method for dispatching inventories:
Inventories dispatched from storage are accounted for with weighted average method.
3. Basis for determining net realizable value
At the balance sheet date, inventories are measured at the lower of cost and net realizable value; provisions for
inventory write-down are made on the excess of its cost over the net realizable value. The net realizable value of
inventories held for sale is determined based on the amount of the estimated selling price less the estimated selling
expenses and relevant taxes and surcharges in the ordinary course of business; the net realizable value of materials
to be processed is determined based on the amount of the estimated selling price less the estimated costs of
completion, selling expenses and relevant taxes and surcharges in the ordinary course of business; at the balance
sheet date, when only part of the same item of inventories have agreed price, their net realizable value is
determined separately and is compared with their costs to set the provision for inventory write-down to be made
or reversed.
4. Inventory system
Perpetual inventory method is adopted.
5. Amortization method of low-value consumables and packages
(1) Low-value consumables
Low-value consumables are amortized with one-off method.
(2) Packages
Packages are amortized with one-off method.
(XII) Contract costs
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Assets related to contract costs including costs of obtaining a contract and costs to fulfil a contract.
The Company recognizes as an asset the incremental costs of obtaining a contract if those costs are expected to be
recovered. The costs of obtaining a contract shall be included into profit or loss when incurred if the amortization
period of the asset is one year or less.
If the costs incurred in fulfilling a contract are not within the scope of standards related to inventories, fixed assets
or intangible assets, etc., the Company shall recognize the costs to fulfil a contract as an asset if all the following
criteria are satisfied:
1. The costs relate directly to a contract or to an anticipated contract, including direct labor, direct materials,
manufacturing overhead cost (or similar cost), cost that are explicitly chargeable to the customer under the
contract, and other costs that are only related to the contract;
2. The costs enhance resources of the Company that will be used in satisfying performance obligations in the
future; and
3. The costs are expected to be recovered.
An asset related to contract costs shall be amortized on a systematic basis that is consistent with related goods or
services, with amortization included into profit or loss.
The Company shall make provision for impairment and recognize an impairment loss to the extent that the
carrying amount of an asset related to contract costs exceeds the remaining amount of consideration that the
Company expects to receive in exchange for the goods or services to which the asset relates less the costs
expected to be incurred. The Company shall recognize a reversal of an impairment loss previously recognized in
profit or loss when the impairment conditions no longer exist or have improved. The carrying amount of the asset
after the reversal shall not exceed the amount that would have been determined on the reversal date if no provision
for impairment had been made previously.
(XIII) Non-current assets or disposal groups classified as held for sale
1. Classification of non-current assets or disposal groups as held for sale
Non-current assets or disposal groups are accounted for as held for sale when the following conditions are all met:
a. the asset must be available for immediate sale in its present condition subject to terms that are usual and
customary for sales of such assets or disposal groups; b. its sales must be highly probable, i.e., the Company has
made a decision on the sale plan and has obtained a firm purchase commitment, and the sale is expected to be
completed within one year.
When the Company acquires a non-current asset or disposal group with a view to resale, it shall classify the
non-current asset or disposal group as held for sale at the acquisition date only if the requirement of “expected to
be completed within one year” is met at that date and it is highly probable that other criteria for held for sale will
be met within a short period (usually within three months).
An asset or a disposal group is still accounted for as held for sale when the Company remains committed to its
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
plan to sell the asset or disposal group in the circumstance that non-related party transactions fail to be completed
within one year due to one of the following reasons: a. a buyer or others unexpectedly set conditions that will
extend the sale period, while the Company has taken timely actions to respond to the conditions and expects a
favorable resolution of the delaying factors within one year since the setting; (2) a non-current asset or disposal
group classified as held for sale fails to be sold within one year due to rare cases, and the Company has taken
action necessary to respond to the circumstances during the initial one-year period and the criteria for held for sale
are met.
2. Measurement of non-current assets or disposal groups as held for sale
(1) Initial measurement and subsequent measurement
For initial measurement and subsequent measurement as at the balance sheet date of a non-current asset or
disposal group as held for sale, where the carrying amount is higher than the fair value less costs to sell, the
carrying amount is written down to the fair value less costs to sell, and the write-down is recognized in profit or
loss as assets impairment loss, meanwhile, provision for impairment of assets as held for sale shall be made.
For a non-current asset or disposal group classified as held for sale at the acquisition date, the asset or disposal
group is measured on initial recognition at the lower of its initial measurement amount had it not been so
classified and fair value less costs to sell. Apart from the non-current asset or disposal group acquired through
business combination, the difference arising from the initial recognition of a non-current asset or disposal group at
the fair value less costs to sell shall be included into profit or loss.
The assets impairment loss recognized for a disposal group as held for sale shall reduce the carrying amount of
goodwill in the disposal group first, and then reduce its carrying amount based on the proportion of each
non-current asset’s carrying amount in the disposal group.
No provision for depreciation or amortization shall be made on non-current assets as held for sale or non-current
assets in disposal groups as held for sale, while interest and other expenses attributable to the liabilities of a
disposal group as held for sale shall continue to be recognized.
(2) Reversal of assets impairment loss
When there is a subsequent increase in fair value less costs to sell of a non-current asset as held for sale at the
balance sheet date, the write-down shall be recovered, and shall be reversed not in excess of the impairment loss
that has been recognized after the non-current asset was classified as held for sale. The reversal shall be included
into profit or loss. Assets impairment loss that has been recognized before the classification is not reversed.
When there is a subsequent increase in fair value less costs to sell of a disposal group as held for sale at the
balance sheet date, the write-down shall be recovered, and shall be reversed not in excess of the non-current assets
impairment loss that has been recognized after the disposal group was classified as held for sale. The reversal shall
be included into profit or loss. The reduced carrying amount of goodwill and non-current assets impairment loss
that has been recognized before the classification is not reversed.
For the subsequent reversal of the impairment loss that has been recognized in a disposal group as held for sale,
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the carrying amount is increased based on the proportion of carrying amount of each non-current asset (excluding
goodwill) in the disposal group.
(3) Non-current asset or disposal group that is no longer classified as held for sale and derecognized
A non-current asset or disposal group that does not met criteria for held for sale and no longer classified as held
for sale, or a non-current asset that removed from a disposal group as held for sale shall be measured at the lower
of: a. its carrying amount before it was classified as held for sale, adjusted for any depreciation, amortization or
impairment that would have been recognized had it not been classified as held for sale; and b. its recoverable
amount.
When a non-current asset or disposal group classified as held for sale is derecognized, unrecognized gains or
losses shall be included into profit or loss.
(XIV) Long-term equity investments
1. Judgment of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions
about the relevant activities require the unanimous consent of the parties sharing control. Significant influence is
the power to participate in the financial and operating policy decisions of the investee but is not control or joint
control of these policies.
2. Determination of investment cost
(1) For business combination under common control, if the consideration of the combining party is that it makes
payment in cash, transfers non-cash assets, assumes its liabilities or issues equity securities, on the date of
combination, it regards the share of the carrying amount of the equity of the combined party included in the
consolidated financial statements of the ultimate controlling party as the initial cost of the investment. The
difference between the initial cost of the long-term equity investments and the carrying amount of the combination
consideration paid or the par value of shares issued offsets capital reserve; if the balance of capital reserve is
insufficient to offset, any excess is adjusted to retained earnings.
When long-term equity investments are obtained through business combination under common control achieved
in stages, the Company determines whether it is a “bundled transaction”. If it is a “bundled transaction”, stages as
a whole are considered as one transaction in accounting treatment. If it is not a “bundled transaction”, on the date
of combination, investment cost is initially recognized at the share of the carrying amount of net assets of the
combined party included the consolidated financial statements of the ultimate controlling party. The difference
between the initial investment cost of long-term equity investments at the acquisition date and the carrying
amount of the previously held long-term equity investments plus the carrying amount of the consideration paid for
the newly acquired equity is adjusted to capital reserve; if the balance of capital reserve is insufficient to offset,
any excess is adjusted to retained earnings.
(2) For business combination not under common control, investment cost is initially recognized at the
acquisition-date fair value of considerations paid.
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When long-term equity investments are obtained through business combination not under common control
achieved in stages, the Company determined whether they are stand-alone financial statements or consolidated
financial statements in accounting treatment:
1) In the case of stand-alone financial statements, investment cost is initially recognized at the carrying amount of
the previously held long-term equity investments plus the carrying amount of the consideration paid for the newly
acquired equity.
2) In the case of consolidated financial statements, the Company determines whether it is a “bundled transaction”.
If it is a “bundled transaction”, stages as a whole are considered as one transaction in accounting treatment. If it is
not a “bundled transaction”, the carrying amount of the acquirer’s previously held equity interest in the acquiree is
remeasured at the acquisition-date fair value, and the difference between the fair value and the carrying amount is
recognized in investment income; when the acquirer’s previously held equity interest in the acquiree involves
other comprehensive income under equity method, the related other comprehensive income is reclassified as
income for the acquisition period, excluding other comprehensive income arising from changes in net liabilities or
assets from remeasurement of defined benefit plan of the acquiree.
(3) Long-term equity investments obtained through ways other than business combination: the initial cost of a
long-term equity investment obtained by making payment in cash is the purchase cost which is actually paid; that
obtained on the basis of issuing equity securities is the fair value of the equity securities issued; that obtained
through debt restructuring is determined according to “CASBE 12 – Debt Restructuring”; and that obtained
through non-cash assets exchange is determined according to “CASBE 7 – Non-cash Assets Exchange”.
3. Subsequent measurement and recognition method of profit or loss
For long-term equity investments with control relationship, it is accounted for with cost method; for long-term
equity investments with joint control or significant influence relationship, it is accounted for with equity method.
4. Disposal of a subsidiary in stages resulting in the Company’s loss of control
(1) Stand-alone financial statements
The difference between the carrying amount of the disposed equity and the consideration obtained thereof is
recognized in profit or loss. If the disposal does not result in the Company’s loss of significant influence or joint
control, the remained equity is accounted for with equity method; however, if the disposal results in the
Company’s loss of control, joint control, or significant influence, the remained equity is accounted for according
to “CASBE 22 – Financial Instruments: Recognition and Measurement”.
(2) Consolidated financial statements
1) Disposal of a subsidiary in stages not qualified as “bundled transaction” resulting in the Company’s loss of
control
Before the Company’s loss of control, the difference between the disposal consideration and the proportionate
share of net assets in the disposed subsidiary from acquisition date or combination date to the disposal date is
adjusted to capital reserve (capital premium), if the balance of capital reserve is insufficient to offset, any excess is
adjusted to retained earnings.
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When the Company loses control, the remained equity is remeasured at the loss-of-control-date fair value. The
aggregated value of disposal consideration and the fair value of the remained equity, less the share of net assets in
the disposed subsidiary held before the disposal from the acquisition date or combination date to the disposal date
is recognized in investment income in the period when the Company loses control over such subsidiary, and
meanwhile goodwill is offset correspondingly. Other comprehensive income related to equity investments in
former subsidiary is reclassified as investment income upon the Company’s loss of control.
2) Disposal of a subsidiary in stages qualified as “bundled transaction” resulting in the Company’s loss of control
In case of “bundled transaction”, stages as a whole are considered as one transaction resulting in loss of control in
accounting treatment. However, before the Company loses control, the difference between the disposal
consideration at each stage and the proportionate share of net assets in the disposed subsidiary is recognized as
other comprehensive income at the consolidated financial statements and reclassified as profit or loss in the period
when the Company loses control over such subsidiary.
(XV) Investment property
1. Investment property includes land use right of leased-out property and of property held for capital appreciation
and buildings that have been leased out.
2. The initial measurement of investment property is based on its cost, and subsequent measurement is made using
the cost model, the depreciation or amortization method is the same as that of fixed assets and intangible assets.
(XVI) Fixed assets
1. Recognition principles of fixed assets
Fixed assets are tangible assets held for use in the production of goods or rendering of services, for rental to others,
or for administrative purposes, and expected to be used during more than one accounting year. Fixed assets are
recognized if, and only if, it is probable that future economic benefits associated with the assets will flow to the
Company and the cost of the assets can be measured reliably.
2. Depreciation method of different categories of fixed assets
Categories Residual value proportion Annual depreciation rate
Depreciation method Useful life (years)
(%) (%)
Buildings and structures Straight-line method 3-35 3-5 1.90-19.40
General equipment Straight-line method 3-5 3-5 9.50-32.33
Special equipment Straight-line method 2-15 0-5 6.33-47.50
Transport facilities Straight-line method 3-15 3-5 9.50-32.33
Other equipment Straight-line method 3-10 5 9.50-31.67
(XVII) Construction in progress
1. Construction in progress is recognized if, and only if, it is probable that future economic benefits associated
with the item will flow to the Company, and the cost of the item can be measured reliably. Construction in
progress is measured at the actual cost incurred to reach its designed usable conditions.
2. Construction in progress is transferred into fixed assets at its actual cost when it reaches the designed usable
conditions. When the auditing of the construction in progress was not finished while reaching the designed usable
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conditions, it is transferred to fixed assets using estimated value first, and then adjusted accordingly when the
actual cost is settled, but the accumulated depreciation is not to be adjusted retrospectively.
(XVIII) Borrowing costs
1. Recognition principle of borrowing costs capitalization
Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and
construction or production of assets eligible for capitalization, it is capitalized and included in the costs of relevant
assets; other borrowing costs are recognized as expenses on the basis of the actual amount incurred, and are
included in profit or loss.
2. Borrowing costs capitalization period
(1) The borrowing costs are not capitalized unless the following requirements are all met: 1) the asset
disbursements have already incurred; 2) the borrowing costs have already incurred; and 3) the acquisition and
construction or production activities which are necessary to prepare the asset for its intended use or sale have
already started.
(2) Suspension of capitalization: where the acquisition and construction or production of a qualified asset is
interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the
borrowing costs is suspended; the borrowing costs incurred during such period are recognized as expenses, and
are included in profit or loss, till the acquisition and construction or production of the asset restarts.
(3) Ceasing of capitalization: when the qualified asset under acquisition and construction or production is ready
for the intended use or sale, the capitalization of the borrowing costs is ceased.
3. Capitalization rate and capitalized amount of borrowing costs
For borrowings exclusively for the acquisition and construction or production of assets eligible for capitalization,
the to-be-capitalized amount of interests is determined in light of the actual interest expenses incurred (including
amortization of premium or discount based on effective interest method) of the special borrowings in the current
period less the interest income on the unused borrowings as a deposit in the bank or as a temporary investment;
where a general borrowing is used for the acquisition and construction or production of assets eligible for
capitalization, the Company calculates and determines the to-be-capitalized amount of interests on the general
borrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset
disbursements less the general borrowing by the capitalization rate of the general borrowing used.
(XIX) Intangible assets
1. Intangible assets include land use right, patent right and non-patented technology etc. The initial measurement
of intangible assets is based on its cost.
2. For intangible assets with finite useful lives, their amortization amounts are amortized within their useful lives
systematically and reasonably, if it is unable to determine the expected realization pattern reliably, intangible
assets are amortized by the straight-line method with details as follows:
Items Amortization period (years)
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Items Amortization period (years)
Franchise Contractual term
Land use right 35-50
Proprietary technology Economic life cycle
Software 3-10
Other 5
3. Expenditures on the research phase of an internal project are recognized as profit or loss when they are incurred.
An intangible asset arising from the development phase of an internal project is recognized if the Company can
demonstrate all of the followings: (1) the technical feasibility of completing the intangible asset so that it will be
available for use or sale; (2) its intention to complete the intangible asset and use or sell it; (3) how the intangible
asset will generate probable future economic benefits, among other things, the Company can demonstrate the
existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used
internally, the usefulness of the intangible asset; (4) the availability of adequate technical, financial and other
resources to complete the development and to use or sell the intangible asset; and (5) its ability to measure reliably
the expenditure attributable to the intangible asset during its development.
Criteria for distinguishing the research phase from the development phase of an internal project to create an
intangible asset:
The planned investigation phase for acquiring new technology and knowledge should be defined as the research
phase, which has the characteristics of planning and exploratory nature; before commercial production or use,
when the research results or other knowledge are applied to a certain plan or design with the intention to produce
new or substantially improved materials, devices, products, etc., such stage should be determined as the
development phase, which has the characteristics of pertinence and greater possibility of forming results. The
Company divides the research and development phases by forming the prototype drawing and starting the
prototype trial production. Expenditures in the research phase of internal research and development projects are
included in profit or loss when they incur. When the Company enters the development phase, project expenditures
are first calculated by projects under “development expenditure”, and if the capitalization conditions are met, they
are reported as development expenditures in the financial statements. The project will be transferred to intangible
assets when the project has the conditions for sale or mass production.
(XX) Impairment of part of long-term assets
For long-term assets such as long-term equity investments, investment property at cost model, fixed assets,
construction in progress, intangible assets with finite useful lives, etc., if at the balance sheet date there is
indication of impairment, the recoverable amount is to be estimated. For goodwill recognized in business
combination and intangible assets with indefinite useful lives, no matter whether there is indication of impairment,
impairment test is performed annually. Impairment test on goodwill is performed on related asset group or asset
group portfolio.
When the recoverable amount of such long-term assets is lower than their carrying amount, the difference is
recognized as provision for assets impairment through profit or loss.
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(XXI) Long-term prepayments
Long-term prepayments are expenses that have been recognized but with amortization period over one year
(excluding one year). They are recorded with actual cost, and evenly amortized within the beneficiary period or
stipulated period. If items of long-term prepayments fail to be beneficial to the following accounting periods,
residual values of such items are included in profit or loss.
(XXII) Employee benefits
1. Employee benefits include short-term employee benefits, post-employment benefits, termination benefits and
other long-term employee benefits.
2. Short-term employee benefits
The Company recognizes, in the accounting period in which an employee provides service, short-term employee
benefits actually incurred as liabilities, with a corresponding charge to profit or loss or the cost of a relevant asset.
3. Post-employment benefits
The Company classifies post-employment benefit plans as either defined contribution plans or defined benefit
plans.
(1) The Company recognizes in the accounting period in which an employee provides service the contribution
payable to a defined contribution plan as a liability, with a corresponding charge to profit or loss or the cost of a
relevant asset.
(2) Accounting treatment by the Company for defined benefit plan usually involves the following steps:
1) In accordance with the projected unit credit method, using unbiased and mutually compatible actuarial
assumptions to estimate related demographic variables and financial variables, measure the obligations under the
defined benefit plan, and determine the periods to which the obligations are attributed. Meanwhile, the Company
discounts obligations under the defined benefit plan to determine the present value of the defined benefit plan
obligations and the current service cost;
2) When a defined benefit plan has assets, the Company recognizes the deficit or surplus by deducting the fair
value of defined benefit plan assets from the present value of the defined benefit plan obligation as a net defined
benefit plan liability or net defined benefit plan asset. When a defined benefit plan has a surplus, the Company
measures the net defined benefit plan asset at the lower of the surplus in the defined benefit plan and the asset
ceiling;
3) At the end of the period, the Company recognizes the following components of employee benefits cost arising
from defined benefit plan: a. service cost; b. net interest on the net defined benefit plan liability (asset); and c.
changes as a result of remeasurement of the net defined benefit liability (asset). Item a and item b are recognized
in profit or loss or the cost of a relevant asset. Item c is recognized in other comprehensive income and is not to be
reclassified subsequently to profit or loss. However, the Company may transfer those amounts recognized in other
comprehensive income within equity.
4. Termination benefits
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Termination benefits provided to employees are recognized as an employee benefit liability for termination
benefits, with a corresponding charge to profit or loss at the earlier of the following dates: a. when the Company
cannot unilaterally withdraw the offer of termination benefits because of an employment termination plan or a
curtailment proposal; or b. when the Company recognizes cost or expenses related to a restructuring that involves
the payment of termination benefits.
5. Other long-term employee benefits
When other long-term employee benefits provided to the employees satisfied the conditions for classifying as a
defined contribution plan, those benefits are accounted for in accordance with the requirements relating to defined
contribution plan, while other benefits are accounted for in accordance with the requirements relating to defined
benefit plan. The Company recognizes the cost of employee benefits arising from other long-term employee
benefits as the followings: a. service cost; b. net interest on the net liability or net assets of other long-term
employee benefits; and c. changes as a result of remeasurement of the net liability or net assets of other long-term
employee benefits. As a practical expedient, the net total of the aforesaid amounts is recognized in profit or loss or
included in the cost of a relevant asset.
(XXIII) Provisions
1. Provisions are recognized when fulfilling the present obligations arising from contingencies such as providing
guarantee for other parties, litigation, products quality guarantee, onerous contract, etc., may cause the outflow of
the economic benefit and such obligations can be reliably measured.
2. The initial measurement of provisions is based on the best estimated expenditures required in fulfilling the
present obligations, and its carrying amount is reviewed at the balance sheet date.
(XXIV) Share-based payment
1. Types of share-based payment
Share-based payment consists of equity-settled share-based payment and cash-settled share-based payment.
2. Accounting treatment for settlements, modifications and cancellations of share-based payment plans
(1) Equity-settled share-based payment
For equity-settled share-based payment transaction with employees, if the equity instruments granted vest
immediately, the fair value of those equity instruments is measured at grant date and recognized as transaction
cost or expense, with a corresponding adjustment in capital reserve; if the equity instruments granted do not vest
until the counterparty completes a specified period of service, at the balance sheet date within the vesting period,
the fair value of those equity instruments measured at grant date based on the best estimate of the number of
equity instruments expected to vest is recognized as transaction cost or expense, with a corresponding adjustment
in capital reserve.
For equity-settled share-based payment transaction with parties other than employees, if the fair value of the
services received can be measured reliably, the fair value is measured at the date the Company receives the service;
if the fair value of the services received cannot be measured reliably, but that of equity instruments can be
measured reliably, the fair value of the equity instruments granted measured at the date the Company receives the
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service is referred to, and recognized as transaction cost or expense, with a corresponding increase in equity.
(2) Cash-settled share-based payment
For cash-settled share-based payment transactions with employees, if share appreciation rights vest immediately,
the fair value of the liability incurred as the acquisition of services is measured at grant date and recognized as
transaction cost or expense, with a corresponding increase in liabilities; if share appreciation rights do not vest
until the employees have completed a specified period of service, the liability is measured, at each balance sheet
date until settled, at the fair value of the share appreciation rights measured at grant date based on the best
estimate of the number of share appreciation right expected to vest.
(3) Modifications and cancellations of share-based payment plan
If the modification increases the fair value of the equity instruments granted, the Company includes the
incremental fair value granted in the measurement of the amount recognized for services received as consideration
for the equity instruments granted; similarly, if the modification increases the number of equity instruments
granted, the Company includes the fair value of the additional equity instruments granted, in the measurement of
the amount recognized for services received as consideration for the equity instruments granted; if the Company
modifies the vesting conditions in a manner that is beneficial to the employee, the Company takes the modified
vesting conditions into account.
If the modification reduces the fair value of the equity instruments granted, the Company does not take into
account that decrease in fair value and continue to measure the amount recognized for services received as
consideration for the equity instruments based on the grant date fair value of the equity instruments granted; if the
modification reduces the number of equity instruments granted to an employee, that reduction is accounted for as
a cancellation of that portion of the grant; if the Company modifies the vesting conditions in a manner that is not
beneficial to the employee, the Company does not take the modified vesting conditions into account.
If the Company cancels or settles a grant of equity instruments during the vesting period (other than that cancelled
when the vesting conditions are not satisfied), the Company accounts for the cancellation or settlement as an
acceleration of vesting, and therefore recognizes immediately the amount that otherwise would have been
recognized for services received over the remainder of the vesting period.
(XXV) Other financial instruments such as preferred shares and perpetual bonds
Pursuant to CASBEs on financial instruments, “Regulations on Distinguishing Financial Liabilities and Equity
Instruments and Related Accounting Treatments” numbered Cai Kuai [2014] 13, and “Regulations on Accounting
Treatments of Perpetual Bonds” numbered Cai Kuai [2019] 2 by Ministry of Finance (MOF), for financial
instruments such as convertible bonds etc., the Company classifies a financial instrument or its components at
initial recognition as a financial asset or liability or equity instrument, based on contract terms and economic
essence it reveals instead of its legal form, combining with the definitions of financial asset, liability and equity
instrument.
At the balance sheet date, for a financial instrument classified as an equity instrument, its interest expenditure or
dividend distribution is treated as profit distribution, and share repurchase and cancelation are treated as changes
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in equity; for a financial instrument classified as a financial liability, its interest expenditure or dividend
distribution is treated as borrowing expense, and gain or loss on repurchase or redemption is included in profit or
loss.
(XXVI) Revenue
1. Revenue recognition principles
At contract inception, the Company shall assess the contracts and shall identify each performance obligation in the
contracts, and determine whether the performance obligation should be satisfied over time or at a point in time.
The Company satisfies a performance obligation over time if one of the following criteria are met, otherwise, the
performance obligation is satisfied at a point in time: (1) the customer simultaneously receives and consumes the
economic benefits provided by the Company’s performance as the Company performs; (2) the customer can
control goods as they are created by the Company’s performance; (3) goods created during the Company’s
performance have irreplaceable uses and the Company has an enforceable right to receive the payments for
performance completed to date during the whole contract period.
For each performance obligation satisfied over time, the Company shall recognize revenue over time by
measuring the progress towards complete satisfaction of that performance obligation. In the circumstance that the
progress cannot be measured reasonably, but the costs incurred in satisfying the performance obligation are
expected to be recovered, the Company shall recognize revenue only to the extent of the costs incurred until it can
reasonably measure the progress. For each performance obligation satisfied at a point in time, the Company shall
recognize revenue at the time point that the client obtains control of relevant goods or services. To determine
whether the customer has obtained control of goods, the Company shall consider the following indications: (1) the
Company has a present right to payment for the goods, i.e., the customer is presently obliged to pay for the goods;
(2) the Company has transferred the legal title of the goods to the customer, i.e., the customer has legal title to the
goods; (3) the Company has transferred physical possession of the goods to the client, i.e., the customer has
physically possessed the goods; (4) the Company has transferred significant risks and rewards of ownership of the
goods to the client, i.e., the customer has obtained significant risks and rewards of ownership of the goods; (5) the
customer has accepted the goods; (6) other evidence indicating the customer has obtained control over the goods.
2. Revenue measurement principle
(1) Revenue is measured at the amount of the transaction price that is allocated to each performance obligation.
The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for
transferring goods or services to a customer, excluding amounts collected on behalf of third parties and those
expected to be refunded to the customer.
(2) If the consideration promised in a contract includes a variable amount, the Company shall confirm the best
estimate of variable consideration at expected value or the most likely amount. However, the transaction price that
includes the amount of variable consideration only to the extent that it is high probable that a significant reversal
in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable
consideration is subsequently resolved.
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(3) In the circumstance that the contract contains a significant financing component, the Company shall determine
the transaction price based on the price that a customer would have paid for if the customer had paid cash for
obtaining control over those goods or services. The difference between the transaction price and the amount of
promised consideration is amortized under effective interest method over contractual period. The effects of a
significant financing component shall not be considered if the Company expects, at the contract inception, that the
period between when the customer obtains control over goods or services and when the customer pays
consideration will be one year or less.
(4) For contracts containing two or more performance obligations, the Company shall determine the stand-alone
selling price at contract inception of the distinct good underlying each performance obligation and allocate the
transaction price to each performance obligation on a relative stand-alone selling price basis.
3. Revenue recognition method
The Company mainly sells electromagnetic wires, ventilation equipment, environment and sanitation machinery,
etc., and engages in environmental integrated sanitation management and operation business and provides
supporting financial services.
(1) Sale of electromagnetic wires and ventilation equipment is a performance obligation satisfied at a point in time.
Revenue from domestic sales is recognized when the Company has delivered goods to the designated address as
agreed by contract and such delivered goods have been verified for acceptance by customers, and the Company
has collected the payments or has obtained the right to the payments, and related economic benefits are highly
probable to flow to the Company. Revenue from overseas sales is recognized when the Company has declared
goods to the customs based on contractual agreements and has obtained a bill of lading, and the Company has
collected the payments or has obtained the right to the payments, and related economic benefits are highly
probable to flow to the Company.
(2) For environment and sanitation machinery, environment and sanitation comprehensive management and
operation business, according to their different business models, revenue recognition methods are divided into
three types:
1) Sales of environment and sanitation machinery products are a performance obligation satisfied at a point in
time, and revenue is recognized when customers receive and consume the products, and the Company has
collected the payments or has obtained the right to the payments, and related economic benefits are highly
probable to flow to the Company.
2) Environment and sanitation comprehensive management business is a performance obligation satisfied over
time. Revenue is recognized at the percentage of completion of the performance obligation based on the
completion status confirmed by the project supervisor.
3) For revenue policies on PPP business with BOT models, please refer to section III (XXXIII) of notes to
financial statements – Other significant accounting policies and estimates – PPP business for details.
(3) For finance lease income, on the commencement date, the sum of the minimum lease payment and the initial
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direct cost is included in finance lease receivable, and the difference between the sum of the minimum lease
payment and the initial direct cost and its present value is recognized as unrealized finance income, which is
amortized during the lease term with the effective interest method, and included in finance income of the period
when it is amortized.
(XXVII) Government grants
1. Government grants shall be recognized if, and only if, the following conditions are all met: (1) the Company
will comply with the conditions attaching to the grants; (2) the grants will be received. Monetary government
grants are measured at the amount received or receivable. Non-monetary government grants are measured at fair
value, and can be measured at nominal amount in the circumstance that fair value cannot be assessed.
2. Government grants related to assets
Government grants related to assets are government grants with which the Company constructs or otherwise
acquires long-term assets under requirements of government. In the circumstances that there is no specific
government requirement, the Company shall determine based on the primary condition to acquire the grants, and
government grants related to assets are government grants whose primary condition is to construct or otherwise
acquire long-term assets. They offset carrying amount of relevant assets, or they are recognized as deferred
income. If recognized as deferred income, they are included in profit or loss on a systematic basis over the useful
lives of the relevant assets. Those measured at notional amount are directly included into profit or loss. For assets
sold, transferred, disposed or damaged within the useful lives, balance of unamortized deferred income is
transferred into profit or loss of the period in which the disposal occurred.
3. Government grants related to income
Government grants related to income are government grants other than those related to assets. For government
grants that contain both parts related to assets and parts related to income, in which those two parts are blurred,
they are thus collectively classified as government grants related to income. For government grants related to
income used for compensating the related future cost, expenses or losses, they are recognized as deferred income
and included in profit or loss or used to offset relevant cost during the period in which the relevant cost, expenses
or losses are recognized; for government grants related to income used for compensating the related cost,
expenses or losses incurred to the Company, they are directly included in profit or loss or used to offset relevant
cost.
4. Government grants related to the ordinary course of business shall be included into other income or used to
offset relevant cost based on business nature, while those not related to the ordinary course of business shall be
included into non-operating revenue or expenditures.
(XXVIII) Contract assets, contract liabilities
The Company presents contract assets or contract liabilities in the balance sheet based on the relationship between
its performance obligations and customers’ payments. Contract assets and contract liabilities under the same
contract shall offset each other and be presented on a net basis.
The Company presents an unconditional right to consideration (i.e., only the passage of time is required before the
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consideration is due) as a receivable, and presents a right to consideration in exchange for goods that it has
transferred to a customer (which is conditional on something other than the passage of time) as a contract asset.
The Company presents an obligation to transfer goods to a customer for which the Company has received
consideration (or the amount is due) from the customer as a contract liability.
(XXIX) Deferred tax assets/Deferred tax liabilities
1. Deferred tax assets or deferred tax liabilities are calculated and recognized based on the difference between the
carrying amount and tax base of assets and liabilities (and the difference of the carrying amount and tax base of
items not recognized as assets and liabilities but with their tax base being able to be determined according to tax
laws) and in accordance with the tax rate applicable to the period during which the assets are expected to be
recovered or the liabilities are expected to be settled.
2. A deferred tax asset is recognized to the extent of the amount of the taxable income, which it is most likely to
obtain and which can be deducted from the deductible temporary difference. At the balance sheet date, if there is
any exact evidence that it is probable that future taxable income will be available against which deductible
temporary differences can be utilized, the deferred tax assets unrecognized in prior periods are recognized.
3. At the balance sheet date, the carrying amount of deferred tax assets is reviewed. The carrying amount of a
deferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable income will be
available to allow the benefit of the deferred tax asset to be utilized. Such reduction is subsequently reversed to
the extent that it becomes probable that sufficient taxable income will be available.
4. The income tax and deferred tax for the period are treated as income tax expenses or income through profit or
loss, excluding those arising from the following circumstances: (a) business combination; and (b) the transactions
or items directly recognized in equity.
(XXX) Leases
1. Operating leases
When the Company is the lessee, lease payments are recognized as cost or profit or loss with straight-line method
over the lease term. Initial expenses are recognized directly into profit or loss. Contingent rents are charged as
profit or loss in the periods in which they are incurred.
When the Company is the lessor, lease income is recognized as profit or loss with straight-line method over the
lease term. Initial expenses, other than those with material amount and eligible for capitalization which are
recognized as profit or loss by installments, are recognized directly as profit or loss. Contingent rents are charged
as profit or loss in the periods in which they are incurred.
2. Finance leases
When the Company is the lessee, at the commencement of the lease term, lessees recognize finance leases as
assets and liabilities in their balance sheets at amounts equal to the lower of fair value of the leased property and
the present value of the minimum lease payments, each determined at the inception of the lease, and recognize the
minimum lease payments as the entering value of long-term payable, and treat the difference of the two as
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unrecognized finance expense. Any initial direct costs of the lessee are added to the amount recognized as an asset.
The effective interest method is used to recognize finance expense of the period during the lease term.
When the Company is the lessor, at the commencement of the lease, lessor recognizes the aggregate of minimum
lease receipts and initial direct costs, each determined at the inception of the lease, as the entering value of finance
lease receivables, and recognize the unguaranteed residual value at the same time. The difference between the
aggregate of the minimum lease receipts, the initial direct costs and the unguaranteed residual value, and the sum
of their present values is recognized as unrealized finance income. The effective interest method is used to
recognize finance income of the period during the lease term.
(XXXI) Work safety fund
The Company accrues work safety fund in accordance with the Circular on Management Measures on the Accrual
and Use of Work Safety Fund numbered Cai Qi [2012] 16 by MOF and State Administration of Work Safety.
Standard work safety fund is included in the cost or current profit or loss, meanwhile accounted for under “special
reserve”. When work safety fund is used as an expense, it is to offset special reserve directly. When work safety
fund is qualified to be included in the cost of fixed assets, it is accounted for under “construction in progress” and
transferred to fixed assets when related safety projects reach the designed useful conditions; meanwhile, the cost
included in fixed assets is to offset “special reserve”, and accumulated depreciation shall be recognized at the
same amount. Such fixed assets shall not be depreciated in future periods.
(XXXII) Segment reporting
Operating segments are determined based on the structure of the Company’s internal organization, management
requirements and internal reporting system. An operating segment is a component of the Company:
(1) that engages in business activities from which it may earn revenues and incur expenses;
(2) whose financial performance is regularly reviewed by the Management to make decisions about resource to be
allocated to the segment and to assess its performance; and
(3) for which accounting information regarding financial position, financial performance and cash flows is
available through analysis.
(XXXIII) Other significant accounting policies and estimates
1. PPP business
PPP is the abbreviation of Public-Private Partnerships. The so-called PPP model generally refers to a project
operation model under which, the private sector obtains the authorization of the public sector to finance, construct
and operate the project for a period of time after the completion of the construction, and to realize the best value
of funds by giving full play to the respective advantages of the public sector and the private sector. The PPP
model can be divided into build-operate-transfer (BOT), management contract (MC), commissioned operation
(OM), build-own-operate (BOO), transfer-operate-transfer (TOT), rebuild-operate-transfer (ROT), etc.
(1) Project construction period
The project company aggregates the actual expenditures incurred in the project and the capitalized interest
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
incurred as investment costs under “construction in progress”. Within a certain period after the completion of the
infrastructure as stipulated in the contract, the project company can unconditionally receive the definite amount of
payment from the contract grantor (that is, the guaranteed minimum recovery part) and the indefinite guaranteed
minimum recovery part, which are transferred to “long-term receivables” and “intangible assets” respectively after
the project is completed.
(2) Project operation period
During the concession operation period, the project company amortizes the “intangible assets” with straight-line
method, so that the income realized by the concession right is matched with the amortized cost, so as to
objectively reflect the status quo of the intangible assets. The Company’s specific accounting calculations are as
follows: during the operation period, costs incurred in operation and maintenance of the project are included in
“operating cost”, services provided in the current period are included in “operating revenue”, while the amortized
amount of “intangible assets” in the same period is included in “operating cost”.
(3) Project termination and transfer
When the project is terminated, the project company needs to transfer project assets to the government. Project
termination and transfer include free transfer upon maturity, charged transfer upon maturity, free transfer ahead of
maturity, and charged transfer ahead of maturity. Under most circumstances, it is free transfer upon maturity. No
special accounting treatment is required for the termination and transfer. Any expense incurred during the transfer
process is directly expensed.
2. Basis of the adoption of hedge accounting and its accounting treatment
(1) Hedge includes fair value hedge, cash flow hedge and hedge of a net investment in a foreign operation.
(2) A hedging relationship qualifies for hedge accounting if all of the following conditions are met: 1) the hedging
relationship consists only of eligible hedging instruments and eligible hedged instruments; 2) at the inception of
the hedge there is formal designation of hedging instruments and hedged item, and documentation of the hedging
relationship and the Company’s risk management objective and strategy for undertaking the hedge; 3) the hedging
relationship meets the hedging effectiveness requirements.
The Company recognizes that the hedging relationship meets effectiveness requirements if the all of the
followings are simultaneously satisfied: a. there is an economic relationship between the hedged item and the
hedging instruments; b. the effect of credit risk does not dominate the value changes that result from that
economic relationship between the hedged item and the hedging instruments; and c. the hedge ratio of the hedging
relationship is the same as the ratio of the quantity of the hedged item that the Company actually hedges and the
number of hedging instruments that the Company actually uses to hedge that quantity of hedged item, but does not
reflect an imbalance between the weightings of the hedged item and the hedging instrument.
The Company shall assess whether a hedging relationship meets the hedge effectiveness requirements at inception
and on an ongoing basis. If a hedging relationship ceases to meet the hedge effectiveness requirement relating to
the hedge ratio but the risk management objective for that designated hedging relationship remains the same, the
hedging relationship shall be rebalanced.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
(3) Hedge accounting
1) Fair value hedge
a. Gain or loss on the hedging instrument shall be recognized in profit or loss (or other comprehensive income, if
the hedging instrument hedges a non-trading equity instrument (or a component thereof) at fair value through
other comprehensive income).
b. The gain or loss on hedged item arising from risk exposure should be recognized in profit or loss, and
meanwhile, the carrying amount of the hedged item which is not measured at fair value should be adjusted. If the
hedged item is a financial asset (or a component thereof) that is measured at fair value through other
comprehensive income in accordance with article XVIII in “CASBE 22 - Financial Instruments: Recognition and
Measurement”, the gain or loss arising from the risk exposure on the hedged item shall be recognized in profit or
loss, with carrying amount unadjusted for it has already been measured at fair value; if the hedged item is a
non-trading equity instrument (or a component thereof) for which the Company has elected to present changes at
fair value through other comprehensive income, the gain or loss arising from the risk exposure on the hedged item
shall be recognized in profit or loss, with carrying amount unadjusted for it has already been measured at fair
value.
When a hedged item is an unrecognized firm commitment (or a component thereof), the cumulative change in fair
value of the hedged item subsequent to its designation is recognized as an asset or a liability with a corresponding
gain or loss recognized in profit or loss. When a firm commitment is performed to acquire an asset or assume a
liability, the initial carrying amount of the asset or the liability is adjusted to include the cumulative change in fair
value of the hedged item that was previously recognized.
For a hedged item that is a financial instrument (or a component thereof) measured at amortized cost, any
adjustment on the carrying amount of the hedged item shall be amortized to profit or loss based on a recalculated
effective interest rate at the date that amortization begins. In the case of a financial asset (or a component thereof)
that is a hedged item and that is measured at fair value through other comprehensive income in accordance with
article XVIII in “CASBE 22 - Financial Instruments: Recognition and Measurement”, amortization applies in the
same manner but to the amount that represents the cumulative gain or loss previously recognized, which shall be
subsequently recognized in profit or loss, instead of by adjusting the carrying amount.
2) Cash flow hedges
a. The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge shall be
recognized in other comprehensive income as cash flow hedge reserve, while the ineffective portion shall be
recognized in profit or loss. The cash flow hedge reserve shall be recognized at the lower of the following (in
absolute amounts): (i) the cumulative gain or loss on the hedging instrument from inception of the hedge; and (ii)
the cumulative change in present value of the expected future cash flows of the hedged item from inception of the
hedge.
b. If a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial
liability, or a hedged forecast transaction for a non-financial asset or non-financial liability becomes a firm
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
commitment for which fair value hedge accounting is applied, the Company shall transfer out the amount of cash
flow hedge reserve previously recognized in other comprehensive income, and include it in the initial cost of the
asset or the liability.
c. For other cash flow hedges, the amount of cash flow hedge reserve previously recognized in other
comprehensive income shall be transferred out into profit or loss in the same period the hedged forecast sale
affects profit or loss.
3) Hedges of a net investment in a foreign operation
The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognized
in other comprehensive income, and reclassified from other comprehensive income to profit or loss on the
disposal of the foreign operation; and the ineffective portion is recognized in profit or loss.
3. Accounting treatment related to share repurchase
When the Company repurchases its shares for the purpose of reducing its registered capital or rewarding its
employees, if the purchased shares are to be kept as treasury shares, the treasury shares are recorded at the cash
distributed to existing shareholders for repurchase; if the purchased shares are to be retired, the difference between
the total book value of shares retired and the cash distributed to existing shareholders for repurchase is to reduce
capital reserve, or retained earnings when the capital reserve is not enough to reduce. If the Company repurchases
vested equity instruments in equity-settled share-based payment transactions with employees, cost of treasury
shares granted to employees and capital reserve (other capital reserve) accumulated within the vesting period are
to be written off on the payment made to employees, with a corresponding adjustment in capital reserve (share
premium).
(XXXIV) Significant changes in accounting policies and estimates
1. Changes in accounting policies arising from changes in CASBEs
The Company has adopted the “CASBE 14 – Revenue” revised by the MOF since January 1, 2020. In accordance
with the relevant regulations for the convergence of the original and revised standards, the comparable period
information is not adjusted, and the cumulative impact of the implementation of the revised standards on the first
implementation date is retrospectively adjusted to the amount of retained earnings at the beginning of the
reporting period and other related items in the financial statements.
Financial statement items on January 1, 2020 significantly affected by the implementation of the revised revenue
standard and their amounts
Balance sheet
Items Adjustment due to the
December 31, 2019 implementation of the revised January 1, 2020
revenue standard
Accounts receivable 5,163,050,940.07 -250,482,933.77 4,912,568,006.30
Contract assets 197,287,015.51 197,287,015.51
Non-current assets due within 760,845,984.28 2,872,896.31 763,718,880.59
one year
Long-term receivables 1,152,179,083.21 -1,299,273.03 1,150,879,810.18
Other non-current assets 44,360,378.52 51,622,294.98 95,982,673.50
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Balance sheet
Items Adjustment due to the
December 31, 2019 implementation of the revised January 1, 2020
revenue standard
Advances received 170,610,799.52 -170,610,799.52
Contract liabilities 150,983,008.42 150,983,008.42
Other current liabilities 29,507,607.98 29,507,607.98
Deferred income 50,399,106.23 -9,879,816.88 40,519,289.35
2. The Company has adopted the “Interpretation of China Accounting Standards for Business Enterprises No. 13”
issued by the MOF in 2019 since January 1, 2020, and the prospective application method is applicable to changes
in accounting policies.
IV. Taxes
(I) Main taxes and tax rates
Taxes Tax bases Tax rates
3%, 6%, 9%, 13%.
The output tax calculated based on the revenue from sales of Exported goods are
Value-added tax (VAT) goods or rendering of services in accordance with the tax law, net subject to “exemption,
of the input tax that is allowed to be deducted in the current credit, refund” policies,
period with refund rate of 10%
or 13%.
For housing property levied on the basis of price, housing
property tax is levied at the rate of 1.2% of the balance after
Housing property tax deducting 30% of the cost; for housing property levied on the 1.2%, 12%
basis of rent, housing property tax is levied at the rate of 12% of
rent revenue.
Urban maintenance and construction Turnover tax actually paid 7%, 5%
tax
Education surcharge Turnover tax actually paid 3%
Local education surcharge Turnover tax actually paid 2%, 1%
Enterprise income tax Taxable income 15%, 20%, 25%
Different enterprise income tax rates applicable to different taxpayers:
Taxpayers Income tax rate
Infore Technology Company 15%
Guangdong Weiqi Company 15%
安徽威奇电工材料有限公司 (Anhui Weiqi Electrical Materials Co., 15%
Ltd.*)
Zoomlion Environmental Company 15%
佛山市顺德区华清源环保有限公司 (Foshan Shunde Huaqingyuan 15%
Environmental Protection Co., Ltd.*)
Shangfeng Industrial Company 15%
佛山市顺德区华博环保水务有限公司 (Foshan Shunde Huabo 20%
Environmental Water Co., Ltd.*)
定南中联环境产业有限责任公司 (Dingnan Zoomlion Environmental 20%
Industry Co., Ltd.*)
会昌中联环境产业有限责任公司 (Huichang Zoomlion Environmental 20%
Industry Co., Ltd.*)
峰云物联科技有限公司 (Fengyun IoT Technology Co., Ltd.*) 20%
*
The English names are for identification purpose only.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Taxpayers Income tax rate
耒阳市中锋环境产业有限公司 (Leiyang Zhongfeng Environmental 20%
Industry Co., Ltd.*)
桦川县中峰城市环境服务有限公司 (Huachuan Zhongfeng Urban 20%
Environmental Service Co., Ltd.*)
深圳盈联环境产业有限公司 (Shenzhen Yinglian Environmental 20%
Industry Co., Ltd.*)
Taxpayers other than the above-mentioned 25%
173
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
(II) Tax preferential policies
1. Enterprise income tax
No. Entities Preferential policies
According to the preferential income tax policy
1 Anhui Weiqi Electrical Materials Co., Ltd. for high-tech enterprises, its 2018-2020
enterprise income tax rate is reduced to 15%.
Shangfeng Industrial Company,
According to the preferential income tax policy
2 Guangdong Weiqi Company,
for high-tech enterprises, its 2019-2021
Infore Technology Company,
enterprise income tax rate is reduced to 15%.
Foshan Shunde Huaqingyuan Environmental Protection Co., Ltd.
According to the preferential income tax policy
3 Zoomlion Environmental Company for high-tech enterprises, its 2020-2022
enterprise income tax rate is reduced to 15%.
Engage in qualified environmental protection,
石门中联环境产业有限责任公司 (Shimen Zoomlion Environmental
energy-saving and water-saving projects, it
4 Industry Co., Ltd.*),
enjoys enterprise income tax exemption in
淮安晨洁环境工程有限公司 (Huaian Chenjie Environmental 2016-2018, and enjoys a 50% reduction in
Engineering Co., Ltd.*) income for 2019-2021.
阜南绿色东方环保能源有限公司 (Funan Green Oriental
Environmental Energy Co., Ltd.*),
汉寿中联环境产业有限责任公司 (Hanshou Zoomlion Environmental
Industry Co., Ltd.*),
Engage in qualified environmental protection,
中方县中联环境产业有限责任公司 (Zhongfang County Zoomlion
energy-saving and water-saving projects, it
5 Environmental Industry Co., Ltd.*),
enjoys enterprise income tax exemption in
安化县中联环境产业有限公司 (Anhua Zoomlion Environmental 2017-2019, and enjoys a 50% reduction in
Industry Co., Ltd.*), income for 2020-2022.
慈利县中联华宝环境产业有限责任公司 (Cili County Zoomlion
Huabao Environmental Industry Co., Ltd.*),
隆回县中联环境产业有限公司 (Longhui County Zoomlion
Environmental Industry Co., Ltd.*)
仙桃绿色东方环保发电有限公司 (Xiantao Green Oriental
Environmental Power Generation Co., Ltd.*),
寿县绿色东方新能源有限责任公司 (Shouxian Green Oriental New
Energy Co., Ltd.*),
张家界中联环境产业有限责任公司 (Zhangjiajie Zoomlion
Environmental Industry Co., Ltd.*),
花垣中联环境产业有限公司 (Huayuan Zoomlion Environmental
Industry Co., Ltd.*),
Engage in qualified environmental protection,
扶绥中峰环境产业有限责任公司 (Fusui Zhongfeng Environmental
energy-saving and water-saving projects, it
6 Industry Co., Ltd.*),
enjoys enterprise income tax exemption in
上思中联环境产业有限公司 (Shangsi Zoomlion Environmental 2018-2020, and enjoys a 50% reduction in
Industry Co., Ltd.*), income for 2021-2023.
宁远县中联环境产业有限责任公司 (Ningyuan County Zoomlion
Environmental Industry Co., Ltd.*),
连平中联家宝环境产业有限责任公司 (Lianping Zoomlion Jiabao
Environmental Industry Co., Ltd.*),
洪江区中峰环境产业有限责任公司 (Hongjiang District Zhongfeng
Environmental Industry Co., Ltd.*),
眉山市彭山区中峰环境产业有限责任公司 (Meishan Pengshan
Zhongfeng Environmental Industry Co., Ltd.*)
长沙中联长高环境产业有限责任公司 (Changsha Zoomlion
Changgao Environmental Industry Co., Ltd.*), Engage in qualified environmental protection,
仙桃盈和环保有限公司 (Xiantao Yinghe Environmental Protection energy-saving and water-saving projects, it
7 Co., Ltd.*), enjoys enterprise income tax exemption in
凯里市中联重科环境产业有限公司 (Kaili Zoomlion Environmental 2019-2021, and enjoys a 50% reduction in
Industry Co., Ltd.*), income for 2022-2024.
娄底中联华宝环保科技有限公司 (Loudi Zoomlion Huabao
*
The English names are for identification purpose only.
174
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
No. Entities Preferential policies
*
Environmental Protection Technology Co., Ltd. ),
长沙市橘洲中联环境产业有限责任公司 (Changsha Juzhou
Zoomlion Environmental Industry Co., Ltd.*),
都昌县中峰环境产业有限公司 (Duchang County Zhongfeng
Environmental Industry Co., Ltd.*),
安龙宁和环保科技有限公司 (Anlong Ninghe Environmental
Protection Technology Co., Ltd.*),
抚顺市盈峰中联城市环境卫生管理有限公司 (Fushun Yingfeng
Zoomlion Urban Environmental Sanitation Management Co., Ltd.*),
仁寿盈峰中联城市环境服务有限公司 (Renshou Infore Zoomlion
Urban Environmental Service Co., Ltd.*),
宜春盈联城市环境服务有限公司 (Yichun Yinglian Urban
Environmental Service Co., Ltd.*),
松原市中联欣雨环境服务有限公司 (Songyuan Zoomlion Xinyu
Environmental Service Co., Ltd.*),
赣州蓉江新区中峰环境科技有限公司 (Ganzhou Rongjiang New
Area Zhongfeng Environmental Technology Co., Ltd.*),
曲阳县盈联环境服务有限公司 (Quyang Yinglian Environmental
Service Co., Ltd.*),
成都盈联环境管理有限公司 (Chengdu Yinglian Environmental
Management Co., Ltd.*),
祁县盈联城市环境服务有限公司 (Qixian Yinglian Urban
Environmental Service Co., Ltd.*),
福建省南安市盈峰城市环境服务有限公司 (Fujian Nan’an Yingfeng
Urban Environmental Service Co., Ltd.*),
故城盈联城市环境服务有限责任公司 (Gucheng Yinglian Urban
Environmental Service Co., Ltd.*),
淮北市盈联城市环境服务有限公司 (Huaibei Yinglian Urban
Environmental Service Co., Ltd.*),
淮北市中峰城市环境服务有限公司 (Huaibei Zhongfeng Urban
Environmental Service Co., Ltd.*),
稷山县盈联城市环境服务有限公司 (Jishan County Yinglian Urban
Environmental Service Co., Ltd.*),
唐山曹妃甸区盈联环境服务有限公司 (Tangshan Caofeidian District
Yinglian Environmental Service Co., Ltd.*),
安义县中峰环境产业有限公司 (Anyi County Zhongfeng
Environmental Industry Co., Ltd.*),
长沙中峰环保科技有限责任公司 (Changsha Zhongfeng
Environmental Protection Technology Co., Ltd.*),
醴陵市盈峰中联环境产业有限公司 (Liling Yingfeng Zoomlion
Environmental Industry Co., Ltd.*),
深圳市盈联城市环境服务有限公司 (Shenzhen Yinglian Urban
Environmental Service Co., Ltd.*)
铜仁市碧江区中峰环境产业有限公司 (Tongren Bijiang District
Zhongfeng Environmental Industry Co., Ltd.*),
百色市盈联城市环境服务有限公司 (Baise Yinglian Urban
Environmental Service Co., Ltd.*),
重庆盈联城市环卫服务有限公司 (Chongqing Yinglian City
Sanitation Service Co., Ltd.*),
Engage in qualified environmental protection,
东兰盈联城市环境服务有限公司 (Donglan Yinglian Urban
energy-saving and water-saving projects, it
8 Environmental Service Co., Ltd.*),
enjoys enterprise income tax exemption in
仙桃盈联环保技术有限公司 (XiantaoYinglian Environmental 2020-2022, and enjoys a 50% reduction in
Technology Co., Ltd.*), income for 2023-2025.
安化盈胜环境卫生服务有限公司 (Anhua Yingsheng Environmental
Sanitation Service Co., Ltd.*),
深圳宝安盈联城市服务有限公司 (Shenzhen Bao’an Yinglian City
Service Co., Ltd.*),
宾川中盈环境服务有限公司 (Binchuan Zhongying Environmental
Service Co., Ltd.*),
*
The English names are for identification purpose only.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
No. Entities Preferential policies
邵阳县中峰环境产业有限公司 (Shaoyang County Zhongfeng
Environmental Industry Co., Ltd.*),
汤阴县盈联环境服务有限公司 (Tangyin County Yinglian
Environmental Service Co., Ltd.*),
西安盈联城市环境服务有限公司 (Xi’an Yinglian Urban
Environmental Service Co., Ltd.*),
漾濞中盈环境服务有限公司 (Yangbi Zhongying Environmental
Services Co., Ltd.*),
容城县盈联城市环境服务有限公司 (Rongcheng County Yinglian
Urban Environmental Service Co., Ltd.*),
盈峰中联城市环境服务有限公司 (Infore Zoomlion City
Environmental Service Co., Ltd.*),
肇源县锦城环境卫生管理服务有限公司 (Zhaoyuan County Jincheng
Environmental Sanitation Management Service Co., Ltd.*),
吉安中峰环境科技有限公司 (Ji’an Zhongfeng Environmental
Technology Co., Ltd.*),
鞍山市盈联城市环境卫生管理有限公司 (Anshan Yinglian Urban
Environmental Sanitation Management Co., Ltd.*),
菏泽盈胜环境卫生服务有限公司 (Heze Yingsheng Environmental
Sanitation Service Co., Ltd.*),
滦南县盈联环境管理有限公司 (Luannan County Yinglian
Environmental Management Co., Ltd.*),
广西桂平市盈合环境卫生管理有限公司 (Guangxi Guiping Yinghe
Environmental Sanitation Management Co., Ltd.*),
神农架林区盈合环境卫生管理有限公司 (Shennongjia Forest Area
Yinghe Environmental Sanitation Management Co., Ltd.*),
佛山市顺德区盈合城市环境服务有限公司 (Foshan Shunde District
Yinghe Urban Environmental Service Co., Ltd.*),
和平县合胜环境卫生服务有限公司 (Heping County Hesheng
Environmental Sanitation Service Co., Ltd.*),
佛山市顺德区联盈环境发展有限公司 (Foshan Shunde District
Lianying Environmental Development Co., Ltd.*),
佛山市盈顺城市环境服务有限公司 (Foshan Yingshun Urban
Environmental Service Co., Ltd.*),
宿迁市联盈城市服务有限公司 (Suqian Lianying City Service Co.,
Ltd.*),
枣庄市盈联城市环境服务有限公司 (Zaozhuang Yinglian Urban
Environmental Service Co., Ltd.*),
枣庄市中盈城市环境服务有限公司 (Zaozhuang Zhongying Urban
Environmental Service Co., Ltd.*),
大庆市萨尔图区中联重科环境发展有限公司 (Daqing Saertu District
Zoomlion Environmental Development Co., Ltd.*),
吉林中峰绿洲环境发展有限公司 (Jilin Zhongfeng Oasis
Environmental Development Co., Ltd.*),
来安县中峰环境科技有限公司 (Lai’an Zhongfeng Environmental
Technology Co., Ltd.*),
香河盈联环保科技有限公司 (Xianghe Yinglian Environmental
Technology Co., Ltd.*),
祁县同盈环境卫生服务有限公司 (Qixian Tongying Environmental
Sanitation Service Co., Ltd.*),
兰陵中联环境服务有限公司 (Lanling Zoomlion Environmental
Service Co., Ltd.*),
运城市中盈城市环境服务有限公司 (Yuncheng Zhongying City
Environmental Service Co., Ltd.*)
*
The English names are for identification purpose only.
*
The English names are for identification purpose only.
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No. Entities Preferential policies
Pursuant to the Circular on the Implementation
of the Inclusive Tax Relief Policy for Small and
Foshan Shunde Huabo Environmental Water Co., Ltd., Micro Enterprises by State Taxation
Dingnan Zoomlion Environmental Industry Co., Ltd., Administration (STA), from January 1, 2019 to
Huichang Zoomlion Environmental Industry Co., Ltd., December 31, 2021, the enterprise income tax for
9 Fengyun IoT Technology Co., Ltd., the portion of the taxable income within 1
Leiyang Zhongfeng Environmental Industry Co., Ltd., million yuan is levied at 20% based on 25% of
Huachuan Zhongfeng Urban Environmental Service Co., Ltd., that portion of income; the enterprise income tax
Shenzhen Yinglian Environmental Industry Co., Ltd. for the portion of the taxable income exceeding 1
million yuan but within 3 million yuan is levied
at 20% based on 50% of that portion of income.
Foshan Shunde Huaqingyuan Environmental Protection Co., Ltd., Revenue from the production of non-restricted
佛山市顺德区华盈环保水务有限公司 (Foshan Shunde District and non-prohibited products that meet the
relevant national and industry standards using
Huaying Environmental Water Co., Ltd.*),
10 resources specified in the “Resources
佛山市顺德区源润水务环保有限公司 (Foshan Shunde District
Comprehensive Utilization of Enterprise Income
Yuanrun Water Environmental Protection Co., Ltd.*),
Tax Preferential Catalogue (2008 Edition)” as the
佛山市顺德区华博环保有限公司 (Foshan Shunde District Huabo main raw material will be reduced to 90% as
Environmental Protection Co., Ltd.*) taxable income for enterprise income tax.
Engaged in qualified environmental protection,
大荔县中联环境产业有限公司 (Dali County Zoomlion energy-saving and water-saving projects, it
11 Environmental Industry Co., Ltd.*), enjoys three-year-exemption and
柳城县盈联环境卫生管理有限公司 (Liucheng County Yinglian three-year-half-reduction policy for enterprise
Environmental Sanitation Management Co., Ltd.*) income tax since the year in which it generates
its first income.
2. VAT
(1) According to the “Notice of MOF and STA on VAT Preferential Policies for Promoting Employment of
Persons with Disabilities” (Cai Shui [2016] No. 52), taxpayers who meet the conditions for enjoying preferential
tax policies shall be entitled to enjoy VAT refund upon collection within limit according to the number of persons
with disabilities employed by taxpayer. In 2020, the subsidiary 辽宁东港电磁线有限公司 (Liaoning Donggang
Magnet Wire Co., Ltd.*, hereinafter referred to as Donggang Magnet Wire Company) enjoys the preferential
policy of VAT refund upon collection at the amount of 57,600 yuan per year for each person with disabilities, and
the refunded VAT upon collection totaled 8,297,977.38 yuan.
(2) According to the “Notice of MOF and STA on VAT Policies for Software Products” (Cai Shui [2011] No. 100),
general VAT taxpayers who sell software products developed and produced by themselves are subject to VAT
refund upon collection for the amount exceeding 3% of their actual VAT burdens. In 2020, the subsidiaries
Zoomlion Environmental Company and Infore Technology Company are entitled to enjoy the VAT refund upon
collection policy for its development and sale of their self-developed software products, and the VAT refunds
received in the current period are 16,098,711.21 yuan and 85,336.07 yuan respectively.
(3) According to the “Announcement of MOF, STA, and the General Administration of Customs (GAC) on
Policies Deepening the VAT Reform” (Announcement No. 39, 2019 of MOF, STA and GAC), eligible taxpayers
can apply to their competent tax authorities for refund of the incremental retained tax credit. In 2020, the
sub-subsidiaries Kaili Zoomlion Environmental Industry Co., Ltd. and Changsha Zoomlion Changgao
Environmental Industry Co., Ltd. received tax refund of 1,480,436.23 yuan and 10,453,410.02 yuan respectively.
(4) According to Article 5 of the “Notice of MOF and STA on Printing and Distributing the ‘VAT Preferential
*
The English names are for identification purpose only.
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Catalogue of Products and Services for Comprehensive Utilization of Resources’” (Cai Shui [2015] No. 78), since
July 1, 2015, sewage treatment services are entitled to enjoy 70% VAT refund upon collection. In 2020, the
sub-subsidiaries Foshan Shunde Huaqingyuan Environmental Protection Co., Ltd., Foshan Shunde District
Huaying Environmental Water Co., Ltd., Foshan Shunde District Yuanrun Water Environmental Protection Co.,
Ltd., and Foshan Shunde District Huabo Environmental Protection Co., Ltd. received VAT refund upon collection
of 1,930,690.82 yuan, 1,025,296.26 yuan, 1,215,817.61 yuan and 151,148.80 yuan respectively.
(5) Pursuant to the “Measures for the Implementation of the Pilot Implementation of VAT Reform for the
Transportation Industry and Certain Modern Service Industries” (Cai Shui [2011] No. 111), revenue from
technology transfer, technology development, and related technical consulting, and technical service businesses is
exempt from VAT. In 2020, the sub-subsidiary 深 圳 市 鼎 铸 环 保 技 术 有 限 公 司 (Shenzhen Dingzhu
Environmental Technology Co., Ltd.*) meets the condition and is exempt from VAT.
3. Urban land use tax
(1) According to the “Notice of MOF and STA on the Urban Land Use Tax and Other Policies for Entities with
Employment of Persons with Disabilities” (Cai Shui [2010] No. 121), the subsidiary Donggang Magnet Wire
Company, as a social welfare company, meets the temporary exemption of land use tax. After confirmation with
Beijingzi Local Taxation Bureau of Donggang Local Taxation Bureau, it is exempt from land use tax in 2020.
(2) According to the “Notice on the Policy Opinions on Deepening the Reform of ‘Heroes in Each Acre’ and
Implementing the Differential Allocation of Resource Elements” issued by the Office of the People’s Government
of Shangyu District, Shaoxing City (Yu Zheng Ban Fa [2020] No. 73), the Company’s subsidiary Shangfeng
Industrial Company meets the conditions of tax incentives and enjoys 100% exemption for land use tax in 2020.
(3) According to Article 1 of the “Announcement of STA, Xiantao Taxation Office on Implementing the Relevant
Matters Concerning the Reduction and Exemption of Housing Property Tax and Urban Land Use Tax During the
New Coronavirus Pneumonia Epidemic”, taxpayers who have suspended production or business due to the impact
of the epidemic may apply for a reduction or exemption of housing property tax and urban land use tax for
self-use real estate and land in the first quarter of 2020. The sub-subsidiary Xiantao Green Oriental Environmental
Power Generation Co., Ltd. meets the above regulations and the urban land use tax for the first quarter is reduced
by 74,665.92 yuan in 2020.
(4) According to the “Announcement on Preferential Policies for Housing Property Tax and Urban Land Use Tax
in Response to the Impact of the New Coronavirus Pneumonia Epidemic” (Su Cai Shui [2020] No. 8), taxpayers
in hospitality, entertainment, transportation, tourism, etc. are temporarily exempted from housing property tax and
urban land use tax in the first half of 2020. The Company’s sub-subsidiary Huaian Chenjie Environmental
Engineering Co., Ltd. meets the conditions and the urban land use tax is reduced by 58,572.00 yuan in the first
half of 2020.
4. Housing property tax
(1) According to Article 1 of the “Announcement of STA, Xiantao Taxation Office on Implementing the Relevant
*
The English name is for identification purpose only.
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Matters Concerning the Reduction and Exemption of Housing Property Tax and Urban Land Use Tax During the
New Coronavirus Pneumonia Epidemic”, taxpayers who have suspended production or business due to the impact
of the epidemic may apply for a reduction or exemption of housing property tax and urban land use tax for
self-used real estate and land in the first quarter of 2020. The sub-subsidiary Xiantao Green Oriental
Environmental Power Generation Co., Ltd. meets the above regulations and the housing property tax for the first
quarter is reduced by 202,425.81 yuan in 2020.
V. Notes to items of consolidated financial statements
Note: “Opening balance” in this report refers to balances as at January 1, 2020 after the adjustment on balances as at December 31,
2019 under the revised revenue standard.
(I) Notes to items of the consolidated balance sheet
1. Cash and bank balances
(1) Details
Items Closing balance Opening balance
Cash on hand 147,826.76 62,621.19
Cash in bank 5,334,320,758.07 2,606,269,825.38
Other cash and bank balances 569,659,386.02 554,435,177.83
Total 5,904,127,970.85 3,160,767,624.40
Including: Deposited overseas 4,585,104.79 36,521,872.96
(2) Other remarks
1) Closing balance of cash in bank included certificate of deposits in amount of 709,048,611.10 yuan, funds frozen due to lawsuits in
amount of 2,837,968.00 yuan, and engineering escrow accounts that are not available for separate use in amount of 22,891.63 yuan,
which was with use restriction.
2) Closing balance of other cash and bank balances included deposit for notes in amount of 458,086,264.82 yuan, deposit for letters
of guarantee in amount of 75,383,801.54 yuan, and deposit for migrant workers’ wages in amount of 922,334.53 yuan, which was
with use restriction.
2. Held-for-trading financial assets
(1) Details
Items Closing balance Opening balance
Financial assets classified as at fair value through profit or 128,017,735.11 217,189,146.28
loss
Including: Debt instrument investments
Equity instrument investments 127,192,985.11 217,138,046.28
Derivative financial assets 824,750.00 51,100.00
Total 128,017,735.11 217,189,146.28
3. Notes receivable
(1) Details
1) Details on categories
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Closing balance
Book balance Provision for bad debts
Categories
Provision Carrying amount
Amount % to Amount proportion
total
(%)
Receivables with provision for bad
debts made on an individual basis
Receivables with provision for bad 67,804,653.12 100.00 3,141,108.14 4.63 64,663,544.98
debts made on a collective basis
Including: Trade acceptance 67,804,653.12 100.00 3,141,108.14 4.63 64,663,544.98
Total 67,804,653.12 100.00 3,141,108.14 4.63 64,663,544.98
(Continued)
Opening balance
Book balance Provision for bad debts
Categories
Provision Carrying amount
Amount % to Amount proportion
total
(%)
Receivables with provision for bad
debts made on an individual basis
Receivables with provision for bad 40,493,712.20 100.00 40,493,712.20
debts made on a collective basis
Including: Trade acceptance 40,493,712.20 100.00 40,493,712.20
Total 40,493,712.20 100.00 40,493,712.20
2) Notes receivable with provision for bad debts made on a collective basis
Closing balance
Items
Book balance Provision proportion
Provision for bad debts
(%)
Bank acceptance portfolio
Trade acceptance portfolio 67,804,653.12 3,141,108.14 4.63
Subtotal 67,804,653.12 3,141,108.14 4.63
(2) Changes in provision for bad debts
1) Details
Increase Decrease
Items Opening Closing
balance Accrual Recovery Others Reversal Write-off Others balance
Bank acceptance
Trade acceptance 3,141,108.14 3,141,108.14
Subtotal 3,141,108.14 3,141,108.14
2) No provision is collected or reversed in the current period
(3) No balance is written off in the current period
(4) No balance is pledged at the balance sheet date
(5) Endorsed or discounted but undue notes at the balance sheet date
Items Closing balance derecognized Closing balance not yet derecognized
Trade acceptance 8,193,775.64
Subtotal 8,193,775.64
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(6) Notes receivable transferred to accounts receivable due to non-performance of issuer
Items Amount transferred
Trade acceptance 720,000.00
Subtotal 720,000.00
4. Accounts receivable
(1) Details
1) Details on categories
Closing balance
Categories Book balance Provision for bad debts
Carrying amount
Amount % to total Amount Provision
proportion (%)
Receivables with
provision made on an 13,881,143.78 0.23 13,881,143.78 100.00
individual basis
Receivables with
provision made on a 5,965,218,384.23 99.77 400,383,520.19 6.71 5,564,834,864.04
collective basis
Total 5,979,099,528.01 100.00 414,264,663.97 6.93 5,564,834,864.04
(Continued)
Opening balance [Note]
Categories Book balance Provision for bad debts
Carrying amount
Amount % to total Amount Provision
proportion (%)
Receivables with
provision made on an
individual basis
Receivables with
provision made on a 5,255,708,371.27 100.00 343,140,364.97 6.53 4,912,568,006.30
collective basis
Total 5,255,708,371.27 100.00 343,140,364.97 6.53 4,912,568,006.30
Note: Please refer to section III (XXXIV) 1 of notes to financial statements for details on the difference between the opening balance
of current period and the closing balance of preceding period (i.e. December 31, 2019).
2) Accounts receivable with provision made on an individual basis
Debtors Book balance Provision for bad Provision proportion Reasons
debts (%)
深圳市为民生态技术有限公
司 (Shenzhen Weimin 10,304,640.00 10,304,640.00 100.00 Expected to be
Ecological Technology Co., irrecoverable
Ltd.)
马鞍山市瑞恒物资贸易有限
2,137,100.00 2,137,100.00 100.00 Expected to be
公司 (Ma’anshan Ruiheng irrecoverable
Material Trading Co., Ltd.*)
徐州伟天化工有限公司
400,000.00 400,000.00 100.00 Expected to be
(Xuzhou Weitian Chemical irrecoverable
Co., Ltd.*)
建德新越置业有限公司
377,496.00 377,496.00 100.00 Expected to be
(Jiande Xinyue Real Estate irrecoverable
Co., Ltd.*)
Other entities 661,907.78 661,907.78 100.00 Expected to be
irrecoverable
The English names are for identification purpose only.
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Debtors Book balance Provision for bad Provision proportion Reasons
debts (%)
Subtotal 13,881,143.78 13,881,143.78 100.00
3) Accounts receivable with provision made on a collective basis
① Parent company and electrotechnical equipment manufacturing industry under age analysis method
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
1-180 days 612,769,602.54
180 days - 1 year 188,806.71 3,776.13 2.00
Subtotal 612,958,409.25 3,776.13
② Ventilation equipment manufacturing industry and environmental integrated industry under age analysis
method
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
Within 1 year 4,237,483,272.06 211,874,163.61 5.00
1-2 years 631,257,697.72 63,125,769.77 10.00
2-3 years 170,701,666.83 51,210,500.05 30.00
3-5 years 77,168,884.29 38,584,442.15 50.00
Over 5 years 32,333,849.41 32,333,849.41 100.00
Subtotal 5,148,945,370.31 397,128,724.99 7.71
③ Commercial factoring portfolio grouped by five-level classification
Closing balance
Five-level classification
Book balance Provision for bad debts Provision proportion (%)
Pass 189,894,604.67 2,848,419.07 1.50
Special-mention 13,420,000.00 402,600.00 3.00
Subtotal 203,314,604.67 3,251,019.07 1.60
(2) Changes in provision for bad debts
Increase Decrease
Items Opening Closing
balance Accrual Recovery Others Reversal Write-off Others balance
Receivables with
provision made on 13,881,143.78 13,881,143.78
an individual basis
Receivables with
provision made on 343,140,364.97 59,264,181.99 2,021,026.77 400,383,520.19
a collective basis
Subtotal 343,140,364.97 73,145,325.77 2,021,026.77 414,264,663.97
(3) Accounts receivable written off in current period
1) Accounts receivable actually written off in current period totaled 2,021,026.77 yuan.
2) Significant accounts receivable written off in current period
Write-off Whether arising
Debtors Nature of Reasons for
Amount written off procedures from related party
receivables write-off
performed transactions
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Write-off Whether arising
Debtors Nature of Reasons for
Amount written off procedures from related party
receivables write-off
performed transactions
Jingyi Freight Service Center,
600,000.00 Expected to be Under the approval No
Jiancaoping District, Taiyuan Goods payment
irrecoverable by the Management
City
安徽万豪物业管理有限公司
520,000.00 Expected to be Under the approval No
(Anhui Wanhao Property Goods payment
irrecoverable by the Management
Management Co., Ltd.)
Public Affairs Management
Office of Tongliao Economic 150,834.00 Expected to be Under the approval No
Goods payment
and Technological irrecoverable by the Management
Development Zone
Jingmen Administration of
150,000.00 Expected to be Under the approval No
City Appearance and Goods payment
irrecoverable by the Management
Environmental Sanitation
Housing and Urban-Rural
Development and Urban 109,856.58 Expected to be Under the approval No
Goods payment
Management Bureau of irrecoverable by the Management
Jiang’an County
Subtotal 1,530,690.58
(4) Details of the top 5 debtors with largest balances
Debtors Book balance Proportion to the total balance of
Provision for bad debts
accounts receivable (%)
No. 1 138,694,988.13 2.32 7,089,710.51
No. 2 117,833,115.80 1.97 5,891,655.79
No. 3 101,061,055.56 1.69 1,515,915.83
No. 4 85,846,357.20 1.44 4,292,317.86
No. 5 50,436,411.79 0.84 2,521,820.59
Subtotal 493,871,928.48 8.26 21,311,420.58
5. Receivables financing
(1) Details
Details on categories
Closing balance
Items
Initial cost Interest Interest Changes in fair Provision for
Carrying amount
adjustment accrued value impairment
Notes 520,429,874.86 520,429,874.86
receivable [Note]
Total 520,429,874.86 520,429,874.86
(Continued)
Opening balance
Items
Initial cost Interest Interest Changes in fair Provision for
Carrying amount
adjustment accrued value impairment
Notes 683,999,481.60 683,999,481.60
receivable
Total 683,999,481.60 683,999,481.60
Note: The acceptor of receivables financing with closing balance of 109,968,904.97 yuan was a finance company with low credit risk
and financial qualification.
(2) Pledged notes at the balance sheet date
The English name is for identification purpose only.
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Items Closing balance of pledged notes
Bank acceptance 306,145,249.74
Subtotal 306,145,249.74
(3) Endorsed or discounted but undue notes at the balance sheet date
Items Closing balance derecognized
Bank acceptance 686,352,514.35
Subtotal 686,352,514.35
Due to the fact that the acceptor of bank acceptance is commercial bank, which is of high credit level, there is very little possibility of
failure in recoverability when it is due. Based on this fact, the Company derecognized the endorsed or discounted bank acceptance.
However, if any bank acceptance is not recoverable when it is due, the Company still holds joint liability on such acceptance,
according to the China Commercial Instrument Law.
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6. Advances paid
(1) Age analysis
Closing balance Opening balance
Ages
Book % to Provision for Carrying amount Book % to Provision for Carrying
balance total impairment balance total impairment amount
134,718,034.9
Within 1 year 97.79 134,718,034.94 64,279,616.58 90.47 64,279,616.58
4
1-2 years 1,328,399.29 0.96 1,328,399.29 4,843,587.16 6.82 4,843,587.16
2-3 years 1,621,900.20 1.18 1,621,900.20 1,928,881.01 2.71 1,928,881.01
Over 3 years 100,864.10 0.07 100,864.10
137,769,198.5
Total 100.00 137,769,198.53 71,052,084.75 100.00 71,052,084.75
3
(2) Details of the top 5 debtors with largest balances
Debtors Book balance Proportion to the total balance of advances
paid (%)
No. 1 19,650,774.39 14.27
No. 2 11,135,988.03 8.08
No. 3 5,881,147.77 4.27
No. 4 3,954,000.00 2.87
No. 5 3,681,661.72 2.67
Subtotal 44,303,571.91 32.16
7. Other receivables
(1) Details
1) Details on categories
Closing balance
Categories Book balance Provision for bad debts
Carrying amount
Amount % to total Amount Provision
proportion (%)
Receivables with
provision made on an
individual basis
Receivables with
provision made on a 287,548,686.45 100.00 29,877,688.17 10.39 257,670,998.28
collective basis
Total 287,548,686.45 100.00 29,877,688.17 10.39 257,670,998.28
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount % to total Amount Provision
proportion (%)
Receivables with
provision made on an
individual basis
Receivables with
provision made on a 246,792,240.61 100.00 21,926,324.89 8.88 224,865,915.72
collective basis
Total 246,792,240.61 100.00 21,926,324.89 8.88 224,865,915.72
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(2) Other receivables with provision made on a collective basis
1) Parent company and electrotechnical equipment manufacturing industry under age analysis method
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
1-180 days 17,962,594.27
180 days - 1 year 5,197,653.69 103,953.07 2.00
1-2 years 14,686,598.17 1,468,659.82 10.00
2-3 years 17,833,863.75 5,350,159.13 30.00
3-5 years 87,216.46 43,608.23 50.00
Over 5 years 404,856.00 323,884.80 80.00
Subtotal 56,172,782.34 7,290,265.05 12.98
2) Ventilation equipment manufacturing industry and environmental integrated industry under age analysis
method
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
Within 1 year 181,722,834.68 9,086,141.76 5.00
1-2 years 29,686,959.35 2,968,695.94 10.00
2-3 years 10,166,980.58 3,050,094.17 30.00
3-5 years 4,633,276.50 2,316,638.25 50.00
Over 5 years 5,165,853.00 5,165,853.00 100.00
Subtotal 231,375,904.11 22,587,423.12 9.76
(3) Changes in provision for bad debts
Phase I Phase II Phase III
Items 12 month Lifetime expected Subtotal
Lifetime expected credit
expected credit credit losses (credit
losses (credit impaired)
losses not impaired)
Opening balance 13,184,692.17 4,735,356.98 4,006,275.74 21,926,324.89
Opening balance in the current
period
--Transferred to phase II -4,437,355.76 4,437,355.76
--Transferred to phase III -4,735,356.98 4,735,356.98
--Reversed to phase II
--Reversed to phase I
Provision made in the current 442,758.42 14,008,604.86 14,451,363.28
period
Provision recovered in current
period
Provision reversed in current period
Provision written off in current 6,500,000.00 6,500,000.00
period
Other changes
Closing balance 9,190,094.83 4,437,355.76 16,250,237.58 29,877,688.17
(4) Other receivables written off in current period
Other receivables actually written off in current period totaled 6,500,000.00 yuan.
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(5) Other receivables categorized by nature
Nature of receivables Closing balance Opening balance
Security deposits 155,500,083.80 114,939,229.61
Temporary advance payment receivable and petty 79,760,368.16 64,158,614.66
cash
Call loans 48,442,016.60 50,530,932.83
Equity transfer payments 9,500,000.00
Others 3,846,217.89 7,663,463.51
Total 287,548,686.45 246,792,240.61
(6) Details of the top 5 debtors with largest balances
Proportion to the total
Debtors Nature of Book balance Ages balance of other Provision for bad debts
receivables
receivables (%)
No. 1 Call loans 30,165,333.33 [Note 1] 10.49 6,395,734.82
No. 2 14,261,550.00 Within 1 4.96 713,077.50
Security deposits
year
No. 3 Call loans and 13,048,263.59 [Note 2] 4.54 1,633,347.22
security deposits
No. 4 Security deposits 7,751,515.52 [Note 3] 2.70 28,294.78
No. 5 7,000,000.00 Within 1 2.43 350,000.00
Security deposits
year
Subtotal 72,226,662.44 25.12 9,120,454.32
Note 1: Of which, 165,333.33 yuan was with age of 1 to 180 days, 1,927,522.33 yuan was with age of 180 days to 1 year,
10,322,794.66 yuan was with age of 1 to 2 years, and 17,749,683.01 yuan was with age of 2 to 3 years.
Note 2: Of which, 11,429,582.76 yuan was with age within 1 year, 618,680.83 yuan was with age of 1 to 2 years, and 1,000,000.00
yuan was with age over 5 years.
Note 3: Of which, 6,336,776.52 yuan was with age of 1 to 180 days, 1,414,739.00 yuan was with age of 180 days to 1 year.
8. Inventories
(1) Details
Closing balance Opening balance
Items
Book balance Provision for Carrying amount Book balance Provision for Carrying amount
write-down write-down
Raw materials 171,456,835.82 11,347,353.70 160,109,482.12 164,384,151.44 13,206,657.73 151,177,493.71
Work in 243,622,797.51 12,052,957.06 231,569,840.45 217,354,425.22 1,954,250.96 215,400,174.26
process
Goods on hand 920,639,142.87 23,583,555.13 897,055,587.74 787,587,870.43 18,308,463.42 769,279,407.01
Products on
consignment 4,463,263.89 4,463,263.89 3,394,638.35 3,394,638.35
for sales
Packages 600,215.41 600,215.41 785,235.30 785,235.30
Low-value 33,051.67 33,051.67 97,647.20 97,647.20
consumables
Cost to fulfill a 11,345,966.57 11,345,966.57 4,866,134.18 4,866,134.18
contract
Total 1,352,161,273.74 46,983,865.89 1,305,177,407.85 1,178,470,102.12 33,469,372.11 1,145,000,730.01
(2) Provision for inventory write-down
1) Details
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Increase Decrease
Items Opening balance Closing balance
Accrual Others Reversal or Others
write-off
Raw materials 13,206,657.73 2,964,417.49 4,823,721.52 11,347,353.70
Work in process 1,954,250.96 11,004,254.24 905,548.14 12,052,957.06
Goods on hand 18,308,463.42 22,302,262.62 17,027,170.91 23,583,555.13
Subtotal 33,469,372.11 36,270,934.35 22,756,440.57 46,983,865.89
2) Determination basis of net realizable value and reasons for the reversal or write-off of provision for inventory
write-down
Items Reasons for write-off of provision for inventory
Determination basis of net realizable value
write-down
Estimated selling price of relevant finished goods Inventories with provision for inventory
Raw materials, work in
less cost to be incurred upon completion, estimated write-down made in preceding period were
process
selling expenses, and relevant taxes and surcharges used/sold in current period
Estimated selling price of relevant finished goods Inventories with provision for inventory
Goods on hand less estimated selling expenses, and relevant taxes write-down made in preceding period were sold
and surcharges in current period
(3) Cost to fulfill a contract
Items Opening balance Increase Amortization Closing balance
Urban garbage
classification EPC project 1,240,097.04 1,486,796.07 2,726,893.11
of Changgao Project
2,445,242.48 2,445,242.48
Nanliu Bobai Project
1,767,838.14 1,767,838.14
Foshan Shunde Project
1,319,009.81 1,319,009.81
Yunli Software Project
Urban classification
construction project of 1,310,653.98 1,310,653.98
Baoan Project
Urban and rural domestic
waste sanitation integration 691,168.25 2,849,387.20 2,857,744.09 682,811.36
project in Nan’an City
Huayuan Township Sewage 824,363.96 7,650,581.60 8,474,945.56
Project
Jiangxi Poyang Leachate 14,601.77 2,647,000.45 2,661,602.22
Project
Others 2,095,903.16 3,132,764.49 4,135,149.96 1,093,517.69
Subtotal 4,866,134.18 24,609,274.22 18,129,441.83 11,345,966.57
9. Contract assets
(1) Details
Closing balance Opening balance [Note]
Items
Book balance Provision for Book balance Provision for
Carrying amount Carrying amount
impairment impairment
Quality
guarantee 179,821,458.38 8,980,802.76 170,840,655.62 209,005,983.19 11,718,967.68 197,287,015.51
deposit
receivable
Total 179,821,458.38 8,980,802.76 170,840,655.62 209,005,983.19 11,718,967.68 197,287,015.51
Note: Please refer to section III (XXXIV) 1 of notes to financial statements for details on the difference between the opening balance
of current period and the closing balance of preceding period (i.e. December 31, 2019).
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(2) Details on provision for impairment of contract assets
1) Details
Increase Decrease
Items Opening Closing
balance Accrual Others Reversal Write-off Others balance
On an individual
basis
On a collective basis 11,718,967.68 -2,738,164.92 8,980,802.76
Subtotal 11,718,967.68 -2,738,164.92 8,980,802.76
2) Contract assets with provision for impairment made on a collective basis
① Parent company and electrotechnical equipment manufacturing industry under age analysis method
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
1-180 days 205,403.46
Subtotal 205,403.46
② Ventilation equipment manufacturing industry and environmental integrated industry under age analysis
method
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
Within 1 year 179,616,054.92 8,980,802.76 5.00
Subtotal 179,616,054.92 8,980,802.76 5.00
10. Non-current assets due within one year
Closing balance
Items
Book balance Unrecognized Provision for bad Carrying amount Discount rate
finance income debts range (%)
Quality guarantee deposit 3,117,560.29 575,338.66 2,542,221.63 N/A
receivable
Sales of goods in 590,525,742.54 13,507,469.77 29,526,287.13 547,491,985.64 4.75
installments
Guaranteed collection 3,396,226.40 2,697,240.24 169,811.32 529,174.84 4.75
amount for BOT projects
Payments for finance lease 101,710,631.53 2,985,183.62 1,564,473.52 97,160,974.39 4.75
Equity transfer payments
received in installments 366,128,123.00 28,979,514.04 337,148,608.96 4.75
[Note 1]
Financial factoring of 190,903,684.69 18,706,828.72 5,062,991.90 167,133,864.07 4.75
accounts receivable
Long-term call loans with
payment of interest by 6,130,000.00 139,500.00 5,990,500.00 N/A
installments and principal
at the maturity date
Total 1,261,911,968.45 66,876,236.39 37,038,402.53 1,157,997,329.53
(Continued)
Opening balance [Note 2]
Items
Book balance Unrecognized Provision for bad Carrying amount Discount rate
finance income debts range (%)
Quality guarantee deposit 3,965,544.65 1,092,648.34 2,872,896.31 N/A
receivable
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Sales of goods in 616,399,938.50 14,169,089.88 30,819,996.92 571,410,851.70 4.75
installments
Guaranteed collection 3,396,226.40 2,775,665.95 169,811.32 450,749.13 4.75
amount for BOT projects
Payments for finance lease 7,689,937.75 374,747.24 115,349.07 7,199,841.44 4.75
Equity transfer payments 198,815,157.09 17,030,615.08 181,784,542.01 4.75
received in installments
Total 830,266,804.39 34,350,118.15 32,197,805.65 763,718,880.59
Note 1: The difference in book balance amounting to 381,000,000.00 yuan compared with opening balance was due to the early
payment in the current period.
Note 2: Please refer to section III (XXXIV) 1 of notes to financial statements for details on the difference between the opening
balance of current period and the closing balance of preceding period (i.e. December 31, 2019).
11. Other current assets
Nature of receivables Closing balance Opening balance
Input tax to be credited and tax credits 524,859,055.94 330,975,304.91
Hedging instruments 639,250.00
Total 524,859,055.94 331,614,554.91
12. Long-term receivables
(1) Details
Closing balance
Items
Book balance Unrecognized Provision for bad Carrying amount Discount rate
finance income debts range (%)
Sales of goods in 788,025,663.31 39,476,135.13 100,750,766.12 647,798,762.06 4.75
installments
Guaranteed collection 205,977,431.75 42,828,397.21 10,298,871.59 152,850,162.95 4.75
amount for BOT projects
Payments for finance lease 42,916,937.55 922,675.24 667,631.54 41,326,630.77 4.75
Equity transfer payments 21,800,446.27 520,511.10 21,279,935.17 N/A
received in installments
Financial factoring of 236,684,800.68 33,097,600.97 3,550,272.01 200,036,927.70 4.75
accounts receivable
Total 1,295,405,279.56 116,324,808.55 115,788,052.36 1,063,292,418.65
(Continued)
Opening balance [Note]
Items
Book balance Unrecognized Provision for bad Carrying amount Discount rate
finance income debts range (%)
Sales of goods in 675,059,396.84 29,938,554.77 79,011,316.52 566,109,525.55 4.75
installments
Guaranteed collection 199,356,036.32 44,203,351.95 9,967,801.92 145,184,882.45 4.75
amount for BOT projects
Payments for finance lease 27,712,057.53 64,288.43 772,836.41 26,874,932.69 4.75
Equity transfer payments 381,000,000.00 25,877,277.30 355,122,722.70 4.75
received in installments
Long-term call loans with
payment of interest by 60,618,680.83 3,030,934.04 57,587,746.79 N/A
installments and principal
at the maturity date
Total 1,343,746,171.52 100,083,472.45 92,782,888.89 1,150,879,810.18
Note: Please refer to section III (XXXIV) 1 of notes to financial statements for details on the difference between the opening balance
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of current period and the closing balance of preceding period (i.e. December 31, 2019).
(2) Changes in provision for bad debts
Increase Decrease
Items Opening Closing
balance Accrual Recovery Others Reversal Write-off Others balance
Provision made on 2,542,185.00 -2,542,185.00
an individual basis
Provision made on a 90,240,703.89 25,547,348.47 115,788,052.36
collective basis
Subtotal 92,782,888.89 23,005,163.47 115,788,052.36
13. Long-term equity investments
(1) Categories
Closing balance Opening balance
Items
Book balance Provision for Book balance Provision for Carrying
Carrying amount
impairment impairment amount
Investments in 318,243,332.69 318,243,332.69 303,292,231.01 303,292,231.01
associates
Total 318,243,332.69 318,243,332.69 303,292,231.01 303,292,231.01
(2) Details
Increase/Decrease
Investees Opening balance Investment income Adjustment in other
Investments Investments
recognized under comprehensive
increased decreased
equity method income
Associates
廉江市绿色东方新能源有限
公司 (Lianjiang Green 33,534,934.15 7,286,539.03
Oriental New Energy Co.,
Ltd.)
天健创新（北京）监测仪表
股份有限公司 (Tengine 839,195.26
Innovation (Beijing) 25,988,232.54 2,735,747.26
[Note 1]
Monitoring Instrument Co.,
Ltd.*)
广东顺控环境投资有限公司
(Guangdong Shunkong 154,058,623.77 26,842,351.03
Environmental Investment
Co., Ltd.*)
广东天枢新能源科技有限公
司 (Guangdong Tianshu
New Energy Technology Co.,
Ltd.*) [Note 2]
重庆中联弘峰环卫有限公司
(Chongqing Zoomlion 15,275,736.13 15,617,403.15 341,667.02
Hongfeng Sanitation Co.,
Ltd.*) [Note 3]
汕头市中联瑞康环境卫生服
务有限公司 (Shantou
Zoomlion Ruikang 14,105,443.32 920,745.64
Environmental Sanitation
Service Co., Ltd.*)
汕头市潮阳区中联瑞康环境
卫生服务有限公司 5,473,688.30 6,800,000.00 4,301,745.88
(Shantou Chaoyang District
The English names are for identification purpose only.
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Increase/Decrease
Investees Opening balance Investment income Adjustment in other
Investments Investments
recognized under comprehensive
increased decreased
equity method income
Zoomlion Ruikang
Environmental Sanitation
Service Co., Ltd.*)
长沙酷哇中联智能科技有限
公司 (Changsha Cowa 8,215,692.49 -1,644,743.20
Zoomlion Intelligent
Technology Co., Ltd.*)
宜春发投联峰环境产业有限
公司 (Yichun Development
Investment Lianfeng 9,835,677.00 9,758,372.39 -77,304.61
Environmental Industry Co.,
Ltd.)
广东亮科环保工程有限公司
(Guangdong Liangke 36,804,203.31 -1,125,180.13
Environmental Engineering
Co., Ltd.*)
Total 303,292,231.01 7,639,195.26 25,375,775.54 39,581,567.92
(Continued)
Increase/Decrease Closing balance
Investees Closing balance of provision for
Changes in other Cash dividend/Profit Provision for Others
equity declared for distribution impairment impairment
Associates
Lianjiang Green
Oriental New Energy 40,821,473.18
Co., Ltd.
Tengine Innovation
(Beijing) Monitoring 29,563,175.06
Instrument Co., Ltd.
Guangdong Shunkong
Environmental 6,893,885.96 174,007,088.84
Investment Co., Ltd.
Guangdong Tianshu
New Energy
Technology Co., Ltd.
Chongqing Zoomlion
Hongfeng Sanitation
Co., Ltd.
Shantou Zoomlion
Ruikang Environmental 15,026,188.96
Sanitation Service Co.,
Ltd.
Shantou Chaoyang
District Zoomlion
Ruikang Environmental 16,575,434.18
Sanitation Service Co.,
Ltd.
Changsha Cowa
Zoomlion Intelligent 6,570,949.29
Technology Co., Ltd.
Yichun Development
Investment Lianfeng
Environmental Industry
Co., Ltd.
Guangdong Liangke
Environmental 35,679,023.18
Engineering Co., Ltd.
The English names are for identification purpose only.
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Increase/Decrease Closing balance
Investees Closing balance of provision for
Changes in other Cash dividend/Profit Provision for Others
equity declared for distribution impairment impairment
Total 6,893,885.96 318,243,332.69
Note 1: In the current period, the Company increased investments in amount of 839,195.26 yuan in Tengine Innovation (Beijing)
Monitoring Instrument Co., Ltd. As the former management of Tengine Innovation (Beijing) Monitoring Instrument Co., Ltd. failed
to achieve the performance targets committed at the time of accepting the Company’s investments, the Company received
compensation for performance commitment of 839,195.26 yuan in June 2020, which was used to directly acquire the equity of
Tengine Innovation (Beijing) Monitoring Instrument Co., Ltd. through block transactions and call auction transactions at the stock
exchange.
Note 2: Due to the long-term losses of Guangdong Tianshu New Energy Technology Co., Ltd., the Company adjusted the carrying
amount of related long-term equity investments as 0 yuan. No investment income or loss is recognized in the current period as
Guangdong Tianshu New Energy Technology Co., Ltd. still suffers losses.
Note 3: It is renamed as 重庆三峰城市环境服务有限公司 (Chongqing Sanfeng Urban Environmental Service Co., Ltd.*) in
August 2020.
14. Other equity instrument investments
Accumulated amount of gains or
losses transferred from other
Items Closing balance Opening balance Dividend income comprehensive income to
retained earnings
Amount Reasons
浙江上虞农商商业银行股份有限
公司 (Zhejiang Shangyu Rural 800,000.00 800,000.00 414,960.00
Commercial Bank Co., Ltd.*)
深圳市盈峰环保产业基金管理有
限公司 (Shenzhen Infore 270,000.00 270,000.00
Environmental Protection Industry
Fund Management Co., Ltd.*)
深圳市盈峰环保产业并购基金
(Shenzhen Infore Environmental 25,000,000.00 25,000,000.00
Protection Industry M&A Fund *)
Subtotal 26,070,000.00 26,070,000.00 414,960.00
15. Investment property
(1) Details
Items Buildings and structures Total
Cost
Opening balance 845,691.00 845,691.00
Increase 2,171,093.43 2,171,093.43
1) Others 2,171,093.43 2,171,093.43
Decrease 267,550.00 267,550.00
1) Disposal 267,550.00 267,550.00
Closing balance 2,749,234.43 2,749,234.43
Accumulated depreciation and amortization
*
The English names are for identification purpose only.
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Items Buildings and structures Total
Opening balance 277,664.61 277,664.61
Increase 526,105.96 526,105.96
1) Accrual or amortization 113,598.31 113,598.31
2) Others 412,507.65 412,507.65
Decrease 63,543.12 63,543.12
1) Disposal 63,543.12 63,543.12
Closing balance 740,227.45 740,227.45
Provision for impairment
Opening balance
Increase
Decrease
Closing balance
Closing carrying amount 2,009,006.98 2,009,006.98
Opening carrying amount 568,026.39 568,026.39
(2) Investment property with certificate of titles being unsettled
Items Carrying amount Reasons for unsettlement
Wanda real estate 1,957,820.99 In processing
Subtotal 1,957,820.99
16. Fixed assets
(1) Details
Items Buildings and General equipment Special Transport Other Total
structures equipment facilities equipment
Cost
Opening balance 674,424,894.25 52,621,187.11 617,079,685.39 38,933,113.79 44,746,033.27 1,427,804,913.81
Increase 515,885,415.23 72,601,863.87 190,818,797.96 16,968,159.45 3,010,656.12 799,284,892.63
1) Acquisition 5,761,419.84 57,620,776.55 70,563,064.01 16,968,159.45 3,010,656.12 153,924,075.97
2) Transferred in
from construction 510,123,995.39 14,981,087.32 86,823,555.19 611,928,637.90
in progress
3) Transferred in 33,432,178.76 33,432,178.76
from inventories
Decrease 5,160,225.21 3,929,194.64 46,788,453.94 16,054,667.27 4,953,781.97 76,886,323.03
1) Disposal/ 5,160,225.21 3,929,194.64 46,788,453.94 16,054,667.27 4,953,781.97 76,886,323.03
Scrapping
Closing balance 1,185,150,084.27 121,293,856.34 761,110,029.41 39,846,605.97 42,802,907.42 2,150,203,483.41
Accumulated
depreciation
Opening balance 150,821,721.30 28,550,539.48 211,296,310.11 18,631,345.18 23,823,412.08 433,123,328.15
Increase 30,581,236.65 10,499,842.01 84,137,347.68 3,153,924.85 6,295,548.74 134,667,899.93
1) Accrual 30,581,236.65 10,499,842.01 84,137,347.68 3,153,924.85 6,295,548.74 134,667,899.93
Decrease 1,497,905.52 3,695,048.71 36,160,558.87 12,075,247.58 4,705,731.66 58,134,492.34
1) Disposal/ 1,497,905.52 3,695,048.71 36,160,558.87 12,075,247.58 4,705,731.66 58,134,492.34
Scrapping
Closing balance 179,905,052.43 35,355,332.78 259,273,098.92 9,710,022.45 25,413,229.16 509,656,735.74
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Items Buildings and General equipment Special Transport Other Total
structures equipment facilities equipment
Provision for
impairment
Opening balance
Increase 1,336,643.39 1,336,643.39
1) Accrual 1,336,643.39 1,336,643.39
Decrease 1,336,643.39 1,336,643.39
1) Disposal/ 1,336,643.39 1,336,643.39
Scrapping
Closing balance
Carrying amount
Closing balance 1,005,245,031.84 85,938,523.56 501,836,930.49 30,136,583.52 17,389,678.26 1,640,546,747.67
Opening balance 523,603,172.95 24,070,647.63 405,783,375.28 20,301,768.61 20,922,621.19 994,681,585.66
(2) No fixed assets temporarily idle at the balance sheet date
(3) Fixed assets leased out under finance leases at the balance sheet date
Items Cost Accumulated Carrying amount
Provision for impairment
depreciation
Special equipment 2,642,248.17 55,046.84 2,587,201.33
Subtotal 2,642,248.17 55,046.84 2,587,201.33
(4) No fixed assets leased out under operating leases at the balance sheet date
(5) Fixed assets with certificate of titles being unsettled
Items Carrying amount Reasons for unsettlement
Shunde Environmental Protection Industrial Park 484,310,105.38 In processing as a new property
Lueryuan Exhibition Center and auxiliary works 102,683,908.90 In processing
Subtotal 586,994,014.28
17. Construction in progress
(1) Details
Closing balance Opening balance
Projects Provision
Book balance Carrying amount Book balance Provision for Carrying amount
for
impairment
impairment
Shunde Environmental
Protection Industrial 392,494,295.41 392,494,295.41
Park
Biyang Waste
Incineration BOT 219,772,333.93 219,772,333.93 34,179,399.20 34,179,399.20
Project
Poyang Waste
Incineration BOT 305,691,397.30 305,691,397.30 99,134,242.08 99,134,242.08
Project
Jiayu Xingzhou
Sewage Treatment 199,194,392.46 199,194,392.46 176,767,886.50 176,767,886.50
BOT Project
Tongshan Xingzhou
Sewage Treatment 182,492,675.47 182,492,675.47 153,467,367.40 153,467,367.40
BOT Project
Tongshan Tongda 59,219,329.12 59,219,329.12 42,597,586.07 42,597,586.07
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Closing balance Opening balance
Projects Provision
Book balance Carrying amount Book balance Provision for Carrying amount
for
impairment
impairment
Wastewater Treatment
BOT Project
Maoming Sewage 97,112,573.45 97,112,573.45 78,770,642.99 78,770,642.99
Treatment BOT Project
Bahrain Right Banner
Sewage Treatment 43,350,467.66 43,350,467.66 42,465,394.81 42,465,394.81
BOT Project
Yinghe PPP project 219,613,167.96 219,613,167.96 100,861,556.23 100,861,556.23
Construction of
employee dormitory in 47,031,231.64 47,031,231.64
Lueryuan
West plot construction
of Lueryuan North 335,590.56 335,590.56 8,248,813.78 8,248,813.78
Plant
Lu’an Kitchen Project 78,929,760.49 78,929,760.49
Changde Zelian PPP 40,884,396.22 40,884,396.22
Project
Liling Waste 60,911,841.93 60,911,841.93 47,952,884.79 47,952,884.79
Incineration Project
Liling Urban-Rural
Sanitation Integrated 36,110,864.53 36,110,864.53 17,622,404.28 17,622,404.28
Project
Liling Landfill Project 15,287,765.22 15,287,765.22 8,867,794.14 8,867,794.14
Huayuan Wastewater 25,632,744.05 25,632,744.05 1,063,286.00 1,063,286.00
Treatment Project
Tongren Sanitation 17,434,225.72 17,434,225.72 148,296,315.67 148,296,315.67
Integrated PPP Project
Jishan Sanitation 13,485,660.35 13,485,660.35 8,385,681.60 8,385,681.60
Integrated PPP Project
Bao’an Sanitation 12,999,292.20 12,999,292.20
Integrated PPP Project
Anlong Sanitation 12,272,607.28 12,272,607.28 10,874,590.34 10,874,590.34
Integrated PPP Project
Foshan Yingshun PPP 8,882,882.68 8,882,882.68
Project
Kaili Garbage Station 62,827,728.16 62,827,728.16
Construction Project
Loudi Garbage Station 20,811,090.87 20,811,090.87
Construction Project
Piecemeal PPP projects 41,062,933.72 41,062,933.72 49,745,832.73 49,745,832.73
Piecemeal projects 16,218,948.06 16,218,948.06 35,132,593.18 35,132,593.18
Equipment to be 28,602,005.95 28,602,005.95 9,895,056.25 9,895,056.25
installed
Total 1,782,529,087.95 1,782,529,087.95 1,550,462,442.48 1,550,462,442.48
(2) Changes in significant projects
Projects Budgets Opening balance Increase Transferred to Transferred to Closing balance
fixed assets intangible assets
Shunde
Environmental 500,000,000.00 392,494,295.41 84,249,863.98 476,744,159.39
Protection Industrial
Park
Biyang Waste
Incineration BOT 314,692,600.00 34,179,399.20 185,592,934.73 219,772,333.93
Project
Poyang Waste 413,059,342.00 99,134,242.08 206,557,155.22 305,691,397.30
Incineration BOT
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Projects Budgets Opening balance Increase Transferred to Transferred to Closing balance
fixed assets intangible assets
Project
Jiayu Xingzhou
Sewage Treatment 196,216,800.00 176,767,886.50 22,426,505.96 199,194,392.46
BOT Project
Tongshan Xingzhou
Sewage Treatment 197,819,400.00 153,467,367.40 29,025,308.07 182,492,675.47
BOT Project
Tongshan Tongda
Wastewater 132,085,538.20 42,597,586.07 16,621,743.05 59,219,329.12
Treatment BOT
Project
Maoming Sewage
Treatment BOT 227,465,447.66 78,770,642.99 18,341,930.46 97,112,573.45
Project
Bahrain Right Banner
Sewage Treatment 75,617,000.00 42,465,394.81 885,072.85 43,350,467.66
BOT Project
Yinghe PPP project 423,744,954.13 100,861,556.23 137,293,079.88 18,541,468.15 219,613,167.96
Construction of
employee dormitory 65,000,000.00 47,031,231.64 47,031,231.64
in Lueryuan
West plot
construction of 44,484,704.00 8,248,813.78 16,943,017.64 24,856,240.86 335,590.56
Lueryuan North Plant
Lu’an Kitchen Project 112,000,000.00 78,929,760.49 78,929,760.49
Changde Zelian PPP 172,483,700.00 40,884,396.22 40,884,396.22
Project
Liling Waste 500,000,000.00 47,952,884.79 12,958,957.14 60,911,841.93
Incineration Project
Liling Urban-Rural
Sanitation Integrated 100,000,000.00 17,622,404.28 22,469,825.97 3,981,365.72 36,110,864.53
Project
Liling Landfill 117,000,000.00 8,867,794.14 6,419,971.08 15,287,765.22
Project
Huayuan Wastewater 53,897,600.00 1,063,286.00 24,999,617.35 430,159.30 25,632,744.05
Treatment Project
Tongren Sanitation
Integrated PPP 246,433,496.10 148,296,315.67 42,209,659.74 173,071,749.69 17,434,225.72
Project
Jishan Sanitation
Integrated PPP 38,745,300.00 8,385,681.60 6,514,273.35 1,414,294.60 13,485,660.35
Project
Bao’an Sanitation
Integrated PPP 519,727,300.00 337,364,374.38 324,365,082.18 12,999,292.20
Project
Anlong Sanitation
Integrated PPP 70,205,700.00 10,874,590.34 6,677,763.06 5,279,746.12 12,272,607.28
Project
Foshan Yingshun PPP 23,000,000.00 8,882,882.68 8,882,882.68
Project
Kaili Garbage Station 110,285,248.02 62,827,728.16 21,317,665.09 84,145,393.25
Construction Project
Loudi Garbage
Station Construction 40,749,163.35 20,811,090.87 805,654.39 21,616,745.26
Project
Piecemeal PPP 49,745,832.73 171,735,719.10 180,418,618.11 41,062,933.72
projects
Piecemeal projects 35,132,593.18 68,164,485.97 87,078,131.09 16,218,948.06
Equipment to be 9,895,056.25 50,637,517.03 23,250,106.56 8,680,460.77 28,602,005.95
installed
Total 1,550,462,442.48 1,665,940,366.52 611,928,637.90 821,945,083.15 1,782,529,087.95
(Continued)
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Accumulated Amount of
Accumulated Completion Annual
Projects amount of borrowing cost Fund source
input to budget percentage capitalization
borrowing cost capitalization in
(%) (%) rate (%)
capitalization current period
Self-raised funds and
Shunde Environmental 100.00 100.00 9,466,988.21 6,534,169.99 5.70 loans from financial
Protection Industrial Park
institutions
Biyang Waste Incineration 74.03 73.90 Self-raised funds
BOT Project
Poyang Waste Incineration 74.01 74.01 Self-raised funds
BOT Project
Jiayu Xingzhou Sewage 100.00 100.00 Self-raised funds
Treatment BOT Project
Tongshan Xingzhou Self-raised funds and
Sewage Treatment BOT 100.00 100.00 3,888,246.23 1,979,986.20 5.77 loans from financial
Project institutions
Tongshan Tongda
Wastewater Treatment 44.83 44.83 Self-raised funds
BOT Project
Self-raised funds and
Maoming Sewage 93.40 93.00 15,406,029.57 5,168,545.31 4.90 loans from financial
Treatment BOT Project
institutions
Bahrain Right Banner
Sewage Treatment BOT 96.00 96.00 Self-raised funds
Project
Yinghe PPP project 56.66 54.50 Self-raised funds
Construction of employee 72.36 72.36 Self-raised funds
dormitory in Lueryuan
West plot construction of 98.00 98.00 Self-raised funds
Lueryuan North Plant
Lu’an Kitchen Project 70.55 70.55 Self-raised funds
Changde Zelian PPP 23.70 23.70 Self-raised funds
Project
Liling Waste Incineration 12.18 12.18 Self-raised funds
Project
Liling Urban-Rural
Sanitation Integrated 36.03 36.03 Self-raised funds
Project
Liling Landfill Project 85.72 85.72 Self-raised funds
Huayuan Wastewater 48.36 48.36 Self-raised funds
Treatment Project
Tongren Sanitation 77.31 77.31 Self-raised funds
Integrated PPP Project
Jishan Sanitation 72.63 72.63 Self-raised funds
Integrated PPP Project
Bao’an Sanitation 70.75 70.75 Self-raised funds
Integrated PPP Project
Anlong Sanitation 66.02 66.02 Self-raised funds
Integrated PPP Project
Foshan Yingshun PPP 38.62 38.62 Self-raised funds
Project
Kaili Garbage Station 87.75 87.75 Self-raised funds
Construction Project
Loudi Garbage Station 54.17 54.17 Self-raised funds
Construction Project
Piecemeal PPP projects Self-raised funds
Piecemeal projects Self-raised funds
Equipment to be installed Self-raised funds
Total 28,761,264.01 13,682,701.50
18. Intangible assets
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(1) Details
Items Land use right Franchise Patent technology Software Total
Cost
Opening balance 629,024,287.79 2,322,292,134.15 458,002,651.66 24,698,381.65 3,434,017,455.25
Increase 13,489,245.00 833,889,756.35 9,433,487.53 5,434,772.29 862,247,261.17
1) Acquisition 13,489,245.00 2,549,720.44 16,038,965.44
2) Transferred in from
construction in 819,060,031.30 2,885,051.85 821,945,083.15
progress
3) Internal research 9,433,487.53 9,433,487.53
and development
4) Repurchased assets 14,829,725.05 14,829,725.05
Decrease 1,061.95 48,946,213.87 168,044.00 49,115,319.82
1) Disposal/Scrapping 1,061.95 48,946,213.87 168,044.00 49,115,319.82
Closing balance 642,513,532.79 3,156,180,828.55 418,489,925.32 29,965,109.94 4,247,149,396.60
Accumulated
amortization
Opening balance 61,555,061.12 490,679,080.07 159,327,805.98 11,557,438.33 723,119,385.50
Increase 13,172,299.20 269,265,691.86 49,737,048.73 3,155,032.52 335,330,072.31
1) Accrual 13,172,299.20 263,369,795.68 49,737,048.73 3,155,032.52 329,434,176.13
2) Due to repurchase 5,895,896.18 5,895,896.18
Decrease 663.72 19,976,545.74 131,769.20 20,108,978.66
1) Disposal/Scrapping 663.72 19,976,545.74 131,769.20 20,108,978.66
Closing balance 74,727,360.32 759,944,108.21 189,088,308.97 14,580,701.65 1,038,340,479.15
Provision for impairment
Opening balance 24,687,522.85 24,687,522.85
Increase 20,185,580.19 20,185,580.19
1) Accrual 20,185,580.19 20,185,580.19
Decrease
1) Disposal/Scrapping
Closing balance 24,687,522.85 20,185,580.19 44,873,103.04
Carrying amount
Closing balance 567,786,172.47 2,371,549,197.49 209,216,036.16 15,384,408.29 3,163,935,814.41
Opening balance 567,469,226.67 1,806,925,531.23 298,674,845.68 13,140,943.32 2,686,210,546.90
At the balance sheet date, intangible assets formed through internal research and development account for 0.69% of total closing
balance of intangible assets.
(2) Land use right with certificate of titles being unsettled
Items Carrying amount Reasons for unsettlement
Lot 4 in Cao’e Street 13,466,762.93 In processing as a new land
Subtotal 13,466,762.93
19. Development expenditures
(1) Details
Items Opening balance Increase Decrease Closing
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Internal balance
Others Recognized as Transferred to
development
intangible assets profit or loss
expenditures
Development 7,861,260.14 6,021,294.07 9,433,487.52 4,449,066.69
expenditures
Total 7,861,260.14 6,021,294.07 9,433,487.52 4,449,066.69
(2) Other remarks
Projects Capitalization Commencement date Closing balance
Certificate of capitalization
progress
Project proposal, project
Project A 100% 07/19/2019 assignment paper, staged summary
report
Project proposal, project
Project B 100% 07/01/2019 assignment paper, staged summary
report
Project proposal, project
Project C 40% 03/15/2020 assignment paper, staged summary 1,763,287.72
report
Project proposal, project
Project D 30% 03/28/2020 assignment paper, staged summary 1,024,782.18
report
Project proposal, project
Project E 50% 03/05/2020 assignment paper, staged summary 1,592,468.75
report
Project proposal, project
Project F 10% 06/25/2020 assignment paper, staged summary 68,528.04
report
Total 4,449,066.69
20. Goodwill
(1) Cost
Due to business Decrease due to
Investee or events Opening balance Closing balance
combination in disposal of
resulting in goodwill
current period subsidiaries
Zoomlion Environmental 5,714,428,315.99 5,714,428,315.99
Company
Green Oriental Company 78,074,688.12 78,074,688.12
佛山市盈峰环境水处理
有限公司 (Foshan
Yingfeng Environmental 316,465,481.91 316,465,481.91
Water Treatment Co.,
Ltd.*)
Shangfeng Industrial 100,455,813.40 100,455,813.40
Company
Donggang Magnet Wire 14,818,794.95 14,818,794.95
Company
Total 6,224,243,094.37 6,224,243,094.37
(2) Provision for impairment
Decrease due to
Investee or events Opening balance Increase Closing balance
disposal of
resulting in goodwill
subsidiaries
Zoomlion Environmental 13,209,901.26 25,405,362.30 38,615,263.56
Company [Note]
Donggang Magnet Wire
14,818,794.95 14,818,794.95
Company
*
The English name is for identification purpose only.
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Decrease due to
Investee or events Opening balance Increase Closing balance
disposal of
resulting in goodwill
subsidiaries
Subtotal 28,028,696.21 25,405,362.30 53,434,058.51
Note: For impairment loss of goodwill of Zoomlion Environmental Company, as the goodwill of 92,031,026.04 yuan was included in
the acquisition of Zoomlion Environmental Company, which corresponded to the original deferred tax liabilities that recognized due
to appraisal appreciation as at the date of business combination not under common control, provision for impairment of
25,405,362.30 yuan was made along with changes in deferred tax liabilities in the current period.
(3) Impairment test process
1) Related information of asset groups or asset group portfolios which include goodwill
Carrying amount of Carrying amount of Carrying amount of
Asset groups or
Legal entities goodwill allocated to asset groups or asset groups or asset
asset group
the asset groups or asset group group portfolios that
portfolios
asset group portfolios portfolios include goodwill
Zoomlion Environmental
Company (manufacturing and
Sanitation vehicles and sales of sanitation vehicles and
equipment equipment), 长沙中标环境产业 11,051,393,640.78 1,385,391,437.05 12,436,785,077.83
manufacturing and
有限公司 (Changsha Zhongbiao
sales asset group
Environmental Industry Co.,
Ltd.)
Zoomlion Environmental
Company (sanitation integrated
operation), Green Oriental
Urban-rural sanitation Company, Huaian Chenjie
integrated operation Environmental Engineering Co., 306,455,386.89 3,277,373,056.32 3,583,828,443.21
asset group portfolio Ltd., and 泌阳县丰和新能源电
力有限公司 (Biyang County
Fenghe New Energy Power Co.,
Ltd.*)
Foshan Yingfeng Environmental
Water governance 316,465,481.91 224,733,923.37 541,199,405.28
operation asset group Water Treatment Co., Ltd.
Fan manufacturing and Shangfeng Industrial Company 159,547,374.49 141,836,086.96 301,383,461.45
sales asset group
Subtotal 11,833,861,884.07 5,029,334,503.70 16,863,196,387.77
Note 1: Goodwill of sanitation vehicles and equipment manufacturing and sales asset group and urban-rural sanitation integrated
operation asset group portfolio included the portion attribution to non-controlling shareholders.
Note 2: In December 2018, Zoomlion Environmental Company, which was acquired under business combination under common
control by the Company, had two asset groups, i.e. sanitation vehicles and equipment manufacturing and sales asset group and
urban-rural sanitation integrated operation asset group (including waste transfer, landfill and disposal).The assessment on the
goodwill of Zoomlion Environmental Company was based on the fair value of the identifiable net assets as at the end of June 2017
under asset-based method in the appraisal report numbered Zhong Rui Ping Bao Zi [2017] 110731042, without considering the
synergy between the urban-rural sanitation integrated operation asset group of Zoomlion Environmental Company and the waste
incineration power generation operation asset group of former Green Oriental Company. After the business combination of Zoomlion
Environmental Company, as its urban-rural sanitation integrated operation asset group and the waste incineration power generation
operation asset group of Green Oriental Company were similar in terms of business acquisition, production and operation activities,
and cash return realization methods, and the Management had started to carry out integrated management, these two asset groups
were identified as the urban-rural sanitation integrated operation asset group portfolio.
The English names are for identification purpose only.
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The original goodwill of Zoomlion Environmental Company in amount of 5.714 billion was re-allocated to the sanitation vehicles
and equipment manufacturing and sales asset group and urban-rural sanitation integrated operation asset group portfolio based on the
gross profit ratio contributed by the two businesses, in amount of 5.636 billion yuan and 78 million yuan, respectively.
2) Impairment test process, method and conclusion
① Significant assumptions and basis
a. It is assumed that the assessed entity is a going concern, and there is no significant change in key aspects that affect production and
operation such as business scope, sales model and channels, and the management;
b. It is assumed that neither the social and economic environment of the assessed entity nor the relevant laws, regulations, and
policies of the country and the region where the entity is located have significant changes;
c. It is assumed that the business scope, business methods, management models, etc. of the assessed entity are continuously improved
on the basis of consistency, and can be adjusted and innovated with the development of the economy in a timely manner;
d. It is assumed that the various products provided by the assessed entity can adapt to market demand, the goals and measures
formulated can be achieved on schedule according to the schedule, and expected benefits will be achieved;
e. It is assumed that interest rates, exchange rates, tax bases and tax rates have no major changes within the normal range prescribed
by the state.
② Determination method of recoverable amount
The recoverable amount of asset groups and asset group portfolios is estimated based on the business characteristics of different asset
groups or asset group portfolios, which is based on the five-year budget approved by the Management. The revenue growth rate of
the product production and sales asset group in 2020 is based on the existing orders, historical data and operating budget, while the
expense rate is based on the average expense rate of the previous three years, in combination with the reasonable income growth,
capital depreciation and labor cost growth in the future; for operation asset groups or asset group portfolios, due to the large
difference in income and gross profit margin between the investment period and period of maturity of PPP operating projects, the
expected growth rate, stable period growth rate and profit rate of the asset groups and asset group portfolios show an irregular
distribution when multiple projects are run in parallel, and the income, costs and expenses are estimated based on the time to mature
operation and design capacity of each specific project.
The recoverable amount of groups and asset group portfolios is calculated based on the discounted expected future operating cash
flows of operating long-term assets excluding non-operating assets and liabilities, initial working capital, surplus assets and
interest-bearing liabilities.
③ Key parameter information for adopting future cash flow discount method
Asset groups or asset group Forecast period stable period Profit margin Pre-tax discount
Forecast period
portfolios growth rate growth rate rate
Sanitation vehicles and
equipment manufacturing and 5 years [Note 1] 0.00% 15.48%-17.16% 12.76%
sales asset group
Urban-rural sanitation integrated [Note 2] [Note 2] [Note 2] [Note 2] 11.63%-
operation asset group portfolio 12.16%
Water governance operation [Note 2] [Note 2] [Note 2] [Note 2] 11.36%
asset group
Fan manufacturing and sales 5 years [Note 3] 0.00% 5.91%-6.96% 11.32%
asset group
Note 1: The revenue growth rate of sanitation vehicles and equipment manufacturing and sales asset group during the forecast period
from 2021 to 2025 is 6.58%, 7.12%, 5.25%, 4.07% and 2.81%, respectively (unit price is expected to be stable with a decline, and
sales volume changes lead to different growth rates).
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Note 2: Please refer to the above determination method of recoverable amount for details.
Note 3: The revenue growth rate of fan manufacturing and sales asset group during the forecast period from 2021 to 2025 is 10.10%,
7.19%, 5.29%, 2.99% and 2.00%, respectively.
④ Conclusion of goodwill impairment test
Recoverable amount asset group or Carrying amount of asset Goodwill impairment
Asset group or asset group
asset group portfolios that include group or asset group portfolios loss attributable to the
portfolios
goodwill that include goodwill Company
Sanitation vehicles and
equipment manufacturing and 12,738,100,000.00 [Note 1] 12,436,785,077.83
sales asset group
Urban-rural sanitation
integrated operation asset group 4,521,775,000.00 [Note 2] 3,583,828,443.21
portfolio
Water governance operation 542,320,000.00 [Note 3] 541,199,405.28
asset group
Fan manufacturing and sales 350,279,688.48 301,383,461.45
asset group
Subtotal 18,152,474,688.48 16,863,196,387.77
Note 1: The present value of estimated future cash flows (recoverable amount) of sanitation vehicles and equipment manufacturing
and sales asset group was based on the appraisal report numbered Zhong Rui Ping Bao Zi [2021] 000413 issued by 中瑞世联资产评
估集团有限公司 (HG Shilian Assets Appraisal Group Co., Ltd.).
Note 2: The present value of estimated future cash flows (recoverable amount) of urban-rural sanitation integrated operation asset
group portfolio was based on the appraisal report numbered Zhong Rui Ping Bao Zi [2021] 000408 issued by HG Shilian Assets
Appraisal Group Co., Ltd. and the appraisal report numbered Zhong Guang Xin Ping Bao Zi [2021] 003 issued by 广东中广信资产
评估有限公司 (Guangdong Zhongguangxin Assets Appraisal Co., Ltd.).
Note 3: It is based on the appraisal report numbered Zhong Guang Xin Ping Bao Zi [2021] 002 issued by Guangdong Zhongguangxin
Assets Appraisal Co., Ltd.
3) Completion of performance commitment and its effect on goodwill impairment test
From 2018 to 2020, the audited net profit of Zoomlion Environmental Company after non-recurring profit or loss attributable to
shareholders of the parent company amounted to 1.105 billion yuan, 1.264 billion yuan, and 1.409 billion yuan, respectively, totaling
3.778 billion yuan, 56 million yuan higher than the commitment, which means the Company fulfilled its performance commitment
(calculated based on the accumulated amount for 3 years as agreed).
21. Long-term prepayments
Items Opening balance Increase Amortization Closing balance
Expenditures on improvement 15,131,380.10 251,103.07 3,648,898.94 11,733,584.23
of leased-in fixed assets
Others 978,558.78 822,043.99 830,384.35 970,218.42
Total 16,109,938.88 1,073,147.06 4,479,283.29 12,703,802.65
22. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets before offset
Items Closing balance Opening balance
The English name is for identification purpose only.
The English name is for identification purpose only.
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Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
difference difference
Provision for impairment of 589,067,868.14 90,264,437.69 484,841,437.43 74,098,839.50
assets
Unrealized profit from 13,119,836.20 1,886,494.71 25,068,470.62 3,678,789.87
internal transactions
Deductible losses 20,799,666.14 3,119,949.91
Total 622,987,370.48 95,270,882.31 509,909,908.05 77,777,629.37
(2) Deferred tax liabilities before offset
Closing balance Opening balance
Items
Taxable temporary Taxable temporary
Deferred tax liabilities Deferred tax liabilities
difference difference
Accelerated depreciation of 5,789,343.84 1,447,335.96
fixed assets
Changes in fair value of 639,250.00 159,812.50
derivative financial instruments
Changes in fair value of
financial assets at fair value 123,048,000.00 30,762,849.39 212,230,500.00 46,963,875.00
through profit or loss
Assets appraisal appreciation
due to business combination not 405,268,960.11 46,674,772.03 454,980,514.43 72,919,489.91
under common control
Total 534,106,303.95 78,884,957.38 667,850,264.43 120,043,177.41
(3) Details of unrecognized deferred tax assets
Items Closing balance Opening balance
Deductible temporary difference 146,931,501.30 119,860,075.63
Deductible losses 141,639,237.32 130,784,839.99
Unrealized profit from internal transactions 339,581,837.11 129,902,841.95
Subtotal 628,152,575.73 380,547,757.57
(4) Maturity years of deductible losses of unrecognized deferred tax assets
Maturity years Closing balance Opening balance Remarks
Year 2021 35,765.88 7,548,263.10
Year 2022 27,961,103.28 65,505,274.76
Year 2023 57,039,954.82 57,482,722.13
Year 2024 56,602,413.34
Subtotal 141,639,237.32 130,536,259.99
23. Other non-current assets
(1) Details
Closing balance Opening balance [Note]
Items
Book balance Provision for Carrying Book balance Provision for Carrying
impairment amount impairment amount
Contract assets 49,013,589.27 9,175,693.26 39,837,896.01 58,262,533.48 6,640,238.50 51,622,294.98
Advances for 45,933,089.17 45,933,089.17 35,842,204.27 35,842,204.27
long-term assets
Receivables
for agent 8,518,174.25 8,518,174.25 8,518,174.25 8,518,174.25
construction
Total 103,464,852.69 9,175,693.26 94,289,159.43 102,622,912.00 6,640,238.50 95,982,673.50
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Note: Please refer to section III (XXXIV) 1 of notes to financial statements for details on the difference between the opening balance
of current period and the closing balance of preceding period (i.e. December 31, 2019).
(2) Contract assets
1) Details
Closing balance Opening balance
Items
Book balance Provision for Carrying Book balance Provision for Carrying amount
impairment amount impairment
Quality guarantee 49,013,589.27 9,175,693.26 39,837,896.01 58,262,533.48 6,640,238.50 51,622,294.98
deposit receivable
Subtotal 49,013,589.27 9,175,693.26 39,837,896.01 58,262,533.48 6,640,238.50 51,622,294.98
2) Details on provision for impairment of contract assets
① Details
Increase Decrease
Items Opening Closing
balance Accrual Others Reversal Write-off Others balance
On an individual
basis
On a collective basis 6,640,238.50 2,535,454.76 9,175,693.26
Subtotal 6,640,238.50 2,535,454.76 9,175,693.26
② Contract assets with provision for impairment made on a collective basis
Ventilation equipment manufacturing industry and environmental integrated industry under age analysis method
Closing balance
Portfolios
Book balance Provision for impairment Provision proportion (%)
Within 1 year 23,955,836.31 1,197,791.81 5.00
1-2 years 14,433,576.28 1,443,357.63 10.00
2-3 years 5,041,402.60 1,512,420.78 30.00
3-5 years 1,121,302.08 560,651.04 50.00
Over 5 years 4,461,472.00 4,461,472.00 100.00
Subtotal 49,013,589.27 9,175,693.26 18.72
24. Short-term borrowings
Items Closing balance Opening balance
Credit borrowings 800,921,295.96 638,320,346.15
Guaranteed borrowings 518,446,764.98 222,329,086.77
Mortgaged borrowings 72,104,019.96 62,091,002.69
Guaranteed and mortgaged borrowings 260,430,637.32 330,480,351.87
Guaranteed and pledged borrowings 4,000,000.00 4,000,000.00
Mortgaged and pledged borrowings 2,002,658.33
Pledged borrowings 349,453,030.00
Total 1,657,905,376.55 1,606,673,817.48
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25. Held-for-trading financial liabilities
(1) Details
Items Opening balance Increase Decrease Closing balance
Held-for-trading financial liabilities 866,300.00 810,300.00 866,300.00 810,300.00
Including: Derivative financial liabilities 866,300.00 810,300.00 866,300.00 810,300.00
Total 866,300.00 810,300.00 866,300.00 810,300.00
(2) Other remarks
Held-for-trading financial liabilities were the floating losses of metal futures contracts held by the sub-subsidiary Anhui Weiqi
Electrical Materials Co., Ltd.
26. Notes payable
Items Closing balance Opening balance
Bank acceptance 3,377,701,187.77 2,597,981,590.26
Trade acceptance 475,474,206.32 343,712,590.88
Total 3,853,175,394.09 2,941,694,181.14
(2) Other remarks
At the balance sheet date, balances of notes due but unpaid, which were not presented for payment by the holders, totaled 313,659.68
yuan.
27. Accounts payable
(1) Details
Items Closing balance Opening balance
Payments for goods 2,983,456,990.78 2,210,599,443.61
Payments for engineering and equipment 342,985,351.65 221,909,224.20
Others 78,382,742.60 53,669,184.18
Total 3,404,825,085.03 2,486,177,851.99
(2) No significant balance with age over one year.
28. Advances received
(1) Details
Items Closing balance Opening balance [Note]
Payments for goods
Total
Note: Please refer to section III (XXXIV) 1 of notes to financial statements for details on the difference between the opening balance
of current period and the closing balance of preceding period (i.e. December 31, 2019).
(2) No significant balance with age over one year.
29. Contract liabilities
Items Closing balance Opening balance [Note]
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Items Closing balance Opening balance [Note]
Advanced goods payments 181,051,683.90 150,983,008.42
Total 181,051,683.90 150,983,008.42
Note: Please refer to section III (XXXIV) 1 of notes to financial statements for details on the difference between the opening balance
of current period and the closing balance of preceding period (i.e. December 31, 2019).
30. Employee benefits payable
(1) Details
Items Opening balance Increase Decrease Closing balance
Short-term employee benefits 221,403,931.32 1,125,108,045.53 1,028,003,858.06 318,508,118.79
Post-employment benefits - 3,708,506.55 19,654,010.40 20,008,646.10 3,353,870.85
defined contribution plan
Termination benefits 3,913,031.07 3,913,031.07
Total 225,112,437.87 1,148,675,087.00 1,051,925,535.23 321,861,989.64
(2) Details of short-term employee benefits
Items Opening balance Increase Decrease Closing balance
Wage, bonus, allowance and 217,765,407.19 1,030,739,891.66 938,895,359.19 309,609,939.66
subsidy
Employee welfare fund 188,802.51 38,852,001.13 38,183,756.31 857,047.33
Social insurance premium 107,872.67 23,255,633.55 23,023,052.90 340,453.32
Including: Medicare premium 64,428.17 21,016,749.34 20,741,190.39 339,987.12
Occupational injuries 38,875.63 1,670,697.64 1,709,376.02 197.25
premium
Maternity premium 4,568.87 568,186.57 572,486.49 268.95
Housing provident fund 1,285,988.97 22,735,531.46 22,636,369.71 1,385,150.72
Trade union fund and 2,055,859.98 9,524,987.73 5,265,319.95 6,315,527.76
employee education fund
Subtotal 221,403,931.32 1,125,108,045.53 1,028,003,858.06 318,508,118.79
(3) Details of defined contribution plan
Items Opening balance Increase Decrease Closing balance
Basic endowment insurance 3,322,704.67 18,738,874.59 19,071,333.80 2,990,245.46
premium
Unemployment insurance 385,801.88 915,135.81 937,312.30 363,625.39
premium
Subtotal 3,708,506.55 19,654,010.40 20,008,646.10 3,353,870.85
31. Taxes and rates payable
Items Closing balance Opening balance
VAT 180,356,026.72 73,783,692.90
Enterprise income tax 163,408,107.06 101,451,575.83
Individual income tax withheld for tax authorities 6,099,807.10 7,085,391.75
Urban maintenance and construction tax 11,172,773.45 3,999,418.16
Housing property tax 1,747,769.26 811,081.30
Land use tax 278,724.12 433,967.55
Stamp tax 1,853,506.57 1,644,718.29
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Items Closing balance Opening balance
Education surcharge 4,603,782.22 1,746,535.21
Local education surcharge 2,980,941.01 1,118,755.00
Others 13,505.15 44,920.49
Total 372,514,942.66 192,120,056.48
32. Other payables
(1) Details
Items Closing balance Opening balance
Dividend payable 9,450,000.00
Other payables 443,477,082.48 365,423,715.69
Total 443,477,082.48 374,873,715.69
(2) Dividend payable
1) Details
Items Closing balance Opening balance
曹国路 (Cao Guolu) 1,050,000.00
绍兴路巧贸易有限公司 (Shaoxing Luqiao Trading Co., 4,200,000.00
Ltd.)
绍兴智赢企业管理有限公司 (Shaoxing Zhiying 2,100,000.00
Enterprise Management Co., Ltd.*)
绍兴和盈企业管理合伙企业（有限合伙） (Shaoxing 2,100,000.00
Heying Enterprise Management Partnership (LP)*)
Subtotal 9,450,000.00
2) No significant balance with age over one year.
(3) Other payables
1) Details
Items Closing balance Opening balance
Factoring financing of accounts receivable with recourse 49,160,385.66 101,147,928.04
right [Note]
Temporary receipts payable 208,719,173.08 110,738,395.22
Temporary receipts of the employee stock ownership plan 92,370,003.00
phase I
Security deposits 72,880,746.04 27,827,224.46
Others 112,716,777.70 33,340,164.97
Total 443,477,082.48 365,423,715.69
Note: The balance refers to the factoring financing of account receivable made by Zoomlion Environmental Company to the
non-bank financial institutions under the control of Zoomlion Heavy Industry Co., Ltd. However, as non-bank financial institutions
have the right to request Zoomlion Environmental Company to repurchase the accounts receivable if they are overdue, the accounts
receivable shall not be derecognized upon the receipts of corresponding factoring, and the receipts shall be presented under other
payables (non-bank financial institutions are listed as risk exposures)
2) No significant balance with age over one year.
The English names are for identification purpose only.
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33. Non-current liabilities due within one year
Items Closing balance Opening balance
Long-term borrowings due within one year 150,862,201.57 86,554,242.52
Total 150,862,201.57 86,554,242.52
34. Other current liabilities
Items Closing balance Opening balance [Note]
Hedging instruments 7,415,450.00
Output tax to be debited 22,448,466.02 19,627,791.10
Customer rebates 25,242,123.71 9,879,816.88
Total 55,106,039.73 29,507,607.98
Note: Please refer to section III (XXXIV) 1 of notes to financial statements for details on the difference between the opening balance
of current period and the closing balance of preceding period (i.e. December 31, 2019).
35. Long-term borrowings
Items Closing balance Opening balance
Guaranteed borrowings 197,500,000.00
Pledged borrowings 81,300,000.00 54,600,000.00
Guaranteed and mortgaged borrowings 94,230,491.81 109,492,159.87
Guaranteed and pledged borrowings 234,212,965.97 479,751,010.91
Guaranteed, pledged and mortgaged borrowings 158,400,000.00
Total 765,643,457.78 643,843,170.78
36. Bonds payable
(1) Details
Items Closing balance Opening balance
Convertible corporate bonds 1,199,466,109.60
Total 1,199,466,109.60
(2) Current period movements (not including other financial instruments such as preferred shares/perpetual bonds
classified as financial liabilities)
Bonds Issuing date Maturity Amount outstanding Opening
Par value Current period issuance
balance
Infore convertible 100.00 11/04/2020 6 years 1,476,189,600.00 1,457,336,184.17
bonds
Subtotal 1,476,189,600.00 1,457,336,184.17
(Continued)
Bonds Equity component Converted to Closing balance
Par value interest Interest adjustments
under split shares
Infore convertible 266,939,831.65 461,056.48 8,608,700.60 1,199,466,109.60
bonds
Subtotal 266,939,831.65 461,056.48 8,608,700.60 1,199,466,109.60
(3) Please refer to section XIV (II) of notes to financial statements for details on converting conditions and time of
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convertible bonds.
37. Long-term payables
Items Opening balance Increase Decrease Closing balance Reasons for balance
Funds from conversion
Special funds for 3,000,000.00 3,000,000.00 of treasury bonds into
treasury bond projects
loans
Special funds for Jiayu
103,080,483.16 19,935,291.42 123,015,774.58 Special government
Sewage Treatment
funds for PPP projects
Project
Special funds for
82,320,040.33 47,400,000.00 129,720,040.33 Special government
Tongshan Sewage
funds for PPP projects
Treatment Project
Subtotal 188,400,523.49 67,335,291.42 255,735,814.91
38. Provisions
Items Closing balance Opening balance Reasons for balance
Provision was made based on the
Pending lawsuit 1,000,000.00 application of the first-instance judgment
by 河北澳晗工程咨询有限公司(Hebei
Aohan Engineering Consulting Co., Ltd.)
Contractual credit 461,553.82
guarantees
Total 1,461,553.82
39. Deferred income
(1) Details
Items Opening balance Increase Decrease Closing balance Reasons for balance
[Note]
Government grants
Government grants 40,519,289.35 61,828,174.00 5,612,643.51 96,734,819.84 related to
assets/income
Total 40,519,289.35 61,828,174.00 5,612,643.51 96,734,819.84
Note: Please refer to section III (XXXIV) 1 of notes to financial statements for details on the difference between the opening balance
of current period and the closing balance of preceding period (i.e. December 31, 2019).
(2) Details of government grants
Items Increase Grants included into Related to
Opening balance Closing balance
other income [Note] assets/income
Special subsidies for
Xiantao Waste Power 11,389,114.20 726,531.48 10,662,582.72 Related to assets
Generation Project
Incremental tax
incentives for 9,482,800.00 948,280.00 8,534,520.00 Related to assets
technological
transformation
Urban sewage and
garbage treatment
facilities and sewage 5,351,375.15 445,536.32 4,905,838.83 Related to assets
pipe network
engineering projects
Special funds for air 1,000,000.00 100,000.00 900,000.00 Related to assets
pollution prevention and
The English name is for identification purpose only.
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Items Increase Grants included into Related to
Opening balance Closing balance
other income [Note] assets/income
control
The fifth batch of
special funds for raising 1,000,000.00 1,000,000.00 Related to assets
manufacturing power in
Hunan Province
Xiantao sludge harmless 17,700,000.00 17,700,000.00 Related to assets
treatment plant
Shouxian Domestic
Waste Incineration 15,040,000.00 1,002,666.71 14,037,333.29 Related to assets
Power Plant Project
Urban and rural
domestic waste transfer,
kitchen waste resource 11,270,000.00 211,034.48 11,058,965.52 Related to assets
utilization and harmless
treatment projects
No. 2 Sewage Treatment
Plant and supporting
pipe network projects in 7,660,000.00 7,660,000.00 Related to assets
Daban Town, Bahrain
Right Banner
The second batch of
awards for rental 5,784,474.00 5,784,474.00 Related to assets
housing in the high-tech
zone
The third batch of
subsidies for
technological 2,500,000.00 2,500,000.00 Related to assets
transformation of
industrial enterprises
Key projects of
enterprise intelligent 819,700.00 35,737.38 783,962.62 Related to assets
transformation of 2018
and 2019
Subsidies for enterprise
technological 1,000,000.00 142,857.14 857,142.86 Related to assets
transformation
Central special
construction supporting 10,000,000.00 10,000,000.00 Related to
funds for Kaili PPP income
Project
Special funds for green
manufacturing system 2,000,000.00 2,000,000.00 Related to
solution supplier income
projects of 2019
Funds for national key
296,000.00 54,000.00 350,000.00 Related to
R&D program projects
income
of 2017
Subtotal 40,519,289.35 61,828,174.00 5,612,643.51 96,734,819.84
Note: Please refer to section V (IV) 3 of notes to financial statements for details on grants included into profit or loss.
40. Share capital
(1) Details
Movements
Items Opening balance Issue of Reserve Closing balance
Bonus Others Subtotal
new transferred to
shares
shares shares
Total share 3,163,062,146.00 3,163,062,146.00
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41. Other equity instruments
(1) Please refer to section XIV (II) of notes to financial statements for basic information of convertible corporate bonds outstanding
as of the balance sheet date
(2) Current period movements of convertible corporate bonds outstanding at the balance sheet date
Opening balance Increase Decrease Closing balance
Items
Quantity Carrying Quantity Carrying amount Quantity Carrying Quantity Carrying amount
amount amount
Convertible
corporate 14,761,896.00 266,939,831.65 14,761,896.00 266,939,831.65
bonds
Total 14,761,896.00 266,939,831.65 14,761,896.00 266,939,831.65
42. Capital reserve
(1) Details
Items Opening balance Increase Decrease Closing balance
Share/capital premium 9,652,714,085.10 4,840,900.20 1,636,434.07 9,655,918,551.23
Other capital reserve 45,403,677.65 12,859,488.20 6,439,840.59 51,823,325.26
Total 9,698,117,762.75 17,700,388.40 8,076,274.66 9,707,741,876.49
(2) Other remarks
Current increase of share/capital premium in amount of 4,840,900.20 yuan was due to the transfer-in of other capital reserve
originally arising from share-based payments upon the expiration of the stock incentive vesting period;
Current decrease of share/capital premium was due to the following events: 1) in January 2020, the Company acquired 5.20% equity
of the subsidiary Shangfeng Industrial Company, and the difference between the acquisition cost and the proportionate share in net
assets of Shangfeng Industrial Company from acquisition date or combination date in amount of -2,225,430.97 yuan was included
into the Company’s share/capital premium; 2) in November 2020, the Company disposed 39.00% equity of the subsidiary Jilin
Zhongfeng Oasis Environmental Development Co., Ltd, and the difference between the disposal consideration and the proportionate
share in net assets of Jilin Zhongfeng Oasis Environmental Development Co., Ltd from acquisition date or combination date in
amount of -314,024.80 yuan was included into the Company’s share/capital premium; 3) in January 2020, the Company acquired
18.86% equity of the subsidiary Xiantao Yinghe Environmental Protection Co., Ltd., and the difference between the acquisition cost
and the proportionate share in net assets of Xiantao Yinghe Environmental Protection Co., Ltd. from acquisition date or combination
date in amount of 903,021.70 yuan was included into the Company’s share/capital premium.
Current increase of other capital reserve was due to the recognition of incentive expenses based on stock incentive plan in amount of
13,624,937.21 yuan, of which, 12,859,488.20 yuan was included into capital reserve – other capital reserve, and 765,449.01 yuan
was included into non-controlling interest. Please refer to section XI of notes to financial statements for details. Current decrease of
other capital reserve was due to the following events: 1) in February 2020, the Company transferred 15,326,208 shares that
repurchased at the end of 2019 to the Company’s special repurchase securities account of employee stock ownership plan at the
market price of 6.42 yuan per share, totaling 98,394,255.36 yuan. The difference between the transfer price and the repurchase
amount of 99,993,195.75 yuan in 2019 amounting to 1,598,940.39 yuan was used to offset capital reserve; 2) please refer to the
above notes to current increase of share/capital premium for details on other decrease of other capital reserve amounting to
4,840,900.20 yuan.
43. Treasury shares
(1) Details
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Items Opening balance Increase Decrease Closing balance
Treasury shares 99,993,195.75 8,920,597.83 99,993,195.75 8,920,597.83
Total 99,993,195.75 8,920,597.83 99,993,195.75 8,920,597.83
(2) Other remarks
Current increase was due to the Proposal on Share Repurchasing Plan approved by the third extraordinary meeting of the ninth
session of the Board of Directors dated April 13, 2020, which decided to repurchase the Company’s shares through centralized
bidding transactions using self-raised funds. In the current period, the Company repurchased 1,137,524 shares in total through
centralized bidding transactions, and paid a total amount of 8,920,597.83 yuan (excluding transaction costs).
Current decrease was due to the Proposal on the Employee Stock Ownership Plan Phase I (Draft) and its Summary deliberated and
approved by the 31st extraordinary meeting of the eighth session of the Board of Directors dated October 23, 2019 and the third
extraordinary shareholders’ general meeting of 2019 dated November 12, 2019, according to which the Company transferred
15,326,208 shares that repurchased at the end of 2019 to the Company’s special repurchase securities account of employee stock
ownership plan at the consideration of 98,394,255.36 yuan. The difference between the transfer price and the repurchase amount of
99,993,195.75 yuan in 2019 amounting to 1,598,940.39 yuan was included into capital reserve.
44. Other comprehensive income (OCI)
Current period cumulative
Less: OCI
Less: OCI
Current previously
Opening previously Less:
Items period recognized but Attributable to Attributable to Closing
balance recognized but Income
cumulative transferred to parent non-controlling balance
transferred to tax
before retained company shareholders
profit or loss in expenses
income tax earnings in
current period
current period
Items to be
reclassified 479,437.51 479,437.51 -479,437.51
subsequently to
profit or loss
Including: Cash flow 479,437.51 479,437.51 -479,437.51
hedging reserves
Total 479,437.51 479,437.51 -479,437.51
45. Special reserve
Items Opening balance Increase Decrease Closing balance
Work safety fund 8,699,413.98 8,699,413.98
Total 8,699,413.98 8,699,413.98
46. Surplus reserve
Items Opening balance Increase Decrease Closing balance
Statutory surplus reserve 232,701,943.56 232,701,943.56
Total 232,701,943.56 232,701,943.56
47. Undistributed profit
Items Preceding period
Current period cumulative
comparative
Balance before adjustment at the end of preceding period 2,520,329,621.90 1,503,796,981.62
Add: Net profit attributable to owners of the parent company 1,386,476,099.73 1,361,453,754.17
Less: Appropriation of statutory surplus reserve 28,614,899.29
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Items Preceding period
Current period cumulative
comparative
Dividend payable on ordinary shares 348,116,836.08 316,306,214.60
Closing balance 3,558,688,885.55 2,520,329,621.90
(II) Notes to items of the consolidated income statement
1. Operating revenue/Operating cost
(1) Details
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 14,273,213,235.36 10,720,797,390.49 12,659,401,544.07 9,368,410,640.28
Other operations 58,811,840.04 45,491,568.51 36,457,122.33 21,045,772.46
Total 14,332,025,075.40 10,766,288,959.00 12,695,858,666.40 9,389,456,412.74
(2) Breakdown of revenue by main categories
Reportable segments Operating revenue
Ventilation equipment and electrotechnical equipment industry 3,433,239,893.56
Environmental integrated industry 10,878,867,146.75
Financial services 17,971,932.25
Subtotal 14,330,078,972.56
Note: The difference between breakdown of revenue by main categories and total operating revenue was housing rental income
amounting to 1,946,102.84 yuan
2. Taxes and surcharges
Items Current period cumulative Preceding period comparative
Urban maintenance and construction tax 31,932,708.59 26,357,347.01
Education surcharge 13,763,632.17 11,464,647.74
Local education surcharge 9,173,301.02 7,610,647.36
Stamp duty 4,012,840.78 9,560,201.75
Housing property tax 6,046,933.52 6,202,318.33
Land use tax 8,949,626.89 9,590,515.17
Vehicle and vessel use tax 578,488.72 389,195.04
Resources tax 1,371.30
Environmental protection tax 3,298.30 23,789.43
Total 74,460,829.99 71,200,033.13
3. Selling expenses
Items Current period cumulative Preceding period comparative
Wages, benefits and insurance premiums 308,668,531.58 291,701,971.07
Agency fees 190,967,041.03 169,045,792.85
Office expenses 66,589,757.23 56,109,183.78
Business entertainment 60,699,969.88 49,632,644.93
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Items Current period cumulative Preceding period comparative
Vehicle usage fees 42,291,788.33 38,035,830.73
Travelling expenses 35,222,537.93 31,747,341.20
Expenses for tendering and bidding 41,237,901.47 30,756,400.47
Marketing expenses 26,738,045.90 21,373,324.53
After-sales service expenses 7,898,372.76 3,554,675.91
Depreciation and amortization 2,203,528.84 3,453,862.68
Share-based payments 1,528,333.10 386,458.95
Others 17,243,205.46 11,078,862.33
Transportation and loading expenses 140,071,729.83
Car service fees 70,313,474.48
Total 801,289,013.51 917,261,553.74
4. Administrative expenses
Items Current period cumulative Preceding period comparative
Wages and benefits, insurance premiums 270,586,381.78 155,298,625.65
and housing provident fund
Depreciation and amortization 82,337,180.72 110,451,999.85
Agency consulting fees 55,508,011.48 37,227,307.12
Office expenses 47,382,856.32 39,029,441.08
Business entertainment 26,542,380.63 17,684,509.81
Travelling expenses 10,444,833.47 8,498,657.67
Vehicle usage fees 7,732,891.83 6,666,552.09
Repair fees 6,350,097.09 1,969,171.96
Share-based payments 5,634,842.48 579,223.19
Others 23,947,210.32 14,429,024.32
Total 536,466,686.12 391,834,512.74
5. R&D expenses
Items Current period cumulative Preceding period comparative
Labor costs 118,576,852.62 123,475,057.84
Direct inputs 91,469,017.06 89,234,328.57
Other expenses 43,355,945.62 32,022,283.05
Share-based payments 1,275,516.89 905,940.89
Total 254,677,332.19 245,637,610.35
6. Financial expenses
Items Current period cumulative Preceding period comparative
Interest expenses 127,630,040.16 99,893,189.87
Interest income -49,689,471.88 -26,182,679.84
Cash discounts -9,393,178.26 -15,017,532.96
Gains and losses on foreign exchange 708,908.76 4,004,549.31
Notes discounting fees 9,031,666.57 16,124,478.20
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Items Current period cumulative Preceding period comparative
Handling fees 32,626,633.00 37,633,636.71
Realized finance income -44,793,266.76 -62,004,243.51
Others -495,893.77
Total 66,121,331.59 53,955,504.01
7. Other income
Items Amount included in non-recurring
Current period cumulative Preceding period comparative
profit or loss
Government grants related to 3,612,643.51 4,318,417.18 3,612,643.51
assets [Note]
Government grants related to 41,281,924.72 102,252,781.89 41,281,924.72
income [Note]
Refund of handling fees for
withholding individual 576,781.45 541,734.54 576,781.45
income tax
Refund of VAT 28,804,978.15 28,806,106.81
Total 74,276,327.83 135,919,040.42 45,471,349.68
Note: Please refer to section V (IV) 3 of notes to financial statements for details on government grants included into other income.
8. Investment income
Items Current period cumulative Preceding period comparative
Investment income from long-term equity 41,578,662.81 33,697,177.55
investments under equity method
Investment income from disposal of 488,224.46 92,216,592.23
long-term equity investments
Investment income from financial 40,547,691.44 16,538,761.63
instruments
Including: Financial assets designated as 11,250,000.00 9,673,130.59
at fair value through profit or loss
Financial assets classified as at fair 28,882,731.44 6,485,251.04
value through profit or loss
Other equity instrument investments 414,960.00 380,380.00
Gains on disposal of financial assets -5,125,103.88 -8,589,637.07
Including: Financial assets classified as at
fair value through other comprehensive -5,152,198.65 -8,589,637.07
income
Financial assets designated as at fair 27,094.77
value through profit or loss
Performance compensation 839,195.26 24,676,400.00
Total 78,328,670.09 158,539,294.34
9. Gains on changes in fair value
Items Current period cumulative Preceding period comparative
Held-for-trading financial assets -89,949,855.53 25,183,593.66
Including: Financial assets as at fair value -89,949,855.53 25,183,593.66
through profit or loss
Gains or losses on ineffective portion of -5,769,445.94 -2,775,150.00
outstanding fair value hedges
Total -95,719,301.47 22,408,443.66
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
10. Credit impairment loss
Items Current period cumulative Preceding period comparative
Bad debts -119,100,867.26 -111,054,884.67
Contractual credit guarantees -461,553.82
Total -119,562,421.08 -111,054,884.67
11. Assets impairment loss
Items Current period cumulative Preceding period comparative
Inventory write-down loss -36,270,934.35 -27,432,998.13
Impairment loss of intangible assets -20,185,580.19
Impairment loss of goodwill -25,405,362.30 -13,209,901.26
Other non-current assets (quality guarantee -2,535,454.76
deposit)
Impairment loss of fixed assets -1,336,643.39
Impairment loss of contract assets 2,738,164.92
Impairment loss of non-current assets due 517,309.92
within one year (quality guarantee deposit)
Total -82,478,500.15 -40,642,899.39
12. Gains on asset disposal
Items Preceding period Amount included in
Current period cumulative
comparative non-recurring profit or loss
Gains on disposal of fixed assets -1,787,925.37 -2,970,694.88 -1,787,925.37
Gains on disposal of construction in 4,360.09
progress
Total -1,787,925.37 -2,966,334.79 -1,787,925.37
13. Non-operating revenue
Items Preceding period Amount included in
Current period cumulative
comparative non-recurring profit or loss
Gains on damage or retirement of 77,383.74 15,329.71 77,383.74
non-current assets
Penalty and confiscatory income 835,893.25 4,633,477.18 835,893.25
Funds no need to pay 1,872,195.17 5,925,978.14 1,872,195.17
Others 1,793,847.85 1,742,459.55 1,793,847.85
Indemnity income 3,499,479.91 17,916.60 3,499,479.91
Recovery of accounts receivable with 1,765,219.77 1,765,219.77
provision for bad debts written off
Total 9,844,019.69 12,335,161.18 9,844,019.69
14. Non-operating expenditures
Items Preceding period Amount included in
Current period cumulative
comparative non-recurring profit or loss
Losses on damage or retirement of 40,814,493.09 150,157,786.26 40,814,493.09
non-current assets
Donation expenditures 10,428,048.44 1,694,833.58 10,428,048.44
Compensation and penalty expenses 6,422,397.70 6,530,821.05 6,422,397.70
Local water conservancy construction 134,126.33 300,201.97
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Items Preceding period Amount included in
Current period cumulative
comparative non-recurring profit or loss
special fund
Others 430,658.49 4,561,436.33 430,658.49
Total 58,229,724.05 163,245,079.19 58,095,597.72
15. Income tax expenses
(1) Details
Items Current period cumulative Preceding period comparative
Current period income tax expenses 240,674,591.23 269,382,714.81
Deferred income tax expenses -33,103,177.47 -23,143,098.99
Total 207,571,413.76 246,239,615.82
(2) Reconciliation of accounting profit to income tax expenses
Items Preceding period
Current period cumulative
comparative
Profit before tax 1,637,392,068.49 1,637,805,781.25
Income tax expenses based on tax rate applicable to the parent 409,348,017.12 409,451,445.31
company
Effect of different tax rate applicable to subsidiaries -213,890,288.36 -157,964,396.30
Effect of prior income tax reconciliation 4,036,346.94 -3,498,939.69
Effect of non-taxable income -10,524,147.60 -5,962,961.92
Effect of non-deductible costs, expenses and losses 5,636,087.35 4,596,680.76
Utilization of deductible losses not previously recognized as -11,209,875.57 -14,507,339.81
deferred tax assets
Effect of deducible temporary differences or deductible losses not 47,130,077.63 33,706,513.05
recognized as deferred tax assets
Effect of plus deduction -22,954,803.75 -19,581,385.58
Income tax expenses 207,571,413.76 246,239,615.82
16. Other comprehensive income, net of income tax
Please refer to section V (I) 44 of notes to financial statements for details.
(III) Notes to items of the consolidated cash flow statement
1. Other cash receipts related to operating activities
Items Current period cumulative Preceding period comparative
Receipts of deposits for notes, letters of credit 546,629,420.18 526,555,043.10
and letters of guarantee
Receipts of government grants 101,409,788.44 114,482,952.67
Receipts of security deposits 87,547,183.94 87,447,241.02
Recovery of petty cash and temporary advance 53,990,787.31 45,003,791.59
payment receivable
Temporary receipts payable 97,576,945.00 38,598,081.73
Recovery of funds in escrow accounts 957,256.52 36,458,569.79
Receipts of interest income 32,491,002.22 15,705,385.93
宇星科技发展（深圳）有限公司 (Yuxing 5,925,978.14
218
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Items Current period cumulative Preceding period comparative
Technology Development (Shenzhen) Co.,
Ltd.), the former shareholder has bought out the
normal collection of payment
Receipts of principal of factoring financing and 192,699,970.39
finance lease
Others 40,191,716.87 11,070,136.06
Total 1,153,494,070.87 881,247,180.03
2. Other cash payments related to operating activities
Items Current period cumulative Preceding period comparative
Payments for deposits for notes, letters of credit 531,970,066.36 582,490,139.33
and letters of guarantee
Operating period expenses 742,930,598.43 833,158,916.30
Security deposits 105,356,641.82 98,018,473.16
Payments for petty cash and temporary advance 69,592,540.81 54,032,904.30
payment receivable
Payments for principal of factoring financing 614,614,522.83 51,703,348.89
and finance lease
Temporary receipts payable 12,179,242.35 15,952,320.10
Others 4,876,929.24 96,342,070.26
Time deposits [Note] 700,000,000.00
Funds allocated to escrow accounts 945,226.15
Total 2,782,465,767.99 1,731,698,172.34
Note: Time deposits were held for the purpose of operating activities at the end of the period, with maturity over three months.
3. Other cash receipts related to investing activities
Items Current period cumulative Preceding period comparative
Redemption of financial products 5,009,700,000.00 4,739,471,000.00
Receipts of special government funds for PPP 67,335,291.42 121,431,966.13
projects by project subsidiaries
Receipts of loan principal and interest from 62,836,100.61 7,522,450.41
Lianjiang Green Oriental New Energy Co., Ltd.
Receipts of loan interest from Guangdong 8,092,859.98 202,541.94
Tianshu New Energy Technology Co., Ltd.
Receipts of the loan interest from Shantou
Zoolion Ruikang Environmental Sanitation 3,158,044.62 19,926.66
Service Co., Ltd.
Receipts of futures margin 4,198,085.50 3,665,289.50
Receipts of performance compensation from the
original shareholders of Guangdong Liangke 24,676,400.00
Environmental Engineering Co., Ltd.
Receipts of loan principal and interest from 吉
林欣雨环保工程有限公司 (Jilin Xinyu 1,104,600.00
Environmental Protection Engineering Co.,
Ltd.)
Receipts of compensation from Tengine
Innovation (Beijing) Monitoring Instrument Co., 839,195.26
Ltd.
Receipts of loan principal and interest from 641,241.65
Shantou Chaoyang District Zoomlion Ruikang
The English name is for identification purpose only.
The English name is for identification purpose only.
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Items Current period cumulative Preceding period comparative
Environmental Sanitation Service Co., Ltd.
Receipts of principal and interest of the agency 113,036,270.31
financing of pipe network project
Receipts of call loan from Yuxing Technology 48,274,568.30
Development (Shenzhen) Co., Ltd.
Receipts of loan and interest from Guangdong 2,027,999.98 11,476,130.49
Liangke Environmental Engineering Co., Ltd.
Receipts of interest on loan from cooperative 152,973.34
suppliers
Total 5,159,933,419.02 5,069,929,517.08
4. Other cash payments related to investing activities
Items Current period cumulative Preceding period comparative
Purchase of financial products 5,009,700,000.00 4,708,470,000.00
13,498,236.44 4,810,370.37
Payments of margin for futures trading
Payments of call loans to the Environmental
Sanitation Management Office of Bijiang 5,930,076.27
District, Tongren City
Payments of call loans to Lianjiang Green 7,000,000.00
Oriental New Energy Co., Ltd.
Payments of call loans to Shantou Zoomlion
Ruikang Environmental Sanitation Service Co., 23,810,370.00
Ltd.
Payments of loan principal to Yuxing 17,434,292.90
Technology Development (Shenzhen) Co., Ltd.
Payments of special government funds for PPP 14,685,800.00
projects to project companies
Payments of loan principal to Guangdong 10,000,000.00
Liangke Environmental Engineering Co., Ltd.
Payments of loan principal to cooperative 7,860,000.00
suppliers
Payments of call loans to Shantou Chaoyang
District Zoomlion Ruikang Environmental 600,000.00
Sanitation Service Co., Ltd.
Total 5,036,128,312.71 4,787,670,833.27
5. Other cash receipts related to financing activities
Items Current period cumulative Preceding period comparative
Receipts of payments for employee stock 6,100,000.00 152,370,003.00
ownership plan
Receipts of call loans from 洪志光 (Hong 1,780,000.00
Zhiguang)
Receipts of call loans from 东莞市家宝园林
绿化有限公司(Dongguan Jiabao Landscaping 6,670,000.00
Co., Ltd.)
Loan amounts of accounts receivable factoring 101,147,928.04
with recourse right
Total 7,880,000.00 260,187,931.04
6. Other cash payments related to financing activities
Items Current period cumulative Preceding period comparative
Repurchase of treasury shares 8,920,597.83 99,993,195.75
The English name is for identification purpose only.
220
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Items Current period cumulative Preceding period comparative
Payments for employee stock ownership plans 60,000,000.00
Factoring service fees and handling fees 6,325,532.07 509,966.47
Repayment of call loans to Dongguan Jiabao 4,112,673.61 885,463.41
Landscaping Co., Ltd.
Acquisition of non-controlling interest of 18,200,000.00
Shangfeng Industrial Company
Payments of call loans to Hong Zhiguang 483,027.48
Repayment of call loans to 李德义 (Li Deyi) 2,625,000.00
Repayment of call loans to Yuxing Technology 355,854.17
Development (Shenzhen) Co., Ltd.
Total 38,041,830.99 164,369,479.80
7. Supplement information to the cash flow statement
(1) Supplement information to the cash flow statement
Supplement information Preceding period
Current period cumulative
comparative
1) Reconciliation of net profit to cash flow from operating activities:
Net profit 1,429,820,654.73 1,391,566,165.43
Add: Provision for assets impairment loss 202,040,921.23 151,697,784.06
Depreciation of fixed assets, oil and gas assets, productive 132,977,279.08 104,334,625.06
biological assets
Amortization of intangible assets 329,434,176.13 241,305,992.40
Amortization of long-term prepayments 4,479,283.29 4,168,155.52
Loss on disposal of fixed assets, intangible assets and other 1,787,925.37 2,966,334.79
long-term assets (Less: gains)
Fixed assets retirement loss (Less: gains) 40,737,109.35 150,142,456.55
Losses on changes in fair value (Less: gains) 95,719,301.47 -22,408,443.66
Financial expenses (Less: gains) 101,148,109.13 81,994,703.40
Investment losses (Less: gains) -83,480,868.78 -167,128,931.39
Decrease of deferred tax assets (Less: increase) -17,493,252.94 -10,698,749.28
Increase of deferred tax liabilities (Less: decrease) -41,158,220.03 -12,284,537.21
Decrease of inventories (Less: increase) -229,881,454.67 21,070,265.60
Decrease of operating receivables (Less: increase) -2,146,572,286.81 500,950,001.46
Increase of operating payables (Less: decrease) 1,817,968,802.17 -983,114,152.76
Others [Note] 51,186,613.03 30,188,384.05
Net cash flows from operating activities 1,688,714,091.75 1,484,750,054.02
2) Significant investing and financing activities not related to cash
receipts and payments:
Conversion of debt into capital
Convertible bonds due within one year
Fixed assets leased in under finance leases
3) Net changes in cash and cash equivalents:
Cash at the end of the period 4,657,826,099.23 2,611,680,947.69
Less: Cash at the beginning of the period 2,611,680,947.69 1,719,966,631.78
Add: Cash equivalents at the end of the period
Less: Cash equivalents at the beginning of the period
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Supplement information Preceding period
Current period cumulative
comparative
Net increase of cash and cash equivalents 2,046,145,151.54 891,714,315.91
Note: Others refer to share-based payments and unrecognized finance income of long-term receivables.
(2) Composition of cash and cash equivalents
Items Closing balance Opening balance
1) Cash 4,657,826,099.23 2,611,680,947.69
Including: Cash on hand 147,826.76 62,621.18
Cash in bank on demand for payment 4,622,411,287.34 2,606,269,825.38
Other cash and bank balances on demand for payment 35,266,985.13 5,348,501.13
Central bank deposit on demand for payment
Deposit in other banks
Loans to other banks
2) Cash equivalents
Including: Bond investments maturing within three months
3) Cash and cash equivalents at the end of the period 4,657,826,099.23 2,611,680,947.69
Including: Cash and cash equivalents of parent company or subsidiaries
with use restrictions
On December 31, 2019, balance of cash and bank balances amounted to 3,160,767,624.40 yuan, while balance of cash and cash
equivalents amounted to 2,611,680,947.69 yuan. The difference of 549,086,676.71 yuan included deposit for notes in amount of
477,341,190.07 yuan, deposit for letters of guarantee in amount of 70,775,730.12 yuan, deposit for migrant workers’ wages in
amount of 919,540.01 yuan, ETC deposit in amount of 12,500.00 yuan, and engineering escrow accounts that are not available for
separate use in amount of 37,716.51 yuan, which was not cash and cash equivalents.
On December 31, 2020, balance of cash and bank balances amounted to 5,904,127,970.85 yuan, while balance of cash and cash
equivalents amounted to 4,657,826,099.23 yuan. The difference of 1,246,301,871.62 yuan included deposit for notes in amount of
458,086,264.82 yuan, deposit for letters of guarantee in amount of 75,383,801.54 yuan, deposit for migrant workers’ wages in
amount of 922,334.53 yuan, deposit for certificate of deposits in amount of 709,048,611.10 yuan, funds frozen due to lawsuits in
amount of 2,837,968.00 yuan, and engineering escrow accounts that are not available for separate use in amount of 22,891.63 yuan,
which was not cash and cash equivalents.
(3) Amount of endorsed commercial acceptance not involving cash receipts and payments
Items Current period cumulative Preceding period comparative
Amount of endorsed commercial acceptance 634,225,860.32 571,366,123.95
Including: Payments for goods 586,283,659.54 414,320,078.88
Payments for acquisition of long-term 36,375,813.18 134,860,435.98
assets, such as fixed assets
Payments for expenses 11,566,387.60 22,185,609.09
(V) Others
1. Assets with title or use right restrictions
Items Closing carrying amount Reasons for restrictions
Cash and bank balances 1,246,301,871.62 Deposits, frozen due to litigation
preservation, escrow account
Accounts receivable 103,965,922.09 Pledge
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Items Closing carrying amount Reasons for restrictions
Receivables financing 306,145,249.74 Pledge
Long-term receivables and non-current assets due 49,160,385.66 Factoring financing with recourse right
within one year
Fixed assets 551,470,379.29 Mortgage
Investment property 51,185.99 Mortgage
Intangible assets 236,472,755.88 Mortgage
100% equity of 阜南绿色东方环保有限公司
(Funan Green Oriental Environmental Protection 58,236,923.40 Pledge
Co., Ltd.)
100% equity of Shouxian Green Oriental New 80,691,695.44 Pledge
Energy Co., Ltd.
100% equity of Xiantao Green Oriental 204,935,012.39 Pledge
Environmental Power Generation Co., Ltd.
25% equity of Lianjiang Green Oriental New 23,149,733.54 Frozen due to litigation preservation
Energy Co., Ltd.
Total 2,860,581,115.04
2. Monetary items in foreign currencies
Items Closing balance in foreign Exchange rate RMB equivalent at the end
currencies of the period
Cash and bank balances 28,114,587.04
Including: USD 1,392,102.02 6.5249 9,083,326.47
EUR 1,974,427.58 8.0250 15,844,781.33
HKD 3,786,215.83 0.8416 3,186,479.24
Accounts receivable 12,817,279.25
Including: USD 1,251,837.80 6.5249 8,168,116.46
HKD 5,524,195.33 0.8416 4,649,162.79
Accounts payable 3,351,820.12
Including: USD 513,696.78 6.5249 3,351,820.12
3. Government grants
(1) Details
1) Government grants related to assets
Opening balance Closing balance
Items Increase Amortization Amortization Remarks
of deferred of deferred
presented under
income income
Pursuant to the
Special subsidies for
11,389,114.20 726,531.48 10,662,582.72 Other income document numbered
Xiantao Waste Power
E Cai Jian Fa [2015]
Generation Project
199
Incremental tax Pursuant to the
incentives for 9,482,800.00 948,280.00 8,534,520.00 Other income document numbered
technological Xiang Gong Xin Tou
transformation Zi [2019] 57
Urban sewage and
Pursuant to the
garbage treatment
5,351,375.15 445,536.32 4,905,838.83 Other income document numbered
facilities and sewage
Fa Gai Huan Zi
pipe network
[2015] 431
engineering projects
Special funds for air 1,000,000.00 100,000.00 900,000.00 Other income Pursuant to the
The English name is for identification purpose only.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Opening balance Closing balance
Items Increase Amortization Amortization Remarks
of deferred of deferred
presented under
income income
pollution prevention document numbered
and control Zhang Cai Zi Huan
Zhi [2019] 41
The fifth batch of
Pursuant to the
special funds for
1,000,000.00 1,000,000.00 Other income document numbered
raising
Xiang Cai Qi Zhi
manufacturing power
[2019] 72
in Hunan Province
Pursuant to the
documents
Xiantao sludge
17,700,000.00 17,700,000.00 Other income numbered Xian Fa
harmless treatment
Gai Huan Zi [2019]
plant
116 and Xian Fa Gai
Huan Zi [2019] 150
Pursuant to the
documents
Shouxian Domestic
15,040,000.00 1,002,666.71 14,037,333.29 Other income numbered Cai Jian
Waste Incineration
[2017] 569 and Huai
Power Plant Project
Fa Gai Zi Huan
[2016] 188
Urban and rural
domestic waste
Pursuant to the
transfer, kitchen
11,270,000.00 211,034.48 11,058,965.52 Other income document numbered
waste resource
Xian Fa Gai Huan Zi
utilization and
[2020] 84
harmless treatment
projects
No. 2 Sewage
Treatment Plant and
Pursuant to the
supporting pipe
7,660,000.00 7,660,000.00 Other income document numbered
network projects in
Chi Cai Zhi Huan
Daban Town,
[2015] 814
Bahrain Right
Banner
The second batch of Pursuant to the
awards for rental 5,784,474.00 5,784,474.00 Other income document numbered
housing in the Zhang Zhu Zu Tong
high-tech zone [2020] 5
The third batch of
Pursuant to the
subsidies for
2,500,000.00 2,500,000.00 Other income document numbered
technological
Zhang Gong Xin
transformation of
Tou Zi Fa [2020] 72
industrial enterprises
Key projects of Pursuant to the
enterprise intelligent 819,700.00 35,737.38 783,962.62 Other income document numbered
transformation of Qu Wei Ban [2019]
2018 and 2019 36
Subsidies for Pursuant to the
enterprise 1,000,000.00 142,857.14 857,142.86 Other income document numbered
technological Zhang Gao Xin
transformation Guan Fa [2017] 33
Subtotal 28,223,289.35 61,774,174.00 3,612,643.51 86,384,819.84
2) Government grants related to income and used to compensate future relevant costs, expenses or losses
Opening balance Amounts Closing balance Amounts carried
Items of deferred Increase carried of deferred forward Remarks
income forward income presented under
Central special Pursuant to the “Agreement
construction on the Appropriation of
supporting funds 10,000,000.00 10,000,000.00 Other income Central Special
for Kaili PPP Construction Funds for PPP
Project Project Phase II of Kaili
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Opening balance Amounts Closing balance Amounts carried
Items of deferred Increase carried of deferred forward Remarks
income forward income presented under
Municipal Domestic Waste
Collection and
Transportation System”
Pursuant to the “Green
Manufacturing System
Special funds for
Solution Supplier Project
green
Contract” by Energy
manufacturing 2,000,000.00 2,000,000.00 Other income Conservation and
system solution
Comprehensive Utilization
supplier projects
Department of Ministry of
of 2019
Industry and Information
Technology
Funds for national
key R&D program 296,000.00 54,000.00 350,000.00 Other income Odd subsidies
projects of 2017
Subtotal 12,296,000.00 54,000.00 2,000,000.00 10,350,000.00
3) Government grants related to income and used to compensate incurred relevant costs, expenses or losses
Items Amounts Presented under Remarks
Central manufacturing high-quality 8,000,000.00 Other income Pursuant to the document numbered Zhang
development funds Cai Qi Zhi [2020] 50
Special funds for green manufacturing 8,000,000.00 Other income Pursuant to the document numbered Qu
system solution supplier project Wei Ban [2019] 36
Subsidies for energy saving and 4,200,000.00 Other income Pursuant to the document numbered Xiang
emission reduction Cai Yu [2020] 3
Enterprise support funds 3,250,000.00 Other income Pursuant to the document numbered Yong
Mei Bao Jing [2019] 10
Subsidies for sludge disposal 2,816,166.83 Other income Pursuant to the document numbered Shun
Fu Ban Han [2010] 694
1,728,833.90 Other income Pursuant to the document numbered Ren
Subsidies for stabilizing employment
She Bu Fa [2020] 30
Special funds for raising provincial 1,500,000.00 Other income Pursuant to the document numbered Xiang
manufacturing power Cai Qi Zhi [2020] 28
Policies fiscal awards for industrial
clusters, “Enterprises Using Cloud
1,100,000.00 Other income Pursuant to the document numbered Qu
Platform”, industrial digital
Wei Ban [2020] 50
transformation, hidden champions
corporates of 2019
Special funds for scientific and 700,000.00 Other income Pursuant to the document numbered Zhe
technological development Cai Ke Jiao [2019] 48
High-level talent subsidy 666,717.85 Other income Pursuant to the document numbered Qu
Wei [2019] 52
Awards for science and technology 618,000.00 Other income Pursuant to the document numbered Yu
innovation Zheng Fa [2019] 31
Supporting funds from high-tech zone 572,000.00 Other income Pursuant to the document numbered Zhang
policy fulfillment Gao Xin Guan Fa [2019] 32
Smart car rewards 500,000.00 Other income Pursuant to the document numbered Xiang
Xin Guan Fa [2020] 22
Land use tax incentives 426,700.00 Other income Pursuant to the document numbered Wu
Zheng Mi [2015] 123
Special subsidies for innovation 400,000.00 Other income Pursuant to the document numbered Zhang
platform construction Fa Gai Chuang Gao [2020] 14
Subsidies for accreditation of high-tech 400,000.00 Other income Pursuant to the document numbered Shun
enterprises Fu Ban Fa [2017] 77
Electricity subsidy income 336,720.00 Other income Pursuant to the document numbered Fo
Gong Xin Han [2020] 969
Exemption of housing property tax and 277,091.73 Other income Pursuant to document of No. 2 (2020)
urban land use tax STA, Xiantao Taxation Office
260,000.00 Other income Pursuant to the document numbered E Cai
Medical waste emergency disposal funds
Huan Fa [2020] 20
Subsidies for competitive supporting 210,000.00 Other income Pursuant to the document numbered Shun
225
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Items Amounts Presented under Remarks
talent projects Ren Cai Ling Dao Ban [2020] 33
Industrial Internet Platform Construction 200,000.00 Other income Pursuant to the document numbered Zhang
and Application Award Cai Qi Zhi [2020] 42
Other odd subsidies 3,119,694.41 Other income
Subtotal 39,281,924.72
(2) In the current period, government grants included into profit or loss totaled 44,894,568.23 yuan.
4. Hedging
(1) Fair value hedge
In order to avoid the risk of changes in the fair value of copper held by the Company (i.e. hedged risk), the subsidiary Guangdong
Weiqi Company entered into the Futures Brokerage Contract (the hedging instrument of Guangdong Weiqi Company) with 五矿经
易期货有限公司 (Minmetals&Jingyi Futures Co., Ltd.). The hedge instrument was a fair value hedge and the accounting period
designated for such hedging relationship was from January 1, 2020 to future accounting periods. The subsidiary Donggang Magnet
Wire Company entered into the Futures Brokerage Contract (the hedging instrument of Donggang Magnet Wire Company) with 兴
业期货有限公司 (Industrial Futures Co., Ltd.*). The hedge instrument was a fair value hedge and the accounting period designated
for such hedging relationship was from January 1, 2020 to future accounting periods. The Company evaluated the effectiveness of the
hedges using ratio analysis method. The financial information related to the fair value hedges for the current period is as follows: the
fair value of the hedging instrument of Guangdong Weiqi Company amounted to -4,793,300.00 yuan at the end of the period, while
that amounted to -429,000.00 yuan at the beginning of the period, with accumulated gains on the hedged items in amount of
191,175.17 yuan; gains of the hedged items arising from the hedged risk amounted to 2,571,837.47 yuan, the floating profit of the
hedged items amounted to 814,549.73 yuan at the end of the period, while that amounted to 377,138.31 yuan at the beginning of the
period, with ineffective portion of 2,763,012.64 yuan included into investment income. The fair value of the hedging instrument of
Donggang Magnet Wire Company amounted to -2,622,150.00 yuan at the end of the period, while that amounted to -802,750.00 yuan
at the beginning of the period, with accumulated gains in amount of -3,329,996.46 yuan; gains of the hedged items arising from the
hedged risk amounted to 5,953,530.28 yuan, the floating profit of the hedged items amounted to 1,804.33 yuan at the end of the
period, while that amounted to 168,432.89 yuan at the beginning of the period, with ineffective portion of 2,623,533.82 yuan
included into investment income.
(2) Cash flow hedge
In order to avoid the risk of changes in cash flows of copper sales contracts entered into between the Company and customers (i.e.
hedged risk), the subsidiary Donggang Magnet Wire Company entered into the Futures Brokerage Contract (the hedging instrument
of Donggang Magnet Wire Company) with Industrial Futures Co., Ltd., and the accounting period designated for such hedging
relationship was from January 1, 2020 to future accounting periods. The Company evaluated the effectiveness of the hedge using
ratio analysis method. The financial information related to the cash flow hedge for the current period is as follows: the fair value of
the hedging instrument of Donggang Magnet Wire Company amounted to 0.00 yuan at the end of the period, with accumulated gains
in amount of 4,282,816.45 yuan. Losses on the hedged items arising from the hedged risk amounted to 4,385,300.00 yuan
VI. Changes in the consolidation scope
(I) Changes in the consolidation scope due to other reasons
1. Entities brought into the consolidation scope
The English names are for identification purpose only.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Entities Equity acquisition Equity acquisition date Capital contribution Capital contribution
method proportion (%)
常德泽联环境服务有限公司
(Changde Zelian Environmental Set up March 2020 46,695,300.00 90.00
*
Service Co., Ltd. )
XiantaoYinglian Environmental Set up April 2020 1,000,000.00 100.00
Technology Co., Ltd.
Shenzhen Yinglian Environmental Set up October 2020 2,000,000.00 100.00
Industry Co., Ltd.
Shenzhen Bao’an Yinglian City Set up May 2020 109,142,740.00 70.00
Service Co., Ltd.
Binchuan Zhongying Environmental Set up June 2020 927,333.00 92.73
Service Co., Ltd.
Tangyin County Yinglian Set up July 2020 5,760,000.00 100.00
Environmental Service Co., Ltd.
Yangbi Zhongying Environmental Set up July 2020 704,682.00 70.47
Services Co., Ltd.
Shaoyang County Zhongfeng Set up June 2020 10,000,000.00 100.00
Environmental Industry Co., Ltd.
Foshan Shunde District Yinghe Urban Set up July 2020 1,000,000.00 100.00
Environmental Service Co., Ltd.
Rongcheng County Yinglian Urban Set up July 2020 21,000,000.00 100.00
Environmental Service Co., Ltd.
Xi’an Yinglian Urban Environmental Set up July 2020 2,000,000.00 100.00
Service Co., Ltd.
永顺中峰经投环境科技有限公司
(Changde Zelian Environmental Set up July 2020 10,246,725.00 75.00
*
Service Co., Ltd. )
Xianghe Yinglian Environmental Set up May 2020 10,000,000.00 100.00
Technology Co., Ltd.
Lanling Zoomlion Environmental Set up December 2020 2,000,000.00 100.00
Service Co., Ltd.
Yuncheng Zhongying City Set up December 2020 1,000,000.00 100.00
Environmental Service Co., Ltd.
Foshan Yingshun Urban Set up November 2020 7,000,000.00 70.00
Environmental Service Co., Ltd.
Anshan Yinglian Urban
Environmental Sanitation Set up October 2020 10,000,000.00 100.00
Management Co., Ltd.
佛山盈通电工材料有限公司
(Foshan Yingtong Electrical Set up October 2020 350,000,000.00 100.00
Materials Co., Ltd.*)
Donglan Yinglian Urban Set up January 2020 [Note] 100.00
Environmental Service Co., Ltd.
Baise Yinglian Urban Environmental Set up January 2020 [Note] 100.00
Service Co., Ltd.
盈峰中联（天津）环境科技有限公
司 (Infore Zoomlion (Tianjin) Set up December 2020 [Note] 100.00
Environmental Technology Co.,
Ltd.*)
桐柏县同盈环境卫生发展有限公司
(Tongbai County Tongying Set up November 2020 [Note] 100.00
Environmental Sanitation
Development Co., Ltd.*)
广东星舟水处理科技有限公司
(Guangdong Xingzhou Water Set up September 2020 [Note] 100.00
Treatment Technology Co., Ltd.*)
Anhua Yingsheng Environmental Set up April 2020 [Note] 100.00
Sanitation Service Co., Ltd.
佛山市顺德区中盈城市环境管理有 Set up December 2020 [Note] 100.00
限公司 (Foshan Shunde Zhongying
*
The English name is for identification purpose only.
*
The English names are for identification purpose only.
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Entities Equity acquisition Equity acquisition date Capital contribution Capital contribution
method proportion (%)
Urban Environmental Management
Co., Ltd.*)
Qixian Tongying Environmental Set up November 2020 [Note] 100.00
Sanitation Service Co., Ltd.
Lai’an Zhongfeng Environmental Set up July 2020 [Note] 100.00
Technology Co., Ltd.
Zhaoyuan County Jincheng
Environmental Sanitation Set up July 2020 [Note] 100.00
Management Service Co., Ltd.
Ji’an Zhongfeng Environmental Set up September 2020 [Note] 100.00
Technology Co., Ltd.
Heze Yingsheng Environmental Set up October 2020 [Note] 100.00
Sanitation Service Co., Ltd.
Luannan County Yinglian Set up November 2020 [Note] 100.00
Environmental Management Co., Ltd.
Guangxi Guiping Yinghe
Environmental Sanitation Set up November 2020 [Note] 100.00
Management Co., Ltd.
Shennongjia Forest Area Yinghe
Environmental Sanitation Set up November 2020 [Note] 100.00
Management Co., Ltd.
重庆中盈环境卫生服务有限公司
(Chongqing Zhongying Set up December 2020 [Note] 100.00
Environmental Sanitation Service
Co., Ltd.*)
仁寿盈联城乡环卫服务有限公司
(Renshou Yinglian Urban and Rural Set up December 2020 [Note] 100.00
*
Sanitation Service Co., Ltd. )
Liucheng County Yinglian
Environmental Sanitation Set up December 2020 [Note] 100.00
Management Co., Ltd.
嵊州市盈合环境卫生管理有限公司
(Shengzhou Yinghe Environmental Set up October 2020 [Note] 100.00
Sanitation Management Co., Ltd.*)
嵊州市中联环境工程有限公司
(Shengzhou Zoomlion Environmental Set up November 2020 [Note] 100.00
Engineering Co., Ltd.*)
佛山市联胜环境卫生服务有限公司
(Foshan Liansheng Environmental Set up September 2020 [Note] 100.00
Sanitation Service Co., Ltd.*)
Heping County Hesheng
Environmental Sanitation Service Set up August 2020 [Note] 100.00
Co., Ltd.
Foshan Shunde District Lianying
Environmental Development Co., Set up October 2020 [Note] 100.00
Ltd.
Suqian Lianying City Service Co., Set up November 2020 [Note] 100.00
Ltd.
寿县联胜环境卫生管理有限公司
(Shouxian Liansheng Environmental Set up December 2020 [Note] 100.00
Sanitation Management Co., Ltd.*)
枣庄市中盈城市环境服务有限公司
(Zaozhuang Zhongying Urban Set up February 2020 [Note] 100.00
Environmental Service Co., Ltd.*)
Note: As of December 31, 2020, these companies’ registered capitals have not been contributed.
2. Entities excluded from the consolidation scope
*
The English names are for identification purpose only.
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Net profit from the period
Entities Equity disposal Disposal-date net
Equity disposal date beginning to the disposal
method assets
date
Leiyang Zhongfeng Cancelled December 2020 2,071,976.28
Environmental Industry Co., Ltd.
深圳盈峰环境网络技术有限公
司 (Shenzhen Infore Cancelled August 2020 118,157.09
Environmental Network
*
Technology Co., Ltd. )
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VII. Interest in other entities
(I) Interest in significant subsidiaries
1. Significant subsidiaries
(1) Basis information
Holding proportion
Main
Subsidiaries Place of Business nature (%) Acquisition method
operating
registration
place Direct Indirect
Business combination
Shangfeng Industrial Shaoxing, Shaoxing, Electrical material 60.20 not under common
Company Zhejiang Zhejiang manufacturing and others
control
Business combination
Guangdong Weiqi Foshan, Foshan, Electrical material 75.00 under common
Company Guangdong Guangdong manufacturing and others
control
Anhui Weiqi
Wuhu, Wuhu, Electrical material 100.00 Set up
Electrical Materials
Anhui Anhui manufacturing and others
Co., Ltd.
Business combination
Donggang Magnet Donggang, Donggang, Electrical material 100.00 not under common
Wire Company Liaoning Liaoning manufacturing and others
control
Business combination
Green Oriental Shenzhen, Shenzhen, Environmental monitoring 70.00 not under common
Company Guangdong Guangdong and solid waste treatment
control
Funan Green Oriental Business combination
Funan, Funan, Environmental monitoring 100.00
Environmental not under common
Anhui Anhui and solid waste treatment
Protection Co., Ltd. control
Xiantao Green
Business combination
Oriental Xiantao, Xiantao, Environmental monitoring 100.00 not under common
Environmental Power Hubei Hubei and solid waste treatment
control
Generation Co., Ltd.
Shouxian Green Business combination
Shouxian, Shouxian, Environmental monitoring 100.00
Oriental New Energy not under common
Anhui Anhui and solid waste treatment
Co., Ltd. control
Xiantao Yinghe
Xiantao, Xiantao, Environmental monitoring 74.88 5.70 Set up
Environmental
Hubei Hubei and solid waste treatment
Protection Co., Ltd.
Infore Technology Foshan, Foshan, Environmental monitoring 100.00 Set up
Company Guangdong Guangdong and solid waste treatment
Foshan Yingfeng Business combination
Foshan, Foshan, Environmental monitoring 100.00
Environmental Water not under common
Guangdong Guangdong and solid waste treatment
Treatment Co., Ltd. control
Foshan Shunde
Business combination
Huaqingyuan Foshan, Foshan, Environmental monitoring 100.00 not under common
Environmental Guangdong Guangdong and solid waste treatment
control
Protection Co., Ltd.
Foshan Shunde
Business combination
District Huaying Foshan, Foshan, Environmental monitoring 100.00 not under common
Environmental Water Guangdong Guangdong and solid waste treatment
control
Co., Ltd.
Foshan Shunde
Business combination
District Yuanrun Foshan, Foshan, Environmental monitoring 100.00 not under common
Water Environmental Guangdong Guangdong and solid waste treatment
control
Protection Co., Ltd.
Foshan Shunde Business combination
Foshan, Foshan, Environmental monitoring 100.00
Huabo Environmental not under common
Guangdong Guangdong and solid waste treatment
Water Co., Ltd. control
Zoomlion Business combination
Changsha, Changsha, Smart sanitation 100.00
Environmental under common
Hunan Hunan
Company control
Changsha Zoomlion
Changsha, Changsha, Smart sanitation 90.00 10.00 Set up
Changgao
Hunan Hunan
Environmental
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Industry Co., Ltd.
Fujian Nan’an
Yingfeng Urban Changsha, Changsha, Smart sanitation 80.00 Set up
Environmental Hunan Hunan
Service Co., Ltd.
Zhangjiajie Zoomlion
Zhangjiajie, Zhangjiajie, Smart sanitation 90.00 Set up
Environmental
Hunan Hunan
Industry Co., Ltd.
Cili County Zoomlion
Huabao Smart sanitation 85.00 Set up
Cili, Hunan Cili, Hunan
Environmental
Industry Co., Ltd.
Hanshou Zoomlion
Hanshou, Hanshou, Smart sanitation 90.00 Set up
Environmental
Hunan Hunan
Industry Co., Ltd.
Longhui County
Zoomlion Longhui, Longhui, Smart sanitation 100.00 Set up
Environmental Hunan Hunan
Industry Co., Ltd.
醴陵中峰环境产业有
限责任公司 (Liling Liling, Liling,
Zhongfeng Smart sanitation 100.00 Set up
Hunan Hunan
Environmental
Industry Co., Ltd.*)
Shimen Zoomlion
Shimen, Shimen, Smart sanitation 90.00 Set up
Environmental
Hunan Hunan
Industry Co., Ltd.
宁波盈峰融资租赁有
限公司(Ningbo Ningbo, Ningbo, Finance lease 100.00 Set up
Infore Finance Lease Zhejiang Zhejiang
Co., Ltd.*)
2. Significant not wholly-owned subsidiaries
Holding proportion of Non-controlling Dividend declared to
Subsidiaries Closing balance of
non-controlling shareholders’ profit or non-controlling
non-controlling interest
shareholders (%) loss shareholders
Guangdong Weiqi 25 6,083,040.07 67,575,011.83
Company
3. Main financial information of significant not wholly-owned subsidiaries
(1) Assets and liabilities
Closing balance
Subsidiaries
Current Non-current Total assets Non-current Total liabilities
Current liabilities
assets assets liabilities
Guangdong 433,372,224.98 85,726,672.38 519,098,897.36 259,725,267.47 259,725,267.47
Weiqi Company
(Continued)
Opening balance
Subsidiaries
Current Non-current Total assets Non-current Total liabilities
Current liabilities
assets assets liabilities
Guangdong 436,465,690.56 94,815,722.49 531,281,413.05 296,239,943.42 296,239,943.42
Weiqi Company
(2) Profit or loss and cash flows
Current period cumulative
Subsidiaries
Operating revenue Net profit Cash flows from
Total comprehensive income
operating activities
*
The English names are for identification purpose only.
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Guangdong Weiqi 1,119,172,392.43 24,332,160.26 24,332,160.26 24,352,206.53
Company
(Continued)
Preceding period comparative
Subsidiaries
Operating revenue Net profit Cash flows from
Total comprehensive income
operating activities
Guangdong Weiqi 1,250,644,588.56 27,841,937.54 27,841,937.54 98,988,759.59
Company
(II) Transactions resulting in changes in subsidiaries’ equity but without losing control
1. Changes in subsidiaries’ equity
Subsidiaries Date of change Holding proportion before Holding proportion after
change (%) change (%)
Shangfeng Industrial Company January 2020 55.00 60.20
Xiantao Yinghe Environmental January 2020 65.99 80.58
Protection Co., Ltd.
Jilin Zhongfeng Oasis
Environmental Development Co., February 2020 80.00 51.00
Ltd.
2. Effect of transactions on non-controlling interest and equity attributable to parent company
Jilin Zhongfeng Oasis
Items Shangfeng Industrial Xiantao Yinghe Environmental
Environmental Development Co.,
Company Protection Co., Ltd.
Ltd.
Acquisition costs/ Disposal
considerations
Cash 18,200,000.00
Total acquisition costs/disposal 18,200,000.00
considerations
Less: Share in subsidiaries’ net
assets based on acquired/ 15,974,569.03 -903,021.70 314,024.80
disposed net assets proportion
Balance 2,225,430.97 -903,021.70 314,024.80
Including: Capital reserve 2,225,430.97 -903,021.70 314,024.80
adjusted
Surplus reserve adjusted
Undistributed profit adjusted
(III) Interest in joint venture or associates
1. Aggregated financial information of insignificant associates
Items Closing balance/ Opening balance/
Current period cumulative Preceding period comparative
Associates
Total carrying amount of investments 318,243,332.69 303,292,231.01
Proportionate shares in the following items 41,578,662.81 33,697,177.55
Net profit 41,578,662.81 33,697,177.55
Other comprehensive income
Total comprehensive income 41,578,662.81 33,697,177.55
VIII. Risks related to financial instruments
In risk management, the Company aims to seek the appropriate balance between the risks and benefits from its use of financial
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instruments and to mitigate the adverse effects that the risks of financial instruments have on the Company’s financial performance,
so as to maximize the profits of shareholders and other equity investors. Based on such risk management objectives, the Company’s
risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and
controls, and to monitor risks and adherence to limits on a timely and reliable basis.
The Company has exposure to the following risks from its use of financial instruments, which mainly include: credit risk, liquidity
risk, and market risk. The Management has deliberated and approved policies concerning such risks, and details are:
(I) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an
obligation.
1. Credit risk management practice
(1) Evaluation method of credit risk
At each balance sheet date, the Company assesses whether the credit risk on a financial instrument has increased significantly since
initial recognition. When assessing whether the credit risk has increased significantly since initial recognition, the Company takes
into account reasonable and supportable information, which is available without undue cost or effort, including qualitative and
quantitative analysis based on historical data, external credit risk rating, and forward-looking information. The Company determines
the changes in default risk of financial instruments during the estimated lifetime through comparison of the default risk at the balance
sheet date and the initial recognition date, on an individual basis or a collective basis.
The Company considers the credit risk on a financial instrument has increased significantly when one or more of the following
qualitative and quantitative standards are met:
1) Quantitative standard mainly relates to the scenario in which, at the balance sheet date, the probability of default in the remaining
lifetime has risen by more than a certain percentage compared with the initial recognition;
2) Qualitative standard mainly relates to significant adverse changes in the debtor’s operation or financial position, present or
expected changes in technology, market, economy or legal environment that will have significant adverse impact on the debtor’s
repayment ability.
(2) Definition of default and credit-impaired assets
A financial instrument is defined as defaulted when one or more following events have occurred, of which the standard is consistent
with that for credit-impairment:
1) Significant financial difficulty of the debtor;
2) A breach of binding clause of contract;
3) It is very likely that the debtor will enter bankruptcy or other financial reorganization;
4) The creditor of the debtor, for economic or contractual reasons relating to the debtor’s financial difficulty, having granted to the
debtor a concession(s) that the creditor would not otherwise consider.
2. Measurement of expected credit losses
The key factors in the measurement of expected credit loss include the probability of default, loss rate of default, and exposure to
default risk. The Company develops a model of the probability of default, loss rate of default, and exposure to default risk on the
basis of quantitative analysis of historical data (e.g. counterparty rating, guarantee measures and collateral type, payment method,
etc.) and forward-looking information.
3. Please refer to section V (I) 4, 5, 9, 10, and 12 of the notes to the financial statements for details on the reconciliation table of
opening balance and closing balance of provision for losses of financial instrument.
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4. Exposure to credit risk and concentration of credit risk
The Company’s credit risk is primarily attributable to cash and bank balances and receivables. In order to control such risks, the
Company has taken the following measures:
(1) Cash and bank balances
The Company deposits its bank balances and other cash and bank balances in financial institutions with relatively high credit levels,
hence, its credit risk is relatively low.
(2) Receivables
The Company performs credit assessment on customers using credit settlement on a regular basis. The Company selects credible and
well-reputed customers based on credit assessment result, and conducts ongoing monitoring on balance of receivables, to avoid
significant risks in bad debts.
As the Company’s credit risks fall into several business partners and customers, as of December 31 2020, 8.26% (December 31,
2019: 5.82%) of the total accounts receivable was due from the five largest customers of the Company. The Company has no
significant central credit risk.
The maximum amount of exposure to credit risk of the Company is the carrying amount of each financial asset at the balance sheet.
(II) Liquidity risk
Liquidity risk is the risk that the Company may encounter deficiency of funds in meeting obligations associated with cash or other
financial assets settlement, which is possibly attributable to failure in selling financial assets at fair value on a timely basis, or failure
in collecting liabilities from counterparties of contracts, or early redemption of debts, or failure in achieving estimated cash flows.
In order to control such risk, the Company comprehensively utilized financing tools such as notes settlement, bank borrowings, etc.
and adopts long-term and short-term financing methods to optimize financing structures, and finally maintains a balance between
financing sustainability and flexibility. The Company has obtained credit limit from several commercial banks to meet working
capital requirements and expenditures.
Financial liabilities classified based on remaining time period till maturity
Closing balance
Items
Carrying amount Contract amount not Within 1 year 1-3 years Over 3 years
yet discounted
Bank borrowings 2,574,411,035.90 2,816,579,057.20 1,882,635,329.74 373,683,509.83 560,260,217.63
Held-for-trading 810,300.00 810,300.00 810,300.00
financial liabilities
Notes payable 3,853,175,394.09 3,853,175,394.09 3,853,175,394.09
Accounts payable 3,404,825,085.03 3,404,825,085.03 3,404,825,085.03
Other payables 443,477,082.48 443,477,082.48 443,477,082.48
Long-term payables 255,735,814.91 255,735,814.91 255,735,814.91
Bonds payable 1,199,466,109.60 1,576,570,492.80 2,952,379.20 7,380,948.00 1,566,237,165.60
Subtotal 11,731,900,822.01 12,351,173,226.51 9,587,875,570.54 381,064,457.83 2,382,233,198.14
(Continued)
Opening balance
Items
Carrying amount Contract amount not Within 1 year 1-3 years Over 3 years
yet discounted
Bank borrowings 2,337,071,230.78 2,447,954,423.08 1,714,831,705.17 448,059,975.95 285,062,741.96
Held-for-trading 866,300.00 866,300.00 866,300.00
financial liabilities
Notes payable 2,941,694,181.14 2,941,694,181.14 2,941,694,181.14
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Opening balance
Items
Carrying amount Contract amount not Within 1 year 1-3 years Over 3 years
yet discounted
Accounts payable 2,486,177,851.99 2,486,177,851.99 2,486,177,851.99
Other payables 374,873,715.69 374,873,715.69 374,873,715.69
Long-term payables 188,400,523.49 188,400,523.49 188,400,523.49
Subtotal 8,329,083,803.09 8,439,966,995.39 7,518,443,753.99 448,059,975.95 473,463,265.45
(III) Market risk
Market risk is the risk that the Company may encounter fluctuation in fair value or future cash flows of financial instruments due to
changes in market price. Market risk mainly includes interest risk and foreign currency risk.
1. Interest risk
Interest risk is the risk that an enterprise may encounter fluctuation in fair value or future cash flows of financial instruments due to
changes in market interest. The Company’s fair value interest risks arise from fixed-rate financial instruments, while the cash flow
interest risks arise from floating-rate financial instruments. The Company determines the proportion of fixed-rate financial
instruments and floating-rate financial instruments based on the market environment, and maintains a proper financial instruments
portfolio through regular review and monitoring. The Company’s interest risk in cash flows relates mainly to bank borrowings with
floating interest rate.
As of December 31, 2020, balance of borrowings with interest accrued at floating interest rate totaled 778,840,801.41 yuan
(December 31, 2019: 985,872,246.35 yuan). If interest rates had been 50 basis points higher/lower and all other variables were held
constant, the Company’s gross profit and equity will not be significantly affected.
2. Foreign currency risk
Foreign currency risk is the risk arising from changes in fair value or future cash flows of financial instrument resulted from changes
in exchange rate. The Company is mainly operated in mainland China, whose main activities are denominated in RMB, hence, the
Company bears insignificant market risk arising from foreign exchange changes.
Please refer to section V (IV) 2 of notes to financial statements for details in foreign currency financial assets and liabilities at the end
of the period.
IX. Fair value disclosure
(I) Details of fair value of assets and liabilities at fair value at the balance sheet date
Fair value as of the balance sheet date
Items
Level 1 fair value Level 2 fair value Level 3 fair value Total
measurement measurement measurement
Recurring fair value measurement
1. Held-for-trading financial assets 128,017,735.11 128,017,735.11
(1) Financial assets classified as at fair 128,017,735.11 128,017,735.11
value through profit or loss
Debt instrument investments
Equity instrument investments 127,192,985.11 127,192,985.11
Derivative financial assets 824,750.00 824,750.00
2. Receivables financing 520,429,874.86 520,429,874.86
3. Other equity instrument investments 26,070,000.00 26,070,000.00
Total assets at recurring fair value 128,017,735.11 546,499,874.86 674,517,609.97
measurement
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Fair value as of the balance sheet date
Items
Level 1 fair value Level 2 fair value Level 3 fair value Total
measurement measurement measurement
4. Held-for-trading liabilities 810,300.00 810,300.00
Derivative financial liabilities 810,300.00 810,300.00
Total liabilities at recurring fair value 810,300.00 810,300.00
measurement
(II) Basis for determining level 1 fair value at recurring and non-recurring fair measurement
It is based on the quoted prices of the identical assets in the active market on the balance sheet date.
(III) Qualitative and quantitative information of valuation technique(s) and key input(s) for level 3 fair value at
recurring and non-recurring fair measurement
There is no quotation in an active market and its fair value cannot be reliably measured. Cost represents the best estimate of fair value,
so cost represents fair value.
X. Related party relationships and transactions
(I) Related party relationships
1. Parent company
(1) Details
Parent company Place of Business Registered Holding proportion over Voting right proportion
registration nature capital the Company (%) over the Company (%)
Infore Holding Group Co., Foshan, Industrial 4 billion 43.55 [Note] 43.55
Ltd. Guangdong investment
Note: Infore Holding Group Co., Ltd. (hereinafter referred to as Infore Holding) directly holds 11.37% of the Company’s equity, and
indirectly holds 32.18% of the Company’s equity through its wholly-owned subsidiary 宁波盈峰资产管理有限公司 (Ningbo
Infore Asset Management Co., Ltd.*).
(2) The Company’s ultimate controlling party is He Jianfeng, who directly holds 2.01% of the Company’s equity,
and indirectly holds 43.55% of the Company’s equity through Infore Holding.
2. Please refer to section VII Interest in other entities in notes to financial statements for details on the Company’s
subsidiaries.
3. Joint ventures and associates of the Company
Please refer to section VII of notes to financial statements for details on the Company’s significant joint ventures and associates.
Details of other joint ventures or associates carrying out related party transactions with the Company in current period or in preceding
period but with balance in current period are as follows:
Associates Relationships with the Company
Tengine Innovation (Beijing) Monitoring Instrument Co., Ltd. Associate of the Company
Guangdong Shunkong Environmental Investment Co., Ltd. Associate of the Company
Guangdong Tianshu New Energy Technology Co., Ltd. Associate of the Company
Lianjiang Green Oriental New Energy Co., Ltd. Associate of the Company’s subsidiary Green Oriental Company
Shantou Zoomlion Ruikang Environmental Sanitation Service Associate of the Company’s subsidiary Zoomlion Environmental
Co., Ltd. Company
*
The English name is for identification purpose only.
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Associates Relationships with the Company
Shantou Chaoyang District Zoomlion Ruikang Environmental Associate of the Company’s subsidiary Zoomlion Environmental
Sanitation Service Co., Ltd. Company
Associate of the Company’s subsidiary Zoomlion Environmental
Changsha Cowa Zoomlion Intelligent Technology Co., Ltd.
Company
Chongqing Sanfeng Urban Environmental Service Co., Ltd. Associate of the Company’s subsidiary Zoomlion Environmental
[Note] Company
内蒙古蒙联运达环保技术有限公司 (Inner Mongolia Associate of the Company’s subsidiary Zoomlion Environmental
Mongolia Lianyunda Environmental Technology Co., Ltd.*) Company
Associate of 广东盈峰环境投资有限公司(Guangdong Infore
Guangdong Liangke Environmental Engineering Co., Ltd.
Environmental Investment Co., Ltd.*)
Note: Zoomlion Environmental Company disposed the 100% equity of Chongqing Sanfeng Urban Environmental Service Co., Ltd.
in July 2020. It is still disclosed as related party one year after its disposal.
4. Other related parties of the Company
Related parties Relationships with the Company
Ningbo Infore Asset Management Co., Ltd. Shareholders holding more than 5% of the Company’s shares
are also under the control of the actual controller
Zoomlion Heavy Industry Co., Ltd. Shareholders holding more than 5% of the Company’s shares
弘创(深圳）投资中心(有限合伙）(Hongchuang (Shenzhen)
Shareholders holding more than 5% of the Company’s shares
Investment Center (Limited Partnership)*)
广东盈峰材料技术股份有限公司 (Guangdong Infore Controlled by the actual controller
Material Technology Co., Ltd.*)
佛山市顺德区盈海投资有限公司 (Foshan Shunde District Controlled by the actual controller
Yinghai Investment Co., Ltd.*)
LADURNER SRL [Note 1] Controlled by the actual controller
广东盈峰母婴商业有限公司 (Guangdong Yingfeng Maternal Controlled by the actual controller
and Child Business Co., Ltd.*)
北京华录蓝火体育产业发展有限公司 (Beijing Hualu Controlled by the actual controller
Lanhuo Sports Industry Development Co., Ltd.*)
美的集团股份有限公司 (Midea Group Co., Ltd.*) Controlled by immediate family of the actual controller
广东美的电器股份有限公司 (Guangdong Midea Electric Co.,
Controlled by immediate family of the actual controller
Ltd.*)
广东美的环境电器制造有限公司 (Guangdong Midea
Controlled by immediate family of the actual controller
Environmental Electrical Manufacturing Co., Ltd.*)
广东美的制冷设备有限公司 (Guangdong Midea
Controlled by immediate family of the actual controller
Refrigeration Equipment Co., Ltd.*)
广东美的商用空调设备有限公司 (Guangdong Midea
Controlled by immediate family of the actual controller
Commercial Air Conditioning Equipment Co., Ltd.*)
广东美的暖通设备有限公司 (Guangdong Midea HVAC
Controlled by immediate family of the actual controller
Equipment Co., Ltd.*)
佛山市顺德区美的洗涤电器制造有限公司 (Foshan Shunde
Controlled by immediate family of the actual controller
District Midea Washing Appliance Manufacturing Co., Ltd.*)
芜湖美的生活电器制造有限公司 (Wuhu Midea Life Electric
Controlled by immediate family of the actual controller
Manufacturing Co., Ltd.*)
威灵(芜湖）电机制造有限公司 (Welling (Wuhu) Motor
Controlled by immediate family of the actual controller
Manufacturing Co., Ltd.*)
芜湖威灵电机销售有限公司 (Wuhu Welling Motor Sales Co.,
Controlled by immediate family of the actual controller
Ltd.*)
佛山市顺德区美的电热电器制造有限公司 (Foshan Shunde
District Midea Electric Heating Appliance Manufacturing Co., Controlled by immediate family of the actual controller
Ltd.*)
安徽美芝精密制造有限公司 (Anhui Meizhi Precision
Controlled by immediate family of the actual controller
Manufacturing Co., Ltd.*)
安徽美芝制冷设备有限公司 (Anhui Meizhi Refrigeration
Controlled by immediate family of the actual controller
Equipment Co., Ltd.*)
*
The English names are for identification purpose only.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Related parties Relationships with the Company
*
佛山市威特包装有限公司 (Foshan Weite Packing Co., Ltd. ) Controlled by immediate family of the actual controller
佛山市威灵洗涤电机制造有限公司 (Foshan Welling
Controlled by immediate family of the actual controller
Washing Motor Manufacturing Co., Ltd.*)
广东美的厨房电器制造有限公司 (Guangdong Midea
Controlled by immediate family of the actual controller
Kitchen Appliance Manufacturing Co., Ltd.*)
广东美芝精密制造有限公司 (Guangdong Meizhi Precision
Controlled by immediate family of the actual controller
Manufacturing Co., Ltd.*)
广东美芝制冷设备有限公司 (Guangdong Meizhi
Controlled by immediate family of the actual controller
Refrigeration Equipment Co., Ltd.*)
广东威灵电机制造有限公司 (Guangdong Welling Motor
Controlled by immediate family of the actual controller
Manufacturing Co., Ltd.*)
安得智联科技股份有限公司 (Ande Zhilian Technology Co.,
Controlled by immediate family of the actual controller
Ltd.*)
淮安威灵电机制造有限公司 (Huaian Welling Motor
Controlled by immediate family of the actual controller
Manufacturing Co., Ltd.*)
佛山市顺德区美的酒店管理有限公司 (Foshan Shunde
Controlled by immediate family of the actual controller
District Midea Hotel Management Co., Ltd.*)
佛山市顺德区美的饮水机制造有限公司 (Foshan Shunde
Controlled by immediate family of the actual controller
District Midea Drinking Machine Manufacturing Co., Ltd. *)
芜湖美的厨卫电器制造有限公司 (Wuhu Midea Kitchen
Controlled by immediate family of the actual controller
Appliance Manufacturing Co., Ltd.*)
芜湖美智空调设备有限公司 (Wuhu Meizhi Air Conditioning
Controlled by immediate family of the actual controller
Equipment Co., Ltd.*)
广东美的集团芜湖制冷设备有限公司 (Guangdong Midea
Controlled by immediate family of the actual controller
Group Wuhu Refrigeration Equipment Co., Ltd.*)
浙江美芝压缩机有限公司 (Zhejiang Meizhi Compressor Co.,
Controlled by immediate family of the actual controller
Ltd.*)
重庆美的制冷设备有限公司 (Chongqing Midea Refrigeration
Controlled by immediate family of the actual controller
Equipment Co., Ltd.*)
佛山市顺德区美融新材料有限公司 (Foshan Shunde District
Controlled by immediate family of the actual controller
Meirong New Material Co., Ltd.*)
合肥华凌股份有限公司 (Hefei Hualing Co., Ltd.*) Controlled by immediate family of the actual controller
江苏美的清洁电器股份有限公司 (Jiangsu Midea Clean
Controlled by immediate family of the actual controller
Electric Co., Ltd.*)
广州华凌制冷设备有限公司 (Guangzhou Hualing
Controlled by immediate family of the actual controller
Refrigeration Equipment Co., Ltd.*)
佛山市美的开利制冷设备有限公司 (Foshan Midea Carrier
Controlled by immediate family of the actual controller
Refrigeration Equipment Co., Ltd.*)
合肥美的电冰箱有限公司 (Hefei Midea Refrigerator Co.,
Controlled by immediate family of the actual controller
Ltd.*)
重庆美的通用制冷设备有限公司 (Chongqing Midea General
Controlled by immediate family of the actual controller
Refrigeration Equipment Co., Ltd.*)
无锡小天鹅股份有限公司 (Wuxi Little Swan Co., Ltd.*) Controlled by immediate family of the actual controller
合肥美的洗衣机有限公司 (Hefei Midea Washing Machine
Controlled by immediate family of the actual controller
Co., Ltd.*)
美的集团电子商务有限公司 (Midea Group E-Commerce Co.,
Controlled by immediate family of the actual controller
Ltd.*)
芜湖安得智联科技有限公司 (Wuhu Ande Zhilian Technology
Controlled by immediate family of the actual controller
Co., Ltd.*)
无锡飞翎电子有限公司 (Wuxi Feiling Electronics Co., Ltd.*) Controlled by immediate family of the actual controller
Yuxing Technology Development (Shenzhen) Co., Ltd. [Note 2] Former subsidiary of the Company
长沙中联恒通机械有限公司 (Changsha Zhonglian Hengtong Associate of the Company’s shareholder Zoomlion Heavy
Machinery Co., Ltd.*) Industry Co., Ltd.
黔西锦江环卫服务有限公司 (Qianxi Jinjiang Sanitation Investee of the Company’s subsidiary Zoomlion Environmental
Service Co., Ltd.*) Company
Note 1: Before June 2019, it was controlled by the same actual controller, and it was still disclosed as a related party one year after its
*
The English names are for identification purpose only.
*
The English names are for identification purpose only.
238
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
disposal. Transactions with it from January to June 2020 were disclosed.
Note 2: The Company disposed 100% of the subsidiary Yuxing Technology Development (Shenzhen) Co., Ltd.’s share in September
2019, and it was still disclosed as a related party one year after its disposal. Transactions with it from January to August 2020 were
disclosed.
(II) Related party transactions
1. Purchase and sale of goods, rendering and receiving of services
(1) Details
1) Purchase of goods and receiving of services
Related parties Preceding period
Content of transaction Current period cumulative
comparative
Tengine Innovation (Beijing) Monitoring Material 5,948,329.20 3,418,241.97
Instrument Co., Ltd.
Guangdong Shunkong Environmental Investment Service 10,324,040.41 7,723,035.46
Co., Ltd.
Changsha Cowa Zoomlion Intelligent Technology Material 18,420,246.29 3,982,301.82
Co., Ltd.
Guangdong Tianshu New Energy Technology Material 2,040,930.62
Co., Ltd.
Guangdong Liangke Environmental Engineering Service 1,415,094.34
Co., Ltd.
Zoomlion Heavy Industry Co., Ltd. Material 212,902,937.86 208,325,953.30
Foshan Weite Packing Co., Ltd. Material 50,126.30 51,465.69
Foshan Welling Washing Motor Manufacturing Material 7,200.00
Co., Ltd.
Guangdong Welling Motor Manufacturing Co., Material 1,514.00
Ltd.
Ande Zhilian Technology Co., Ltd. Service 344,789.17
Foshan Shunde District Midea Hotel Service 258,969.00 65,508.00
Management Co., Ltd.
Yuxing Technology Development (Shenzhen) 414,119,447.57 228,783,858.22
Material and service
Co., Ltd.
Subtotal 664,411,330.42 453,772,658.80
2) Sale of goods and rendering of services
Related parties Preceding period
Content of transaction Current period cumulative
comparative
Tengine Innovation (Beijing) Monitoring Service 91,160.75
Instrument Co., Ltd.
Guangdong Shunkong Environmental Investment 8,436,283.18 22,360,176.98
Goods and service
Co., Ltd.
Lianjiang Green Oriental New Energy Co., Ltd. Goods and service 1,669,383.77 1,763,895.97
Guangdong Tianshu New Energy Technology Goods 4,308,486.19
Co., Ltd.
Shantou Zoomlion Ruikang Environmental Goods 31,087.18 12,158,397.68
Sanitation Service Co., Ltd.
Shantou Chaoyang District Zoomlion Ruikang Goods 17,093,774.87 11,384,001.77
Environmental Sanitation Service Co., Ltd.
Chongqing Sanfeng Urban Environmental Goods 3,717,248.06 3,762,327.43
Service Co., Ltd.
Changsha Cowa Zoomlion Intelligent Technology Goods 132,075.47
Co., Ltd.
Inner Mongolia Mongolia Lianyunda Goods -844,827.59
Environmental Technology Co., Ltd.
Guangdong Liangke Environmental Engineering Goods 9,651,047.83
Co., Ltd.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Related parties Preceding period
Content of transaction Current period cumulative
comparative
Zoomlion Heavy Industry Co., Ltd. Goods 1,001,779.94 10,534,763.41
Guangdong Infore Material Technology Co., Ltd. Goods 894,188.70 453,471.47
LADURNER SRL Goods 4,419,762.20 5,812,437.88
Guangdong Midea Environmental Electrical 68,920,672.88 59,426,197.53
Goods and service
Manufacturing Co., Ltd.
Guangdong Midea Refrigeration Equipment Co., Service 1,504,970.07
Ltd.
Foshan Shunde District Midea Washing Goods 2,840,516.48
Appliance Manufacturing Co., Ltd.
Welling (Wuhu) Motor Manufacturing Co., Ltd. Goods 248,644.59 973,186.35
Foshan Shunde District Midea Electric Heating 23,433,965.27 22,863,885.23
Goods and service
Appliance Manufacturing Co., Ltd.
Anhui Meizhi Precision Manufacturing Co., Ltd. Goods 190,736,216.24 259,848,632.72
Anhui Meizhi Refrigeration Equipment Co., Ltd. Goods 37,768,536.63 45,386,587.27
Foshan Welling Washing Motor Manufacturing Goods 63,898,185.18 71,171,715.09
Co., Ltd.
Guangdong Midea Kitchen Appliance Goods 63,378,147.84 44,663,668.66
Manufacturing Co., Ltd.
Guangdong Meizhi Precision Manufacturing Co., Goods 242,552,390.47 327,518,187.49
Ltd.
Guangdong Meizhi Refrigeration Equipment Co., 254,151,014.66 330,934,494.51
Goods and service
Ltd.
Guangdong Welling Motor Manufacturing Co., Goods 1,079,224.79 4,001,223.29
Ltd.
Huaian Welling Motor Manufacturing Co., Ltd. Goods 118.88 72.19
Foshan Shunde District Midea Drinking Machine Service 25,689.66
Manufacturing Co., Ltd.
Wuhu Midea Kitchen Appliance Manufacturing Service 2,502,691.27
Co., Ltd.
Wuhu Meizhi Air Conditioning Equipment Co., Service 403,047.67
Ltd.
Chongqing Midea Refrigeration Equipment Co., Service
Ltd.
Foshan Shunde District Meirong New Material Service 1,595,876.81
Co., Ltd.
Hefei Hualing Co., Ltd. Service 1,614,683.33
Jiangsu Midea Clean Electric Co., Ltd. Goods 16,626,060.13 12,279,806.71
Guangzhou Hualing Refrigeration Equipment Service 379.16
Co., Ltd.
Wuxi Little Swan Co., Ltd. Service 279,151.44 3,520,028.24
Chongqing Midea General Refrigeration Service 1,006,896.56
Equipment Co., Ltd.
Yuxing Technology Development (Shenzhen) Goods 98,913,778.68 64,147,137.70
Co., Ltd.
Wuxi Feiling Electronics Co., Ltd. Goods 1,517,067.01
Qianxi Jinjiang Sanitation Service Co., Ltd. Goods 940.20
Subtotal 1,114,859,232.28 1,325,705,379.74
2. Related party leases
The Company as the lessee
Lessors Lease expenses for Lease expenses for the
Types of asset leased
current period preceding period
Foshan Shunde District Yinghai Investment Co., Office building and 1,258,927.15 1,167,587.99
Ltd. parking lot
Zoomlion Heavy Industry Co., Ltd. Transport facilities 94,159.30
240
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Guangdong Yingfeng Maternal and Child Office building 83,620.76
Business Co., Ltd.
Beijing Hualu Lanhuo Sports Industry Office building 161,872.36
Development Co., Ltd.
3. Related party guarantees
The Company and its subsidiaries as guaranteed parties
Guarantors Commencement date Maturity date Whether the Remarks
Amount guaranteed
guarantee is mature
20,000,000.00 04/28/2020 04/27/2021 No
10,000,000.00 04/28/2020 04/27/2021 No
Infore Holding 20,000,000.00 03/05/2020 03/04/2021 No [Note]
20,000,000.00 03/12/2020 03/11/2021 No
30,000,000.00 03/18/2020 03/17/2021 No
Subtotal 100,000,000.00
Note: These guaranteed loans were also provided with mortgaged guarantee by the Company’s sub-subsidiary Guangdong Weiqi
Company with its buildings and structures with cost of 43,561,911.28 yuan and net value of 18,221,115.63 yuan, and its land use
right with cost of 21,913,812.79 yuan and net value of 14,015,261.42 yuan.
4. Call loans between related parties
Related parties Amount Commencement date Maturity date Remarks
Call loans to related parties
50,800,000.00 01/06/2019 01/05/2023
9,818,680.83 01/06/2019 01/05/2023
Lianjiang Green Oriental New [Note 1]
Energy Co., Ltd. 4,000,000.00 09/28/2020 09/30/2023
3,000,000.00 12/14/2020 09/30/2023
21,000,000.00 04/30/2019 12/31/2021
Guangdong Liangke Environmental [Note 2]
Engineering Co., Ltd. 9,229,600.00 04/30/2019 12/31/2021
3,440,000.00 05/18/2018 05/20/2020
1,000,000.00 09/17/2018 05/20/2020
Guangdong Tianshu New Energy [Note 3]
Technology Co., Ltd. 1,500,000.00 09/26/2018 05/20/2020
1,500,000.00 10/17/2018 05/20/2020
Shantou Zoomlion Ruikang 23,810,370.00 12/30/2019 08/10/2024 [Note 4]
Environmental Sanitation Service
1,200,000.00 09/04/2018 [Note 5]
Co., Ltd.
Shantou Chaoyang District
Zoomlion Ruikang Environmental 600,000.00 04/18/2019 04/17/2020 [Note 6]
Sanitation Service Co., Ltd.
Yuxing Technology Development 273,210,601.26 09/01/2019 08/31/2020 [Note 7]
(Shenzhen) Co., Ltd.
Subtotal 404,109,252.09
Note 1: According to the “Loan Contract” signed by its subsidiary Green Oriental Company and Lianjiang Green Oriental New
Energy Co., Ltd., at the beginning of the period, Green Oriental Company has already lent 60,618,680.83 yuan to Lianjiang Green
Oriental New Energy Co., Ltd., which shall pay capital occupation fee of 3,687,559.22 yuan at the beginning of the period. In the
current period, Green Oriental Company lent another 7,000,000.00 yuan and additional capital occupation fee of 4,626,763.85 yuan
shall be collected. In the current period, Green Oriental Company received payment of principal of 60,000,000.00 yuan and capital
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
occupation fee of 2,836,100.61 yuan. As of December 31, 2020, outstanding principal due from Lianjiang Green Oriental New
Energy Co., Ltd. is 7,618,680.83 yuan and capital occupation fee is 5,478,222.46 yuan.
Note 2: According to the “Loan Agreement” signed between the Company and Guangdong Liangke Environmental Engineering Co.,
Ltd., at the beginning of the period, the Company has already lent 30,229,600.00 yuan to Guangdong Liangke Environmental
Engineering Co., Ltd., which shall pay capital occupation fee of 180,833.33 yuan at the beginning of the period. In the current period,
the Company shall collect additional capital occupation fee of 2,012,499.98 yuan, while actually received payment of principal of
229,600.00 yuan and capital occupation fee of 2,027,999.98 yuan. As of December 31, 2020, outstanding principal due from
Guangdong Liangke Environmental Engineering Co., Ltd. is 30,000,000.00 yuan and capital occupation fee is 165,333.33 yuan.
Note 3: According to the “Loan Agreement” signed between the Company and Guangdong Tianshu New Energy Technology Co.,
Ltd., at the beginning of the period, the Company has already lent 7,440,000.00 yuan to Guangdong Tianshu New Energy
Technology Co., Ltd., which shall pay capital occupation fee of 490,316.65 yuan at the beginning of the period. In the current period,
the Company shall collect additional capital occupation fee of 162,543.33 yuan, while actually received payment of principal of
7,440,000.00 yuan and capital occupation fee of 652,859.98 yuan. As of December 31, 2020, all outstanding principal and interest
due from Guangdong Tianshu New Energy Technology Co., Ltd. have been collected.
Note 4: According to the “Loan Agreement” signed between Ningbo Infore Finance Lease Co., Ltd. and Shantou Zoomlion Ruikang
Environmental Sanitation Service Co., Ltd., at the beginning of the period, Ningbo Infore Finance Lease Co., Ltd. has already lent
23,810,370.00 yuan to Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. In the current period, Ningbo Infore
Finance Lease Co., Ltd. shall collect capital occupation fee of 1,268,991.32 yuan, while actually received payment of principal of
1,810,000.00 yuan and capital occupation fee of 1,268,991.32 yuan. As of December 31, 2020, outstanding principal due from
Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. is 22,000,370.00 yuan.
Note 5: According to the “Loan Agreement” signed between Zoomlion Environmental Company and Shantou Zoomlion Ruikang
Environmental Sanitation Service Co., Ltd., at the beginning of the period, Zoomlion Environmental Company has already lent
1,200,000.00 yuan to Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd., which shall pay capital occupation fee
of 79,053.30 yuan at the beginning of the period. In the current period, Zoomlion Environmental Company shall collect additional
capital occupation fee of 59,779.78 yuan, while actually received payment of capital occupation fee of 79,053.30 yuan. As of
December 31, 2020, outstanding principal due from Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. is
1,200,000.00 yuan and capital occupation fee is 59,779.78 yuan.
Note 6: According to the “Loan Agreement” signed between Zoomlion Environmental Company and Shantou Chaoyang District
Zoomlion Ruikang Environmental Sanitation Service Co., Ltd., at the beginning of the period, Zoomlion Environmental Company
has already lent 600,000.00 yuan to Shantou Chaoyang District Zoomlion Ruikang Environmental Sanitation Service Co., Ltd.,
which shall pay capital occupation fee of 20,989.17 yuan at the beginning of the period. In the current period, Zoomlion
Environmental Company shall collect additional capital occupation fee of 20,252.48 yuan, while actually received payment of
principal of 600,000.00 yuan and capital occupation fee of 41,241.65 yuan. As of December 31, 2020, all outstanding principal and
interest due from Shantou Chaoyang District Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. have been collected.
Note 7: According to the “Loan Agreement” signed between Ningbo Infore Finance Lease Co., Ltd. and Yuxing Technology
Development (Shenzhen) Co., Ltd., at the beginning of the period, Ningbo Infore Finance Lease Co., Ltd. has already lent
276,647,986.57 yuan to Yuxing Technology Development (Shenzhen) Co., Ltd., which shall pay capital occupation fee of
8,409,591.52 yuan at the beginning of the period. In the current period from January to August, Ningbo Infore Finance Lease Co.,
Ltd. shall collect additional capital occupation fee of 10,965,866.40 yuan. From January to August, Ningbo Infore Finance Lease Co.,
Ltd. received payment of principal of 35,855,292.53 yuan and capital occupation fee of 911,532.68 yuan. As of August 31, 2020,
outstanding principal due from Yuxing Technology Development (Shenzhen) Co., Ltd. is 240,792,694.04 yuan and capital occupation
fee is 18,463,925.24 yuan.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
5. Key management’s emoluments
Items Current period cumulative Preceding period comparative
Key management’s emoluments 11,767,886.08 10,096,571.00
6. Related financial services
As of December 31, 2020, the amount of bank deposits deposited by Zoomlion Environmental Company in the Finance Company of
Zoomlion Heavy Industry Co., Ltd. is 4,434,637.47 yuan (recorded under cash and bank balances). The non-bank financial
institutions of Zoomlion Environmental Company provide commercial factoring financial services to Zoomlion Environmental
Company, which recognized factoring service and handling fee of 20,636,013.40 yuan in the current period; non-bank financial
institutions of Zoomlion Heavy Industry Co., Ltd. carried out sales and leaseback business with customers, and realized sales income
of 229,507,615.04 yuan (excluding tax).
7. Special agreement on continued implementation of sales contract signed in the name of Zoomlion Heavy
Industry Co., Ltd.
Since June 1, 2017, the sanitation business of Zoomlion Heavy Industry Co., Ltd. was merged into Zoomlion Environmental
Company. In order to continue the implementation of the sales contract originally signed in the name of Zoomlion Heavy Industry
Co., Ltd., Zoomlion Environmental Company invoiced Zoomlion Heavy Industry Co., Ltd., which will then issue the same amount
invoice to end customers. The tax-excluded amount of income on such transactions in 2020 is 37,870,525.69 yuan. Zoomlion
Environmental Company related such transactions directly to end customers.
(III) Balance due to or from related parties
1. Balance due from related parties
Closing balance Opening balance
Items Related parties
Book balance Provision for bad Book balance Provision for bad
debts debts
Guangdong Shunkong 14,326,635.42 956,013.54 5,168,127.94 258,406.40
Environmental Investment Co., Ltd.
Guangdong Tianshu New Energy 9,839,076.38 294,006.22
Technology Co., Ltd.
Lianjiang Green Oriental New 86,391.50 23,172.40
Energy Co., Ltd.
Shantou Zoomlion Ruikang
Environmental Sanitation Service 1,804.00 90.20 2,523.00 126.15
Co., Ltd.
Chongqing Sanfeng Urban 3,309,480.00 165,474.00 279,850.00 13,992.50
Environmental Service Co., Ltd.
Guangdong Liangke Environmental 9,830,000.00 491,500.00
Accounts Engineering Co., Ltd.
receivable Zoomlion Heavy Industry Co., Ltd. 365,661.93 18,283.10 772,991.75 58,955.78
Guangdong Infore Material 181,291.59 50,326.30
Technology Co., Ltd.
LADURNER SRL 10,504,733.59 759,851.47
Guangdong Midea Electric Co., Ltd. 54,018.62 54,018.62 54,018.62 54,018.62
Guangdong Midea Environmental 17,001,270.68 16,866,404.93
Electrical Manufacturing Co., Ltd.
Guangdong Midea Refrigeration 42,819.11 42,819.11 42,819.11 42,819.11
Equipment Co., Ltd.
Guangdong Midea Commercial Air 33,413.42 33,413.42 33,413.42 33,413.42
Conditioning Equipment Co., Ltd.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Closing balance Opening balance
Items Related parties
Book balance Provision for bad Book balance Provision for bad
debts debts
Guangdong Midea HVAC 42,241.88 42,241.88 42,241.88 42,241.88
Equipment Co., Ltd.
Foshan Shunde District Midea
Electric Heating Appliance 12,253,229.14 8,859,696.30
Manufacturing Co., Ltd.
Anhui Meizhi Precision 48,419,022.58 54,724,604.98
Manufacturing Co., Ltd.
Anhui Meizhi Refrigeration 11,682,642.93 7,620,106.21
Equipment Co., Ltd.
Foshan Welling Washing Motor 15,452,106.60 19,552,917.35
Manufacturing Co., Ltd.
Guangdong Midea Kitchen 31,207,585.83 21,735,966.80
Appliance Manufacturing Co., Ltd.
Guangdong Meizhi Precision 44,672,031.52 65,072,912.51
Manufacturing Co., Ltd.
Guangdong Meizhi Refrigeration 50,376,967.95 73,530,555.63
Equipment Co., Ltd.
Guangdong Welling Motor 166,891.19 333,923.14
Manufacturing Co., Ltd.
Jiangsu Midea Clean Electric Co., 6,206,937.40 3,989,605.22
Ltd.
Wuxi Little Swan Co., Ltd. 308,054.33
Changsha Zhonglian Hengtong 850,000.00 42,500.00 4,899,631.10 489,963.11
Machinery Co., Ltd.
Yuxing Technology Development 285,057,578.09 8,551,727.34
(Shenzhen) Co., Ltd.
Wuxi Feiling Electronics Co., Ltd. 504,880.89
Subtotal 276,906,400.56 2,163,532.49 579,503,002.20 10,305,515.78
Guangdong Midea Kitchen 250,128.00
Notes receivable
Appliance Manufacturing Co., Ltd.
Subtotal 250,128.00
Zoomlion Heavy Industry Co., Ltd. 1,586,000.00 2,000,000.00
Guangdong Midea Environmental 100,000.00 3,445,502.58
Electrical Manufacturing Co., Ltd.
Guangdong Midea Environmental 5,485,875.67
Electrical Manufacturing Co., Ltd.
Guangdong Midea Refrigeration 200,000.00
Equipment Co., Ltd.
Guangdong Midea Commercial Air 50,000.00
Conditioning Equipment Co., Ltd.
Guangdong Midea HVAC 470,538.86
Equipment Co., Ltd.
Foshan Shunde District Midea
Washing Appliance Manufacturing 1,476,232.74
Receivables Co., Ltd.
financing Wuhu Midea Life Electric 885,759.28 293,275.50
Manufacturing Co., Ltd.
Welling (Wuhu) Motor 138,789.45
Manufacturing Co., Ltd.
Wuhu Welling Motor Sales Co., Ltd. 284,225.20 38,349.24
Foshan Shunde District Midea
Electric Heating Appliance 1,818,137.80
Manufacturing Co., Ltd.
Anhui Meizhi Precision 22,533,500.00
Manufacturing Co., Ltd.
Anhui Meizhi Refrigeration 4,800,000.00
Equipment Co., Ltd.
Guangdong Midea Kitchen 13,342,437.82 6,929,001.57
Appliance Manufacturing Co., Ltd.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Closing balance Opening balance
Items Related parties
Book balance Provision for bad Book balance Provision for bad
debts debts
Guangdong Meizhi Precision 5,000,000.00
Manufacturing Co., Ltd.
Guangdong Meizhi Refrigeration 3,744,419.06 50,000.00
Equipment Co., Ltd.
Guangdong Welling Motor 387,466.11
Manufacturing Co., Ltd.
Wuhu Midea Kitchen Appliance 189,549.75 1,152,106.74
Manufacturing Co., Ltd.
Guangdong Midea Group Wuhu 350,000.00 3,327,378.95
Refrigeration Equipment Co., Ltd.
Zhejiang Meizhi Compressor Co., 1,012,405.60 626,848.50
Ltd.
Chongqing Midea Refrigeration 2,980,000.00 150,000.00
Equipment Co., Ltd.
Jiangsu Midea Clean Electric Co., 435,471.31 4,700,000.00
Ltd.
Foshan Midea Carrier Refrigeration 146,934.55
Equipment Co., Ltd.
Hefei Midea Refrigerator Co., Ltd. 17,315,354.30 988,216.94
Wuxi Little Swan Co., Ltd. 1,779,475.49
Hefei Midea Washing Machine Co., 4,555,382.40 500,000.00
Ltd.
Midea Group E-Commerce Co., Ltd. 5,000,000.00
Subtotal 56,178,724.34 64,089,911.07
Changsha Cowa Zoomlion 3,315,588.08
Advances paid Intelligent Technology Co., Ltd.
Zoomlion Heavy Industry Co., Ltd. 3,954,000.00
Subtotal 3,954,000.00 3,315,588.08
Guangdong Shunkong 1,730,000.00 519,000.00 1,730,000.00 173,000.00
Environmental Investment Co., Ltd.
Lianjiang Green Oriental New 13,048,263.59 1,633,347.22 3,792,918.14 639,645.91
Energy Co., Ltd.
Shantou Zoomlion Ruikang
Environmental Sanitation Service 1,259,779.98 332,233.34 1,279,053.30 123,952.67
Co., Ltd.
Shantou Chaoyang District
Zoomlion Ruikang Environmental 620,989.19 31,049.46
Other
receivables Sanitation Service Co., Ltd.
Guangdong Liangke Environmental
30,165,333.33 6,395,734.82 30,410,433.33 2,004,384.19
Engineering Co., Ltd.
Zoomlion Heavy Industry Co., Ltd. 60,964.27 3,048.21 264,300.00 13,215.00
Foshan Shunde District Yinghai 205,228.40 4,104.57 205,228.40
Investment Co., Ltd.
Welling (Wuhu) Motor 24,655.19 19,724.15
Manufacturing Co., Ltd.
Subtotal 46,469,569.57 8,887,468.16 38,327,577.55 3,004,971.38
Guangdong Tianshu New Energy 11,736,792.59 176,051.89
Technology Co., Ltd.
Lianjiang Green Oriental New 60,618,680.83 3,030,934.04
Long-term
Energy Co., Ltd.
receivables and
Shantou Zoomlion Ruikang
non-current 25,456,370.00 865,973.60 37,789,740.00 1,413,279.60
Environmental Sanitation Service
assets due within
Co., Ltd.
one year
Shantou Chaoyang District
Zoomlion Ruikang Environmental 22,377,360.00 1,491,761.00 13,876,120.00 815,002.00
Sanitation Service Co., Ltd.
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Closing balance Opening balance
Items Related parties
Book balance Provision for bad Book balance Provision for bad
debts debts
Subtotal 59,570,522.59 2,533,786.49 112,284,540.83 5,259,215.64
2. Balance due to related parties
Items Related parties Closing balance Opening balance
Tengine Innovation (Beijing) Monitoring Instrument 1,701,531.98 726,844.36
Co., Ltd.
Guangdong Shunkong Environmental Investment 937,079.65
Co., Ltd.
Guangdong Tianshu New Energy Technology Co., 867,574.51
Ltd.
Changsha Cowa Zoomlion Intelligent Technology 162,901.47
Co., Ltd.
Guangdong Liangke Environmental Engineering Co., 2,776,000.50 4,517,490.21
Ltd.
Zoomlion Heavy Industry Co., Ltd. 117,954,922.58 102,010,448.89
Accounts
payable Midea Group Co., Ltd. 587,507.93 587,507.93
Foshan Weite Packing Co., Ltd. 44,581.00 17,155.96
Foshan Welling Washing Motor Manufacturing Co., 9,160.00
Ltd.
Foshan Shunde District Midea Hotel Management 44,874.00
Co., Ltd.
Changsha Zhonglian Hengtong Machinery Co., Ltd. 602,880.40
Yuxing Technology Development (Shenzhen) Co., 53,047,681.79
Ltd.
Wuhu Ande Zhilian Technology Co., Ltd. 26,257.78
Subtotal 125,670,397.80 160,952,003.14
Tengine Innovation (Beijing) Monitoring Instrument 3,977,532.00 1,513,120.00
Co., Ltd.
Guangdong Tianshu New Energy Technology Co., 2,096,770.00
Ltd.
Notes payable Changsha Cowa Zoomlion Intelligent Technology Co., 1,712,500.00
Ltd.
Zoomlion Heavy Industry Co., Ltd. 131,784,307.87 161,557,616.20
Yuxing Technology Development (Shenzhen) Co., 40,918,701.26
Ltd.
Subtotal 139,571,109.87 203,989,437.46
Lianjiang Green Oriental New Energy Co., Ltd. 956,067.99
Contract Guangdong Liangke Environmental Engineering Co., 15,610.67
liabilities Ltd.
Zoomlion Heavy Industry Co., Ltd. 3,857,629.05
Subtotal 4,829,307.71
Lianjiang Green Oriental New Energy Co., Ltd. 2,508,650.53
Advances
received 湖北中联重科工程起重机械有限公司 (Hubei 2,000.00
Zoomlion Engineering Hoisting Machinery Co., Ltd.*)
Subtotal 2,510,650.53
Zoomlion Heavy Industry Co., Ltd. [Note] 49,328,337.00 135,707,394.06
绿色东方投资控股有限公司 (Green Oriental 21,875,000.00 21,875,000.00
Other payables
Investment Holdings Co., Ltd.*)
广东美的物业管理股份有限公司 (Guangdong 5,000.00 5,000.00
*
The English names are for identification purpose only.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Items Related parties Closing balance Opening balance
*
Midea Property Management Co., Ltd. )
浙江上风风能有限公司 (Zhejiang Shangfeng Wind 14.30
Energy Co., Ltd.*)
Changsha Zhonglian Hengtong Machinery Co., Ltd. 7,500.00 7,500.00
Yuxing Technology Development (Shenzhen) Co., 1,285,934.67
Ltd.
Subtotal 71,215,837.00 158,880,843.03
Note: It is the other payables and unpaid factoring service fees caused by the factoring business of accounts receivable with recourse
right.
XI. Share-based payment
(I) Overall information
1. Details
Total equity instruments granted in current period
Total equity instruments vested in current period
Total equity instruments retired in current period
Phase II stock options: the exercise price is 9.15 yuan per share; after 12
months from the date of grant, if the exercise conditions are met, the
incentive targets can exercise by three installments respectively at 30%,
30%, 40% within the next 36 months; as of the report date, the first period
of phase II has due and expired, the second period of phase II is in the
exercise period, and the third period of phase II is still in the waiting
The range of exercise prices of stock options period.
outstanding at the end of the period and the remaining
contractual life Phase III stock options: the exercise price is 6.34 yuan/share; after 12
months from the date of grant, if the exercise conditions are met, the
incentive targets can exercise by three installments respectively at 30%,
30%, 40% within the next 36 months; as of the report date, the first period
of phase III has expired due to failure in meeting the performance
indicators, and the second and the third periods of phase III are still in the
waiting period.
The range of exercise prices of other equity
instruments at the end of the period and the remaining
contractual life
2. Other remarks
(1) The decision-making procedures and approval status of the Company’s phase III stock option incentive plan
According to the “Proposal on the ‘Phase III Stock Option Incentive Plan (Draft)’ and Its Summary” approved by the Company’s
third extraordinary shareholder’s general meeting on November 12, 2019, and the “Proposal on Adjusting the List of Incentive
Persons and the Number of Granted Stock Options for Phase III Stock Options” deliberated and approved by 32 nd meeting of the
eighth session of the Board of Directors on November 26, 2019, the Company intends to implement stock option incentive plans for
some of the Company’s middle and senior managers and core backbones (technology, marketing, production, etc.). The total number
of stock options granted to incentive targets is 65.09 million, accounting for approximately 2.06% of the Company’s total share
capital of 3,163.0621 million shares when the incentive plan is signed. If each stock option meets the exercise conditions after 12
months from the grant date, the incentive targets exercise the option by three installments at 30%, 30%, and 40% at the exercise price
of 6.45 yuan per share within the next 36 months.
On April 23, 2020, according to the “Proposal on Adjusting the Incentive Targets and the Number of Options Exercised in Phase II
and Phase III Stock Option Incentive Plans” deliberated and approved by the fourth meeting of the ninth session of the Board of
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Directors and the third meeting of the ninth session of the Board of Supervisors, 5 employees who resigned due to personal reasons
were identified by the Company’s Board of Directors as no longer suitable for incentives. According to the provisions of the “Phase
III Stock Option Incentive Plan (Draft)”, their first, second, and third installments of stock options, a total of 1.28 million, were
cancelled. After the adjustments, the incentive targets of phase III stock option incentive plan have been adjusted from the original
249 to 244, and the number of locked stock options granted has been adjusted from 65.09 million to 63.81 million.
Meanwhile, the “Proposal on the Company’s Phase III Stock Option Incentive Plan’s Failure to Meet the Exercising Conditions for
the First Exercise Period and Cancellation of Part of the Stock Options” was deliberated and approved, given that the Company’s
performance did not reach the vesting conditions of the first period of the Phase III Stock Option Incentive Plan. The 19.143 million
stock options granted but not yet exercised in the first period cannot be exercised. According to the relevant provisions of the “Phase
III Stock Option Incentive Plan (Draft)”, the Company’s Board of Directors agreed to cancel the 19.143 million stock options granted
but not yet exercised in the first period.
The Company has disclosed the “Announcement on the Implementation of the Annual Equity Distribution of 2019” on July 4, 2020,
based on the Company’s current total share capital after excluding the repurchased shares (0 share), i.e. 3,163,062,146 shares, cash
dividend of 1.10 yuan (tax included) for every 10 shares is to be distributed to all shareholders. The equity registration date for this
equity distribution is July 9, 2020, and the ex-rights and ex-dividend date is July 10, 2020. Given that the Company’s 2019 equity
distribution has been implemented on July 10, 2020, according to provisions on the adjustment of the exercise price of the phase II
and Phase III stock option incentive plan drafts, if the Company has capital reserve transferred to share capital, distribution of share
bonus, or share split, share reduction, dividend distribution, and share allotments, the exercise price of stock options will be adjusted
accordingly. After the implementation of this equity distribution, the exercise price of phase III stock option incentive plan will be
adjusted from 6.45 yuan per share to 6.34 yuan per share.
According to the “Proposal on Revising the Performance Appraisal Indicators of Phase III Stock Option Incentive Plan” deliberated
and approved by the sixth meeting of the ninth session of the Board of Directors on August 20, 2020, it is agreed to revise the
performance appraisal indicators of phase III stock option incentive plan.
(2) The decision-making procedures and approval status of the Company’s phase II stock option incentive plan
According to the “Proposal on Granting Stock Options to Phase II Stock Option Incentive Targets” deliberated and approved by the
14th extraordinary meeting of the eighth session of the Board of Directors of the Company on March 12, 2018, the Company intends
to implement stock option incentive plan for some middle and senior managers, core backbones and key management and core
backbones of its holding subsidiaries in the environmental protection industry, and the total number of stock options granted to the
incentive targets was 27.15 million, accounting for 2.35% of the Company’s total share capital of 1,166.9889 million shares at the
time the incentive plan was signed. If each stock option meets the exercise conditions after 12 months from the grant date, the
incentive targets exercise the option by three installments at 30%, 30%, and 40% at the exercise price of 9.36 yuan per share within
the next 36 months.
According to the “Proposal on Adjusting the Equity Incentive Plan Exercise Price, Incentive Targets and Number of Options”
deliberated and approved by the 30th meeting of the eighth session of the Board of Directors on August 27, 2019, due to the
implementation of the 2018 equity distribution plan, as well as the resignation, position adjustment of some incentive targets, and
other relevant reasons, it is agreed to adjust the equity incentive targets, the number of options, and the exercise price. After
adjustment, the incentive targets were adjusted from 118 to 81, and the number of locked stock options granted was adjusted from
27.15 million to 18.25 million shares, and the exercise price was adjusted from 9.36 yuan/share to 9.26 yuan/share. According to the
“Proposal on Matters Related to the First Exercise Period of Phase II Incentive Plan” deliberated and approved by the 30th meeting of
the eighth session of the Board of Directors on August 27, 2019, given that the conditions for the first exercise period of the
Company’s phase II stock option incentive plan have been fulfilled, the phase II equity incentive plan has determined and passed the
assessment for a total of 81 incentive targets, and a total of 5,475,000 shares were exercised in the first exercise period.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
As of the end of the first exercise period (i.e. March 11, 2020), there are still 5,475,000 stock options that have not been exercised.
According to the provisions of the phase II stock option incentive plan, “the incentive targets must be exercised within the validity
period of the stock options. After the expiration date, the stock options that have been granted but not yet exercised shall not be
exercised and shall be cancelled by the Company.”, the Company cancelled the 5,475,000 stock options granted but not exercised in
the first exercise period of the phase II stock option incentive plan for the 81 incentive targets mentioned above. After the completion
of the cancellation, the Company’s phase II stock option incentive plan will continue to be implemented in accordance with the
requirements. The number of the phase II stock options was adjusted from 18.25 million to 12.775 million.
The Company has disclosed the “Announcement on the Implementation of the Annual Equity Distribution of 2019” on July 4, 2020,
based on the Company’s current total share capital after excluding the repurchased shares (0 share), i.e. 3,163,062,146 shares, cash
dividend of 1.10 yuan (tax included) per 10 shares is to be distributed to all shareholders. The equity registration date for this equity
distribution is July 9, 2020, and the ex-rights and ex-dividend date is July 10, 2020. Given that the Company’s 2019 equity
distribution has been implemented on July 10, 2020, according to provisions on the adjustment of the exercise price of the phase II
and Phase III stock option incentive plan drafts, if the Company has capital reserve transferred to share capital, distribution of share
bonus, or share split, share reduction, dividend distribution, and share allotments, the exercise price of stock options will be adjusted
accordingly. After the implementation of this equity distribution, the exercise price of phase II stock option incentive plan will be
adjusted from 9.26 yuan per share to 9.15 yuan per share.
(3) The decision-making procedures and approval status of the Company’s phase I stock option incentive plan
According to the “Proposal on the ‘Stock Option Incentive Plan (Draft)’ and Its Summary” deliberated and approved by the
Company’s third extraordinary shareholder’s general meeting of 2016 on March 9, 2016, the Company intends to implement stock
option incentive plans for some of the Company’s middle and senior managers and core technical (business) backbones. The total
number of stock options granted to incentive targets is 5.44 million, accounting for approximately 1.12% of the Company’s total
share capital of 484.9244 million shares when the incentive plan is signed.
As in 2016 cash dividend was distributed at 0.398874 yuan (tax included) for every 10 shares and capital reserve was transferred to
share capital, the number of unexercised options of the stock option incentive plan will be adjusted to 7,427,028, and the exercise
price will be adjusted from 12.49 yuan/share to 8.31 yuan/share.
According to the “Proposal on Adjusting the Number of Stock Options, Exercise Prices and Incentive Targets of the Company’s
Phase I Stock Option Incentive Plan” deliberated and approved by the 15 th meeting of the eighth session of the Board of Directors on
April 20, 2018, due to the implementation of the 2016 equity distribution plan, as well as the resignation of some incentive targets,
and failure in meeting performance indicators, it is agreed to adjust the equity incentive targets, the number of options, and the
exercise price. After adjustment, the incentive targets were adjusted from 55 to 51, and the number of locked stock options granted
was adjusted to 6,923,501, and the exercise price was adjusted from 12.49 yuan/share to 8.31 yuan/share.
According to the “Proposal on the Cancellation of Certain Stock Options which Have Been Expired but Not Exercised” deliberated
and approved by the 27th meeting of the eighth session of the Board of Directors on April 17, 2019, the Company cancelled the
2,967,197 stock options granted but not exercised in the second exercise period of the phase I stock option incentive plan for the 51
incentive targets.
According to the “Proposal on Matters Related to the Third Exercise Period of the Company’s Phase I Stock Option Incentive Plan”
deliberated and approved by the 30th meeting of the eighth session of the Company’s Board of Directors on August 27, 2019, in view
of the fact that conditions of the third exercise period of phase I stock option incentive plan have been fulfilled, the Company’s phase
I stock option incentive plan has determined and passed the assessment for a total of 40 incentive targets, and 3,021,177 options will
be exercised during the third exercise period.
As of the end of the third exercise period (that is, March 10, 2020), there are still 3,021,177 stock options that have not been
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
exercised. According to the provisions of the phase I stock option incentive plan, “the incentive targets must be exercised within the
validity period of the stock options. After the expiration date, the stock options that have been granted but not yet exercised shall not
be exercised and shall be cancelled by the Company.”, the Company cancelled the 3,021,177 stock options granted but not exercised
in the third exercise period of the phase I stock option incentive plan for the 40 incentive targets mentioned above. After the
completion of the cancellation, the Company’s phase I stock option incentive plan has been completed.
(II) Equity-settled share-based payment
1. Details
Stock options: Fair value of the stock options at the grant
Determination method for grant-date fair value of equity instruments date was determined according to the Black-Scholes
option pricing model
Determination method for the number of equity instruments expected to It is expected that all incentive targets still with the
vest Company by then will fully exercise their rights
Reasons for significant difference between the estimates in current period None
and preceding period
Capital reserve accumulated due to equity-settled share-based payment 49,094,842.72
Total expenses incurred due to equity-settled share-based payment 13,624,937.21
XII. Commitments and contingencies
(I) Significant commitments
As of the balance sheet date, the Company has no significant commitments to be disclosed.
(II) Contingencies
1. Contingent liabilities incurred by pending lawsuit/arbitration and the financial effect
(1) On November 19, 2018, Green Oriental Investment Holdings Co., Ltd., the former shareholder of the Company’s 70%-controlled
subsidiary Green Oriental Company, filed a civil complaint with the People’s Court of Shenzhen Qianhai Cooperation Zone,
requesting the Company and its sub-subsidiary 深圳市绿色方舟投资有限公司 (Shenzhen Green Ark Investment Co., Ltd.*) to pay
21,875,000 yuan and interest thereof for the 25% equity acquisition of Lianjiang Green Oriental New Energy Co., Ltd. in 2016, and
therefore applied for freezing the 25% equity of Lianjiang Green Oriental New Energy Co., Ltd. According to the Civil Judgment
[2018] Yue 0391 Min Chu No. 4117 issued by the People’s Court of Qianhai Cooperation Zone, Shenzhen, Guangdong Province on
June 18, 2019: the sub-subsidiary Shenzhen Green Ark Investment Co., Ltd. shall pay 21,875,000 yuan and interest thereof for the 25%
equity acquisition of Lianjiang Green Oriental New Energy Co., Ltd. in 2016 to Green Oriental Investment Holdings Co., Ltd. On
July 12, 2019, Shenzhen Green Ark Investment Co., Ltd. filed a civil appeal petition to Shenzhen Intermediate People’s Court,
requesting to revoke the Civil Judgment [2018] Yue 0391 Min Chu No. 4117 in accordance with the law, and to dismiss all the claims
made by Green Oriental Investment Holdings Co., Ltd.
According to the civil appeal and the case report issued by 广东广信君达律师事务所(Guangdong Guangxin Junda Law Firm*) on
March 30, 2021, the Company and its lawyers believe that: First, the first instance court was unclear on facts, and has applied to the
wrong law provisions. It has not correctly understand the Cooperation Framework Agreement and the Equity Transfer Contract, nor
the relationship between the Company, Shenzhen Green Ark Investment Co., Ltd., Green Oriental Investment Holdings Co., Ltd., and
Mr. 郑维先 (Zheng Weixian) in the acquisition of Green Oriental Company; second, for the equity transfer of Lianjiang Green
Oriental New Energy Co., Ltd., Green Oriental Company assisted Green Oriental Investment Holdings Co., Ltd. in fulfilling its
capital contribution obligations, and has the right to demand that the capital contribution be offset with the equity transfer payment;
Third, Green Oriental Investment Holdings Co., Ltd.’s action of using the court as a tool for transferring property should not be
*
The English name is for identification purpose only.
*
The English name is for identification purpose only.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
supported and protected by law. Therefore, the Company and its sub-subsidiary Shenzhen Green Ark Investment Co., Ltd. as parties
to the same transaction, have the right to exercise the right of defense to refuse to pay the above-mentioned equity transfer payment.
As of the date of issuance of these financial statements, the second instance of this case is still under trial.
(2) In November 2018, due to the fact that Green Oriental Investment Holdings Co., Ltd. and Zheng Weixian failed to fulfill the
performance indicators agreed on the “Cooperation Framework Agreement of Shenzhen Green Oriental Environmental Protection
Co., Ltd.” and the relevant supplementary agreement, the Company filed a lawsuit to Foshan Intermediate People’s Court, requesting
Green Oriental Investment Holdings Co., Ltd. and Zheng Weixian to pay the Company 125,538,200 yuan as compensation. The
Company claimed that the related debts occurred during the duration of the marriage relationship between Zheng Weixian and 任喆
(Ren Zhe), and further claimed that the debts belonged to the joint debts of the spouse, and required Ren Zhe to bear joint liabilities
for the above-mentioned compensation. At the same time, the Company applied for property preservation in litigation. In May 2020,
the Company applied to Foshan Intermediate People’s Court to change the litigation request to require Green Oriental Investment
Holdings Co., Ltd. and Zheng Weixian to compensate the Company for various losses totaling 164,560,620 yuan, and to require Ren
Zhe to bear joint liabilities for the above debts. On January 13, 2021, Foshan Intermediate People’s Court made a judgment of first
instance, ordering Green Oriental Investment Holdings Co., Ltd. and Zheng Weixian to compensate the Company for various losses
totaling 163,460,620 yuan, and ordering the Company has a priority right of compensation for the 30% equity of Green Oriental
Company held by Green Oriental Investment Holdings Co., Ltd. within the extent of 200 million yuan due to the debts assumed by
Green Oriental Investment Holdings Co., Ltd. and Zheng Weixian in this case. Later, Green Oriental Investment Holdings Co., Ltd.
and Zheng Weixian filed an appeal to Guangdong Provincial Higher People’s Court. As of the date of issuance of this report, the
Company has not received the notice of the second instance hearing.
2. Certain customers of the Company use finance lease services provided by banks to finance their purchase. According to the
arrangement of the agreement, the Company provides guarantees for such transactions. If customers default, the Company will be
required to compensate the bank for the lease payment owed by customers. Meanwhile, the Company has the right to take back and
sell the machinery that is the subject of the lease, and keep any sales income exceeding the balance of the guarantee payment to the
leasing company. As of December 31, 2020, the Company’s maximum exposure to these guarantees is 21,859,801.75 yuan.
3. Certain customers of the Company use finance lease services provided by third-party finance lease companies to finance their
purchase from the Company. According to the arrangement of the agreement, the Company provides guarantees for third-party
finance lease companies. If customers default, the Company will be required to compensate the third-party finance lease companies
for the lease payment owed by customers. Meanwhile, the Company has the right to take back and sell the machinery that is the
subject of the lease, and keep any sales income exceeding the balance of the guarantee payment to the leasing company. As of
December 31, 2020, the Company’s maximum exposure to these guarantees is 24,295,580.00 yuan.
XIII. Events after the balance sheet date
(I) Significant non-adjusted events
Pursuant to the “Proposal on Transferring the 51% of the Company’s Controlling Right over Subsidiary through Public Listing”
deliberated and approved by the 11th extraordinary meeting of the ninth session of the Board of Directors on January 29, 2021 and the
first extraordinary shareholders’ general meeting of 2021 on February 24, 2021, the Company is agreed to transfer 51% of the
controlling right in Foshan Yingtong Electrical Materials Co., Ltd. to the transferee 广东赢合企业管理有限公司 (Guangdong
Yinghe Enterprise Management Co., Ltd.*) at the consideration of 255 million yuan.
(II) Profit distribution after the balance sheet date
According to the 2020 Profit Distribution Plan deliberated and approved by the 13 th meeting of the ninth session of the Board of
Directors on April 22, 2021, the Company intends to distribute cash dividends of 0.12 yuan (tax included) per share based on the
*
The English name is for identification purpose only.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
existing total share capital of 3,163,080,346.00 shares, a total of 379,569,641.52 yuan.
XIV. Other significant events
(I) Segment information
1. Identification basis for reportable segments
Operating segments are determined based on the structure of the Company’s internal organization, management requirements and
internal reporting system. An operating segment is a component of the Company:
(1) that engages in business activities from which it may earn revenues and incur expenses;
(2) whose financial performance is regularly reviewed by the Management to make decisions about resource to be allocated to the
segment and to assess its performance; and
(3) for which accounting information regarding financial position, financial performance and cash flows is available through analysis.
The Company identified reportable segments based on products. It evaluates the operating performance of electrotechnical equipment
manufacturing, ventilation equipment manufacturing and environmental integrated industry respectively.
2. Financial information of reportable segments
Products segment
Ventilation equipment
Items and electrotechnical Environmental Financial Inter-segment Total
equipment integrated industry services offsetting
manufacturing
Revenue from 3,452,359,441.20 11,001,494,213.74 17,971,932.25 198,612,351.83 14,273,213,235.36
main operations
Cost of main 2,980,218,989.45 7,935,625,872.82 5,073,767.91 200,121,239.69 10,720,797,390.49
operations
Total assets 24,723,177,484.84 20,815,358,907.74 964,343,472.47 16,392,342,874.17 30,110,536,990.88
Total liabilities 4,445,743,062.23 13,214,561,495.46 603,449,139.06 5,424,236,887.77 12,839,516,808.98
(II) Public issuance of convertible bonds with A share convertible rights and the projects in which the raised funds invest
Under the Approval of the Public Issuance of Convertible Bonds by Infore Environment Technology Group Co., Ltd. issued by China
Securities Regulatory Commission (Zheng Jian Xu Ke [2020] 2219) on September 10, 2020, on November 4, the Company issued
publicly convertible bonds of 1,476,189,600 yuan, with a total issuance of 14,761,896 sheets, and a term of 6 years. The coupon rate
of the convertible bonds issued this time is 0.20% in the first year, 0.50% in the second year, 0.80% in the third year, 1.50% in the
fourth year, 1.80% in the fifth year, and 2.00% in the sixth year. Interest of the convertible corporate bonds is paid once a year, and
principal and the last year’s interest are paid at maturity. The Company will redeem all convertible bonds not converted by investors
at the 110% of the par value (including the last year’s interest) within 5 trading days upon maturity of the convertible bonds issued
this time.
The duration of the convertible bonds issued this time is 6 years from the date of issuance, that is, from November 4, 2020 to
November 3, 2026. The initial conversion price of the convertible bonds issued this time is 8.31 yuan/share; the conversion period of
the convertible bonds issued this time starts from the first trading day (May 10, 2021) six months after the issuance ends on
November 10, 2020 to the maturity date of the convertible bonds (November 3, 2026).
The total amount of funds raised from the public issuance of convertible bonds is 1,476,189,600 yuan. The net proceeds after
deducting related issuance expenses are intended to be used in the following projects:
No. Projects Intended investment from the
Total investments (in ,000)
raised fund (in ,000)
1 Smart sanitation comprehensive 1,966,836.40 1,296,384.90
configuration center
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
No. Projects Intended investment from the
Total investments (in ,000)
raised fund (in ,000)
2 Supplementing the working capital 176,189.60 160,951.30
Total 2,143,026.00 1,457,336.20
On November 4, 2020, the Company actually issued 14,761,896 sheets of convertible corporate bonds, each with a par value of 100
yuan, issued at par value, with a total issuance of 1,476,189,600 yuan and issuance costs of 18,853,400 yuan (excluding tax). The
debt and equity components of the convertible bonds are split as follows:
Items Debt component Equity component Total
Total issuance 1,205,796,393.83 270,393,206.17 1,476,189,600.00
Issuance costs 15,400,041.31 3,453,374.52 18,853,415.83
Net issuance at the issuance date 1,190,396,352.52 266,939,831.65 1,457,336,184.17
Current period amortization 9,069,757.08 9,069,757.08
Closing balance 1,199,466,109.60 266,939,831.65 1,466,405,941.25
(III) Other significant transactions and matters which are influential to investors on their decision-making
1. As of December 31, 2020, the Company’s controlling shareholder, actual controller and persons acting in concert held a total of
1,441,121,828 shares of the Company, accounting for 45.56% of the Company’s total share capital, of which 932,367,969 shares
were pledged, accounting for 64.70% of its holdings of the Company, and 29.48% of the Company’s total share capital. Details are as
follows:
Shareholder Holder of the pledge Number of share Initial Remarks
Repurchase date
pledged transaction date
100,000,000 11/28/2019 12/31/2023 Financing
中国建设银行股份有限
公司(China Construction 11,786,321 07/24/2020 12/31/2023 Supplementing the
Bank Corporation working capital
Limited*), Foshan Branch 46,831,044 07/24/2020 12/31/2023 Supplementing the
working capital
Infore Holding
Till owner of Providing guarantee
pledged for exchangeable
中信证券股份有限公司
100,000,000 07/10/2020 collateral corporate bonds for
(CITIC Securities Co.,
completes the share swaps or
Ltd.*) termination repayment of
procedures principal and interest
Subtotal 258,617,365
中国民生银行股份有限
Ningbo Infore
Asset 公司 (China Minsheng
Banking Corporation 610,798,429 10/14/2020 09/23/2021 Financing for M&A
Management
Co., Ltd. Limited*), Hong Kong
Branch
China Construction Bank
51,228,846 07/24/2020 12/31/2023 Supplementing the
Corporation Limited,
working capital
He Jianfeng Shunde Branch
China Construction Bank
11,723,329 07/24/2020 12/31/2023 Supplementing the
Corporation Limited,
working capital
Shunde Branch
Subtotal 62,952,175
Total 932,367,969
XV. Notes to items of parent company financial statements
(I) Notes to items of parent company balance sheet
1. Other receivables
*
The English names are for identification purpose only.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
(1) Details
Items Closing balance Opening balance
Dividend receivable 50,000,000.00 116,089,770.73
Other receivables 3,045,331,754.24 2,426,827,344.30
Total 3,095,331,754.24 2,542,917,115.03
(2) Dividend receivable
1) Details
Items Closing balance Opening balance
Donggang Magnet Wire Company 50,000,000.00 50,000,000.00
Shangfeng Industrial Company 66,089,770.73
Subtotal 50,000,000.00 116,089,770.73
2) Significant balance with age over one year
Items Closing balance Ages Whether impaired and
Reasons for balances
judgment basis
Donggang Magnet Wire 50,000,000.00 1-2 years Capital arrangement of the Not impaired based on
Company subsidiary expected losses
Subtotal 50,000,000.00
(3) Other receivables
1) Details
① Details on categories
Closing balance
Categories Book balance Provision for bad debts
Carrying amount
Amount % to total Amount Provision
proportion (%)
Receivables with
provision made on an
individual basis
Receivables with
provision made on a 3,052,349,446.28 100.00 7,017,692.04 0.23 3,045,331,754.24
collective basis
Subtotal 3,052,349,446.28 100.00 7,017,692.04 0.23 3,045,331,754.24
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount % to total Amount Provision
proportion (%)
Receivables with
provision made on an
individual basis
Receivables with
provision made on a 2,430,614,901.70 100.00 3,787,557.40 0.16 2,426,827,344.30
collective basis
Subtotal 2,430,614,901.70 100.00 3,787,557.40 0.16 2,426,827,344.30
② Other receivables with provision made using age analysis method
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
1-180 days 3,016,068,113.67
180 days - 1 year 3,781,914.69 75,638.29 2.00
1-2 years 14,486,498.17 1,448,649.82 10.00
2-3 years 17,833,863.75 5,350,159.13 30.00
Over 5 years 179,056.00 143,244.80 80.00
Subtotal 3,052,349,446.28 7,017,692.04 0.23
2) Changes in provision for bad debts
① Details
Phase I Phase II Phase III
Items 12 month Subtotal
Lifetime expected credit Lifetime expected credit
expected credit
losses (credit not impaired) losses (credit impaired)
losses
Opening balance 279,102.55 3,371,210.05 137,244.80 3,787,557.40
Opening balance in current period
--Transferred to phase II -279,102.55 279,102.55
--Transferred to phase III -3,371,210.05 3,371,210.05
--Reversed to phase II
--Reversed to phase I
Provision made in current period 75,638.29 1,169,547.27 8,484,949.08 9,730,134.64
Provision recovered in current
period
Provision reversed in current period
Provision written off in current 6,500,000.00 6,500,000.00
period
Other changes
Closing balance 75,638.29 1,448,649.82 5,493,403.93 7,017,692.04
3) Other receivables written off in current period
Other receivables actually written off in current period totaled 6,500,000.00 yuan.
4) Other receivables categorized by nature
Nature of receivables Closing balance Opening balance
Security deposits 452,729.40 500,020.26
Call loans 30,165,333.33 41,548,535.29
Temporary advance payment receivable 3,021,731,383.55 2,346,859,836.64
Equity transfer payments 41,706,509.51
Subtotal 3,052,349,446.28 2,430,614,901.70
5) Details of the top 5 debtors with largest balances
Proportion to the total
Debtors Nature of receivables Book balance Ages Provision for
balance of other
bad debts
receivables (%)
No. 1 Temporary advance 598,182,205.25 1-180 days 19.60
payment receivable
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Proportion to the total
Debtors Nature of receivables Book balance Ages Provision for
balance of other
bad debts
receivables (%)
No. 2 Temporary advance 388,384,258.49 1-180 days 12.72
payment receivable
No. 3 Temporary advance 379,225,521.77 1-180 days 12.42
payment receivable
No. 4 Temporary advance 345,945,509.17 1-180 days 11.33
payment receivable
No. 5 Temporary advance 281,276,824.34 1-180 days 9.22
payment receivable
Subtotal 1,993,014,319.02 65.29
2. Long-term equity investments
(1) Details
Closing balance Opening balance
Items
Book balance Provision for Book balance Provision for Carrying amount
Carrying amount
impairment impairment
Investments in 16,490,166,786.49 16,490,166,786.49 16,457,034,334.03 16,457,034,334.03
subsidiaries
Investments in
associates and 204,174,912.87 204,174,912.87 180,046,856.31 180,046,856.31
joint ventures
Total 16,694,341,699.36 16,694,341,699.36 16,637,081,190.34 16,637,081,190.34
(2) Investments in subsidiaries
Provision for Closing balance
Investees Opening balance Increase Decrease Closing balance impairment made of provision for
in current period impairment
Xiantao Yinghe
Environmental 44,340,000.00 59,414,840.00 103,754,840.00
Protection Co., Ltd.
Shangfeng Industrial 181,276,112.84 18,647,202.02 199,923,314.86
Company
Donggang Magnet
Wire Company 181,900,523.46 181,900,523.46
[Note]
Guangdong Weiqi 122,351,660.90 122,351,660.90
Company [Note]
Anhui Weiqi
Electrical Materials 100,468,524.92 100,468,524.92
Co., Ltd. [Note]
Changsha
Zhongbiao 5,000,000.00 270,000.00 5,270,000.00
Environmental
Industry Co., Ltd.
Infore Zoomlion
City Environmental 15,300,000.00 15,300,000.00
Service Co., Ltd.
盈峰环境水务投资
有限公司 (Infore
Water Environment 113,055,998.06 113,055,998.06
Investment Co.,
Ltd.*)
Zoomlion
Environmental 15,250,344,307.78 4,102,207.11 15,254,446,514.89
Company
Green Oriental 189,216,316.02 1,096,177.90 190,312,493.92
Company
*
The English names are for identification purpose only.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Provision for Closing balance
Investees Opening balance Increase Decrease Closing balance impairment made of provision for
in current period impairment
Infore Technology 123,192,918.10 4,681,279.47 127,874,197.57
Company
Foshan Shunde
Huaqingyuan 279,997.29 626,455.24 906,452.53
Environmental
Protection Co., Ltd.
Ningbo Infore
Finance Lease Co., 7,307,974.66 349,015,000.00 356,322,974.66
Ltd
Guangdong Infore
Environmental 100,000,000.00 100,000,000.00
Investment Co., Ltd.
巴林右旗盈峰环境
水务有限公司
(Bahrain Right 23,000,000.00 23,000,000.00
Banner Infore Water
Environment Co.,
Ltd.*)
Subtotal 16,457,034,334.03 437,853,161.74 404,720,709.28 16,490,166,786.49
Note: In November 2020, the Company transferred all equities of Guangdong Weiqi Company, Donggang Magnet Wire Company
and Anhui Weiqi Electrical Materials Co., Ltd. to the sub-subsidiary Foshan Yingtong Electrical Materials Co., Ltd.
(3) Investments in associates and joint ventures
Increase/Decrease
Investees Opening balance Investment income Adjustment in other
Investments
Investments increased recognized under comprehensive
decreased
equity method income
Associates
Guangdong Shunkong
Environmental 154,058,623.77 27,447,000.00
Investment Co., Ltd.
Tengine Innovation
(Beijing) Monitoring 25,988,232.54 839,195.26 [Note 1] 2,735,747.26
Instrument Co., Ltd.
Guangdong Tianshu
New Energy Technology
Co., Ltd. [Note 2]
Total 180,046,856.31 839,195.26 30,182,747.26
(Continued)
Increase/Decrease
Closing balance of
Investees Cash dividend/Profit Closing balance provision for
Changes in other Provision for Others
declared for impairment
equity impairment
distribution
Associates
Guangdong Shunkong
Environmental 6,893,885.96 174,611,737.81
Investment Co., Ltd.
Tengine Innovation
(Beijing) Monitoring 29,563,175.06
Instrument Co., Ltd.
Guangdong Tianshu New
Energy Technology Co.,
Ltd.
Total 6,893,885.96 204,174,912.87
Note 1: Please refer to section V (1) 13 of notes to financial statements for details.
257
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Note 2: Please refer to section V (1) 13 of notes to financial statements for details.
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
(II) Notes to items of the parent company income statement
1. Operating revenue/Operating cost
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 7,213,284.07 4,157,985.26 33,915,501.26 28,584,116.83
Total 7,213,284.07 4,157,985.26 33,915,501.26 28,584,116.83
2. Investment income
Items Current period cumulative Preceding period comparative
Investment income from long-term equity 30,182,747.26 117,730,792.60
investments under equity method
Investment income from disposal of long-term -104,720,709.28 76,458,323.18
equity investments
Investment income from financial instruments 22,152,496.14 12,454,322.89
Including: Financial assets designated as at fair 11,250,397.44 9,673,130.57
value through profit or loss
Financial assets classified as at fair value 10,487,138.70 2,400,812.32
through profit or loss
Other equity instrument investments 414,960.00 380,380.00
Gains on disposal of financial assets classified 27,094.77
as at fair value through profit or loss
Shareholder performance compensation 839,195.26 24,676,400.00
Total -51,519,175.85 231,319,838.67
XVI. Other supplementary information
(I) Non-recurring profit or loss
1. Schedule of non-recurring profit or loss
(1) Details
Items Amount Remarks
Gains on disposal of long-term equity investments
amounted to 488,224.46 yuan, gains on disposal of
Gains on disposal of non-current assets, including -42,036,810.26 fixed assets amounted to -1,787,925.37 yuan, gains on
write-off of provision for impairment scrapping of fixed assets amounted to -11,767,441.22
yuan, and gains on scrapping of intangible assets
amounted to -28,969,668.13 yuan
Tax refund, credit or exemption approved beyond
the power of authorities, without formal 621,422.30
documents, or with occasionality
Government grants included in profit or loss
(excluding those closely related to operating
activities of the Company, satisfying government 42,047,479.15
policies and regulations, and continuously
enjoyed with certain quantity/quota based on
certain standards)
4,578,541.63 yuan from Lianjiang Green Oriental
New Energy Co., Ltd., 2,012,499.98 yuan from
Guangdong Liangke Environmental Engineering Co.,
Ltd., 1,328,771.30 yuan from Shantou Zoomlion
Fund possession charge from non-financial 22,117,071.89 Ruikang Environmental Sanitation Service Co., Ltd.,
entities and included in profit or loss 264,600.00 yuan from Jilin Xinyu Environmental
Protection Engineering Co., Ltd., 162,543.33 yuan
from Guangdong Tianshu New Energy Technology
Co., Ltd., and 20,252.48 yuan from Shantou Chaoyang
District Zoomlion Ruikang Environmental Sanitation
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Items Amount Remarks
Service Co., Ltd., excluding VAT for the above call
loans amounting to
178,515.17 yuan; amortization of realized finance
income from equity transfer payments received in
installment of Yuxing Technology Development
(Shenzhen) Co., Ltd. amounted to 13,928,378.34 yuan
Gains on acquisition of subsidiaries, joint
ventures and associates due to the surplus of
acquisition-date fair value of net identifiable
assets in acquiree over the acquisition cost
Gains on non-cash assets exchange
Gains on assets consigned to the third party for 23,771,715.03 Investment income from financial products amounted
investment or management to 23,771,715.03 yuan
Assets impairment loss incurred due to force
majeure such as natural disasters
Gains on debt restructuring
Entity restructuring expenses, such as staffing and
integrating expenses
Gains on transactions with unfair value
Net profit on subsidiaries acquired through
business combination under common control
from the beginning of the period to the
combination date
Contingent gains on non-operating activities
Gains on changes in fair value of financial assets Changes in fair value of financial assets amounted to
and liabilities at fair value through profit or loss -89,949,855.53 yuan, investment income from
and investment income from disposal of financial ineffective portion of closed hedges amounted to
assets and liabilities at fair value through profit or -90,608,285.06 5,117,398.33 yuan, changes in fair value of ineffective
loss, and available-for-sale financial assets, portion of outstanding hedges amounted to
excluding those arising from hedging business -5,769,445.94 yuan, and handling fees for futures
related to operating activities transactions amounted to -6,381.92 yuan
The reversed provision for impairment of
receivables based on impairment testing on an
individual basis
Gains on designated loans
Gains on changes in fair value of investment
properties with subsequent measurement at the
fair value mode
Gains on reconciliation of current period profit or
loss following legal and regulative requirements
on taxation, accounting, etc.
Management charges for consigned operations
Other non-operating revenue or expenditures -7,514,468.68
Compensation for performance commitment of
Other profit or loss satisfying the definition of 839,195.26 Tengine Innovation (Beijing) Monitoring Instrument
non-recurring profit or loss
Co., Ltd.
Subtotal -50,762,680.37
Less: Enterprise income tax affected -8,391,224.21
Non-controlling interest affected (after tax) 3,371,490.83
Net non-recurring profit or loss attributable to -45,742,946.99
shareholders of the parent company
2. The Company recognized “Other profit or loss satisfying the definition of non-recurring profit or loss” based on the “Interpretation
Pronouncement on Information Disclosure Criteria for Public Companies No. 1 - Non-Recurring Profit or Loss” issued by China
Securities Regulatory Commission, and remarks on exceptions are as follows:
Items Amount Reasons
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Items Amount Reasons
Government grants that closely related to operating
VAT refund 28,804,978.15
activities of the Company, satisfying government
policies and regulations, and continuously enjoyed
Subsidy for sludge disposal 2,816,166.83 with certain quantity/quota based on certain standards
(II) RONA and EPS
1. Details
EPS (yuan/share)
Profit of the reporting period Weighted average RONA
(%) Basic EPS Diluted EPS
Net profit attributable to shareholders of 8.62 0.44 0.44
ordinary shares
Net profit attributable to shareholders of
ordinary shares after deducting non-recurring 8.90 0.45 0.45
profit or loss
2. Calculation process of weighted average RONA
Items Symbols Current period cumulative
Net profit attributable to shareholders of ordinary shares A 1,386,476,099.73
Non-recurring profit or loss B -45,742,946.99
Net profit attributable to shareholders of ordinary shares after deducting C=A-B 1,432,219,046.72
non-recurring profit or loss
Opening balance of net assets attributable to shareholders of ordinary D 15,514,697,715.97
shares
Net assets attributable to shareholders of ordinary shares increased due to E
offering of new shares or conversion of debts into shares
Number of months counting from the next month when the net assets F
were increased to the end of the reporting period
Net assets attributable to shareholders of ordinary shares decreased due G 347,936,836.06
to cash dividends appropriation
Number of months counting from the next month when the net assets H 7
were decreased to the end of the reporting period
Net assets attributable to shareholders of ordinary shares decreased due I 8,920,597.83
to share repurchase
Number of months counting from the next month when the net assets J 3
were decreased to the end of the reporting period
Net assets attributable to shareholders of ordinary
shares increased due to amortization of share-based K1 12,859,488.20
payments in the current period
Number of months counting from the next month
when other net assets were increased to the end of L1 6
the reporting period
Net assets increased due to the issuing of K2 266,939,831.65
convertible bonds
Number of months counting from the next month
when other net assets were increased or decreased to L2 1
the end of the reporting period
Others Net assets increased due to the acquisition of
non-controlling interest of the subsidiary Shangfeng K3 -2,225,430.97
Industrial Company
Number of months counting from the next month
when other net assets were increased or decreased to L3 11
the end of the reporting period
Net assets increased due to the equity disposal of
the sub-subsidiary Jilin Zhongfeng Oasis K4 -314,024.80
Environmental Development Co., Ltd. but without
losing control
Number of months counting from the next month L4 11
when other net assets were increased or decreased to
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Items Symbols Current period cumulative
the end of the reporting period
Transfer of repurchased shares to stock incentive K5 98,394,255.36
plan in the preceding period
Number of months counting from the next month
when other net assets were increased or decreased to L5 7
the end of the reporting period
Net assets increased due to the acquisition of
non-controlling interest of Xiantao Yinghe K6 903,021.70
Environmental Protection Co., Ltd.
Number of months counting from the next month
when other net assets were increased or decreased to L6 4
the end of the reporting period
Net assets decreased due to the dividend distribution
of the sub-subsidiary Songyuan Zoomlion Xinyu K7 180,000.00
Environmental Service Co., Ltd.
Number of months counting from the next month
when other net assets were increased or decreased to L7 8
the end of the reporting period
Effect of profits or losses of copper futures on other K8 -479,437.51
comprehensive income
Number of months counting from the next month
when other net assets were increased or decreased to L8 6
the end of the reporting period
Number of months in the reporting period M 12
L= D+A/2+
Weighted average net assets E×F/M-G×H/M+ 16,086,427,295.05
I×J/M+K×L/M
Weighted average RONA M=A/L 8.62%
Weighted average RONA after deducting non-recurring profit or loss N=C/L 8.90%
3. Calculation process of basic EPS and diluted EPS
(1) Calculation process of basic EPS
Items Symbols Current period cumulative
Net profit attributable to shareholders of ordinary shares A 1,386,476,099.73
Non-recurring profit or loss B -45,742,946.99
Net profit attributable to shareholders of ordinary shares after deducting C=A-B 1,432,219,046.72
non-recurring profit or loss
Opening balance of total shares D 3,147,735,938
Number of shares increased due to conversion of reserve to share capital E
or share dividend appropriation
Number of shares increased due to transfer of repurchased shares to F 15,326,208
employee stock ownership plan
Number of months counting from the next month when the share was G 7
increased to the end of the reporting period
Number of shares decreased due to share repurchase H 1,137,524
Number of months counting from the next month when the share was I 3
decreased to the end of the reporting period
Number of shares decreased in the reporting period J
Number of months in the reporting period K 12
Weighted average of outstanding ordinary shares L=D+E+F×G/K-H×I/K-J 3,156,391,845
Basic EPS M=A/L 0.44
Basic EPS after deducting non-recurring profit or loss N=C/L 0.45
(2) Calculation process of diluted EPS
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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Items Symbols Current period cumulative
Net profit attributable to shareholders of ordinary shares A 1,386,476,099.73
Net profit affected by dilutive potential ordinary shares B 9,069,757.08
Diluted net profit attributable to shareholders of ordinary shares C=A-B 1,395,545,856.81
Non-recurring profit or loss D -45,742,946.99
Diluted net profit attributable to shareholders of ordinary shares after E=C-D 1,441,288,803.80
deducting non-recurring profit or loss
Weighted average of outstanding ordinary shares F 3,156,391,845
Weighted average of ordinary shares increased due to warrant, share G 22,295,943
options, convertible bonds, etc.
Weighted average of diluted outstanding ordinary shares H=F+G 3,178,687,788
Diluted EPS M=C/H 0.44
Diluted EPS after deducting non-recurring profit or loss N=E/H 0.45
263
Annual Report 2020 of Infore Environment Technology Group Co., Ltd.
Part XIII Documents Available for Reference
(I) The financial statements signed and stamped by the Company’s legal representative, Chief Financial Officer and head of the
accounting department.
(II) The original copy of the Independent Auditor’s Report signed and stamped by the certified public accountants and stamped by
the CPA firm.
(III) All the originals of the Company’s announcements and documents that were disclosed to the public during the Reporting Period
on the media designated by the CSRC for information disclosure.
The originals or legally valid copies of the documents above are lodged in the Company and the Shenzhen Stock Exchange, which
are available to all investors.
264
