Infore Environment Technology Group
Co., Ltd.
2022 Annual Report
April 2023
2022 Annual Report
Part I Important Notice, Table of Contents and Definitions
The Board of Directors, the Board of Supervisors as well as the directors,
supervisors and senior management of Infore Environment Technology Group
Co., Ltd. warrant that the information in this report contains no
misrepresentations, misleading statements or material omissions, and jointly
and severally accept liability for the truthfulness, accuracy and completeness
of information in this report.
Ma Gang, the Company's legal representative, Wang Qingbo, the
Company's principal officer in charge of accounting, and Wu Shanshan, the
principal officer of the Company's accounting division (head of accounting)
warrant that the financial statements contained in this report are truthful,
accurate and complete.
All directors of the Company attended the Board meeting to review this
report.
Any forward-looking statements such as future plans mentioned in this
report shall not be considered as promises to investors. Investors are advised to
pay attention to possible investment risks.
The Board has approved a proposal for dividend plan as follows: based on
the total share capital (minus shares in the Company's repurchase account) on
the date of record for the 2022 final dividend plan, a cash dividend of RMB
1.10 (tax inclusive) per 10 shares will be distributed to the shareholders, with
no bonus issue from either profit or capital reserves.
1
CONTENTS
Part I Important Notice, Table of Contents and Definitions ................................... 1
Part II Company Profile and Principal Financial Indicators ................................. 5
Part III Management Discussion and Analysis ...................................................... 11
Part IV Corporate Governance................................................................................ 44
Part V Environmental and Social Responsibility ................................................... 69
Part VI Significant Events ........................................................................................ 81
Part VII Share Changes and Shareholder Information ........................................ 95
Part VIII Information on Preference Shares ........................................................ 104
Part IX Information on Bonds ............................................................................... 105
Part X Financial Report.......................................................................................... 109
2
Documents Available for Reference
(I) Financial statements with signatures and seals of the legal representative of the Company,
principal officer in charge of accounting and principal officer of the accounting division.
(II) Original audit report with the seal of the accounting firm, and signed and stamped by
certified public accountants (CPAs).
(III) Originals of all corporate documents and announcements publicly disclosed on the
website designated by the China Securities Regulatory Commission (CSRC) during the reporting
period.
The originals and legally effective photocopies of the aforesaid documents are available at the
Company and the stock exchange for inspection by investors.
3
Definitions
Term means Definition
Company, the Company, Infore Enviro means Infore Environment Technology Group Co., Ltd.
Zoomlion Environmental means Changsha Zoomlion Environmental Industry Co., Ltd.
Infore Technology means Guangdong Infore Technology Co., Ltd.
Shangfeng, Shangfeng Industrial
means Zhejiang Shangfeng Special Blower Industrial Co., Ltd.
Company
Green Oriental Company means Shenzhen Green Oriental Environmental Protection Co., Ltd.
CSRC means China Securities Regulatory Commission
SZSE means Shenzhen Stock Exchange
General Meetings of Shareholders of Infore Environment
General Meetings of Shareholders means
Technology Group Co., Ltd.
Board of Directors of Infore Environment Technology Group
Board of Directors, the Board means
Co., Ltd.
Board of Supervisors of Infore Environment Technology
Board of Supervisors means
Group Co., Ltd.
Company Law means Company Law of the People's Republic of China
Securities Law means Securities Law of the People's Republic of China
Articles of Association of Infore Environment Technology
Articles of Association means
Group Co., Ltd.
4
Part II Company Profile and Principal Financial Indicators
I. Company Profile
Abbreviated stock name Infore Enviro Stock code 000967
Stocks listed on Shenzhen Stock Exchange
Chinese name 盈峰环境科技集团股份有限公司
Chinese abbreviated name 盈峰环境科技集团
Foreign name (if any) Infore Environment Technology Group Co., Ltd.
Legal representative Ma Gang
No. 1818 Renmin West Road, Dongguan Subdistrict, Shangyu District, Shaoxing City, Zhejiang
Registered address
Province
Postal code 312300
On February 29, 2016, the Company changed its registered address to No. 1818 Renmin Road
Historical updates to
West, Dongguan Subdistrict, Shangyu District, Shaoxing City, Zhejiang Province, from Shangpu
registered address
Town, Shangyu City, Zhejiang Province.
23/F, Infore Center, No. 7-8 Yixing Road, Xincheng Area, Beijiao Town, Shunde District,
Office address
Foshan City, Guangdong Province
Postal code 528300
Company website www.inforeenviro.com
Email inforeenviro@infore.com
II. Contact Details
Board Secretary Securities Representative
Name Jin Taotao Wang Fei
23/F, Infore Center, No. 7-8 Yixing Road, 23/F, Infore Center, No. 7-8 Yixing Road,
Address Xincheng Area, Beijiao Town, Shunde Xincheng Area, Beijiao Town, Shunde District,
District, Foshan City, Guangdong Province Foshan City, Guangdong Province
Telephone 0757-26335291 0757-26335291
Fax 0757-26330783 0757-26330783
Email wangyf@infore.com wangyf@infore.com
III. Information Disclosure and Access
Stock exchange website on which the
Shenzhen Stock Exchange: http://www.szse.cn/
report is published
Publications and websites on which the China Securities Journal, Shanghai Securities Journal, Securities Times, Securities
report is published Daily, and Cninfo (http://www.cninfo.com.cn/)
Securities Department, 23/F, Infore Center, No. 7-8 Yixing Road, Xincheng Area,
Place where the report is lodged
Beijiao Town, Shunde District, Foshan City
5
IV. Changes to Registered Information
Unified Social Credit Code 913300006096799222
Since its listing in 2000, the Company has changed the scope of its business five times. Scope of
business as at November 18, 1993: the research, development and production of ventilators, air-
cooling and water-cooling equipment, air conditioners, refrigerators, quick-freezing equipment,
molds and power generators. Export (refer to the documents of approval from the Ministry of
Foreign Trade and Economic Cooperation for details): on July 2, 2002, the scope of business
expanded to include "metal and plastic-steel composite pipes and profiles". On November 14,
2003, the scope of business expanded to include "environmental engineering". On February 29,
2016, a strategic transformation led to an expansion of the Company's scope of business to: the
R&D, maintenance and operation of environmental monitoring instruments; the development of
as well as and consultancy and other services for environmental management technologies; the
operation of environmental management facilities; environmental engineering; environmental
conservation engineering; municipal engineering; the design and implementation of water
conservancy and other water-related projects; the development of and services for technologies
for water pollution control, water treatment and ecological restoration; the R&D, sales and
relevant technology consultation for communication products, network products, mechatronic
products, automation control products, buildings and smart community products; and the design,
development, investment, operation, management and technical consultancy for the disposal and
Changes to the Company's recycling of municipal and solid waste and relevant supporting facilities; the sales of ventilators,
principal activities since its air-cooling and water-cooling equipment as well as air conditioners; the operation of import and
listing (if any) export businesses, industrial investment, investment management, asset management and
investment consulting. On May 18, 2016, "investment, the operation of import and export
businesses, industrial investment, investment management and asset management" were
removed from the Company's scope of business. On June 28, 2019, the Company's scope of
business was updated to: the R&D, manufacturing, sales, technology consultation, maintenance
and operation of sanitation equipment, specialized industrial robots, new energy vehicles,
environmental monitoring equipment, special equipment for environmental protection and
automobile charging equipment and parts; the leasing, design, operation, management,
technological development and services for the disposal and recycling of municipal and solid
waste and relevant supporting facilities; the design, construction, operation, management,
technological development and services for environmental engineering, municipal engineering,
landscape engineering, electrical engineering, water conservancy and other water-related
projects, water pollution control, air pollution control and soil remediation; the commercial
cleaning, collection, transportation and treatment (based on license) of urban solid waste; the
development, technological consultation and services for environmental protection, IoT and
Internet technologies; the R&D and sales of software; the sales of ventilators, air-cooling and
water-cooling equipment as well as air conditioners; import and export businesses; and
investment consultation.
1. In 2000, the Company went public, and its largest shareholder was Zhejiang Fan and Air-
cooling Equipment Co., Ltd. 2. On February 23, 2006, the former controlling shareholder of the
Company, Zhejiang Shangfeng Industry Group Co., Ltd., and the Company's shareholder, Midea
Group Co., Ltd., transferred their respective stocks of 9,575,027 shares and 24,897,984 shares to
Guangdong Infore Group Co., Ltd. Guangdong Infore Group Co., Ltd. became the Company's
largest shareholder. 3. On August 5, 2008, the Company's controlling shareholder, Guangdong
Changes to the Company's Infore Group Co., Ltd. changed its name to "Guangdong Infore Holding Investment Group Co.,
controlling shareholders since Ltd." 4. On September 30, 2010, Guangdong Infore Holding Investment Group Co., Ltd.
its incorporation (if any) changed its name to "Infore Holding Investment Group Co., Ltd." The latter became the
Company's controlling shareholder. 5. On January 4, 2019, the private placement of new shares
for the purchase of new assets was made and the Company issued 1,017,997,382 shares to
Ningbo Infore Asset Management Co., Ltd. to acquire its 51% equity interest in Zoomlion
Environmental. Ningbo Infore Asset Management Co., Ltd. became the Company's largest
shareholder. As at the end of the reporting period, the Company's controlling shareholder was
Ningbo Infore Asset Management Co., Ltd.
6
V. Other Relevant Information
The accounting firm engaged by the Company
Name of accounting firm Pan-China Certified Public Accountants LLP (Special General Partnership)
27/F, Run'ao Business Center (T2), Qianjiang Century CBD, Xiaoshan District, Hangzhou
Office address of accounting firm
City, Zhejiang Province
Authorized signatories Bian Shanshan, and Wei Xiaohui
The sponsor engaged by the Company to exercise constant supervision over the Company during the reporting period
Applicable Not applicable
Sponsor Sponsor's office address Representative Supervisory period
Huaxing Securities, 2301, Raffles
City The Bund East Tower, No.
Huaxing Securities Co., Ltd. Li Zeming, Zheng Zaoshun 2022
1089 Dongdaming Road, Hongkou
District, Shanghai
The financial advisor engaged by the Company to exercise constant supervision over the Company during the reporting period
Applicable Not Applicable
VI. Major Accounting Data and Financial Indicators
Whether the Company needs to retrospectively adjust or restate accounting data in previous years
Yes No
Reasons for retrospective adjustment or restatement
Changes in accounting policy
2021 YoY change 2020
2022 Pre-
Post-adjustment Post-adjustment Pre-adjustment Post-adjustment
adjustment
Operating 12,255,992,938. 11,813,537,44 11,866,291,611. 14,332,025,075 14,332,025,075
3.28%
revenue (RMB) 42 4.48 45 .40 .40
Net profit
attributable to
the listed 728,467,910.4 1,386,476,099. 1,386,476,099.
418,794,179.13 752,792,198.66 -44.37%
company's 2 73 73
shareholders
(RMB)
Net profit
attributable to
the listed
company's
532,726,168.3 1,432,219,046. 1,432,219,046.
shareholders 324,753,411.18 557,050,456.60 -41.70%
6 72 72
after non-
recurring gains
and losses
(RMB)
Net cash flows
from operating 1,662,482,287.7 809,218,720.1 1,688,714,091. 1,688,714,091.
809,218,720.13 105.44%
activities 1 3 75 75
(RMB)
7
Basic earnings
per share 0.13 0.23 0.24 -45.83% 0.44 0.44
(RMB/share)
Diluted
earnings per
0.13 0.23 0.24 -45.83% 0.44 0.44
share
(RMB/share)
Weighted
average return 2.41% 4.33% 4.51% -2.10% 8.62% 8.62%
on equity
December 31, 2021 YoY change December 31, 2020
December 31,
2022 Pre-
Post-adjustment Post-adjustment Pre-adjustment Post-adjustment
adjustment
Total assets 29,271,291,859. 28,332,009,62 28,362,883,652 30,110,536,990 30,110,536,990
3.20%
(RMB) 98 8.13 .30 .88 .88
Net assets
attributable to
the listed 17,288,602,018. 16,903,241,70 16,927,565,990 16,920,214,085 16,920,214,085
2.13%
company's 09 2.09 .33 .42 .42
shareholders
(RMB)
Reasons for changes in accounting policy and corrections of accounting errors
Starting from January 1, 2022, the Company has adopted the provisions on accounting for sales of products or by-products
produced before the fixed asset is ready for its intended use or during the R&D process, set out in the Interpretation of China
Accounting Standards for Business Enterprises No. 15 issued by the MOF, and applied these provisions retrospectively to the sales
of trial operation that occurred between the beginning of the earliest period presented in the financial statements and January 1,
2022.
The lower of the net profit before and after non-recurring gains and losses is negative for the last three accounting years, and
the latest auditor's report shows there is uncertainty as to the Company's ability to continue as a going concern.
Yes No
The lower of the net profit before and after non-recurring gains and losses is negative.
Yes No
VII. Accounting Data Differences Arising from Domestic/Overseas Accounting Standards
1. Differences in net profit and net assets under China Accounting Standards and International
Accounting Standards
Applicable Not Applicable
No such differences during the reporting period.
2. Differences in net profit and net assets under China Accounting Standards and Overseas Accounting
Standards
Applicable Not Applicable
No such differences during the reporting period.
8
VIII. Quarterly Key Financial Indicators
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 2,822,730,007.65 2,846,011,416.84 2,750,321,825.31 3,836,929,688.62
Net profit attributable to the listed
141,498,457.27 183,213,831.62 198,562,482.06 -104,480,591.82
company's shareholders
Net profit attributable to the listed
company's shareholders after non- 119,491,513.27 168,617,465.61 177,023,669.56 -140,379,237.26
recurring gains and losses
Net cash flows from operating
-533,382,264.09 725,338,426.88 -25,714,879.22 1,496,241,004.14
activities
Whether the financial indicators above or their sums differ materially from those in the Company's disclosed quarterly and interim
reports
Yes No
IX. Non-recurring Gains and Losses Items and Amounts
Applicable Not applicable
Unit: RMB
Item 2022 2021 2020 Note
Gain or loss for the disposal of
non-current assets (inclusive of
-2,289,681.16 6,337,251.97 -42,036,810.26 --
provisions to write off impaired
assets)
Tax rebates, reductions and
exemptions granted ultra vires or
1,004,379.44 3,768,945.18 621,422.30 --
without official documents of
approval
Government subsidies recognized
as gain or loss during the
reporting period (exclusive of
government subsidies given in the
80,268,041.82 55,341,877.03 42,047,479.15 --
Company's ordinary course of
business at fixed quotas or
amounts as per the government's
policies or regulations)
Capital collected from non-
financial enterprises that was
1,280,730.46 3,173,551.55 22,117,071.89 --
recognized as gain or loss during
the reporting period
Income from wealth
Gain or loss on entrusting other
management
parties with investment or asset 19,091,108.25 29,170,261.66 23,771,715.03
products: RMB
management
19,091,108.25.
Gain/loss on debt restructuring -5,380,200.00 --
Gain or loss arising from changes
in fair value of financial assets -79,222,823.84 -90,608,285.06 --
and financial liabilities held for
9
trading as well as the disposal of
financial assets and financial
liabilities held for trading and
financial assets available for sale
(exclusive of effective hedges that
arise in relation to the Company's
ordinary business operations)
Operating revenue and expenses
2,164,235.04 2,598,028.75 -7,514,468.68 --
other than the above items
Other gains and losses that fall
into the definition of non- 19,785,940.63 172,459,718.81 839,195.26 --
recurring gains and losses
Less: Income tax 22,153,064.81 -8,007,245.43 -8,391,224.21 --
Minority interest affected (after
-269,278.28 5,892,314.48 3,371,490.83 --
tax)
Total 94,040,767.95 195,741,742.06 -45,742,946.99 --
Details on other gains and losses that fall into the definition of non-recurring gain/loss:
Applicable Not applicable
Other gains and losses are primarily gains of RMB 429,102.26 from the refund of personal income tax withholding fees,
gains of RMB 17,460,524.12 from the additional deduction of input VAT, gains of RMB 51,896,314.25 from the re-measurement
at fair value of the controlling stake in Lianjiang Green Oriental Environmental New Energy Co., Ltd., and losses of RMB
50,000,000.00 from the reversal of performance compensation to the original shareholders of Green Oriental Company.
Explanation of classification of non-recurring gains and losses listed in the Explanatory Announcement No. 1 on Information
Disclosure by Companies Offering Securities to the Public — Non-recurring Gains and Losses as recurring gains and losses
Applicable Not applicable
Item Amount Involved (RMB) Reason
Regular government subsidies given in the
Company's ordinary course of business at fixed
Value-added tax rebate 18,822,951.14
quotas or amounts as per the government's policies
or regulations
Regular government subsidies given in the
Company's ordinary course of business at fixed
Subsidy for sludge disposal 2,584,059.14
quotas or amounts as per the government's policies
or regulations
10
Part III Management Discussion and Analysis
I. Industry Performance During Reporting Period
1. Overview of the Smart Sanitation Industry
2022 marked the convening of the 20th CPC National Congress and was a crucial year for implementing China's 14 th Five-
Year Plan. The CPC Central Committee, State Council, state ministries and commissions issued and refined a range of sanitation-
related policies and standards, promoting the industry's marketization. The urban service market maintained robust momentum
thanks to the sanitation marketization reform and the "urban steward" model. Driven by policy incentives, demand for
environmental protection equipment remained high, indicating a positive outlook over the long term. However, the market
experienced a continued decline from the previous year due to macroeconomic challenges.
In 2023, the sanitation market is expected to further expand, as new energy sanitation approaches an economic inflection
point. Numerous policies and implementing plans are anticipated to facilitate municipal governments in sanitation, leading to full
marketization of the sanitation sector. Smart sanitation is an essential item of government spending, as it is closely related to
people's livelihoods. The sector's long-term growth is not entirely connected with short-term economic volatility, and it is tied to
long-term economic trends, policy directives, environmental requirements, and people's living standards.
2. Development Trends
(1) Steady progress in marketization and gradual concentration of industry leaders
The marketization of China's urban service industry refers to municipal governments' gradual withdrawal from the actual
management and operation in the sanitation industry and a shift toward an operational model in which the government procures
services from eligible service providers through open tenders. Under this model, local governments make use of the competitive
market, exercise special supervision and use other means to effectively boost the service efficiency and quality of urban service
providers. The government's ongoing investment and introduction of favorable policies that promote urban environmental
development have expanded the domestic urban service industry's potential for growth.
The marketization of China's domestic sanitation sector will further expand the industry's room for growth in the future.
Players in the sanitation industry with competitive advantages such as good connections with the government, capital,
management experience, strong brand effects and cost synergy are well positioned to seize the opportunities from the current wave
of marketization, to achieve rapid growth. China's urban service industry is set for growth in the future. Increasing market
concentration is also expected.
(2) Rapid development of IoT and increased adoption of smart sanitation
In addition to having huge growth potential, the sanitation industry has to cope with a wide range of challenges, including
challenges in operating and supervising a great number of vehicles and equipment, managing numerous and dispersed personnel,
managing infrastructure across districts, and monitoring and assessing widely-dispersed operating areas. The industry is
characterized by numerous practitioners, wide service areas, and massive tasks. To overcome these challenges, it should prioritize
efforts to optimize its service portfolio, such as adopting sanitation facilities powered by IT. In this context, smart sanitation is
emerging as a trend in the sanitation management industry. Through the IoT-powered Smart Sanitation Cloud Platform, the
Company monitors sanitation operations in real-time. It is capable of 24/7, all-round, seamless, precise, and efficient operation,
maintenance, supervision, and management of service personnel, vehicles, objects, and events. This contributes to a holistic
enhancement of urban governance and public services.
11
(3) New opportunities from environmental protection equipment powered by new energy and smart technologies
As China advances ecological construction, achieving carbon peak and neutrality has been included in the national plan for
ecological endeavors. Against this backdrop, new energy-powered sanitation vehicles, an important segment of public service
vehicles, will drive industry growth by enabling low-noise, zero-emissions and effective environmental protection. The increased
adoption of 5G sanitation robots, autonomous sanitation vehicles, and small smart sanitation robots continues to expand the
frontiers of the environmental protection equipment sector, and these fields have a very promising market. The future of
urban/rural services is increasingly steered toward one that is smart, requires less or even no human labor. Small intelligent
equipment and autonomous vehicles will present the next breakthrough. As the smart sanitation market expects environmental
protection equipment to be increasingly intelligent and energy-efficient, companies with more technological achievements and
stronger R&D capabilities will gain a bigger market share.
For a detailed analysis on the industry, please refer to Discussion and Analysis on the Future Development of the Company.
II. Principal Business During the Reporting Period
1. Principal activities
Infore Enviro is a leading investor and operator in the urban service industry. With "smart sanitation" at the core of its
business, the Company employs a flexible business model for investment and operation and integrates new energy equipment,
autonomous vehicles and other smart environmental protection equipment with a smart platform that is powered by IoT, big data
and advanced industry-specific technologies to improve segmented full cycle dynamic control. The Company provides customers
with integrated IoT applications and a smart platform for operations and services across the full life cycle in areas such as cleaning
and disinfection in urban and rural areas, domestic waste sorting, collection, transportation and disposal of solid waste, personnel
management, collection and transportation of food waste, supervision of dirt transportation, leachate treatment and smart city
development.
In 2022, the Company rapidly enhanced its competitiveness in urban services, topping the industry rankings in terms of
annual increase in contract value. The Company also ranked first in terms of sales of environmental protection equipment for the
22nd consecutive year.
2. Principal products
12
In terms of intelligent equipment, leveraging its leading position in the environmental protection equipment industry, strong
R&D and manufacturing capabilities and a well-established nation-wide sales network, the Company forged a comprehensive suite
of environmental protection equipment of over 400 models, providing customers with a wide range of solutions including a variety
of sanitation and cleaning equipment, waste collection and transportation equipment, and new and clean energy environmental
protection equipment. The Company's range of products spans from 5G sanitation robots, autonomous sanitation vehicles, small
smart sanitation robots, new energy-powered environmental protection equipment, waste collection and transportation equipment,
separate stations to sanitation and cleaning equipment, showcasing its leading R&D capabilities in intelligent equipment.
Smart Sanitation Cloud Platform is a big data smart cloud platform developed in-house and a pioneering platform in China's
sanitation industry that encompasses the full industrial chain. The platform is worth RMB 180 million, supported by over 20 smart
sanitation-related copyrighted software and patents and integrating 5G, AI, big data, cloud computing, edge computing and other
advanced technologies to form an immersive framework and develop core technologies such as integrated IoT applications, data
communication, video command and control, safe driving tests, IoT software and hardware compatible technologies and big data
applications. Through the platform, the Company can monitor all environmental sanitation service personnel, vehicles, objects,
and events on a real-time basis. The Company has designed robust sanitation management models to boost operating quality,
reduce operating costs, and make sanitation management effective through statistical data and assessments.
At present, the platform is providing intelligent services for more than 70,000 products of customers across China, with over
30,000 daily active users. 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 sector by dint of intelligence.
13
In terms of smart services, the Company's "Environmental Sanitation APP" enables remote monitoring, data collection and
procedural approval for its line-up of smart equipment and products during operations. Through visualized data and automatic
analysis, the Smart Sanitation Cloud Platform is capable of digitalized equipment management, sophisticated process management,
and quantified materials management. This drives a digitalized, intelligent, IT-based, and integrated management approach
throughout the entire sanitation process.
3. Technology accumulation and innovation
(1) Cumulative R&D capabilities
Infore Enviro's R&D team of environmental protection equipment comprises experts from national research institutions,
having a powerful innovation DNA. The Company owns 944 patents, including 517 utility patents, 338 utility model patents, and
89 design patents. It leads the industry in terms of the number of technical and utility patents. Many national, industry, and local
standards have been made under the direction of Infore Enviro. With provincial research centers, the Company has been
recognized as a National Intellectual Property Competitive Enterprise and received numerous awards, including the China Patent
Excellence Award, China Machinery Industry Science and Technology Award, Hunan Provincial Science and Technology
Progress Award, and Huaxia Construction Science and Technology Award. It has obtained the first autonomous drive test license
in sanitation. Furthermore, the Company was identified by the Ministry of Industry and Information Technology (MIIT) as a
leading enterprise with key tasks in new-generation AI industry innovation, making it a top player in China's AI domain and a
member of the "national team" of smart sanitation robot innovators.
During the reporting period, the Company invested RMB 364 million in R&D, a 25.63% increase year-on-year (YoY). In
2022, it continued to improve and innovate in product tech, with 231 patent applications, including 102 utility patents, 109 utility
model patents, and 20 design patents.
(2) Innovation of cloud platform
Smart Sanitation Cloud Platform is a big data smart cloud platform that was developed in-house by the Company. By
integrating advanced underlying technologies such as big data, cloud computing, IoT, mobile Internet and AI into the platform, the
Company developed core technologies such as integrated IoT applications, data communication, video command and control, safe
driving tests, IoT software and hardware compatible technologies and big data applications. The seamless integration of
environmental protection equipment and operations allows the platform to achieve real-time connectivity between urban service
personnel, vehicles, objects, and events as well as standardized, digitalized and smart operation and management. In terms of
smart governance, the Company established a digital operation and management system for plants, stations and equipment on the
cloud platform. Through smart and safe operation that requires less labor and energy consumption, the Company strives to develop
competitive advantages with smart governance.
The platform is supported by over 20 smart sanitation-related software copyrights and patents and has won accolades such as
the MIIT's 2019 Pilot Demonstration of the Integration of Key Industries and the Internet, 2021 Outstanding Cases of Mobile IoT,
2021 Excellent Industrial App of Hunan, 2022 Changsha's Key R&D Project Garbage Classification Collection and
Transportation System Based on Image Recognition and CNN Deep Learning Algorithm and 2022 Changsha Torch Plan for
Intelligent Vehicle Industry Ecosystem. The platform has provided smart services to over 70,000 products of customers.
(3) Leader in new energy
14
Pioneering the development of new energy in the sanitation industry, the Company offers the most comprehensive portfolio
of new energy products in the industry. Infore Enviro started the research and development of new energy-powered environmental
protection equipment in 2007 and successfully developed the first pure-electric sweeper truck in China in July 2008. The
Company was tasked with the cleaning and sanitation of the streets during the 2008 Beijing Olympics. Three decades of sustained
R&D in sanitation vehicles and over a decade of hard work have led Infore Enviro into developing over 40 types of new energy
vehicles for cleaning, washing, waste collection and urban sanitation. Its nearly 200 vehicle models form the most comprehensive
suite of new energy-powered sanitation vehicles in China.
During the reporting period, the Company launched its fifth generation of new energy-powered environmental protection
equipment, as the industry's most comprehensive range of products, including over 100 varieties that cover road sweeping and
washing, garbage transportation, urban landscape, solar power cleaning, and mobile charging. Additionally, it unveiled the
industry's first domain controller platform to fully integrate the chassis-control system of the chassis and upper installation, with
platformized hardware, integrated software, modular functionality and scene-based products. The Company has reduced system
costs by 9% while increasing system performance by 15%, leading the innovative development of new energy sanitation. This
helps customers cut lower purchasing and operating costs.
(4) Pioneer in smart sanitation robots
The Company has independently developed over 10 models of smart sanitation robots (both basic and 5G smart models are
available) and offers the most comprehensive suite of cutting-edge smart sanitation robots in the market. The entire series of
products are integrated with core technologies such as green new energy, 5G+AIOT cluster control, AI, machine vision, and 360-
degree image recognition and are equipped with sensors such as laser radar, ultrasonic radar, high precision differential GPS, 360-
degree cameras, allowing for smart robotic operations and smart navigation as well as paving the way for a more diverse
operational capacity in a wide range of locations and scenarios. The Company's first "5G Cloud + Sanitation Robot" is a smart
remote cluster model of operation that redefines how sanitation is carried out. By raising the standards of digitalization and
efficiency in the industry drastically and reducing safety risks to sanitation personnel as well as labor costs, the new model of
operation presents clear social benefits for the community and economy.
The Company's 5G smart sanitation robot crew has been deployed in Shenzhen, Changsha and Suzhou. The crew has become
a new benchmark for smart urban sanitation and has been repeatedly recognized by government agencies and other associations as
a model for technological innovation that breathes new life into the traditional sanitation industry with AI. The 5G smart sanitation
robot crew digitalizes and informatizes urban sanitation, raises the capabilities for and standards of informatization in the
sanitation industry and improves the standards of sophisticated management of urban public services, creating a better living
environment for the people.
Other businesses of the Company primarily include environmental monitoring, solid waste treatment, and ventilator
equipment manufacturing.
The Company's environmental monitoring business covers the monitoring of smoke, air quality, haze, water quality, water
conservation, soil and dust and the provision of an integrated one-stop service for environmental protection, water conservation,
water supply and smart cities. The sales of products form the main part of the business and are supplemented by the provision of
services for operation and maintenance.
The Company's solid waste disposal business primarily encompasses the incineration of domestic waste to generate energy,
the landfilling of domestic waste, the recycling of food waste and the utilization of solid waste in industrial parks. With waste-to-
energy projects as the core, the industrial parks of solid waste recycling are equipped with treatment facilities for 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. Their operating model is Public-Private Partnership
(PPP).
15
The Company's manufacturing of ventilation equipment extends mainly to the production of ventilators, mufflers, dampers,
refrigerators, magnetic levitation fans, blowers and nuclear-grade dampers in the areas of nuclear power, subways, tunnels, rail
transportation, industrial and civil construction. Its fans are mainly sold via direct sales and retailers.
III. Analysis of Core Competitiveness
1. Industry leader in sanitation equipment
As a leader in China's environmental protection equipment sector, the Company has state-of-the-art core technologies and
offers the most comprehensive range of environmental protection equipment in the industry. In terms of R&D, the Company has
mastered industry-leading technologies in new energy-powered environmental protection equipment, intelligent robots of
environmental sanitation and autonomous environmental sanitation vehicles, and obtained the first drive test license in
environmental sanitation from the government. The Company developed the world's first smart sanitation robot crew and
successfully deployed the crew in Orange Isle, a 5A-level national scenic spot in Changsha City, Hunan Province. The Company's
5G autonomous sanitation robot crew has also been deployed in the college town in Changsha. The Company has developed a
comprehensive suite of environmental protection equipment that spans over 400 models and allows the Company to meet the
diverse sanitation demands across the country. The Company has ranked first in sales in the domestic market for 22 consecutive
years. As one of the pioneers in environmental protection equipment, the Company developed the first wet and dry vacuum
sweeper truck, the first fully hydraulic mini road sweeper, the first tunnel road washer, the first pure-electric road sweeper and the
first natural gas-powered road washer in China. The Company has extensive and proven experience in the environmental
sanitation industry and become the most influential brand in the industry.
2. Fast-growing urban services with standardized management
The Company established a new sanitation ecosystem with its operational model of "mechanized production+smart
operation+standardized service". With its new operational model, the Company aims for the centralized management of services
and planning, visual monitoring of the entire process of sanitation, swift response to emergencies and a closed-loop management.
With smart analysis performed on all data and improvements to management and controls that are based on evidence and rigorous
science, the Company strives to standardize services, refine sanitation management by virtue of smart technologies, grow business
rapidly, build key competitive advantages, and lead in the new era of smart sanitation.
From 2016 to 2022, the Company recorded a contract value of RMB 1.237 billion, RMB 5.561 billion, RMB 8.711 billion,
RMB 9.72 billion, RMB 12.574 billion, RMB 8.435 billion, and RMB 9.251 billion, respectively and an annual service contract
value of RMB 55 million, RMB 305 million, RMB 429 million, RMB 855 million, RMB 1.248 billion, RMB 1.228 billion, and
RMB 1.819 billion, respectively for urban services, representing annual growth by 454.54%, 40.66%, 99.3%, 45.96%, -1.6%, and
48.13% respectively.
3. All-round, 24/7, and whole-process after-sales service
After-sales service is a critical touchpoint for companies to connect with customers, and high-quality after-sales service is a
company's core competitive edge. Based on product lifecycle management, the Company launched a "Speedy Service" Program
that follows the "1314" service standards—responding to customers within 15 minutes; departing within 30 minutes and arriving at
material service areas within 2 hours; addressing general faults within 1 day and material faults within 3 days; offering free
services four times each quarter. For this service program, the Company has deployed resources, including one platform, 300
service outlets, 1,000 service engineers, and 400 service stations. Currently, Infore Enviro can deliver timely, warm, quality,
fairly-priced, and trustworthy services to its customers.
16
4. Corporate culture and management team
Corporate culture is the cornerstone of a company's creativity and unity as well as an important part of a company's key
competitive advantages. With the corporate mission of "Cleaner World, Better Future", the company sticks to the corporate
philosophy of "simple and professional with quick execution" and the core values of "Our clients are vital to us; our employees are
our partners in our endeavors; we aim to be achievement-oriented - competence beats mediocrity; and technology innovation is the
basis for our development." We adopt the development strategy with leading technology at the center, being order-driven as the
means, and motivating talent as the basis, and are committed to becoming a respected and trusted leader in providing intelligent
environmental equipment and services with environmental sanitation robotics at its core. After years of efforts, the Company has
deeply incorporated the core elements of its corporate culture into operating targets and routine affairs. These principles have
guided its business segments, branches, and subsidiaries in benchmarking operations, advancing refined management, and high-
quality growth.
The Company is helmed by a pragmatic and competent management team. The Company's management team endorses the
corporate culture and shares the same management philosophy. Each member of the team complements the others' strengths and
has clearly defined responsibilities. As a whole, the team is united and possesses strong executive abilities. With abundant industry
experience and forward-looking vision, the team identifies industry trends with precision and speed and seizes market
opportunities promptly. For many years, the Company has promoted stock incentives and employee stock ownership as well as set
up team management frameworks for cornerstone partnerships, senior partnerships and general partnerships, gathering a group of
passionate trailblazers who share the Company's values, building a community for key employees in the Company and propelling
the Company towards stable, healthy and long-term growth.
IV. Analysis of Principal Business
1. Overview
Infore Enviro faced severe external challenges in 2022 amidst the macroeconomic situation. Despite that, the Company
remained committed to its development strategies and annual business plan, with a strong emphasis on its core "5115" strategy. It
significantly improved its internal operations by strengthening its key teams and intensifying technological innovation and product
research and development. As a result, the Company maintained its position as an industry leader in smart sanitation based on its
established R&D advantages in environmental protection equipment.
In 2022, the Company generated RMB 418,794,200 in net profit attributable to the listed company's shareholders and RMB
12,255,992,900 in operating revenue. As at the end of the reporting period, the Company reported RMB 29,271,291,900 in total
17
assets and RMB 17,288,602,000 in net assets attributable to the listed company's shareholders. During the reporting period, the
Company registered rapid growth in urban services while maintaining its leadership in the environmental protection equipment
sector.
1. Ranked first for annual increase in contract value of urban services in 2022
According to Huanjing Sinan, Infore Enviro signed 88 sanitation projects across 21 Chinese provinces in 2022. These new
contracts have a cumulative value of RMB 9.251 billion and an annual value of RMB 1.819 billion, the highest in the industry.
The Company's operating revenue in urban services increased by 37.45% YoY to RMB 4.158 billion in 2022. As at the end of the
reporting period, Infore Enviro was running 233 urban service projects. These contracts have an annual value of RMB 5.525
billion and a cumulative value of RMB 54.165 billion. The Company's executory contracts total RMB 42.712 billion, ranking third
in the industry. The Company performed well in terms of sustainable operation.
2. Ranked first in terms of sales of environmental protection equipment in 2022
According to the motor vehicle accident liability compulsory insurance data released by the China Banking and Insurance
Regulatory Commission, the Company sold 13,743 pieces of environmental protection equipment in 2022. The sales generated
revenue of RMB 6.084 billion, ranking first in the industry for the 22 nd consecutive year.
3. Ranked first in terms of sales of new energy-powered environmental protection equipment in 2022
In 2022, the Company sold 1,369 pure-electric sanitation vehicles, representing a market share of 29.3%, the highest among
all players in the industry. During the reporting period, the Company continued to expand its new energy-powered product
portfolio, with solar power road washers and mobile charging vehicles to be launched. The new offerings are expected to bring
new opportunities and enhance the Company's competitiveness.
4. Improvement of quality and efficiency and continuous optimization of net cash generated from operating activities
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
abandoned high-risk orders, strengthened the mechanism for classification and responsibility regarding contract risks, enhanced
reflow of corporate sales income, and accelerated operation turnover efficiency to improve cash flows from operating activities.
As at the end of the reporting period of 2022, the Company recorded RMB 1,662,482,300 in cash flows from operating activities,
up 105.44% from a year earlier. Increase in net cash generated from the operating activities of the Company led to the
improvement of operation quality ultimately. The Company improved quality and efficiency and supported its high-quality
sustainable development.
5. Digital transformation and the setup of a highly efficient operating system
Digitalization is a core transformation strategy of the Company. In 2022, Infore Enviro continued to digitalize value chains to
empower business operations. By expanding online coverage and enhancing standardization and information technology, the
Company strengthened its business management capabilities and created new momentum for growth. During the reporting period,
the Company completed the first phase of its IBS168 Digitalization Strategy, achieving the digitalization of all scenarios and
business processes across value chains using one system and platform under Infore Enviro. Fruitful results have been
accomplished in smart environmental protection product R&D and delivery.
6. High cash dividends for shareholders
Valuing investor return, the Company has been implementing an active profit distribution policy. It has paid high cash
dividends for many years in a row as return for its shareholders. According to the 2022 profit distribution plan (proposed)
approved at the second meeting of the tenth Board of Directors, a cash dividend of RMB 1.10 (tax inclusive) per 10 shares will be
distributed to the shareholders, based on the total share capital (minus shares in the Company's repurchase account) on the date of
record for the plan. A total cash dividend of around RMB 348 million (tax included) is estimated to be distributed. As the proposed
plan is awaiting the approval of the general meeting of shareholders, the actual dividend amount will be disclosed in the
Company's announcement. The amount accounts for 83.18% of the net profit attributable to the listed company's shareholders in
2022.
18
In the past three years (2020–2022), the Company has paid RMB 1.033 billion in cash dividends, accounting for 26.87%,
41.45%, and 83.18% of the net profit attributable to the listed company's shareholders, respectively.
7. Active fulfillment of social responsibility as part of its corporate responsibility
In 2022, while seeking business growth, the Company fulfilled its social responsibility as it got involved in poverty
alleviation and disaster relief efforts.
The Company made targeted donations to the communities and towns in Guangning County of Zhaoqing City, Red Cross and
Sihekou Village of Xiantao City, Longhua District of Shenzhen City, and Zaoshi Town and Weixin Town of Shimen County,
supporting families in need. It also purchased agricultural products from local poor households as part of its assistance program.
These efforts were widely recognized by local public-interest organizations. To help with disaster relief, the Company promptly
dispatched environmental protection vehicles to ensure smooth traffic flow during heavy snowfalls in some regions of China. In
February, when Beijing suffered heavy snowfalls, the Company sent out snow removal equipment for high-speed snow sweeping
and pushing, solids spreading, and pre-wet spreading on the turns, steep slopes, and pedestrian paths in the Winter Olympics area,
guaranteeing the smooth flow of the main roads of Yanqing District and the driveways for Winter Olympics. In response to the
heavy snowfalls in Changsha and Xiangtan, a branch of Infore Enviro in Xiangtan promptly sent a snow and ice removal task
force equipped with 241 vehicles. The team worked overnight, and as a result, bridges, roads, and pedestrian paths were reopened
by the next morning, ensuring safe traffic flow.
2. Revenue and cost
(1) Breakdown of operating revenue
Unit: RMB
2022 2021
As a As a
percentage of percentage of YoY change
Amount Amount
operating operating
revenue revenue
Total revenue 12,255,992,938.42 100% 11,866,291,611.45 100% 3.28%
Sector
Smart sanitation 10,242,746,845.77 83.57% 9,237,262,348.48 77.84% 10.89%
Others 2,013,246,092.65 16.43% 2,629,029,262.97 22.16% -23.42%
Product
Intelligent
6,084,414,800.17 49.64% 6,211,980,162.80 52.35% -2.05%
equipment
Smart service 4,158,332,045.60 33.93% 3,025,282,185.68 25.49% 37.45%
Others 2,013,246,092.65 16.43% 2,629,029,262.97 22.16% -23.42%
Region
Domestic 12,237,181,369.71 99.85% 11,823,457,237.71 99.64% 3.50%
Overseas 18,811,568.71 0.15% 42,834,373.74 0.36% -56.08%
Wholesale
Direct sales 10,735,356,968.50 87.59% 10,484,616,229.37 88.36% 2.39%
Retail 1,520,635,969.92 12.41% 1,381,675,382.08 11.64% 10.06%
19
(2) Sectors, products, regions or sales models accounting for over 10% of operating revenue or profit
Applicable Not applicable
Unit: RMB
Gross YoY change in YoY change in
YoY change in
Operating revenue Operating cost profit operating gross profit
operating costs
margin revenue margin
Sector
Smart
10,242,746,845.77 8,023,297,059.91 21.67% 10.89% 10.58% 0.22%
sanitation
Others 2,013,246,092.65 1,446,213,771.36 28.17% -23.42% -26.83% 3.35%
Product
Intelligent
6,084,414,800.17 4,507,247,164.35 25.92% -2.05% -4.86% 2.18%
equipment
Smart
4,158,332,045.60 3,516,049,895.56 15.45% 37.45% 39.61% -1.30%
service
Others 2,013,246,092.65 1,446,213,771.36 28.17% -23.42% -26.83% 3.35%
Region
Domestic 12,237,181,369.71 9,453,598,848.51 22.75% 3.50% 2.79% 0.53%
Overseas 18,811,568.71 15,911,982.76 15.41% -56.08% -55.04% -1.97%
Wholesale
Direct sales 10,735,356,968.50 8,286,953,862.97 22.81% 2.39% 1.68% 0.55%
Retail 1,520,635,969.92 1,182,556,968.30 22.23% 10.06% 9.31% 0.53%
The Company's main business data for the year was adjusted to take into account revised statistical standards that were updated
during the reporting period
Applicable Not Applicable
(3) Whether revenue from goods sales higher than revenue from rendering services
Yes No
Sector Item Unit 2022 2021 YoY change
Sales Unit 17,674 18,689 -5.43%
Intelligent
Production Unit 16,221 19,654 -17.47%
sanitation
Inventory Unit 1,634 3,087 -47.07%
Explanation of data with YoY differences that exceed 30%
Applicable Not applicable
Inventory decreased by 47.07% compared to the end of the previous year, mainly due to the Company's enhanced inventory
management. Production reserve plans were based on sales plans to determine reasonable inventory mix and quantity.
(4) Fulfillment of material sales/procurement contracts signed during the reporting period
Applicable Not Applicable
20
(5) Breakdown of operating costs
Sector
Unit: RMB
2022 2021
As a
Sector Item As a YoY change
percentage
Amount percentage of Amount
of operating
operating cost
cost
Smart
Raw materials 4,021,886,417.92 50.13% 4,554,862,117.93 62.77% -11.70%
sanitation
Smart
Labor expense 1,056,998,188.36 13.17% 760,855,544.92 10.49% 38.92%
sanitation
Smart
Depreciation 423,631,356.77 5.28% 340,775,770.93 4.70% 24.31%
sanitation
Smart
Utilities 463,060,371.23 5.77% 412,552,873.06 5.69% 12.24%
sanitation
Other
Smart
manufacturing 2,057,720,725.63 25.65% 1,186,613,371.99 16.35% 73.41%
sanitation
overhead
Others Raw materials 729,321,140.14 50.43% 1,225,476,817.59 62.00% -40.49%
Others Labor expense 97,064,385.84 6.71% 106,315,926.43 5.38% -8.70%
Others Depreciation 140,507,354.03 9.72% 74,885,542.04 3.79% 87.63%
Others Utilities 26,661,871.00 1.84% 24,877,256.71 1.26% 7.17%
Other
Others manufacturing 452,659,020.35 31.30% 544,983,347.57 27.57% -16.94%
overhead
Note
Labor costs, depreciation, utilities and other manufacturing overhead in smart sanitation rose significantly on a YoY basis.
This is primarily the result of increased revenue from smart services during the period, leading to a corresponding increase in costs
of supporting facilities, labor and outsourced labor, as well as costs of construction and services for PPP projects.
The costs of raw materials of other business and other manufacturing overhead dropped significantly on a YoY basis, mainly
due to the electromagnetic wire business in January and February 2021. Depreciation climbed notably YoY, primarily reflecting
the operations of several newly built power plants.
(6) Changes in the scope of consolidated financial statements for the reporting period
Yes No
1. Business combination not involving enterprises under common control
Equity acquisition Shareholding ratio
Acquiree Date of acquisition Equity acquisition
cost (RMB) (%)
Business
Zhejiang Yolsh Electric Drive Technology combination not
April 30, 2022 50,000,002.00 70
Co., Ltd. under common
control
September 17, 2019 43,750,000.00 35 Business
Lianjiang Greenlander New Energy Co., combination not
Ltd. February 28, 2022 120,000,000.00 50 under common
control
2. Other business combinations
Company name Mode of acquisition Date of Capital contribution Shareholding ratio
21
acquisition (RMB) (%)
Shaodong Tongying Environmental
Incorporation January 7, 2022 283,200.00 100.00
Sanitation Management Co., Ltd.
Xiangyin County Yingsheng January 24,
Incorporation 500,000.00 100.00
Environmental Protection Co., Ltd. 2022
Shengzhou Yinglia Environmental January 19,
Incorporation 100,000.00 100.00
Sanitation Management Co., Ltd. 2022
Guilin Yingsheng Environmental Sanitation January 28,
Incorporation [Note] 100.00
Management Co., Ltd. 2022
Guiyang Yinglian Environmental February 11,
Incorporation [Note] 100.00
Equipment Co., Ltd. 2022
Taicang Zhongying Environmental February 21,
Incorporation [Note] 100.00
Technology Co., Ltd. 2022
Baoding Yinghe Environmental Sanitation February 28,
Incorporation 500,000.00 100.00
Management Co., Ltd. 2022
Wenshui County Yingsheng Environmental February 16,
Incorporation 500,000.00 100.00
Sanitation Service Co., Ltd. 2022
Maoming Yinghe Urban Environmental
Incorporation January 4, 2022 7,000,000.00 100.00
Sanitation Service Co., Ltd.
Wushan County Tongying Environmental February 14,
Incorporation 500,000.00 100.00
Sanitation Service Co., Ltd. 2022
Harbin Tongying Environmental Sanitation
Incorporation March 23, 2022 200,000.00 100.00
Management Co., Ltd.
Pengshui County Yingchuang
Incorporation March 11, 2022 500,000.00 100.00
Environmental Sanitation Service Co., Ltd.
Bengbu Tongying Environmental January 29,
Incorporation 200,000.00 100.00
Sanitation Management Co., Ltd. 2022
Daye Tongying Environmental Service Co.,
Incorporation April 11, 2022 100,000.00 100.00
Ltd.
Urumqi Lianying Urban Environmental
Incorporation June 2, 2022 2,000,000.00 100.00
Service Co., Ltd.
Baoting Tongying Environmental
Incorporation June 8, 2022 100,000.00 100.00
Sanitation Service Co., Ltd.
Zhaoqing Duanzhou District Zhongying
Urban Environmental Management Co., Incorporation May 25, 2022 [Note] 100.00
Ltd.
Zhanjiang Development Zone Zhongying
Incorporation June 10, 2022 1,000,000.00 100.00
Urban Environmental Service Co., Ltd.
Shaoxing Lianbao Environmental
Incorporation May 27, 2022 100,000.00 100.00
Sanitation Management Co., Ltd.
Xingguo County Yinghe Environmental
Incorporation June 9, 2022 300,000.00 100.00
Sanitation Management Co., Ltd.
Huaibei Tongying Environmental
Incorporation April 12, 2022 33,000,000.00 100.00
Sanitation Management Co., Ltd.
Yongzhou Lingling District Tongying
Incorporation June 21, 2022 [Note] 100.00
Environmental Sanitation Service Co., Ltd.
Shaoyang Tongying Environmental
Incorporation May 10, 2022 100,000.00 100.00
Sanitation Service Co., Ltd.
Jianli Yinglian Environmental Sanitation
Incorporation April 29, 2022 100,000.00 100.00
Management Co., Ltd.
Suzhou Gusu District Zhongying
Incorporation June 9, 2022 [Note] 100.00
Environmental Industry Co., Ltd.
Guangzhou Zengcheng District Yinghe
Incorporation May 24, 2022 [Note] 100.00
Urban Environmental Service Co., Ltd.
Baishan Yingyuan Environmental Service
Incorporation June 9, 2022 200,000.00 100.00
Engineering Co., Ltd.
Shenzhen Longhua District Yinglian Urban
Incorporation July 5, 2022 3,000,000.00 100.00
Service Co., Ltd.
Guzhang County Yinglian Environmental
Incorporation June 28, 2022 7,200,000.00 100.00
Sanitation Management Co., Ltd.
Changshu Zhongying Environmental
Incorporation April 26, 2022 [Note] 100.00
Sanitation Service Co., Ltd.
Suining Anju Yinglian Environmental
Incorporation July 7, 2022 200,000.00 100.00
Sanitation Service Co., Ltd.
Jieyang Yingdong Urban Environmental Incorporation July 7, 2022 [Note] 100.00
22
Management Co., Ltd.
Tongdao Yinglian Jiamei Environmental
Incorporation July 5, 2022 2,652,000.00 51.00
Industry Co., Ltd.
Heyang Yinglian Urban Environmental
Incorporation July 19, 2022 1,000,000.00 100.00
Service Co., Ltd.
Ninghai County Tongying Environmental
Incorporation August 10, 2022 100,000.00 100.00
Sanitation Management Co., Ltd.
Zhanjiang Potou District Yingsheng
Environmental Sanitation Management Co., Incorporation August 24, 2022 [Note] 100.00
Ltd.
Liaoyang Yinglian Urban Environmental
Incorporation August 10, 2022 3,000,000.00 100.00
Sanitation Management Co., Ltd.
Linqing Yinglian Urban Environmental
Incorporation August 3, 2022 1,000,000.00 100.00
Service Co., Ltd.
Zhanjiang Xiashan District Yinghe Urban
Incorporation August 8, 2022 [Note] 100.00
Environmental Management Co., Ltd.
Haicheng Zhongying Environmental September 8,
Incorporation 8,000,000.00 100.00
Sanitation Management Co., Ltd. 2022
Foshan Shunde District Yingjia Urban September 5,
Incorporation 1,680,000.00 70.00
Environmental Service Co., Ltd. 2022
Xiamen Yingsheng Environmental Service September 8,
Incorporation 500,000.00 100.00
Co., Ltd. 2022
Nanfeng Yingniang Environmental September 15,
Incorporation 255,000.00 51.00
Sanitation Management Co., Ltd. 2022
Tengchong Yinglian Environmental September 22,
Incorporation 200,000.00 100.00
Protection Technology Co., Ltd. 2022
Chuzhou Yingsheng Environmental October 20,
Incorporation 500,000.00 100.00
Sanitation Management Co., Ltd. 2022
Fuyang Yingsheng Environmental October 14,
Incorporation 300,000.00 100.00
Sanitation Management Co., Ltd. 2022
Changsha Zhiying Environmental
Incorporation October 9, 2022 300,000.00 60.00
Sanitation Management Co., Ltd.
Foshan Shunde District Yingzhi Smart City December 14,
Incorporation [Note] 100.00
Environmental Service Co., Ltd. 2022
Pingdingshan Yingsheng Environmental November 10,
Incorporation [Note] 100.00
Sanitation Management Co., Ltd. 2022
Chenzhou Zhongying Environmental November 21,
Incorporation 600,000.00 100.00
Service Co., Ltd. 2022
Zhenfeng Yinglian Environmental December 6,
Incorporation [Note] 100.00
Sanitation Management Co., Ltd. 2022
Linfen Yaodu District Yingsheng
December 12,
Environmental Sanitation Management Co., Incorporation [Note] 100.00
2022
Ltd.
Fuyang Zhiying Environmental Sanitation November 24,
Incorporation 300,000.00 100.00
Management Co., Ltd. 2022
Chengdu Yinggang Urban Environmental December 7,
Incorporation [Note] 100.00
Sanitation Service Co., Ltd. 2022
Foshan Shunde District Yingteng Smart December 9,
Incorporation 1,500,000.00 100.00
City Environmental Service Co., Ltd. 2022
Qingyang County Yinghe Environmental November 30,
Incorporation [Note] 100.00
Sanitation Management Co., Ltd. 2022
Changsha Fenglan Environmental January 26,
Incorporation [Note] 100.00
Protection Technology Co., Ltd. 2022
Changsha Infore Environmental Industry
Incorporation January 6, 2022 [Note] 100.00
Co., Ltd.
September 26,
Hubei Fenghe New Materials Co., Ltd. Incorporation [Note] 100.00
2022
Heyang Zhongying Environmental September 19,
Incorporation [Note] 100.00
Sanitation Management Co., Ltd. 2022
Lanling County Lianying Environmental November 4,
Incorporation 1,000,000.00 100.00
Sanitation Service Co., Ltd. 2022
Pingdingshan Yinghe Environmental November 30,
Incorporation [Note] 100.00
Sanitation Management Co., Ltd. 2022
Shenzhen Infore City Service Intelligent
Incorporation March 25, 2022 [Note] 100.00
Technology Co., Ltd.
23
Guangdong Infore Mobile Charging January 12,
Incorporation [Note] 100.00
Technology Co., Ltd. 2022
Guangdong Infore Intelligent Cleaning
Incorporation August 12, 2022 200,000.00 100.00
Technology Co., Ltd.
Changfeng County Yinghe Environmental December 16,
Incorporation [Note] 100.00
Sanitation Management Co., Ltd. 2022
Note: As at December 31, 2022, these companies' registered capitals have not been contributed.
3. Entities excluded from the consolidation scope
Company name Mode of equity disposal Date of equity disposal
Zoomlion Heavy (Ningxia) Environmental Industry Co., Ltd. De-registration March 14, 2022
Guangdong Yinglian Urban Environmental Management Co.,
De-registration June 15, 2022
Ltd.
Dali County Zoomlion Environmental Industry Co., Ltd. De-registration June 17, 2022
Kunming Zhongfeng Environmental Sanitation Equipment Co.,
De-registration July 26, 2022
Ltd.
Changsha Fenglan Environmental Protection Technology Co.,
De-registration July 25, 2022
Ltd.
Foshan Yinghe Investment Co., Ltd De-registration November 18, 2022
(7) Material changes in the business, products or services during the reporting period
Applicable Not Applicable
(8) Major customers and suppliers
Major customers of the Company
Total sales to top five customers (RMB) 534,551,857.64
Total sales to top five customers as a percentage of annual total
4.36%
sales
Total sales to related parties among top five customers as a
0.74%
percentage of annual total sales
Top five customers
As a percentage of annual
No. Customer Sales revenue (RMB)
total sales
1 Customer A 128,261,956.19 1.05%
2 Customer B 118,007,524.43 0.96%
3 Customer C 108,597,119.74 0.89%
4 Customer D 90,942,152.84 0.74%
5 Customer E 88,743,104.44 0.72%
Total -- 534,551,857.64 4.36%
Other information about major customers
Applicable Not Applicable
Major suppliers of the Company
Total purchases from top five suppliers (RMB) 1,755,553,263.19
Total purchases from top five suppliers as a percentage of
23.96%
annual total purchases
Total purchases from related parties among top five suppliers as 0.00%
24
a percentage of annual total purchases
Top five suppliers
Purchase during the reporting As a percentage of total
No. Supplier
period (RMB) purchases
1 Customer A 1,112,860,451.33 15.19%
2 Customer B 190,826,777.88 2.60%
3 Customer C 175,161,894.72 2.39%
4 Customer D 144,298,134.51 1.97%
5 Customer E 132,406,004.75 1.81%
Total -- 1,755,553,263.19 23.96%
Other information about major suppliers
Applicable Not Applicable
3. Expenses
Unit: RMB
Reason for material
2022 2021 YoY change
change
Selling expenses 762,970,847.95 738,833,571.05 3.27% --
Administrative
609,601,680.23 585,353,407.57 4.14% --
expenses
Mainly due to increase
in interest expense and
Financial Expenses 101,839,423.91 58,604,804.53 73.77%
decrease in financing
income
Mainly due to further
R&D expenses 340,775,707.34 262,619,127.29 29.76% increase in R&D
investments
4. R&D investments
Applicable Not applicable
Expected impact on
Name of major R&D
Objectives Progress Proposed goals future development of
projects
the Company
To develop new
products to expand the
It is conducive to the
Research and biological indicator
To develop an online Company's continuous
Application of Online product portfolio, used
monitoring instrument advancement towards
Monitoring Technology for automatic online Mass-produced and
to monitor the high-tech innovative
for Comprehensive monitoring of the launched on the market
biological toxicity of enterprises and
Toxicity of Water biological toxicity of
water quality breakthroughs in
Quality surface water and
technical difficulties.
certain polluted source
water.
To expand the range of To develop a set of It is conducive to the
Ambient Air Automatic scientific instruments, online monitoring Company's continuous
Online Monitoring enabling online R&D completed systems capable of advancement towards
Series Products monitoring of various monitoring 116 VOCs high-tech innovative
VOCs in ambient air in all workplaces with enterprises and
25
VOCs emissions breakthroughs in
technical difficulties.
It is conducive to the
To develop a wet
To solve the small Company's continuous
Third-generation garbage collection and
capacity and advancement towards
Leakage-free compression truck with
airtightness challenge R&D completed high-tech innovative
Compression Garbage full airtightness, no
of leakage-free garbage enterprises and
Truck leakage, and large
trucks' trash containers breakthroughs in
loading capacity
technical difficulties.
It is conducive to the
Company's continuous
To further reduce the To reduce the
18-ton Pure-Electric advancement towards
energy consumption operational noise and
Dual-fan Road R&D completed high-tech innovative
and noise of the energy consumption of
Cleaners enterprises and
existing model the existing model
breakthroughs in
technical difficulties.
To expand the product
It is conducive to the
range for landscape
To develop a landscape Company's continuous
maintenance, such as
trimming vehicle with advancement towards
18-ton Front Collection the trimming of green
R&D completed a front arm and the high-tech innovative
Green Hedge Trimmer belts on highways and
feature of switching enterprises and
urban roads as well as
between tools quickly breakthroughs in
the pruning of high
technical difficulties.
branches on roadside
This helps to improve
To industrialize the
Nuclear-grade To explore and expand the key competitive
Under R&D result and generate
Centrifugal Roof Fan the segment advantages of the
market orders
Company
This helps to improve
To industrialize the
Low-noise Mist Gun To explore and expand the key competitive
R&D completed result and generate
Fan the segment advantages of the
market orders
Company
This helps to improve
Large-scale urban To industrialize the
To explore and expand the key competitive
transportation smart R&D completed result and generate
the segment advantages of the
purification system market orders
Company
It is conducive to the
To meet the market Company's continuous
demand for garbage To develop a small advancement towards
Economic Garbage
collection and Under R&D product for garbage high-tech innovative
Transfer Vehicle
transportation transfers enterprises and
equipment breakthroughs in
technical difficulties.
It is conducive to the
Company's continuous
To meet the market
To develop an advancement towards
Economic Integrated demand for auxiliary
R&D completed integrated road high-tech innovative
Road Sweeper road garbage cleaning
sweeper enterprises and
equipment
breakthroughs in
technical difficulties.
It is conducive to the
Company's continuous
To meet the market To develop a pure- advancement towards
Electric Road Cleaner demand for road Under R&D electric cleaning high-tech innovative
cleaning products machine enterprises and
breakthroughs in
technical difficulties.
26
It is conducive to the
Company's continuous
To develop a road To develop a road advancement towards
Economic Roller Road
sweeper suitable for R&D completed sweeper suitable for high-tech innovative
Sweeper
semi-enclosed scenes semi-enclosed scenes enterprises and
breakthroughs in
technical difficulties.
Information about R&D personnel
2022 2021 Change
Number of R&D personnel 1,415 1,407 0.57%
R&D personnel as a percentage of
8.23% 10.53% -2.30%
total staff
Education background of R&D personnel
Bachelor's degree 995 1,064 -6.48%
Master's degree 374 303 23.43%
Doctoral degree 12 6 100.00%
College degree 34 34 0.00%
Age composition of R&D personnel
< 30 years 662 647 -3.86%
30~40 years 641 596 7.55%
> 40 years 112 114 33.33%
Information about R&D investments
2022 2021 Change
R&D investments (RMB) 364,237,563.22 289,920,069.26 25.63%
R&D investments as a percentage
2.97% 2.44% 0.53%
of operating revenue
Capitalized R&D investments
23,461,855.88 27,300,941.97 -14.06%
(RMB)
Capitalized R&D investments as a
percentage of total R&D 6.44% 9.42% -2.98%
investments
Reasons and impacts of material change in R&D personnel composition
Applicable Not Applicable
Reasons for significant YoY change in total R&D investments as a percentage of operating revenue
Applicable Not Applicable
Reasons and rationale for significant change in capitalization rate of R&D investment
Applicable Not Applicable
5. Cash flow
Unit: RMB
Item 2022 2021 YoY change
Subtotal of cash inflows from
14,255,237,258.75 14,872,489,012.69 -4.15%
operating activities
27
Subtotal of cash outflows from
12,592,754,971.04 14,063,270,292.56 -10.46%
operating activities
Net cash flows from operating
1,662,482,287.71 809,218,720.13 105.44%
activities
Subtotal of cash inflows from
5,558,632,508.54 5,412,369,009.46 2.70%
investing activities
Subtotal of cash outflows from
6,696,412,810.26 6,534,593,586.86 2.48%
investing activities
Net cash flows from investing
-1,137,780,301.72 -1,122,224,577.40 -1.39%
activities
Subtotal of cash inflows from
2,381,374,197.63 2,901,823,101.45 -17.94%
financing activities
Subtotal of cash outflows from
2,447,214,731.68 3,125,894,632.23 -21.71%
financing activities
Net cash flows from financing
-65,840,534.05 -224,071,530.78 70.62%
activities
Net increase in cash and cash
461,918,360.27 -539,079,213.51 185.69%
equivalents
Explanation of main impact factor of material change of the data YoY
Applicable Not applicable
(1) Net cash flows from operating activities increased by 105.44% on a YoY basis. This is primarily because eligible VAT
refunds increased, and the notes payable for inventory purchases were not due during the reporting period.
(2) Net cash flows from financing activities rose by 70.62% on a YoY basis, mainly due to the cash payment of RMB 446
million for stock repurchases in 2021 and no such payment in 2022.
Explanation of reasons for the material difference between net cash flows from operating activities during the reporting period and
net profit for the year
Applicable Not Applicable
V. Analysis of Non-Core Business
Applicable Not applicable
Unit: RMB
As a percentage of Recurrent or non-
Amount Reasons for generation
total profit recurrent
RMB 8,548,481.77 is the
returns on long-term
equity investments
Investment income -41,466,125.62 -7.45% -- calculated using the
equity method, which is
recurrent; the other
portion is non-recurrent.
Gain or loss on
0.00 0.00% -- No
changes in fair value
Mainly due to provision of
Impairment of assets -312,998,494.66 -56.27% No
goodwill impairment loss
Non-operating revenue 12,798,235.90 2.30% -- No
Non-operating
13,947,988.82 2.51% -- No
expenses
28
VI. Assets and Liabilities
1. Material changes of asset items
Unit: RMB
December 31, 2022 January 1, 2022 Reason
for
As a percentage As a percentage Change
Amount Amount material
of total assets of total assets change
Cash and cash
4,728,203,530.46 16.15% 4,583,245,371.02 16.16% -0.01% --
equivalents
Accounts receivable 5,625,792,472.37 19.22% 4,946,704,963.71 17.44% 1.78% --
Contract assets 101,023,854.33 0.35% 140,367,802.53 0.49% -0.14% --
Inventories 881,038,036.95 3.01% 1,124,149,719.01 3.96% -0.95% --
Investment
27,105,435.03 0.09% 1,837,703.68 0.01% 0.08% --
properties
Long-term equity
676,829,959.84 2.31% 603,580,781.31 2.13% 0.18% --
investment
Fixed assets 2,268,287,202.01 7.75% 1,758,052,005.19 6.20% 1.55% --
Construction in
41,073,267.68 0.14% 224,068,633.86 0.79% -0.65% --
progress
Right-of-use assets 31,859,454.24 0.11% 25,505,911.86 0.09% 0.02% --
Short-term
440,103,105.44 1.50% 439,024,733.46 1.55% -0.05% --
borrowings
Contract liabilities 274,289,978.25 0.94% 210,432,628.98 0.74% 0.20% --
Long-term
1,922,306,226.32 6.57% 1,697,742,767.72 5.99% 0.58% --
borrowings
Lease liabilities 23,255,624.30 0.08% 18,523,740.10 0.07% 0.01% --
Intangible assets 6,048,114,364.49 20.66% 5,350,595,868.40 18.86% 1.80% --
Offshore assets account for high proportion
Applicable Not Applicable
2. Assets and liabilities measured at fair value
Applicable Not applicable
Unit: RMB
Gain/loss Cumulative
Accrual of Purchase Sales
on changes changes in
Opening impairment amount amount Other Closing
Item in fair value fair value
balance during the during the during the changes balance
during the included in
period period period
period equity
Financial assets
4.
Investments
15,702,971. 15,352,971.
in other 0.00 0.00 350,000.00 0.00 0.00 0.00
01 01
entity
instruments
29
Subtotal of
15,702,971. 15,352,971.
financial 0.00 0.00 350,000.00 0.00 0.00 0.00
01 01
assets
15,702,971. 15,352,971.
Total 0.00 0.00 350,000.00 0.00 0.00 0.00
01 01
Financial
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
liabilities
Whether any material changes occurred to the measurement attributes of the Company's major assets during the reporting period
Yes No
3. Restricted asset rights as at the end of the reporting period
Carrying amounts at the
Items Reason for restriction
end of the period
Deposits, escrow accounts, frozen due to
Cash and cash equivalents 147,538,284.47
litigation preservation
Accounts receivable 276,390,131.13 Pledged
Notes receivable - bank acceptance 2,732,733.00 Endorsed or discounted but undue
Notes receivable - trade acceptance 5,422,499.62 Endorsed or discounted but undue
Receivable financing 42,293,141.00 Pledged
Long-term account receivable and non-current assets due
66,716,222.75 Factoring financing with recourse
within one year
Fixed assets 477,655,980.05 Mortgaged
Intangible assets 47,082,404.81 Mortgaged
100% equity interest in Funan Green Oriental
69,631,957.01
Environmental Energy Co., Ltd.
100% equity interest in Poyang Greenlander Renewable
80,733,192.59
Energy Co., Ltd.
Mortgaged [Note]
50% equity interest in Lianjiang Greenlander New Energy
68,922,363.62
Co., Ltd.
100% equity interest in Biyang County Fenghe Power New
105,525,597.14
Energy Co., Ltd.
25% equity interest in Lianjiang Greenlander New Energy
34,461,181.81 Frozen for litigation preservation
Co., Ltd.
Total 1,425,105,689.00
Note: The pledged amount refers to the Company's proportionate share in net assets of each entity.
VII. Investments
1. Overview
Applicable Not applicable
Investment amount for the reporting Investment amount for the prior period
Change
period (RMB) (RMB)
106,000,002.00 0.00 100.00%
2. Material equity investments made during the reporting period
Applicable Not Applicable
30
3. Material non-equity investments ongoing during the reporting period
Applicable Not Applicable
4. Financial investments
(1) Securities investments
Applicable Not Applicable
No such cases during the reporting period.
(2) Derivatives investments
Applicable Not Applicable
No such cases during the reporting period.
5. Use of proceeds
Applicable Not applicable
(1) Overall use of proceeds
Applicable Not applicable
Unit: RMB 10,000
Total amount
Total Total
of proceeds Accumulative Share of Proceeds
Total amount of Accumulative amount Purpose and
Fund-raising with change amount of accumulative left idle
Year amount of proceeds amount of of tracking of
type of use during proceeds with proceeds with for over
proceeds used during proceeds used unused unused proceeds
the reporting change of use change of use 2 years
the period proceeds
period
RMB 1 billion
will
temporarily
replenish
Public working
offering of capital, and the
147,618.9 111,533.
2020 convertible 7,309.89 34,879.69 0 0 0.00% remaining 0
6 84
corporate amount will be
bonds used to
implement
recent
investment
projects.
147,618.9 111,533.
Total -- 7,309.89 34,879.69 0 0 0.00% -- 0
6 84
Explanation of the overall use of proceeds
According to 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, the lead underwriter of the Company, Huaxing Securities Co., Ltd. (formerly
known as Huajing Securities, hereinafter "Huaxing Securities") issued 14,761,896 convertible corporate bonds ("CBs") to the public
with the offering price of RMB 100 and a par value of RMB 100 for each CB, raising a total of RMB 1,476,189,600.00. Specifically,
priority allotment of 9,405,386 CBs were issued to original shareholders of the Company, accounting for 63.71% of the total amount of
this public offering; 5,304,730 CBs were issued to public investors through online channels, accounting for 35.94% of the total amount
of this public offering; 51,780 CBs were to be underwritten by the lead underwriter, accounting for 0.35% of the total amount of this
31
public offering. Proceeds in this offering had been remitted to the Company's raised fund supervision account by the lead underwriter
Huaxing Securities on November 10, 2020, and the amount actually received after deducting RMB 15,238,100 of underwriting and
sponsorship fees (tax exclusive) was RMB 1,460,951,500. After deducting RMB 3,615,300 (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 amount of proceeds from this offering was
RMB 1,457,336,200. The availability of the above-mentioned proceeds has been verified by Pan-China Certified Public Accountants
LLP in its Capital Verification Report (T.J.Y. [2020] No.490).
As at December 31, 2022, the accumulated use of proceeds was RMB 348,796,900, and the total amount of proceeds not yet used was
RMB 1,115,338,400.
(2) Projects with committed investment of proceeds
Applicable Not applicable
Unit: RMB 10,000
Whether Investment
Committed The Accumulative Whether
projects progress as Date when Whether
investment Adjusted investment investment Benefits there are
have been Total at the end the projects the
projects and total amount amount as at realized during material
changed amount of of the are ready for estimated
investment of investment during the the end of the the reporting changes in
(including proceeds reporting their intended return is
excessive amount (1) reporting reporting period the project
partial period use realized
proceeds period period (2) feasibility
change) (3)=(2)/(1)
Committed investment projects
The project
of the
comprehens
129,63 129,638. December
ive smart No 7,309.89 18,784.56 14.49% 3,086.17 N/A No
8.49 49 31, 2023
sanitation
allocation
center
Replenishm
No benefit
ent of 16,095. 16,095.1 100.00 December
No 0 16,095.13 generated N/A No
working 13 3 % 31, 2020
separately
capital
Subtotal of
committed 145,73 145,733.
-- 7,309.89 34,879.69 -- -- 3,086.17 -- --
investment 3.62 62
projects
Investment of excessive proceeds
N/A
Repayment
of bank
-- 0 0 0 0 0.00% -- -- -- --
loans (if
any)
Replenishm
ent of
working -- 0 0 0 0 0.00% -- -- -- --
capital (if
any)
Subtotal of
investment
-- 0 0 0 0 -- -- 0 -- --
of excessive
proceeds
145,73 145,733.
Total -- 7,309.89 34,879.69 -- -- 3,086.17 -- --
3.62 62
32
On April 29, 2022, the Proposal on the Delay of Part of the Projects of Proceeds from
the Public Issuance of A-share Convertible Corporate Bonds was deliberated and
approved at the 18th meeting of the Ninth Board of Directors and the 17th meeting of
the Ninth Board of Supervisors. The Company agreed to adjust the investment
Project-by-project details and reasons for
progress by changing the date for the intended use of the above projects to December
failure to realize planned progress and
31, 2023. The adjustment was made because the investment progress of the project of
expected return (including the reasons for
the comprehensive smart sanitation allocation center was mainly based on the current
choosing "N/A" for "Whether the expected
business size and growth expectations of the Company's sanitation projects. The
return is realized")
project's investment progress fell short of expectations due to the uneven development
of sanitation projects and the delay in tendering for some sanitation projects caused by
the macroeconomic situation. Therefore, the Company adjusted the project's
investment progress to ensure the quality and full use of proceeds.
Explanations of the material changes in the
N/A
project feasibility
Amount, purpose, and progress of excessive
N/A
proceeds
Location changes in the implementation of
N/A
investment projects of the proceeds
Adjustments to the implementation method
N/A
of investment projects of the proceeds
Early investment and placement of the
N/A
investment projects of the proceeds
Applicable
The Proposal on Using Part of the Idle Proceeds to Replenish Working Capital was
deliberated and approved at the 10th Extraordinary Meeting of the Ninth Board of
Directors and the 9th Extraordinary Meeting of the Ninth Board of Supervisors held by
the Company on December 4, 2020, allowing the Company to use idle proceeds of no
more than RMB 1 billion for temporary replenishment of working capital, which shall
be used for the production and operation related to the Company's main businesses for
a period of no more than 12 months as at the date when the Proposal was deliberated
and approved by the Board of Directors.
The Company issued the Announcement on the Early Return of Proceeds for
Temporary Replenishment of Working Capital on October 21, 2021, in which the
Company returned all the above-mentioned RMB 1 billion of proceeds for temporary
replenishment of working capital to the relevant designated account for proceeds on
October 20, 2021 in advance for a period not exceeding 12 months.
The Proposal on Using Part of the Idle Proceeds to Replenish Working Capital was
Temporary replenishment of working deliberated and approved at the 15th Meeting of the Ninth Board of Directors and the
capital with idle proceeds 14th Meeting of the Ninth Board of Supervisors held by the Company on October 22,
2021, allowing the Company to use idle proceeds of no more than RMB 1 billion for
temporary replenishment of working capital, which shall be used for the production
and operation related to the Company's main businesses with a tenor of no more than
12 months as at the date when the Proposal was deliberated and approved by the
Board of Directors.
The Company issued the Announcement on the Return of Proceeds for Temporary
Replenishment of Working Capital on October 21, 2022, in which the Company
returned all the above-mentioned RMB 1 billion of proceeds for temporary
replenishment of working capital to the relevant designated account for proceeds on
October 20, 2022 for a period not exceeding 12 months.
The Proposal on Using Part of the Idle Proceeds to Replenish Working Capital was
deliberated and approved at the 21st Meeting of the Ninth Board of Directors and the
19th Meeting of the Ninth Board of Supervisors held by the Company on October 26,
2022, allowing the Company to use idle proceeds of no more than RMB 1 billion for
temporary replenishment of working capital, which shall be used for the production
and operation related to the Company's main businesses with a tenor of no more than
33
12 months as at the date when the Proposal was deliberated and approved by the
Board of Directors. As at December 31, 2022, the balance of the idle proceeds used by
the Company for temporary replenishment of working capital was RMB
1,000,000,000.
The amount of and reasons for the balance
of the proceeds from the project N/A
implementation
The balance of the idle proceeds used by the Company for temporary replenishment of
Purpose and tracking of the unused working capital was RMB 1,000,000,000. The other unused raised fund of RMB
proceeds 115,338,400 were kept in the designated account for proceeds in the form of demand
deposits to be used for the construction of the corresponding investment projects.
Problems in the use of proceeds and
N/A
disclosure, or other cases
(3) Changed projects of proceeds
Applicable Not Applicable
No such cases during the reporting period.
VIII. Sale of Material Assets and Equity Investments
1. Sale of material assets
Applicable Not Applicable
No such cases during the reporting period.
2. Sale of material equity investments
Applicable Not Applicable
IX. Analysis of Major Subsidiaries and Joint Stock Companies
Applicable Not applicable
Main subsidiaries and joint stock companies with an over 10% influence on the Company's net profit
Unit: RMB
Type of co Principal ac Registered ca Operating re Operating pr
Company name Total assets Net assets Net profit
mpany tivities pital venue ofit
Changsha Zoom
RMB 2,351.
lion Environme Smart sani 15,277,34 7,727,96 9,989,531,8 840,460,93 732,781,07
Subsidiary 5298 millio
ntal Industry C tation 7,909.46 3,001.04 68.73 5.27 8.39
n
o., Ltd.
Shenzhen Green
Oriental Enviro RMB 150 m 1,824,625, 71,415,0 260,096,67 -1,344,498. -294,582.6
Subsidiary Others
nmental Protecti illion 955.67 47.49 2.90 79 2
on Co., Ltd.
Acquisition and disposal of subsidiaries during the reporting period
Applicable Not applicable
Acquisition and
Company name disposal of Effects on the overall operations and performance
subsidiaries during
34
the reporting period
Business
Zhejiang Yolsh Electric Drive Technology Co., combination not
Positive effects on the Company's business
Ltd. under common
control
Business
combination not
Lianjiang Greenlander New Energy Co., Ltd. Positive effects on the Company's business
under common
control
Shaodong Tongying Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Xiangyin County Yingsheng Environmental
Incorporation Positive effects on the Company's business
Protection Co., Ltd.
Shengzhou Yinglia Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Guilin Yingsheng Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Guiyang Yinglian Environmental Equipment Co.,
Incorporation Positive effects on the Company's business
Ltd.
Taicang Zhongying Environmental Technology
Incorporation Positive effects on the Company's business
Co., Ltd.
Baoding Yinghe Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Wenshui County Yingsheng Environmental
Incorporation Positive effects on the Company's business
Sanitation Service Co., Ltd.
Maoming Yinghe Urban Environmental
Incorporation Positive effects on the Company's business
Sanitation Service Co., Ltd.
Wushan County Tongying Environmental
Incorporation Positive effects on the Company's business
Sanitation Service Co., Ltd.
Harbin Tongying Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Pengshui County Yingchuang Environmental
Incorporation Positive effects on the Company's business
Sanitation Service Co., Ltd.
Bengbu Tongying Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Daye Tongying Environmental Service Co., Ltd. Incorporation Positive effects on the Company's business
Urumqi Lianying Urban Environmental Service
Incorporation Positive effects on the Company's business
Co., Ltd.
Baoting Tongying Environmental Sanitation
Incorporation Positive effects on the Company's business
Service Co., Ltd.
Zhaoqing Duanzhou District Zhongying Urban
Incorporation Positive effects on the Company's business
Environmental Management Co., Ltd.
Zhanjiang Development Zone Zhongying Urban
Incorporation Positive effects on the Company's business
Environmental Service Co., Ltd.
Shaoxing Lianbao Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Xingguo County Yinghe Environmental
Incorporation Positive effects on the Company's business
Sanitation Management Co., Ltd.
Huaibei Tongying Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Yongzhou Lingling District Tongying
Incorporation Positive effects on the Company's business
Environmental Sanitation Service Co., Ltd.
Shaoyang Tongying Environmental Sanitation
Incorporation Positive effects on the Company's business
Service Co., Ltd.
Jianli Yinglian Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
35
Suzhou Gusu District Zhongying Environmental
Incorporation Positive effects on the Company's business
Industry Co., Ltd.
Guangzhou Zengcheng District Yinghe Urban
Incorporation Positive effects on the Company's business
Environmental Service Co., Ltd.
Baishan Yingyuan Environmental Service
Incorporation Positive effects on the Company's business
Engineering Co., Ltd.
Shenzhen Longhua District Yinglian Urban
Incorporation Positive effects on the Company's business
Service Co., Ltd.
Guzhang County Yinglian Environmental
Incorporation Positive effects on the Company's business
Sanitation Management Co., Ltd.
Changshu Zhongying Environmental Sanitation
Incorporation Positive effects on the Company's business
Service Co., Ltd.
Suining Anju Yinglian Environmental Sanitation
Incorporation Positive effects on the Company's business
Service Co., Ltd.
Jieyang Yingdong Urban Environmental
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Tongdao Yinglian Jiamei Environmental Industry
Incorporation Positive effects on the Company's business
Co., Ltd.
Heyang Yinglian Urban Environmental Service
Incorporation Positive effects on the Company's business
Co., Ltd.
Ninghai County Tongying Environmental
Incorporation Positive effects on the Company's business
Sanitation Management Co., Ltd.
Zhanjiang Potou District Yingsheng
Incorporation Positive effects on the Company's business
Environmental Sanitation Management Co., Ltd.
Liaoyang Yinglian Urban Environmental
Incorporation Positive effects on the Company's business
Sanitation Management Co., Ltd.
Linqing Yinglian Urban Environmental Service
Incorporation Positive effects on the Company's business
Co., Ltd.
Zhanjiang Xiashan District Yinghe Urban
Incorporation Positive effects on the Company's business
Environmental Management Co., Ltd.
Haicheng Zhongying Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Foshan Shunde District Yingjia Urban
Incorporation Positive effects on the Company's business
Environmental Service Co., Ltd.
Xiamen Yingsheng Environmental Service Co.,
Incorporation Positive effects on the Company's business
Ltd.
Nanfeng Yingniang Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Tengchong Yinglian Environmental Protection
Incorporation Positive effects on the Company's business
Technology Co., Ltd.
Chuzhou Yingsheng Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Fuyang Yingsheng Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Changsha Zhiying Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Foshan Shunde District Yingzhi Smart City
Incorporation Positive effects on the Company's business
Environmental Service Co., Ltd.
Pingdingshan Yingsheng Environmental
Incorporation Positive effects on the Company's business
Sanitation Management Co., Ltd.
Chenzhou Zhongying Environmental Service Co.,
Incorporation Positive effects on the Company's business
Ltd.
Zhenfeng Yinglian Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Linfen Yaodu District Yingsheng Environmental
Incorporation Positive effects on the Company's business
Sanitation Management Co., Ltd.
Fuyang Zhiying Environmental Sanitation Incorporation Positive effects on the Company's business
36
Management Co., Ltd.
Chengdu Yinggang Urban Environmental
Incorporation Positive effects on the Company's business
Sanitation Service Co., Ltd.
Foshan Shunde District Yingteng Smart City
Incorporation Positive effects on the Company's business
Environmental Service Co., Ltd.
Qingyang County Yinghe Environmental
Incorporation Positive effects on the Company's business
Sanitation Management Co., Ltd.
Hubei Fenghe New Materials Co., Ltd. Incorporation Positive effects on the Company's business
Heyang Zhongying Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Lanling County Lianying Environmental
Incorporation Positive effects on the Company's business
Sanitation Service Co., Ltd.
Pingdingshan Yinghe Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Shenzhen Infore City Service Intelligent
Incorporation Positive effects on the Company's business
Technology Co., Ltd.
Guangdong Infore Mobile Charging Technology
Incorporation Positive effects on the Company's business
Co., Ltd.
Guangdong Infore Intelligent Cleaning
Incorporation Positive effects on the Company's business
Technology Co., Ltd.
Changsha Infore Environmental Industry Co.,
Incorporation Positive effects on the Company's business
Ltd.
Changfeng County Yinghe Environmental
Incorporation Positive effects on the Company's business
Sanitation Management Co., Ltd.
Zoomlion Heavy (Ningxia) Environmental Asset optimization, no material impact on the
De-registration
Industry Co., Ltd. Company's production, operation and performance
Dali County Zoomlion Environmental Industry Asset optimization, no material impact on the
De-registration
Co., Ltd. Company's production, operation and performance
Kunming Zhongfeng Environmental Sanitation Asset optimization, no material impact on the
De-registration
Equipment Co., Ltd. Company's production, operation and performance
Guangdong Yinglian Urban Environmental Asset optimization, no material impact on the
De-registration
Management Co., Ltd. Company's production, operation and performance
Asset optimization, no material impact on the
Foshan Yinghe Investment Co., Ltd De-registration
Company's production, operation and performance
Fact sheet of major subsidiaries
X. Structured Entities Controlled by the Company
Applicable Not Applicable
XI. Future Prospects of the Company
(I) Market opportunities
1. The 2022 national policies are favorable for the development of the sanitation industry
On January 24, the State Council issued the Comprehensive Work Plan for Energy Conservation and Emission Reduction
during the 14th Five-Year Plan Period. The document sets out guiding requirements for eliminating vehicles with the national III
emission standard, promoting new energy vehicles, and winning the battle against pollution, which is conducive to industry
development.
On January 25, the Ministry of Ecology and Environment (MEE), the Ministry of Agriculture and Rural Affairs (MOARA),
the Ministry of Housing and Urban-Rural Development (MOHURD), the Ministry of Water Resources, and the National Rural
Revitalization Bureau jointly issued the Action Plan for the Battle Against Agricultural and Rural Pollution (2021–2025). The
document calls for substantial progress in rural environmental remediation, effective control of agricultural non-point source
37
pollution, and ongoing improvement of the rural ecological environment by 2025. Additionally, 80,000 administrative villages will
complete environmental remediation, 40% of rural domestic sewage will be treated, and large-scale black and odorous water
bodies in rural areas will be eliminated.
On February 9, the National Development and Reform Commission (NDRC), the MEE, the MOHURD, and the National
Health Commission released the Guiding Opinions on Accelerating the Construction of Urban Environmental Infrastructure. The
document specifies comprehensive arrangements for addressing the relevant issues to accelerate the development of the garbage
collection, transfer, and transportation system.
On February 11, the State Council issued the Plan for Advancing Agricultural and Rural Modernization during the 14th Five-
Year Plan Period. The document urges relevant parties to steadily propel toilet renovation in economically underdeveloped, high-
altitude, cold, and water-scarce areas, build manure and domestic sewage treatment facilities and comprehensive organic waste
disposal and utilization facilities based on local realities, support 600 counties to rectify rural living environments and create
beautiful and livable villages.
On February 22, Central Document No. 1, Opinions of the CPC Central Committee and the State Council on Effectively
Implementing the Key Task of Promoting Rural Revitalization in 2022, was unveiled. In terms of rural development and
environmental improvement, the document outlined the priorities for enhancing rural living environments, such as toilet revolution,
sewage treatment, and garbage management.
On March 9, the State Administration for Market Regulation and the National Standardization Management Committee of
China released the Standards for Rural Environmental Sanitation and Cleaning Services. The document requires that rural
sanitation and cleaning services should be provided by professional organizations or individual contractors, and outlines the
requirements that these two fields must meet. The document also specifies the content and quality requirements for the cleaning
services of garbage collection sites, roads, public toilets, public water areas, and other public facilities.
On March 17, the NDRC issued the Key Tasks for the Development of New Urbanization and Urban-Rural Integration in
2022. The document calls for improving hazardous waste and medical waste centralized treatment facilities as well as the
comprehensive utilization system of bulk solid waste, advancing domestic waste classification actively and steadily, and closing
the gap in urban sewage treatment capacity at a faster pace. It also urged to repair and update old and damaged sewage pipeline
networks and rainwater and sewage pipeline networks that cause waterlogging problems, launch "green life" campaigns, and
encourage green transportation as well as green household and community development.
On March 24, the NDRC and the National Energy Administration issued the Mid- and Long-Term Development Plan for the
Hydrogen Energy Industry (2021–2035), which suggests piloting the use of fuel cell commercial vehicles in public services such
as urban buses, logistics delivery vehicles, and sanitation vehicles in areas where conditions permit. This is beneficial for
promoting the adoption of hydrogen fuel in the sanitation industry.
On April 1, the State Administration for Market Regulation and the National Standardization Management Committee of
China released the Requirements for Urban and Rural Community Environmental Sanitation and Cleaning Services. According to
the standard, community sanitation and cleaning services cover a wide range of fields, including but not limited to the cleaning of
roads, indoor and outdoor public areas, agricultural markets, public toilets, and water areas, as well as garbage collection and
transportation and emergency operations.
On April 27, the MOHURD, the NDRC, and the Ministry of Water Resources jointly issued the Action Plan for the
Construction of Urban Drainage and Flood Control System during the 14 th Five-Year Plan Period. The Plan sets out requirements
to check urban drainage and flood control facilities, urban flood control engineering facilities, and urban natural retention space to
assess disaster risks. It also urges the relevant parties to evaluate the emergency management capabilities of urban drainage and
flood control and inspect flood control safety hazards in critical infrastructure such as water and gas supply. Furthermore, the
document calls for the construction of drainage pipeline networks, pumping stations, and drainage channels, as well as measures to
reduce rainwater at the source and rectify water accumulation points. These actions will promote systematic governance.
38
On May 29, the MOHURD, the MOARA, the NDRC, the MEE, the National Rural Revitalization Bureau, and the All-China
Federation of Supply and Marketing Cooperatives jointly issued the Notice on Further Strengthening the Construction and
Management of Rural Domestic Waste Collection, Transportation, and Disposal System. The document sets out the objectives for
2025 and defined key tasks such as overall planning of the construction and operational management of rural domestic waste
collection, transportation, and disposal systems, promoting source classification and resource utilization, improving collection,
transportation, and disposal systems, enhancing operational management, and establishing a mechanism for joint building,
governance, and sharing. These measures will drive the growth of waste-related products in the rural environmental sanitation
market.
On June 17, the MEE, the NDRC, the MIIT, the MOHURD, the Ministry of Transport, the MOARA, and the National
Energy Administration jointly issued the Implementation Plan for Synergizing the Reduction of Pollution and Carbon Emissions.
The Plan sets forth requirements to accelerate the development of new energy vehicles, promote the electrification of public
transportation in a phased manner, steadily replace old vehicles with new energy vehicles, and gradually adopt new and clean
energy-powered non-road mobile machinery. It also calls for exploring the demonstration application and commercial operation of
medium and heavy-duty electric and fuel cell trucks. By 2030, the sales of new energy vehicles in key areas of air pollution
prevention and control will rise to around 50% of the total vehicle sales.
On July 26, the Ministry of Civil Affairs, the NDRC, the MOHURD, and 13 other departments jointly issued the Opinions on
Improving the Comprehensive Village-level Service Functions. The document sets forth requirements to accelerate the
construction of household access roads to facilitate public travel and firefighting, advance the rural toilet revolution, speed up the
classification and resource utilization of domestic waste, comprehensively improve the management of rural domestic waste, and
propel the treatment of rural domestic sewage at a faster pace.
On July 29, the MOHURD and the NDRC jointly released the National Urban Infrastructure Construction Plan during the
14th Five-Year Plan Period. The Plan sets out requirements to increase the capacity for domestic waste classification, collection,
and transportation by 200,000 tons daily, the capacity for domestic waste incineration by 200,000 tons daily, and the capacity for
resource utilization of domestic waste by 30 million tons yearly during the 14th Five-Year Plan period. In addition, 500 existing
domestic waste treatment facilities will be renovated.
On September 14, the General Office of the Ministry of Transport announced the first batch of pilot projects for intelligent
transportation applications (autonomous driving and intelligent shipping). A total of 18 pilot projects were launched, many of
which involved autonomous driving in environmental sanitation. Among them, 14 self-driving pilot projects covered low-speed
scenarios such as unmanned delivery, vending, shuttle, cleaning, and port driving, with more than 1,400 driverless vehicles
invested.
On November 10, the MEE, the NDRC, and 13 other departments issued the Action Plan for the Critical Battle Against
Severely Polluted Weather, Ozone Pollution, and Diesel Truck Pollution. The Plan urges the relevant parties to promote the
electrification of public service vehicles, ensuring no less than 80% of incremental or upgraded buses, taxis, and logistics delivery
and light-duty sanitation vehicles in key areas and national ecological civilization experimental zones are fueled by new energy
sources. This will significantly drive the adoption of new energy-powered sanitation vehicles.
2. The demands for urban services will keep increasing
The source of urban services revenue is the government budget with the nature of rigid expenditure and is less affected by
macroeconomic regulation factors. The business is featured by continuity and stability.
(1) The scale of demand for services driven by urbanization
As urbanization continues, the construction of urban roads will directly increase the area for road cleaning, urban housing,
compound construction, and urban greening, hence increasing the demand for environmental protection equipment and urban
cleaning services. Furthermore, sanitation is one of the prerequisites for each province, city, and district to construct urban
upgrades such as "national civilized cities", "national hygienic cities", "national model cities of environmental protection", and
"national ecological garden cities". According to the National Bureau of Statistics and the MOHURD, statistics show that from
39
2015 to 2021, the area of road cleaning in China's cities and counties increased from 9.678 billion sqm to 13.337 billion sqm, an
overall increase of nearly 37.8%; the domestic waste removed and transported in cities and counties rose from 258 million tons to
317 million tons, an overall growth of 22.9%. Driven by urbanization, in order to maintain the cleanliness and sanitation of urban
roads, residential compounds, and municipal gardens, as well as the normal transfer and treatment of domestic waste, the release
of urban service demands are constantly facilitated.
(2) The "Beautiful Countryside" kick-started, and the rural sanitation market is gradually gaining momentum
The Five-Year Action Plan for the Remediation and Improvement of Rural Living Environment (2021-2025) requires that "the
rural toilet revolution shall be firmly implemented", "the promotion of rural domestic sewage treatment shall be accelerated", and
"the standard of rural domestic waste treatment shall be improved comprehensively". 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. This will create
vast opportunities for urban services and the entire sanitation industry.
(3) Continued promotion of waste classification and the continued release of market demands
In September 2020, President Xi Jinping chaired the meeting of the Central Comprehensively Deepening Reforms
Commission, at which the Several Opinions on Further Promoting Domestic Waste Classification was deliberated and approved.
The accelerated implementation of waste classification policies would overturn the traditional domestic waste collection and
transportation system. Conventional sanitation vehicles will no longer meet the needs of classified collection and transportation.
Domestic waste is treated in four steps, namely "dumping", "collection", "transportation", and "disposal", requiring upgrades and
renovation of traditional sanitation technology and equipment. Additionally, making the system smart requires increased
investment, spurring a continuous release of market demand.
(4) Full electrification of public service vehicles and increasing demand for new energy-powered environmental protection
equipment
On January 30, 2023, the MIIT, together other seven other state departments issued the Notice on Organizing the Pilot
Program of Pilot Zones for Full Electrification of Public Service Vehicles, setting out to launch nationwide pilot programs of pilot
zones for full electrification of public service vehicles from 2023 to 2025. The document requires that there should be a significant
rise in the proportion of new energy vehicles in incremental and upgraded vehicles in pilot areas, with an 80% level in terms of
buses, taxis, sanitation, postal and express delivery, and urban logistics vehicles to be fueled by new energy. Since 2012, China has
made a guiding policy to accelerate the cultivation of the new energy vehicle industry, and has successively released important
documents for its promotion. After a period of development, new energy-powered sanitation vehicles are poised for significant
growth.
(5) The increasing mechanization will drive the growth in the environmental protection equipment market
The increase in mechanization rate of the sanitation industry will reduce the cost of sanitation operations and relieve the
financial burden of governments and enterprises. With the expansion of China's urban and rural road cleaning areas, the
mechanization rate of the sanitation industry is gradually increasing. According to the statistics on urban and rural construction
released by MOHURD, at the end of 2021, the mechanical cleaning space of the road in cities across the country reached 10,342
million square meters, with a mechanical cleaning rate of 78.41%; the mechanical cleaning space of the road in counties across the
country reached 2.995 billion square meters, with a mechanical cleaning rate of 76.25%. In comparison, the mechanization rate of
sanitation industry in the urban area of developed countries can usually reach 80%. As such, there is still room for development in
terms of the mechanization level of sanitation industry in China. In the future, as labor costs continue to rise, the mechanization of
sanitation operations will become the main development direction of the domestic sanitation market, and it will cover road
cleaning, guardrail cleaning, waste collection & transportation, and other segments.
(6) The trend of aging population will drive the expansion of the environmental protection equipment market
The frequent adjustments made by China in terms of minimum wages in different cities have largely influenced the operating
costs of urban service enterprises. The defects including high operating costs and low working efficiency in the traditional manual
40
urban service model have increased the business pressure on sanitation operation enterprises. Furthermore, China's elderly
population is expected to reach 280 million by 2022, with an aging population of 19.8%, according to the National Committee on
Aging Population. The aging trend will exacerbate the workforce deficit in the sanitation industry. Meanwhile, with the
diversification of job options, the number of young and middle-aged laborers who are willing to engage in sanitation work is also
decreasing. Therefore, improving the mechanization rate of the sanitation industry and expanding the use of environmental
protection equipment is not only a realistic need in the face of the labor market shortage, but also the requirement for the
development of urban sanitation level.
(7) Industrial breakthrough fueled by technological advancement
The rapid development of 5G and AI technology has widened industrial boundaries and opened up a slew of new
opportunities. Small-sized smart devices and smart services will be the new bonanza, introducing new variables and increments for
the sector. Smart, less humanized, or even unmanned sanitation will be a general trend.
(II) Business plan of 2022
In 2022, the Company closely revolved around its development strategy and annual business plan, focusing on its core
strategic business. It strengthened technological innovation and product research and development, improved internal operations,
and actively promoted smart sanitation, achieving its business plan relatively well for 2022. The business target set at the
beginning of the year was for the Company to achieve RMB 60 billion in the planned cumulative contract amount of its smart
urban services and RMB 4. billion in its annual operating revenue; the actual planned cumulative contract amount of the
Company's smart urban services reached RMB 54.165 billion while its annual operating revenue recorded RMB 4.158 million.
In 2022, the Company completed its annual revenue target of RMB 4 billion for smart services, with an achievement rate of
103.95%; It did not complete its operation target of RMB 60 billion in total contract value, with an achievement rate of 90.27%.
The reason for the Company's failure to achieve the operating target of the total contract value is the decrease of orders with long
cycles of more than 5 years in the market, resulting in a slight decrease of the total contract value of orders obtained by the
Company. In 2023, the Company will take into account the market development trend, diversify the business forms and actively
attract short- and medium-cycle projects.
2023 Operation target: to achieve a cumulative contract value of RMB 80 billion for the Company's smart urban service
solutions, and to realize an annual revenue of RMB 6.5 billion; from 2020 to 2024, the planned cumulative contract value would
be RMB 100 billion, so as to achieve an annual revenue of RMB 10 billion.
The Company will continue to increase resource input in its strategic core business, smart urban service, striving to be one of
the top-ranking enterprises in the industry in the next five years.
In 2023, the Company will continue to follow the strategy of technology and product leadership, with a further focus on smart
sanitation. At the same time, it will expand its presence in new energy products, including solar panel brackets as well as energy
storage products for industrial and commercial purposes.
(III) Plan for use of funds
2023 is a key period for the Company's rapid development. Given the relatively large demand for funds, the Company will
formulate a funding supply and demand plan to match the Company's development. The Company will make full use of its own
funds. It will also further strengthen the management of accounts receivable while optimizing the financial structure to provide
strong financial guarantees for the Company's business development and control financial risks. The source of funds is the
optimization and combination of multiple channels including the issuance of commercial paper, medium-term note, cash flows
from operating activities, and bank loans.
(IV) Main risk factors that may adversely affect the achievement of the Company's future development strategies and
business objectives
1. Policy-related risks
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
41
national industrial policies since it is typically policy-driven. Adjustments to macroeconomic policies, tax policies, environmental
industry policies and environmental management policies will affect the Company's performance.
Countermeasures: To raise the scientific decision-making capacity of managers and boost the Company's resilience against
policy-related risks, the Company will pay careful attention to changes in national macroeconomic policies and strengthen
research and analysis of industry policies.
2. Operation management risks
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.
Countermeasures: the Company is concentrating on strengthening the management and risk control systems, further
improving the operation management system and business process, continuing to refine management, and strengthening the risk
control and culture of subsidiaries, all while strengthening the talent team.
3. Heightened market competition risks
The sanitation industry in China is an emerging comprehensive industry that is still in the early stages of marketization and
has a relatively low level of concentration. However, the industry is currently in a period of rapid growth. With its rapid growth,
the involvement of upstream and downstream enterprises, and the continuous participation of new enterprises in different sectors,
market competition will continue to intensify. The Company will likely face the risk of losing market share in the future.
Countermeasures: the Company will continue to pursue a technology-driven development strategy in order to preserve its
technological leadership in the industry and, as a result, solidify its market leadership.
Nothing in this report about future plans, performance forecasts, or other matters represents a commitment by the Company to
any investors or other third parties. All investors and relevant persons shall remain adequately aware of risks.
XII. Visits Paid to the Company for Purposes of Research, Communication, and Interview
during the Reporting Period
Applicable Not applicable
Main content of
Reference of the
discussion and
Time Venue Method Visitor type Visitor study's basic
materials
information
provided
Guangfa Securities, Guotai
Junan Securities, Dongxing For details, please
Securities, Ping An Wealth refer to the
Management, Huatai Asset Record Sheet of
Management, Kaifeng Investor Relations
Business
Investment, Hongta Hongtu Activities
strategy and
May 10, 2022 Shenzhen China Field study Institution Fund, Goldstate Securities, disclosed by the
operating status
OH Bay, Evergrande Life, Company on May
of the Company
Everbright Securities, 11, 2022 on
Natural Power Capital, Cninfo
Yingda Securities, Chasing (www.cninfo.com
Securities, and Penghua .cn)
Fund
"Interactive Investors participated in the The Company's For details, please
May 25, 2022 Platform for Others Others 2021 Infore Enviro online projects and refer to the
Investor performance briefing market Record Sheet
42
Relations" on developments Investor Relations
Panorama Activities
Network disclosed by the
Company on May
25, 2022 on
Cninfo
(www.cninfo.com
.cn)
43
Part IV 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 CSRC. 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 ensure the Board of Directors' deliberation and decision-making are
professional and efficient.
2. The Company convenes the Annual General Meeting of Shareholders in strict accordance with the relevant provisions of
the Articles of Association and Rules of Procedure for General Meeting of Shareholders of the Company. The Board of Directors,
which is the decision-making body of the Company, conscientiously implements the resolutions of General Meetings of
Shareholders. The Board of Supervisors exercises its supervisory authorities 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 management
members, 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 of Shareholders and the Meetings of 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 insiders who have access to insider information, effectively prevent
securities violations of laws and regulations such as insider trading, maintain the fairness of information disclosure, and protect the
legitimate rights and interests of the general investors, the Company promptly, truthfully and fully recorded all the persons with
access to the insider information before disclosure at stages such as discussion and planning, demonstration and consultation,
establishment and in phases such as reporting, transmission, preparation, examination, resolution, and disclosure, as well relevant
information archives regarding the content, time, place, basis and method, etc. for the insiders to know the insider information, 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 Measures for the Administration of Information Disclosure by Listed Companies, as
well as the relevant provisions of the Articles of Association, Information Disclosure Management Policy, and Policy on Internal
Reporting of Material Information of the Company.
4. The Company discloses information strictly in accordance with the provisions of the Company Law, the Securities Law, the
Rules Governing the Listing of Shares on SZSE, 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 stock exchange for issues relating to information disclosure. During the reporting period, there
were no governance irregularities such as the provision of undisclosed information to the controlling shareholder and the de facto
controller.
5. During the reporting period, when material events occurred in the Company, there was no abnormal fluctuation in the stock
price arising from leakage of inside information. As part of its next steps, the Company will constantly improve its 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 SZSE.
As to the actual status of corporate governance whether there is any material departure from laws, administrative regulations and
the rules issued by the CSRC on listed company governance
Yes No
44
As to the actual status of governance of the Company, there is no material non-compliance with laws, administrative regulations,
and the rules issued by the CSRC on the governance of listed companies.
II. Independence of the Company from the Controlling Shareholder and De Facto
Controller and on Ensuring Company's Assets, Personnel, Finance, Structure and
Businesses and Other Aspects
The Company is completely independent of the controlling shareholder in terms of businesses, personnel, assets, organization and
finance, etc., and has fully independent businesses and operation capacity. 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,
CFO, Board Secretary and other senior management members of the Company do not hold positions other than directors in the
controlling shareholder, the financial officers of the Company do not have a part-time job in affiliated 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 are completely independent.
(3) Integrity of assets: The Company owns independent and complete assets and has independent production, supply and sales
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, Board of Supervisors and other internal institutions operate
fully 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 of Shareholders Convened During the
Reporting Period
1. General meetings of shareholders convened during the reporting period
Investor
Date of the Disclosure
Meeting Type participation Meeting resolution
meeting date
ratio
The Announcement on the
Resolutions of the 2021 Annual
General Meeting of
Shareholders (Announcement
The 2021 Annual Annual General No.: 2022-043) published in the
General Meeting Meeting of 49.66% May 24, 2022 May 25, 2022 Securities Daily, the Securities
of Shareholders Shareholders Times, the China Securities
Journal, the Shanghai
Securities News and
http://www.cninfo.com.cn,
which are the media designated
45
by the Company for
information disclosure.
The Announcement on the
Resolutions of the First
Extraordinary General Meeting
of Shareholders in 2022
(Announcement No.: 2022-075)
The first
published in the Securities
extraordinary Extraordinary
September 13, September 14, Daily, the Securities Times, the
general meeting of general meeting of 47.33%
2022 2022 China Securities Journal, the
shareholders in shareholders
Shanghai Securities News and
2022
Cninfo
(http://www.cninfo.com.cn),
which are the media designated
by the Company for
information disclosure.
2. Extraordinary general meeting of shareholders convened at the request of preference shareholders
with resumed voting rights
Applicable Not Applicable
V. Information of directors, supervisors and senior management members
1. Basic information
Numbe
r of
Number
shares Ending Reasons
Beginning of shares
Incumbent/ Start of End of increas Other number of for share
Name Position Gender Age number of decreased
Former tenure tenure ed changes shares increase/d
shares held during the
during held ecrease
period
the
period
Chairman of
the Board December January 11, 1,654,60
Ma Gang Incumbent Male 44 1,654,600 0 0 0 N/A
and 4,2014 2026 0
President
September January 11,
Su Bin Director Incumbent Male 45 0 0 0 0 0 N/A
6, 2021. 2026
Kuang January 30, January 11,
Director Incumbent Male 44 0 0 0 0 0 N/A
Guangxiong 2019. 2026
January 30, January 11,
Shen Ke Director Incumbent Male 52 0 0 0 0 0 N/A
2019. 2026
Independent December January 11,
Zhang Yu Incumbent Male 45 0 0 0 0 0 N/A
Director 26, 2019. 2026
Independent December January 11,
Li Ruidong Incumbent Male 46 0 0 0 0 0 N/A
Director 26, 2019. 2026
Independent January 12, January 11,
Li Yingzhao Incumbent Male 61 0 0 0 0 0 N/A
Director 2023. 2026
Chairman of
Jiao November January 11,
the Board of Incumbent Male 42 308,692 0 0 0 308,692 N/A
Wanjiang 14, 2016. 2026
Supervisors
December January 11,
Liu Kan Supervisor Incumbent Male 39 0 0 0 0 0 N/A
26, 2019. 2026
Employee Femal November January 11,
Lin Meiling Incumbent 38 0 0 0 0 0 N/A
Supervisor e 14, 2016. 2026
46
Vice
Wang April 29, January 11,
President & Incumbent Male 47 800 0 0 0 800 N/A
Qingbo 2022. 2026
CFO
Vice
President December January 11,
Jin Taotao Incumbent Male 40 0 0 0 0 0 N/A
and Board 26, 2019 2026
Secretary
Independent November December
Shi Shuiping Left office Male 48 0 0 0 0 0 N/A
Director 14, 2016 26, 2022
Vice
November April 29,
Lu Anfeng President & Left office Male 45 486,762 0 0 0 486,762 N/A
8, 2013 2022
CFO
2,450,85
Total -- -- -- -- -- -- 2,450,854 0 0 0 --
4
Whether any director or supervisor left office or any senior management member was dismissed during their tenure during the
reporting period
Yes No
During the reporting period, the Ninth Board of Directors of the Company expired in December 2022, and Mr. Shi Shuiping,
an independent director of the Ninth Board, also left office due to the expiration of his term. In addition, in April, Mr. Lu Anfeng,
the former Vice President and CFO, resigned due to work-related reasons. His resignation took effect as from the date of
submission to the Board of Directors according to the Company Law, Guidelines No. 1 of Shenzhen Stock Exchange for Self-
regulation of Listed Companies—Standardized Operation of Companies Listed on the Main Board, and Articles of Association. Mr.
Lu directly holds 486,762 shares in the Company and has fulfilled the corresponding undertakings in accordance with relevant
provisions. The above changes will not adversely affect the production and operation of the Company.
Changes of the company's directors, supervisors and senior management members
Applicable Not applicable
Name Position held Type Date Reason
Left office due to Left office due to
Shi Shuiping Independent Director December 26, 2022
expiry of term expiry of term
Lu Anfeng Vice President & CFO Dismissed April 29, 2022 Work-related reasons
2. Position and biographical information
Professional backgrounds, major work experience and current posts in the Company of the incumbent directors, supervisors and
senior management members:
1. Mr. Ma Gang, born in 1979, with a master's degree, is Chairman of the tenth Board of Directors of Infore Environment.
Starting from December 2014 till now, he has been serving 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,
General Manager at Midea Small Domestic Appliance Sales Company in China, 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
Product Company, and Deputy Director at Midea Domestic Market Department.
2. Mr. Su Bin, born in 1978, with a Master's degree, is the Director of the tenth Board of Directors of Infore Enviro. From
October 2020 till now, he has been Vice President of Infore Group Co., Ltd. From March 2013 to October 2020, he successively
held the positions of Executive President and President of Fosun Group's Energy and Environment Group, as well as the Executive
President and Vice President of Fosun Capital, etc. He was a Partner of Mingli China Growth Fund from January 2009 to February
2013 and an Executive Director of Hongshang Industrial Holding Group Co., Ltd. from March 2003 to December 2008.
47
3. Mr. Kuang Guangxiong, born in 1979, holding a master's degree, is a PRC Certified Public Accountant and International
Accountant, in addition to Director of the tenth Board of Directors of Infore Enviro. 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, 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.
4. Mr. Shen Ke, born in 1971, holding a master's degree, is the Director of the tenth Board of Directors of Infore Enviro. He is
Vice President of Zoomlion Heavy Industry Science and Technology Co., Ltd. from September 2020 to the present. From July
2003 to September 2020, he held the positions of Head of the Investment Development Department, Board Secretary, and
Investment Director at Zoomlion Heavy Industry Science and Technology Co., Ltd.
5. Mr. Zhang Yu, born in 1978, holding a doctorate degree, is an Independent Director of the tenth Board of Directors of
Infore Enviro. He has served as Associate Professor and Professor at China Europe International Business School since 2015, and
held the position of Assistant Professor at the University of California, Irvine from 2008 to 2015.
6. Mr. Li Ruidong, born in 1977, holding a bachelor's degree, is an Independent Director of the tenth Board of Directors of
Infore Enviro. He has been President and Editor-in-chief at the China Environment Magazine since November 2013. He served as
Assistant to the 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. Li Yingzhao, born in 1962, holding a doctorate, is a Professor of Accounting at the School of Business Administration,
South China University of Technology, and he currently serves as Independent Director of the tenth Board of Directors of Infore
Enviro. He also currently serves as Independent Director at Guangdong TLOONG Technology Group Co., Ltd. and Guangzhou
Haige Communications Group Co., Ltd., and External Supervisor of Nanhai Rural Commercial Bank Co., Ltd. He served as
Independent Director at such listed companies as Guangzhou Friendship Group Co., Ltd. and Shenzhen Zhongjin Lingnan
Nonfemet Co., Ltd. He has participated in the SZSE training and received the Independent Director Qualification.
8. Mr. Wang Qingbo, born in 1976, holding a bachelor's degree, is Vice President and CFO of Infore Enviro. He previously
served as Vice President and Vice President of Finance at Guangdong NVC Lighting Technology Co., Ltd., Vice President of
Finance at Guangdong Xinbang Logistics Co., Ltd., CFO at Midea Annto Logistics Division, Deputy CFO at Midea Small
Domestic Appliance Division, Financial Manager at Midea Industrial Design Company, and Financial Supervisor at Midea Fan
Factory.
9. Mr. Jin Taotao, born in 1983, a master's degree holder, is Vice President and Board Secretary of Infore Enviro. He held the
positions of Engineer at the Environmental Planning Institute of the MEE (formerly the 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 SZSE qualification training for Board Secretaries in November 2019 and obtained the qualification certificate for Board
Secretary.
10. Mr. Jiao Wanjiang, born in 1981, holding a master's degree, is Chairman of the tenth Board of Supervisors of Infore
Enviro. He is currently the 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 Technology Group Co., Ltd. He joined Midea in July 2005. He successively held the positions
of Domestic Sales Branch Manager of Guangdong Midea Small Domestic Appliance Sales Company in China, Senior Product
Planning Manager at Headquarters and Head of Brand & Marketing Department of Headquarter.
11. Mr. Liu Kan, born in 1984, holding a bachelor's degree, is the Supervisor of the tenth Board of Supervisors of Infore
Enviro. He has served the Company since February 2016, and is currently Director of the Operation Management Department of a
subsidiary. He held the positions of General Manager at Infore Network Technology Co., Ltd. from 2017 to November 2019,
Director of the Operation Management Department of University Science & Technology (Shenzhen) Co., Ltd. from 2016 to 2017,
48
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, holding a bachelor's degree, is the Supervisor of the tenth Board of Supervisors of Infore
Enviro. She is currently the 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.
Positions held in shareholder entities:
Applicable Not applicable
Receiving remuneration
Name of the
Position held at the End of or allowance from the
personnel holding Shareholder entity Start of tenure
shareholder entity tenure shareholding entity or
position
not
Infore Group Co.,
Ma Gang Director March 6, 2018 - No
Ltd.
Infore Group Co., Director and Co-
Su Bin November 13, 2020 - Yes
Ltd. President
Kuang Infore Group Co., Director and Co-
October 1, 2018 - Yes
Guangxiong Ltd. President
Zoomlion Heavy
Industry Science
Shen Ke Vice President June 29, 2015 - Yes
and Technology
Co., Ltd.
Statements on
positions held in
-
shareholder
entities
Positions held in other entities:
Applicable Not applicable
Name of the Receiving remuneration
Name of other Position held in
personnel holding Start of tenure End of tenure or allowance from other
entity other entity
position entities or not
Bichamp Cutting
Shen Ke Technology Director July 5, 2014. - No
(Hunan) Co., Ltd.
China Europe
Zhang Yu International Professor July 1, 2015. - Yes
Business School
China
President and
Li Ruidong Environment November 1, 2013 - Yes
Editor-in-chief
Magazine
Statements on
positions held in -
other entities
Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors and senior
management members as well as those who left office during the reporting period:
Applicable Not Applicable
3. Remuneration of directors, supervisors and senior management Members
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and senior
management members
49
The remuneration of the directors, supervisors and senior management members of the Company for 2022 is strictly in
compliance with the Remuneration Plan for Directors, Supervisors and Senior Management Members in 2022 deliberated and
adopted by the Company, the Rules of Procedure for the Board of Directors formulated by the Company, the Rules of Procedure
for the Board of Supervisors and the Articles of Association of the Company, as well as the relevant provisions of the Company
Law. The remuneration of the Company's directors, supervisors and senior management members shall be determined on the basis
of reasonable remuneration in the market and the Company's performance appraisal results. The actual remuneration of the
independent 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 members of the Company during the reporting period
Unit: RMB 10,000
Total pre-tax Receiving
Incumbent/For remuneration remuneration from
Name Position Gender Age
mer from the the Company's
Company related parties or not
Chairman of the
Ma Gang Male 44 Incumbent 194.37 No
Board and President
Su Bin Director Male 45 Incumbent 0 Yes
Kuang
Director Male 44 Incumbent 0 Yes
Guangxiong
Shen Ke Director Male 52 Incumbent 0 Yes
Shi Shuiping Independent Director Male 48 Left office 10 No
Zhang Yu. Independent Director Male 45 Incumbent 10 No
Li Ruidong. Independent Director Male 46 Incumbent 10 No
Chairman of the
Jiao Wanjiang. Male 42 Incumbent 83.18 No
Board of Supervisors
Liu Kan. Supervisor Male 39 Incumbent 70.11 No
Lin Meiling. Employee Supervisor Female 38 Incumbent 14.78 No
Vice President &
Wang Qingbo. Male 47 Incumbent 97.90 No
CFO
Vice President and
Jin Taotao Male 40 Incumbent 126.09 No
Board Secretary
Vice President &
Lu Anfeng Male 45 Left office 33.61 No
CFO
Total -- -- -- -- 650.04 --
VI. Performance of Duties by Directors during the Reporting Period
1. Information on the Board of Directors during the reporting period
Meeting Date of the meeting Disclosure date Meeting resolution
The Announcement on the Resolutions of the 16th
Extraordinary Meeting of the Ninth Board of
Directors (Announcement No.: 2022-003) was
The 16th extraordinary published in the Securities Daily, the Securities
meeting of the Ninth Board of January 14, 2022 January 15, 2022 Times, the China Securities Journal, the Shanghai
Directors Securities News and Cninfo
(www.cninfo.com.cn), which are the media
designated by the Company for information
disclosure.
50
The Announcement on the Resolutions of the 17th
Extraordinary Meeting of the Ninth Board of
Directors (Announcement No.: 2022-009) was
The 17th extraordinary published in the Securities Daily, the Securities
meeting of the Ninth Board of March 17, 2022. March 18, 2022. Times, the China Securities Journal, the Shanghai
Directors Securities News and Cninfo
(www.cninfo.com.cn), which are the media
designated by the Company for information
disclosure.
The Announcement on the Resolutions of the 18th
Meeting of the Ninth Board of Directors
(Announcement No.: 2022-018) was published in
The 18th meeting of the Ninth the Securities Daily, the Securities Times, the
April 29, 2022 April 30, 2022
Board of Directors China Securities Journal, the Shanghai Securities
News and Cninfo (www.cninfo.com.cn), which
are media the designated by the Company for
information disclosure.
The Announcement on the Resolutions of the 19th
Meeting of the Ninth Board of Directors
(Announcement No.: 2022-062) was published in
The 19th meeting of the Ninth the Securities Daily, the Securities Times, the
August 24, 2022. August 25, 2022.
Board of Directors China Securities Journal, the Shanghai Securities
News and Cninfo (www.cninfo.com.cn), which
are the media designated by the Company for
information disclosure.
The Announcement on the Resolutions of the 20th
Extraordinary Meeting of the Ninth Board of
Directors (Announcement No.: 2022-073) was
The 20th extraordinary published in the Securities Daily, the Securities
meeting of the Ninth Board of September 08, 2022 September 09, 2022 Times, the China Securities Journal, the Shanghai
Directors Securities News and Cninfo
(www.cninfo.com.cn), which are the media
designated by the Company for information
disclosure.
The Announcement on the Resolutions of the 21st
Meeting of the Ninth Board of Directors
(Announcement No.: 2022-080) was published in
The 21st meeting of the Ninth the Securities Daily, the Securities Times, the
October 26, 2022. October 27, 2022.
Board of Directors China Securities Journal, the Shanghai Securities
News and Cninfo (www.cninfo.com.cn), which
are the media designated by the Company for
information disclosure.
The Announcement on the Resolutions of the 22nd
Meeting of the Ninth Board of Directors
(Announcement No.: 2022-088) was published in
The 22nd meeting of the Ninth the Securities Daily, the Securities Times, the
December 27, 2022 December 28, 2022
Board of Directors China Securities Journal, the Shanghai Securities
News and Cninfo (www.cninfo.com.cn), which
are the media designated by the Company for
information disclosure.
2. Attendance of directors at Board meetings and general meetings of shareholders
Attendance of directors at Board meetings and general meetings of shareholders
Director's Number of Number of Number of Number of Having failed Number of
Number of
name Board Board Board Board to attend two general
Board
meetings meetings meetings meetings consecutive meetings of
51
meetings held attended on attended by attended absent with Board shareholders
site way of through proxy apologies meetings in attended
telecoms person or not
Ma Gang. 7 7 0 0 0 No 2
Su Bin. 7 4 3 0 0 No 2
Kuang
7 4 3 0 0 No 2
Guangxiong.
Shen Ke. 7 1 6 0 0 No 2
Zhang Yu. 7 1 6 0 0 No 2
Li Ruidong 7 1 6 0 0 No 2
Shi Shuiping 7 3 4 0 0 No 2
Explanation of failure to attend two consecutive Board meetings
NA
3. Objections raised to relevant matters of the Company
Whether any directors raised an objection to any relevant matter of the Company
Yes No
Directors did not raise any objection to the relevant matters of the Company during the reporting period.
4. Other information about the performance of duties by directors
Whether any recommendations from directors were adopted by the Company
Yes No
Explanation of adoption/rejection of directors' recommendations for the Company
During the reporting period, the directors of the Company acted in a diligent and responsible manner, and actively attended
Board meetings and general meetings of shareholders in strict compliance with provisions and requirements in the Articles of
Association of the Company, the Rules of Procedure for the Board of Directors of the Company and relevant laws and regulations.
Based on the actual situation of the Company, the directors proposed relevant opinions on the Company's material governance and
operation decisions, reached a consensus through adequate communication and discussion, firmly supervised and promoted the
execution of resolutions of the Board of Directors, ensured the decision-making was scientific, timely and highly efficient and
protected the legitimate rights and interests of the Company and all shareholders.
VII. Information on Special Committees under the Board during the Reporting Period
Specific
Other information
Number Important
information on matters
Name of the of Date of the opinions and
Members Meeting contents on that
committee meetings meeting suggestions
performance objections
held proposed
of duties were raised
(if any)
1. Pre-approval of the Financial
Agreed to
Shi Shuiping, Statements in 2021 Annual Report; 2.
pass the
Kuang 2021 Annual Internal Control Self-
Audit February relevant
Guangxiong, 5 Assessment Report; -- N/A
Committee 14, 2022. proposals of
Li Ruidong, 3. 2022 Internal Audit Work Plan
this
Zhang Yu Report; 4. Ex-ante Communication of
meeting.
2021 Annual Report.
52
1. 2021 Annual Report and its
summary; 2. 2021 Annual Final
Financial Accounting Report; 3. 2021
Profit Distribution Plan Proposal; 4.
2022 First Quarter Report; 5.
Assurance Report on the Placement
and Use of Proceeds in 2021; 6.
Proposal on the Delay of Part of the
Projects of Proceeds from the Public
Issuance of A-share Convertible
Corporate Bonds; 7. Proposal on
Changes to Accounting Policy of the
Company and Its Subsidiaries; 8.
Proposal on Provision for
Impairment of Goodwill in 2021; 9.
Proposal on the Increase in
Financing Factoring Limit for
Wholly-owned Subsidiaries and
Equity Participating Subsidiaries; 10.
Proposal on the 2022 Annual Plan
for Entrusted Wealth Management
with Self-owned Funds; 11. Proposal
on Estimated Routine Related Party
Transactions for 2022; 12. Proposal
on Guarantee Limits Provided by the
Agreed to
Shi Shuiping, Company to Its Subsidiaries; 13.
pass the
Kuang Proposal on Related Party
April 28, relevant
Guangxiong, Transactions for Temporary -- N/A
2022 proposals of
Li Ruidong, Borrowing Funds Provided by Infore
this
Zhang Yu Group Co., Ltd. to the Company in
meeting.
2022; 14. Proposal on the Provision
of Buyer's Credit Guarantees for
Customers; 15. Proposal on the
Conducting of Asset Pool Business;
16. Proposal on the Application for
Comprehensive Credit Lines from
Banks and the Authorization for the
Chairman to Sign Bank Credit
Contracts; 17. Proposal on the
Reappointment of Accounting Firms;
18. Revised Management Policy for
External Guarantees; 19. Revised
Management Policy for Related Party
Transactions; 20. Revised Work
Policy for Independent Directors; 21.
Revised Management Policy for
Proceeds; 22. Revised Management
Policy for Entrusted Wealth
Management; 23. Revised
Registration Policy for Insider
Information Persons; 24. Revised
Management Policy for Information
Disclosure; 25. Revised Policy for
Internal Reporting of Material
Information.
Shi Shuiping, 1. Summary of Internal Audit for the Agreed to
August 23,
Kuang First Half of 2022; 2. 2022 Interim pass the -- N/A
2022
Guangxiong, Report and its summary; 3. Special relevant
53
Li Ruidong Report on the Placement and Use of proposals of
Proceeds in the First Half of 2022; 4. this
Proposal on Changes to Accounting meeting.
Policy of the Company and Its
Subsidiaries; 5. Proposal on the
Increase in Guarantee Limits; 6.
Proposal on the Increase in the
Limits of Buyer's Credit Guarantees
Provided to Customers; 7. Proposal
on the Conducting of Factoring for
Accounts Receivable.
1. Internal Control Work Report in Agreed to
Shi Shuiping, the Third Quarter of 2022; 2. Third pass the
Kuang October 25, Quarter Report in 2022; and 3. relevant
-- N/A
Guangxiong, 2022 Proposal on the Use of Part of Idle proposals of
Li Ruidong Proceeds to Temporarily Supplement this
Working Capital. meeting.
Agreed to
Shi Shuiping, pass the
Kuang December Proposal on Continuing Asset Pool relevant
-- N/A
Guangxiong, 26, 2022 Business in 2023. proposals of
Li Ruidong this
meeting.
1. Reviewing the Performance of the
Company's Directors and Executives
in Fulfilling Their Duties in 2021 and
Conducting Annual Performance
Assessment Based on Assessment
Criteria and Remuneration Policies
and Plans; 2. Proposal on Second Agreed to
Li Ruidong, Employee Stock Ownership Plan pass the
Kuang January 14, (Draft) and Its Summary; 3. Proposal relevant
-- N/A
Guangxiong, 2022 on the Formulation of the proposals of
Zhang Yu Management Measures for the this
Second Employee Stock Ownership meeting.
Plan; 4. Proposal on the Request for
Authorization from the General
Meeting of Shareholders for the
Remunerati Board of Directors to Handle Matters
on & Related to the Company's Second
6
Appraisal Employee Stock Ownership Plan.
Committee 1. Proposal on the Second Employee
Stock Ownership Plan (Revised
Draft) and Its Summary; 2. Proposal
on the Management Measures for the
Second Employee Stock Ownership Agreed to
Li Ruidong, Plan (Revised); 3. Proposal on the pass the
Kuang March 16, Request for Authorization from the relevant
-- N/A
Guangxiong, 2022 General Meeting of Shareholders for proposals of
Zhang Yu the Board of Directors to Handle this
Matters Related to the Company's meeting.
Second Employee Stock Ownership
Plan; 4. Implementation of the
Remuneration Plan for Directors,
Supervisors, and Executives in 2021.
Li Ruidong, April 28, 1. Proposal on the Remuneration Agreed to
-- N/A
Kuang 2022 Plan for Directors, Supervisors, and pass the
54
Guangxiong, Executives in 2022; 2. Proposal on relevant
Zhang Yu the Cancellation of Expired, proposals of
Unexercised Stock Options for the this
Third Exercise Period of the Third meeting.
Stock Option Incentive Scheme).
1. Proposal on the Adjustment of the
Agreed to
Exercise Price of the Third Stock
Li Ruidong, pass the
Option Incentive Scheme; 2. Proposal
Kuang August 23, relevant
on the Change of the Asset Manager -- N/A
Guangxiong, 2022 proposals of
and the Adjustment of the Transaction
Zhang Yu this
Price of the Second Employee Stock
meeting.
Ownership Plan.
1. Proposal on the Adjustment of the
Recipients and Exercise Quantity and Agreed to
Li Ruidong, Canceling Certain Stock Options of pass the
Kuang October 25, the Third Stock Option Incentive relevant
-- N/A
Guangxiong, 2022 Scheme; 2. Proposal on Matters proposals of
Zhang Yu Related to the Exercise During the this
Third Exercise Period of the Third meeting.
Stock Option Incentive Scheme.
Agreed to
Li Ruidong, Proposal on the Cancellation of pass the
Kuang December Expired, Unexercised Stock Options relevant
-- N/A
Guangxiong, 26, 2022 for the Second Exercise Period of the proposals of
Zhang Yu Third Stock Option Incentive Scheme. this
meeting.
Agreed to
pass the
Zhang Yu, Ma Proposal on the Appointment of the
April 28, relevant
Gang, Shi Vice President and CFO of the -- N/A
2022 proposals of
Shuiping Company
this
Nomination meeting.
2
Committee Agreed to
pass the
Zhang Yu, Ma
December Proposal on the Election of the New relevant
Gang, Shi -- N/A
26, 2022 Board of Directors of the Company proposals of
Shuiping
this
meeting.
1. Proposal on the Investment and
Construction of Phase II Projects of
the Company's Environmental
Protection Technology Industrial
Park in Shunde; 2. Proposal on the
Spin-off of Subsidiaries to be Listed
on the ChiNext Board in Compliance
Agreed to
with Relevant Laws and Regulations;
pass the
3. Proposal on the Plan for the Spin-
Strategy Ma Gang, Su April 28, relevant
3 off of Zhejiang Shangfeng Special -- N/A
Committee Bin, Shen Ke 2022 proposals of
Blower Industrial Co., Ltd. to be
this
Listed on the ChiNext Board; 4.
meeting.
Proposal on the Revised Plan of
Infore Environment Technology
Group Co., Ltd. for the Spin-off of
Zhejiang Shangfeng Special Blower
Industrial Co., Ltd. to be Listed on
the ChiNext Board; 5. Proposal on
the Spin-off of Subsidiaries to be
55
Listed in Compliance with the Rules
for the Spin-off of Listed Companies
(Trial); 6. Proposal on the Spin-off of
Zhejiang Shangfeng Special Blower
Industrial Co., Ltd. to be Listed on
the ChiNext Board, Which Is
Conducive to Protecting the
Legitimate Rights and Interests of
Shareholders and Creditors; 7.
Proposal on the Company's
Maintenance of Independence and
Capabilities of Business Continuity;
8. Proposal on Zhejiang Shangfeng
Special Blower Industrial Co., Ltd.
Possessing Capabilities of
Standardized Operations; 9. Proposal
on the Explanation of the
Completeness and Compliance of the
Spin-off Procedures and the Validity
of the Submitted Legal Documents;
10. Proposal on the Analysis of the
Purpose, Commercial Rationality,
Necessity, and Feasibility of the Spin-
off; 11. Proposal on the Request for
the Authorization from the General
Meeting of Shareholders for the
Board of Directors and its Authorized
Personnel to Handle Matters Related
to the Spin-off and Listing; 12.
Revised Management Policy for
Authorization; 13. Revised
Management Policy for Investment;
14. Revised Management Policy for
Subsidiaries; 15. Revised
Management Policy for Securities
Investment.
Agreed to
Proposal on the Application for a
pass the
Change from Foreign-invested
Ma Gang, Su August 23, relevant
Limited Liability Company to -- N/A
Bin, Shen Ke 2022 proposals of
Domestic-invested Limited Liability
this
Company.
meeting.
Agreed to
Proposal on the Suspension of pass the
Ma Gang, Su September Downward Revision of the relevant
-- N/A
Bin, Shen Ke 7, 2022 Conversion Price of Infore proposals of
Convertible Bonds. this
meeting.
VIII. Work of the Board of Supervisors
Whether the Board of Supervisors identified any risk in the Company in its supervision during the reporting period
Yes No
The Board of Supervisors has no objection to supervisory matters during the reporting period.
56
IX. Information on Employees of the Company
1. Number, specialty and educational backgrounds of employees
Number of in-service employees of the parent company at the
232
end of the reporting period
Number of in-service employees of the major subsidiaries at
16,954
the end of the reporting period
Total number of in-service employees at the end of the
17,186
reporting period
Total number of paid employees during the reporting period 17,186
Number of retirees to whom the parent company or its major
0
subsidiaries need to pay retirement pensions
Specialty
Specialty category Number of people in the specialty
Production personnel 12,864
Sales personnel 1,168
Technical personnel 1,691
Finance personnel 177
Administrative personnel 1,286
Total 17,186
Educational level
Types of educational level Number of people
Doctoral degree 12
Master's degree 528
Bachelor's degree 2,788
College 2,280
Below college 11,578
Total 17,186
2. Remuneration policy
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 individual performance assessment results. The Company
swings the weight of salary payment towards strategic 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, the extent of changes in the industry environment and the corporate payment capacity.
3. Training plan
The Company pursues a talent strategy of high quality, high incentives, high performance, and high cultural identity. In 2022,
Infore Enviro reconstructed its talent development and learning map, using the employee capability charging station as the main
platform to offer a diverse and hierarchical talent development system. The Company launched seven new training programs and
57
optimized two existing ones, with a focus on leadership, expertise, general skills, and new employees. Leadership programs
emphasized developing senior leadership and building a talent pool. Expertise programs enhanced job-specific skills through
routine training and marketing and R&D lectures. In terms of general skills, senior executives shared strategic consensus, industry
trends, or business priorities every month to improve employees' career skills. To better support new employees, both from
campus and social recruitment, a range of training programs were carried out, such as the Young Talent Training Camp, Dual
Mentor Plan, Graduate Training Program, and 90-day Transition for New Employees from Social Recruitment. Moreover, the
Company provided career paths for both managers and experts and offered opportunities for job rotation and internal recruitment.
These measures have encouraged the comprehensive development of various talents, helping employees grow with the Company.
4. Labor outsourcing
Applicable Not applicable
Total hours of labor outsourced 59,917,325.06
Total payment for labor outsourcing (RMB) 624,155,450.00
X. Company's Profit Distribution and Converting Capital Reserve into Share Capital
Formulation, execution or adjustments of profit distribution policy, especially cash dividend policy during 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 on an annual basis. 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 the 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 realized 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 proposal for the annual profit distribution of the Company.
Special remarks on the cash dividend policy
Whether it complies with the Company's Articles of
Association or resolutions of the general meetings of Yes
shareholders:
Whether dividend distribution standards and ratio are explicit
Yes
and clear:
Whether the decision-making procedure and mechanism are
Yes
complete:
Whether independent directors diligently performed their duties
Yes
and played their due role:
Whether minority shareholders have the opportunity to fully
express their opinions and demands and whether their legal Yes
rights and interests are adequately protected:
In case of adjusting or changing the cash dividend policy,
whether the conditions and procedures involved are in Yes
compliance with applicable regulations and transparent:
The Company made profits during the reporting period and the parent company's profits distributable to shareholders was positive,
but no proposal for cash dividend distribution was put forward.
58
Applicable Not Applicable
2. Profit distribution and converting capital surplus into share capital for the reporting period
Applicable Not applicable
Bonus shares per 10 shares (share) 0
Dividend per 10 shares (RMB) (tax inclusive) 1.10
Total shares as the basis for the proposal for profit distribution
3,166,940,177.00
(share)
Cash dividends (RMB) (tax inclusive) 348,363,419.47
Cash dividends in other forms (such as share repurchase)
0.00
(RMB)
Total cash dividends (inclusive of those in other forms) (RMB) 348,363,419.47
Distributable profit (RMB) 559,764,885.53
Total cash dividends (inclusive of those in other forms) as a
62.23%
percentage of total distributed profit
Information on this cash dividend
Others
Details about the proposal for profit distribution and converting capital reserve into share capital
The profit distribution plan for 2022 is as follows: based on the total share capital (minus company shares in the Company's
repurchase account) on the date of record for the 2022 profit distribution plan, a cash dividend of RMB 1.10 (tax inclusive) per 10
shares will be distributed to the shareholders, with no bonus issue from either profit or capital reserves.
At the end of 2021, the Company reported RMB 706,488,302.65 in profits available for distribution and RMB 394,435,926.25 in
retained earnings after cash dividends. In 2022, the Company realized a net profit of RMB 183,698,843.64 and a surplus reserve
of RMB 18,369,884.36. As a result, profits available for distribution at the end of 2022 reached RMB 559,764,885.53. When the
profit distribution plan for 2022 is implemented, if the total share capital (minus shares in the Company's repurchase account) on
the date of record for the plan remains unchanged, which is 3,166,940,177, a cash dividend of RMB 1.10 (tax inclusive) will be
distributed for every 10 shares, totaling RMB 348,363,419.47. As a result, retained earnings after cash dividends will be RMB
211,401,466.06. On the other hand, if the total share capital changes due to reasons such as the conversion of convertible bonds,
share repurchases, stock incentive exercise, and the listing of new shares from refinancing before the plan is implemented, the
Company will maintain the policy of distributing RMB 0.11 (tax inclusive) per share and adjust the total cash dividends
accordingly.
XI. Company's Implementation of Stock Option Incentive Scheme and Employee Stock
Ownership Plan or Other Employee Incentive Measures
Applicable Not applicable
1. Stock incentive
Overview of the Second Stock Option Incentive Scheme:
1. On March 11, 2022, the third exercise period of the Company's Second Stock Option Incentive Scheme expired, with
4,100,000 outstanding stock options of 40 recipients. The Company would cancel the 4,100,000 stock options that were granted
and were not exercised during the third exercise period of the Second Stock Option Incentive Scheme, in accordance with the
applicable laws and regulations.
2. On April 29, 2022, the Proposal on the Cancellation of Expired, Unexercised Stock Options for the Third Exercise Period
of the Second Stock Option Incentive Scheme was deliberated and approved at the 18th meeting of the Ninth Board of Directors and
the 17th meeting of the Ninth Board of Supervisors. According to the provisions of the Second Stock Option Incentive Scheme
59
(Draft), the Board of Directors agreed to cancel the 4,100,000 expired stock options of 40 recipients unexercised during the third
exercise period. After the cancellation, the Second Stock Option Incentive Scheme will be fully implemented.
For more information, please refer to the announcements published on April 30, 2022 on the media for information disclosure
designated by the Company, including Securities Daily, Securities Times, China Securities Journal, and Shanghai Securities News,
as well as Cninfo (http://www.cninfo.com.cn).
Overview of the Third Stock Option Incentive Scheme:
1. On April 22, 2021, the Proposal on Matters Related to the Exercise in the Second Exercise Period of the Third Stock
Option Incentive Scheme was deliberated and approved at the 13th meeting of the Ninth Board of Directors and the 12th meeting of
the Ninth Board of Supervisors. A total of 17,814,000 stock options of the Third Stock Option Incentive Scheme were deemed fit
to be exercised at RMB 6.34 per share voluntarily in the second exercise period. Prior to the exercise of stock option, if the
Company has dividend distribution, capital reserve transferred to share capital, distribution of share bonus, share split, share
reduction or increase issue in stocks, etc., the exercise price of stock options will be adjusted accordingly.
2. On August 19, 2021, the 14th meeting of the Ninth Board of Directors and the 13th meeting of the Ninth Board of
Supervisors held by the Company deliberated and approved the Proposal for Adjustment of the Option Exercise Prices of Phase II
and Third Stock Option Incentive Schemes. In view of the fact that the Company's 2020 annual equity distribution was completed
on July 8, 2021, according to relevant provisions on the adjustment of the stock option exercise price of the Third Stock Option
Incentive Scheme (Draft), if the Company has capital reserve transferred to share capital, distribution of share bonus, share split,
share reduction, dividend distribution or share allotments, etc. within the validity period of the stock options, the exercise price of
stock options will be adjusted accordingly. After the implementation of this equity distribution, the exercise price of the Third
Stock Option Incentive Scheme will be adjusted from RMB 6.34 per share to RMB 6.22 per share.
3. On August 24, 2022, the 19th meeting of the Ninth Board of Directors and the 18th meeting of the Ninth Board of
Supervisors held by the Company deliberated and approved the Proposal for Adjustment of the Option Exercise Prices of the Third
Stock Option Incentive Schemes. In view of the fact that the Company's 2021 annual equity distribution was completed on July 20,
2022, according to relevant provisions on the adjustment of the stock option exercise price of the Third Stock Option Incentive
Scheme (Revised Draft), if the Company has capital reserve transferred to share capital, distribution of share bonus, share split,
share reduction, dividend distribution or share allotments, etc. within the validity period of the stock options, the exercise price of
stock options will be adjusted accordingly. After the implementation of this equity distribution, the exercise price of the Third
Stock Option Incentive Scheme will be adjusted from RMB 6.22 per share to RMB 6.12 per share.
4. On October 26, 2022, the 21st Meeting of the Ninth Board of Directors and the 19th meeting of the Ninth Board of
Supervisors held by the Company deliberated and approved the Proposal for the Adjustment of the Eligible Participants and the
Number of Options to Be Exercised under the Third Stock Option Incentive Schemes and Cancellation of Partial Stock Options
and the Proposal for Matters Relating to Option Exercise during the Third Exercise Period of the Third Stock Option Incentive
Scheme of the Company.
(1) The Company's 22 recipients resigned and were identified by the Company's Board of Directors as no longer suitable for
incentives. According to the Third Stock Option Incentive Scheme (Revised Draft), their 1,788,000 stock options in total were
canceled for the second and third exercise periods. After the adjustments, the number of recipients of the Third Stock Option
Incentive Scheme was adjusted from the original 231 to 209, and the number of locked stock options granted was adjusted from
23,752,000 to 21,964,000.
(2) The exercise conditions for the third exercise period under the Third Stock Option Incentive Scheme have been met, and
the total number of exercisable options is 21,964,000, which are exercised by individual exercise at the price of RMB 6.12 per
share. Prior to the exercise of stock option, if the Company has dividend distribution, capital reserve transferred to share capital,
distribution of share bonus, share split, share reduction or increase issue in stocks, etc., the exercise price of stock options will be
adjusted accordingly.
60
5. On December 27, 2022, the Proposal on the Cancellation of Expired, Unexercised Stock Options for the Second Exercise
Period of the Third Stock Option Incentive Scheme was deliberated and approved at the 22nd meeting of the Ninth Board of
Directors and the 20th meeting of the Ninth Board of Supervisors. The 231 recipients exercised 16,409,380 stock options, with
1,404,620 unexercised during the second exercise period of the Third Stock Option Incentive Scheme. According to the Third
Stock Option Incentive Scheme (Revised Draft), the Board of Directors agreed to cancel the 1,404,620 expired stock options. After
the completion of the cancellation, the Company's Third Stock Option Incentive Scheme will continue to be implemented in
accordance with the requirements.
6. As at December 31, 2022, when the second exercise period of the Third Stock Option Incentive Scheme expired,
16,409,380 stock options had been exercised; no stock options were exercised during the third exercise period of the Third Stock
Option Incentive Scheme because the market price was lower than the exercise price.
For more information, please refer to announcements published on 23 April 2021, 21 August 2022 25 August 2022, 27
October 2022 and 28 December 2022 on the media for information disclosure designated by the Company and Cninfo
(http://www.cninfo.com.cn).
Equity incentives granted to directors and senior management members of the Company:
Applicable Not Applicable
Appraisal mechanism and incentives for senior management members
The Company has established a sound performance assessment and incentive system. The Board of Directors of the Company
established the Remuneration & Appraisal Committee as the administrative institution for the appointment and remuneration
appraisal of the senior management members of the Company, which shall be responsible for formulating remuneration standards
and schemes for the senior management members, reviewing their performance of duties and formulating scientific and reasonable
remuneration scheme and submitting to the board for review and discussion. The senior management members currently serving in
the Company shall be subject to comprehensive performance appraisal based on their positions, the current remuneration system of
the Company, the Company's actual operating performance, individual performance, performance of duties and achievement of
responsibilities and goals, and the result of such appraisal shall serve as the basis to determine their remunerations. The Company
pays the remunerations of senior management members based on schedule. During the reporting period, the senior management
members of the Company conscientiously performed their duties in strict accordance with the Company Law, the Articles of
Association and the relevant laws and regulations, actively implemented relevant resolutions of the general meetings of
Shareholders and Board meetings, and completed various tasks of the year in a quite good way.
2. Implementation of the employee stock ownership plan
Applicable Not applicable
Information on all effective employee stock ownership plans during the reporting period
As a percentage of
Number of Total number the total share Source of funds to
Scope of employees Changes
employees of shares held capital of the listed implement the plan
company
Directors (excluding
independent directors), As at May 9, 2022, the First Employees'
supervisors, middle and Employee Stock Ownership legitimate
senior level Plan was completed, with all remuneration, self-
management personnel, 136 0 36,211,560 shares (accounting 0.00% raised funds and
key elite personnel for 1.14% of the Company's other funds obtained
(technology, marketing, total share capital) sold through by legitimate and
production, etc.) of the centralized bidding. compliant means.
Company.
Directors (excluding 134 64,789,616 As at October 12, 2022, stock 2.04% Employees'
61
independent directors), purchases were completed in the legitimate
supervisors, senior level Second Employee Stock remuneration, self-
management personnel, Ownership Plan, with a total of raised funds, and
and key elite personnel 64,789,616 shares (accounting other funds obtained
(technology, marketing, for 2.04% of the Company's by means permitted
production, etc.) of the total share capital) purchased. by laws and
Company. All the shares purchased have regulations.
entered the lock-up period.
Shareholding of directors, supervisors and senior management members in the employee stock ownership plan during the
reporting period
Number of shares held Number of shares held As a percentage of the
Name Position at the beginning of the at the end of the total share capital of
reporting period reporting period the listed company
Ma Gang Chairman & President 128,795 17,246,996 0.54%
Wang Qingbo Vice President & CFO 0 4,159,493 0.13%
Vice President &
Jin Taotao 6,104 2,462,005 0.08%
Board Secretary
Chairman of the Board
Jiao Wanjiang 18,908 1,846,504 0.06%
of Supervisors
Liu Kan Supervisor 0 155,495 0.00%
Changes in the asset management institution during the reporting period
Applicable Not applicable
On August 24, 2022, the Proposal on the Change of the Asset Manager and the Adjustment of the Transaction Price of the
Second Employee Stock Ownership Plan was deliberated and approved at the 19th meeting of the Ninth Board of Directors. In
accordance with laws and regulations and based on the realities during the implementation of the plan, the Company decided to
replace the former asset manager, Guangfa Securities Asset Management (Guangdong) Co., Ltd., with the Management
Committee of the Second Employee Stock Ownership Plan to manage the plan.
Changes in equity arising from the disposal of shares by holders during the reporting period
Applicable Not applicable
During the reporting period, the First Employee Stock Ownership Plan was completed after the lock-up period expired, with
all 36,211,560 shares (1.14% of the Company's total share capital) sold through centralized bidding from November 11, 2021, to
May 9, 2022. The actual shareholding period was consistent with the duration disclosed in the First Employee Stock Ownership
Plan (Draft). The Management Committee carried out property liquidation and distribution according to the First Employee Stock
Ownership Plan (Draft) and the relevant provisions of the asset management plan. Therefore, the equity distribution of the First
Employee Stock Ownership Plan was completed.
Exercise of shareholders' rights during the reporting period
NA
Other relevant circumstances and explanations of the employee stock ownership plan during the reporting period
Applicable Not applicable
On August 24, 2022, the Proposal on the Change of the Asset Manager and the Adjustment of the Transaction Price of the
Second Employee Stock Ownership Plan was deliberated and approved at the 19th meeting of the Ninth Board of Directors. In
accordance with laws and regulations and based on the realities during the implementation of the plan, the Company decided to
appoint the Management Committee of the Second Employee Stock Ownership Plan to manage the plan. Moreover, the Board of
62
Directors agreed to adjust the transfer price of the Second Employee Stock Ownership Plan to RMB 4.94 per share from RMB
5.04 per share after the Company's equity distribution for 2021 was completed on July 20, 2022.
Change of the members of the employee stock ownership plan management committee
Applicable Not Applicable
The financial impact of the employee stock ownership plan on the listed company during the reporting period and relevant
accounting treatment
Applicable Not applicable
The Company's Second Employee stock ownership plan was completed in 2022 through the transfer of shares in the
Company's repurchase special security account and centralized bidding in the secondary market, and 46,410,852 shares were
transferred from the Company's repurchase special security account, resulting in the decrease of capital reserve of RMB
132,175,661.99.
Termination of the employee stock ownership plan during the reporting period
Applicable Not applicable
During the reporting period, the First Employee Stock Ownership Plan was fully implemented, with the completion of
property liquidation and distribution. The gains enjoyed by the participants of this employee stock ownership plan have been
distributed in proportion to their holdings of the underlying stocks after deducting taxes and fees.
Other statements:
NA
3. Other employee incentive measures
Applicable Not Applicable
XII. Establishment and Implementation of the Internal Control System during the
Reporting Period
1. Establishment and implementation of internal control
(1) Internal control development
Infore Enviro has established and improved various rules and regulations relating to corporate governance and internal
control in accordance with the requirements of the Company Law, the Securities Law, the Basic Standard for Enterprise Internal
Control, the Rules Governing the Listing of Shares on SZSE and other statutory documents. The operations of the General Meeting
of Shareholders, the Board of Directors and the Board of Supervisors in Infore Enviro comply with the provisions of the relevant
laws, regulations, the Articles of Association of the Company, the Rules of Procedure for the General Meeting of Shareholders, the
Rules of Procedure for the Board of Directors, and the Rules of Procedure for the Board of Supervisors. Corresponding internal
management systems with respect to such material issues as financial accounting, fundraising, external investment, external
guarantee, related party transactions and information disclosure have been established in Infore Enviro to ensure the legality and
compliance of day-to-day operations and decision-making procedures concerning material matters.
(2) Internal control implementation
(a) Execution of information disclosure management policies
As verified, the Company effectively complied with the Information Disclosure Management Policy in 2022, with good
performance in information disclosure, and was not subjected to punishment by the securities regulatory authorities for violation of
rules regarding information disclosure.
63
(b) Execution of financial internal control policies
As verified, with respect to finance and accounting, the Company has established the relevant internal management system in
accordance with the requirements of the Accounting Standards for Enterprises, the Company Law and other relevant laws and
regulations, which can ensure the accuracy and reliability of the financial and accounting information and the safety and
effectiveness of the financial and accounting systems.
(c) Execution of other internal control policies
As verified, Infore Enviro complied with the provisions of the Articles of Association of the Company and the relevant rules
and regulations, performed necessary decision-making procedures, and implemented the internal control system quite well.
2. Details of material internal control deficiencies identified during the reporting period
Yes No
XIII. Management and Control of the Company over the Subsidiaries during the Report
Period
Problems in Resolution Follow-up
Integration Resolution
Company name Integration plan the measures resolution
progress progress
integration taken plan
Conducting unified control over human
resources, financial resources, performance
targets, and corporate culture to optimize
Zhejiang Yolsh resource allocation and enhance business
Electric Drive collaboration; assigning core management
Completed N/A N/A N/A N/A
Technology Co., personnel to serve as directors and senior
Ltd. management of subsidiaries to improve
management efficiency and economic benefits
and help subsidiaries achieve operational
objectives.
Assigning directors and senior management
and overseeing critical matters related to
Lianjiang operations, finance, audit, material
Greenlander New investments, legal affairs, and human Completed N/A N/A N/A N/A
Energy Co., Ltd. resources to improve management efficiency
and economic benefits and help subsidiaries
achieve operational objectives.
XIV. Self-assessment Report or Audit Report on Internal Control
1. Internal control self-assessment report
Date of full disclosure of the internal
April 25, 2023
control assessment report
Index of full disclosure of the internal For details, see the 2022 Internal Control Self-Assessment Report disclosed at
control assessment report http://www.cninfo.com.cn
The total assets of the organization
included in the assessment as a
percentage of the total assets in the 100.00%
Company's consolidated financial
statements
The revenue of the organization included 100.00%
64
in the assessment as a percentage of the
revenue in the Company's consolidated
financial statements
Deficiency identification criteria
Category Financial reports Non-financial reports
Material deficiencies:
1. Violations of national laws and
regulations, e.g., environmental pollution,
serious damage to the local ecological
environment, failure to report or disclose
information as regulations;
Material deficiencies: 2. Loss of more than 30% of middle and
1. Fraud committed by directors, senior managers and senior technical
supervisors and senior management personnel without timely replenishment,
members; affecting the normal operations of the
2. Enterprise's correction of a financial Company;
report published or reported; 3. Failure to take timely and active
3. Material misstatement during the response measures against frequent
period's financial report identified by negative media reports, which involve a
CPAs, which was not identified in the wide range of subjects, leading to a
course of the functioning of internal material negative impact on the Company;
controls; 4. Failure to address the findings of
4. Ineffective supervision over internal internal control assessments, particularly
control by the Audit Committee and material or significant deficiencies.
internal audit agency of enterprise; 5. Absence of policy control or systematic
5. Lack of post qualification or obvious failure of critical businesses;
incompetence of principal financial 6. Unreasonable decision-making
personnel; procedures of enterprise, e.g., decision-
Qualitative criteria 6. Ineffective compliance supervision and making mistakes, resulting in unsuccessful
violations of regulations that could M&A;
materially affect the reliability of financial 7. Losses suffered by the enterprise in
reports; consecutive years for reasons apart from
7. The management's failure to correct policy reasons, posing challenges to the
significant deficiency after a reasonable Company's ability to continue as a going
period of being aware of the deficiency. concern;
Significant deficiencies: 8. Lack of internal controls in subsidiaries,
1. Anti-fraud procedures and controls; leading to poor management.
2. Internal control over unconventional or Significant deficiencies:
unsystematic transactions; 1. Fraud committed by middle-level
3. Internal control over the selection and managers;
application of accounting policy with 2. Negative reports published by
reference to the generally accepted influential media in that year;
accounting standards; 3. Failure to remedy general deficiencies
4. Internal control over the financial identified in the prior year, without
reporting procedures at the end of the reasonable explanation;
reporting period. 4. Incompetency of some managers or
operators.
General deficiencies:
1. Fraud committed by general employees;
2. Failure to remedy general deficiencies
identified in the prior year, but with
reasonable explanation;
Material deficiencies: Material deficiencies:
1. The potentially misstated amount in the Direct property loss of RMB 10 million or
Quantitative criteria profit statement is greater than or equal to above or punishment by government
1% of the revenue in the consolidated authorities at the national level, officially
financial statements of the Company for disclosed with a negative effect on the
65
the most recent fiscal year or 5% of the Company's periodic reporting;
total pre-tax profit; Significant deficiencies:
2. The potentially misstated amount in the Direct property loss of between RMB 5
balance sheet is greater than or equal to million (inclusive) and RMB 10 million or
1% of the total assets in the consolidated punishment by government authorities at
financial statements of the Company for the provincial level or higher, without a
the most recent fiscal year. negative effect on the Company's periodic
Significant deficiencies: reporting;
1. The potentially misstated amount in the General deficiencies:
profit statement is greater than or equal to Direct property loss of less than RMB 5
0.5% of the Company's revenue or 3% of million or punishment by government
the total pre-tax profit in the consolidated authorities below the provincial level,
financial statements for the most recent without a negative effect on the Company's
fiscal year but less than 1% of the periodic reporting.
Company's revenue or 5% of the total pre-
tax profit in the consolidated financial
statements for the most recent fiscal year.
2. The potentially misstated amount in the
balance sheet is greater than or equal to
0.5% of the total assets in the consolidated
financial statements of the Company for
the most recent fiscal year but less than 1%
of the total assets in the consolidated
financial statements for the most recent
fiscal year.
General deficiencies:
1. The potentially misstated amount in the
profit statement is less than 0.5% of the
Company's revenue or 3% of the total pre-
tax profit in the consolidated financial
statements for the most recent fiscal year;
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
0
financial reports
Number of material deficiencies in non-
0
financial reports
Number of significant deficiencies in
0
financial reports
Number of significant deficiencies in
0
non-financial reports
2. Audit report on internal control
Applicable Not applicable
The Opinion paragraph in the audit report on internal control
Infore Enviro maintained, in all material respects, effective internal control over financial reporting as at December 31, 2022, in
accordance with the Basic Standard for Enterprise Internal Control and other applicable rules.
Disclosure status of the audit report on internal control Disclosed
Disclosure date of the full audit report on internal control April 25, 2023
Index to the full audit report on internal control PCCPAAR [2023] No. 4801
66
Opinion type of the audit report on internal control Standard unqualified opinion
Whether any material deficiency in the non-financial reports No
Whether the accounting firm has issued the audit report with modified opinion on the Company's internal control
Yes No
Whether the auditor's report on the Company's internal control is consistent with the self-assessment report issued by the
Company's Board of Directors
Yes No
XV. Rectification of Self-Detected Problems through the Special Campaign to Improve
Governance of Listed Companies
According to the system of the CSRC for filling and reporting the special self-examination list for the governance of listed
companies, the Company conducted self-examination work during the special campaign based on the principle of seeking truth
from facts and in strict accordance with the Company Law, the Securities Law, Guidelines No. 1 of Shenzhen Stock Exchange for
Self-regulation of Listed Companies—Standardized Operation of Companies Listed on the Main Board and other relevant laws
and regulations as well as its internal rules and regulations, carefully sorted out the issues and filled in the forms. Through this
self-examination, the Company believes that its corporate governance complies with the requirements of the Company Law, the
Securities Law, Guidelines No. 1 of Shenzhen Stock Exchange for Self-regulation of Listed Companies—Standardized Operation
of Companies Listed on the Main Board and other laws and regulations, and that its corporate governance structure is relatively
sound, the operations are standardized, and there is no material problems or mistakes. The Company shall continue to enhance
management in the following areas:
1. Further refining internal control policies
The Company shall systemically sort out and improve its corporate governance and internal control in accordance with the
latest laws and regulations and combined with the requirements of the regulatory authorities and its self-examination result, further
perfect its internal control system and implement the corresponding examination and approval procedure on the revised and
improved relevant systems.
2. Further leveraging the roles of special committees under the Board of Directors
During the reporting period, the Company maintained special committees in strict accordance with the relevant laws and
regulations, and the special committees conducted on-site inspection and supervised and guided the Company's operation and
management and the execution of resolutions of the Board of Directors. In the future, the Company shall continue to create
conditions for members of the special committees to familiarize themselves with the business of the Company, facilitate them to
play their roles and provide advice and suggestions on the Company's development planning, operation and management, risk
control, selection and engagement of senior management members and back-up personnel, performance appraisal of senior
management members, internal control and internal audit, etc., to further improve the scientific decision-making capacity and risk
prevention capacity of the Company.
3. Further improving the quality of information disclosure
The Company shall optimize its policy system in strict accordance with the Administration of Information Disclosure Affairs
and in combination with its own situation. In daily information disclosure management, the Company shall conduct information
disclosure in a concise and easy-to-understand manner on the premise that the Company, its shareholders and other information
disclosure obligors shall ensure the authenticity, accuracy, completeness, timeliness and fairness of information disclosure. The
relevant personnel of information disclosure shall treat the information disclosure in a diligent manner, prevent mistakes and
ensure the quality of information disclosure and promote the level of information disclosure. During the reporting period, the
Company and relevant personnel completed the information disclosure work in strict accordance with the requirements of laws
and regulations.
67
4. Further increasing the training in laws and regulations
By optimizing the internal training program and intensifying training, the Company helped its staff better understand laws,
regulations, and normative documents such as the Securities Law, the Rules Governing the Listing of Shares on SZSE, and the
Guidelines No. 1 of Shenzhen Stock Exchange for Self-regulation of Listed Companies—Standardized Operation of Companies
Listed on the Main Board. , and continuously strengthen relevant study, strictly observe relevant provisions, manage its operations
in a prudent manner and eradicate violations.
68
Part V Environmental and Social Responsibility
I. Material Environmental Issues
Whether the listed company and its subsidiaries are major pollutant emitters announced by national environmental protection
authorities
Yes No
Environmental protection policies and industry standards
The Company strictly abides by the laws, regulations, and emission standards, such as the Environmental Protection Law of
the People's Republic of China, Law of the People's Republic of China on Prevention and Control of Water Pollution, Integrated
Wastewater Discharge Standard, and Law of the People's Republic of China on the Prevention and Control of Air Pollution. It has
consistently improved its management policies and optimized treatment facilities and technologies to minimize the discharge of
pollutants.
Environmental protection administrative licensing
The Company has been running all its key pollutant discharge projects according to laws and regulations for many years.
During the construction period, environmental impact assessment was carried out for these projects in accordance with relevant
laws and regulations such as 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 environmental impact assessment documents were approved by
environmental authorities. Besides, the Company obtained approval from environmental authorities before pilot production,
organized environmental protection acceptance inspection for the completed project during pilot production, and simultaneously
designed, constructed and put into use the supporting environmental protection facilities and the main works.
Industry discharge standards and discharge of pollutants in production and operating activities
Pollutant
Types of main Names of main Total
Number of Layout of Discharge discharge Total
Name of company or pollutants and pollutants and Way of approved Excessive
discharge discharge concentration standards discharge
subsidiary characteristic characteristic discharge discharge discharge
outlets outlets /intensity implement volume
pollutants pollutants volume
ed
Foshan Shunde
Huaqingyuan Water
Environmental
Protection Co., Ltd.
(Phases I and II GB
Beijiang River
sewage stations by Continuous 18918-
Wastewater COD 1 trunk stream 10.5mg/L 423.83t 1606t/a N/A
the gate), Foshan discharge 2002,
waterway
Shunde Yuanrun Class 1A
Water Environmental
Protection Co., Ltd.
(Phase III sewage
station by the gate)
Foshan Shunde
Huaqingyuan Water
Environmental
Protection Co., Ltd. GB
Beijiang River
(Phases I and II Ammonia Continuous 18918-
Wastewater 1 trunk stream 0.52mg/L 20.99t 200.75t/a N/A
sewage stations by nitrogen discharge 2002,
waterway
the gate), Foshan Class 1A
Shunde Yuanrun
Water Environmental
Protection Co., Ltd.
69
(Phase III sewage
station by the gate)
Foshan Shunde
Huaqingyuan Water
Environmental
Protection Co., Ltd.
(Phases I and II GB
Beijiang River
sewage stations by Total Continuous 18918-
Wastewater 1 trunk stream 0.25mg/L 10.09t 20.075t/a N/A
the gate), Foshan phosphorus discharge 2002,
waterway
Shunde Yuanrun Class 1A
Water Environmental
Protection Co., Ltd.
(Phase III sewage
station by the gate)
Foshan Shunde
Huaqingyuan Water
Environmental
Protection Co., Ltd.
(Phases I and II GB
Beijiang River
sewage stations by Continuous 18918-
Wastewater Total nitrogen 1 trunk stream 6.15mg/L 248.24t 602.25t/a N/A
the gate), Foshan discharge 2002,
waterway
Shunde Yuanrun Class 1A
Water Environmental
Protection Co., Ltd.
(Phase III sewage
station by the gate)
Funan Green
Oriental
80m North side of 4.199mg/N GB18485
Environmental Waste gas Smoke 1 2.602t 14.6t/a N/A
chimney the main plant m -2014
Protection Energy
Co., Ltd.
Funan Green
Oriental
80m North side of 41.814mg/ GB18485
Environmental Waste gas SO2 1 26.548t 89.28t/a N/A
chimney the main plant Nm -2014
Protection Energy
Co., Ltd.
Funan Green
Oriental
80m North side of 150.85mg/ GB18485
Environmental Waste gas NOx 1 94.538t 96.72t/a N/A
chimney the main plant Nm -2014
Protection Energy
Co., Ltd.
Funan Green
Oriental
80m North side of 38.343mg/ GB18485
Environmental Waste gas HCl 1 23.831t / N/A
chimney the main plant Nm -2014
Protection Energy
Co., Ltd.
Funan Green
Oriental
80m North side of 14.684mg/ GB18485
Environmental Waste gas CO 1 9.174t / N/A
chimney the main plant Nm -2014
Protection Energy
Co., Ltd.
Funan Green
Oriental
80m North side of 0.0146mg/ GB18485
Environmental Waste gas Pb 1 Nm / / N/A
chimney the main plant -2014
Protection Energy
Co., Ltd.
0.0000945
Funan Green Waste gas Cd 80m 1 North side of mg/Nm GB18485 / / N/A
70
Oriental chimney the main plant -2014
Environmental
Protection Energy
Co., Ltd.
Funan Green
Oriental
80m North side of 0.0048mg/N GB18485
Environmental Waste gas Hg 1 m / / N/A
chimney the main plant -2014
Protection Energy
Co., Ltd.
Funan Green
Oriental
80m North side of 0.057ng- GB18485
Environmental Waste gas Dioxins 1 TEQ/m3 / / N/A
chimney the main plant -2014
Protection Energy
Co., Ltd.
Shouxian
80m West side of GB18485
Greenlander New Waste gas Smoke 1 2.8mg/Nm 1.55t 12t/a N/A
chimney the main plant -2014
Energy Co., Ltd.
Shouxian
80m West side of GB18485
Greenlander New Waste gas SO2 1 29.0mg/Nm 23.7t 70.8t/a N/A
chimney the main plant -2014
Energy Co., Ltd.
Shouxian
80m West side of 184.3mg/N GB18485
Greenlander New Waste gas NOx 1 138.27t 144t/a N/A
chimney the main plant m -2014
Energy Co., Ltd.
Shouxian
80m West side of GB18485
Greenlander New Waste gas HCl 1 44.1mg/Nm 32.46t / N/A
chimney the main plant -2014
Energy Co., Ltd.
Shouxian
80m West side of GB18485
Greenlander New Waste gas CO 1 3.4mg/Nm 4.03t / N/A
chimney the main plant -2014
Energy Co., Ltd.
Shouxian
80m West side of GB18485
Greenlander New Waste gas Pb 1 0.029mg/m3 / / N/A
chimney the main plant -2014
Energy Co., Ltd.
Shouxian
80m West side of 0.00096mg/ GB18485
Greenlander New Waste gas Cd 1 m3 / / N/A
chimney the main plant -2014
Energy Co., Ltd.
Shouxian
80m West side of 0.000043mg GB18485
Greenlander New Waste gas Hg 1 /Nm / / N/A
chimney the main plant -2014
Energy Co., Ltd.
Shouxian
80m West side of 0.038ngTEQ GB18485
Greenlander New Waste gas Dioxins 1 /m3 / / N/A
chimney the main plant -2014
Energy Co., Ltd.
Lianjiang
80m East side of GB18485
Greenlander New Waste gas Smoke 1 2.8mg/Nm 0.885t 6.78t/a N/A
chimney the main plant -2014
Energy Co., Ltd.
Lianjiang
80m East side of GB18485
Greenlander New Waste gas SO2 1 29.0mg/Nm 14.689t 26.06t/a N/A
chimney the main plant -2014
Energy Co., Ltd.
Lianjiang
80m East side of 184.3mg/N GB18485
Greenlander New Waste gas NOx 1 101.252t 104t/a N/A
chimney the main plant m -2014
Energy Co., Ltd.
Lianjiang
80m East side of GB18485
Greenlander New Waste gas HCI 1 44.1mg/Nm 25.205t / N/A
chimney the main plant -2014
Energy Co., Ltd.
Lianjiang
80m East side of GB18485
Greenlander New Waste gas CO 1 3.4mg/Nm 21.473t / N/A
chimney the main plant -2014
Energy Co., Ltd.
Lianjiang Waste gas Pb 80m 1 East side of 0.029mg/m3 GB18485 0.885t / N/A
71
Greenlander New chimney the main plant -2014
Energy Co., Ltd.
Lianjiang
80m East side of 0.00096mg/ GB18485
Greenlander New Waste gas Cd 1 m3 / / N/A
chimney the main plant -2014
Energy Co., Ltd.
Lianjiang
80m East side of 0.000043mg GB18485
Greenlander New Waste gas Hg 1 /Nm / / N/A
chimney the main plant -2014
Energy Co., Ltd.
Lianjiang
80m East side of 0.038ngTEQ GB18485
Greenlander New Waste gas Dioxins 1 /m3 / / N/A
chimney the main plant -2014
Energy Co., Ltd.
Xiantao Green
Oriental
Environmental 80m West side of GB18485
Waste gas Smoke 1 0.22mg/m 0.2t / N/A
Protection Power chimney the main plant -2014
Co., Ltd. (1#
furnace)
Xiantao Green
Oriental
Environmental 80m West side of GB18485
Waste gas SO2 1 29.36mg/m 29.3t 58t/a N/A
Protection Power chimney the main plant -2014
Co., Ltd. (1#
furnace)
Xiantao Green
Oriental
Environmental 80m West side of GB18485
Waste gas NOx 1 189.1mg/m 121.4t 148.85t/a N/A
Protection Power chimney the main plant -2014
Co., Ltd. (1#
furnace)
Xiantao Green
Oriental
Environmental 80m West side of GB18485
Waste gas HCl 1 22.5mg/m 15.4t / N/A
Protection Power chimney the main plant -2014
Co., Ltd. (1#
furnace)
Xiantao Green
Oriental
Environmental 80m West side of GB18485
Waste gas CO 1 5.6mg/m 3.56t / N/A
Protection Power chimney the main plant -2014
Co., Ltd. (1#
furnace)
Xiantao Green
Oriental
Environmental 80m West side of 0.0029mg/m GB18485
Waste gas Pb 1 / / N/A
Protection Power chimney the main plant -2014
Co., Ltd. (1#
furnace)
Xiantao Green
Oriental
Environmental 80m West side of 0.00013mg/ GB18485
Waste gas Cd 1 / / N/A
Protection Power chimney the main plant m -2014
Co., Ltd. (1#
furnace)
Xiantao Green
Oriental 80m West side of GB18485
Waste gas Hg 1 ND / / N/A
Environmental chimney the main plant -2014
Protection Power
72
Co., Ltd. (1#
furnace)
Xiantao Green
Oriental
Environmental 80m West side of 0.0012ngTE GB18485
Waste gas Dioxins 1 / / N/A
Protection Power chimney the main plant Q/m3 -2014
Co., Ltd. (1#
furnace)
Xiantao Green
Oriental
Environmental 80m West side of GB18485
Waste gas Smoke 1 1.4mg/m 0.6t / N/A
Protection Power chimney the main plant -2014
Co., Ltd. (2#
furnace)
Xiantao Green
Oriental
Environmental 80m West side of GB18485
Waste gas SO2 1 21.5mg/m 10.2t 58t/a N/A
Protection Power chimney the main plant -2014
Co., Ltd. (2#
furnace)
Xiantao Green
Oriental
Environmental 80m West side of GB18485
Waste gas NOx 1 186.5mg/m 86.7t 148.85t/a N/A
Protection Power chimney the main plant -2014
Co., Ltd. (2#
furnace)
Xiantao Green
Oriental
Environmental 80m West side of GB18485
Waste gas HCI 1 22.1mg/m 10.33t / N/A
Protection Power chimney the main plant -2014
Co., Ltd. (2#
furnace)
Xiantao Green
Oriental
Environmental 80m West side of GB18485
Waste gas CO 1 0.87mg/m 1.99t / N/A
Protection Power chimney the main plant -2014
Co., Ltd. (2#
furnace)
Xiantao Green
Oriental
Environmental 80m West side of 0.0032mg/m GB18485
Waste gas Pb 1 / / N/A
Protection Power chimney the main plant -2014
Co., Ltd. (2#
furnace)
Xiantao Green
Oriental
Environmental 80m West side of 0.00014mg/ GB18485
Waste gas Cd 1 / / N/A
Protection Power chimney the main plant m -2014
Co., Ltd. (2#
furnace)
Xiantao Green
Oriental
Environmental 80m West side of GB18485
Waste gas Hg 1 ND / / N/A
Protection Power chimney the main plant -2014
Co., Ltd. (2#
furnace)
0.002ngTEQ
Xiantao Green Waste gas Dioxins 80m 1 West side of GB18485 / / N/A
/m3
73
Oriental chimney the main plant -2014
Environmental
Protection Power
Co., Ltd. (2#
furnace)
Poyang Greenlander
80m North side of 0.7655 GB18485
Renewable Energy Waste gas Smoke 1 0.517t 12t/a N/A
chimney the main plant mg/Nm3 -2014
Co., Ltd.
Poyang Greenlander North side of
80m 40.0409mg/ GB18485
Renewable Energy Waste gas SO2 1 the main plant 26.413t 80t/a N/A
chimney Nm3 -2014
Co., Ltd.
Poyang Greenlander North side of
80m 223.9976mg GB18485
Renewable Energy Waste gas NOx 1 the main plant 148.984t 250t/a N/A
chimney /Nm3 -2014
Co., Ltd.
Poyang Greenlander North side of
80m 38.3231mg/ GB18485
Renewable Energy Waste gas HCI 1 the main plant 25.622t / N/A
chimney Nm3 -2014
Co., Ltd.
Poyang Greenlander North side of
80m 2.40mg/Nm GB18485
Renewable Energy Waste gas CO 1 the main plant 1.452t / N/A
chimney 3 -2014
Co., Ltd.
Poyang Greenlander North side of
80m 0.01mg/Nm GB18485
Renewable Energy Waste gas Pb 1 the main plant 3 / / N/A
chimney -2014
Co., Ltd.
Poyang Greenlander North side of
80m 0.00015mg/ GB18485
Renewable Energy Waste gas Cd 1 the main plant Nm3 / / N/A
chimney -2014
Co., Ltd.
Poyang Greenlander North side of
80m 0.000035mg GB18485
Renewable Energy Waste gas Hg 1 the main plant /Nm3 / / N/A
chimney -2014
Co., Ltd.
Poyang Greenlander North side of
80m GB18485
Renewable Energy Waste gas Dioxins 1 the main plant 0.063ng/m3 / / N/A
chimney -2014
Co., Ltd.
Biyang Fenghe New
80m South side of 1.658mg/N GB18485
Energy Power Co., Waste gas Smoke 1 0.585t 10.95t/a N/A
chimney the main plant m3 -2014
Ltd.
Biyang Fenghe New
80m South side of 42.092mg/N GB18485
Energy Power Co., Waste gas SO2 1 29.186t 31.68t/a N/A
chimney the main plant m3 -2014
Ltd.
Biyang Fenghe New
80m South side of 193.750mg/ GB18485
Energy Power Co., Waste gas NOx 1 131.695t 159.72t/a N/A
chimney the main plant Nm3 -2014
Ltd.
Biyang Fenghe New
80m South side of 30.925mg/N GB18485
Energy Power Co., Waste gas HCl 1 20.758t / N/A
chimney the main plant m3 -2014
Ltd.
Biyang Fenghe New
80m South side of 5.392mg/N GB18485
Energy Power Co., Waste gas CO 1 2.161t / N/A
chimney the main plant m3 -2014
Ltd.
Biyang Fenghe New
80m South side of 0.059mg/N GB18485
Energy Power Co., Waste gas Pb 1 / / N/A
chimney the main plant m3 -2014
Ltd.
Biyang Fenghe New
80m South side of 0.0002mg/N GB18485
Energy Power Co., Waste gas Cd 1 / / N/A
chimney the main plant m3 -2014
Ltd.
Biyang Fenghe New
80m South side of 0.004mg/N GB18485
Energy Power Co., Waste gas Hg 1 / / N/A
chimney the main plant m3 -2014
Ltd.
Biyang Fenghe New Waste gas Dioxins 80m 1 South side of 0.0058ng/m GB18485 / / N/A
74
Energy Power Co., chimney the main plant 3 -2014
Ltd.
Liling Zhaoyang Table 2 in
Lujiang River
Intermittent GB
Environmental Wastewater COD trunk stream 6.66mg/L 7.944 t / N/A
discharge 1 16889-
waterway
Protection Co., Ltd. 2008
Liling Zhaoyang Table 2 in
Ammonia Lujiang River
Intermittent GB
Environmental Wastewater trunk stream 7.135mg/L 1.986 t / N/A
nitrogen discharge 1 16889-
waterway
Protection Co., Ltd. 2008
Discharge
outlets of
kitchen waste
and sludge
Ammonia: Ammonia
were set at the
Xiantao Yinghe Ammonia and 1.5 mg/Nm : 1.031 t
end of the GB14554
Environmental Waste gas hydrogen Centralized 2 Hydrogen Hydrogen / N/A
deodorization -93
Protection Co., Ltd. sulfide sulfide: 0.06 sulfide:
system, and
mg/Nm 0.04012 t
waste gas was
discharged
through the
chimney
Discharge
outlets of
kitchen biogas
combustion Smoke: 20 Smoke: Smoke:
were set at the mg/Nm3. 0.0496 t 0.241 t;
Xiantao Yinghe
Smoke, SO2 end of the SO2: 50 GB13271 SO2: SO2:
Environmental Waste gas Centralized 1 N/A
and NOX combustion mg/Nm3 -2014 0.0718 t 0.467 t;
Protection Co., Ltd.
system, and NOX: 200 NOX: NOX:
waste gas was mg/Nm3 0.7218 t 1.809 t
discharged
through the
chimney
Sewage
discharge
outlets were
set at the end
of the sewage
treatment COD: COD: COD:4.2
Xiantao Yinghe COD and facility, and 500mg/L 2.1376 t 627t;
GB8978-
Environmental Wastewater ammonia Centralized 1 sewage was Ammonia Ammonia Ammonia N/A
1996
Protection Co., Ltd. nitrogen discharged to nitrogen: 45 nitrogen: nitrogen:
the sewage mg/L 0.1131 t 0.427 t
plant in the
west of the
city after
centralized
treatment
Eastern Emission
exhaust outlet Standard
of waste gas of
from paint Volatile
Changsha Zoomlion
drying for 0.03905 Organic
Environmental Waste gas Benzene Planned 2 0.038624t / N/A
whole-vehicle mg/m Compoun
Industry Co., Ltd.
coating ds and Ni
(longitude for
112° 50' Surface
14.28", Coating
75
latitude 28° (Automob
13' 59.99") / ile
Western Manufact
exhaust outlet uring and
of waste gas Repair
from paint Industry)
drying for (DB43/13
whole-vehicle 56-2017);
coating 1
(longitude mg/m
112° 50'
12.30",
latitude 28°
13' 59.99")
Eastern
exhaust outlet
of waste gas
Emission
from paint
Standard
drying for
of
whole-vehicle
Volatile
coating
Organic
(longitude
Compoun
112° 50'
ds and Ni
14.28",
for
latitude 28°
Changsha Zoomlion Surface
13' 59.99") / 0.0514175
Environmental Waste gas Toluene Planned 2 Coating 0.057679t / N/A
Western mg/m
Industry Co., Ltd. (Automob
exhaust outlet
ile
of waste gas
Manufact
from paint
uring and
drying for
Repair
whole-vehicle
Industry)
coating
(DB43/13
(longitude
56-2017);
112° 50'
3 mg/m
12.30",
latitude 28°
13' 59.99")
Eastern
Emission
exhaust outlet
Standard
of waste gas
of
from paint
Volatile
drying for
Organic
whole-vehicle
Compoun
coating
ds and Ni
(longitude
for
112° 50'
Changsha Zoomlion Surface
14.28", 0.300981
Environmental Waste gas Xylene Planned 2 Coating 0.27389t / N/A
latitude 28° mg/m
Industry Co., Ltd. (Automob
13' 59.99") /
ile
Western
Manufact
exhaust outlet
uring and
of waste gas
Repair
from paint
Industry)
drying for
(DB43/13
whole-vehicle
56-2017);
coating
17 mg/m
(longitude
76
112° 50'
12.30",
latitude 28°
13' 59.99")
Eastern
exhaust outlet
of waste gas
Emission
from paint
Standard
drying for
of
whole-vehicle
Volatile
coating
Organic
(longitude
Compoun
112° 50'
ds and Ni
14.28",
for
latitude 28°
Changsha Zoomlion Surface
Non-methane 13' 59.99") / 1.774702
Environmental Waste gas Planned 2 Coating 1.770279t 424.83t/a N/A
hydrocarbons Western mg/m
Industry Co., Ltd. (Automob
exhaust outlet
ile
of waste gas
Manufact
from paint
uring and
drying for
Repair
whole-vehicle
Industry)
coating
(DB43/13
(longitude
56-2017);
112° 50'
40 mg/m
12.30",
latitude 28°
13' 59.99")
Standard
for
Pollution
Control
Chongqing on the
Longitude
Tongliang Fenglan Landfill
Ammonia Intermittent 106° 2' 26.20"
Environmental Wastewater 1 8.86mg/L Site of 0.9746t / N/A
nitrogen discharge Latitude 29°
Protection Municipal
56' 4.16"
Technology Co., Ltd. Solid
Waste
(GB1688
9-2008);
25 mg/L
Standard
for
Pollution
Control
Chongqing on the
Longitude
Tongliang Fenglan Landfill
Intermittent 106° 2' 26.20"
Environmental Wastewater COD 1 9.81mg/L Site of 0.9989t / N/A
discharge Latitude 29°
Protection Municipal
56' 4.16"
Technology Co., Ltd. Solid
Waste
(GB1688
9-2008);
100 mg/L
Pollutant treatment
77
The Company values environmental protection and has established a management division to coordinate its safety and
environmental protection. Safety and environmental protection departments equipped with management personnel have also been
set up across key business segments. In recent years, the Company and its subsidiaries have consistently strengthened
environmental protection policies and strictly regulated the operating procedures and job responsibilities of environmental
protection facilities to ensure proper operation.
Environmental self-monitoring plan
The Company developed the 2022 Environmental Self-Monitoring Plan for each of its key pollutant-discharging projects in
accordance with environmental impact assessment requirements and relevant laws and regulations, and filed them with local
ecological and environmental protection authorities. It also engaged a professional third-party inspection institution to carry out
regular environmental monitoring of the pollutants discharged by the projects.
Contingency plan for environmental emergencies
The Company engaged 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 2022, 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.
Investment in environmental governance and protection payment of environmental protection taxes
The Company's commitment to green development and environmental protection underpins its sustained efforts in clean
production, energy conservation, consumption reduction, emission reduction, and efficiency improvement. By incorporating its
environmental protection philosophy into daily management, the Company strives to become a resource-conserving and
environmentally friendly business. In 2022, it invested RMB 20,830,700 in environmental protection and paid RMB 50,100 in
environmental protection taxes in accordance with laws and regulations.
Measures adopted during the reporting period to reduce carbon emissions and their effects
Applicable Not applicable
The Company made rational use of waste resources and effectively reduced environmental carbon emissions through
environmental protection industrial modes such as domestic waste incineration for power generation, kitchen waste resource
utilization and sewage treatment. In terms of the project of domestic waste incineration for power generation, the greenhouse gas
emission reduction is about 0.78-1.32kg per kilowatt-hour, and 0.36TCO2e per ton of waste, with sound emission reduction effect.
Administrative penalties for environmental issues during the reporting period
Impact on the production
Name of company
Reason Violation Penalty and operation of the listed Rectification measures
or subsidiary
company
1. Carried out legal and
regulatory training and
exams regarding garbage
transportation across
Article 49(2) of the
RMB 50,000 on project companies;
Law of the People's
Huaibei 2. Transported garbage to
Huaibei Zhongfeng Republic of China There is no material
Zhongfeng qualified landfills in strict
Urban Non-compliant on Prevention and impact on the production
Urban accordance with laws and
Environmental operation Control of and operation of the listed
Environmental regulations; kept
Service Co., Ltd. Environmental company.
Service Co., transportation records
Pollution by Solid
Ltd. with the signatures of
Waste
each person in charge of
garbage transportation;
carried out inspections
from time to time.
78
1. Released and organized
the implementation of the
Management Policy for
Environmental Pollution
Control of Sanitation
Projects to specify the
Fengxian Zhongying Violation of Article
management standards
Urban 20 of Urban There is no material
Administrative for environmental
Environmental Non-compliant Drainage and impact on the production
penalties of protection of sanitation
Sanitation operation Wastewater and operation of the listed
RMB 100,000 projects;
Management Co., Treatment company.
2. Checked the
Ltd. Regulations
implementation of the
aforesaid policy across
projects during the safety,
health, and environmental
assessment in the second
quarter.
Zhaoqing Duanzhou
District Zhongying Violation of Article
RMB 6,000 and
Urban 21(3) of the There is no material Provided pre-employment
correction
Environmental Non-compliant Measures for the impact on the production training and strictly
before
Management Co., operation Administration of and operation of the listed followed work
September 8,
Ltd. (the actual Municipal Domestic company. requirements
2022
punished subjects Garbage
were individuals)
Improved diversion of
Violation of Article
rainwater and sewage,
28(4) of the There is no material
Liling Zhaoyang inspected and repaired
Non-compliant Measures for the impact on the production
Environmental RMB 50,000 pile surface, conducted
operation Administration of and operation of the listed
Protection Co., Ltd. temporary and daily
Municipal Domestic company.
cover to reduce rainwater
Garbage
infiltration.
Violation of Item 2
of Article 28 of the There is no material Strengthened the
Liling Zhaoyang
Non-compliant Measures for the impact on the production inspection of routine
Environmental RMB 99,000
operation Administration of and operation of the listed equipment to prevent
Protection Co., Ltd.
Municipal Domestic company. leakage.
Garbage
Violation of Article
42(4) of
1. Project companies
Environmental
There is no material rectified their ways of
Liling Zhaoyang Protection Law and Administrative
Non-compliant impact on the production treatment;
Environmental Articles 10 and 39 penalties of
operation and operation of the listed 2. The Company
Protection Co., Ltd. of Law on RMB 750,000
company. conducted inspections
Prevention and
from time to time.
Control of Water
Pollution
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
NA
79
II. Corporate Social Responsibility
For details, please refer to the 2022 Corporate Social Responsibility Report disclosed at Cninfo (www.cninfo.com.cn).
III. Performance in Consolidating Achievements of Poverty Alleviation and Promoting
Rural Revitalization
The Company donated RMB 437,300 to poverty alleviation endeavors during the reporting period.
80
Part VI Significant Events
I. Performance of undertakings
1. Undertakings of the Company's de facto controller, shareholders, related parties, and acquirer, as well
as the Company and other commitment makers fulfilled during the reporting period or ongoing at the
period-end
Applicable Not applicable
Term of Fulfillment of
Undertaking Party Type Content Date
undertakings undertakings
Undertaking on not I have no plan to relinquish the It is being properly
De facto
to relinquish the control of the listed company within January fulfilled without
controller: He 60 months
control of the listed 60 months from the date of 3, 2019 breach of such
Jianfeng
company completion of this transaction. undertaking.
1. The shares in the listed company
acquired from this transaction shall
not be transferred within 36 months
from the closing date of issuance. 2.
Within 6 months from the completion
of this transaction, in case the closing
The undertaking has
Ningbo Infore price of the listed company's stock is
been fulfilled and
Asset Undertaking on lower than its issue price for 20 January
42 months strictly observed by
Management trading restrictions consecutive trading days, or the 3, 2019
the undertaking
Co., Ltd. closing price by the end of the sixth
parties.
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
Undertakings for at least 6 months.
made in asset Counterparties The undertaking has
The shares in the listed company
restructuring Ningbo Yingtai, been fulfilled and
Undertaking on acquired from this transaction shall January
Ningbo 36 months strictly observed by
trading restrictions not be transferred within 36 months 3, 2019
Zhongfeng, the undertaking
from the closing date of issuance.
Ningbo Liantai parties.
Undertaking to
De facto avoid horizontal
controllers He competition, Undertaking to avoid horizontal It is being properly
Jianfeng, regulate and reduce competition, regulate and reduce August fulfilled without
Indefinitely
Ningbo Infore, related party related party transactions, and 15, 2018 breach of such
and Infore transactions, and independence of listed companies undertaking.
Group independence of
listed companies
Ningbo Infore,
Hongchuang Undertaking to
Investment, avoid horizontal It is being properly
Undertaking to avoid horizontal
Zoomlion, competition, and August fulfilled without
competition, and regulate and reduce Indefinitely
Ningbo Yingtai, regulate and reduce 15, 2018 breach of such
related party transactions
Ningbo related party undertaking.
Zhongfeng, transactions
Ningbo Liantai
81
Not fulfilled
properly. The
audited net profit
(net profit is the
lower of before or
after deducting non-
recurring profit or
loss) for the period
The accumulative total net profit
from 2016 to 2019
recorded by Lianjiang Greenlander
is RMB 2,156,500,
New Energy Co., Ltd, Xiantao Green
RMB -24,424,500,
Oriental Environmental Protection
Greenlander RMB -19,192,800,
Power Co., Ltd., Funan Green
Investment and RMB -625,700
Undertaking related Oriental Environmental Energy Co., October
Holding Co., 48 months respectively; and the
to performance Ltd.and Shouxian Greenlander New 14, 2015
Ltd. and Zheng accumulated net
Energy Co., Ltd. from 2016 to 2019
Weixian profit is RMB -
shall not be less than RMB 120
42,086,600 which is
million (net profit is subject to the
RMB 162,086,600
lower after deducting non-recurring
less than the
profit or loss).
performance
commitment,
indicating a failure
to achieve the
commitment in
respect of the net
profit for 2016 -
2019.
1. From 2016 to 2019, Green Oriental
Company signed a new BOT
Agreement on Waste Incineration
Not fulfilled
Power Generation (subject to the
properly. The newly
signing of franchise agreement), with
signed projects by
an agreed daily disposal capacity of
Green Oriental
no less than 6,500 tons (the daily
Greenlander Company from
disposal capacity of a single project
Investment 2016 to 2019 totaled
shall be no less than 500 tons, and at October
Holding Co., Project undertakings 48 months 1,400 tons, 5,100
least one shall be more than 2000 14, 2015
Ltd. and Zheng tons less than the
tons). 2. Jiujiang Company must start
Weixian project undertaking.
construction and obtain approval
The project in
before 31 December 2020. If it fails
Jiujian has not
to start construction or the
commenced
construction is recovered by the
construction.
government, it shall compensate the
listed company at a consideration of
no less than RMB5 million.
Whether the
undertakings were No
fulfilled on time
The main cause is that the project construction progress was slower than expected.
If the undertaking
On July 18, 2022, the High People's Court of Guangdong Province ruled that Greenlander Investment Holding Co., Ltd. and
is overdue, the
Zheng Weixian shall pay the Company RMB 113,460,600 for the unfulfilled performance commitment and supported the
specific reasons
Company to enjoy the priority of compensation within RMB 200 million for the 30% of equity interest in Shenzhen Greenland
for not fulfilling it
Environmental Protection Co., Ltd. held by the Greenlander Investment Holding Co., Ltd. As Greenlander Investment Holding
and the next work
Co., Ltd. and Zheng Weixian have not carried out the effective judgment, Infore Environment Technology Group Co., Ltd. has
plan shall be
applied to the Intermediate People's Court of Foshan City, Guangdong Province for compulsory enforcement, and received the
elaborated
notice of acceptance of the enforcement case numbered (2022) Yue 06 Zhi 1500 on August 4, 2022.
82
2. Where any earnings forecast was made for any of the Company's assets or projects and the reporting
period is still within the forecast period, the Company shall explain whether the performance of the asset
or project reaches the earnings forecast and why
Applicable Not Applicable
II. Occupation of the Company's Capital by the Controlling Shareholder or Other Related
Parties for Non-Operating Purposes
Applicable Not Applicable
No such cases during the reporting period.
III. Illegal Provision of Guarantees for External Parties
Applicable Not Applicable
No such cases during the reporting period.
IV. Explanations Given by the Board of Directors Regarding the "Modified Audit Opinion"
for the Latest Period
Applicable Not Applicable
V. Explanation of the Board of Directors, the Board of Supervisors, and Independent
Directors (If Any) Regarding the "Modified Audit Opinion" for the Reporting Period
Applicable Not Applicable
VI. Reason for Changes in Accounting Policy, Accounting Estimates or Corrections of
Material Accounting Errors as Compared to the Financial Report for the Prior Year
Applicable Not Applicable
1. Starting from January 1, 2022, the Company has adopted the regulations about accounting for sales of products or by-
products produced by fixed assets before intended use or during the R&D process, as stipulated in the Interpretation of China
Accounting Standards for Business Enterprises No. 15 issued by the MOF, and applied these regulations retrospectively to the
sales of trial operation that occurred between the beginning of the earliest period presented in the financial statements and January
1, 2022. Details are set out below:
Financial statement items Dec. 31, 2021/2021 (before Dec. 31, 2021/ 2021 (after
Amounts affected
significantly affected retrospective adjustment) retrospective adjustment)
Items of balance sheet as at
December 31, 2021
Intangible assets 5,319,721,844.23 30,874,024.17 5,350,595,868.40
Minority interests 350,671,301.45 6,549,735.93 357,221,037.38
Retained profits 3,850,610,683.45 24,324,288.24 3,874,934,971.69
Items of income statement of 2021
Operating revenue 11,813,537,444.48 52,754,166.97 11,866,291,611.45
Operating cost 9,210,318,426.37 21,880,142.80 9,232,198,569.17
83
2. Starting from January 1, 2022, the Company has adopted the regulations about judgment on onerous contracts in the
Interpretation of China Accounting Standards for Business Enterprises No. 15 issued by the MOF, 2022. This change in
accounting policy has no impact on the Company's financial statements.
3. Starting from November 30, 2022, the Company has adopted the regulations about accounting for income tax
consequences of dividends on a financial instrument classified by the issuer as an equity instrument in the Interpretation of China
Accounting Standards for Business Enterprises No. 16 issued by the MOF. This change in accounting policy has no effect on the
Company's financial statements.
4. Starting from November 30, 2022, the Company has adopted the regulations about accounting for modifications of share-
based payment transactions from cash-settled to equity-settled in the Interpretation of China Accounting Standards for Business
Enterprises No. 16 issued by the MOF. This change in accounting policy has no effect on the Company's financial statements.
VII. Reason for Changes in Scope of the Consolidated Financial Statements as Compared to
the Financial Report for the Prior Year
Applicable Not applicable
For details of the changes in the scope of the consolidated financial statements during the reporting period, please refer to Note 8
"Changes in the Scope of Consolidation" in Part X Financial Report.
VIII. Engagement and Disengagement of Accounting Firm
Incumbent accounting firm
Pan-China Certified Public Accountants LLP (Special General
Name of the domestic accounting firm
Partnership)
The Company's payment to the domestic accounting firm (in
310
RMB 10,000)
Consecutive years of the domestic audit service provided by the
21
accounting firm
Names of the domestic certified public accountants from the
Bian Shanshan, and Wei Xiaohui
accounting firm
Consecutive years of audit service provided by domestic
4 years and 1 year, respectively
certified public accountants from the accounting firm
Whether the accounting firm was changed during the period
Yes No
Engagement of any accounting firm for internal control audit, financial advisor, or sponsor
Applicable Not applicable
During the year, Pan-China Certified Public Accountants LLP (Special General Partnership) was appointed as the accounting firm
for the Company's internal control audit, and Huaxing Securities Co., Ltd. was appointed as the Company's sponsor.
IX. Possibility of Delisting after the Disclosure of This Report
Applicable Not Applicable
84
X. Bankruptcy and Reorganization
Applicable Not Applicable
No such cases during the reporting period.
XI. Material Litigation and Arbitration
Applicable Not Applicable
No such cases during the reporting period.
During the reporting period, other lawsuits that did not meet the disclosure criteria for material litigation primarily included
purchase and sales contract disputes, with a total amount of approximately RMB 375 million, which are not expected to incur any
provision of a large amount.
XII. Punishments and Rectifications
Applicable Not Applicable
No such cases during the reporting period.
XIII. Credit Quality of the Company as well as Its Controlling Shareholder and De Facto
Controller
Applicable Not Applicable
During the reporting period, the Company as well as its controlling shareholder and de facto controller were of good credit quality,
with no such cases as non-fulfillment of effective court judgments or outstanding debts of large amounts due and unpaid.
XIV. Material Related Party Transactions
1. Related party transactions in relation to day-to-day operations
Applicable Not applicable
Pricing Approved Available
Type of Contents of Transaction As a
Related principle of transaction Over the market
Related related related Transaction amount percentage Method of Disclosure Disclosure
party related limit approved price for
party party party price (RMB10,00 of similar settlement date document
relationship party (RMB10,00 limit similar
transaction transaction 0) transactions
transaction 0) transactions
Sharehol
der
holding
Zoomlion Goods or Goods or As per www.cni
more Market April 30,
Heavy financial financial -- 10,782.4 22,061 No contractual -- nfo.com.c
than 5% price 2022
Industry services services terms n
of the
Company
's shares
Total -- -- 10,782.4 -- 22,061 -- -- -- -- --
Details of any large-amount sales return N/A
Give the actual fulfillment situation Before the Company's routine related party transactions in 2022, subsidiaries comprehensively assessed
during the reporting period (if any) and estimated their related party transactions. However, due to changes in the market and customer
where an estimate by type had been demand, there were differences between the Company's related party transactions and the actual situation.
made for the total amounts of daily This was regular business activity and had minimal impact on day-to-day operations and performance.
85
related party transactions to occur during
the 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 interests
Applicable Not Applicable
No such cases during the reporting period.
3. Related party transactions regarding joint investments in external parties
Applicable Not Applicable
No such cases during the reporting period.
4. Current associated rights of credit and liabilities
Applicable Not Applicable
No such cases during the reporting period.
5. Transactions with finance companies with related party relationships
Applicable Not applicable
Deposit business
Amount of the period
Opening
Maximum daily Total Ending balance
Related party Range of balance (in Total deposited
Related parties deposit limit (in withdrawn (in RMB
relationship deposit rate RMB amount (in
RMB 10,000) amount (in 10,000)
10,000) RMB 10,000)
RMB 10,000)
Related company
Zoomlion to a shareholder
No interest
Finance Co., holding more than 0 0 31 0 31
accrued
Ltd. 5% of the
Company's shares
6. Transactions between the finance company controlled by the Company and related parties
Applicable Not Applicable
There is no deposit, loan, credit, or other financial business between the finance company controlled by the Company and related
parties.
7. Other material related party transactions
Applicable Not Applicable
No such cases during the reporting period.
86
XV. Material Contracts and Execution Thereof
1. Trusts, subcontracts, and leases
(1) Trusts
Applicable Not Applicable
No such cases during the reporting period.
(2) Subcontracts
Applicable Not Applicable
No such cases during 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 23 rd floor of Yingfeng Business Building at 8 Yixin Road, Junlan Community,
Beijiao Town, Shunde District, Foshan City, as the business premises with a construction area of 1,578.68 sqm. The rent payable
for 2022 was RMB 1,345,100, and the actual payment was RMB 1,345,100. As at December 31, 2022, the above amounts have
been settled.
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 leasing items brought about profits or losses to the Company accounting for more than 10% of the gross profit of the Company
during the reporting period.
2. Material guarantees
Applicable Not applicable
Unit: RMB 10,000
Guarantees provided by the Company and its subsidiaries for external parties (excluding those for subsidiaries)
Disclosure date
Actual Actual Counter- Guarantee for
Guaranteed of the Guarantee Collaterals Term of Completed
occurrence guarantee Guarantee type guarantees a related
party guarantee limit limit (if any) guarantee or not
date amount (if any) party or not
announcement
Joint and
Buyer's credit August 25, May 14,
9,762.75 9,762.75 several liability N/A -- 1 year No No
business 2022 2022
guarantee
Joint and
Buyer's credit August 25, June 08,
2,935.95 2,935.95 several liability N/A -- 2 years No No
business 2022 2022
guarantee
Joint and
Buyer's credit August 25, 38,980.8 September
38,980.89 several liability N/A -- 1 year No No
business 2022 9 18, 2022
guarantee
Buyer's credit August 25, July 26, Joint and
1,115 1,115 N/A -- 1 year No No
business 2022 2022 several liability
87
guarantee
Joint and
Buyer's credit August 25, July 19,
2,000.57 2,000.57 several liability N/A -- 1 year No No
business 2022 2022
guarantee
Joint and
Buyer's credit August 25, 21,609.8 June 30,
21,609.85 several liability N/A -- 3 years No No
business 2022 5 2021
guarantee
Joint and
Buyer's credit August 25, September
4,114.54 4,114.54 several liability N/A -- 2 years No No
business 2022 05, 2022
guarantee
Guangdong
Wellkey Joint and
January 30, January 01,
Electric 14,000 0 several liability N/A -- 5 years Yes Yes
2021 2021
Material Co., guarantee
Ltd.
Guangdong
Wellkey Joint and
January 30, June 02,
Electric 2,000 0 several liability N/A -- 2 years Yes Yes
2021 2021
Material Co., guarantee
Ltd.
Liaoning
Donggang Joint and
January 30, July 22,
Magnetic 500 500 several liability N/A -- 3 years No Yes
2021 2022
Wire Co., guarantee
Ltd.
Liaoning
Donggang Joint and
January 30, August 22,
Magnetic 1,000 1,000 several liability N/A -- 3 years No Yes
2021 2022
Wire Co., guarantee
Ltd.
Anhui
Wellkey Joint and
January 30, June 28,
Electric 4,000 4,000 several liability N/A -- 1 year No Yes
2021 2022
Material Co., guarantee
Ltd.
Anhui
Wellkey Joint and
January 30, June 21,
Electric 2,000 2,000 several liability N/A -- 1 year No Yes
2021 2022
Material Co., guarantee
Ltd.
Anhui
Wellkey Joint and
January 30, May 10,
Electric 3,000 3,000 several liability N/A -- 1 year No Yes
2021 2023
Material Co., guarantee
Ltd.
Anhui
Wellkey Joint and
January 30, February
Electric 2,000 2,000 several liability N/A -- 1 year No Yes
2021 17, 2022
Material Co., guarantee
Ltd.
Liaoning
Donggang
January 30,
Magnetic 23,500 -- -- -- -- -- -- -- --
2021
Wire Co.,
Ltd.
Guangdong January 30,
18,000 -- -- -- -- -- -- -- --
Wellkey 2021
88
Electric
Material Co.,
Ltd.
Anhui
Wellkey
January 30,
Electric 1,000 -- -- -- -- -- -- -- --
2021
Material Co.,
Ltd.
Buyer's credit August 25, 24,480.4
-- -- -- -- -- -- -- --
business 2022 5
Total approved limit for Total actual amount of
external guarantee during the 105,000 external guarantee during the 93,019.55
reporting period (A1) reporting period (A2)
Total approved limit for Total actual balance of
external guarantee at the end 176,000 external guarantee at the end 93,019.55
of the reporting period (A3) of the reporting period (A4)
Guarantees provided by the Company for its subsidiaries
Disclosure date
Actual Actual Counter- Guarantee for
Guaranteed of the Guarantee Collaterals Term of Completed
occurrence guarantee Guarantee type guarantees a related
party guarantee limit limit (if any) guarantee or not
date amount (if any) party or not
announcement
Zhejiang
Shangfeng
Joint and
Special April 30, November
22,000 16,766.59 several liability N/A -- 1 year No Yes
Blower 2022 13, 2020
guarantee
Industrial
Co., Ltd.
Zhejiang
Shangfeng
Joint and
Special April 30, January 4,
22,350 11,606.43 several liability N/A -- 2 years No Yes
Blower 2022 2022
guarantee
Industrial
Co., Ltd.
Zhejiang
Shangfeng
Joint and
Special April 30, November
30,000 18,276.68 several liability N/A -- 1 year No Yes
Blower 2022 8, 2022
guarantee
Industrial
Co., Ltd.
Zhejiang
Shangfeng
Joint and
Special April 30, March 3,
7,500 525 several liability N/A -- 5 years No Yes
Blower 2022 2021
guarantee
Industrial
Co., Ltd.
Zhejiang
Shangfeng
Joint and
Special April 30, March 31,
12,000 9,000 several liability N/A -- 2 years No Yes
Blower 2022 2022
guarantee
Industrial
Co., Ltd.
Zhejiang
Shangfeng
Joint and
Special April 30, February
10,000 1,297.82 several liability N/A -- 3 years No Yes
Blower 2022 28, 2022
guarantee
Industrial
Co., Ltd.
89
Guangdong
Joint and
Infore April 30, June 17,
5,000 0 several liability N/A -- 1 year No Yes
Technology 2022 2020
guarantee
Co., Ltd.
Guangdong
Joint and
Infore April 30, March 1,
4,000 1,512.72 several liability N/A -- 3 years No Yes
Technology 2022 2021
guarantee
Co., Ltd.
Guangdong
Joint and
Infore April 30, June 17,
3,000 1,313.3 several liability N/A -- 1 year No Yes
Technology 2022 2022
guarantee
Co., Ltd.
Guangdong
Joint and
Infore April 30, February
12,000 2,662.3 several liability N/A -- 1 year No Yes
Technology 2022 24, 2022
guarantee
Co., Ltd.
Guangdong
Joint and
Infore December 26, December
15,000 4,923.08 several liability N/A -- 5 years No Yes
Technology 2017 26, 2018
guarantee
Co., Ltd.
Guangdong
Infore Smart Joint and
April 30, January13,
Sanitation 2,000 1,400 several liability N/A -- 5 years No Yes
2022 2022
Technology guarantee
Co., Ltd.
Changsha
Zhongbiao Joint and
April 30, September
Environment 5,000 0 several liability N/A -- 1 year No Yes
2022 11, 2021
al Industry guarantee
Co., Ltd.
Shenzhen
Green
Joint and
Oriental February 2, August 25,
13,000 4,485 several liability N/A -- 8 years No Yes
Environment 2016 2016
guarantee
al Protection
Co., Ltd.
Shouxian
Joint and
Greenlander April 30, November
9,221 7,701.21 several liability N/A -- 15 years No Yes
New Energy 2022 10, 2022
guarantee
Co., Ltd.
Xiantao
Green
Oriental Joint and
April 30, June 7,
Environment 27,870 26,900 several liability N/A -- 13 years No Yes
2022 2022
al Power guarantee
Generation
Co., Ltd.
Poyang
Greenlander Joint and
August 21, January21,
Renewable 28,000 27,000 several liability N/A -- 10 years No Yes
2020 2021
Energy Co., guarantee
Ltd.
Maoming
Infore Joint and
December 26, March 20,
Environment 15,000 10,428.05 several liability N/A -- 15 years No Yes
2017 2018
Water guarantee
Treatment
90
Technology
Co., Ltd.
Lianjiang
Joint and
Greenlander April 30, November
9,963 8,278.29 several liability N/A -- 15 years No Yes
New Energy 2022 30, 2020
guarantee
Co., Ltd.
Lianjiang
Joint and
Greenlander April 30, May 25,
17,600 2,148.61 several liability N/A -- 15 years No Yes
New Energy 2022 2022
guarantee
Co., Ltd.
Lu'an
Zhongfeng
Joint and
Urban April 23, June 8,
8,000 7,700 several liability N/A -- 13 years No Yes
Environment 2021 2021
guarantee
al Service
Co., Ltd.
Tongshan
Tongda Water Joint and
April 25, February 1,
Treatment 6,000 970 several liability N/A -- 18 years No Yes
2020 2021
Technology guarantee
Co., Ltd.
Changde
Zelian Joint and
April 23, May 26,
Environment 12,000 12,000 several liability N/A -- 15 years No Yes
2021 2021
al Service guarantee
Co., Ltd.
Xiantao
Yinghe Joint and
August 21, January20,
Environment 30,100 13,800 several liability N/A -- 15 years No Yes
2020 2021
al Protection guarantee
Co., Ltd.
Biyang
Fenghe New Joint and
April 23, April 29,
Energy 15,000 14,422.85 several liability N/A -- 13 years No Yes
2021 2022
Power Co., guarantee
Ltd.
Changsha
Zoomlion
Joint and
Changgao October 24, March 25,
10,000 5,000 several liability N/A -- 5 years No Yes
Environment 2019 2020
guarantee
al Industry
Co., Ltd.
Xiangtan
Yinglian Joint and
April 30, July 5,
Environment 15,000 4,000 several liability N/A -- 10 years No Yes
2022 2022
al Industry guarantee
Co., Ltd.
Tongren
Bijiang
District Joint and
April 30, August 19,
Zhongfeng 14,300 12,350 several liability N/A -- 15 years No Yes
2022 2022
Environment guarantee
al Industry
Co., Ltd.
Huai' an Joint and
August 25, December
Yinghe 15,000 1,595 several liability N/A -- 15 years No Yes
2022 26, 2022
Environment guarantee
91
Technology
Co., Ltd.
Biyang
Fenghe New
April 23,
Energy 9,000 -- -- -- -- -- -- -- --
2021
Power Co.,
Ltd.
Zhejiang
Shangfeng
Special April 30,
19,500 -- -- -- -- -- -- -- --
Blower 2022
Industrial
Co., Ltd.
Guangdong
Infore April 30,
3,000 -- -- -- -- -- -- -- --
Technology 2022
Co., Ltd.
Guangdong
Infore Smart
April 30,
Sanitation 6,000 -- -- -- -- -- -- -- --
2022
Technology
Co., Ltd.
Changsha
Zhongbiao
April 30,
Environmental 2,000 -- -- -- -- -- -- -- --
2022
Industry Co.,
Ltd.
Anlong
Ninghe
Environmental April 30,
4,400 -- -- -- -- -- -- -- --
Protection 2022
Technology
Co., Ltd.
Xiantao
Green
Oriental
April 30,
Environment 130 -- -- -- -- -- -- -- --
2022
al Power
Generation
Co., Ltd.
Poyang
Greenlander
August 25,
Renewable 28,000 -- -- -- -- -- -- -- --
2022
Energy Co.,
Ltd.
Huaibei
Tongying
Environmental August 25,
11,000 -- -- -- -- -- -- -- --
Sanitation 2022
Management
Co., Ltd.
Huai'an
Chenjie
August 25,
Environmental 7,000 -- -- -- -- -- -- -- --
2022
Engineering
Co., Ltd.
Other holding August 25, 10,000 -- -- -- -- -- -- -- --
92
subsidiaries 2022
Total actual guarantee
Total approved guarantee
amount for subsidiaries
limit for subsidiaries during 329,852.5 228,062.93
during the reporting period
the reporting period (B1)
(B2)
Total approved guarantee Total actual guarantee
limit for subsidiaries at the balance for subsidiaries at
495,934 228,062.93
end of the reporting period the end of the reporting
(B3) period (B4)
Guarantees between subsidiaries
Disclosure
date of the Actual Actual Counter- Guarantee
Guaranteed Guarantee Collateral Term of Completed
guarantee occurrence guarantee Guarantee type guarantees for a related
party limit s (if any) guarantee or not
limit date amount (if any) party or not
announcement
Total approved guarantee Total actual guarantee
limit for subsidiaries amount for subsidiaries
0 0
during the reporting period during the reporting period
(C1) (C2)
Total approved guarantee Total actual guarantee
limit for subsidiaries at the balance for subsidiaries at
0 0
end of the reporting period the end of the reporting
(C3) period (C4)
Total guarantee amount (total of the three kinds above)
Total approved guarantee Total actual guarantee amount
limit during the reporting 434,852.5 during the reporting period 321,082.48
period (A1+B1+C1) (A2+B2+C2)
Total approved guarantee
Total actual guarantee
limit at the end of the
671,934 balance at the end of the 321,082.48
reporting period
reporting period (A4+B4+C4)
(A3+B3+C3)
Total actual guarantees (A4+B4+C4) as a percentage
18.57%
of the Company's net assets
Of which:
Balance of debt guarantees provided directly or
indirectly for the guaranteed party with a liability-to- 196,271.03
asset ratio over 70% (E)
Total of the three types of guarantees above
196,271.03
(D+E+F)
Provision of external guarantees in breach of the
N/A
prescribed procedures (if any)
3. Entrusted cash management
(1) Entrusted wealth management
Applicable Not applicable
Overview of entrusted wealth management during the reporting period
Unit: RMB 10,000
Entrustment Undue Unrecovered Accrued impairment amount
Type Funding source
amount amount overdue amount for unrecovered overdue
93
wealth management
Bank's wealth
Own funds 163,320 0 0 0
management product
Total 163,320 0 0 0
High-risk entrusted wealth management with a material single amount or low security and low liquidity
Applicable Not Applicable
Entrusted wealth management with expected irrecoverable principal or other circumstances that may lead to impairment
Applicable Not Applicable
(2) Entrusted loans
Applicable Not Applicable
No such cases during the reporting period.
4. Other material contracts
Applicable Not Applicable
No such cases during the reporting period.
XVI. Other Material Events
Applicable Not Applicable
No such cases during the reporting period.
XVII. Material Events of Subsidiaries
Applicable Not applicable
On April 29, 2022, the Proposal on the Revised Plan of Infore Environment Technology Group Co., Ltd. for the Spin-off of
Zhejiang Shangfeng Special Blower Industrial Co., Ltd. to be Listed on the ChiNext Board was deliberated and approved at the
18th meeting of the Ninth Board of Directors.
On May 24, 2022, relevant proposals on the spin-off of the subsidiary Shangfeng for listing on the ChiNext market of SZSE
were deliberated and approved by the Company's 2021 Annual General Meeting of Shareholders. For more information, please
refer to the announcement published on 30 April 2022 on the media for information disclosure designated by the Company and
Cninfo (www.cninfo.com.cn).
On June 30, 2022, SZSE accepted the application for the initial public offering of shares and listing on the ChiNext submitted
by Shangfeng.
On July 25, 2022, SZSE issued the Letter on Review and Inquiry of the Application Documents of Zhejiang Shangfeng
Special Blower Industrial Co., Ltd. for IPO and Listing on the ChiNext (Review Letter [2022] No. 010721). Shangfeng submitted
its reply to the letter on December 7, 2022.
On December 15, 2022, SZSE issued the Letter on the Second Round of Review and Inquiry of the Application Documents of
Zhejiang Shangfeng Special Blower Industrial Co., Ltd. for IPO and Listing on the ChiNext (Review Letter [2022] No. 011129).
Shangfeng is preparing its reply to the letter and advancing its spin-off and listing in an orderly manner.
94
Part VII Share Changes and Shareholder Information
I. Share Changes
1. Share changes
Unit: Share
Before Increase/decrease during the period (+/-) After
Shares as divide Shares as dividen
Quantity Ratio New issues nd converted fr d converted from Others Sub-total Quantity Ratio
om profit capital reserves
-1,137,761, -1,137,76
I. Restricted Shares 1,139,599,318 35.84% 0 0 0 1,838,140 0.06%
178 1,178
1.1 Shares held by t
0 0.00% 0 0 0 0 0 0 0.00%
he State
1.2 Shares held by s
tate-owned corporatio 0 0.00% 0 0 0 0 0 0 0.00%
ns
1.3 Shares held by o
-1,137,761, -1,137,76
ther domestic investor 1,139,599,318 35.84% 0 0 0 1,838,140 0.06%
178 1,178
s
Including: Shares
-1,137,761, -1,137,76
held by domestic corp 1,137,761,778 35.78% 0 0 0 0 0.00%
778 1,778
orations
Shares held by do
1,837,540 0.06% 0 0 0 600 600 1,838,140 0.06%
mestic individuals
4. Shares held by ov
0 0.00% 0 0 0 0 0 0 0.00%
erseas investors
Including: Shares
held by overseas corp 0 0.00% 0 0 0 0 0 0 0.00%
orations
Shares held by ov
0 0.00% 0 0 0 0 0 0 0.00%
erseas individuals
1,137,761, 1,137,79 3,177,667, 99.9
II. Unrestricted Shares 2,039,872,433 64.16% 33,808 0 0
178 4,986 419 4%
1. RMB-denominat 1,137,761, 1,137,79 3,177,667, 99.9
2,039,872,433 64.16% 33,808 0 0
ed ordinary shares 178 4,986 419 4%
2. Domestically list
0 0.00% 0 0 0 0 0 0 0.00%
ed foreign shares
3. Overseas listed fo
0 0.00% 0 0 0 0 0 0 0.00%
reign shares
4. Others 0 0.00% 0 0 0 0 0 0 0.00%
III. Total Number of S 3,179,505, 100.0
3,179,471,751 100.00% 33,808 0 0 0 33,808
hares 559 0%
Reasons for share changes
Applicable Not applicable
95
1. On December 29, 2021, the Company disclosed the Prompt Announcement on the Lifting of the Restricted Shares for
Material Asset Restructuring. The assets acquired by the Company's non-public offering of shares were listed on SZSE on January
4, 2019. The shares were issued to eight subscribers, including Ningbo Yingtai Investment Partnership (L.P.), Ningbo Zhongfeng
Investment Partnership (L.P.), and Ningbo Liantai Investment Partnership (L.P.) On January 4, 2022, a total of 119,764,396 shares
(3.77% of the Company's total shares) placed with three of the aforesaid shareholders, namely, Ningbo Yingtai Investment
Partnership (L.P.), Ningbo Zhongfeng Investment Partnership (L.P.), and Ningbo Liantai Investment Partnership (L.P.), became
publicly tradable upon the expiration of a 36-month lockup, as the conditions for lifting the sale restrictions were met.
2. On June 30, 2022, the Company disclosed the Prompt Announcement on the Lifting of the Restricted Shares for Material
Asset Restructuring. The assets acquired by the Company's non-public offering of shares were listed on SZSE on January 4, 2019.
The shares were issued to eight subscribers, including Ningbo Infore Asset Management Co., Ltd. On July 4, 2022, a total of
1,017,997,382 shares (32.02% of the Company's total shares) placed with Ningbo Infore Asset Management Co., Ltd. became
publicly tradable upon the expiration of a 42-month lockup, the conditions for lifting the sales restrictions were met.
3. Due to a change in the Company's executive positions, Mr. Wang Qingbo, the current Vice President and CFO, directly
held 800 shares of Infore Enviro. According to the provisions of SZSE, 600 of these shares were locked up. Therefore, restricted
shares increased by 600 during the reporting period.
4. As at November 25, 2022, the second exercise period of the Third Stock Option Incentive Scheme has ended, with a
cumulative 16,409,380 options exercised. In particular, 25,000 options were exercised in the second exercise period of the Third
Stock Option Scheme, increasing the Company's unrestricted shares by 25,000.
5. As at December 31, 2022, 15,833 shares in total were converted from the Infore Convertible Bonds issued by the Company.
In particular, 8,808 shares were converted in 2022, increasing the Company's unrestricted shares by 8,808.
In summary, the Company's total share capital rose to 3,179,505,559 from 3,179,471,751 shares.
Approval of changes in share capital
Applicable Not applicable
1. On April 22, 2021, the Company convened the 13th Meeting of the Ninth Board of Directors. Upon discussion, the meeting
approved the Proposal on Matters Related to the Exercise in the 2nd Exercise Period of the 3rd Stock Option Incentive Scheme. A
total of 231 recipients of the 3rd Stock Option Incentive Scheme were deemed fit to exercise their 17,814,000 stock options
voluntarily in the 2nd exercise period before November 25, 2022.
2. With the approval granted by the CSRC under Document ZH.J.X.K [2020] No. 2219, the Company publicly issued
14,761,896 convertible corporate bonds on November 4, 2020, each with a par value of RMB 100 and the total issued amount is
RMB 1,476,189,600. Approved by the SZSE, the Company's convertible corporate bonds of RMB 1,476,189,600 have been listed
for trading on the SZSE since December 2, 2020. The Infore Convertible Bonds in this offering have been convertible into the
Company's shares since May 10, 2021.
Transfer of shares
Applicable Not applicable
During the reporting period, China Securities Depository and Clearing (Shenzhen) Corporation Limited handled the share
registration procedures for 25,000 exercised stock options in the Third Stock Option Incentive Scheme and 8,808 shares converted
from the convertible corporate bonds.
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 deems necessary or required to be disclosed by the securities regulatory authorities
Applicable Not Applicable
96
2. Changes in restricted shares
Applicable Not applicable
Unit: Share
Number of shares Increase of Decrease of Number of
Reasons for
held at the restricted shares restricted shares shares held at Date of lifting
Name of shareholders trading
beginning of the during the during the the end of the trading restriction
restriction
period period period period
Ningbo Infore Asset Restricted shares
Management Co., 1,017,997,382 0 1,017,997,382 0 in private July 4, 2022
Ltd. placement
Ningbo Yingtai
Restricted shares
Investment
40,913,514 0 40,913,514 0 in private January 4, 2022
Partnership (Limited
placement
Partnership)
Ningbo Zhongfeng
Restricted shares
Investment
40,141,033 0 40,141,033 0 in private January 4, 2022
Partnership (Limited
placement
Partnership)
Ningbo Liantai
Restricted shares
Investment
38,709,849 0 38,709,849 0 in private January 4, 2022
Partnership (Limited
placement
Partnership)
25% of the total
Locked-up
shareholdings are
Others 1,837,540 600 0 1,838,140 shares of senior
unlocked
management
annually
Total 1,139,599,318 600 1,137,761,778 1,838,140 -- --
II. Issuance and Listing of Securities
1. Issuance of securities (exclusive of preference shares) during the reporting period
Applicable Not Applicable
2. Changes in total shares, shareholder structure and asset and liability structures
Applicable Not applicable
1. On December 29, 2021, the Company disclosed the Prompt Announcement on the Lifting of the Restricted Shares for
Material Asset Restructuring. The assets acquired by the Company's non-public offering of shares were listed on SZSE on January
4, 2019. The shares were issued to eight subscribers, including Ningbo Yingtai Investment Partnership (L.P.), Ningbo Zhongfeng
Investment Partnership (L.P.), and Ningbo Liantai Investment Partnership (L.P.) The 119,764,396 shares placed with three of the
shareholders above, namely, Ningbo Yingtai Investment Partnership (L.P.), Ningbo Zhongfeng Investment Partnership (L.P.), and
Ningbo Liantai Investment Partnership (L.P.), not allowed to be transferred within 36 months from the date the issuance was
completed, became publicly tradable on January 4, 2022.
2. On June 30, 2022, the Company disclosed the Prompt Announcement on the Lifting of the Restricted Shares for Material
Asset Restructuring. The assets acquired by the Company's non-public offering of shares were listed on SZSE on January 4, 2019.
The shares were issued to eight subscribers, including Ningbo Infore Asset Management Co., Ltd. The 1,017,997,382 shares
placed with Ningbo Infore Asset Management Co., Ltd., not allowed to be transferred within 42 months from the date the issuance
was completed, became publicly tradable on July 4, 2022.
97
3. Due to a change in the Company's executive positions, Mr. Wang Qingbo, the current Vice President and CFO, directly
held 800 shares of Infore Enviro. According to the provisions of SZSE, 600 of these shares were locked up. The restricted shares
increased by 600 in 2022;
4. On April 22, 2021, the Company convened the 13th Meeting of the Ninth Board of Directors. Upon discussion, the meeting
approved the Proposal on Matters Related to the Exercise in the Second Exercise Period of the Third Stock Option Incentive
Scheme. A total of 231 recipients of the Third Stock Option Incentive Scheme were deemed fit to exercise their 17,814,000 stock
options voluntarily in the second exercise period before November 25, 2022. As at November 25, 2022, a cumulative 16,409,380
options were exercised in the second exercise period of the Third Stock Option Incentive Scheme, as the exercise conditions were
met. In particular, 25,000 options were exercised in 2022, adding 25,000 shares to the Company's unrestricted shares.
5. With the approval granted by the CSRC under Document ZH.J.X.K. [2020] No. 2219, the Company publicly issued
14,761,896 convertible corporate bonds on November 4, 2020, each with a par value of RMB 100, and the total issued amount was
RMB 1,476,189,600. Approved by the SZSE, the Company's convertible corporate bonds of RMB 1,476,189,600 have been listed
for trading on the SZSE since December 2, 2020. The Infore Convertible Bonds in this offering have been convertible into the
Company's shares since May 10, 2021. On January 4, 2023, the Company disclosed the Announcement on Results of Conversion of
Convertible Bonds and Changes in Share Capital in the Fourth Quarter of 2022. As at December 31, 2022, 15,833 shares in total
were converted from the "Infore Convertible Bonds" issued by the Company. In particular, 8,808 shares were converted in 2022,
increasing non-restricted shares by 8,808.
3. Existing internal employee shares
Applicable Not Applicable
III. Controlling Shareholders and De Facto Controller
1. Shareholders and their shareholdings
Unit: Share
Preference
Shareholders at Preference shareholders
shareholders with
Shareholders of the end of the with resumed voting
resumed voting
common shares at previous month power at the end of the
40,314 37,882 power at the end 0 0
the end of the prior to the previous month prior to the
of the reporting
reporting period disclosure date disclosure date of this
period (if any)
of this report report (if any) (see Note 8)
(see Note 8)
Shareholders with over 5% of total shares or top 10 shareholders
Shareholdings Increase/decrease Shares pledged,
Name of Nature of Shareholding Restricted Unrestricted tagged or frozen
at the end of the during the
shareholders shareholders ratio shares held shares held
reporting period reporting period Status Quantity
Ningbo Infore Asset Domestic non-
610,798,42
Management Co., state-owned 32.02% 1,017,997,382 0 0 1,017,997,382 Pledged
9
Ltd. legal person
Zoomlion Heavy
Domestic non-
Industry Science
state-owned 12.56% 399,214,659 0 0 399,214,659 - -
and Technology Co.,
legal person
Ltd.
Domestic non-
Infore Group Co., 100,000,00
state-owned 11.31% 359,609,756 0 0 359,609,756 Pledged
Ltd. 0
legal person
Hongchuang Domestic non-
(Shenzhen) state-owned 9.76% 310,423,813 0 0 310,423,813 - -
Investment Center legal person
98
(Limited
Partnership)
Infore Environment
Technology Group
Co., Ltd.－The
Others 2.04% 64,789,616 64,789,616 0 64,789,616 - -
Second Employee
Stock Ownership
Plan
Domestic
He Jianfeng 2.00% 63,514,690 0 0 63,514,690 - -
natural person
Zara Green Hong Foreign legal
1.72% 54,778,335 0 0 54,778,335 - -
Kong Limited persons
Domestic
Chen Liyuan 0.98% 31,018,000 0 0 31,018,000 - -
natural person
Guangdong
Hengjian State-owned
0.88% 28,059,147 0 0 28,059,147 - -
Investment Holding corporation
Co., Ltd.
Ningbo Yingtai
Investment Domestic non-
Partnership state-owned 0.80% 25,570,914 -15,342,600 0 25,570,914 - -
(Limited legal person
Partnership)
Strategic investor/general legal person
becoming a top 10 shareholder in a Not applicable.
rights issue (if any) (see note 3)
Ningbo Infore Asset Management Co., Ltd. and Infore Group Co., Ltd. share the same de facto controller—
Related party or acting-in-concert
He Jianfeng, and they are persons acting in concert mutually. Apart from that, the Company is not aware of
relationship among the
any related party or acting-in-concert relationship (as defined in the Methods for the Acquisition and
aforementioned shareholders
Management of Listed Companies) among other shareholders aforementioned.
Shareholders above
entrusting/entrusted with or waiving Not applicable.
voting rights
Top 10 shareholders with repurchase
NA
account (if any) (see note 10)
Shareholding of top 10 unrestricted shareholders
Type of shares
Name of shareholders Unrestricted shares at the end of the reporting period
Type of shares Quantity
Ningbo Infore Asset Management RMB-dominated
1,017,997,382 1,017,997,382
Co., Ltd. common shares
Zoomlion Heavy Industry Science RMB-dominated
399,214,659 399,214,659
and Technology Co., Ltd. common shares
RMB-dominated
Infore Group Co., Ltd. 359,609,756 359,609,756
common shares
Hongchuang (Shenzhen) Investment RMB-dominated
310,423,813 310,423,813
Center (Limited Partnership) common shares
Infore Environment Technology
RMB-dominated
Group Co., Ltd.－The Second 64,789,616 64,789,616
common shares
Employee Stock Ownership Plan
RMB-dominated
He Jianfeng 63,514,690 63,514,690
common shares
RMB-dominated
Zara Green Hong Kong Limited 54,778,335 54,778,335
common shares
RMB-dominated
Chen Liyuan 31,018,000 31,018,000
common shares
99
Guangdong Hengjian Investment RMB-dominated
28,059,147 28,059,147
Holding Co., Ltd. common shares
Ningbo Yingtai Investment RMB-dominated
25,570,914 25,570,914
Partnership (Limited Partnership) common shares
Related party or acting-in-concert
relationship among top 10 Ningbo Infore Asset Management Co., Ltd. and Infore Group Co., Ltd. share the same de facto controller—
unrestricted public shareholders, as He Jianfeng, and they are persons acting in concert mutually. Apart from that, the Company is not aware of
well as between top 10 unrestricted any related party or acting-in-concert relationship (as defined in the Methods for the Acquisition and
public shareholders and top 10 Management of Listed Companies) among other shareholders aforementioned.
shareholders
Top 10 common shareholders
Infore Environment Technology Group Co., Ltd. -- Second Employee Stock Ownership Plan holds
involved in securities margin trading
64,789,616 shares in the Company through credit accounts.
(if any) (see note 4)
Whether any top 10 common shareholders or top 10 unrestricted common shareholders of the Company conducted any agreed
repurchase transactions during the reporting period
Yes No
No such cases during the reporting period.
2. Controlling shareholder
Nature of the controlling shareholder: Natural person
Type of the controlling shareholder: Legal person
Legal
Name of the controlling Date of
representative/person- Organization code Principal business activities
shareholder incorporation
in-charge
Asset management, industrial
investment, investment
management. (The Company
shall not engage in financial
businesses such as deposit taking,
financing guarantee, entrusted
wealth management, and fund-
Ningbo Infore Asset
Wei Ting May 2, 2017 91330206MA290L5J3L raising from the public without
Management Co., Ltd.
the approval of regulatory
authorities such as financial
regulators.) (Business activities
subject to approval under laws
shall not be carried out without
the approval of relevant
authorities.)
Other domestically and
overseas listed
companies as controlling
Not applicable.
shareholders and equity
participants during the
reporting period
Changes in controlling shareholders during the reporting period
Applicable Not Applicable
During the reporting period, there was no change in controlling shareholders of the Company.
100
3. De facto controller and persons acting in concert
Nature of the de facto controller: Domestic natural person
Type of the de facto controller: Natural person
Name of the de facto Relationship with the de facto Residency in other countries
Nationality
controller: controller or regions or not
The de facto controller
He Jianfeng China Yes
himself
Main occupation and position Chairman of the Board and President of Infore Group Co., Ltd.
Controlling interests in other
domestically and overseas
Beijing Baination Pictures Co., Ltd. (Stock code: 300291)
listed companies in the past
10 years
Change in de facto controller during the reporting period
Applicable Not Applicable
During the reporting period, there was no change in de facto controller of the Company.
Ownership and control relationship between the de facto controller and the Company
Haikou Chaozhi Haikou Chaoyu
Foshan Infore Trading Enterprise Management Enterprise Management
Co., Ltd. Partnership (Limited Partnership (Limited
He Jianfeng Partnership) Partnership)
Infore Group Co., Ltd.
Ningbo Infore Asset Management Co., Ltd.
Infore Environment Technology Group Co., Ltd.
The de facto controller controls the Company via trust or other asset management arrangement
Applicable Not Applicable
4. The pledged shares in the Company's controlling shareholder or largest shareholder and its persons
acting in concert account for 80% of their total shareholdings
Applicable Not Applicable
101
5. Other institutional shareholders with a shareholding of more than 10%
Applicable Not applicable
Legal
Name of
representative/ Date of Registered
institutional Principal business or management activities
person-in- incorporation capital
shareholder
charge
Development, production, and sales of engineering machinery, agricultural
machinery, sanitation machinery, crane trucks and exclusive chassis, fire
engines and exclusive chassis, aerial work machines, emergency and
rescue equipment, mining machinery, machinery in coal mines, material
transportation facilities, other machinery, 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
Zoomlion decorative materials, vehicles for engineering and metal materials,
Heavy chemical materials, and chemical products (excluding hazardous
RMB
Industry Zhan August 31, chemicals and monitoring products). Sales of lubricant oil, lubricating
8,677,992,2
Science and Chunxin 1999 grease and hydraulic oil (excluding hazardous chemicals). Retail of
36
Technology refined oil products (operated by licensed subsidiaries only). Operation of
Co., Ltd. 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 services. Film production and planning (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 marketing of domestic business and
goods except for the above items. Business information consulting
services. Import and export of commodities or technologies (excluding the
Infore RMB
April 19, import and export of commodities and technologies that are prohibited by
Group Co., He Jianfeng 4,450,000,0
2002 the state or involve administrative review and approval). R&D,
Ltd. 00
manufacturing, sales and 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-cooling, water-cooling 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 under laws
shall not be carried out without the approval of relevant authorities.)
6. Limitations on shareholding reduction by the Company's controlling shareholder, de facto controller,
reorganizer and other commitment makers
Applicable Not Applicable
102
IV. Repurchase of Shares during the Reporting Period
The progress of share repurchase
Applicable Not Applicable
Progress on reducing the repurchased shares by way of centralized bidding:
Applicable Not Applicable
103
Part VIII Information on Preference Shares
Applicable Not Applicable
During the reporting period, the Company had no preference shares.
104
Part IX Information on Bonds
Applicable Not applicable
I. Enterprise Bond
Applicable Not Applicable
During the reporting period, the Company had no enterprise bond.
II. Corporate Bond
Applicable Not Applicable
During the reporting period, the Company had no corporate bond.
III. Debt Financing Instruments of Non-financial Enterprises
Applicable Not Applicable
During the reporting period, the Company had no debt financing instruments for non-financial enterprises
IV. Convertible Corporate Bonds
Applicable Not applicable
1. Previous adjustments of the conversion price
With the approval granted by the CSRC under Document ZH.J.X.K. [2020] No. 2219, the Company publicly issued
14,761,896 convertible corporate bonds on November 4, 2020, with a par value of RMB 100 and a total amount of RMB
1,476,189,600. The initial conversion price of this tranche of convertible bonds is RMB 8.31 per share. In case of distribution of
bonus shares, increase of share capital through conversion, issuance of new shares (excluding the increased share capital due to the
conversion of convertible corporate bonds issued this time), allotment of shares and distribution of cash dividends, the conversion
price will be adjusted accordingly pursuant to relevant laws and regulations.
On July 8, 2021, the distribution of the Company's equity interests in 2020 was completed. In accordance with the issuance
terms of the Prospectus for Public Offering of Convertible Corporate Bonds by Infore Environment Technology Group Co., Ltd.
and the relevant regulations of the CSRC on the issuance of convertible bonds, the conversion price of Infore Convertible Bonds
was adjusted from the original RMB 8.31 per share to RMB 8.19 per share since July 8, 2021. The adjusted conversion price will
take effect on July 8, 2021.
On July 20, 2022, the Company's equity distribution for 2021 was completed. In accordance with the relevant requirements of
the Prospectus for Public Offering of Convertible Corporate Bonds by Infore Environment Technology Group Co., Ltd., the
conversion price of Infore Convertible Bonds was adjusted from the original RMB 8.19 per share to RMB 8.09 per share, effective
on July 20, 2022. The adjusted conversion price took effect as from July 20, 2022.
2. Information on cumulative conversion of bonds into shares
Applicable Not applicable
105
The number of
shares
Accumulated The
Accumulated converted as a
Abbreviated Commenceme share unconverted
Total issued share percentage of Amount
name of nt and end date Total issued conversion amount as a
amount conversion the total issued unconverted
convertible of share number (sheet) number percentage of
(RMB) amount shares in the (RMB)
bond conversion the total issued
(RMB) Company
amount
before start of
conversion
Infore
1,476,189,60 1,476,059,70
Convertible 2021-05-10 14,761,896 129,900.00 15,833 0.00% 99.99%
0.00 0.00
Bonds
3. Information on top 10 convertible bond holders
Number of Amount of
Proportion of
Nature of convertible bonds convertible bonds
convertible bonds
No. Name of convertible bond holders convertible held at the end of the held at the end of the
held at the end of the
bond holders reporting period reporting period
reporting period
(sheet) (RMB)
Renmin stable and double-benefit
fixed-income pension product --
1 Others 510,449 51,044,900.00 3.46%
Industrial and Commercial Bank of
China Co., Ltd.
CITIC Securities - Sany Heavy
Industry Co., Ltd. - CITIC Securities
2 Others 464,080 46,408,000.00 3.14%
Sany Zunxiang Customized No. 1
Single Asset Management Plan
Industrial and Commercial Bank of
China Co., Ltd -- Aegon-industrial
3 Others 447,180 44,718,000.00 3.03%
Hengyi Bond Securities Investment
Fund
CNPC Enterprise Annuity Program --
4 Industrial and Commercial Bank of Others 444,071 44,407,100.00 3.01%
China Limited
Fullgoal Fuyi aggressive fixed-
income pension product -- Industrial
5 Others 316,414 31,641,400.00 2.14%
and Commercial Bank of China Co.,
Ltd
Taiping Pension Insurance Co., Ltd. --
6 Others 258,723 25,872,300.00 1.75%
Taiping Jinshi Bond Portfolio
ICBC Credit Suisse Tianfeng
convertible bond fixed income
7 Others 247,205 24,720,500.00 1.67%
pension product - Bank of China
Limited
Yinhua Kunli No.2 fixed income
8 pension product -- CITIC Bank Co., Others 239,028 23,902,800.00 1.62%
Ltd.
PICC Asset stable value fixed income
9 pension product - Industrial and Others 200,000 20,000,000.00 1.35%
Commercial Bank of China Co., Ltd.
Basic Pension Insurance Fund
10 Others 197,639 19,763,900.00 1.34%
Portfolio 102
106
4. Information on material changes in the profitability, asset status and credit standing of guarantor
Applicable Not Applicable
5. Change in the Company's liabilities and credit standing, and cash arrangements for debt repayment in
coming years at the end of the reporting period
On June 23, 2022, China Chengxin International Credit Rating Co., Ltd. issued the Follow-up Rating Report on the Public
Offering of Convertible Corporate Bonds by Infore Environment Technology Group Co., Ltd. (2022) (X.P.W.H. [2022] Tracking
No.0895), maintaining the corporate credit rating of the Company at AA +, maintaining the credit rating of Infore Convertible
Bonds at AA +, with a rating outlook as stable. For details, please refer to the Follow-up Rating Report on Public Offering of
Convertible Corporate Bonds by the Company disclosed by the Company on June 30, 2022 on Cninfo (www.cninfo.com.cn).
The primary sources of funds for the Company to pay the principal and interest of the convertible bonds in the future are as
follows: (1) The Company seeks organic growth by strengthening financial management and increasing net cash inflows and net
profits from operating activities; (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.
V. During the Reporting Period, the Loss in the Scope of Consolidated Statements
Outstripped 10% of the Net Assets at the End of the Previous Year
Applicable Not Applicable
VI. Overdue Interest-Bearing Debts Other Than Bonds at the End of the Reporting Period
Applicable Not Applicable
VII. Violation of Rules and Regulations During the Reporting Period
Yes No
VIII. Main Accounting Data and Financial Indicators of the Company in Last Two Years as
at the End of the Reporting Period
Unit: RMB 10,000
At the end of the reporting
Item At the end of last year YoY change
period
Current ratio 1.67 1.70 -1.76%
Liabilities-to-assets ratio 39.40% 39.10% 0.30%
Quick ratio 1.56 1.55 0.65%
The reporting period The prior year YoY change
Net profit after deducting
32,475.34 55,705.05 -41.70%
non-recurring profit and loss
EBITDA/total liabilities 12.30% 14.03% -1.73%
Interest coverage ratio 3.79 6.02 -37.04%
Cash/interest coverage ratio 14.07 9.46 48.73%
107
EBITDA/interest coverage
7.39 9.15 -19.23%
ratio
Loan repayment rate 100.00% 100.00% 0.00%
Interest coverage ratio 100.00% 100.00% 0.00%
108
Part X Financial Report
I. Audit Report
Type of audit opinions Standard unqualified opinion
Signing date of the auditor’s report April 24, 2023
Name of the auditor Pan-China Certified Public Accountants LLP (Special General Partnership)
No. of the auditor’s report PCCPAAR [2023] No. 4798
Names of certified public accountants Bian Shanshan, and Wei Xiaohui
Main body of the 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, 2022, 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, 2022, 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.
The Company is mainly engaged in sales of environmental and sanitation machinery and ventilation equipment as well as
sanitation operation service. In 2022, the operating revenue amounted to 12,255,992,938.42 yuan, with year-over-year growth of
3.28%.
Sales of environmental and sanitation machinery 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 sanitation operation service is
a performance obligation satisfied over time. Revenue is recognized based on the service assessment statement confirmed by the
labor receiving party, etc.
As operating revenue is one of the key performance indicators of the Company, the authenticity, accuracy and completeness of
109
revenue recognition have a significant impact on the Company’s financial statements, 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 sales 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 from sales of environmental and sanitation machinery, ventilation equipment, etc., we checked supporting
documents related to revenue recognition by sampling method, including sales contracts, sales invoices, delivery lists, shipping
documents, client acceptance receipts, etc. For revenue from sanitation operation service, we checked supporting documents related
to revenue recognition by sampling method, including sales contracts, service assessment statements, supervision schedule, etc.;
(5) We performed confirmation procedures on significant clients of product sales and major clients of sanitation operation
service to confirm the sales amounts in the current period, and the balances of current accounts;
(6) 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
(7) 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
1. Key audit matters
Please refer to section III (X) and section V (I) 3, 9 and 11 of notes to the financial statements for details.
As of December 31, 2022, the book balance of accounts receivable amounted to 6,210,048,763.32 yuan, with provision for bad
debts of 584,256,290.95 yuan, and the carrying amount amounted to 5,625,792,472.37 yuan; the book balance of long-term
receivables (including those due within one year) amounted to 1,541.22 million yuan, with provision for bad debts of 132.59 million
yuan, and the carrying amount amounted to 1,408.64 million yuan. The carrying amount of accounts receivable and long-term
receivables (collectively referred to as “receivables”) totaled 7,034.43 million yuan.
Based on credit risk features of receivables, 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 receivables 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 receivables with expected
credit losses measured on a collective basis, the Management classifies portfolios on the basis of overdue days or ages, adjusts them
based on historical credit risk loss experience and forward-looking estimations, prepares the comparison table of overdue days or
ages and expected credit loss rate of receivables, so as to calculate the provision for bad debts to be accrued.
As the amount of receivables is significant and the impairment testing involves significant judgment of the Management, we
have identified impairment of receivables as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for impairment of receivables are as follows:
(1) We obtained understandings of key internal controls related to receivables, assessed the design of these controls, determined
whether they had been executed, and tested the effectiveness of the operation;
(2) We reviewed receivables 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 receivables and objective evidence, and
assessed whether the credit risk features of receivables had been appropriately identified by the Management;
110
(4) For receivables with expected credit losses measured on an individual basis, we obtained and checked the Management’s
estimations on the expected future cash flows, assessed the reasonableness of key assumptions and the accuracy of data adopted in
the estimations and checked them with acquired external evidence;
(5) For receivables 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 overdue days or ages and
expected credit loss rate of receivables 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 overdue days, ages, etc.) and whether the calculation of provision for bad debts was accurate;
(6) We checked the subsequent collection of receivables and assessed the reasonableness of provision for bad debts made by the
Management; and
(6) We checked whether information related to impairment of receivables 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 notes to the financial statements for details.
As of December 31, 2022, the cost of goodwill amounted to 6,268,845,549.87 yuan, with provision for impairment of
529,242,870.08 yuan, and the carrying amount amounted to 5,739,602,679.79 yuan, accounting for 19.61% of total assets.
The Management will perform impairment test on goodwill together with related asset groups or asset group portfolios when
there is evidence indicating impairment loss in asset group or asset group portfolio related to goodwill, or at the end of each period,
and the recoverable amount of related asset groups or asset group portfolios is determined based on the estimated present value of
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 the 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 competency, professional quality and objectivity of external appraisers engaged by us and the
appropriateness of their works;
(5) We assessed the reasonableness and consistency of impairment test method adopted by the Management;
(6) 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;
(7) 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;
(8) We tested the accuracy, completeness and relativity of data used in the impairment test by the Management and reviewed the
internal consistency of related information in the impairment test;
(9) We tested whether the calculation of estimated present value of future cash flows by the Management was accurate; and
(10) We checked whether information related to impairment of goodwill had been presented appropriately in the financial
statements.
111
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
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
112
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.
Pan-China Certified Public Accountants LLP Chinese Certified Public Accountant: Bian Shanshan
(Engagement Partner)
Hangzhou China Chinese Certified Public Accountant: Wei Xiaohui
Date of Report: April 24, 2023
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 financial performance 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.
113
Infore Environment Technology Group Co., Ltd.
Consolidated balance sheet as at December 31, 2022
(Expressed in Renminbi Yuan)
Note
Assets Closing balance December 31, 2021
No.
Current assets:
Cash and bank balances 1 4,728,203,530.46 4,583,245,371.02
Settlement funds
Loans to other banks
Held-for-trading financial assets
Derivative financial assets
Notes receivable 2 13,565,706.22 54,402,653.25
Accounts receivable 3 5,625,792,472.37 4,946,704,963.71
Receivables financing 4 107,316,593.41 296,379,694.57
Advances paid 5 192,360,542.24 128,604,382.66
Premiums receivable
Reinsurance accounts receivable
Reinsurance reserve receivable
Other receivables 6 385,622,271.00 509,164,126.27
Financial assets under reverse repo
Inventories 7 881,038,036.95 1,124,149,719.01
Contract assets 8 101,023,854.33 140,367,802.53
Assets held for sale
Non-current assets due within one year 9 476,505,825.28 739,917,866.53
Other current assets 10 497,450,797.42 492,705,381.17
Total current assets 13,008,879,629.68 13,015,641,960.72
Non-current assets:
Loans and advances
Debt investments
Other debt investments
Long-term receivables 11 932,130,871.82 1,017,246,537.53
Long-term equity investments 12 676,829,959.84 603,580,781.31
Other equity instrument investments 13 15,352,971.01 15,702,971.01
Other non-current financial assets
Investment property 14 27,105,435.03 1,837,703.68
Fixed assets 15 2,268,287,202.01 1,758,052,005.19
Construction in progress 16 41,073,267.68 224,068,633.86
Productive biological assets
Oil & gas assets
Right-of-use assets 17 31,859,454.24 25,505,911.86
Intangible assets 18 6,048,114,364.49 5,350,595,868.40
Development expenditures 19 30,338,218.08 15,682,278.17
Goodwill 20 5,739,602,679.79 5,976,192,021.27
Long-term prepayments 21 30,210,935.91 15,733,757.32
Deferred tax assets 22 114,577,132.19 109,565,926.15
Other non-current assets 23 306,929,738.21 233,477,295.83
Total non-current assets 16,262,412,230.30 15,347,241,691.58
Total assets 29,271,291,859.98 28,362,883,652.30
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
114
Infore Environment Technology Group Co., Ltd.
Consolidated balance sheet as at December 31, 2022 (continued)
(Expressed in Renminbi Yuan)
Liabilities & Equity Note No. Closing balance December 31, 2021
Current liabilities:
Short-term borrowings 24 440,103,105.44 439,024,733.46
Central bank loans
Loans from other banks
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 25 2,515,229,293.17 2,468,799,189.71
Accounts payable 26 2,771,961,271.66 2,960,061,508.33
Advances received
Contract liabilities 27 274,289,978.25 210,432,628.98
Financial liabilities under repo
Absorbing deposit and interbank deposit
Deposit for agency security transaction
Deposit for agency security underwriting
Employee benefits payable 28 409,574,018.72 310,701,572.37
Taxes and rates payable 29 114,968,226.88 139,494,861.08
Other payables 30 657,122,287.53 683,714,082.05
Handling fee and commission payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one year 31 561,019,099.59 378,610,951.81
Other current liabilities 32 31,616,947.24 62,964,777.60
Total current liabilities 7,775,884,228.48 7,653,804,305.39
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 33 1,922,306,226.32 1,697,742,767.72
Bonds payable 34 1,308,690,556.32 1,254,962,176.00
Including: Preferred shares
Perpetual bonds
Lease liabilities 35 23,255,624.30 18,523,740.10
Long-term payables 36 315,735,814.91 315,735,814.91
Long-term employee benefits payable
Provisions 37 4,575,049.22 3,129,793.85
Deferred income 38 120,890,710.04 101,635,992.65
Deferred tax liabilities 22 54,207,628.08 32,562,033.97
Other non-current liabilities 39 8,333,333.33
Total non-current liabilities 3,757,994,942.52 3,424,292,319.20
Total liabilities 11,533,879,171.00 11,078,096,624.59
Equity:
Share capital 40 3,179,505,559.00 3,175,734,760.00
Other equity instruments 41 266,916,341.80 266,929,289.24
Including: Preferred shares
Perpetual bonds
Capital reserve 42 9,662,511,254.48 9,772,795,863.75
Less: Treasury shares 43 94,132,795.17 455,303,777.91
Other comprehensive income 44 -4,630,000.00 -4,280,000.00
Special reserve 45
Surplus reserve 46 315,124,767.92 296,754,883.56
General risk reserve
Undistributed profit 47 3,963,306,890.06 3,874,934,971.69
Total equity attributable to the parent company 17,288,602,018.09 16,927,565,990.33
Non-controlling interest 448,810,670.89 357,221,037.38
Total equity 17,737,412,688.98 17,284,787,027.71
Total liabilities & equity 29,271,291,859.98 28,362,883,652.30
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
115
nfore Environment Technology Group Co., Ltd.
Parent company balance sheet as at December 31, 2022
(Expressed in Renminbi Yuan)
Note
Assets Closing balance December 31, 2021
No.
Current assets:
Cash and bank balances 632,554,163.45 920,283,773.31
Held-for-trading financial assets
Derivative financial assets
Notes receivable 2,964,486.88
Accounts receivable
Receivables financing 118,400,000.00 221,756,340.36
Advances paid 638,924.48 601,403.69
Other receivables 1 4,492,807,441.80 3,884,005,093.84
Inventories
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets
Total current assets 5,244,400,529.73 5,029,611,098.08
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 2 17,076,616,871.15 16,956,047,890.72
Other equity instrument investments 15,352,971.01 15,702,971.01
Other non-current financial assets
Investment property
Fixed assets
Construction in progress
Productive biological assets
Oil & gas assets
Right-of-use assets 593,318.35 1,779,955.11
Intangible assets 1,749,936.60 2,755,338.15
Development expenditures
Goodwill
Long-term prepayments
Deferred tax assets
Other non-current assets
Total non-current assets 17,094,313,097.11 16,976,286,154.99
Total assets 22,338,713,626.84 22,005,897,253.07
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
116
Infore Environment Technology Group Co., Ltd.
Parent company balance sheet as at December 31, 2022 (continued)
(Expressed in Renminbi Yuan)
Liabilities & Equity Closing balance December 31, 2021
Current liabilities:
Short-term borrowings 20,022,000.00 150,165,000.00
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 42,395,262.51
Accounts payable 1,137,507.93 1,137,507.93
Advances received
Contract liabilities
Employee benefits payable 4,221,817.88 3,357,619.13
Taxes and rates payable 6,259,662.49 10,278,606.48
Other payables 1,064,116,084.37 892,387,560.66
Liabilities held for sale
Non-current liabilities due within one year 311,902,807.73 1,539,297.15
Other current liabilities
Total current liabilities 1,450,055,142.91 1,058,865,591.35
Non-current liabilities:
Long-term borrowings 59,871,432.00 300,000,000.00
Bonds payable 1,308,690,556.32 1,254,962,176.00
Including: Preferred shares
Perpetual bonds
Lease liabilities 579,712.08
Long-term payables 3,000,000.00 3,000,000.00
Long-term employee benefits payable
Provisions 4,114,064.16 3,129,793.85
Deferred income
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 1,375,676,052.48 1,561,671,681.93
Total liabilities 2,825,731,195.39 2,620,537,273.28
Equity:
Share capital 3,179,505,559.00 3,175,734,760.00
Other equity instruments 266,916,341.80 266,929,289.24
Including: Preferred shares
Perpetual bonds
Capital reserve 15,324,654,061.79 15,433,256,911.67
Less: Treasury shares 94,132,795.17 455,303,777.91
Other comprehensive income -4,630,000.00 -4,280,000.00
Special reserve
Surplus reserve 280,904,378.50 262,534,494.14
Undistributed profit 559,764,885.53 706,488,302.65
Total equity 19,512,982,431.45 19,385,359,979.79
Total liabilities & equity 22,338,713,626.84 22,005,897,253.07
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
117
Infore Environment Technology Group Co., Ltd.
Consolidated income statement for the year ended December 31, 2022
(Expressed in Renminbi Yuan)
Note
Items Current period cumulative Preceding period comparative
No.
I. Total operating revenue 12,255,992,938.42 11,866,291,611.45
Including: Operating revenue 1 12,255,992,938.42 11,866,291,611.45
Interest income
Premiums earned
Revenue from handling charges and commission
II. Total operating cost 11,359,383,512.75 10,931,753,295.05
Including: Operating cost 1 9,469,510,831.27 9,232,198,569.17
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 74,685,022.05 54,143,815.44
Selling expenses 3 762,970,847.95 738,833,571.05
Administrative expenses 4 609,601,680.23 585,353,407.57
R&D expenses 5 340,775,707.34 262,619,127.29
Financial expenses 6 101,839,423.91 58,604,804.53
Including: Interest expenses 170,568,834.86 149,868,429.63
Interest income 86,389,951.68 107,324,690.38
Add: Other income 7 119,564,678.48 83,541,172.51
Investment income (or less: losses) 8 -41,466,125.62 239,933,995.59
Including: Investment income from associates and joint ventures 8,548,481.77 36,885,135.08
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 -73,074,674.05
Credit impairment loss 10 -104,837,162.42 -98,375,820.02
Assets impairment loss 11 -312,998,494.66 -230,940,495.92
Gains on asset disposal (or less: losses) 12 532,796.72 -1,161,842.22
III. Operating profit (or less: losses) 557,405,118.17 854,460,652.29
Add: Non-operating revenue 13 12,798,235.90 10,028,024.42
Less: Non-operating expenditures 14 13,947,988.82 11,786,454.06
IV. Profit before tax (or less: total loss) 556,255,365.25 852,702,222.65
Less: Income tax expenses 15 96,963,243.68 53,503,488.11
V. Net profit (or less: net loss) 459,292,121.57 799,198,734.54
(I) Categorized by the continuity of operations
1. Net profit from continuing operations (or less: net loss) 459,292,121.57 792,171,037.03
2. Net profit from discontinued operations (or less: net loss) 7,027,697.51
(II) Categorized by the portion of equity ownership
1. Net profit attributable to owners of parent company (or less: net loss) 418,794,179.13 752,792,198.66
2. Net profit attributable to non-controlling shareholders (or less: net loss) 40,497,942.44 46,406,535.88
VI. Other comprehensive income after tax 16 -350,000.00 -4,280,000.00
Items attributable to the owners of the parent company -350,000.00 -4,280,000.00
(I) Not to be reclassified subsequently to profit or loss -350,000.00 -4,280,000.00
1. Remeasurements of 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 -350,000.00 -4,280,000.00
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
Items attributable to non-controlling shareholders
VII. Total comprehensive income 458,942,121.57 794,918,734.54
Items attributable to the owners of the parent company 418,444,179.13 748,512,198.66
Items attributable to non-controlling shareholders 40,497,942.44 46,406,535.88
VIII. Earnings per share (EPS):
(I) Basic EPS (yuan per share) 0.13 0.24
(II) Diluted EPS (yuan per share) 0.13 0.24
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
118
Infore Environment Technology Group Co., Ltd.
Parent company income statement for the year ended December 31, 2022
(Expressed in Renminbi Yuan)
Note Current period Preceding period
Items
No. cumulative comparative
I. Operating revenue 1 818,861.05 487,932.74
Less: Operating cost 1 818,861.05 487,932.74
Taxes and surcharges 24,479.22 227,340.60
Selling expenses 188,548.41 562,853.92
Administrative expenses 37,210,341.13 24,147,760.09
R&D expenses
Financial expenses -26,702,758.90 -17,684,273.22
Including: Interest expenses 17,704,428.72 23,111,838.20
Interest income 105,355,828.68 83,393,551.31
Add: Other income 134,351.98 184,301.81
Investment income (or less: losses) 2 192,483,839.36 697,535,882.88
Including: Investment income from associates and joint ventures 25,737,537.83 24,398,494.78
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) -73,120,883.39
Credit impairment loss 304,725.02 -11,011,665.82
Assets impairment loss
Gains on asset disposal (or less: losses)
II. Operating profit (or less: losses) 182,202,306.50 606,333,954.09
Add: Non-operating revenue 1,496,537.14 1,877,643.88
Less: Non-operating expenditures 36,656.80
III. Profit before tax (or less: total loss) 183,698,843.64 608,174,941.17
Less: Income tax expenses -32,354,461.28
IV. Net profit (or less: net loss) 183,698,843.64 640,529,402.45
(I) Net profit from continuing operations (or less: net loss) 183,698,843.64 640,529,402.45
(II) Net profit from discontinued operations (or less: net loss)
V. Other comprehensive income after tax -350,000.00 -4,280,000.00
(I) Not to be reclassified subsequently to profit or loss -350,000.00 -4,280,000.00
1. Remeasurements of 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 -350,000.00 -4,280,000.00
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 183,348,843.64 636,249,402.45
VII. Earnings per share (EPS):
(I) Basic EPS (yuan per share)
(II) Diluted EPS (yuan per share)
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
119
Infore Environment Technology Group Co., Ltd.
Consolidated cash flow statement for the year ended December 31, 2022
(Expressed in Renminbi Yuan)
Note Preceding period
Items Current period cumulative
No. comparative
I. Cash flows from operating activities:
Cash receipts from sale of goods or rendering of services 11,979,875,703.49 11,921,988,281.60
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 178,294,936.92 26,261,970.67
Other cash receipts related to operating activities 1 2,097,066,618.34 2,924,238,760.42
Subtotal of cash inflows from operating activities 14,255,237,258.75 14,872,489,012.69
Cash payments for goods purchased and services received 7,399,369,111.76 9,223,061,869.14
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 2,062,334,468.26 1,604,759,059.51
Cash payments for taxes and rates 734,988,426.49 628,578,908.13
Other cash payments related to operating activities 2 2,396,062,964.53 2,606,870,455.78
Subtotal of cash outflows from operating activities 12,592,754,971.04 14,063,270,292.56
Net cash flows from operating activities 1,662,482,287.71 809,218,720.13
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments 56,196,352.10
Cash receipts from investment income 24,671,510.32 42,698,349.08
Net cash receipts from the disposal of fixed assets, intangible assets and other long-term assets 16,999,998.22 17,760,470.09
Net cash receipts from the disposal of subsidiaries & other business units 115,100,000.00 445,597,313.96
Other cash receipts related to investing activities 3 5,401,861,000.00 4,850,116,524.23
Subtotal of cash inflows from investing activities 5,558,632,508.54 5,412,369,009.46
Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets 1,083,515,734.97 1,734,581,869.14
Cash payments for investments 130,189,561.55 10,130,000.00
Net increase of pledged borrowings
Net cash payments for the acquisition of subsidiaries & other business units 83,807,513.74
Other cash payments related to investing activities 4 5,398,900,000.00 4,789,881,717.72
Subtotal of cash outflows from investing activities 6,696,412,810.26 6,534,593,586.86
Net cash flows from investing activities -1,137,780,301.72 -1,122,224,577.40
III. Cash flows from financing activities:
Cash receipts from absorbing investments 57,744,844.02 96,777,104.58
Including: Cash received by subsidiaries from non-controlling shareholders as investments 34,345,285.00 17,943,815.00
Cash receipts from borrowings 2,033,074,142.02 2,571,966,000.32
Other cash receipts related to financing activities 5 290,555,211.59 233,079,996.55
Subtotal of cash inflows from financing activities 2,381,374,197.63 2,901,823,101.45
Cash payments for the repayment of borrowings 1,732,314,139.87 2,180,619,133.00
Cash payments for distribution of dividends or profits and for interest expenses 451,503,767.45 491,122,899.60
Including: Cash paid by subsidiaries to non-controlling shareholders as dividend or profit 11,792,867.41 339,454.75
Other cash payments related to financing activities 6 263,396,824.36 454,152,599.63
Subtotal of cash outflows from financing activities 2,447,214,731.68 3,125,894,632.23
Net cash flows from financing activities -65,840,534.05 -224,071,530.78
IV. Effect of foreign exchange rate changes on cash & cash equivalents 3,056,908.33 -2,001,825.46
V. Net increase in cash and cash equivalents 461,918,360.27 -539,079,213.51
Add: Opening balance of cash and cash equivalents 4,118,746,885.72 4,657,826,099.23
VI. Closing balance of cash and cash equivalents 4,580,665,245.99 4,118,746,885.72
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
120
Infore Environment Technology Group Co., Ltd.
Parent company cash flow statement for the year ended December 31, 2022
(Expressed in Renminbi Yuan)
Current period Preceding period
Items
cumulative comparative
I. Cash flows from operating activities:
Cash receipts from sale of goods and rendering of services 728,741.14
Receipts of tax refund
Other cash receipts related to operating activities 622,328,508.84 1,467,056,243.50
Subtotal of cash inflows from operating activities 622,328,508.84 1,467,784,984.64
Cash payments for goods purchased and services received 1,743,599.35
Cash paid to and on behalf of employees 20,656,924.48 16,185,831.90
Cash payments for taxes and rates 24,479.22 383,530.02
Other cash payments related to operating activities 727,589,122.93 1,235,268,785.97
Subtotal of cash outflows from operating activities 748,270,526.63 1,253,581,747.24
Net cash flows from operating activities -125,942,017.79 214,203,237.40
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments 115,100,000.00 549,259,519.99
Cash receipts from investment income 221,911,743.60 509,652,357.10
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 1,416,859,323.47 2,165,423,619.03
Subtotal of cash inflows from investing activities 1,753,871,067.07 3,224,335,496.12
Cash payments for the acquisition of fixed assets, intangible assets and other long-
513,101.79
term assets
Cash payments for investments 96,546,250.00 436,550,000.00
Net cash payments for the acquisition of subsidiaries & other business units
Other cash payments related to investing activities 1,441,321,272.72 3,012,636,177.10
Subtotal of cash outflows from investing activities 1,537,867,522.72 3,449,699,278.89
Net cash flows from investing activities 216,003,544.35 -225,363,782.77
III. Cash flows from financing activities:
Cash receipts from absorbing investments 23,399,559.02 78,833,289.58
Cash receipts from borrowings 96,200,000.00 650,000,000.00
Other cash receipts related to financing activities 228,995,320.75 580,000,000.00
Subtotal of cash inflows from financing activities 348,594,879.77 1,308,833,289.58
Cash payments for the repayment of borrowings 155,585,856.00 800,000,000.00
Cash payments for distribution of dividends or profits and for interest expenses 340,633,373.24 393,783,090.74
Other cash payments related to financing activities 181,368,993.06 447,594,655.11
Subtotal of cash outflows from financing activities 677,588,222.30 1,641,377,745.85
Net cash flows from financing activities -328,993,342.53 -332,544,456.27
IV. Effect of foreign exchange rate changes on cash and cash equivalents
V. Net increase in cash and cash equivalents -238,931,815.97 -343,705,001.64
Add: Opening balance of cash and cash equivalents 870,283,773.31 1,213,988,774.95
VI. Closing balance of cash and cash equivalents 631,351,957.34 870,283,773.31
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
121
Infore Environment Technology Group Co., Ltd.
Consolidated statement of changes in equity for the year ended December 31, 2022
(Expressed in Renminbi Yuan)
Current period cumulative
Total equit
Equity attributable to parent company
y
Other equity instrume
Items Gen Non-cont
nts Other co
Less: eral rolling in
Share capit Prefe Capital res mprehen Special r Surplus Undistribut terest
Perpe Treasury s risk
al rred erve sive inco eserve reserve ed profit
tual b Others hares reser
share me
ve
onds
s
I. Balance at the end of prior 3,175,734, 266,929, 9,772,79 455,303,7 -4,280, 296,754,8 3,874,934, 357,221, 17,284,78
year 760.00 289.24 5,863.75 77.91 000.00 83.56 971.69 037.38 7,027.71
Add: Cumulative changes of
accounting policies
Error correction of prior pe
riod
Business combination und
er common control
Others
II. Balance at the beginning o 3,175,734, 266,929, 9,772,79 455,303,7 -4,280, 296,754,8 3,874,934, 357,221, 17,284,78
f current year 760.00 289.24 5,863.75 77.91 000.00 83.56 971.69 037.38 7,027.71
III. Current period increase 3,770,799. -12,947. -110,284, -361,170, -350,00 18,369,88 88,371,91 91,589,6 452,625,6
(or less: decrease) 00 44 609.27 982.74 0.00 4.36 8.37 33.51 61.27
(I) Total comprehensive inco -350,00 418,794,17 40,497,9 458,942,1
me 0.00 9.13 42.44 21.57
(II) Capital contributed or wit 3,770,799. -12,947. -110,284, -361,170, 60,341,2 314,985,4
hdrawn by owners 00 44 609.27 982.74 09.93 34.96
1. Ordinary shares contribute 3,761,991. -112,538, -361,170, 46,970,6 299,365,5
d by owners 00 093.97 982.74 75.00 54.77
2. Capital contributed by hol
-12,947.
ders of other equity instrume 8,808.00 66,691.53 62,552.09
44
nts
3. Amount of share-based pa 3,868,55 170,516. 4,039,069.
yment included in equity 2.56 82 38
-1,681,75 13,200,0 11,518,25
4. Others
9.39 18.11 8.72
18,369,88 -330,422,2 -9,249,5 -321,301,8
(III) Profit distribution
4.36 60.76 18.86 95.26
1. Appropriation of surplus re 18,369,88 -18,369,88
serve 4.36 4.36
2. Appropriation of general ri
sk reserve
3. Appropriation of profit to -312,052,3 -9,249,5 -321,301,8
owners 76.40 18.86 95.26
4. Others
(IV) Internal carry-over withi
n equity
1. Transfer of capital reserve
to capital
2. Transfer of surplus reserve
to capital
3. Surplus reserve to cover lo
sses
4. Changes in defined benefit
plan carried over to retained
earnings
5. Other comprehensive inco
me carried over to retained ea
rnings
6. Others
(V) Special reserve
1. Current period appropriati 8,693,98 8,693,981.
on 1.54 54
-8,693,9 -8,693,98
2. Current period use
81.54 1.54
(VI) Others
IV. Balance at the end of curr 3,179,505, 266,916, 9,662,51 94,132,79 -4,630, 315,124,7 3,963,306, 448,810, 17,737,41
ent period 559.00 341.80 1,254.48 5.17 000.00 67.92 890.06 670.89 2,688.98
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
122
Infore Environment Technology Group Co., Ltd.
Consolidated statement of changes in equity for the year ended December 31, 2022 (continued)
(Expressed in Renminbi Yuan)
Preceding period comparative
Non-contr
Total equit
Equity attributable to parent company olling inte
y
rest
Items Other equity instrume Gen
nts Other co
Less: eral
Share capi Capital rese mprehen Special r Surplus Undistribu
tal Prefe Perpe rve
Treasury s
sive inco eserve reserve
risk
ted profit
rred stual b Others hares
me
reser
hares onds ve
I. Balance at the end of prior 3,163,06 266,939,8 9,707,741, 8,920,59 232,701,9 3,558,68 350,806,0 17,271,02
year 2,146.00 31.65 876.49 7.83 43.56 8,885.55 96.48 0,181.90
Add: Cumulative changes of
accounting policies
Error correction of prior pe
riod
Business combination und
er common control
Others
II. Balance at the beginning o 3,163,06 266,939,8 9,707,741, 8,920,59 232,701,9 3,558,68 350,806,0 17,271,02
f current year 2,146.00 31.65 876.49 7.83 43.56 8,885.55 96.48 0,181.90
III. Current period increase 12,672,61 -10,542.4 65,053,98 446,383,1 -4,280,0 64,052,94 316,246,0 6,414,94 13,766,84
(or less: decrease) 4.00 1 7.26 80.08 00.00 0.00 86.14 0.90 5.81
(I) Total comprehensive inco -4,280,0 752,792,1 46,406,53 794,918,7
me 00.00 98.66 5.88 34.54
(II) Capital contributed or wit 12,672,61 -10,542.4 65,053,98 446,383,1 -39,652,1 -408,319,2
hdrawn by owners 4.00 1 7.26 80.08 40.23 61.46
1. Ordinary shares contribute 12,665,58 66,167,70 17,943,81 96,777,10
d by owners 9.00 0.58 5.00 4.58
2. Capital contributed by hol
-10,542.4
ders of other equity instrume 7,025.00 52,079.08 48,561.67
1
nts
3. Amount of share-based pa 10,348,24 388,939.6 10,737,18
yment included in equity 2.29 3 1.92
-11,514,03 446,383,1 -57,984,8 -515,882,1
4. Others
4.69 80.08 94.86 09.63
64,052,94 -436,546, -339,454. -372,832,6
(III) Profit distribution
0.00 112.52 75 27.27
1. Appropriation of surplus r 64,052,94 -64,052,9
eserve 0.00 40.00
2. Appropriation of general ri
sk reserve
3. Appropriation of profit to -372,493, -339,454. -372,832,6
owners 172.52 75 27.27
4. Others
(IV) Internal carry-over withi
n equity
1. Transfer of capital reserve
to capital
2. Transfer of surplus reserve
to capital
3. Surplus reserve to cover lo
sses
4. Changes in defined benefit
plan carried over to retained
earnings
5. Other comprehensive inco
me carried over to retained e
arnings
6. Others
(V) Special reserve
1. Current period appropriati 7,434,02 7,434,025.
on 5.58 58
-7,434,0 -7,434,02
2. Current period use
25.58 5.58
(VI) Others
IV. Balance at the end of curr 3,175,73 266,929,2 9,772,795, 455,303,7 -4,280,0 296,754,8 3,874,93 357,221,0 17,284,78
ent period 4,760.00 89.24 863.75 77.91 00.00 83.56 4,971.69 37.38 7,027.71
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
123
Infore Environment Technology Group Co., Ltd.
Parent company statement of changes in equity for the year ended December 31, 2022
(Expressed in Renminbi Yuan)
Current period cumulative
Other equity instruments Spec
Items Other co
Share capital Preferr Perpetu
Capital reser Less: Treas ial re Surplus res Undistribute
mprehensi Total equity
ed shar al bond Others ve ury shares
ve income
serve erve d profit
es s
3,175,734,7 266,929,2 15,433,256, 455,303,7 -4,280,0 262,534,4 706,488,30 19,385,35
I. Balance at the end of prior year
60.00 89.24 911.67 77.91 00.00 94.14 2.65 9,979.79
Add: Cumulative changes of acc
ounting policies
Error correction of prior period
Others
II. Balance at the beginning of cu 3,175,734,7 266,929,2 15,433,256, 455,303,7 -4,280,0 262,534,4 706,488,30 19,385,35
rrent year 60.00 89.24 911.67 77.91 00.00 94.14 2.65 9,979.79
III. Current period increase (or le 3,770,799.0 -12,947.4 -108,602,84 -361,170, -350,00 18,369,88 -146,723,4 127,622,45
ss: decrease) 0 4 9.88 982.74 0.00 4.36 17.12 1.66
-350,00 183,698,84 183,348,84
(I) Total comprehensive income
0.00 3.64 3.64
(II) Capital contributed or withdr 3,770,799.0 -12,947.4 -108,602,84 -361,170, 256,325,98
awn by owners 0 4 9.88 982.74 4.42
1. Ordinary shares contributed by 3,761,991.0 -112,538,09 -361,170, 252,394,87
owners 0 3.97 982.74 9.77
2. Capital contributed by holders -12,947.4
8,808.00 66,691.53 62,552.09
of other equity instruments 4
3. Amount of share-based payme 3,868,552.5 3,868,552.
nt included in equity 6 56
4. Others
18,369,88 -330,422,2 -312,052,3
(III) Profit distribution
4.36 60.76 76.40
1. Appropriation of surplus reser 18,369,88 -18,369,88
ve 4.36 4.36
2. Appropriation of profit to own -312,052,3 -312,052,3
ers 76.40 76.40
3. Others
(IV) Internal carry-over within eq
uity
1. Transfer of capital reserve to c
apital
2. Transfer of surplus reserve to c
apital
3. Surplus reserve to cover losses
4. Changes in defined benefit pla
n carried over to retained earning
s
5. Other comprehensive income c
arried over to retained earnings
6. Others
(V) Special reserve
1. Current period appropriation
2. Current period use
(VI) Others
IV. Balance at the end of current 3,179,505,5 266,916,3 15,324,654, 94,132,79 -4,630,0 280,904,3 559,764,88 19,512,98
period 59.00 41.80 061.79 5.17 00.00 78.50 5.53 2,431.45
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
124
Infore Environment Technology Group Co., Ltd.
Parent company statement of changes in equity for the year ended December 31, 2022 (continued)
(Expressed in Renminbi Yuan)
Preceding period comparative
Other equity instruments Other co Spec
Items Prefer Perpet Capital reserv Less: Trea mprehens ial re Surplus res Undistribute
Share capital Total equity
red sh ual bo Others e sury shares ive incom serve erve d profit
ares nds e
3,163,062,1 266,939,8 15,356,688,8 8,920,59 198,481,5 502,505,01 19,478,756,
I. Balance at the end of prior year
46.00 31.65 89.72 7.83 54.14 2.72 836.40
Add: Cumulative changes of accou
nting policies
Error correction of prior period
Others
II. Balance at the beginning of curre 3,163,062,1 266,939,8 15,356,688,8 8,920,59 198,481,5 502,505,01 19,478,756,
nt year 46.00 31.65 89.72 7.83 54.14 2.72 836.40
III. Current period increase (or less: 12,672,614. 76,568,021.9 446,383,1 -4,280,0 64,052,94 203,983,28 -93,396,85
-10,542.41
decrease) 00 5 80.08 00.00 0.00 9.93 6.61
-4,280,0 640,529,40 636,249,40
(I) Total comprehensive income
00.00 2.45 2.45
(II) Capital contributed or withdraw 12,672,614. 76,568,021.9 446,383,1 -357,153,0
-10,542.41
n by owners 00 5 80.08 86.54
1. Ordinary shares contributed by o 12,665,589. 66,167,700.5 446,383,1 -367,549,8
wners 00 8 80.08 90.50
2. Capital contributed by holders of
7,025.00 -10,542.41 52,079.08 48,561.67
other equity instruments
3. Amount of share-based payment 10,348,242.2 10,348,242.
included in equity 9 29
4. Others
64,052,94 -436,546,1 -372,493,1
(III) Profit distribution
0.00 12.52 72.52
64,052,94 -64,052,94
1. Appropriation of surplus reserve
0.00 0.00
-372,493,1 -372,493,1
2. Appropriation of profit to owners
72.52 72.52
3. Others
(IV) Internal carry-over within equi
ty
1. Transfer of capital reserve to capi
tal
2. Transfer of surplus reserve to cap
ital
3. Surplus reserve to cover losses
4. Changes in defined benefit plan c
arried over to retained earnings
5. Other comprehensive income car
ried over to retained earnings
6. Others
(V) Special reserve
1. Current period appropriation
2. Current period use
(VI) Others
IV. Balance at the end of current pe 3,175,734,7 266,929,2 15,433,256,9 455,303,7 -4,280,0 262,534,4 706,488,30 19,385,359,
riod 60.00 89.24 11.67 77.91 00.00 94.14 2.65 979.79
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
125
Infore Environment Technology Group Co., Ltd.
Notes to Financial Statements
For the year ended December 31, 2022
Monetary unit: RMB Yuan
I. Company profile
Infore Environment Technology Group Co., Ltd. (the “Company”), formerly known as Zhejiang Shangfeng Industrial Co., Ltd.,
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
Zhejiang Fan Air Cooling Equipment Co., Ltd., the main initiator, and Shangyu Fan Factory and 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, 2022, it
has registered capital of 3,179,474,144.00 yuan, and total share capital of 3,179,505,559.00 yuan. The difference between the
registered capital and share capital is because the change related to new share capital has not been registered at the administration for
industry and commerce. According to the records in China Securities Depository and Clearing Corporation Limited, as of December
31, 2022, the Company has restricted outstanding shares of 1,838,140 shares, and unrestricted outstanding shares of 3,177,667,419
shares, totaling 3,179,505,559 shares. The Company’s shares were listed on the 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 protection
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. Its revenue is mainly from sales of environmental and sanitation machinery,
ventilation equipment, and sanitation operation service.
The financial statements were approved and authorized for issue by the second meeting of the tenth session of the Board of
Directors dated April 24, 2023.
The Company has brought 247 subsidiaries including Changsha Zoomlion Environmental Industry Co., Ltd. (the “Zoomlion
Environmental Company”), Zhejiang Shangfeng Special Blower Industrial Co., Ltd. (the “Shangfeng Industrial Company”),
Guangdong Infore Technology Co., Ltd. (the “Infore Technology Company”) and Shenzhen Green Oriental Environmental Protection
Co., Ltd. (the “Green Oriental Company”) into the consolidation scope. Please refer to section VI and VII of notes to the 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, depreciation of right-of-use assets, amortization of intangible assets, 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
126
Enterprises (CASBEs), and present truly and completely the financial position, financial performance 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.
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 sale 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
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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 exchange rate at the balance sheet date; the
equity items, other than undistributed profit, are translated at the spot exchange 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 in
circumstances where the Company does not consider the financing components in contracts within one year, they are measured at the
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 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
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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.
(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 is 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 is 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
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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 and information
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 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, 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 at fair value through other comprehensive income, contract assets, leases receivable, 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 leases receivable, and accounts receivable and contract assets resulting from transactions 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 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 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
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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 on a collective basis and expected credit losses measured using
three-stage model
Basis for determination of
Items 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
Balances due from related parties future economic conditions, the Company
balances 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
Other receivables – Portfolio grouped with future economic conditions, the Company
Nature of the balance
performance compensations 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
future economic conditions, the Company
Other receivables – Portfolio grouped with ages Ages
calculates expected credit loss through
exposure at default and 12-month or lifetime
expected credit loss rate.
Expected credit loss rates are calculated
Long-term receivables – Portfolio grouped with
based on five-level classification of credit
finance lease payment/ Long-term receivables –
assets of non-bank financial institutions:
Portfolio grouped with receivables financing
Nature of the balance 1.5% for pass category, 3% for special-
factoring payment /Accounts receivable –
mention category, 30% for substandard
Portfolio grouped with commercial factoring
category, 60% for doubtful category, and
payment
100% for loss category
(3) Accounts receivable and contract assets with expected credit losses measured on a collective basis using simplified approach
1) Specific portfolios and method for measuring expected credit loss
Basis for determination of Method for measuring expected credit loss
Items
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
Balances due from related parties future economic conditions, the Company
balances 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
Ages prepares the comparison table of overdue
ages
days/ages and lifetime expected credit loss
rate of accounts receivable, so as to calculate
expected credit loss.
Based on historical credit loss experience,
Accounts receivable – Portfolio grouped with
Nature of the balance the current situation and the forecast of
government subsidies for new energy vehicles
future economic conditions, the Company
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Basis for determination of Method for measuring expected credit loss
Items
portfolio
prepares the comparison table of overdue
days/ages and lifetime expected credit loss
rate of accounts receivable, so as to calculate
expected credit loss.
Based on historical credit loss experience,
the current situation and the forecast of
Contract assets – Portfolio grouped with future economic conditions, the Company
Nature of the balance
warranty reserve calculates expected credit loss through
exposure at default and lifetime expected
credit loss rate.
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 accrued at 5% of the balance. For long-term
Nature of the balance
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
a. Parent company
Ages Expected credit loss rate of accounts receivable (%)
1-180 days (inclusive, the same hereinafter) 0
180 days - 1 year 2
1-2 years 10
2-3 years 30
3-5 years 50
Over 5 years 80
b. Ventilation equipment manufacturing industry and environmental integrated industry
Ages Expected credit loss rate of accounts receivable (%)
Within 1 year (inclusive, the same hereinafter) 5
1-2 years 10
2-3 years 30
3-5 years 50
Over 5 years 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:
(1) currently has a legally enforceable right to set off the recognized amounts; and (2) 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, materials, supplies, etc. to be consumed in the production process or in the rendering of services.
2. Accounting method for dispatching inventories:
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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 inventories 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 are determined separately and are 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
Assets related to contract costs include 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.
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 held for sale
1. Classification of non-current assets or disposal groups held for sale
Non-current assets or disposal groups are accounted for as held for sale when the following conditions are all met: (1) 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; (2) 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 plan to sell the
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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: (1) 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 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 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 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 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 held for sale or non-current assets in disposal
groups held for sale, while interest and other expenses attributable to the liabilities of a disposal group 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 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 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 held for sale, 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 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.
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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.
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 a long-term equity investment with control relationship, it is accounted for with cost method; for a long-term equity
investment 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
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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.
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
Residual value proportion Annual depreciation rate
Categories Depreciation method Useful life (years)
(%) (%)
Buildings and structures Straight-line method 3-35 3.00-5.00 2.71-32.33
General equipment Straight-line method 3-5 3.00-5.00 19.00-32.33
Special equipment Straight-line method 2-15 0.00-5.00 6.33-50.00
Transport facilities Straight-line method 3-15 3.00-5.00 6.33-32.33
Other equipment Straight-line method 3-10 5.00 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 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
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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, 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)
Franchise Contractual term
Land use right 35-50
Patented 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,
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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 presented 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, right-of-use assets, 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.
(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
Termination benefits provided to employees are recognized as an employee benefit liability for termination benefits, with a
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corresponding charge to profit or loss at the earlier of the following dates: (1) when the Company cannot unilaterally withdraw the
offer of termination benefits because of an employment termination plan or a curtailment proposal; or (2) 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: (1) service cost; (2) net interest on the
net liability or net assets of other long-term employee benefits; and (3) 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 or fulfils certain performance conditions, 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 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 or fulfils certain performance conditions, 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
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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 and the “Regulations on Accounting Treatments of Perpetual Bonds” (Cai Kuai
[2019] No. 2), 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 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 is 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 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 customer 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 payments 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 customer, 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 customer, 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
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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.
(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 environmental and sanitation machinery, ventilation equipment, etc., and engages in sanitation
operation service.
(1) Sale of ventilation equipment is a performance obligation satisfied at a point in time. Revenue from domestic sales of
products that do not require installation 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 obtained delivery receipts,
and has collected the payments or has obtained the right to the payments, and related economic benefits are highly probable to flow
to the Company. For products that need to be installed, revenue is recognized when the products are delivered and qualified for
installation, commissioning and acceptance. 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) Sales of environmental and sanitation machinery products is 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.
(3) Sanitation operation service is a performance obligation satisfied over time. Revenue is recognized based on the service
assessment statement confirmed by the labor receiving party, etc.
(4) For revenue recognition method of PPP business with BOT models, please refer to section III (XXXIII) of notes to the
financial statements for details.
(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 purchases, 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
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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 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 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: (1) business combination; and (2) the transactions or items directly recognized in
equity.
(XXX) Leases
1. The Company as lessee
At the commencement date, the Company recognizes a lease that has a lease term of 12 months or less as a short-term lease,
which shall not contain a purchase option; the Company recognizes a lease as a lease of a low-value asset if the underlying asset is of
low value when it is new. If the Company subleases an asset, or expects to sublease an asset, the head lease does not qualify as a
lease of a low-value asset.
For all short-term leases and leases of low-value assets, lease payments are recognized as cost or profit or loss with straight-line
method over the lease term.
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Apart from the above-mentioned short-term leases and leases of low-value assets with simplified approach, the Company
recognizes right-of-use assets and lease liabilities at the commencement date.
(1) Right-of-use assets
The right-of-use asset is measured at cost and the cost shall comprise: 1) the amount of the initial measurement of the lease
liabilities; 2) any lease payments made at or before the commencement date, less any lease incentives received; 3) any initial direct
costs incurred by the lessee; and 4) an estimate of costs to be incurred by the lessee in dismantling and removing the underlying
asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions
of the lease.
The Company depreciates the right-of-use asset using the straight-line method. If it is reasonable to be certain that the
ownership of the underlying asset can be acquired by the end of the lease term, the Company depreciates the right-of-use asset from
the commencement date to the end of the useful life of the underlying asset. Otherwise, the Company depreciates the right-of-use
asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.
(2) Lease liabilities
At the commencement date, the Company measures the lease liability at the present value of the lease payments that are not paid
at that date, discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the Company’s
incremental borrowing rate shall be used. Unrecognized financing expenses, calculated at the difference between the lease payment
and its present value, are recognized as interest expenses over the lease term using the discount rate which has been used to
determine the present value of lease payment and included in profit or loss. Variable lease payments not included in the measurement
of lease liabilities are included in profit or loss in the periods in which they are incurred.
After the commencement date, if there is a change in the following items: (a) actual fixed payments; (b) amounts expected to be
payable under residual value guarantees; (c) an index or a rate used to determine lease payments; (d) assessment result or exercise of
purchase option, extension option or termination option, the Company remeasures the lease liability based on the present value of
lease payments after changes, and adjusts the carrying amount of the right-of-use asset accordingly. If the carrying amount of the
right-of-use asset is reduced to zero but there shall be a further reduction in the lease liability, the remaining amount shall be
recognized into profit or loss.
2. The Company as lessor
At the commencement date, the Company classifies a lease as a finance lease if it transfers substantially all the risks and rewards
incidental to ownership of an underlying asset. Otherwise, it is classified as an operating lease.
(1) Operating lease
Lease receipts are recognized as lease income with straight-line method over the lease term. Initial direct costs incurred shall be
capitalized, amortized on the same basis as the recognition of lease income, and included into profit or loss by installments. Variable
lease payments related to operating lease which are not included in the lease payment are charged as profit or loss in the periods in
which they are incurred.
(2) Finance lease
At the commencement date, the Company recognizes the finance lease payment receivable based on the net investment in the
lease (sum of the present value of unguaranteed residual value and lease receipts that are not received at the commencement date,
discounted by the interest rate implicit in the lease), and derecognizes assets held under the finance lease. The Company calculates
and recognizes interest income using the interest rate implicit in the lease over the lease term.
Variable lease payments not included in the measurement of the net investment in the lease are charged as profit or loss in the
periods in which they are incurred.
3. Sale and leaseback
(1) The Company as the lessee
In accordance with the “CASBE 14 – Revenues”, the Company would assess and determine whether the transfer of an asset in
the sale and leaseback transaction is accounted for as a sale of that asset.
If the transfer of an asset is accounted for as a sale of the asset, the Company measures the right-of-use asset arising from the
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leaseback at the proportion of the original carrying amount of the asset that relates to the right of use retained by the Company.
Accordingly, the Company recognizes only the amount of any gain or loss that relates to the rights transferred to the lessor.
Otherwise, the Company continues the recognition of the transferred assets, and recognizes a financial liability equal to the
amount of transfer income in accordance with the “CASBE 22 – Financial Instruments: Recognition and Measurement” at the same
time.
(2) The Company as the lessor
In accordance with the “CASBE 14 – Revenues”, the Company would assess and determine whether the transfer of an asset in
the sale and leaseback transaction is accounted for as a sale of that asset.
If the transfer of an asset is accounted for as a sale of the asset, the Company accounts for the purchase of assets in accordance
with other applicable standards, and accounts for the lease of assets in accordance with the “CASBE 21 – Leases”.
Otherwise, the Company does not recognize the transferred asset, but recognizes a financial asset equal to the amount of transfer
income in accordance with the “CASBE 22 – Financial Instruments: Recognition and Measurement”.
(XXXI) Work safety fund
The Company accrues work safety fund in accordance with the “Circular on Management Measures on the Appropriation and
Use of Work Safety Fund” (Cai Zi [2022] No. 136) issued by Ministry of Finance (MOF) and Ministry of Emergency Management.
Standard work safety fund is included in the cost or 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
The Company adopts the build-operate-transfer approach (PPP projects, mainly using BOT, TOT, etc.) to participate in the
public infrastructure business. The project company obtains the franchise of public infrastructure projects from government
departments and participates in the construction and operation of the project. After the franchise expires, the project company needs
to hand over relevant infrastructure to the government or the department designated by the government.
For the PPP project contract under which the Company provides multiple services (such as the rendering of construction
services of PPP projects as well as post-completion operation services and maintenance services), the Company identifies each
performance obligation in the contracts in accordance with the provisions of “CASBE 14 – Revenues”, and allocates the transaction
price to each performance obligation on the basis of the relative stand-alone selling prices. If the stand-alone selling price cannot be
directly observed, or if there is a lack of similar market prices, the Company will take into account market conditions, specific factors
of the Company and information related to customers and other relevant information, and make a reasonable estimate of the stand-
alone selling price using methods such as market adjustment method, cost-plus method, residual value method, etc. Construction
services are performance obligations satisfied over time. Revenue from construction services is recognized by the percentage of
completion of the performance obligations, which is determined based on the proportion of the incurred costs to the estimated total
costs. In the circumstance that the percentage of completion cannot be measured reasonably, but the incurred costs are expected to be
recovered, the Company recognizes revenue only to the extent of the incurred costs until it can reasonably measure the percentage of
144
completion.
The Company has the right to charge users of public goods and services during the operation of the project in accordance with
the PPP project contracts. However, if the amount of the fees is uncertain, such right does not constitute an unconditional right to
receive cash, and the consideration or construction revenue of the relevant PPP project assets is recognized as intangible assets when
the PPP project assets reach the designed useful conditions, which shall be accounted for in accordance with “CASBE 6 – Intangible
Assets”.
If the Company is qualified to have the right to receive a determinable amount of cash (or other financial assets) during the
operation of the project in accordance with the PPP project contracts, such amount is recognized as accounts receivable when the
Company has the right to such consideration (the right depends only on the factor of the passage of time) and is accounted for in
accordance with “CASBE 22 – Financial Instruments: Recognition and Measurement”. The Company recognizes the difference
between the consideration or construction revenue of the relevant PPP project assets and the determinable amount of cash (or other
financial assets) as intangible assets when the PPP project assets reach the designed useful conditions.
For the portion of the consideration or construction revenue recognized as intangible assets, the contract assets recognized
during the relevant construction period are presented under “intangible assets” in the balance sheet; for other contract assets
recognized during the construction period, they are presented under “contract assets”, or “other non-current assets” in the balance
sheet if they are expected to be realized within twelve months of the balance sheet date.
After the PPP project assets reach the designed useful conditions, the Company recognizes revenue related to operating services
in accordance with “CASBE 14 – Revenues”.
2. 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
Changes in accounting policies arising from changes in CASBEs
1. The Company has adopted the regulations about accounting for sales of products or by-products produced by fixed assets
before intended use or during the R&D process as stipulated the “Interpretation of China Accounting Standards for Business
Enterprises No. 15” issued by the MOF since January 1, 2022. Details on retroactive adjustments on trial sales occurring between the
beginning of the earliest period presented in the financial statements in which the Company adopts the above regulations and January
1, 2022 are as follows:
Dec. 31, 2021/ Dec. 31, 2021/
Financial statement items
Year 2021 (before retroactive Amounts affected Year 2021 (after retroactive
significantly affected
adjustments) adjustments)
Items of balance sheet as of December
31, 2021
Intangible assets 5,319,721,844.23 30,874,024.17 5,350,595,868.40
Non-controlling interest 350,671,301.45 6,549,735.93 357,221,037.38
Undistributed profit 3,850,610,683.45 24,324,288.24 3,874,934,971.69
Items of income statement of 2021
Operating revenue 11,813,537,444.48 52,754,166.97 11,866,291,611.45
Operating cost 9,210,318,426.37 21,880,142.80 9,232,198,569.17
2. The Company has adopted the regulations about judgment on onerous contracts in the “Interpretation of China Accounting
145
Standards for Business Enterprises No. 15” issued by the MOF since January 1, 2022. Such change in accounting policies has no
impact on the Company’s financial statements.
3. The Company has adopted the regulations about accounting for income tax consequences of dividends on a financial
instrument classified by the issuer as an equity instrument in the “Interpretation of China Accounting Standards for Business
Enterprises No. 16” issued by the MOF since November 30, 2022. Such change in accounting policies has no impact on the
Company’s financial statements.
4. The Company has adopted the regulations about accounting for modifications of share-based payment transactions from cash-
settled to equity-settled in the “Interpretation of China Accounting Standards for Business Enterprises No. 16” issued by the MOF
since November 30, 2022. Such change in accounting policies has no impact on the Company’s financial statements.
IV. Taxes
(I) Main taxes and tax rates
Taxes Tax bases Tax rates
3%, 6%, 9%, 13%. Exported
The output tax calculated based on the revenue from sales
goods are subject to
of goods or rendering of services in accordance with the
Value-added tax (VAT) “exemption, credit, refund”
tax law, net of the input tax that is allowed to be deducted
policies, with refund rate of
in the current period
13%.
For housing property levied on the basis of price, housing
property tax is levied at the rate of 1.2% of the balance
Housing property tax after deducting 30% of the cost; for housing property 1.2%, 12%
levied on the basis of rent, housing property tax is levied
at the rate of 12% of lease income.
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%
Shangfeng Industrial Company 15%
Zoomlion Environmental Company 15%
Foshan Shunde Huaqingyuan Environmental Protection Co., Ltd. (the “Huaqingyuan
15%
Company”)
Fengyun IoT Technology Co., Ltd. 15%
Zhejiang Yolsh Electric Drive Technology Co., Ltd. (the “Yolsh Company”) 15%
Guangdong Infore Intelligent Sanitation Technology Co., Ltd. 15%
Lianjiang Green Oriental New Energy Co., Ltd. (the “Lianjiang Company”) 15%
25%, 20% for small enterprises with meager
Taxpayers other than the above-mentioned
profit
(II) Tax preferential policies
1. Enterprise income tax
No. Entities Preferential policies
Zoomlion Environmental Company, Fengyun Pursuant to the preferential income tax policy for high-tech enterprises,
1
IoT Technology Co., Ltd., Yolsh Company enterprise income tax rate is reduced to 15% from 2020 to 2022.
Shangfeng Industrial Company, Infore Pursuant to the preferential income tax policy for high-tech enterprises,
2
Technology Company, Huaqingyuan Company, enterprise income tax rate is reduced to 15% from 2022 to 2024.
146
No. Entities Preferential policies
Guangdong Infore Intelligent Sanitation
Technology Co., Ltd., Lianjiang Company
Pursuant to the “Law of the People’s Republic of China on Enterprise
Income Tax” and its implementation regulations, the “Notice of MOF,
State Taxation Administration (STA) and National Development and
Reform Commission (NDRC) on Publishing the Catalog of Enterprise
Income Tax Preferences for Environmental Protection, Energy Saving,
Funan Green Oriental Environmental Energy
and Water Saving Projects (Trial)” (Cai Shui [2009] No. 166) (the “2009
Co., Ltd. (the “Funan Company”), Hanshou
Catalog”), the project companies are entitled to enjoy the preferential
3 Zoomlion Environmental Industry Co., Ltd., Cili
policy of three-year exemption from the first profit-making year,
County Zoomlion Huabao Environmental
followed by three years of 50% reduction of enterprise income tax.
Industry Co., Ltd., etc.
Pursuant to the “Announcement No. 36, 2021 of MOF, STA, NDRC, and
Ministry of Ecology and Environment” issued by four departments
including the MOF dated December 16, 2021, the entities’ business
comply with the “2021 Catalog”, and relevant projects can still enjoy the
above preferential policy.
Pursuant to the “Announcement of MOF and STA on the Implementation
of the Tax Relief Policy for Small Enterprises with Meager Profit and
Individually-owned Businesses” (No. 12, 2021), from January 1, 2021 to
December 31, 2022, the enterprise income tax for the portion of the
Foshan Shunde Huabo Environmental Water
taxable income within 1 million yuan is levied at 20% based on 12.5% of
Co., Ltd., Foshan Shunde Yuanyi Water
4 that portion of income; pursuant to the “Announcement of MOF and STA
Environmental Protection Co., Ltd., Dingnan
on Further Implementation of the Tax Relief Policy for Small Enterprises
Zoomlion Environmental Industry Co., Ltd., etc.
with Meager Profit” (Announcement No. 13, 2022), from January 1,
2022 to December 31, 2024, the enterprise income tax for the portion of
the taxable income exceeding 1 million yuan but within 3 million yuan is
levied at 20% based on 25% of that portion of income.
Revenue from the production of non-restricted and non-prohibited
Huaqingyuan Company, Foshan Shunde District
products that meet the relevant national and industry standards using
Huaying Environmental Water Co., Ltd., Foshan
resources specified in the “Resources Comprehensive Utilization of
5 Shunde District Yuanrun Water Environmental
Enterprise Income Tax Preferential Catalog (2008 Edition)” as the main
Protection Co., Ltd., Foshan Shunde District
raw material will be reduced to 90% as taxable income for enterprise
Huabo Environmental Protection Co., Ltd.
income tax in the current period.
Pursuant to the document numbered Guo Ban Han [2012] 103 by the
State Council, newly established enterprises that settle in the Ruili Pilot
Zone are entitled to enjoy the five-year-exemption and five-year-half-
reduction policy for the enterprise income tax shared by the local
6 Ruili Yinglian Environmental Industry Co., Ltd. authority of the region (40% of total enterprise income tax), i.e., they
enjoy enterprise income tax exemption from 2021 to 2025, and enjoy a
50% reduction in income from 2026 to 2030, while for the enterprise
income tax shared by central government (60%), they enjoy the
preferential policy as small enterprises with meager profit.
2. VAT
(1) Pursuant 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 2022, the subsidiary Zoomlion Environmental Company is entitled to enjoy the
VAT refund upon collection policy for sale of its self-developed and self-produced software products, and the VAT refunds received
in the current period amount to 14,240,650.62 yuan.
(2) Pursuant to the “Announcement of MOF and STA on Clarifying Extra VAT Deduction Policy for Life Service Industry”
(Announcement No. 87, 2019 of MOF and STA), eligible taxpayers can apply to their competent tax authorities for extra tax credit.
In 2022, the subsidiaries Zoomlion Environmental Company, Foshan Shunde Yuanyi Water Environmental Protection Co., Ltd.,
Infore Technology Company, and Infore Zoomlion City Environmental Service Co., Ltd. are engaged in life services, and extra tax
credit they enjoy in the current period amounts to 17,344,728.48 yuan, 59,918.88 yuan, 34,500.00 yuan, and 21,376.76 yuan
respectively.
(3) Pursuant to Article 5 of the “Notice of MOF and STA on Printing and Distributing the ‘VAT Preferential Catalog of Products
and Services for Comprehensive Utilization of Resources’” (Cai Shui [2015] No. 78), since July 1, 2015, enterprises rendering
147
sewage treatment services are entitled to enjoy 70% VAT refund upon collection. In 2022, the subsidiaries Huaqingyuan Company,
Foshan Shunde District Huaying Environmental Water Co., Ltd., and Foshan Shunde District Yuanrun Water Environmental
Protection Co., Ltd. received VAT refund upon collection of 1,518,783.05 yuan, 524,860.77 yuan, and 978,122.98 yuan respectively.
Pursuant to Article 4 of the “Notice of MOF and STA on Printing and Distributing the ‘Announcement on VAT Policy for
Improving Comprehensive Utilization of Resources’” (Announcement No. 40, 2021 of MOF and STA), since March 1, 2022,
enterprises rendering sewage treatment services are entitled to enjoy VAT refund upon collection policy or VAT exemption policy.
The subsidiaries Huaqingyuan Company, Foshan Shunde District Huaying Environmental Water Co., Ltd., Foshan Shunde District
Yuanrun Water Environmental Protection Co., Ltd. and Foshan Shunde Huabo Environmental Water Co., Ltd. have adopted VAT
exemption policy since March 1, 2022.
(4) Pursuant to Article 2 of the “Notice of MOF and STA on Printing and Distributing the ‘VAT Preferential Catalog of Products
and Services for Comprehensive Utilization of Resources’” (Cai Shui [2015] No. 78), enterprises producing electricity and heat
products with fuel from garbage and biogas resources produced by garbage fermentation are entitled to enjoy 100% VAT refund upon
collection. Pursuant to Article 5, enterprises rendering garbage treatment and sewage treatment services are entitled to enjoy 70%
VAT refund upon collection. The subsidiary Lianjiang Company received VAT refund upon collection of 1,560,533.72 yuan.
(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 2022, the subsidiary
Shenzhen Dingzhu Environmental Technology Co., Ltd. meets the condition and is exempt from VAT.
3. Urban land use tax
Pursuant to the “Several Opinions on Deepening the Reform of Optimal Allocation of Resource Factors in Manufacturing
Enterprises” issued by the Office of the People’s Government of Zhejiang Province (Zhe Zheng Ban Fa [2019] No. 62), the
Company’s subsidiary Shangfeng Industrial Company meets the conditions of tax incentives and enjoys 100% exemption for land
use tax in 2022.
V. Notes to items of consolidated financial statements
(I) Notes to items of the consolidated balance sheet
1. Cash and bank balances
(1) Details
Items Closing balance Opening balance
Cash on hand 84,414.54 89,806.02
Cash in bank 4,590,418,271.45 4,190,857,415.70
Other cash and bank balances 137,700,844.47 392,298,149.30
Total 4,728,203,530.46 4,583,245,371.02
Including: Deposited overseas 3,949,867.33 4,464,479.35
(2) Other remarks
1) At the balance sheet date, cash in bank included funds frozen due to lawsuits of 1,100,000.00 yuan and engineering escrow
accounts not available for separate use of 9,107,818.42 yuan, which was with use restrictions.
2) At the balance sheet date, other cash and bank balances included deposits for notes of 46,878,240.34 yuan, deposits for letters
of guarantee of 87,619,095.60 yuan, engineering deposits of 927,865.56 yuan, ETC deposits of 3,000.00 yuan, deposits for buyer’s
credit of 901,432.50 yuan and deposits for land reclamation of 1,000,832.05 yuan, which were with use restrictions.
2. Notes receivable
148
(1) Details
1) Details on categories
Closing balance
Book balance Provision for bad debts
Categories
Provision Carrying amount
Amount % to total Amount proportion
(%)
Receivables with provision for bad debts
15,111,625.30 100.00 1,545,919.08 10.23 13,565,706.22
made on a collective basis
Including: Bank acceptance 6,474,284.28 42.84 6,474,284.28
Trade acceptance 8,637,341.02 57.16 1,545,919.08 17.90 7,091,421.94
Total 15,111,625.30 100.00 1,545,919.08 10.23 13,565,706.22
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Provision Carrying amount
Amount % to total Amount
proportion (%)
Receivables with provision for bad
57,247,027.23 100.00 2,844,373.98 4.97 54,402,653.25
debts made on a collective basis
Including: Bank acceptance 6,412,054.79 11.20 6,412,054.79
Trade acceptance 50,834,972.44 88.80 2,844,373.98 5.60 47,990,598.46
Total 57,247,027.23 100.00 2,844,373.98 4.97 54,402,653.25
2) Notes receivable with provision for bad debts made on a collective basis
Closing balance
Items
Book balance Provision for bad debts Provision proportion (%)
Bank acceptance portfolio 6,474,284.28
Trade acceptance portfolio 8,637,341.02 1,545,919.08 17.90
Subtotal 15,111,625.30 1,545,919.08 10.23
(2) Changes in provision for bad debts
1) Details
Opening Increase Decrease Closing
Items
balance Accrual Recovery Others Reversal Write-off Others balance
Trade acceptance
2,844,373.98 -1,298,454.90 1,545,919.08
portfolio
Total 2,844,373.98 -1,298,454.90 1,545,919.08
2) No provision for bad debts collected or reversed in the current period.
(3) Endorsed or discounted but undue notes at the balance sheet date
Items Closing balance derecognized Closing balance not yet derecognized
Bank acceptance 2,732,733.00
Trade acceptance 5,422,499.62
Subtotal 8,155,232.62
Due to the fact that the acceptor of bank acceptance is commercial bank, which is of high credit level, there is very little
149
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.
(4) Notes receivable transferred to accounts receivable due to non-performance of issuer
Items Amount transferred
Trade acceptance 10,308,511.28
Subtotal 10,308,511.28
3. Accounts receivable
(1) Details
1) Details on categories
Closing balance
Categories Book balance Provision for bad debts
% to Provision Carrying amount
Amount Amount
total proportion (%)
Receivables with
provision made on an 26,702,254.77 0.43 16,482,074.94 61.73 10,220,179.83
individual basis
Receivables with
provision made on a 6,183,346,508.55 99.57 567,774,216.01 9.18 5,615,572,292.54
collective basis
Total 6,210,048,763.32 100.00 584,256,290.95 9.41 5,625,792,472.37
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Provision proportion Carrying amount
Amount % to total Amount
(%)
Receivables with
provision made on an 5,544,902.60 0.10 5,544,902.60 100.00
individual basis
Receivables with
provision made on a 5,418,868,812.39 99.90 472,163,848.68 8.71 4,946,704,963.71
collective basis
Total 5,424,413,714.99 100.00 477,708,751.28 8.81 4,946,704,963.71
2) Accounts receivable with provision made on an individual basis
Provision for bad Provision proportion
Debtors Book balance Reasons
debts (%)
Jilin Yongle Environmental Expected credit
9,196,000.00 4,598,000.00 50.00
Protection Technology Co., Ltd. losses.
Changchun Kunhong Construction Expected credit
6,680,359.67 3,340,179.84 50.00
Machinery Co., Ltd. losses.
Jiangsu Provincial Construction
4,564,000.00 2,282,000.00 50.00 Expected credit losses
Group Co., Ltd.
Maanshan Ruiheng Material Expected to be
2,137,100.00 2,137,100.00 100.00
Trading Co., Ltd. irrecoverable.
Kunming Jialize Characteristic Expected to be
1,330,000.00 1,330,000.00 100.00
Town Real Estate Co., Ltd. irrecoverable.
Expected to be
Others 2,794,795.10 2,794,795.10 100.00
irrecoverable.
Subtotal 26,702,254.77 16,482,074.94 61.73
3) Accounts receivable with provision for bad debts made on a collective basis
150
Closing balance
Items
Book balance Provision for bad debts Provision proportion (%)
Portfolio grouped with ages 5,637,281,540.29 560,509,940.46 9.94
Portfolio grouped with commercial
470,296,266.41 7,264,275.55 1.54
factoring receivable
Portfolio grouped with government grants
75,768,701.85
receivable for new energy vehicles
Subtotal 6,183,346,508.55 567,774,216.01 9.18
4) Accounts receivable with provision made on a collective basis using age analysis method
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
Within 1 year 4,234,275,752.50 211,713,787.59 5.00
1-2 years 808,922,667.80 80,892,266.78 10.00
2-3 years 325,458,501.17 97,637,550.35 30.00
3-5 years 196,716,566.15 98,358,283.07 50.00
Over 5 years 71,908,052.67 71,908,052.67 100.00
Subtotal 5,637,281,540.29 560,509,940.46 9.94
5) Commercial factoring portfolio grouped by five-level classification
Closing balance
Five-level classification Unrealized financing Provision for bad Provision proportion
Book balance
income debts (%)
Pass 456,307,495.83 6,844,612.44 1.50
Special-mention 13,988,770.58 419,663.11 3.00
Subtotal 470,296,266.41 7,264,275.55 1.54
(2) Age analysis
Ages Closing book balance
Within 1 year 4,708,241,417.53
1-2 years 892,266,330.70
2-3 years 336,117,089.17
3-5 years 199,203,953.15
Over 5 years 74,219,972.77
Total 6,210,048,763.32
(3) Changes in provision for bad debts
Increase Decrease
Opening Closing
Items Others
balance Accrual Recovery Reversal Write-off Others balance
[Note]
Receivables
with provision
5,544,902.60 10,937,172.34 16,482,074.94
made on an
individual basis
Receivables
with provision
472,163,848.68 98,799,645.29 3,554,130.25 6,743,408.21 567,774,216.01
made on a
collective
151
Increase Decrease
Opening Closing
Items Others
balance Accrual Recovery Reversal Write-off Others balance
[Note]
basis
Total 477,708,751.28 109,736,817.63 3,554,130.25 6,743,408.21 584,256,290.95
Note: Other increase refers to balance transferred in due to business combination of Yolsh Company and Lianjiang Company in
the current period.
(4) Accounts receivable written off in the current period
1) Accounts receivable actually written off in the current period totaled 6,732,408.21 yuan.
2) Significant accounts receivable written off in the current period
Whether arising from
Nature of Write-off procedures
Debtors Amount written off Reasons for write-off related party
receivables performed
transactions
Shenzhen Sustained Way
Payments for Expected to be Approval of the
Environmental Industry 3,268,000.00 No
goods irrecoverable. Management.
Co., Ltd.
Shenzhen Jieya
Payments for Expected to be Approval of the
Environmental Protection 573,432.50 No
goods irrecoverable. Management.
Industry Co., Ltd.
Jinan Lijie Cleaning Co., Payments for Expected to be Approval of the
483,700.00 No
Ltd. goods irrecoverable. Management.
Xiamen Xiang’an
Municipal Group Payments for Expected to be Approval of the
450,000.00 No
Environmental goods irrecoverable. Management.
Engineering Co., Ltd.
Shenzhen EIT Intelligent
Payments for Expected to be Approval of the
City Operation Group 390,000.00 No
goods irrecoverable. Management.
Co., Ltd.
Shenzhen SYS
Payments for Expected to be Approval of the
Environmental Industry 325,500.00 No
goods irrecoverable. Management.
Group Co., Ltd.
Chengdu Shiyang
Payments for Expected to be Approval of the
Environmental Sanitation 230,400.00 No
goods irrecoverable. Management.
Service Co., Ltd
Subtotal 5,721,032.50
(5) Details of the top 5 debtors with largest balances
Proportion to the total balance
Debtors Book balance Provision for bad debts
of accounts receivable (%)
No. 1 200,788,348.94 3.23 8,569,313.68
No. 2 112,174,999.99 1.81 1,682,625.00
No. 3 97,577,518.13 1.57 5,742,670.82
No. 4 96,146,633.46 1.55 11,195,690.69
No. 5 75,768,701.85 1.22
Subtotal 582,456,202.37 9.38 27,190,300.19
(6) Accounts receivable derecognized due to financial assets transfer
Gains or losses related to Ways of financial assets
Items Amount derecognized
derecognition transfer
Factoring of accounts
Sales of ventilation
6,864,481.85 -401,852.13 receivable without recourse
equipment
right.
Factoring of accounts
Sales of sanitation vehicles 727,566,841.07 -65,516,521.10 receivable without recourse
right.
Subtotal 734,431,322.92 -65,918,373.23
152
4. Receivables financing
(1) Details
Closing balance Opening balance
Items Accumulated provision for Accumulated provision for
Carrying amount Carrying amount
credit impairment credit impairment
Bank acceptance 107,316,593.41 296,379,694.57
Total 107,316,593.41 296,379,694.57
(2) Pledged notes at the balance sheet date
Items Closing balance of pledged notes
Bank acceptance 42,293,141.00
Subtotal 42,293,141.00
(3) Endorsed or discounted but undue notes at the balance sheet date
Items Closing balance derecognized
Bank acceptance 128,363,287.12
Subtotal 128,363,287.12
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.
5. Advances paid
(1) Age analysis
1) Details
Closing balance Opening balance
Ages Provision
% to Provision for Carrying % to Carrying
Book balance Book balance for
total impairment amount total amount
impairment
Within 1
186,619,989.22 97.01 186,619,989.22 124,131,454.89 96.52 124,131,454.89
year
1-2 years 4,515,793.00 2.35 4,515,793.00 3,969,968.37 3.09 3,969,968.37
2-3 years 1,175,026.94 0.61 1,175,026.94 67,855.05 0.05 67,855.05
Over 3 years 49,733.08 0.03 49,733.08 435,104.35 0.34 435,104.35
Total 192,360,542.24 100.00 192,360,542.24 128,604,382.66 100.00 128,604,382.66
2) No unsettled significant advances paid with age over one year.
(2) Details of the top 5 debtors with largest balances
Proportion to the total balance of advances
Debtors Book balance
paid (%)
No. 1 9,352,256.00 4.86
No. 2 6,600,000.00 3.43
No. 3 5,940,000.00 3.09
No. 4 4,133,064.10 2.15
No. 5 3,116,814.17 1.62
153
Proportion to the total balance of advances
Debtors Book balance
paid (%)
Subtotal 29,142,134.27 15.15
6. Other receivables
(1) Details
1) Details on categories
Closing balance
Categories Book balance Provision for bad debts
Provision Carrying amount
Amount % to total Amount
proportion (%)
Receivables with provision
made on an individual basis
Receivables with provision
425,375,694.15 100.00 39,753,423.15 9.35 385,622,271.00
made on a collective basis
Total 425,375,694.15 100.00 39,753,423.15 9.35 385,622,271.00
(Continued)
Opening balance
Book balance Provision for bad debts
Categories
Provision Carrying amount
Amount % to total Amount proportion
(%)
Receivables with provision
made on an individual basis
Receivables with provision
541,370,425.50 100.00 32,206,299.23 5.95 509,164,126.27
made on a collective basis
Total 541,370,425.50 100.00 32,206,299.23 5.95 509,164,126.27
2) Other receivables with provision made on a collective basis
a. Parent company
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
Portfolio grouped with
performance 113,460,620.00
compensation
Portfolio grouped with
33,439,539.20 1,664,734.56 4.98
ages
Including: 1-180 days 27,553,285.28
1-2 years 829,381.49 82,938.15 10.00
2-3 years 4,763,199.03 1,428,959.71 30.00
3-5 years 273,673.40 136,836.70 50.00
Over 5 years 20,000.00 16,000.00 80.00
Subtotal 146,900,159.20 1,664,734.56 1.13
b. Ventilation equipment manufacturing industry and environmental integrated industry
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
Portfolio grouped with ages 278,475,534.95 38,088,688.59 13.68
154
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
Including: Within 1 year 168,395,746.55 8,420,041.44 5.00
1-2 years 57,254,890.72 5,725,489.07 10.00
2-3 years 22,546,852.80 6,764,055.84 30.00
3-5 years 26,197,885.28 13,098,942.64 50.00
Over 5 years 4,080,159.60 4,080,159.60 100.00
Subtotal 278,475,534.95 38,088,688.59 13.68
(2) Changes in provision for bad debts
Stage 1 Stage 2 Stage 3
Items Lifetime expected credit Subtotal
12 month expected Lifetime expected credit
losses (credit not
credit losses losses (credit impaired)
impaired)
Opening balance 10,946,143.63 4,064,577.60 17,195,578.00 32,206,299.23
Opening balance in the current
period
--Transferred to stage 2 -2,879,332.17 2,879,332.17
--Transferred to stage 3 -2,731,005.18 2,731,005.18
--Reversed to stage 2
--Reversed to stage 1
Provision made in the current
353,229.98 1,595,522.63 3,099,831.78 5,048,584.39
period
Provision recovered in the
current period
Provision reversed in the current
period
Provision written off in the
75,000.00 75,000.00
current period
Other changes [Note] 2,573,539.53 2,573,539.53
Closing balance 8,420,041.44 5,808,427.22 25,524,954.49 39,753,423.15
Note: Other increase refers to balance transferred in due to business combination of Yolsh Company and Lianjiang Company in
the current period.
(3) Other receivables actually written off in the current period totaled 75,000.00 yuan.
(4) Other receivables categorized by nature
Nature of receivables Closing balance Opening balance
Temporary advance payment receivable and petty
189,730,555.74 108,556,330.04
cash
Security deposits 115,535,012.45 129,986,238.82
Performance compensation 113,460,620.00 163,460,620.00
Call loans receivable 13,046,550.18
Equity transfer payments 115,100,000.00
Debt transfer payments 9,000,000.00
Others 6,649,505.96 2,220,686.46
Total 425,375,694.15 541,370,425.50
155
(5) Details of the top 5 debtors with largest balances
Proportion to the total
Provision for bad
Debtors Nature of receivables Book balance Ages balance of other
debts
receivables (%)
Performance
compensation and
No. 1 113,792,911.19 [Note 1] 26.75 166,145.60
temporary advance
payment receivable
Temporary advance
No. 2 payment receivable and 9,960,076.90 1-180 days 2.34
petty cash
No. 3 Security deposits 8,675,600.00 [Note 2] 2.04 2,135,180.00
Temporary advance
No. 4 payment receivable and 7,323,619.46 1-180 days 1.72
petty cash
Temporary advance
No. 5 payment receivable and 7,190,173.17 Within 1 year 1.69 359,508.66
petty cash
Subtotal 146,942,380.72 34.54 2,660,834.26
Note 1: It includes 113,460,620.00 yuan as performance compensation with age of 1 to 2 years and 332,291.19 yuan as
temporary advance payment receivable with age of 3 to 5 years.
Note 2: It includes 1,870,000.00 yuan as security deposits with age within 1 year and 6,805,600.00 yuan as security deposits
with age of 2 to 3 years.
7. Inventories
(1) Details
Closing balance Opening balance
Items Provision for Carrying Provision for
Book balance Book balance Carrying amount
write-down amount write-down
Raw materials 179,291,553.12 10,856,535.28 168,435,017.84 147,473,632.02 10,760,156.11 136,713,475.91
Work in process 177,447,500.50 2,633,928.18 174,813,572.32 181,227,151.81 2,023,841.04 179,203,310.77
Goods on hand 543,123,849.45 16,365,369.64 526,758,479.81 809,403,199.63 18,453,429.33 790,949,770.30
Materials on
consignment for 710,664.71 710,664.71 2,741,520.48 2,741,520.48
further processing
Cost to fulfill a
10,320,302.27 10,320,302.27 14,541,641.55 14,541,641.55
contract
Total 910,893,870.05 29,855,833.10 881,038,036.95 1,155,387,145.49 31,237,426.48 1,124,149,719.01
(2) Provision for inventory write-down
1) Details
Increase Decrease
Opening
Items Reversal or write- Closing balance
balance Accrual Others Others
off
Raw materials 10,760,156.11 5,916,565.11 5,820,185.94 10,856,535.28
Work in process 2,023,841.04 2,419,415.75 1,809,328.61 2,633,928.18
Goods on hand 18,453,429.33 8,449,741.13 10,537,800.82 16,365,369.64
Total 31,237,426.48 16,785,721.99 18,167,315.37 29,855,833.10
2) Determination basis of net realizable value and reasons for the reversal or write-off of provision for inventory write-down
Reasons for write-off of provision for
Items Determination basis of net realizable value
inventory write-down
156
Reasons for write-off of provision for
Items Determination basis of net realizable value
inventory write-down
Estimated selling price of relevant finished Inventories with provision for inventory
goods less cost to be incurred upon completion, write-down made at the beginning of the
Raw materials, work in process
estimated selling expenses, and relevant taxes period were used or sold in the current
and surcharges period.
Estimated selling price of relevant finished Inventories with provision for inventory
Goods on hand goods less estimated selling expenses, and write-down made at the beginning of the
relevant taxes and surcharges period were sold in the current period.
(3) Cost to fulfill a contract
Items Opening balance Increase Carried forward Closing balance
Kitchen delivery project of Futian
7,541,198.74 1,713,298.79 9,254,497.53
District, Shenzhen City
MVR concentrated solution project of
2,382,149.87 404,351.39 2,786,501.26
Liling City
Leachate full-scale quantitative
treatment emergency operation project 1,242,114.60 175,849.38 1,417,963.98
of Qingyuan City
Township sewage delivery project
907,876.13 4,740.90 4,128.08 908,488.95
phase II of Hanshou County
Leachate delivery project of Xi’an
769,578.05 362,875.63 14,601.20 1,117,852.48
Chanba Transfer Station
Leachate delivery project of Jin’an
449,012.13 449,012.13
District, Fuzhou City
Leachate delivery project of Fuzhou
2,063,811.25 4,634.80 2,059,176.45
Qingliangshan Transfer Station
Well-point equipment sales of Leiyang
1,815,112.42 1,815,112.42
City
Equipment sales of Yongshun County,
Xiangxi Tujia and Miao Autonomous
1,450,156.90 1,450,156.90
Prefecture - township sewage
(Wanping)
Others 1,249,712.03 9,812,255.53 8,092,452.49 2,969,515.07
Subtotal 14,541,641.55 17,802,452.19 22,023,791.47 10,320,302.27
8. Contract assets
(1) Details
Closing balance Opening balance
Items Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
Quality
guarantee
116,355,489.32 15,331,634.99 101,023,854.33 154,503,581.34 14,135,778.81 140,367,802.53
deposits
receivable
Total 116,355,489.32 15,331,634.99 101,023,854.33 154,503,581.34 14,135,778.81 140,367,802.53
(2) No significant changes in carrying amount of contract assets in the current period.
(3) Details on provision for impairment of contract assets
1) Details
Increase Decrease
Items Opening balance Closing balance
Accrual Others Reversal Write-off Others
On a collective basis 14,135,778.81 1,195,856.18 15,331,634.99
Total 14,135,778.81 1,195,856.18 15,331,634.99
2) Contract assets with provision for impairment made on a collective basis
157
Closing balance
Items
Book balance Provision for impairment Provision proportion (%)
Portfolio grouped with quality
116,355,489.32 15,331,634.99 13.18
guarantee deposits
Subtotal 116,355,489.32 15,331,634.99 13.18
9. Non-current assets due within one year
Closing balance
Items Unrecognized Provision for bad Discount rate
Book balance Carrying amount
finance income debts range (%)
Sales of goods in
433,440,778.60 8,785,866.67 21,166,538.93 403,488,373.00 4.30-4.65
installments
Payments for finance lease 58,791,768.45 2,263,633.33 895,847.05 55,632,288.07 4.30-4.65
Factoring of receivables
17,823,638.14 171,119.36 267,354.57 17,385,164.21 4.30-4.65
financing
Total 510,056,185.19 11,220,619.36 22,329,740.55 476,505,825.28
(Continued)
Opening balance
Items Unrecognized Provision for bad Discount rate
Book balance Carrying amount
finance income debts range (%)
Sales of goods in
549,703,610.72 12,319,023.60 27,555,680.53 509,828,906.59 4.75
installments
Payments for finance lease 170,788,078.94 4,223,522.86 2,561,821.18 164,002,734.90 4.75
Factoring of receivables
83,062,917.65 15,730,748.85 1,245,943.76 66,086,225.04 4.75
financing
Total 803,554,607.31 32,273,295.31 31,363,445.47 739,917,866.53
10. Other current assets
(1) Details
Closing balance Opening balance
Items Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
Input VAT to be
credited and
482,764,023.99 482,764,023.99 477,804,757.55 477,804,757.55
excess input
VAT credits
Cost to obtain a
9,306,113.04 9,306,113.04 14,900,623.62 14,900,623.62
contract
Listing expenses
of subsidiary 5,380,660.39 5,380,660.39
spun off
Total 497,450,797.42 497,450,797.42 492,705,381.17 492,705,381.17
(2) Costs to obtain a contract
Provision for
Items Opening balance Increase Amortization Closing balance
impairment
Costs to obtain a
14,900,623.62 40,082,864.75 45,677,375.33 9,306,113.04
contract
Subtotal 14,900,623.62 40,082,864.75 45,677,375.33 9,306,113.04
11. Long-term receivables
(1) Details
158
Closing balance
Items Unrealized finance Provision for bad Discount rate
Book balance Carrying amount
income debts range (%)
Sales of goods in
607,626,695.18 28,919,805.27 101,644,682.13 477,062,207.78 4.30-4.65
installments
Guaranteed collection
32,146,788.99 3,759,737.26 1,607,339.45 26,779,712.28 4.30-4.65
amount for BOT projects
Payments for finance lease 40,885,220.88 2,877,273.01 682,107.05 37,325,840.82 4.30-4.65
Factoring of receivables
421,616,855.59 24,329,491.82 6,324,252.83 390,963,110.94 4.30-4.65
financing
Total 1,102,275,560.64 59,886,307.36 110,258,381.46 932,130,871.82
(Continued)
Opening balance
Items Unrealized finance Provision for bad Discount rate
Book balance Carrying amount
income debts range (%)
Sales of goods in
784,543,617.37 38,122,001.69 105,634,590.61 640,787,025.07 4.75
installments
Guaranteed collection
165,505,733.94 21,853,615.22 8,275,286.70 135,376,832.02 4.75
amount for BOT projects
Payments for finance
58,523,840.64 1,784,539.32 877,857.61 55,861,443.71 4.75
lease
Factoring of receivables
212,483,560.05 24,075,069.92 3,187,253.40 185,221,236.73 4.75
financing
Total 1,221,056,752.00 85,835,226.15 117,974,988.32 1,017,246,537.53
(2) Changes in provision for bad debts
1) Details
Increase Decrease
Items Opening balance Closing balance
Accrual Recovery Others Reversal Write-off Others
Provision
made on a 117,974,988.32 -7,716,606.86 110,258,381.46
collective basis
Total 117,974,988.32 -7,716,606.86 110,258,381.46
2) Long-term receivables with provision for bad debts made on a collective basis using age analysis method
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
Payments undue 221,372,398.91 11,068,619.95 5.00
Payments due 418,401,085.26 92,183,401.63 22.03
Subtotal 639,773,484.17 103,252,021.58 16.14
3) Long-term receivables with provision for bad debts using the five-level classification
Closing balance
Items
Book balance Provision for bad debts Provision proportion (%)
Portfolio grouped with finance
40,885,220.88 682,107.05 1.67
lease payment
Portfolio grouped with factoring
421,616,855.59 6,324,252.83 1.50
of receivables financing
Subtotal 462,502,076.47 7,006,359.88 1.51
12. Long-term equity investments
(1) Categories
159
Closing balance Opening balance
Items Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
Investments in
676,829,959.84 676,829,959.84 603,580,781.31 603,580,781.31
associates
Total 676,829,959.84 676,829,959.84 603,580,781.31 603,580,781.31
(2) Details
Increase/Decrease
Opening Investment income
Investees Investments Investments Adjustment in other
balance recognized under
increased decreased comprehensive income
equity method
Associates
Lianjiang Company 44,578,478.42 208,271,314.25 1,283,929.81
Tengine Innovation (Beijing)
30,205,115.36 -573,592.29
Monitoring Instrument Co., Ltd.
Guangdong Shunkong
Environmental Investment Co., 195,130,199.37 28,071,555.60
Ltd.
Guangdong Tianshu New
2,688,700.75 -2,688,700.75
Energy Technology Co., Ltd.
Shantou Zoomlion Ruikang
Environmental Sanitation 19,550,920.59 2,409,925.57
Service Co., Ltd.
Shantou Chaoyang District
Zoomlion Ruikang
19,433,725.73 11,843,311.55 142,662.64
Environmental Sanitation
Service Co., Ltd.
Changsha Cowa Zoomlion
5,429,199.88 -535,617.37
Intelligent Technology Co., Ltd.
Guangdong Liangke
Environmental Engineering Co., 34,109,839.80 -1,414,239.82
Ltd.
Guangxi Zoomlion Guilv Urban
2,136,327.10 225,424.74
Environmental Service Co., Ltd.
Shenzhen Yingmei City
30,000.00 -1,834.71
Housekeeper Co., Ltd.
Foshan Yingtong Electrical
250,288,274.31 -21,355,020.22
Materials Co., Ltd.
China Urban Institute (Beijing)
Environmental Technology Co., 96,346,250.00 1,040,896.22
Ltd.
Beijing Xingyun Zhixing
10,000,000.00 -517,922.14
Technology Co., Ltd.
Guangdong Yingling Testing
Technology Service Co., Ltd.
[Note 2]
Total 603,580,781.31 326,460,875.80 6,087,467.28
(Continued)
Increase/Decrease
Closing balance
Investees Cash dividend/ Closing balance of provision for
Changes in Provision for
Profit declared for Others impairment
other equity impairment
distribution
Associates
Lianjiang Company [Note 1] 51,330.46 2,543,348.57 251,641,704.37
Tengine Innovation (Beijing)
29,631,523.07
Monitoring Instrument Co., Ltd.
Guangdong Shunkong 5,165,442.07 218,036,312.90
160
Increase/Decrease
Closing balance
Investees Cash dividend/ Closing balance of provision for
Changes in Provision for
Profit declared for Others impairment
other equity impairment
distribution
Environmental Investment Co.,
Ltd.
Guangdong Tianshu New
Energy Technology Co., Ltd.
Shantou Zoomlion Ruikang
Environmental Sanitation 21,960,846.16
Service Co., Ltd.
Shantou Chaoyang District
Zoomlion Ruikang
31,419,699.92
Environmental Sanitation
Service Co., Ltd.
Changsha Cowa Zoomlion
4,893,582.51
Intelligent Technology Co., Ltd.
Guangdong Liangke
Environmental Engineering Co., 32,695,599.98
Ltd.
Guangxi Zoomlion Guilv Urban
2,361,751.84
Environmental Service Co., Ltd.
Shenzhen Yingmei City
28,165.29
Housekeeper Co., Ltd.
Foshan Yingtong Electrical
228,933,254.09
Materials Co., Ltd.
China Urban Institute (Beijing)
Environmental Technology Co., 97,387,146.22
Ltd.
Beijing Xingyun Zhixing
9,482,077.86
Technology Co., Ltd.
Guangdong Yingling Testing
Technology Service Co., Ltd.
[Note 2]
Total 51,330.46 7,708,790.64 251,641,704.37 676,829,959.84
Note 1: The Company acquired 50% of equity of Lianjiang Company through its subsidiary Guangdong Infore Environmental
Investment Co., Ltd. in February 2022 and included Lianjiang Company into the consolidation scope since March 2022. Since then,
the Company changed the accounting method for long-term equity investments in Lianjiang Company from equity method to cost
method.
Note 2: Long-term equity investments of 0.00 yuan in Guangdong Yingling Testing Technology Service Co., Ltd. was due to its
long-term loss. The carrying amount of such long-term equity investment was adjusted to 0.00 yuan by the Company under the
equity method.
13. Other equity instrument investments
Accumulated amount of gains or losses
Dividend transferred from other comprehensive
Items Closing balance Opening balance income to retained earnings
income
Amount Reasons
Zhejiang Shangyu Rural
800,000.00 800,000.00 414,960.00
Commercial Bank Co., Ltd.
Shenzhen Infore Environmental
Protection Industry Fund 270,000.00 270,000.00
Management Co., Ltd.
Shenzhen Infore Environmental
Protection Industry M&A Fund 14,282,971.01 14,632,971.01
[Note]
Subtotal 15,352,971.01 15,702,971.01 414,960.00
Note: As of December 31, 2022, Shenzhen Infore Environmental Protection Industry M&A Fund is still in liquidation.
161
14. Investment property
(1) Details
Items Buildings and structures Total
Cost
Opening balance 2,528,684.43 2,528,684.43
Increase 26,905,180.23 26,905,180.23
1) Transferred in from fixed assets 26,905,180.23 26,905,180.23
Decrease 362,764.00 362,764.00
1) Disposal 362,764.00 362,764.00
Closing balance 29,071,100.66 29,071,100.66
Accumulated depreciation and amortization
Opening balance 690,980.75 690,980.75
Increase 1,388,918.95 1,388,918.95
1) Accrual or amortization 118,676.59 118,676.59
2) Transferred in from fixed assets 1,270,242.36 1,270,242.36
Decrease 114,234.07 114,234.07
1) Disposal 114,234.07 114,234.07
Closing balance 1,965,665.63 1,965,665.63
Carrying amount
Closing balance 27,105,435.03 27,105,435.03
Opening balance 1,837,703.68 1,837,703.68
(2) Investment property with certificate of titles being unsettled
Items Carrying amount Reasons for unsettlement
Shangyu Wanda real estate 1,470,497.16 In processing.
Subtotal 1,470,497.16
15. Fixed assets
(1) Details
Buildings and General Transport Other
Items Special equipment Total
structures equipment facilities equipment
Cost
Opening balance 1,234,214,194.53 147,773,153.57 781,618,637.79 63,065,547.32 34,399,532.35 2,261,071,065.56
Increase 342,986,037.45 18,836,436.00 415,794,459.71 8,694,113.65 3,562,521.63 789,873,568.44
1) Acquisition 3,645,851.54 14,375,711.91 294,827,428.84 6,368,917.72 3,562,521.63 322,780,431.64
2) Transferred in
from construction 339,340,185.91 3,039,068.79 62,325,777.62 404,705,032.32
in progress
3) Business
1,401,645.46 36,101,829.37 2,325,195.93 39,828,670.76
combination
162
Buildings and General Transport Other
Items Special equipment Total
structures equipment facilities equipment
4) Transferred in
20,009.84 22,539,423.88 22,559,433.72
from inventories
Decrease 27,801,393.99 2,457,504.94 23,402,702.68 5,444,440.54 89,652.25 59,195,694.40
1) Disposal/
896,213.76 2,457,504.94 20,508,595.90 5,444,440.54 89,652.25 29,396,407.39
Scrapping
2) Transferred
out into 2,894,106.78 2,894,106.78
intangible assets
3) Transferred
out into
26,905,180.23 26,905,180.23
investment
property
Closing balance 1,549,398,837.99 164,152,084.63 1,174,010,394.82 66,315,220.43 37,872,401.73 2,991,748,939.60
Accumulated
depreciation
Opening balance 162,890,147.66 44,876,760.79 262,836,971.23 15,024,913.91 17,390,266.78 503,019,060.37
Increase 50,428,941.64 22,384,289.60 157,794,175.67 7,033,369.62 509,506.92 238,150,283.45
1) Accrual 50,428,941.64 21,202,568.76 140,020,345.68 5,328,021.03 509,506.92 217,489,384.03
2) Business
1,181,720.84 17,453,188.23 1,705,348.59 20,340,257.66
combination
3) Others 320,641.76 320,641.76
Decrease 1,364,011.96 1,960,750.57 10,882,856.32 3,455,727.39 44,259.99 17,707,606.23
1) Disposal/
93,769.60 1,960,750.57 10,755,095.90 3,455,727.39 44,259.99 16,309,603.45
Scrapping
2) Transferred
out into 127,760.42 127,760.42
intangible assets
3) Transferred
out into
1,270,242.36 1,270,242.36
investment
property
Closing balance 211,955,077.34 65,300,299.82 409,748,290.58 18,602,556.14 17,855,513.71 723,461,737.59
Provision for
impairment
Opening balance
Increase
Decrease
Closing balance
Carrying amount
Closing balance 1,337,443,760.65 98,851,784.81 764,262,104.24 47,712,664.29 20,016,888.02 2,268,287,202.01
Opening balance 1,071,324,046.87 102,896,392.78 518,781,666.56 48,040,633.41 17,009,265.57 1,758,052,005.19
(2) No fixed assets temporarily idle at the balance sheet date.
(3) No fixed assets leased out under operating leases at the balance sheet date.
(4) Fixed assets with certificate of titles being unsettled
Items Carrying amount Reasons for unsettlement
Integration project plant 300,293,498.89 In processing.
Employee dormitory in Lueryuan 141,972,601.77 In processing.
163
Items Carrying amount Reasons for unsettlement
Bottom renovation workshop in Lueryuan 21,647,559.63 In processing.
Lueryuan Exhibition Center 26,765,381.16 In processing.
Staff canteen in Lueryuan 23,701,199.56 In processing.
Subtotal 514,380,241.01
16. Construction in progress
(1) Details
Closing balance Opening balance
Projects Provision for Carrying Provision for Carrying
Book balance Book balance
impairment amount impairment amount
Integrated construction of
intelligent equipment and
189,748,878.58 189,748,878.58
intelligent sanitation
services
Equipment to be
16,211,018.08 16,211,018.08 5,468,920.80 5,468,920.80
installed
Piecemeal projects 24,862,249.60 24,862,249.60 28,850,834.48 28,850,834.48
Total 41,073,267.68 41,073,267.68 224,068,633.86 224,068,633.86
2) Changes in significant projects
Transferred to Transferred to
Projects Budgets Opening balance Increase Closing balance
fixed assets intangible assets
Integrated construction
of intelligent equipment
300,000,000.00 189,748,878.58 147,501,302.90 337,250,181.48
and intelligent sanitation
services
Equipment to be
5,468,920.80 47,603,237.91 12,661,983.80 24,199,156.83 16,211,018.08
installed
Piecemeal projects 28,850,834.48 50,815,966.29 54,792,867.04 11,684.13 24,862,249.60
Total 224,068,633.86 245,920,507.10 404,705,032.32 24,210,840.96 41,073,267.68
(Continued)
Accumulated Completion Accumulated amount Amount of borrowing Annual
Fund
Projects input to budget percentage of borrowing cost cost capitalization in capitalization
source
(%) (%) capitalization the current period rate (%)
Integrated construction
of intelligent equipment
Self-raised
and intelligent sanitation
services
Equipment to be
Self-raised
installed
Piecemeal projects Self-raised
Total
17. Right-of-use assets
(1) Details
Items Buildings and structures Other equipment Total
Cost
Opening balance 28,646,420.80 2,789,202.39 31,435,623.19
164
Items Buildings and structures Other equipment Total
Increase 18,533,774.47 18,533,774.47
1) Leased in 12,740,668.64 12,740,668.64
2) Business combination 5,793,105.83 5,793,105.83
Decrease 330,555.41 2,789,202.39 3,119,757.80
1) Disposal 330,555.41 2,789,202.39 3,119,757.80
Closing balance 46,849,639.86 46,849,639.86
Accumulated depreciation
Opening balance 4,608,299.09 1,321,412.24 5,929,711.33
Increase 10,436,979.07 489,263.38 10,926,242.45
1) Accrual 6,574,908.51 489,263.38 7,064,171.89
2) Business combination 3,862,070.56 3,862,070.56
Decrease 55,092.54 1,810,675.62 1,865,768.16
1) Disposal 55,092.54 1,810,675.62 1,865,768.16
Closing balance 14,990,185.62 14,990,185.62
Carrying amount
Closing balance 31,859,454.24 31,859,454.24
Opening balance 24,038,121.71 1,467,790.15 25,505,911.86
18. Intangible assets
(1) Details
Patented
Items Land use right Software Franchise Total
technology
Cost
Opening balance 587,639,227.37 42,482,834.75 5,680,343,377.63 434,557,655.81 6,745,023,095.56
Increase 69,926,700.00 28,203,758.40 1,101,341,090.79 24,821,938.40 1,224,293,487.59
1) Acquisition 69,926,700.00 3,857,244.58 843,596,123.76 260,000.00 917,640,068.34
2) Transferred in
from construction 24,210,840.96 24,210,840.96
in process
3) Business
135,672.86 254,850,860.25 18,578,729.79 273,565,262.90
combination
4) Transferred in
2,894,106.78 2,894,106.78
from fixed assets
5) Internal
research and 5,983,208.61 5,983,208.61
development
Decrease 317,311.32 6,437,730.28 6,755,041.60
1) Disposal 317,311.32 6,437,730.28 6,755,041.60
Closing balance 657,565,927.37 70,369,281.83 6,775,246,738.14 459,379,594.21 7,962,561,541.55
Accumulated
amortization
Opening balance 72,559,037.10 15,226,121.11 1,038,620,552.82 223,148,413.09 1,349,554,124.12
165
Patented
Items Land use right Software Franchise Total
technology
Increase 12,506,507.53 8,487,398.02 454,508,759.62 47,992,191.82 523,494,856.99
1) Accrual 12,506,507.53 8,377,643.38 404,599,253.49 33,486,365.77 458,969,770.17
2) Business
109,754.64 49,781,745.71 14,505,826.05 64,397,326.40
combination
3) Transferred in
127,760.42 127,760.42
from fixed assets
Decrease 212,547.43 6,164,663.54 6,377,210.97
1) Disposal 212,547.43 6,164,663.54 6,377,210.97
Closing balance 85,065,544.63 23,500,971.70 1,486,964,648.90 271,140,604.91 1,866,671,770.14
Provision for
impairment
Opening balance 24,687,522.85 20,185,580.19 44,873,103.04
Increase 2,902,303.88 2,902,303.88
1) Business
2,902,303.88 2,902,303.88
combination
Decrease
Closing balance 24,687,522.85 23,087,884.07 47,775,406.92
Carrying amount
Closing balance 572,500,382.74 46,868,310.13 5,263,594,566.39 165,151,105.23 6,048,114,364.49
Opening balance 515,080,190.27 27,256,713.64 4,617,035,301.96 191,223,662.53 5,350,595,868.40
(2) No land use right with certificate of titles being unsettled at the balance sheet date.
19. Development expenditures
(1) Details
Increase Decrease
Opening Internal Recognized as Closing
Items Transferred to Others
balance development Others intangible balance
profit or loss [Note]
expenditures assets
Development
15,682,278.17 23,461,855.88 5,983,208.61 2,822,707.36 30,338,218.08
expenditures
Total 15,682,278.17 23,461,855.88 5,983,208.61 2,822,707.36 30,338,218.08
Note: Other decrease refers to provision for impairment made in the current period.
(2) Other remarks
Development expenditures of 2022 mainly refer to expenditures for development of environmental protection equipment,
automated production line, etc., and the supporting documents for capitalization include project proposal, project schedule and
periodic summary report.
20. Goodwill
(1) Details
Investees or Closing balance Opening balance
events
resulting in
goodwill Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
166
Investees or Closing balance Opening balance
events
resulting in
goodwill Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
Zoomlion
5,714,428,315.9 528,229,356.5 5,186,198,959.4 5,714,428,315.9 233,232,278.1 5,481,196,037.8
Environmental
9 5 4 9 5 4
Company
Green Oriental
78,074,688.12 78,074,688.12 78,074,688.12 78,074,688.12
Company
Foshan Infore
Environmenta
l Water 316,465,481.91 316,465,481.91 316,465,481.91 316,465,481.91
Treatment
Co., Ltd.
Shangfeng
Industrial 100,455,813.40 100,455,813.40 100,455,813.40 100,455,813.40
Company
Yolsh
13,389,232.61 13,389,232.61
Company
Lianjiang
46,032,017.84 1,013,513.53 45,018,504.31
Company
6,268,845,549.8 529,242,870.0 5,739,602,679.7 6,209,424,299.4 233,232,278.1 5,976,192,021.2
Total
7 8 9 2 5 7
(2) Cost
Investees or events resulting in Opening Due to business combination Decrease due to disposal
Closing balance
goodwill balance in the current period of 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
Foshan Infore Environmental
316,465,481.91 316,465,481.91
Water Treatment Co., Ltd.
Shangfeng Industrial Company 100,455,813.40 100,455,813.40
Yolsh Company 13,389,232.61 13,389,232.61
Lianjiang Company 46,032,017.84 46,032,017.84
Total 6,209,424,299.42 59,421,250.45 6,268,845,549.87
(3) Provision for impairment
Decrease due to
Investees or events resulting in
Opening balance Increase disposal of Closing balance
goodwill
subsidiaries
Zoomlion Environmental
233,232,278.15 294,997,078.40 528,229,356.55
Company [Note 1]
Lianjiang Company [Note 2] 1,013,513.53 1,013,513.53
Total 233,232,278.15 296,010,591.93 529,242,870.08
Note 1: For impairment loss of goodwill of Zoomlion Environmental Company, as the goodwill of 92,031,026.04 yuan was
recognized at the time of the acquisition of Zoomlion Environmental Company through deferred tax liabilities due to appraisal
appreciation at the date of business combination not under common control, provision for impairment of 6,884,864.15 yuan was
made along with changes in deferred tax liabilities in the current period. The accumulated provision for impairment of goodwill
167
arising from this factor totaled 52,899,507.95 yuan. Provision for impairment of 288,112,214.25 yuan was made at the difference
between the recoverable amount and the carrying amount of equipment asset group portfolio of Zoomlion Environmental Company,
and the accumulated provision for impairment of goodwill arising from this factor totaled 475,329,848.60 yuan.
Note 2: For impairment loss of goodwill of Lianjiang Company, as the goodwill of 30,000,000.00 yuan was recognized at the
time of the acquisition of Lianjiang Company through deferred tax liabilities due to appraisal appreciation at the date of business
combination not under common control, provision for impairment of 1,013,513.53 yuan was made along with changes in deferred tax
liabilities in the current period. The accumulated provision for impairment of goodwill arising from this factor totaled 1,013,513.53
yuan.
(4) Impairment test process
1) Related information of asset group or asset group portfolios which include goodwill
Carrying amount of Carrying amount of
Carrying amount of
Asset groups or asset goodwill allocated to asset groups or asset
Legal entities asset groups or asset
group portfolios the asset groups or group portfolios that
group portfolios
asset group portfolios include goodwill
Zoomlion Environmental
Sanitation vehicles and Company (manufacturing and
equipment sales of sanitation vehicles and
10,684,300,240.09 1,497,825,670.20 12,182,125,910.29
manufacturing and equipment), Changsha Zhongbiao
sales asset group Environmental Industry Co., Ltd.,
etc.
Zoomlion Environmental
Company (sanitation integrated
operation), Green Oriental
Urban-rural sanitation
Company, Huaian Chenjie
integrated operation 352,487,404.73 4,367,010,686.04 4,719,498,090.77
Environmental Engineering Co.,
asset group portfolio
Ltd., Biyang County Fenghe New
Energy Power Co., Ltd., Lianjiang
Company
Water governance Foshan Infore Environmental
316,465,481.91 148,814,220.56 465,279,702.47
operation asset group Water Treatment Co., Ltd., etc.
Ventilation equipment
manufacturing and Shangfeng Industrial Company 159,547,374.49 149,261,344.26 308,808,718.75
sales asset group
Electrical equipment
manufacturing and Yolsh Company 19,127,475.16 28,249,030.31 47,376,505.47
sales asset group
Note 1: Goodwill amortized to 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 treatment). Data of original goodwill at
the formation 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 cost of original goodwill of Zoomlion Environmental Company 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.
Note 3: The Company acquired Lianjiang Company through business combination not under common control. After the
168
business combination of Lianjiang Company, as its asset group and urban-rural sanitation integrated operation asset group and the
waste incineration power generation operation asset group of the Company were similar in terms of business acquisition, production
and operation activities, and cash return realization methods, and the Management had carried out integrated management, the asset
group of Lianjiang Company was identified as the urban-rural sanitation integrated operation asset group portfolio.
2) Impairment test process, method and conclusion of goodwill impairment loss
a. 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 budget approved by the Management. The revenue growth rate of the
product production and sales asset group in 2022 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.
b. Key parameter information for adopting future cash flow discount method
Forecast period Stable period Pre-tax discount
Asset groups or asset group portfolios Forecast period Profit margin
growth rate growth rate rate
Sanitation vehicles and equipment 14.12%-
5 years [Note 1] 0.00% 11.21%
manufacturing and sales asset group 14.80 %
Urban-rural sanitation integrated
[Note 1] [Note 1] [Note 1] [Note 1] 8.86%-9.96%
operation asset group portfolio
Water governance operation asset group [Note 1] [Note 1] [Note 1] [Note 1] 9.80%
Ventilation equipment manufacturing 10.04%-
5 years [Note 2] 0.00% 11.59%
and sales asset group 10.31%
Electrical equipment manufacturing 5.24%-
5 years [Note 3] 0.00% 13.68%
and sales asset group 10.14%
Note 1: Please refer to the determination method of recoverable amount for details.
Note 2: The revenue growth rate of ventilation equipment manufacturing and sales asset group during the forecast period from
2023 to 2027 is 4.77%, 4.00%, 3.00%, 2.00% and 1.00% respectively.
Note 3: The revenue growth rate of electrical equipment manufacturing and sales asset group during the forecast period from
2023 to 2027 is 128.86%, 20.00%, 25.00%, 30.00% and 35.00% respectively.
c. Conclusion of goodwill impairment test
Recoverable amount asset group or Carrying amount of asset Goodwill impairment loss
Asset group or asset group
asset group portfolios that include group or asset group portfolios attributable to the
portfolios
goodwill that include goodwill Company
Sanitation vehicles and
equipment manufacturing and 11,617,200,000.00 12,182,125,910.29 288,112,214.25
sales asset group
Urban-rural sanitation integrated
4,927,567,225.59 4,719,498,090.77
operation asset group portfolio
Water governance operation
479,400,000.00 465,279,702.47
asset group
Ventilation equipment
manufacturing and sales asset 786,909,446.86 308,808,718.75
group
Electrical equipment
manufacturing and sales asset 48,436,242.27 47,376,505.47
group
Note 1: The present value of estimated future cash flows (recoverable amount) of sanitation vehicles and equipment
169
manufacturing and sales asset group was based on the appraisal report numbered Zhong Rui Ping Bao Zi [2023] 000545 issued by
Chungrui Worldunion 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 [2023] 000550 issued by Chungrui
Worldunion Assets Appraisal Group Co., Ltd. and the appraisal report numbered Jun Rui Ping Bao Zi [2023] 016 issued by Shenzhen
Junrui Assets Appraisals LLP.
Note 3: The present value of estimated future cash flows (recoverable amount) of water governance operation asset group was
based on the appraisal report numbered Jun Rui Ping Bao Zi [2023] 017 issued by Shenzhen Junrui Assets Appraisals LLP.
21. Long-term prepayments
Other
Items Opening balance Increase Amortization Closing balance
decreases
Expenditures on
improvement of 11,253,726.52 20,965,713.65 6,159,422.60 278,437.52 25,781,580.05
leased-in fixed assets
Others 4,480,030.80 2,310,429.06 2,361,104.00 4,429,355.86
Total 15,733,757.32 23,276,142.71 8,520,526.60 278,437.52 30,210,935.91
22. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets before offset
Closing balance Opening balance
Items Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
difference difference
Provision for impairment of
668,318,234.13 102,350,161.93 636,152,868.76 97,253,128.24
assets
Unrealized profit from internal
22,214,585.93 3,332,187.89 22,789,085.85 7,986,502.74
transactions
Deductible losses 47,115,916.60 8,894,782.37 47,114,527.25 4,326,295.17
Total 737,648,736.66 114,577,132.19 706,056,481.86 109,565,926.15
(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
24,481,935.20 3,672,290.28 27,522,123.27 4,128,318.49
fixed assets
Assets appraisal appreciation
due to business combination 448,250,679.76 50,535,337.80 361,902,254.82 28,433,715.48
not under common control
Total 472,732,614.96 54,207,628.08 389,424,378.09 32,562,033.97
(3) Details of unrecognized deferred tax assets
Items Closing balance Opening balance
Deductible temporary difference 510,065,399.73 381,701,381.09
Deductible losses 596,581,457.35 430,013,174.82
Unrealized profit from internal transactions 343,937,402.32 313,377,877.13
Subtotal 1,450,584,259.40 1,125,092,433.04
(4) Maturity years of deductible losses of unrecognized deferred tax assets
Maturity years Closing balance Opening balance Remarks
170
Maturity years Closing balance Opening balance Remarks
Year 2022 6,812,010.93
Year 2023 24,742,029.97 43,809,247.32
Year 2024 82,954,604.70 93,695,529.33
Year 2025 206,033,354.21 214,803,545.16
Year 2026 97,279,157.08 70,892,842.08
Year 2027 185,572,311.39
Subtotal 596,581,457.35 430,013,174.82
23. Other non-current assets
(1) Details
Closing balance Opening balance
Items Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
Contract assets 154,548,259.36 17,968,552.02 136,579,707.34 177,652,059.17 19,320,439.53 158,331,619.64
Advances for long-
93,266,692.04 93,266,692.04 48,695,481.45 48,695,481.45
term assets
Receivables for
8,518,174.25 8,518,174.25 8,518,174.25 8,518,174.25
agent construction
Cost to obtain a
68,565,164.58 68,565,164.58 17,932,020.49 17,932,020.49
contract
Total 324,898,290.23 17,968,552.02 306,929,738.21 252,797,735.36 19,320,439.53 233,477,295.83
(2) Contract assets
1) Details
Closing balance Opening balance
Items Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
Quality
guarantee
154,548,259.36 17,968,552.02 136,579,707.34 177,652,059.17 19,320,439.53 158,331,619.64
deposit
receivable
Subtotal 154,548,259.36 17,968,552.02 136,579,707.34 177,652,059.17 19,320,439.53 158,331,619.64
2) No significant changes in carrying amount of contract assets in the current period.
3) Details on provision for impairment of contract assets
a. Details
Increase Decrease
Items Opening balance Closing balance
Accrual Others Reversal Write-off Others
On a collective
19,320,439.53 -1,351,887.51 17,968,552.02
basis
Subtotal 19,320,439.53 -1,351,887.51 17,968,552.02
b. Contract assets with provision for impairment made on a collective basis
Closing balance
Portfolios
Book balance Provision for impairment Provision proportion (%)
Portfolio grouped with
154,548,259.36 17,968,552.02 11.63
ages
Subtotal 154,548,259.36 17,968,552.02 11.63
171
(3) Cost to obtain a contract
Provision for
Items Opening balance Increase Amortization Closing balance
impairment
Cost to obtain a
17,932,020.49 64,824,178.55 14,191,034.46 68,565,164.58
contract
Subtotal 17,932,020.49 64,824,178.55 14,191,034.46 68,565,164.58
24. Short-term borrowings
Items Closing balance Opening balance
Credit borrowings 140,139,583.33 150,165,000.00
Guaranteed borrowings 281,942,622.11 276,091,575.54
Mortgaged borrowings 18,020,900.00 6,959,699.59
Guaranteed and mortgaged borrowings 4,005,800.00
Mortgaged and pledged borrowings 1,802,658.33
Total 440,103,105.44 439,024,733.46
25. Notes payable
Items Closing balance Opening balance
Trade acceptance 222,877,645.46 187,465,744.62
Bank acceptance 2,292,351,647.71 2,281,333,445.09
Total 2,515,229,293.17 2,468,799,189.71
26. Accounts payable
(1) Details
Items Closing balance Opening balance
Payments for goods 2,547,048,086.70 2,688,599,026.21
Payments for engineering and equipment 164,908,990.42 158,035,096.31
Others 60,004,194.54 113,427,385.81
Total 2,771,961,271.66 2,960,061,508.33
(2) No significant accounts payable with age over one year at the balance sheet date.
27. Contract liabilities
(1) Details
Items Closing balance Opening balance
Payments for goods 247,747,809.30 210,432,628.98
Rebate for customers 26,542,168.95
Total 274,289,978.25 210,432,628.98
(2) No significant changes in the carrying amount of contract liabilities in the current period.
28. Employee benefits payable
(1) Details
172
Items Opening balance Increase Decrease Closing balance
Short-term employee benefits 309,821,227.12 2,044,442,686.63 1,948,865,833.01 405,398,080.74
Post-employment benefits -
656,757.53 100,746,200.60 99,411,265.32 1,991,692.81
defined contribution plan
Termination benefits 223,587.72 18,160,542.17 16,199,884.72 2,184,245.17
Total 310,701,572.37 2,163,349,429.40 2,064,476,983.05 409,574,018.72
(2) Details of short-term employee benefits
Items Opening balance Increase Decrease Closing balance
Wage, bonus, allowance and
298,907,271.54 1,891,746,076.66 1,801,219,758.13 389,433,590.07
subsidy
Employee welfare fund 589,365.95 52,609,348.34 52,431,388.23 767,326.06
Social insurance premium 354,306.41 55,738,677.77 55,259,224.48 833,759.70
Including: Medicare premium 333,668.77 50,699,785.65 50,265,374.19 768,080.23
Occupational injuries
20,637.64 5,038,892.12 4,993,850.29 65,679.47
premium
Housing provident fund 1,505,062.18 32,305,406.40 32,003,543.19 1,806,925.39
Trade union fund and
8,465,221.04 12,043,177.46 7,951,918.98 12,556,479.52
employee education fund
Subtotal 309,821,227.12 2,044,442,686.63 1,948,865,833.01 405,398,080.74
(3) Details of defined contribution plan
Items Opening balance Increase Decrease Closing balance
Basic endowment insurance premium 644,163.94 96,600,105.01 95,648,740.85 1,595,528.10
Unemployment insurance premium 12,593.59 4,146,095.59 3,762,524.47 396,164.71
Subtotal 656,757.53 100,746,200.60 99,411,265.32 1,991,692.81
29. Taxes and rates payable
Items Closing balance Opening balance
VAT 66,918,012.44 55,281,814.33
Enterprise income tax 36,440,528.78 64,521,114.98
Individual income tax withheld for tax authorities 3,778,293.58 5,611,096.21
Urban maintenance and construction tax 1,991,056.41 5,322,911.41
Housing property tax 2,606,954.11 3,075,518.72
Land use tax 157,193.04 165,374.75
Stamp duty 1,661,333.48 1,713,517.40
Education surcharge 845,859.65 2,282,093.47
Local education surcharge 562,045.06 1,519,623.59
Others 6,950.33 1,796.22
Total 114,968,226.88 139,494,861.08
30. Other payables
(1) Details
173
Items Closing balance December 31, 2021
Factoring of accounts receivable with recourse right [Note] 66,789,887.39 49,479,996.55
Temporary receipts payable 297,006,996.69 175,580,442.10
Employee stock ownership plan 180,075,747.64
Security deposits 129,748,015.42 114,857,152.31
Others 163,577,388.03 163,720,743.45
Total 657,122,287.53 683,714,082.05
Note: The balance refers to the factoring of accounts receivable with recourse right made by Zoomlion Environmental Company
to the non-bank financial institutions. 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, and the
receipts of factoring shall be recognized as other payables.
(2) No significant other payables with age over one year at the balance sheet date.
31. Non-current liabilities due within one year
Items Closing balance Opening balance
Long-term borrowings due within one year 555,746,357.94 373,296,214.00
Lease liabilities due within one year 4,673,226.74 5,314,737.81
Long-term payables due within one year 599,514.91
Total 561,019,099.59 378,610,951.81
32. Other current liabilities
Items Closing balance Opening balance
Output VAT to be recognized 31,616,947.24 27,205,068.15
Rebate for customers 35,759,709.45
Total 31,616,947.24 62,964,777.60
33. Long-term borrowings
Items Closing balance Opening balance
Credit borrowings 18,800,000.00 300,000,000.00
Guaranteed borrowings 70,029,166.64 171,964,611.10
Pledged borrowings 454,467,547.52 293,820,000.00
Guaranteed and mortgaged borrowings 150,000,000.00 49,230,775.77
Guaranteed and pledged borrowings 1,229,009,512.16 738,727,380.85
Guaranteed, pledged and mortgaged borrowings 144,000,000.00
Total 1,922,306,226.32 1,697,742,767.72
34. Bonds payable
(1) Details
Items Closing balance Opening balance
174
Items Closing balance Opening balance
Convertible corporate bonds 1,308,690,556.32 1,254,962,176.00
Total 1,308,690,556.32 1,254,962,176.00
(2) Current period movements (not including other financial instruments such as preferred shares/perpetual bonds classified as
financial liabilities)
Bonds Issuing date Maturity Par value Amount outstanding
Infore convertible bonds 11/4/2020 6 years 100.00 1,476,189,600.00
Subtotal 100.00 1,476,189,600.00
(Continued)
Funds returned
Current Premium/ Current due to
Par value Converted
Bonds Opening balance period Discount period conversion of Closing balance
interest to shares
issuance amortization repayment bonds into
shares
Infore
convertible 1,254,962,176.00 8,084,435.38 53,086,819.12 7,380,303.50 62,552.09 18.59 1,308,690,556.32
bonds
Subtotal 1,254,962,176.00 8,084,435.38 53,086,819.12 7,380,303.50 62,552.09 18.59 1,308,690,556.32
(3) Converting conditions and time of convertible bonds
Under the “Approval of the Public Offering of Convertible Bonds by Infore Environment Technology Group Co., Ltd.” issued
by China Securities Regulatory Commission (Zheng Jian Xu Ke [2020] 2219) dated 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 pieces, 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) after the expiration of six months from the end
date of the issuance on November 10, 2020 to the maturity date of the convertible bonds (November 3, 2026).
As of December 31, 2022, a total of 1,299 Infore convertible bonds had been converted to the Company’s ordinary A shares,
with a total of 15,833 shares converted. In the current period, capital reserve (share premium) of 66,691.53 yuan was recognized at
the difference between the carrying amount of the convertible bonds actually converted and other equity instruments and share
capital increased due to actual conversion of bonds into shares.
35. Lease liabilities
Items Closing balance Opening balance
Unpaid lease payments 24,948,023.12 20,701,888.38
Less: Unrecognized financing expenses 1,692,398.82 2,178,148.28
Total 23,255,624.30 18,523,740.10
36. Long-term payables
(1) Details
Items Closing balance Opening balance
175
Items Closing balance Opening balance
Special payables 315,735,814.91 315,735,814.91
Total 315,735,814.91 315,735,814.91
(2) Special payables
Reasons for
Items Opening balance Increase Decrease Closing balance
balance
Funds from
Special funds for conversion of
3,000,000.00 3,000,000.00
treasury bond projects treasury bonds
into loans.
Special
Special funds for Jiayu
government
Sewage Treatment 176,015,774.58 176,015,774.58
funds for PPP
Project
projects.
Special
Special funds for
government
Tongshan Sewage 136,720,040.33 136,720,040.33
funds for PPP
Treatment Project
projects.
Subtotal 315,735,814.91 315,735,814.91
37. Provisions
Items Closing balance Opening balance
Credit guarantees 4,575,049.22 3,129,793.85
Total 4,575,049.22 3,129,793.85
38. Deferred income
(1) Details
Reasons for
Items Opening balance Increase Decrease Closing balance
balance
Government grants
Government grants 101,635,992.65 37,339,750.00 18,085,032.61 120,890,710.04 related to
assets/income
Total 101,635,992.65 37,339,750.00 18,085,032.61 120,890,710.04
(2) Details of government grants
Grants included
Opening Related to
Items Increase into other income Other decrease Closing balance
balance assets/income
[Note]
Investment plan on the
construction of
Related to
ecological civilization 2,200,000.00 880,000.00 94,189.60 2,985,810.40
assets
of 2020 within the
central budget
No. 2 Sewage
Treatment Plant and
Related to
supporting pipe network 7,660,000.00 7,660,000.00
assets
projects in Daban Town,
Bahrain Right Banner
Special subsidies for
Related to
Xiantao waste power 9,936,051.24 726,531.48 9,209,519.76
assets
generation project
Shouxian domestic
Related to
waste incineration 13,034,666.58 1,002,666.73 12,031,999.85
assets
power plant project
Urban sewage and Related to
4,456,150.42 441,822.07 4,014,328.35
garbage treatment assets
176
Grants included
Opening Related to
Items Increase into other income Other decrease Closing balance
balance assets/income
[Note]
facilities and sewage
pipe network
engineering projects
Development,
demonstration and
application of time of
flight mass
Related to
spectrometry for soft 354,166.67 141,666.72 212,499.95
assets
ionization-high
resolution on-line
detection of
atmospheric VOCS
Research and
application of water Related to
1,400,000.00 466,666.68 933,333.32
quality and environment assets
monitoring technology
R&D and application
project of water quality
comprehensive toxicity
Related to
rapid monitoring 2,320,000.00 890,000.00 1,430,000.00
assets
instrument based on
electrochemically active
microorganisms
Urban and rural
domestic waste transfer,
Related to
kitchen waste resource 10,847,931.04 388,620.69 10459310.35
assets
utilization and harmless
treatment projects
Xiantao sludge harmless Related to
17,700,000.00 610,344.83 17,089,655.17
treatment plant assets
Subsidies for enterprise
Related to
technological 714,285.72 142,857.14 571,428.58
assets
transformation
Subsidies for key
projects of enterprise
Related to
intelligent 1,527,957.44 203,061.88 1,324,895.56
assets
transformation of 2018
and 2020
Funds for provincial Related to
1,055,749.60 800,000.00 360,917.96 1,494,831.64
“Kunpeng Action” plan assets
Incremental tax
incentives for Related to
7,586,240.00 948,280.00 6,637,960.00
technological assets
transformation
The second batch of
awards for rental Related to
5,743,156.33 165,270.68 5,577,885.65
housing in the high-tech assets
zone
The third batch of
municipal subsidies for
Related to
technological 4,562,500.00 500,000.00 4,062,500.00
assets
transformation of
industrial enterprises
The fifth batch of
special funds for raising Related to
1,000,000.00 297,520.66 702,479.34
manufacturing power in assets
Hunan Province
Special funds for air
Related to
pollution prevention and 800,000.00 100,000.00 700,000.00
assets
control
Special subsidies for
Related to
construction and 416,444.76 94,781.44 321,663.32
assets
application of industrial
177
Grants included
Opening Related to
Items Increase into other income Other decrease Closing balance
balance assets/income
[Note]
Internet platform
The third batch of
special funds for raising Related to
416,444.76 94,781.44 321,663.32
manufacturing power in assets
Hunan Province of 2021
The fourth batch of
special funds for raising Related to
129,558.22 13,381.99 116,176.23
manufacturing power in assets
Hunan Province of 2021
Special funds for
provincial modern Related to
94,689.87 28,569.01 66,120.86
service industry of Hi- assets
tech District
Integrated construction
of intelligent equipment
Related to
and intelligent 30,400,000.00 304,680.09 30,095,319.91
assets
sanitation services of
Infore Zoomlion
The second batch of
subsidized loans for
Related to
industrial technology 1,939,750.00 68,421.52 1,871,328.48
assets
transformation in
Changsha of 2021
The fifth batch of special
funds for raising Related to
1,000,000.00 1,000,000.00
manufacturing power in assets
Hunan Province of 2022
Central special
construction supporting Related to
10,000,000.00 10,000,000.00
funds for Kaili PPP income
Project
Total 101,635,992.65 37,339,750.00 8,085,032.61 10,000,000.00 120,890,710.04
Note: Please refer to section V (IV) 3 of notes to the financial statements for details on government grants included into profit or
loss.
39. Other non-current liabilities
Items Closing balance Opening balance
Central special construction funds 8,333,333.33
Total 8,333,333.33
40. Share capital
(1) Details
Movements
Items Opening balance Reserve Closing balance
Issue of new Bonus
transferred Others Subtotal
shares shares
to shares
Total share 3,175,734,760.00 3,770,799.00 3,770,799.00 3,179,505,559.00
(2) Other remarks
Current increase was due to:
1) the subscription of 3,761,991 shares by a total of 107 equity incentive targets according to the “Proposal on Matters Related
to the Second Exercise Period of the Phase III Stock Option Incentive Plan” implemented by the Company in the current period. As
of December 31, 2022, the Company had actually received payments for subscription of 23,399,331.66 yuan from equity incentive
targets, with share capital increased by 3,761,991 yuan, capital reserve (share premium) increased by 19,637,568.02 yuan and
178
financial expenses increased by 227.36 yuan.
2) conversion of convertible corporate bonds with par value of 71,600 yuan into the Company’s ordinary A shares of 8,808
shares, with capital premium (share premium) recognized at 66,691.53 yuan.
41. Other equity instruments
(1) Please refer to section V (I) 34 of notes to financial statements for basic information of convertible corporate bonds
outstanding at 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 Carrying Carrying
Quantity Carrying amount Quantity Quantity Quantity Carrying amount
amount amount
Convertible
corporate 14,761,313 266,929,289.24 716 12,947.44 14,760,597 266,916,341.80
bonds
Total 14,761,313 266,929,289.24 716 12,947.44 14,760,597 266,916,341.80
Note: As of December 31, 2022, convertible corporate bonds with par value of 71,600 yuan had been converted into ordinary A
shares, with other equity instruments decreased by 12,947.44 yuan accordingly.
42. Capital reserve
(1) Details
Items Opening balance Increase Decrease Closing balance
Capital premium (share
9,718,763,486.07 19,704,259.55 133,857,421.38 9,604,610,324.24
premium)
Other capital reserve 54,032,377.68 3,868,552.56 57,900,930.24
Total 9,772,795,863.75 23,572,812.11 133,857,421.38 9,662,511,254.48
(2) Other remarks
1) Current increase of capital premium (share premium) was mainly due to:
a. increase of capital premium (share premium) of 19,637,568.02 yuan. Please refer to section V (I) 40 of notes to the financial
statements for details;
b. conversion of convertible corporate bonds with par value of 71,600 yuan into the Company’s ordinary A shares of 8,808
shares, resulting in the recognition of capital premium (share premium) of 66,691.53 yuan;
2) Current decrease of capital premium (share premium) was mainly due to:
a. completion of the Company’s phase II employee stock ownership plan in 2022 through transfer of shares in the Company’s
repurchase special security account and centralized bidding in secondary market, and 46,410,852 shares was transferred from the
Company’s repurchase special security account, resulting in the decrease of capital reserve of 132,175,661.99 yuan.
b. difference of -1,681,759.39 yuan between the consideration for acquisition of 5% of equity of the subsidiary Liling Zhaoyang
Environmental Protection Co., Ltd. dated April 30, 2022 and the proportionate share in net assets continuously calculated from the
acquisition date or combination date while acquiring long-term equity investments.
3) Current increase of other capital reserve was due to stock option incentive expenses of 4,039,069.40 yuan recognized based
on the equity incentive plan, with 3,868,552.56 yuan included in capital reserve – other capital reserve and 170,516.84 yuan included
in non-controlling interest. Please refer to section XI of notes to the financial statements for details.
43. Treasury shares
(1) Details
Items Opening balance Increase Decrease Closing balance
179
Treasury shares 455,303,777.91 361,170,982.74 94,132,795.17
Total 455,303,777.91 361,170,982.74 94,132,795.17
(2) Other remarks
Pursuant to the 17th extraordinary meeting of the ninth session of the Board of Directors dated March 17, 2022 and the
“Proposal on the ‘Phase II Employee Stock Ownership Plan (Revised Draft)’ and its Summary” deliberated and approved by
shareholders’ meeting of 2021 dated May 24, 2022 and related proposals, the phase II employee stock ownership plan was planned to
acquire shares of the Company through acquisition of repurchased shares, purchase from the secondary market (including but not
limited to centralized biding and block trading) and other method permitted by laws and regulations. In 2022, 46,410,852 shares were
transferred from the Company’s repurchase special security account, which resulted in the decrease of treasury shares of
361,170,982.74 yuan.
44. Other comprehensive income (OCI)
Current period cumulative
Net OCI after tax Less: OCI
previously
Less: OCI recognized but
previously transferred to
Opening Current retained Closing
Items recognized Less: Attributable
balance period Attributable to earnings in the balance
but Income to non-
cumulative parent
transferred to tax controlling current period
before income company
profit or loss expenses shareholders (attributable to
tax parent
in the current
period company after
tax)
OCI not to be
reclassified
-4,280,000.00 -350,000.00 -350,000.00 -4,630,000.00
subsequently to
profit or loss
Including:
Changes in
fair value
- - -
of other -350,000.00
4,280,000.00 350,000.00 4,630,000.00
equity
instrument
investments
- - -
Total -350,000.00
4,280,000.00 350,000.00 4,630,000.00
45. Special reserve
Items Opening balance Increase Decrease Closing balance
Work safety fund 8,693,981.54 8,693,981.54
46. Surplus reserve
(1) Details
Items Opening balance Increase Decrease Closing balance
Statutory surplus reserve 296,754,883.56 18,369,884.36 315,124,767.92
Total 296,754,883.56 18,369,884.36 315,124,767.92
(2) Other remarks
Current increase of 18,369,884.36 yuan was due to the appropriation of statutory surplus reserve at 10% of net profit generated
by the parent company in the current period.
180
47. Undistributed profit
Preceding period
Items Current period cumulative
comparative
Opening balance 3,874,934,971.69 3,558,688,885.55
Add: Net profit attributable to owners of the parent company 418,794,179.13 752,792,198.66
Less: Appropriation of statutory surplus reserve 18,369,884.36 64,052,940.00
Dividend payable on ordinary shares 312,052,376.40 372,493,172.52
Closing balance 3,963,306,890.06 3,874,934,971.69
(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 12,206,399,059.56 9,429,679,886.47 11,808,597,210.09 9,196,610,154.21
Other operations 49,593,878.86 39,830,944.80 57,694,401.36 35,588,414.96
Total 12,255,992,938.42 9,469,510,831.27 11,866,291,611.45 9,232,198,569.17
Including: Revenue
from contracts with 12,253,033,163.91 9,467,213,554.61 11,865,905,141.65 9,232,078,451.86
customers
(2) Breakdown of revenue from contracts with customers by main categories
1) Breakdown of revenue by goods or services
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Intelligent sanitation 10,242,746,845.76 8,023,297,059.91 9,237,262,348.48 7,255,659,678.83
Other businesses 2,010,286,318.15 1,443,916,494.70 2,628,642,793.17 1,976,418,773.03
Subtotal 12,253,033,163.91 9,467,213,554.61 11,865,905,141.65 9,232,078,451.86
2) Breakdown of revenue by operating regions
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Domestic 12,234,221,595.20 9,451,301,571.85 11,823,070,767.91 9,196,686,878.55
Overseas 18,811,568.71 15,911,982.76 42,834,373.74 35,391,573.31
Subtotal 12,253,033,163.91 9,467,213,554.61 11,865,905,141.65 9,232,078,451.86
3) Breakdown of revenue by time of transferring goods or rendering services
Items Current period cumulative Preceding period comparative
Recognized at a point in time 6,705,692,980.49 7,936,363,900.72
Recognized over time 5,547,340,183.42 3,929,541,240.93
Subtotal 12,253,033,163.91 11,865,905,141.65
2. Taxes and surcharges
Items Current period cumulative Preceding period comparative
181
Items Current period cumulative Preceding period comparative
Urban maintenance and construction tax 27,686,507.84 20,078,805.96
Education surcharge 12,075,573.31 8,704,420.76
Housing property tax 9,759,719.80 6,991,844.08
Land use tax 8,282,959.61 8,241,902.89
Local education surcharge 7,807,835.47 5,684,439.06
Stamp duty 7,540,686.80 3,049,851.77
Vehicle and vessel use tax 1,481,678.21 1,380,035.94
Environmental protection tax 50,061.01 10,786.17
Others 1,728.81
Total 74,685,022.05 54,143,815.44
3. Selling expenses
Items Current period cumulative Preceding period comparative
Employee benefits 340,290,000.65 320,344,321.96
Marketing expenses and agency fees 221,534,865.64 203,886,678.86
Business entertainment 47,320,675.86 45,787,322.29
Office expenses 39,159,155.49 52,439,230.50
Expenses for tendering and bidding 33,479,432.56 27,560,842.44
Vehicle usage fees 27,886,649.81 34,084,353.47
Business travelling expenses 22,889,790.05 29,426,404.02
Depreciation and amortization 8,871,711.08 1,634,177.49
After-sales service expenses 8,427,436.37 6,529,791.01
Share-based payments 789,290.58 2,009,420.94
Others 12,321,839.86 15,131,028.07
Total 762,970,847.95 738,833,571.05
4. Administrative expenses
Items Current period cumulative Preceding period comparative
Employee benefits 325,720,014.09 308,636,988.29
Depreciation and amortization 92,377,339.97 90,950,246.67
Office expenses 49,435,534.41 57,223,541.20
Business entertainment 47,088,220.88 44,724,844.78
Agency consulting fees 38,554,467.66 30,647,767.32
Vehicle usage fees 15,346,887.97 10,477,269.96
Business travelling expenses 9,732,527.31 13,652,785.76
Repair fees 2,863,363.74 2,929,951.84
182
Items Current period cumulative Preceding period comparative
Share-based payments 1,905,828.75 4,002,420.59
Others 26,577,495.45 22,107,591.16
Total 609,601,680.23 585,353,407.57
5. R&D expenses
Items Current period cumulative Preceding period comparative
Employee benefits 248,961,357.20 159,381,200.38
Direct inputs 40,506,455.35 58,423,533.28
Other expenses 50,336,437.55 41,705,479.82
Share-based payments 971,457.24 3,108,913.81
Total 340,775,707.34 262,619,127.29
6. Financial expenses
Items Current period cumulative Preceding period comparative
Interest expenses 170,568,834.86 149,868,429.63
Interest income -86,389,951.68 -107,324,690.38
Gains and losses on foreign exchange -3,056,908.33 2,001,825.46
Others 20,717,449.06 14,059,239.82
Total 101,839,423.91 58,604,804.53
7. Other income
Preceding period Amount included in non-
Items Current period cumulative
comparative recurring profit or loss
Government grants related to assets
8,085,032.61 4,481,738.05 8,085,032.61
[Note]
Government grants related to income
93,590,019.49 76,124,682.16 72,183,009.21
[Note]
Refund of handling fees for
429,102.26 748,344.55 429,102.26
withholding individual income tax
Extra deduction of input VAT 17,460,524.12 2,186,407.75 17,460,524.12
Total 119,564,678.48 83,541,172.51 98,157,668.20
Note: Please refer to section V (IV) 3 of notes to the 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
8,548,481.77 36,885,135.08
investments under equity method
Investment income from disposal of long-
8,040,787.90
term equity investments
Gains from fair value remeasurement at
51,896,314.25
the time of obtaining control [Note]
Investment income from financial products 19,091,108.25 29,170,261.66
183
Items Current period cumulative Preceding period comparative
Performance compensation -50,000,000.00 163,460,620.00
Losses from debt restructuring -5,380,200.00
Gains of factoring of accounts receivable
-65,918,373.23
without recourse right
Others 296,543.34 2,377,190.95
Total -41,466,125.62 239,933,995.59
Note: It mainly refers to the combination of Lianjiang Company achieved in stages. For the equity of the acquiree held before
the purchase date, it is remeasured at the fair value of the equity on the purchase date, with the difference between the fair value and
its carrying amount recognized as current investment income.
9. Gains on changes in fair value
Items Current period cumulative Preceding period comparative
Held-for-trading financial assets -73,146,774.32
Gains or losses on ineffective portion of
72,100.27
outstanding fair value hedges
Total -73,074,674.05
10. Credit impairment loss
Items Current period cumulative Preceding period comparative
Bad debts -103,391,907.05 -95,707,579.99
Credit guarantee loss -1,445,255.37 -2,668,240.03
Total -104,837,162.42 -98,375,820.02
11. Assets impairment loss
Items Current period cumulative Preceding period comparative
Inventory write-down loss -15,053,708.82 -21,599,097.67
Impairment loss of goodwill -296,010,591.93 -194,617,014.59
Impairment loss of other non-current
2,080,536.79 -10,144,746.27
assets (quality guarantee reserve)
Impairment loss of contract assets -1,192,023.34 -5,154,976.05
Impairment loss of non-current assets due
575,338.66
within one year (quality guarantee reserve)
Impairment loss of development
-2,822,707.36
expenditures
Total -312,998,494.66 -230,940,495.92
12. Gains on asset disposal
Preceding period Amount included in non-
Items Current period cumulative
comparative recurring profit or loss
Gains on disposal of fixed assets 301,250.20 -2,254,626.67 301,250.20
Gains on disposal of intangible assets 10,073.29 10,073.29
Gains on disposal of construction in
1,092,784.45
progress
Gains on disposal of right-of-use assets 221,473.23 221,473.23
184
Preceding period Amount included in non-
Items Current period cumulative
comparative recurring profit or loss
Total 532,796.72 -1,161,842.22 532,796.72
13. Non-operating revenue
Preceding period Amount included in non-
Items Current period cumulative
comparative recurring profit or loss
Gains on damage or retirement of non-
8,797.04 883,148.89 8,797.04
current assets
Penalty and confiscatory income 9,298,430.37 5,865,087.13 9,298,430.37
Others 3,491,008.49 3,279,788.40 3,491,008.49
Total 12,798,235.90 10,028,024.42 12,798,235.90
14. Non-operating expenditures
Preceding period Amount included in non-
Items Current period cumulative
comparative recurring profit or loss
Losses on damage or retirement of non-
2,913,020.22 1,424,842.60 2,913,020.22
current assets
Donation expenditures 2,302,553.92 2,446,175.58 2,302,553.92
Local water conservancy construction
409,764.78 3,814,764.68
special fund
Penalty and confiscatory expenses 6,695,894.28 3,454,356.96 6,695,894.28
Others 1,626,755.62 646,314.24 1,626,755.62
Total 13,947,988.82 11,786,454.06 13,538,224.04
15. Income tax expenses
(1) Details
Items Current period cumulative Preceding period comparative
Current period income tax expenses 110,132,217.76 102,531,906.08
Deferred income tax expenses -13,168,974.08 -49,028,417.97
Total 96,963,243.68 53,503,488.11
(2) Reconciliation of accounting profit to income tax expenses
Items Current period cumulative Preceding period comparative
Profit before tax 556,255,365.25 852,702,222.65
Income tax expenses based on tax rate
139,063,841.31 213,175,555.66
applicable to the parent company
Effect of different tax rate applicable to
-14,174,894.59 -120,536,448.40
subsidiaries
Effect of prior income tax reconciliation 2,488,907.40 -16,697,363.73
Effect of non-taxable income -10,408,754.85 -14,748,654.06
Effect of non-deductible costs, expenses and
10,640,861.01 5,653,209.37
losses
Effect of utilization of deductible losses not
-3,001,651.62 -37,647,884.38
previously recognized as deferred tax assets
Effect of deducible temporary differences or
deductible losses not recognized as deferred 20,910,057.40 57,511,538.80
tax assets in the current period
Effect of extra deduction -49,866,353.99 -33,206,465.15
185
Items Current period cumulative Preceding period comparative
Difference between deferred and current
1,311,231.61
income tax rates
Income tax expenses 96,963,243.68 53,503,488.11
16. Other comprehensive income, net of income tax
Please refer to section V (I) 44 of notes to the 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
385,183,093.29 528,970,066.36
and letters of guarantee
Receipts of government grants 112,106,818.35 64,060,624.96
Receipts of security deposits 109,630,599.89 123,421,879.05
Recovery of petty cash and temporary advance
76,785,785.58 47,474,118.30
payment receivable
Temporary receipts payable 152,028,816.71 77,741,104.34
Receipts of interest income 48,011,644.19 34,375,977.08
Receipts of factoring payment and principal of
1,128,899,220.36 1,177,976,505.96
finance lease
Receipt of principal and interest of time
67,760,782.25 714,576,527.78
deposits
Recovery of current accounts from Foshan
99,092,452.39
Yingtong Electrical Materials Co., Ltd.
Others 16,659,857.72 56,549,504.20
Total 2,097,066,618.34 2,924,238,760.42
2. Other cash payments related to operating activities
Items Current period cumulative Preceding period comparative
Payments for deposits for notes, letters of credit
130,498,826.74 386,586,903.23
and letters of guarantee
Operating period expenses 807,025,083.75 564,282,900.37
Payments for security deposits 64,966,788.26 64,552,986.72
Payments for petty cash and temporary advance
120,806,495.16 75,087,728.42
payment receivable
Payments for factoring and principal of finance
1,181,778,621.41 1,322,074,716.14
lease
Temporary receipts payable 80,648,317.53 120,319,766.85
Time deposits 50,000,000.00
Others 10,338,831.68 23,965,454.05
Total 2,396,062,964.53 2,606,870,455.78
3. Other cash receipts related to investing activities
Items Current period cumulative Preceding period comparative
Redemption of financial products 5,398,900,000.00 4,730,043,650.04
186
Items Current period cumulative Preceding period comparative
Receipts of special government funds for PPP
60,000,000.00
projects
Receipts of futures margin 12,531,843.01
Receipts of principal and interest of call loans 2,961,000.00 47,541,031.18
Total 5,401,861,000.00 4,850,116,524.23
4. Other cash payments related to investing activities
Items Current period cumulative Preceding period comparative
Purchase of financial products 5,398,900,000.00 4,728,990,700.00
Payments of margin for futures trading 23,440,407.33
Payments for equity exchange deposit to
36,000,000.00
Property Rights Exchange Center
Net cash outflows from disposal of subsidiaries 1,450,610.39
Total 5,398,900,000.00 4,789,881,717.72
5. Other cash receipts related to financing activities
Items Current period cumulative Preceding period comparative
Receipts of payments for employee stock
228,995,320.75 180,000,000.00
ownership plan
Factoring of accounts receivable with recourse
17,309,890.84 49,479,996.55
right
Receipts of call loans 44,250,000.00 3,600,000.00
Total 290,555,211.59 233,079,996.55
6. Other cash payments related to financing activities
Items Current period cumulative Preceding period comparative
Repurchase of treasury shares 446,383,180.08
Payments for factoring service fees and handling fees 14,049,209.58 1,059,316.17
Payments for rents 6,227,752.76 6,345,974.18
Recovery of call loans 57,303,692.00
Prepaid IPO listing expenses 5,703,500.00
Payments for employee stock ownership plan 180,112,670.02
Others 364,129.20
Total 263,396,824.36 454,152,599.63
7. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
Preceding period
Supplementary information Current period cumulative
comparative
1) Reconciliation of net profit to cash flows from operating activities:
Net profit 459,292,121.57 799,198,734.54
187
Preceding period
Supplementary information Current period cumulative
comparative
Add: Provision for assets impairment loss 417,835,657.08 329,316,315.94
Depreciation of fixed assets, oil and gas assets, productive
217,634,741.39 169,587,581.86
biological assets
Depreciation of right-of-use assets 7,064,171.89 5,929,711.33
Amortization of intangible assets 458,736,681.20 364,198,624.40
Amortization of long-term prepayments 8,520,526.60 12,295,429.49
Losses on disposal of fixed assets, intangible assets and other
-614,542.02 1,161,842.22
long-term assets (Less: gains)
Fixed assets retirement loss (Less: gains) 2,904,223.18 541,693.71
Losses on changes in fair value (Less: gains) 73,074,674.05
Financial expenses (Less: gains) 177,688,052.22 133,836,548.78
Investment losses (Less: gains) -24,239,932.54 -240,822,713.67
Decrease of deferred tax assets (Less: increase) -4,814,568.19 -14,295,043.84
Increase of deferred tax liabilities (Less: decrease) -8,354,405.89 -44,875,587.45
Decrease of inventories (Less: increase) 226,633,956.56 -51,110,526.14
Decrease of operating receivables (Less: increase) -409,725,335.43 632,657,980.48
Increase of operating payables (Less: decrease) 129,881,870.69 -1,398,299,495.83
Others [Note] 4,039,069.40 36,822,950.26
Net cash flows from operating activities 1,662,482,287.71 809,218,720.13
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 4,580,665,245.99 4,118,746,885.72
Less: Cash at the beginning of the period 4,118,746,885.72 4,657,826,099.23
Add: Cash equivalents at the end of the period
Less: Cash equivalents at the beginning of the period
Net increase of cash and cash equivalents 461,918,360.27 -539,079,213.51
Note: Others refer to share-based payments and unrealized finance income of long-term receivables.
(2) Net cash payments for acquisition of subsidiaries in the current period
Items Current period cumulative
Cash and cash equivalents paid in the current period as consideration for business combination in
94,000,002.00
the current period
Including: Yolsh Company 10,000,002.00
Lianjiang Company 84,000,000.00
Less: Cash and cash equivalents held by subsidiaries on the purchase date 10,192,488.26
188
Items Current period cumulative
Including: Yolsh Company 5,299,149.95
Lianjiang Company 4,893,338.31
Net cash payments for acquisition of subsidiaries in the current period 83,807,513.74
(3) Net cash receipts from disposal of subsidiaries in the current period
Items Current period cumulative
Cash and cash equivalents received in the current period for subsidiary disposal in the current
period
Less: Cash and cash equivalents held by subsidiaries at the loss-of-control date
Add: Cash and cash equivalents received in the current period for subsidiary disposal in prior
115,100,000.00
periods
Including: Foshan Yingtong Electrical Materials Co., Ltd. 115,100,000.00
Net cash receipts from disposal of subsidiaries in the current period 115,100,000.00
(4) Composition of cash and cash equivalents
Items Closing balance Opening balance
1) Cash 4,580,665,245.99 4,118,746,885.72
Including: Cash on hand 84,414.54 89,806.02
Cash in bank on demand for payment 4,580,210,453.03 4,118,371,038.72
Other cash and bank balances on demand for payment 370,378.42 286,040.98
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 4,580,665,245.99 4,118,746,885.72
Including: Cash and cash equivalents of parent company or subsidiaries
with use restrictions
On December 31, 2022, balance of cash and bank balances amounted to 4,728,203,530.46 yuan, while balance of cash and cash
equivalents amounted to 4,580,665,245.99 yuan. The difference of 147,538,284.47 yuan included deposit for notes of 46,878,240.34
yuan, deposit for letters of guarantee of 87,619,095.60 yuan, engineering deposits of 927,865.56 yuan, ETC deposits of 3,000.00
yuan, deposits for buyer’s credit of 901,432.50 yuan, deposits for land reclamation of 1,000,832.05 yuan, funds frozen due to
lawsuits of 1,100,000.00 yuan and engineering escrow accounts that are not available for separate use of 9,107,818.42 yuan, which
was not cash and cash equivalents.
(5) Amount of endorsed commercial acceptance not involving cash receipts and payments
Items Current period cumulative Preceding period comparative
Amount of endorsed commercial acceptance 1,631,967,302.20 498,785,469.51
Including: Payments for goods 1,463,149,825.79 411,289,567.42
Payments for acquisition of long-term
168,817,476.41 87,495,902.09
assets, such as fixed assets
(IV) Others
1. Assets with title or use right restrictions
189
Items Closing carrying amount Reasons for restrictions
Deposits, escrow accounts, frozen due to
Cash and bank balances 147,538,284.47
litigation preservation
Accounts receivable 276,390,131.13 Pledged
Notes receivable – bank acceptance 2,732,733.00 Endorsed or discounted but undue
Notes receivable – trade acceptance 5,422,499.62 Endorsed or discounted but undue
Receivables financing 42,293,141.00 Pledged
Long-term receivables and non-current assets due
66,716,222.75 Factoring financing with recourse right
within one year
Fixed assets 477,655,980.05 Mortgaged
Intangible assets 47,082,404.81 Mortgaged
100% equity of Funan Company 69,631,957.01
100% equity of Poyang Green Oriental Renewable
80,733,192.59
Energy Co., Ltd.
Pledged [Note]
50% equity of Lianjiang Company 68,922,363.62
100% equity of Biyang County Fenghe New
105,525,597.14
Energy Power Co., Ltd.
25% equity of Lianjiang Company 34,461,181.81 Frozen due to litigation preservation
Total 1,425,105,689.00
Note: The pledged amount refers to the Company’s proportionate share in net assets of each entity.
2. Monetary items in foreign currencies
Closing balance in foreign RMB equivalent at the end
Items Exchange rate
currencies of the period
Cash and bank balances
Including: USD 4,694,035.77 6.9646 32,692,081.52
EUR 3,015,012.99 7.4229 22,380,139.92
HKD 2,719,595.11 0.8933 2,429,414.31
Accounts receivable
Including: EUR 1,061,170.00 7.4229 7,876,958.79
3. Government grants
(1) Details
1) Government grants related to assets
Opening balance Amortization
Closing balance of
Items of deferred Increase Amortization presented Remarks
deferred income
income under
Pursuant to the
documents
Xiantao sludge harmless Other
17,700,000.00 610,344.83 17,089,655.17 numbered Xian Fa
treatment plant income
Gai Huan Zi [2019]
116 and [2019] 150.
Investment plan on the Pursuant to the
construction of ecological Other document numbered
2,200,000.00 880,000.00 94,189.60 2,985,810.40
civilization of 2020 income Zhu Fa Gai Tou Zi
within the central budget [2020] 204.
No. 2 Sewage Treatment Pursuant to the
Plant and supporting pipe Other document numbered
7,660,000.00 7,660,000.00
network projects in Daban income Chi Cai Zhi Zi Huan
Town, Bahrain Right [2019] 814.
190
Opening balance Amortization
Closing balance of
Items of deferred Increase Amortization presented Remarks
deferred income
income under
Banner
Pursuant to the
documents
Special subsidies for
Other numbered E Cai Jian
Xiantao waste power 9,936,051.24 726,531.48 9,209,519.76
income Fa [2015] 199 and
generation project
Huai Fa Gai Zi
Huan [2016] 188.
Pursuant to the
documents
Shouxian domestic waste
Other numbered Huai Fa
incineration power plant 13,034,666.58 1,002,666.73 12,031,999.85
income Gai Zi Huan [2016]
project
188 and Cai Jian
[2017] 569.
Urban sewage and
Pursuant to the
garbage treatment
Other document numbered
facilities and sewage pipe 4,456,150.42 441,822.07 4,014,328.35
income Fa Gai Huan Zi
network engineering
[2015] 431.
projects
Development,
demonstration and
application of time of Pursuant to the
flight mass spectrometry Other document numbered
354,166.67 141,666.72 212,499.95
for soft ionization-high income Shun Ke Fa [2021]
resolution on-line 29.
detection of atmospheric
VOCS
Research and application
Pursuant to the
of water quality and Other
1,400,000.00 466,666.68 933,333.32 document numbered
environment monitoring income
Fo Ke [2021] 27.
technology
R&D and application
project of water quality
Pursuant to the
comprehensive toxicity
document numbered
rapid monitoring 2,320,000.00 890,000.00 1,430,000.00
Yue Ke Zi Zi [2022]
instrument based on
145.
electrochemically active
microorganisms
Urban and rural domestic
Pursuant to the
waste transfer, kitchen
Other document numbered
waste resource utilization 10,847,931.04 388,620.69 10,459,310.35
income Xian Fa Gai Huan
and harmless treatment
Zi [2020] 84.
projects
Pursuant to the
Subsidies for enterprise
Other document numbered
technological 714,285.72 142,857.14 571,428.58
income Chang Gao Xin
transformation
Guan Fa [2017] 33.
Subsidies for key projects Pursuant to the
of enterprise intelligent Other document numbered
1,527,957.44 203,061.88 1,324,895.56
transformation of 2018 - income Qu Wei Ban [2019]
2020 36.
Pursuant to the
Funds for provincial Other document numbered
1,055,749.60 800,000.00 360,917.96 1,494,831.64
“Kunpeng Action” plan income Zhe Wei Ban Fa
[2020] 8.
Pursuant to the
Incremental tax incentives
Other document numbered
for technological 7,586,240.00 948,280.00 6,637,960.00
income Xiang Gong Xin
transformation
Tou Zi [2019] 57.
Pursuant to the
The second batch of
Other document numbered
awards for rental housing 5,743,156.33 165,270.68 5,577,885.65
income Chang Zhu Zu Tong
in the high-tech zone
[2020] 5.
191
Opening balance Amortization
Closing balance of
Items of deferred Increase Amortization presented Remarks
deferred income
income under
The third batch of
Pursuant to the
municipal subsidies for
Other document numbered
technological 4,562,500.00 500,000.00 4,062,500.00
income Chang Gong Xin
transformation of
Tou Zi Fa [2020] 72.
industrial enterprises
The fifth batch of special Pursuant to the
funds for raising Other document numbered
1,000,000.00 297,520.66 702,479.34
manufacturing power in income Xiang Cai Qi Zhi
Hunan Province [2019] 72.
Pursuant to the
Special funds for air
Other document numbered
pollution prevention and 800,000.00 100,000.00 700,000.00
income Chang Cai Zi Huan
control
Zhi [2019] 41.
Special subsidies for Pursuant to the
construction and Other document numbered
416,444.76 94,781.44 321,663.32
application of industrial income Chang Cai Qi Zhi
Internet platform [2021] 62.
The third batch of special Pursuant to the
funds for raising Other document numbered
416,444.76 94,781.44 321,663.32
manufacturing power in income Chang Cai Qi Zhi
Hunan Province of 2021 [2021] 54.
The fourth batch of Pursuant to the
special funds for raising Other document numbered
129,558.22 13,381.99 116,176.23
manufacturing power in income Chang Cai Qi Zhi
Hunan Province of 2021 [2021] 55.
Special funds for Pursuant to the
provincial modern service Other document numbered
94,689.87 28,569.01 66,120.86
industry of Hi-tech income Chang Fa Gai Fu
District Wu [2020] 284.
Special funds for the
integration of
advanced
Integrated construction of
manufacturing and
intelligent equipment and
Other modern service
intelligent sanitation 30,400,000.00 304,680.09 30,095,319.91
income industries of 2021
services of Infore
from National
Zoomlion
Development and
Reform
Commission.
The second batch of
Pursuant to the
subsidized loans for
Other document numbered
industrial technology 1,939,750.00 68,421.52 1,871,328.48
income Chang Cai Qi Zhi
transformation in
[2022] 15.
Changsha of 2021
The fifth batch of special Pursuant to the
funds for raising Other document numbered
1,000,000.00 1,000,000.00
manufacturing power in income Chang Cai Qi Zhi
Hunan Province of 2022 [2022] 53.
Subtotal 91,635,992.65 37,339,750.00 8,085,032.61 120,890,710.04
2) Government grants related to income and used to compensate future relevant costs, expenses or losses
Amounts
Closing
Opening balance Amounts carried
balance of
Items of deferred Increase carried Decrease forward Remarks
deferred
income forward presented
income
under
Central Pursuant to the
special “Agreement on the
construction Appropriation of Central
Other non-
supporting 10,000,000.00 10,000,000.00 Special Construction
current liabilities
funds for Funds for PPP Project
Kaili PPP Phase II of Kaili
Project Municipal Domestic
192
Amounts
Closing
Opening balance Amounts carried
balance of
Items of deferred Increase carried Decrease forward Remarks
deferred
income forward presented
income
under
Waste Collection and
Transportation System”.
Subtotal 10,000,000.00 10,000,000.00
2) Government grants related to income and used to compensate incurred relevant costs, expenses or losses
Items Amount Presented under Remarks
VAT refund 18,822,951.14 Other income
Pursuant to the document numbered Yong
Enterprise supporting funds 15,420,000.00 Other income
Mei Bao Jing [2019] 10.
Pursuant to the document numbered Chang
Subsidies for new energy vehicles 9,558,600.00 Other income
Zheng Ban Han [2019] 11.
Subsidies for energy conservation and Pursuant to the document numbered Chang
7,300,000.00 Other income
emission reduction of 2022 Cai Qi Zhi [2022] 16.
Pursuant to the document numbered Zhe Wei
Subsidies for “Kunpeng Action” plan 6,200,000.00 Other income
Ban Fa [2020] 8.
Pursuant to the document numbered Ren She
Subsidies for stabilizing employment 3,850,018.51 Other income
Bu Fa [2022] 31.
Pursuant to the “Notice on Applying for
Realization of industrial policies of Hi-
3,600,000.00 Other income Supporting Items under Changsha Hi-tech
tech District of 2021
District Policy in 2021”.
Funds for ecological torch plan of Pursuant to the document numbered Chang
2,703,100.00 Other income
Changsha intelligent vehicle industry Zheng Ban Fa [2020] 12.
Special funds for raising
Pursuant to the document numbered Chang
manufacturing power in Hunan 2,500,000.00 Other income
Cai Qi Zhi [2022] 45.
Province
Pursuant to the document numbered Shun
Subsidies for sludge treatment 2,584,059.14 Other income
Guan [2010] 238.
Awards for purchasing local auxiliary Pursuant to the document numbered Chang
2,100,000.00 Other income
products Cai Qi Zhi [2022] 50.
Promotion and application of new
Pursuant to the document numbered Chang
energy vehicles in 2020 and previous 2,000,000.00 Other income
Cai Qi Zhi [2022] 54.
years
Pursuant to the document numbered Xiang
R&D fund awards 1,692,000.00 Other income
Ke Ji [2021] 13.
Subsidies for stabilizing employment Pursuant to the document numbered Yue Ren
1,411,493.00 Other income
and entrepreneurship She Gui [2021] 12.
Pursuant to the document numbered Qu Wei
Subsidies for strong cluster chains 1,000,000.00 Other income
Ban [2021] 57.
The second batch of awards for talent Pursuant to the document numbered Chang
1,000,000.00 Other income
and science and technology Ke Fa [2021] 3.
Pursuant to the document numbered Qu Wei
Subsidies for talent policy 2,000,000.00 Other income
Ban [2021] 57.
Pursuant to the document numbered Qu Wei
Capital market supporting awards 1,000,000.00 Other income
[2016] 53.
Pursuant to the documents numbered Fo
Awards for enterprises above Gong Xin Han [2021] 517, [2022] 439,
950,000.00 Other income
designated scale [2021] 382, and Shun Jing Han [2022] 234,
[2021] 629.
Pursuant to the document numbered Qu Wei
Awards for enterprise cultivation 600,000.00 Other income
Ban [2021] 57.
Pursuant to the document “Notice on
Awards for military-civilian integration Carrying Out the Implementation of
468,551.00 Other income
policy Military-civilian Integration Policy in
Shangyu District in 2021”.
Pursuant to the document numbered Yu Qu
Subsidies for high-level talents 359,982.22 Other income
Ren Ling [2017] 2.
Subsidies for stabilizing employment Pursuant to the document numbered Chang
269,000.00 Other income
of Hi-tech District Gao Xin Guan Fa [2022] 4.
193
Items Amount Presented under Remarks
The second batch of subsidies and
Pursuant to the document numbered Chang
awards for accredited hi-tech 200,000.00 Other income
Ke Fa [2019] 51.
enterprises in Changsha of 2020
Provincial air quality ecological Pursuant to the document numbered E Cai
200,000.00 Other income
compensation funds Huan Fa [2021] 31.
Awards for Changsha green
Pursuant to the document numbered Chang
manufacturing system construction 200,000.00 Other income
Cai Qi Zhi [2022] 43.
project of 2021
Awards for frontrunner of average Pursuant to the document numbered Qu Wei
200,000.00 Other income
benefit per mu Ban [2021] 57.
Subsidies for vocational skill Pursuant to the document numbered Shao
186,960.00 Other income
enhancement Shi Ren She Fa [2020] 9.
Pursuant to the document numbered Fo Zu
Subsidies for talent program 150,000.00 Other income
Tong [2022] 49.
Pursuant to the document numbered Shao
Awards for academician workstations 150,000.00 Other income
Shi Ke Xie [2021] 10.
Awards for acceleration of scientific
Pursuant to the document numbered Qu Wei
and technological innovation and 130,000.00 Other income
Ban [2021] 57.
modern service industry
Industrial and trade economic Pursuant to the document numbered Cao
101,200.00 Other income
development incentives Gong Wei [2019] 166.
Awards for accreditation projects under
Pursuant to the document numbered Qu Wei
scientific and technological innovation 90,000.00 Other income
Ban [2021] 57.
policy
Subsidies for employment and Pursuant to the document numbered Qu Wei
34,665.20 Other income
internship of college students [2019] 52.
Pursuant to the document numbered Zhu Fa
Enterprise supporting funds 30,000.00 Other income
Gai Tou Zi [2020] 204.
Other piecemeal subsidies 4,527,439.28 Other income
Subtotal 93,590,019.49
(2) In the current period, government grants included into profit or loss totaled 101,675,052.10 yuan.
VI. Changes in the consolidation scope
(I) Business combination not under common control
1. Business combination not under common control in the current period
(1) Basic information
Proportion of equity
Acquirees Equity acquisition date Equity acquisition cost Equity acquisition method
acquired (%)
Business combination
Yolsh Company 4/30/2022 50,000,002.00 70.00 not under common
control
9/17/2015 43,750,000.00 35.00 Business combination
Lianjiang Company not under common
2/28/2022 120,000,000.00 50.00 control
(Continued)
Acquiree’s income from
Determination basis for Acquiree’s net profit from
Acquirees Acquisition date acquisition date to period
acquisition date acquisition date to period end
end
Yolsh Company 4/30/2022 The equity transfer is 49,388,868.87 -8,190,158.87
completed and relevant
Lianjiang Company 2/28/2022 handover procedures are 42,873,081.36 2,537,111.74
finished
2. Combination costs and goodwill
(1) Details
194
Items Yolsh Company Lianjiang Company
Combination costs 50,000,002.00 240,000,000.00
Cash 50,000,002.00 120,000,000.00
Acquisition-date fair value of equity held before the
120,000,000.00
acquisition date
Total combination costs 50,000,002.00 240,000,000.00
Less: Share of fair value of net identifiable assets acquired 36,610,769.39 193,967,982.16
Goodwill 13,389,232.61 46,032,017.84
3. Acquisition-date identifiable assets and liabilities of acquirees
(1) Details
Yolsh Company [Note] Lianjiang Company
Items Acquisition-date Acquisition-date Acquisition-date Acquisition-date
fair value carrying amount fair value carrying amount
Assets
Cash and bank balances 5,299,149.95 5,299,149.95 4,893,338.31 4,893,338.31
Notes receivable 271,130.00 271,130.00
Accounts receivable 15,757,462.39 15,757,462.39 29,888,953.53 29,888,953.53
Receivables financing 840,948.31 840,948.31
Advances paid 562,705.85 562,705.85 66,217.14 66,217.14
Other receivables 7,910,153.57 7,910,153.57 4,615,314.47 4,615,314.47
Inventories 20,099,445.54 20,099,445.54 3,094,224.43 3,094,224.43
Contract assets 34,495.56 34,495.56
Other current assets 3,492,951.91 3,492,951.91
Fixed assets 17,428,908.65 17,428,908.65 2,186,840.34 2,186,840.34
Construction in progress 4,454,334.01 4,454,334.01 3,796,874.62 3,796,874.62
Right-of-use assets 1,931,035.27 1,931,035.27
Intangible assets 1,196,518.08 1,196,518.08 325,069,114.54 205,069,114.54
Long-term prepayments 512,670.00 512,670.00 2,798,988.13 2,798,988.13
Deferred tax assets 196,637.85 196,637.85
Other non-current assets 655,300.17 655,300.17 9,551.32 9,551.32
Liabilities
Short-term borrowings 15,534,884.77 15,534,884.77
Accounts payable 21,185,688.75 21,185,688.75 36,364,819.11 36,364,819.11
Contract liabilities 2,412,975.42 2,412,975.42
Employee benefits payable 1,897,556.15 1,897,556.15 986,052.40 986,052.40
Taxes and rates payable 209,143.28 209,143.28 4,660,003.12 4,660,003.12
Other payables 41,383,842.93 41,383,842.93 25,979,380.96 25,979,380.96
Other current liabilities 313,686.80 313,686.80
195
Yolsh Company [Note] Lianjiang Company
Items Acquisition-date Acquisition-date Acquisition-date Acquisition-date
fair value carrying amount fair value carrying amount
Lease liabilities 1,217,134.58 1,217,134.58
Long-term payables 2,368,245.54 2,368,245.54
Long-term borrowings 88,150,768.84 88,150,768.84
Deferred tax liabilities 30,000,000.00
Capital increase by shareholders
61,870,000.00
[Note]
Net assets 52,301,099.13 -9,568,900.87 193,967,982.16 103,967,982.16
Less: Non-controlling interest
Net assets acquired 52,301,099.13 -9,568,900.87 193,967,982.16 103,967,982.16
Note: On April 30, 2022, the Company’s subsidiary Guangdong Infore Environmental Investment Co., Ltd. acquired part of the
equity of Yolsh Company at a consideration of 2 yuan, and increased its capital by 61.87 million yuan together with original
shareholders after the acquisition, which were considered as a bundled transaction, and these two transactions as a whole are
considered as one transaction for obtaining the control in the accounting treatment.
4. Gains/Losses on fair value remeasurement of equity held before the acquisition date
Changes in other
Gains/Losses on Determination method
Acquisition-date comprehensive
Acquisition-date fair value and major assumptions
fair value of income/equity related to
carrying amount of remeasurement of on acquisition-date fair
Acquirees equity held equity held before the
equity held before equity held before value of equity held
before the acquisition date
the acquisition date the acquisition before the acquisition
acquisition date transferred to investment
date date
income/ retained earnings
Lianjiang
32,103,685.75 84,000,000.00 51,896,314.25 Purchase price
Company
(II) Changes in the consolidation scope due to other reasons
1. Entities brought into the consolidation scope
Equity Capital
Equity Capital
No. Entities acquisition contribution
acquisition date contribution
method proportion (%)
Shaodong Tongying Environmental
1 Set up 1/7/2022 283,200.00 100.00
Sanitation Management Co., Ltd.
Xiangyin County Yingsheng
2 Set up 1/24/2022 500,000.00 100.00
Environmental Protection Co., Ltd.
Shengzhou Yinglia Environmental
3 Set up 1/19/2022 100,000.00 100.00
Sanitation Management Co., Ltd.
Guilin Yingsheng Environmental
4 Set up 1/28/2022 [Note] 100.00
Sanitation Management Co., Ltd.
Guiyang Yinglian Environmental
5 Set up 2/11/2022 [Note] 100.00
Equipment Co., Ltd.
Taicang Zhongying Environmental
6 Set up 2/21/2022 [Note] 100.00
Technology Co., Ltd.
Baoding Yinghe Environmental
7 Set up 2/28/2022 500,000.00 100.00
Sanitation Management Co., Ltd.
Wenshui County Yingsheng
8 Environmental Sanitation Service Co., Set up 2/16/2022 500,000.00 100.00
Ltd.
Maoming Yinghe Urban
9 Environmental Sanitation Service Co., Set up 1/4/2022 7,000,000.00 100.00
Ltd.
Wushan County Tongying
10 Environmental Sanitation Service Co., Set up 2/14/2022 500,000.00 100.00
Ltd.
196
Equity Capital
Equity Capital
No. Entities acquisition contribution
acquisition date contribution
method proportion (%)
Harbin Tongying Environmental
11 Set up 3/23/2022 200,000.00 100.00
Sanitation Management Co., Ltd.
Pengshui County Yingchuang
12 Environmental Sanitation Service Co., Set up 3/11/2022 500,000.00 100.00
Ltd.
Bengbu Tongying Environmental
13 Set up 1/29/2022 200,000.00 100.00
Sanitation Management Co., Ltd.
Daye Tongying Environmental
14 Set up 4/11/2022 100,000.00 100.00
Service Co., Ltd.
Urumqi Lianying Urban
15 Set up 6/2/2022 2,000,000.00 100.00
Environmental Service Co., Ltd.
Baoting Tongying Environmental
16 Set up 6/8/2022 100,000.00 100.00
Sanitation Service Co., Ltd.
Zhaoqing Duanzhou District
17 Zhongying Urban Environmental Set up 5/25/2022 [Note] 100.00
Management Co., Ltd.
Zhanjiang Development Zone
18 Zhongying Urban Environmental Set up 6/10/2022 1,000,000.00 100.00
Service Co., Ltd.
Shaoxing Lianbao Environmental
19 Set up 5/27/2022 100,000.00 100.00
Sanitation Management Co., Ltd.
Xingguo County Yinghe
20 Environmental Sanitation Set up 6/9/2022 300,000.00 100.00
Management Co., Ltd.
Huaibei Tongying Environmental
21 Set up 4/12/2022 33,000,000.00 100.00
Sanitation Management Co., Ltd.
Yongzhou Lingling District Tongying
22 Environmental Sanitation Service Co., Set up 6/21/2022 [Note] 100.00
Ltd.
Shaoyang Tongying Environmental
23 Set up 5/10/2022 100,000.00 100.00
Sanitation Service Co., Ltd.
Jianli Yinglian Environmental
24 Set up 4/29/2022 100,000.00 100.00
Sanitation Management Co., Ltd.
Suzhou Gusu District Zhongying
25 Set up 6/9/2022 [Note] 100.00
Environmental Industry Co., Ltd.
Guangzhou Zengcheng District
26 Yinghe Urban Environmental Service Set up 5/24/2022 [Note] 100.00
Co., Ltd.
Baishan Yingyuan Environmental
27 Set up 6/9/2022 200,000.00 100.00
Service Engineering Co., Ltd.
Shenzhen Longhua District Yinglian
28 Set up 7/5/2022 3,000,000.00 100.00
Urban Service Co., Ltd.
Guzhang County Yinglian
29 Environmental Sanitation Set up 6/28/2022 7,200,000.00 100.00
Management Co., Ltd.
Changshu Zhongying Environmental
30 Set up 4/26/2022 [Note] 100.00
Sanitation Service Co., Ltd.
Suining Anju Yinglian Environmental
31 Set up 7/7/2022 200,000.00 100.00
Sanitation Service Co., Ltd.
Jieyang Yingdong Urban
32 Set up 7/7/2022 [Note] 100.00
Environmental Management Co., Ltd.
Tongdao Yinglian Jiamei
33 Set up 7/5/2022 2,652,000.00 51.00
Environmental Industry Co., Ltd.
Heyang Yinglian Urban
34 Set up 7/19/2022 1,000,000.00 100.00
Environmental Service Co., Ltd.
Ninghai County Tongying
35 Environmental Sanitation Set up 8/10/2022 100,000.00 100.00
Management Co., Ltd.
Zhanjiang Potou District Yingsheng
36 Environmental Sanitation Set up 8/24/2022 [Note] 100.00
Management Co., Ltd.
Liaoyang Yinglian Urban
37 Set up 8/10/2022 3,000,000.00 100.00
Environmental Sanitation
197
Equity Capital
Equity Capital
No. Entities acquisition contribution
acquisition date contribution
method proportion (%)
Management Co., Ltd.
Linqing Yinglian Urban
38 Set up 8/3/2022 1,000,000.00 100.00
Environmental Service Co., Ltd.
Zhanjiang Xiashan District Yinghe
39 Urban Environmental Management Set up 8/8/2022 [Note] 100.00
Co., Ltd.
Haicheng Zhongying Environmental
40 Set up 9/8/2022 8,000,000.00 100.00
Sanitation Management Co., Ltd.
Foshan Shunde District Yingjia Urban
41 Set up 9/5/2022 1,680,000.00 70.00
Environmental Service Co., Ltd.
Xiamen Yingsheng Environmental
42 Set up 9/8/2022 500,000.00 100.00
Service Co., Ltd.
Nanfeng Yingniang Environmental
43 Set up 9/15/2022 255,000.00 51.00
Sanitation Management Co., Ltd.
Tengchong Yinglian Environmental
44 Set up 9/22/2022 200,000.00 100.00
Protection Technology Co., Ltd.
Chuzhou Yingsheng Environmental
45 Set up 10/20/2022 500,000.00 100.00
Sanitation Management Co., Ltd.
Fuyang Yingsheng Environmental
46 Set up 10/14/2022 300,000.00 100.00
Sanitation Management Co., Ltd.
Changsha Zhiying Environmental
47 Set up 10/9/2022 300,000.00 60.00
Sanitation Management Co., Ltd.
Foshan Shunde District Yingzhi
48 Smart City Environmental Service Set up 12/14/2022 [Note] 100.00
Co., Ltd.
Pingdingshan Yingsheng
49 Environmental Sanitation Set up 11/10/2022 [Note] 100.00
Management Co., Ltd.
Chenzhou Zhongying Environmental
50 Set up 11/21/2022 600,000.00 100.00
Service Co., Ltd.
Zhenfeng Yinglian Environmental
51 Set up 12/6/2022 [Note] 100.00
Sanitation Management Co., Ltd.
Linfen Yaodu District Yingsheng
52 Environmental Sanitation Set up 12/12/2022 [Note] 100.00
Management Co., Ltd.
Fuyang Zhiying Environmental
53 Set up 11/24/2022 300,000.00 100.00
Sanitation Management Co., Ltd.
Chengdu Yinggang Urban
54 Environmental Sanitation Service Co., Set up 12/7/2022 [Note] 100.00
Ltd.
Foshan Shunde District Yingteng
55 Smart City Environmental Service Set up 12/9/2022 1,500,000.00 100.00
Co., Ltd.
Qingyang County Yinghe
56 Environmental Sanitation Set up 11/30/2022 [Note] 100.00
Management Co., Ltd.
Changsha Fenglan Environmental
57 Set up 1/26/2022 [Note] 100.00
Protection Technology Co., Ltd.
Changsha Infore Environmental
58 Set up 1/6/2022 [Note] 100.00
Industry Co., Ltd.
Hubei Fenghe New Materials Co.,
59 Set up 9/26/2022 [Note] 100.00
Ltd.
Heyang Zhongying Environmental
60 Set up 9/19/2022 [Note] 100.00
Sanitation Management Co., Ltd.
Lanling County Lianying
61 Environmental Sanitation Service Co., Set up 11/4/2022 1,000,000.00 100.00
Ltd.
Pingdingshan Yinghe Environmental
62 Set up 11/30/2022 [Note] 100.00
Sanitation Management Co., Ltd.
Shenzhen Infore City Service
63 Set up 3/25/2022 [Note] 100.00
Intelligent Technology Co., Ltd.
198
Equity Capital
Equity Capital
No. Entities acquisition contribution
acquisition date contribution
method proportion (%)
Guangdong Infore Mobile Charging
64 Set up 1/12/2022 [Note] 100.00
Technology Co., Ltd.
Guangdong Infore Intelligent
65 Set up 8/12/2022 200,000.00 100.00
Cleaning Technology Co., Ltd.
Changfeng County Yinghe
66 Environmental Sanitation Set up 12/16/2022 [Note] 100.00
Management Co., Ltd.
Note: As of December 31, 2022, these companies’ registered capitals have not been contributed.
2. Entities excluded from the consolidation scope
Entities Equity disposal method Equity disposal date
Zoomlion Heavy (Ningxia) Environmental Industry Co., Ltd. Cancellation 3/14/2022
Guangdong Yinglian Urban Environmental Management Co.,
Cancellation 6/15/2022
Ltd.
Dali County Zoomlion Environmental Industry Co., Ltd. Cancellation 6/17/2022
Kunming Zhongfeng Environmental Sanitation Equipment Co.,
Cancellation 7/26/2022
Ltd.
Changsha Fenglan Environmental Protection Technology Co.,
Cancellation 7/25/2022
Ltd.
Foshan Yinghe Investment Co., Ltd. Cancellation 11/18/2022
VII. Interest in other entities
(I) Interest in significant subsidiaries
1. Significant subsidiaries
Main operating Place of Holding proportion (%)
Subsidiaries Business nature Acquisition method
place registration Direct Indirect
Business
Fan equipment
Shangfeng Industrial Shaoxing, Shaoxing, combination not
manufacturing and 60.20
Company Zhejiang Zhejiang under common
others
control
Business
Environmental
Shenzhen, Shenzhen, combination not
Green Oriental Company monitoring and solid 70.00
Guangdong Guangdong under common
waste treatment
control
Business
Environmental
Funan, Funan, combination not
Funan Company monitoring and solid 70.00
Anhui Anhui under common
waste treatment
control
Xiantao Green Oriental Business
Environmental
Environmental Power Xiantao, Xiantao, combination not
monitoring and solid 70.00
Generation Co., Ltd. (the Hubei Hubei under common
waste treatment
“Xiantao Company”) control
Business
Shouxian Green Oriental New Environmental
Shouxian, Shouxian, combination not
Energy Co., Ltd. (the monitoring and solid 70.00
Anhui Anhui under common
“Shouxian Company”) waste treatment
control
Xiantao Yinghe Environmental
Xiantao, Xiantao,
Environmental Protection Co., monitoring and solid 74.88 5.70 Set up
Hubei Hubei
Ltd. waste treatment
Environmental
Foshan, Foshan,
Infore Technology Company monitoring and solid 100.00 Set up
Guangdong Guangdong
waste treatment
Business
Environmental
Foshan Infore Environmental Foshan, Foshan, combination not
monitoring and solid 100.00
Water Treatment Co., Ltd. Guangdong Guangdong under common
waste treatment
control
199
Main operating Place of Holding proportion (%)
Subsidiaries Business nature Acquisition method
place registration Direct Indirect
Business
Environmental
Foshan, Foshan, combination not
Huaqingyuan Company monitoring and solid 100.00
Guangdong Guangdong under common
waste treatment
control
Business
Foshan Shunde District Environmental
Foshan, Foshan, combination not
Huaying Environmental monitoring and solid 100.00
Guangdong Guangdong under common
Water Co., Ltd. waste treatment
control
Foshan Shunde District Business
Environmental
Yuanrun Water Foshan, Foshan, combination not
monitoring and solid 100.00
Environmental Protection Co., Guangdong Guangdong under common
waste treatment
Ltd. control
Business
Foshan Shunde Huabo Environmental
Foshan, Foshan, combination not
Environmental Water Co., monitoring and solid 100.00
Guangdong Guangdong under common
Ltd. waste treatment
control
Business
Zoomlion Environmental Changsha, Changsha, combination
Smart sanitation 100.00
Company Hunan Hunan under common
control
Changsha Zoomlion
Changsha, Changsha,
Changgao Environmental Smart sanitation 100.00 Set up
Hunan Hunan
Industry Co., Ltd.
Fujian Nan’an Infore Urban
Changsha, Changsha,
Environmental Service Co., Smart sanitation 80.00 Set up
Hunan Hunan
Ltd.
Zhangjiajie Zoomlion
Zhangjiajie, Zhangjiajie,
Environmental Industry Co., Smart sanitation 90.00 Set up
Hunan Hunan
Ltd.
Cili County Zoomlion
Huabao Environmental Cili, Hunan Cili, Hunan Smart sanitation 60.00 Set up
Industry Co., Ltd.
Hanshou Zoomlion
Hanshou, Hanshou,
Environmental Industry Co., Smart sanitation 90.00 Set up
Hunan Hunan
Ltd.
Longhui County Zoomlion
Longhui, Longhui,
Environmental Industry Co., Smart sanitation 100.00 Set up
Hunan Hunan
Ltd.
Shimen Zoomlion
Shimen, Shimen,
Environmental Industry Co., Smart sanitation 90.00 Set up
Hunan Hunan
Ltd.
Ningbo Infore Finance Lease Ningbo, Ningbo,
Finance lease 99.31 0.69 Set up
Co., Ltd. Zhejiang Zhejiang
(II) Transactions resulting in changes in subsidiaries’ equity but without losing control
1. Changes in subsidiaries’ equity
Subsidiaries Date of change Holding proportion before change Holding proportion after change
Liling Zhaoyang
Environmental Protection Co., April 2022 85.00% 90.00%
Ltd.
2. Effect of transactions on non-controlling interest and equity attributable to parent company
Items Liling Zhaoyang Environmental Protection Co., Ltd.
Acquisition costs
Cash 12,000,000.00
Total acquisition costs 12,000,000.00
Less: Share in subsidiaries’ net assets based on acquired net assets
10,318,240.61
proportion
200
Items Liling Zhaoyang Environmental Protection Co., Ltd.
Balance 1,681,759.39
Including: Capital reserve adjusted 1,681,759.39
(III) Interest in joint ventures or associates
1. Significant associates
Main operating Place of Holding proportion (%) Accounting treatment on
Associates Business nature investments in joint
place registration Direct Indirect ventures or associates
Foshan Yingtong
Electrical Materials Foshan Foshan manufacturing 49.00 Equity method
Co., Ltd.
2. Main financial information of significant associates
Closing balance/ Opening balance/
Current period cumulative March to December 2021
Items
Foshan Yingtong Electrical Materials Foshan Yingtong Electrical Materials
Co., Ltd. Co., Ltd.
Current assets 1,089,506,862.74 1,217,742,853.56
Non-current assets 201,274,064.95 207,896,682.32
Total assets 1,290,780,927.69 1,425,639,535.88
Current liabilities 691,609,958.01 785,232,779.36
Non-current liabilities 520,544.08 543,576.58
Total liabilities 692,130,502.09 785,776,355.94
Non-controlling interest 68,425,663.17 72,189,124.88
Equity attributable to owners of parent company 530,224,762.44 567,674,055.06
Proportionate share in net assets 259,810,133.60 278,160,286.98
Adjustments
Others -30,876,879.51 -27,872,012.67
Carrying amount of investments in associates 228,933,254.09 250,288,274.31
Operating revenue 2,238,921,694.12 2,995,793,551.09
Net profit -44,464,542.43 13,526,119.01
3. Aggregated financial information of insignificant joint ventures and associates
Closing balance/ Opening balance/
Items
Current period cumulative Preceding period comparative
Associates
Total carrying amount of investments 447,896,705.75 353,292,507.00
Net profit 31,671,037.49 31,596,860.77
Other comprehensive income
Total comprehensive income 31,671,037.49 31,596,860.77
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
201
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 given default, and exposure to
default risk. The Company develops a model of the probability of default, loss given 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) 2, 3, 6, 8, 11, and 23 of the notes to the financial statements for details on the reconciliation
statement of opening balance and closing balance of provision for losses of financial instrument.
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.
202
(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, 2022, 9.38% (December 31,
2021: 6.62%) 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 utilizes 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 Contract amount not
Carrying amount Within 1 year 1-3 years Over 3 years
yet discounted
Bank borrowings 2,918,155,689.70 3,064,480,800.96 795,179,666.92 725,728,644.01 1,543,572,490.03
Held-for-trading
financial liabilities
Notes payable 2,515,229,293.17 2,515,229,293.17 2,515,229,293.17
Accounts payable 2,771,961,271.66 2,771,961,271.66 2,771,961,271.66
Other payables 657,122,287.53 657,122,287.53 657,122,287.53
Lease liabilities 31,093,459.06 33,953,751.30 9,005,728.14 16,755,133.25 8,192,889.91
Long-term payables 316,335,329.82 316,335,329.82 599,514.91 315,735,814.91
Bonds payable 1,308,690,556.32 1,573,618,113.60 7,380,948.00 11,809,516.80 1,554,427,648.80
Subtotal 10,518,587,887.26 10,932,700,848.04 6,756,478,710.33 754,293,294.06 3,421,928,843.65
(Continued)
December 31, 2021
Items Contract amount not
Carrying amount Within 1 year 1-3 years Over 3 years
yet discounted
Bank borrowings 2,510,063,715.18 2,890,446,695.70 903,057,645.84 823,095,870.05 1,164,293,179.81
Held-for-trading
financial liabilities
Notes payable 2,468,799,189.71 2,468,799,189.71 2,468,799,189.71
Accounts payable 2,960,061,508.33 2,960,061,508.33 2,960,061,508.33
Other payables 683,714,082.05 683,714,082.05 683,714,082.05
Lease liabilities 23,838,477.91 26,991,613.43 5,689,725.04 9,207,622.33 12,094,266.06
203
December 31, 2021
Items Contract amount not
Carrying amount Within 1 year 1-3 years Over 3 years
yet discounted
Long-term payables 315,735,814.91 315,735,814.91 315,735,814.91
Bonds payable 1,254,962,176.00 1,573,618,113.60 7,380,948.00 11,809,516.80 1,554,427,648.80
Subtotal 10,217,174,964.09 10,919,367,017.73 7,028,703,098.97 844,113,009.18 3,046,550,909.58
(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, 2022, balance of borrowings with interest accrued at floating interest rate totaled 1,755,696,317.89 yuan
(December 31, 2021: 1,287,312,619.35 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 the financial statements for details on 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 at 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. Receivables financing 107,316,593.41 107,316,593.41
2. Other equity instrument investments 15,702,971.01 15,702,971.01
Total assets at recurring fair value
123,019,564.42 123,019,564.42
measurement
(II) Qualitative and quantitative information of valuation technique(s) and key input(s) for level 3 fair value at recurring and
non-recurring fair measurement
1. For receivables financing, the Company uses specific valuation techniques to determine its fair value based on its par value.
2. For other equity instrument investments, the Company uses specific valuation techniques to determine its fair value.
X. Related party relationships and transactions
(I) Related party relationships
1. Parent company
204
(1) Details
Place of Business Registered Holding proportion over Voting right proportion
Parent company
registration nature capital the Company (%) over the Company (%)
Foshan, Industrial
Infore Group Co., Ltd. 4.45 billion 43.33 [Note] 43.33
Guangdong investment
Note: Infore Group Co., Ltd. (the “Infore Group”) directly holds 11.31% equity of the Company, and indirectly holds 32.02%
equity of the Company through its wholly-owned subsidiary Ningbo Infore Asset Management Co., Ltd.
(2) The Company’s ultimate controlling party is He Jianfeng, who directly holds 2.00% equity of the Company, and indirectly
holds 43.33% equity of the Company through Infore Group.
2. Please refer to section VII of notes to the 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 the 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:
Joint ventures or 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
Shenzhen Yingmei City Housekeeper Co., Ltd. Associate of the Company
China Urban Institute (Beijing) Environmental Technology Co.,
Associate of the Company
Ltd.
Lianjiang Company [Note 1]
Shantou Zoomlion Ruikang Environmental Sanitation Service Associate of the Company’s subsidiary Zoomlion Environmental
Co., Ltd. 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 2] Company
Yichun Development Investment Lianfeng Environmental Associate of the Company’s subsidiary Zoomlion Environmental
Industry Co., Ltd. [Note 3] Company
Associate of Guangdong Infore Environmental Investment Co.,
Guangdong Liangke Environmental Engineering Co., Ltd.
Ltd.
Associate of Guangdong Infore Environmental Investment Co.,
Foshan Yingtong Electrical Materials Co., Ltd.
Ltd.
Guangxi Zoomlion Guilv Urban Environmental Service Co., Associate of the Company’s subsidiary Zoomlion Environmental
Ltd. Company
Associate of Guangdong Infore Environmental Investment Co.,
Beijing Xingyun Zhixing Technology Co., Ltd.
Ltd.
Note 1: In March 2022, the Company acquired 50% of the equity of Lianjiang Company, and it was changed from an associate
to a subsidiary after then. Transactions with it from January 1, 2021 to February 28, 2022 are disclosed as related party transactions.
Note 2: Zoomlion Environmental Company disposed all the equity of Chongqing Sanfeng Urban Environmental Service Co.,
Ltd. in July 2020, and it was still disclosed as a related party one year after its disposal. Transactions with it from January to July
2021 were disclosed.
Note 3: Zoomlion Environmental Company disposed all the equity of Yichun Development Investment Lianfeng Environmental
Industry Co., Ltd. in October 2020, and it was still disclosed as a related party one year after its disposal. Transactions with it from
January to October 2021 were disclosed.
4. Other related parties of the Company
Related parties Relationships with the Company
205
Related parties Relationships with the Company
Shareholder holding more than 5% of the Company’s shares,
Ningbo Infore Asset Management Co., Ltd.
which is also under the control of the actual controller
Zoomlion Heavy Industry Co., Ltd. Shareholder holding more than 5% of the Company’s shares
Guangdong Infore Material Technology Co., Ltd. Controlled by the actual controller
Foshan Shunde District Yinghai Investment Co., Ltd. Controlled by the actual controller
Shenzhen Infore Smart Technology Co., Ltd. Controlled by the actual controller
Midea Group Co., Ltd. Controlled by immediate family of the actual controller
Guangdong Midea Electric Co., Ltd. Controlled by immediate family of the actual controller
Guangdong Midea Environmental Electrical Manufacturing Co.,
Controlled by immediate family of the actual controller
Ltd.
Guangdong Midea Refrigeration Equipment Co., Ltd. Controlled by immediate family of the actual controller
Guangdong Midea Building Technologies Co., Ltd. Controlled by immediate family of the actual controller
Guangdong Midea HVAC Equipment Co., Ltd. Controlled by immediate family of the actual controller
Wuhu Welling Motor Sales Co., Ltd. Controlled by immediate family of the actual controller
Foshan Shunde District Midea Electric Heating Appliance
Controlled by immediate family of the actual controller
Manufacturing Co., Ltd.
Anhui Meizhi Precision Manufacturing Co., Ltd. Controlled by immediate family of the actual controller
Anhui Meizhi Refrigeration Equipment Co., Ltd. Controlled by immediate family of the actual controller
Foshan Welling Washing Motor Manufacturing Co., Ltd. Controlled by immediate family of the actual controller
Guangdong Midea Kitchen Appliance Manufacturing Co., Ltd. Controlled by immediate family of the actual controller
Guangdong Meizhi Precision Manufacturing Co., Ltd. Controlled by immediate family of the actual controller
Guangdong Meizhi Refrigeration Equipment Co., Ltd. Controlled by immediate family of the actual controller
Guangdong Welling Motor Manufacturing Co., Ltd. Controlled by immediate family of the actual controller
Ande Zhilian Technology Co., Ltd. Controlled by immediate family of the actual controller
Foshan Shunde District Midea Hotel Management Co., Ltd. Controlled by immediate family of the actual controller
Chongqing Midea General Refrigeration Equipment Co., Ltd. Controlled by immediate family of the actual controller
Wuxi Feiling Electronics Co., Ltd. Controlled by immediate family of the actual controller
Guangdong Midea Kitchen and Bathroom Appliance
Controlled by immediate family of the actual controller
Manufacturing Co., Ltd.
Guangdong Bomei Property Service Co., Ltd. Controlled by immediate family of the actual controller
Ningbo Midea Property Management Co., Ltd. Controlled by immediate family of the actual controller
Controlled by the Company’s associate Foshan Yingtong
Guangdong Weiqi Electrical Materials Co., Ltd. [Note]
Electrical Materials Co., Ltd.
Controlled by the Company’s associate Foshan Yingtong
Liaoning Donggang Magnet Wire Co., Ltd. [Note]
Electrical Materials Co., Ltd.
Controlled by the Company’s associate Foshan Yingtong
Anhui Weiqi Electrical Materials Co., Ltd. [Note]
Electrical Materials Co., Ltd.
Associate of the Company’s shareholder Zoomlion Heavy Industry
Zoomlion Hengtong Machinery Co., Ltd.
Co., Ltd.
Investee of the Company’s subsidiary Zoomlion Environmental
Qianxi Jinjiang Sanitation Service Co., Ltd.
Company
Green Oriental Investment Holdings Co., Ltd. Non-controlling shareholder of the subsidiary
Jin Taotao Board Secretary
Note: The Company disposed 51% of the equity of the former subsidiary Foshan Yingtong Electrical Materials Co., Ltd. (parent
206
company of Anhui Weiqi Electrical Materials Co., Ltd., Guangdong Weiqi Electrical Materials Co., Ltd., and Liaoning Donggang
Magnet Wire Co., Ltd.) in February 2021, and it was changed from a subsidiary to an associate after then. Transactions with it from
March 1, 2021 to December 31, 2022 are disclosed as related party transactions.
(II) Related party transactions
1. Purchase and sale of goods, rendering and receiving of services
(1) Purchase of goods and receiving of services
Preceding period
Related parties Content of transaction Current period cumulative
comparative
Tengine Innovation (Beijing) Monitoring
Materials 9,239,400.36 4,255,866.47
Instrument Co., Ltd.
Guangdong Shunkong Environmental Investment
Labor services 9,909,911.14 10,008,420.70
Co., Ltd.
Changsha Cowa Zoomlion Intelligent
Materials 10,847,784.36 17,487,345.13
Technology Co., Ltd.
Guangdong Tianshu New Energy Technology
Materials 7,638,710.54 4,008,257.44
Co., Ltd.
Guangdong Liangke Environmental Engineering
Labor services 1,415,094.34 825,471.70
Co., Ltd.
Zoomlion Heavy Industry Co., Ltd. Materials 105,493,871.91 165,728,113.90
Ande Zhilian Technology Co., Ltd. Labor services 74,500.00
Foshan Shunde District Midea Hotel
Labor services 180,887.93 875,868.89
Management Co., Ltd.
Ningbo Midea Property Management Co., Ltd. Labor services 516,713.84 101,650.94
Subtotal 145,242,374.42 203,365,495.17
(2) Sale of goods and rendering of services
Preceding period
Related parties Content of transaction Current period cumulative
comparative
Goods and labor
Lianjiang Company 2,071,112.39
services
Guangdong Tianshu New Energy Technology
Goods and factoring 90,942,152.84 36,664,775.29
Co., Ltd.
Shantou Zoomlion Ruikang Environmental
Goods 65,565.12 70,430.81
Sanitation Service Co., Ltd.
Shantou Chaoyang District Zoomlion Ruikang
Goods 589,792.61 3,516,958.41
Environmental Sanitation Service Co., Ltd.
Chongqing Sanfeng Urban Environmental
Goods 3,499,292.04
Service Co., Ltd.
Changsha Cowa Zoomlion Intelligent Technology
Goods 49,417.06
Co., Ltd.
Guangdong Liangke Environmental Engineering
Goods and factoring 781,333.30 -9,569,059.05
Co., Ltd.
Zoomlion Heavy Industry Co., Ltd. Goods 1,995,580.83 4,446,362.79
Guangdong Midea HVAC Equipment Co., Ltd. Goods 543,008.85
Goods and labor
Guangdong Bomei Property Service Co., Ltd. 3,118,410.25
services
Guangxi Zoomlion Guilv Urban Environmental Goods and labor
6,862,177.99
Service Co., Ltd. services
Guangdong Infore Material Technology Co., Ltd. Goods 222,817.99
Guangdong Midea Environmental Electrical Goods and labor
18,308,649.75
Manufacturing Co., Ltd. services
Foshan Shunde District Midea Electric Heating Goods and labor
4,253,728.91
Appliance Manufacturing Co., Ltd. services
207
Preceding period
Related parties Content of transaction Current period cumulative
comparative
Anhui Meizhi Precision Manufacturing Co., Ltd. Goods 74,788,944.90
Anhui Meizhi Refrigeration Equipment Co., Ltd. Goods 8,273,640.64
Foshan Welling Washing Motor Manufacturing
Goods 4,739,447.22
Co., Ltd.
Guangdong Midea Kitchen Appliance
Goods 8,689,087.00
Manufacturing Co., Ltd.
Guangdong Meizhi Precision Manufacturing Co.,
Goods 67,835,355.54
Ltd.
Guangdong Meizhi Refrigeration Equipment Co., Goods and labor
64,391,718.91
Ltd. services
Guangdong Welling Motor Manufacturing Co.,
Goods 143,985.09
Ltd.
Wuxi Feiling Electronics Co., Ltd. Goods 434,430.62
Qianxi Jinjiang Sanitation Service Co., Ltd. Goods 19,276.10
Yichun Development Investment Lianfeng
Goods 48,038,229.26
Environmental Industry Co., Ltd.
Anhui Weiqi Electrical Materials Co., Ltd. Goods and factoring 416,492.94 877,546.38
Guangdong Weiqi Electrical Materials Co., Ltd. Factoring 1,873,184.56 1,824,062.44
Liaoning Donggang Magnet Wire Co., Ltd. Factoring 124,354.60 1,947,698.76
Foshan Yingtong Electrical Materials Co., Ltd. Factoring 233,830.19
Subtotal 107,545,884.08 345,537,909.25
2. Related party leases
(1) The Company as the lessor
Lease income for the current Lease income for the preceding
Lessees Types of assets leased
period period
Guangdong Tianshu New Plant and comprehensive
988,266.74
Energy Technology Co., Ltd. building
(2) The Company as the lessee
Current period cumulative
Lease of right-of-use assets recognized
Expenses for short-term leases
Types of assets and leases of low-value assets Lease expenses paid
Lessors with simplified approach and (excluding variable Increased
leased Interest
variable lease payments not lease payments not principal
expenses
included in the measurement of included in the of lease
recognized
lease liabilities measurement of lease liabilities
liabilities)
Foshan Shunde District
Office building,
Yinghai Investment 1,256,323.04 63,604.54
parking space
Co., Ltd.
Shenzhen Infore Smart
Office building 840,509.43
Technology Co., Ltd.
(Continued)
Preceding period comparative
Lease of right-of-use assets recognized
Expenses for short-term leases
Types of assets and leases of low-value assets Lease expenses paid
Lessors with simplified approach and (excluding variable Increased
leased Interest
variable lease payments not lease payments not principal of
expenses
included in the measurement of included in the lease
recognized
lease liabilities measurement of liabilities
lease liabilities)
208
Preceding period comparative
Lease of right-of-use assets recognized
Expenses for short-term leases
Types of assets and leases of low-value assets Lease expenses paid
Lessors with simplified approach and (excluding variable Increased
leased Interest
variable lease payments not lease payments not principal of
expenses
included in the measurement of included in the lease
recognized
lease liabilities measurement of liabilities
lease liabilities)
Foshan Shunde District
Office building,
Yinghai Investment Co., 1,211,475.03 3,095,959.57 17,392.41
parking space
Ltd.
Shenzhen Infore Smart
Office building 460,904.20
Technology Co., Ltd.
3. Related party guarantees
The Company and its subsidiaries as guaranteed parties
Whether the
Commencement
Guaranteed parties Amount guaranteed Maturity date guarantee is Remarks
date
mature
Anhui Weiqi Electrical Materials
40,000,000.00 6/28/2022 6/28/2023 No None
Co., Ltd.
Anhui Weiqi Electrical Materials
20,000,000.00 6/21/2022 6/21/2023 No None
Co., Ltd.
Anhui Weiqi Electrical Materials
30,000,000.00 5/10/2022 5/10/2023 No None
Co., Ltd.
Anhui Weiqi Electrical Materials
20,000,000.00 2/17/2022 2/17/2023 No None
Co., Ltd.
Liaoning Donggang Magnet Wire
5,000,000.00 7/22/2022 7/21/2023 No
Co., Ltd.
[Note]
Liaoning Donggang Magnet Wire
10,000,000.00 8/22/2022 8/21/2023 No
Co., Ltd.
Note: These guaranteed loans were also provided with mortgaged guarantee by Liaoning Donggang Magnet Wire Co., Ltd. with
its buildings and structures with cost of 30,603,925.53 yuan and net value of 8,306,077.76 yuan, and its land use right with cost of
9,747,692.64 yuan and net value of 6,536,721.11 yuan.
4. Key management’s emoluments
Items Current period cumulative Preceding period comparative
Key management’s emoluments 6,500,407.42 9,318,141.11
5. 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 invoice of the
same amount to end customers. The tax-excluded amount of income from such transactions in 2022 is -3,077,570.96 yuan. Zoomlion
Environmental Company related such transactions directly to end customers.
6. Temporary call loans between related parties
In 2022, Infore Group lent temporary funds to the Company and its subsidiaries, totaling 1.00 billion yuan, which were usually
returned within one working day. Therefore, the two parties have not settled the interest on the funds occupied.
(III) Balance due to or from related parties
1. Balance due from related parties
209
Closing balance Opening balance
Items Related parties Provision for bad Provision for bad
Book balance Book balance
debts debts
Guangdong Shunkong
4,158,567.88 890,025.90 4,202,907.51 420,290.75
Environmental Investment Co., Ltd.
Guangdong Tianshu New Energy
200,788,348.94 8,569,313.68 46,417,357.14 1,431,117.86
Technology Co., Ltd.
Lianjiang Company 378,000.00 18,900.00
Shantou Zoomlion Ruikang
Environmental Sanitation Service 10,711.00 535.55 7,095.00 354.75
Co., Ltd.
Guangdong Liangke Environmental
30,000,000.00 450,000.00
Engineering Co., Ltd.
Zoomlion Heavy Industry Co., Ltd. 665,051.93 126,337.58 365,661.93 36,566.19
Guangdong Midea Electric Co., Ltd. 54,018.62 54,018.62 54,018.62 54,018.62
Guangdong Midea Refrigeration
42,819.11 42,819.11 42,819.11 42,819.11
Equipment Co., Ltd.
Guangdong Midea Building
33,413.42 33,413.42 33,413.42 33,413.42
Technologies Co., Ltd.
Accounts Guangdong Midea HVAC
233,371.88 51,798.38 42,241.88 42,241.88
receivable Equipment Co., Ltd.
Zoomlion Hengtong Machinery Co.,
850,000.00 85,000.00
Ltd.
Guangdong Weiqi Electrical
112,174,999.99 1,682,625.00 73,000,000.00 1,136,107.50
Materials Co., Ltd.
Shantou Chaoyang District
Zoomlion Ruikang Environmental 4,017,898.31 401,789.83 4,502,500.00 225,125.00
Sanitation Service Co., Ltd.
Changsha Cowa Zoomlion
55,841.28 2,792.06
Intelligent Technology Co., Ltd.
Anhui Weiqi Electrical Materials
30,586,839.62 458,802.59 34,300,000.00 530,355.75
Co., Ltd.
Liaoning Donggang Magnet Wire
31,300,000.00 469,500.00 31,000,000.00 485,227.50
Co., Ltd.
Foshan Yingtong Electrical
20,486,000.00 307,290.00
Materials Co., Ltd.
Guangdong Bomei Property Service
903,500.08 45,175.00
Co., Ltd.
Guangxi Zoomlion Guilv Urban
3,762,921.52 188,146.08
Environmental Service Co., Ltd.
Subtotal 439,218,462.30 13,771,590.74 195,251,855.89 4,544,330.39
Changsha Cowa Zoomlion
300,000.00
Intelligent Technology Co., Ltd.
Guangdong Midea Kitchen and
Notes receivable Bathroom Appliance Manufacturing 749,469.98
Co., Ltd.
Wuhu Welling Motor Sales Co., Ltd. 111,985.59
Subtotal 1,161,455.57
Receivables
Zoomlion Heavy Industry Co., Ltd. 200,000.00
financing
Subtotal 200,000.00
Changsha Cowa Zoomlion
18,333.33
Intelligent Technology Co., Ltd.
Guangdong Tianshu New Energy
32,200.00
Technology Co., Ltd.
Advances paid
Shenzhen Yingmei City
3,710.00
Housekeeper Co., Ltd.
Chongqing Midea General
31,500.00
Refrigeration Equipment Co., Ltd.
210
Closing balance Opening balance
Items Related parties Provision for bad Provision for bad
Book balance Book balance
debts debts
Zoomlion Heavy Industry Co., Ltd. 85,768.19
Subtotal 117,268.19 54,243.33
Guangdong Shunkong
1,730,000.00 865,000.00 1,730,000.00 865,000.00
Environmental Investment Co., Ltd.
Lianjiang Company 12,245,069.06 1,562,903.45
Zoomlion Heavy Industry Co., Ltd. 7,190,173.17 359,508.66 1,160,821.56 58,041.08
Foshan Shunde District Yinghai
205,228.40 102,614.20 205,228.40 61,568.52
Other Investment Co., Ltd.
receivables Jin Taotao 1,000,000.00 20,000.00
Guangdong Midea HVAC
10,000.00 500.00
Equipment Co., Ltd.
Shenzhen Infore Smart Technology
304,020.00 15,308.44
Co., Ltd.
Guangdong Weiqi Electrical
337,565.30 168,782.65
Materials Co., Ltd.
Subtotal 9,776,986.87 1,511,713.95 16,341,119.02 2,567,513.05
Contract assets Zoomlion Heavy Industry Co., Ltd. 162,550.00 8,127.50
Subtotal 162,550.00 8,127.50
Guangdong Tianshu New Energy
5,137,500.01 77,062.50 8,666,666.67 137,425.00
Technology Co., Ltd.
Long-term
Shantou Zoomlion Ruikang
receivables and
Environmental Sanitation Service 3,456,000.00 651,050.00 3,376,732.97 378,762.50
non-current
Co., Ltd.
assets due within
Shantou Chaoyang District
one year
Zoomlion Ruikang Environmental 7,531,548.45 983,685.27 16,598,713.91 1,656,232.00
Sanitation Service Co., Ltd.
Subtotal 16,125,048.46 1,711,797.77 28,642,113.55 2,172,419.50
2. Balance due to related parties
Items Related parties Closing balance Opening balance
Tengine Innovation (Beijing) Monitoring Instrument
6,033,821.63 750,887.68
Co., Ltd.
Guangdong Shunkong Environmental Investment
993,522.02 310,000.00
Co., Ltd.
Guangdong Tianshu New Energy Technology Co.,
6,037,232.82 2,239,549.66
Ltd.
Changsha Cowa Zoomlion Intelligent Technology
Accounts 7,253,459.78 367,363.53
Co., Ltd.
payable Guangdong Liangke Environmental Engineering Co.,
875,000.00 825,471.70
Ltd.
Zoomlion Heavy Industry Co., Ltd. 55,248,477.35 88,865,189.93
Midea Group Co., Ltd. 587,507.93 587,507.93
Foshan Shunde District Midea Hotel Management
80,789.37 105,413.51
Co., Ltd.
Subtotal 77,109,810.90 94,051,383.94
Tengine Innovation (Beijing) Monitoring Instrument
3,002,040.00 668,890.00
Co., Ltd.
Notes payable
Guangdong Tianshu New Energy Technology Co.,
520,000.00 2,644,400.00
Ltd.
211
Items Related parties Closing balance Opening balance
Changsha Cowa Zoomlion Intelligent Technology
5,184,750.00
Co., Ltd.
Zoomlion Heavy Industry Co., Ltd. 59,153,632.35 75,448,044.94
Subtotal 62,675,672.35 83,946,084.94
Guangdong Tianshu New Energy Technology Co.,
1,681.42
Ltd.
Guangdong Liangke Environmental Engineering Co.,
Contract 987,079.67 987,079.70
Ltd.
liabilities
Zoomlion Heavy Industry Co., Ltd. 6,145,050.10 6,081,760.12
Guangxi Zoomlion Guilv Urban Environmental
78,180.53
Service Co., Ltd.
Subtotal 7,211,991.72 7,068,839.82
Zoomlion Heavy Industry Co., Ltd. 363,559.20 104,612.82
Green Oriental Investment Holdings Co., Ltd. 21,875,000.00 21,875,000.00
Guangdong Bomei Property Service Co., Ltd. 5,000.00 5,000.00
Other payables Zoomlion Hengtong Machinery Co., Ltd. 4,300.00
Guangdong Tianshu New Energy Technology Co.,
2,700.00 2,700.00
Ltd.
Guangxi Zoomlion Guilv Urban Environmental
403,654.00
Service Co., Ltd.
Changsha Cowa Zoomlion Intelligent Technology
100,000.00
Co., Ltd.
Subtotal 22,654,213.20 22,087,312.82
XI. Share-based payment
(I) Overall information
1. Details
Total equity instruments granted in current period
Total equity instruments vested in current period 3,761,991.00
Total equity instruments expired in current period 5,504,620.00
Phase III stock options: the exercise price is 6.12 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 range of exercise prices of stock options outstanding at the
the report date, the first installment of phase III has expired due
end of the period and the remaining contractual life
to failure in meeting the performance indicators; in the second
installment of phase III, 16,409,380.00 shares have been vested,
while the rest has due and expired; and the third installment of
phase III is still in the vesting period.
The range of exercise prices of other equity instruments at the end
of the period and the remaining contractual life
2. Other remarks
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 shareholders’ meeting of 2019 dated November 12, 2019, and the “Proposal on Adjusting the List of
Incentive Targets and the Number of Granted Stock Options for Phase III Stock Option Incentive Plan” deliberated and approved by
32nd meeting of the eighth session of the Board of Directors dated 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%
212
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.
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 Directors and the
third meeting of the ninth session of the Board of Supervisors dated April 23, 2020, 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.
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 by the fourth meeting of the ninth
session of the Board of Directors and the third meeting of the ninth session of the Board of Supervisors. Given that the Company’s
performance did not reach the exercising 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 exercise 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 inclusive) 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 equity
distribution of 2019 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 conversion of capital reserve into 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.
According to the “Proposal on Adjusting the Incentive Targets and the Number of Options Exercised and Cancellation of Part of
the Stock Options in Phase II and Phase III Stock Option Incentive Plans” deliberated and approved by the 13th meeting of the ninth
session of the Board of Directors and the 12th meeting of the ninth session of the Board of Supervisors dated April 22, 2021, 13
incentive targets who resigned from the Company or the Company’s holding subsidiaries 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 second and third installments of stock options, a total of 3.101 million, were cancelled. After the
adjustments, the incentive targets of phase III stock option incentive plan have been adjusted from the original 244 to 231, and the
number of locked stock options granted has been adjusted from 44.667 million to 41.566 million.
According to the “Proposal on Matters Related to the Second Exercise Period of Phase III Stock Option Incentive Plan”
deliberated and approved by the 13th meeting of the ninth session of the Board of Directors and the 12th meeting of the ninth session
of the Board of Supervisors, given that the conditions for the second exercise period of the Company’s phase III stock option
incentive plan have been fulfilled, the phase III stock option incentive plan has determined and passed the assessment for a total of
231 incentive targets, and a total of 17.814 million shares can be exercised in the second exercise period.
Pursuant to the “Profit Distribution of 2020” deliberated and approved by the shareholders’ meeting of 2020 dated May 14,
2021, based on the Company’s current total share capital of 3,163,086,005 shares after excluding the repurchased shares of
58,976,234 share, i.e., 3,104,109,771 shares, cash dividend of 1.20 yuan (tax inclusive) for every 10 shares is to be distributed to all
213
shareholders, with 0 bonus share (tax inclusive) and no conversion of capital reserve into share capital. The equity registration date
for this equity distribution is July 7, 2021, and the ex-rights and ex-dividend date is July 8, 2021.
The “Proposal on Adjusting the Exercise Price of Stock Options in Phase II and Phase III Stock Option Incentive Plans” was
deliberated and approved by the 14th meeting of the ninth session of the Board of Directors and the 13th meeting of the ninth session
of the Board of Supervisors on August 19, 2021. Given that the Company’s equity distribution of 2020 has been implemented on July
8, 2021, according to provisions on the adjustment of the exercise price of the phase III stock option incentive plan drafts, if the
Company has conversion of capital reserve into 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 adjustment, the exercise
price of phase III stock option incentive plan will be adjusted from 6.34 yuan per share to 6.22 yuan per share.
Pursuant to the “Profit Distribution of 2021” deliberated and approved by the shareholders’ meeting of 2021 dated May 24,
2022, based on the Company’s current total share capital of 3,179,499,998 shares after excluding the repurchased shares of
58,976,234 share, i.e., 3,120,523,764 shares, cash dividend of 1.00 yuan (tax inclusive) for every 10 shares is to be distributed to all
shareholders, with 0 bonus share (tax inclusive) and no conversion of capital reserve into share capital. The equity registration date
for this equity distribution is July 19, 2022, and the ex-rights and ex-dividend date is July 20, 2022.
The “Proposal on Adjusting the Exercise Price of Stock Options in Phase III Stock Option Incentive Plan” was deliberated and
approved by the 19th meeting of the ninth session of the Board of Directors and the 18th meeting of the ninth session of the Board of
Supervisors on August 24, 2022. Given that the Company’s equity distribution of 2021 has been implemented on July 20, 2022, after
the adjustment, the exercise price of phase III stock option incentive plan will be adjusted from 6.22 yuan per share to 6.12 yuan per
share.
According to the “Proposal on Adjusting the Incentive Targets and the Number of Options Exercised and Cancellation of Part of
the Stock Options in Phase III Stock Option Incentive Plan” deliberated and approved by the 21st meeting of the ninth session of the
Board of Directors and the 19th meeting of the ninth session of the Board of Supervisors dated October 26, 2022, 22 incentive targets
who resigned from the Company 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 (Revised Draft)”, their third installments of stock options,
a total of 1.788 million, were cancelled. After the adjustments, the incentive targets of phase III stock option incentive plan have been
adjusted from the original 231 to 209, and the number of locked stock options granted has been adjusted from 23.752 million to
21.964 million.
(II) Equity-settled share-based payment
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 63,871,094.05
Total expenses incurred due to equity-settled share-based payment 4,039,069.40
XII. Commitments and contingencies
(I) Significant commitments
As of December 31, 2022, the Company has no significant commitments to be disclosed.
(II) Contingencies
1. Contingent liabilities incurred by pending lawsuit/arbitration and the financial effect
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 Qianhai Cooperation Zone,
214
Shenzhen City, Guangdong Province, requesting the Company and its subsidiary Shenzhen Green Ark Investment Co., Ltd. to pay
21.875 million yuan and interest thereof for the 25% equity acquisition of Lianjiang Company in 2016, and therefore applied for
freezing the 25% of equity of Lianjiang Company According to the Civil Judgment numbered [2018] Yue 0391 Min Chu 4117 issued
by the People’s Court of Qianhai Cooperation Zone, Shenzhen City, Guangdong Province on June 18, 2019, the subsidiary Shenzhen
Green Ark Investment Co., Ltd. shall pay 21.875 million yuan and interest thereof for the 25% equity acquisition of Lianjiang
Company 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 numbered [2018] Yue 0391
Min Chu 4117 in accordance with the law, and to dismiss all the claims made by Green Oriental Investment Holdings Co., Ltd.
On May 20, 2021, the Shenzhen Intermediate People’s Court made the final judgement numbered (2019) Yue 03 Min Zhong
24451. The court believed that although the Company and Shenzhen Green Ark Investment Co., Ltd. were related parties, they were
independent of each other as corporations, thus did not support the Shenzhen Green Ark Investment Co., Ltd.’s unsafe right of
defense against Green Oriental Investment Holdings Co., Ltd. based on the “Cooperation Framework Agreement”; meanwhile, as
Green Oriental Company and Shenzhen Green Ark Investment Co., Ltd. were also independent corporations, the court did not
support Shenzhen Green Ark Investment Co., Ltd.’s claim for a set-off based on the reason that Green Oriental Company had the
creditor’s rights to Green Oriental Investment Holdings Co., Ltd. The civil judgment numbered (2019) Yue 03 Min Zhong 24451
upheld the first-instance judgment. On January 8, 2021, Shenzhen Yongsheng Electric Power Equipment Co., Ltd. claimed that it had
acquired the creditor’s rights as confirmed by the civil judgment numbered (2019) Yue 03 Min Zhong 24451, and applied to the
People’s Court of Qianhai Cooperation Zone, Shenzhen City, Guangdong Province for compulsory enforcement.
Later, Shenzhen Green Ark Investment Co., Ltd. raised an enforcement objection, which had been accepted by the court with the
case number of (2021) Yue 0391 Zhi Yi 240. According to the civil judgment numbered [2021] Yue 0391 Min Chu 5890 issued by
the People’s Court of Qianhai Cooperation Zone, Shenzhen City, Guangdong Province on July 31, 2022, the court ruled to revoke the
defendant Green Oriental Investment Holdings Co., Ltd.’s transfer of its creditor’s right including equity transfer funds of 21,875,000
yuan and interest thereof, litigation fees of 172,535 yuan and preservation fees of 5,000 yuan to the defendant Shenzhen Yongsheng
Electric Power Equipment Co., Ltd. On August 10, 2022, Green Oriental Investment Holdings Co., Ltd. and Shenzhen Yongsheng
Electric Power Equipment Co., Ltd. filed an appeal to the Shenzhen Intermediate People’s Court.
As of December 31, 2022, the Company has accrued other payables of 21,875,000.00 yuan due to Green Oriental Investment
Holdings Co., Ltd.
2. Contingent liabilities incurred by providing debt guarantees for other entities and the financial effect
(1) Please refer to section X of notes to the financial statements for details on guarantees provided by the Company to related
parties.
(2) Guarantees provided by the Company and its subsidiaries to non-related parties
1) Certain customers of the Company use working capital loans provided by banks to finance their purchase. According to the
arrangement of the agreement, the Company provides guarantees for such transactions. Meanwhile, the actual controller of the
borrower provides a joint and several liability guarantee for the full amount of loans. As of December 31, 2022, the Company’s
maximum exposure to these guarantees is 154,811,847.71 yuan.
2) 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 lease company. As of
December 31, 2022, the Company’s maximum exposure to these guarantees is 302,693,073.88 yuan.
XIII. Events after the balance sheet date
(I) Significant non-adjusting events
The Company has no significant non-adjusting events after the balance sheet date.
(II) Profit distribution after the balance sheet date
215
According to the “Profit Distribution Plan of 2022” deliberated and approved by the second meeting of the tenth session of the
Board of Directors on April 24, 2023, the Company intends to distribute cash dividends of 1.1 yuan (tax inclusive) per 10 shares
based on the existing total share capital of 3,166,940,177 shares (net of shares in the Company’s special account for repurchase), with
cash dividends distributed totaling 348,363,419.47 yuan.
XIV. Other significant events
(I) Segment information
1. Identification basis for reportable segments
Reportable segments are identified according to the structure of the Company’s internal organization, management requirements
and internal reporting system, and based on product segments. The Company evaluates the operating performance of intelligent
sanitation and other businesses respectively. Assets and liabilities shared by different segments are allocated among segments
proportionate to their respective sizes.
2. Financial information of reportable segments
Products segment
Items Intelligent sanitation Other businesses Inter-segment offsetting Total
Operating revenue 9,910,820,445.84 2,409,994,016.00 64,821,523.42 12,255,992,938.42
Operating cost 7,708,213,679.79 1,826,058,429.24 64,761,277.76 9,469,510,831.27
Total assets 16,529,487,408.40 31,653,128,611.19 18,911,324,159.61 29,271,291,859.98
Total liabilities 8,411,563,383.89 10,573,528,529.35 7,451,212,742.24 11,533,879,171.00
(II) Leases
1. The Company as lessee
(1) Please refer to section V (I) 25 of notes to the financial statements for details on right-of-use assets.
(2) Please refer to section III (XXXII) of notes to the financial statements for details on the Company’s accounting policies on
short-term leases and leases for which the underlying asset is of low value. The amounts of short-term leases and low-value asset
leases included into profit or loss are as follows:
Items Current period cumulative Preceding period comparative
Expense relating to short-term leases 10,884,849.01 14,170,570.16
Expense relating to leases of low-value assets (excluding short-
term leases)
Total 10,884,849.01 14,170,570.16
(3) Profit or loss and cash flows related to leases
Items Current period cumulative Preceding period comparative
Interest expenses on lease liabilities 1,337,799.45 1,106,627.08
Variable lease payments included in profit or loss but not
included in the measurement of lease liabilities
Income from subleasing right-of-use assets
Total cash outflows related to leases 17,112,601.77 20,516,544.34
Gains or losses arising from sale and leaseback transactions
(2) Please refer to section VIII (II) of the notes to the financial statements for details on maturity analysis of lease payments and
related liquidity risk management.
2. The Company as lessor
(1) Operating lease
1) Lease income
216
Items Current period cumulative Preceding period comparative
Lease income 1,855,150.51 386,469.80
Including: Income relating to variable lease
payments not included in the measurement of
the lease liability
2) Assets leased out under operating leases
Items Closing balance December 31, 2021
Investment property 27,105,435.03 1,837,703.68
Subtotal 27,105,435.03 1,837,703.68
Please refer to section V (I) 21 of notes to the financial statements for details on fixed assets leased out under operating leases.
3) Undiscounted lease payments to be received arising from non-cancellable leases based on the lease contract signed with
lessee
Remaining years Closing balance December 31, 2021
Within 1 year 157,112.00 157,112.00
1-2 years 157,112.00 157,112.00
2-3 years 157,112.00 157,112.00
3-4 years 157,112.00 157,112.00
4-5 years 157,112.00 157,112.00
Over 5 years 157,112.00 314,224.00
Total 942,672.00 1,099,784.00
(2) Finance lease
1) Current period profit or loss related to finance lease
Items Current period cumulative Preceding period comparative
Finance income on the net investment in the
5,464,955.41 11,787,986.68
lease
Income relating to variable lease payments
not included in the measurement of the net
investment in the lease
2) Undiscounted lease payments to be received arising from non-cancellable leases based on the lease contract signed with
lessee
Remaining years Closing balance December 31, 2021
Within 1 year 58,791,768.45 170,788,078.94
1-2 years 10,723,621.03 52,525,528.58
2-3 years 22,145,694.83 5,998,312.06
3-4 years 6,143,705.02
4-5 years 1,497,760.00
Over 5 years 374,440.00
Total 99,676,989.33 229,311,919.58
3) Reconciliation of undiscounted lease payments to net investment in the lease
Items Closing balance December 31, 2021
Undiscounted lease payments 99,676,989.33 229,311,919.58
217
Less: Unrealized finance income relating to
5,140,906.34 6,008,062.18
lease payments
Add: Present value of unguaranteed residual
value
Net investment in the lease 94,536,082.99 223,303,857.40
(III) PPP contracts
Details on the Company’s top five PPP contracts are listed as follows:
Significant contractual
Related rights enjoyed and Changes
terms that may affect the Classification
No. Projects Summary of contracts obligations assumed by the in
amount, timing and risk of contracts
Company contracts
of future cash flows
Funan County Urban
Management and Law
The project is a waste Annual guaranteed waste
Enforcement Bureau
incineration power supply: the first phase is no
granted the project
generation project less than 180,000 tons/year,
company the exclusive
invested by the Company and the second phase has
right to invest and
and the Funan County not yet been agreed; the
finance, design, construct,
Urban Management and waste treatment price is 52
operate and maintain
Law Enforcement Bureau yuan/ton, which will be
domestic waste power
in the form of BOT. It is adjusted every three years;
generation projects;
planned to be located in if the annual waste supply
during the concession
Funan, Anhui, and is of the Funan County Urban
Funan period, the project
mainly used for Management and Law
County company shall bear the
incineration of domestic Enforcement Bureau is
Domestic costs, responsibilities and
waste in Funan. The more than 0.36 million BOT;
Waste risks by itself, be
1 planned total investment tons, the two parties can No mixed
Incineration responsible for the
is about 1.24 billion yuan, build another factory, while model
Power investment and financing,
and the designed daily the Company has the
Plant design, construction,
domestic waste treatment priority to invest and
Project operation and
scale is 500 tons in the construct under the same
maintenance of the
first phase and 1,000 tons conditions; the Company’s
project facilities, and
in the final phase. The remaining electricity is
hand over the project
concession period of the connected to the grid
facilities to the Funan
project is 30 years according to relevant
County Urban
(calculated from the date procedures, and the on-grid
Management and Law
of commercial operation). electricity price is
Enforcement Bureau or
The project has started determined according to the
its designated institution
commercial operation in “Power Purchase and Sale
free of charge when the
2020. Contract”.
concession period
expires.
The project is a waste Since the commencement During the cooperation
treatment project invested of operation, the annual period, the project
by the Company and guaranteed minimum company has the
Liling Urban supply is 146,000 tons. If exclusive right to invest,
Management and Law the volume of waste construct, operate,
Enforcement Bureau in delivered is less than such maintain and manage the
the form of DBOT and guaranteed minimum project in Liling City. The
PPP Project ROT. It is mainly used to volume, the waste project company provides
of Resource incinerate domestic waste treatment fee will be paid waste treatment services
DBOT &
Recovery in Liling City. The according to the guaranteed to the Liling Urban
ROT;
of Liling planned total investment minimum volume. The unit Management and Law
2 No intangible
Urban and is about 717 million yuan, price of waste collection Enforcement Bureau, and
assets
Rural including 3 sub-projects: and transportation service charges the Liling Urban
model
Domestic Liling Urban and Rural is 198 yuan/ton (the Management and Law
Waste Domestic Waste treatment capacity is within Enforcement Bureau
Collection and 600 tons/day); the unit thereon; meanwhile, it
Transportation System price of waste pretreatment sells the surplus
Construction Project and incineration power electricity generated by
(DBOT), Liling Urban generation service is 84 waste incineration and
and Rural Domestic yuan/ton (the treatment waste heat to the power
Waste Pretreatment and capacity is within 600 company and collects
Incineration Power tons/day), and the unit price electricity fees, and sells
218
Significant contractual
Related rights enjoyed and Changes
terms that may affect the Classification
No. Projects Summary of contracts obligations assumed by the in
amount, timing and risk of contracts
Company contracts
of future cash flows
Generation Project of landfill service is 56.71 recyclable metals and
(DBOT) and Liling yuan/ton (calculated with refuse derived fuels and
Domestic Waste Harmless the treatment capacity of collects fees. The project
Treatment Plant (ROT). 300 tons/day) or 37.53 company shall bear the
The designed waste yuan/ton (calculated with costs, responsibilities and
collection and the treatment capacity of risks by itself during the
transportation scale is 600 600 tons/day); a subsidy cooperation period, be
tons/day, the scale of fee will be paid according responsible for the
pretreatment and to the agreement for the investment and financing,
incineration power disposal of waste that design, construction,
generation projects is 600 exceeds the design operation and
tons/day in the near term capacity. The Company’s maintenance of the
and 900 tons/day in the remaining electricity is project facilities, and
long term. The project connected to the grid shall hand over all the
cooperation period is 25 according to relevant necessary assets for the
years from November procedures, and the on-grid project to an institution
2018. electricity price is designated by the Liling
determined according to the Municipal People’s
“Power Purchase and Sale Government free of
Contract”. charge when the
cooperation period
expires or terminates
according to the contract.
The project is a
integration project
including road cleaning,
public area and urban
village waste sorting, During the operation
collection and period, the project
management (including company shall undertake
the facility configuration, the responsibilities of
maintenance and investment and financing
management), other waste The amount paid for this of the project, purchasing
collection, transportation project is equal to the total of vehicles and
and transfer, operation monthly operating service equipment, design and
and maintenance fee minus the daily construction, operation,
management of waste assessment deductions of maintenance and
transfer stations, the project. Monthly handover of the parking
operation and operation service fee = lots. After the expiry of
maintenance management monthly comprehensive the operation period, the
Xin’an,
of public toilets, road cleaning and fee + project assets, project
Fuyong and
construction and monthly waste collection, facilities and project site BOT;
Fuhai
operation and transportation and transfer shall be handed over to intangible
3 Streets No
maintenance of sanitation fee + monthly public toilet the implementing agency assets
Sanitation
parking lots, greening management fee + monthly (except for the parking model
Integration
management, construction greening maintenance fee + lots built by the Company
PPP Project
and operation and monthly sanitation parking itself, but if the land used
maintenance of smart lot service fee + monthly for the parking lot is
sanitation platforms, smart sanitation platform provided by the
sanitation emergency operation and management government, the site
support, etc. in the fee. From the start of the involved in these parking
administrative area of operation period, every 3 lots shall be handed over
Xin’an, Fuyong and Fuhai extension years is a price to the implementing
streets in Bao’an District, adjustment period. agency), and the project
which is invested by the company shall collect
Company and Shenzhen fees from the sub-district
Bao’an District Urban office during the
Management and Law operation period
Enforcement Bureau in according to the contract.
the form of BOT. The
initial investment of the
project is 520 million
yuan, and the operation
219
Significant contractual
Related rights enjoyed and Changes
terms that may affect the Classification
No. Projects Summary of contracts obligations assumed by the in
amount, timing and risk of contracts
Company contracts
of future cash flows
period is 15 years
(including construction
and equipment
configuration period of 1
year) from June 1, 2020
to May 31, 2035.
Since the commencement
of operation, the daily
guaranteed minimum
volume of waste delivered
or consigned under the first
phase is 500 tons. If the
Lianjiang Municipal
actual volume is less than
The project is a waste Bureau of Urban Utilities
such guaranteed minimum
incineration power and Landscaping granted
volume, the waste
generation project the project company the
treatment fee will be paid
invested by the Company exclusive right to invest
according to the guaranteed
and the Lianjiang and finance, design,
minimum volume. The
Municipal Bureau of construct, operate and
price of waste treatment: in
Urban Utilities and maintain domestic waste
the first stage: from
Landscaping in the form power generation
December 1, 2019 to the
of BOT. It is planned to projects; during the
operation of the second
be located in Lianjiang, concession period, the
phase (“72+24 hours” trial
Lianjiang Guangdong, and is mainly project company shall
operation is conducted and
Domestic used for incineration of bear the costs,
a compliance BOT;
Waste domestic waste in responsibilities and risks
commissioning report is intangible
4 Incineration Lianjiang. The planned by itself, be responsible No
issued), the waste treatment assets
Power total investment is about for the investment and
fee is adjusted from 40 model
Generation 493 million yuan, and the financing, design,
yuan/ton to 65 yuan/ton; in
Project designed daily domestic construction, operation
the second stage: after the
waste treatment scale is and maintenance of the
operation of the second
500 tons in the first phase project facilities, and
phase (“72+24 hours” trial
and 1,100 tons in the final hand over the project
operation is conducted and
phase. The concession facilities to the Lianjiang
a compliance
period of the project is 30 Municipal Bureau of
commissioning report is
years (calculated from the Urban Utilities and
issued), the waste treatment
date of commercial Landscaping or its
fee is adjusted from 65
operation). The first phase designated institution free
yuan/ton to 78 yuan/ton;
has started commercial of charge when the
the Company’s remaining
operation in 2016. concession period
electricity is connected to
expires.
the grid according to
relevant procedures, and
the on-grid electricity price
is determined according to
the “Power Purchase and
Sale Contract”.
The project is a circular The return on the sub- In accordance with
economy industrial park projects including resource relevant laws and
project invested by the utilization of kitchen waste, regulations, Xiantao
Company and Xiantao harmless treatment of Urban Management and
Urban Management and sludge, resource recovery Law Enforcement Bureau
Law Enforcement Bureau of construction waste, granted Xiantao Yinghe
Xiantao
in the form of BOT. It is leachate treatment station Environmental Protection
Circular BOT;
located in Xiantao City, (Phase I), domestic waste Co., Ltd., within the
Economy intangible
5 Hubei Province. The transfer system, domestic scope of the project No
Industrial assets
industrial park project waste sanitary landfill is service and cooperation
Park PPP model
includes 8 sub-projects: government feasibility gap period, an exclusive right
Project
the recycling of kitchen subsidy, which is made up to: (1) invest in, build,
waste, the harmless of the unit price of waste operate and maintain 5
treatment of sludge, the treatment multiplied by the sub-projects including the
resource recovery of higher of basic supply, resource recovery of
construction waste, the actual treatment capacity kitchen waste, sludge
leachate treatment station and design treatment harmless treatment,
220
Significant contractual
Related rights enjoyed and Changes
terms that may affect the Classification
No. Projects Summary of contracts obligations assumed by the in
amount, timing and risk of contracts
Company contracts
of future cash flows
(Phase II), the leachate capacity, with the unit price construction waste
treatment station (Phase adjusted every three years; recycling, leachate
I), and the domestic waste while leachate treatment treatment station (Phase
transfer system (the station (Phase II) and the II), and Xiantao
cooperation period of the sanitary landfill (fly ash Environmental Science
above 6 sub-projects landfill) part are entirely and Technology Museum
covers 30 years from the paid by the users. The (2) invest, reconstruct,
commencement date of Company generates operate and maintain 3
each sub-project, which products including but not sub-projects including the
includes the construction limited to electricity and leachate treatment station
period of 1 year and the building materials through (Phase I), domestic waste
operation period of 29 waste treatment and transfer system and
years), the Xiantao comprehensive utilization. domestic waste sanitary
Environmental Protection The ownership and revenue landfill. Xiantao Yinghe
Science and Technology of the products belong to Environmental Protection
Museum (the cooperation the Company. Co., Ltd. shall bear the
period covers 11 years costs, responsibilities and
from the commencement risks by itself during the
date, which includes the cooperation period, be
construction period of 1 responsible for the
year and the operation investment, construction,
period of 10 years), the operation and
domestic waste sanitary maintenance of the
landfill (the cooperation project facilities, and
period covers 10 years hand over the project
and 3 months from the facilities in good
commencement date, condition and free of
which includes the charge to the Xiantao
construction period of 3 Urban Management and
months and the operation Law Enforcement Bureau
period of 10 years). The or its designated
project investment is institution when the
about 462 million yuan. cooperation period
The domestic waste expires, and guarantee the
transfer system has been normal operation of the
put into use successively project facilities. During
from 2019 to 2020, and the cooperation period,
the remaining projects are Xiantao Yinghe
still under construction. Environmental Protection
Co., Ltd. provides kitchen
waste recycling, sludge
harmless treatment,
construction waste
recycling, leachate
treatment, services of
environmental protection
science and technology
museum, domestic waste
transfer, domestic waste
emergency landfill, fly
ash landfill and other
services, and enjoys the
right to charge service
fees and related income.
(IV) Other significant transactions and matters which are influential to investors on their decision-making
1. As of December 31, 2022, 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 45.33% of the Company’s total share capital, of which, 710,798,429 shares
were pledged, accounting for 49.32% of its holdings of the Company, and 22.36% of the Company’s total share capital. Details are as
follows:
221
Number of Initial
Shareholder Holder of the pledge Repurchase date Remarks
shares pledged transaction date
China Construction Bank
Infore Group Corporation Limited, 100,000,000 11/28/2019 12/31/2023 Financing
Foshan Branch
China Minsheng Banking
Ningbo Infore Asset
Corporation Limited, 610,798,429 6/25/2021 3/29/2024 Financing for M&A
Management Co., Ltd.
Foshan Branch
Total 710,798,429
2. Recognition of performance compensation and indemnity
Pursuant to the “Proposal on Signing the Equity Transfer Agreement and Cooperation Framework Agreement” deliberated and
approved by the 13th interim meeting of the seventh session of the Board of Directors of the Company dated October 14, 2015, the
Company signed the “Signing of Equity Transfer Agreement” and the “Cooperation Framework Agreement of Shenzhen Green
Oriental Environmental Protection Co., Ltd.” (the “Cooperation Framework Agreement”), which stipulated that the Company will
acquire 51.00% of equity of Green Oriental Company held by Shenzhen Feima Investment Co., Ltd. and Shenzhen Qianhai Chima
Environmental Protection Investment Co., Ltd. at the consideration totaling 100,548,976.00 yuan, of which, 96,605,878.90 yuan is
the consideration for the 49.00% of equity of Green Oriental Company held by Shenzhen Feima Investment Co., Ltd., and
3,943,097.10 yuan is the consideration for the 2.00% of equity of Green Oriental Company held by Shenzhen Qianhai Chima
Environmental Protection Investment Co., Ltd.
According to the Cooperation Framework Agreement, Green Oriental Investment Holdings Co., Ltd. (the “Hong Kong
Investment Company”) and Zheng Weixian made commitments on the business performance of Green Oriental Company in the next
four years as follows: (1) from January 1, 2016 to December 31, 2019, the total net profit realized by the four project companies
including Lianjiang Company, Xiantao Company, Funan Company and Shouxian Company (collectively, the “four project
companies”) shall not be less than 120 million yuan. Otherwise, the Hong Kong Investment Company and Zheng Weixian shall
compensate the Company based on the difference between the accumulated committed net profit and the accumulated realized net
profit multiplied by 60%, which should be paid in cash. If the cash compensation is insufficient, they will compensate the Company
with the equity of Green Oriental Company held by Hong Kong Investment Company; (2) within 24 months after the completion of
registration of capital increase at the administration for market regulation, the Hong Kong Investment Company shall transfer its
Luyi Project and Puyang Project to Green Oriental Company, and smoothly start the construction as scheduled according to the law.
If the projects cannot be transferred or partially transferred, unable to be transferred, or are withdrawn and cancelled by the
government within the above period, Hong Kong Investment Company and Zheng Weixian will pay the lump sum indemnity of not
less than 5.00 million yuan for each project to the Company; (3) before December 31, 2018, the Poyang Project and the Yangxin
Project must officially start construction and obtain approval procedures. If the construction cannot be started or the projects are
withdrawn by the government, the Hong Kong Investment Company and Zheng Weixian will pay the indemnity of not less than
10.00 million yuan for each project to the Company; (4) before December 31, 2020, Jiujiang Green Oriental Renewable Energy Co.,
Ltd. must start construction and obtain approval procedures. If the construction cannot be started or it is withdrawn by the
government, Hong Kong Investment Company and Zheng Weixian will pay the indemnity of not less than 5.00 million yuan for each
project to the Company; (5) from January 1, 2016 to December 31, 2019, for the new waste incineration power generation BOT
agreement (subject to the signed franchise agreement) signed by Green Oriental Company, the total daily processing capacity shall be
not less than 6,500 tons (the daily processing capacity of a single project is not less than 500 tons, at least one of which must be more
than 2,000 tons). If the above conditions are not met, Hong Kong Investment Company and Zheng Weixian will compensate Green
Oriental Company 5 million yuan for every 500 tons less than the daily processing capacity.
In addition, in 2015, the Company and the Hong Kong Investment Company entered into the equity pledge contract, stipulating
that the Hong Kong Investment Company would pledge 49% of equity of Green Oriental Company for the debt portfolio worth 340
million yuan as agreed in the Cooperation Framework Agreement. The equity pledge was processed by both parties in the same year.
As of October 31, 2015, the Company has paid all the equity transfer payments, and Green Oriental Company has been brought
222
into the consolidation scope since the end of October 2015. In April 2016, the Company continued to acquire 19.00% of equity of
Green Oriental Company through capital increase of 86.67 million yuan and finally held 70% of equity of Green Oriental Company.
On April 23, 2020, Pan-China Certified Public Accountants issued an assurance report numbered PCCPAAR [2020] 3439, which
stated that: the audited net profits of the four project companies for the year ended December 31, 2016, 2017, 2018 and 2019 (the
lower of net profits before and after deducting non-recurring profit or loss) amounted to 2.16 million yuan, -24.42 million yuan, -
19.19 million yuan and -0.63 million yuan, respectively; the accumulated net profit amounted to -42.09 million yuan, which was
162.09 million yuan less than the amount of performance commitment, and the committed net profits from 2016 to 2019 were not
achieved.
In order to promote the implementation of performance compensation and indemnity, the Company filed a lawsuit with the
Intermediate People’s Court of Foshan City, Guangdong Province, requiring Hong Kong Investment Company and Zheng Weixian to
pay indemnity and compensation to the Company in accordance with the Cooperation Framework Agreement.
On January 13, 2021, the Intermediate People’s Court of Foshan City, Guangdong Province made a first-instance judgment,
requesting Hong Kong Investment Company and Zheng Weixian to pay the indemnity of 113.46 million yuan for the unfulfilled
performance commitment, i.e., [120 million yuan - (-42.09 million yuan)]*70%; pay the compensation of 50.00 million yuan for the
unfinished daily processing volume; at the same time, the court supported the Company to enjoy the priority of compensation within
200 million yuan for the 30% of equity of Green Oriental Company held by the Hong Kong Investment Company.
On January 29, 2021, Hong Kong Investment Company and Zheng Weixian appealed to the Higher People’s Court of
Guangdong Province.
On November 2, 2021, the Higher People’s Court of Guangdong Province held a public hearing of the second-instance case.
On July 18, 2022, the Higher People’s Court of Guangdong Province made the final judgement of the second instance, ruling
that Hong Kong Investment Company and Zheng Weixian shall pay the Company 113.46 million yuan for the unfulfilled
performance commitment and supported the Company to enjoy the priority of compensation within 200 million yuan for the 30% of
equity of Green Oriental Company held by the Hong Kong Investment Company.
As Hong Kong Investment Company and Zheng Weixian have not carried out the effective judgment, the Company has applied
to the Intermediate People’s Court of Foshan City, Guangdong Province for compulsory enforcement, and received the notice of
acceptance of the enforcement case numbered (2022) Yue 06 Zhi 1500 on August 4, 2022.
3. On April 29, 2022, according to the “Proposal on Spin-off of the Subsidiary Zhejiang Shangfeng Special Blower Industrial
Co., Ltd. for Listing on the ChiNext”, “Infore Environment Technology Group Co., Ltd.’s Proposal on the Spin-Off of Its Subsidiary
Zhejiang Shangfeng Special Blower Industrial Co., Ltd. for Listing on the ChiNext (Revised Draft)” deliberated and approved by the
18th meeting of the ninth session of the Board of Directors of the Company, the Company intended to spin off its subsidiary
Shangfeng Industrial Company for listing on the ChiNext.
On May 24, 2022, relevant proposals on spin-off of the subsidiary Shangfeng Industrial Company for listing on the ChiNext of
the Shenzhen Stock Exchange were deliberated and approved by the Company’s shareholders’ meeting of 2021.
On June 30, 2022, the Shenzhen Stock Exchange accepted the application documents for the initial public offering of shares and
listing on the ChiNext submitted by Shangfeng Industrial Company.
On July 25, 2022, the Shenzhen Stock Exchange issued the “Letter on Review and Inquiry of the Application Documents of
Zhejiang Shangfeng Special Blower Industrial Co., Ltd. for IPO and Listing on the ChiNext” (Review Letter [2022] No. 010721). On
December 7, 2022, Shangfeng Industrial Company completed the reply to the Shenzhen Stock Exchange’s letter on review and
inquiry.
On December 15, 2022, the Shenzhen Stock Exchange issued the “Letter on the Second Round of Review and Inquiry of the
Application Documents of Zhejiang Shangfeng Special Blower Industrial Co., Ltd. for IPO and Listing on the ChiNext” (Review
Letter [2022] No. 011129). On March 17, 2023, Shangfeng Industrial Company completed the reply to the Shenzhen Stock
Exchange’s letter on the second round of review and inquiry.
At present, the spin-off and listing of shares of Shangfeng Industrial Company is conducted in a steady and orderly manner.
223
XV. Notes to items of parent company financial statements
(I) Notes to items of parent company balance sheet
1. Other receivables
(1) Details
1) Details on categories
Closing balance
Categories Book balance Provision for bad debts
Provision Carrying amount
Amount % to total Amount
proportion (%)
Receivables with provision
made on an individual basis
Receivables with provision
4,494,472,176.36 100.00 1,664,734.56 0.04 4,492,807,441.80
made on a collective basis
Total 4,494,472,176.36 100.00 1,664,734.56 0.04 4,492,807,441.80
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Provision Carrying amount
Amount % to total Amount
proportion (%)
Receivables with provision
made on an individual basis
Receivables with provision
3,886,958,823.73 100.00 2,953,729.89 0.08 3,884,005,093.84
made on a collective basis
Total 3,886,958,823.73 100.00 2,953,729.89 0.08 3,884,005,093.84
2) Other receivables with provision made on a collective basis
Closing balance
Portfolios
Book balance Provision for bad debts Provision proportion (%)
Portfolio grouped with performance
113,460,620.00
compensation
Portfolio grouped with balances due from
4,347,572,017.16
related parties within the consolidation scope
Portfolio grouped with ages 33,439,539.20 1,664,734.56 4.98
Including: 1-180 days 27,553,285.28
180 days-1 year
1-2 years 829,381.49 82,938.15 10.00
2-3 years 4,763,199.03 1,428,959.71 30.00
3-4 years 205,228.40 102,614.20 50.00
4-5 years 68,445.00 34,222.50 50.00
Over 5 years 20,000.00 16,000.00 80.00
Total 4,494,472,176.36 1,664,734.56 0.04
(2) Changes in provision for bad debts
Stage 1 Stage 2 Stage 3
Items 12 month Total
Lifetime expected credit Lifetime expected credit
expected credit
losses (credit not impaired) losses (credit impaired)
losses
Opening balance 2,352,013.49 489,925.38 111,791.02 2,953,729.89
224
Stage 1 Stage 2 Stage 3
Items 12 month Total
Lifetime expected credit Lifetime expected credit
expected credit
losses (credit not impaired) losses (credit impaired)
losses
Opening balance in the current
period
--Transferred to stage 2 -16,587.63 16,587.63
--Transferred to stage 3 -476,319.90 476,319.90
--Reversed to stage 2
--Reversed to stage 1
Provision made in the current
-2,335,425.86 52,745.04 993,685.49 -1,288,995.33
period
Provision recovered in the current
period
Provision reversed in the current
period
Provision written off in the current
period
Other changes
Closing balance 82,938.15 1,581,796.41 1,664,734.56
(3) Other receivables categorized by nature
Nature of receivables Closing book balance Opening book balance
Security deposits 293,673.40 293,673.40
Temporary advance payment receivable 4,380,717,882.96 3,723,204,530.33
Performance compensation 113,460,620.00 163,460,620.00
Total 4,494,472,176.36 3,886,958,823.73
(4) Details of the top 5 debtors with largest balances
Proportion to the
total balance of Provision for bad
Debtors Nature of receivables Book balance Ages
other receivables debts
(%)
Ningbo Infore Finance Temporary advance
873,908,037.63 1-180 days 19.44
Lease Co., Ltd. payment receivable
Guangdong Infore
Temporary advance
Environmental Investment 676,294,343.85 1-180 days 15.05
payment receivable
Co., Ltd.
Infore Technology Temporary advance
596,479,588.99 1-180 days 13.27
Company payment receivable
Temporary advance
Xiantao Company 265,946,649.13 1-180 days 5.92
payment receivable
Foshan Infore
Temporary advance
Environmental Water 174,709,169.42 1-180 days 3.89
payment receivable
Treatment Co., Ltd.
Subtotal 2,587,337,789.02 57.57
2. Long-term equity investments
(1) Details
Closing balance Opening balance
Items Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
Investments in
16,730,929,074.70 16,730,929,074.70 16,727,278,440.02 16,727,278,440.02
subsidiaries
Investments in 345,687,796.45 345,687,796.45 228,769,450.70 228,769,450.70
225
Closing balance Opening balance
Items Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
associates and
joint ventures
Total 17,076,616,871.15 17,076,616,871.15 16,956,047,890.72 16,956,047,890.72
(2) Investments in subsidiaries
Provision for
Closing balance of
impairment
Investees Opening balance Increase Decrease Closing balance provision for
made in the
impairment
current period
Infore Water
Environment Investment 113,055,998.06 113,055,998.06
Co., Ltd.
Foshan Infore
Environmental Water 250,020,000.00 44,088.09 250,064,088.09
Treatment Co., Ltd.
Infore Technology
132,925,243.41 1,427,658.22 134,352,901.63
Company
Infore Zoomlion City
Environmental Service 15,300,000.00 15,300,000.00
Co., Ltd.
Guangdong Infore
Environmental 100,000,000.00 100,000,000.00
Investment Co., Ltd.
Changsha Zhongbiao
Environmental Industry 5,270,000.00 5,270,000.00
Co., Ltd.
Ningbo Infore Finance
356,322,974.66 356,322,974.66
Lease Co., Ltd.
Huaqingyuan Company 899,210.16 88,581.41 987,791.57
Changsha Zoomlion
Environmental Industry 15,258,688,696.79 1,488,734.89 15,260,177,431.68
Co., Ltd.
Shangfeng Industrial
200,111,023.93 87,777.12 200,198,801.05
Company
Green Oriental
190,930,453.01 262,464.49 191,192,917.50
Company
Xiantao Yinghe
Environmental 103,754,840.00 103,754,840.00
Protection Co., Ltd.
Lianjiang Company 51,330.46 51,330.46
Guangdong Infore
Intelligent Cleaning 200,000.00 200,000.00
Technology Co., Ltd.
Subtotal 16,727,278,440.02 3,650,634.68 16,730,929,074.70
(3) Investments in associates and joint ventures
Increase/Decrease
Investees Opening balance Investment income
Investments Investments Adjustment in other
recognized under
increased decreased comprehensive income
equity method
Associates
Shenzhen Yingmei City
30,000.00 -1,834.71
Housekeeper Co., Ltd.
Guangdong Tianshu New
Energy Technology Co., 2,799,486.97 -2,799,486.97
Ltd.
Tengine Innovation
30,205,115.36 -573,592.29
(Beijing) Monitoring
226
Increase/Decrease
Investees Opening balance Investment income
Investments Investments Adjustment in other
recognized under
increased decreased comprehensive income
equity method
Instrument Co., Ltd.
Guangdong Shunkong
Environmental 195,734,848.37 28,071,555.61
Investment Co., Ltd.
China Urban Institute
(Beijing) Environmental 96,346,250.00 1,040,896.19
Technology Co., Ltd.
Total 228,769,450.70 96,346,250.00 25,737,537.83
(Continued)
Increase/Decrease
Closing balance of
Investees Cash dividend/ Closing balance provision for
Changes in Provision for
Profit declared for Others impairment
other equity impairment
distribution
Associates
Shenzhen Yingmei City
28,165.29
Housekeeper Co., Ltd.
Guangdong Tianshu
New Energy
Technology Co., Ltd.
Tengine Innovation
(Beijing) Monitoring 29,631,523.07
Instrument Co., Ltd.
Guangdong Shunkong
Environmental 5,165,442.08 218,640,961.90
Investment Co., Ltd.
China Urban Institute
(Beijing) Environmental 97,387,146.19
Technology Co., Ltd.
Total 5,165,442.08 345,687,796.45
(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
Revenue from main
818,861.05 818,861.05 487,932.74 487,932.74
operations
Total 818,861.05 818,861.05 487,932.74 487,932.74
2. Investment income
Items Current period cumulative Preceding period comparative
Investment income from long-term equity
25,737,537.83 24,398,494.78
investments under equity method
Investment income from long-term equity
216,137,869.15 427,103,189.89
investments under cost method
Investment income from disposal of long-term
73,073,695.75
equity investments
Investment income from financial products 193,472.38 2,931,309.05
Performance compensation -50,000,000.00 163,460,620.00
Others 414,960.00 6,568,573.41
227
Items Current period cumulative Preceding period comparative
Total 192,483,839.36 697,535,882.88
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 non-current assets, including
-2,289,681.16
write-off of provision for impairment
Tax refund, credit or exemption approved beyond the
power of authorities, without formal documents, or 1,004,379.44
with occasionality
Government grants included in profit or loss
(excluding those closely related to operating activities
of the Company, satisfying government policies and 80,268,041.82
regulations, and continuously enjoyed with certain
quantity/quota based on certain standards)
Fund possession charge from non-financial entities
1,280,730.46
and included in profit or loss
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 Investment income from financial products
19,091,108.25
investment or management amounted to 19,091,108.25 yuan.
Assets impairment loss incurred due to force majeure
such as natural disasters
Gains on debt restructuring -5,380,200.00
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 or losses on changes in fair value of held-for-
trading financial assets and held-for-trading financial
liabilities, and investment income from disposal of held-
for-trading financial assets, held-for-trading financial
liabilities and available-for-sale financial assets,
excluding those arising from hedging business related to
operating activities
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
Net other non-operating revenue or expenditures 2,164,235.04
228
Items Amount Remarks
It includes gains from refund of handling fees for
withholding individual income tax of 429,102.26
yuan; gains from extra deduction of input VAT of
17,460,524.12 yuan; gains from fair value
Other profit or loss satisfying the definition of non-
19,785,940.63 remeasurement at the time of obtaining control of
recurring profit or loss
Lianjiang Company of 51,896,314.25 yuan; and
reversal of losses arising from performance
compensation of the original shareholders of
Green Oriental Company of 50,000,000.00 yuan.
Subtotal 115,924,554.48
Less: Enterprise income tax affected 22,153,064.81
Non-controlling interest affected (after tax) -269,278.28
Net non-recurring profit or loss attributable to
94,040,767.95
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
Government grants that closely related to operating
VAT refund 18,822,951.14 activities of the Company, satisfying government
policies and regulations, and continuously enjoyed
with certain quantity/quota based on certain
Subsidy for sludge treatment 2,584,059.14 standards.
(II) ROE and EPS
1. Details
EPS (yuan/share)
Profit of the reporting period Weighted average ROE (%)
Basic EPS Diluted EPS
Net profit attributable to shareholders of
2.41 0.13 0.13
ordinary shares
Net profit attributable to shareholders of
ordinary shares after deducting non-recurring 1.87 0.10 0.10
profit or loss
2. Calculation process of weighted average ROE
Items Symbols Current period cumulative
Net profit attributable to shareholders of ordinary shares A 418,794,179.13
Non-recurring profit or loss B 94,040,767.95
Net profit attributable to shareholders of ordinary shares after deducting
C=A-B 324,753,411.18
non-recurring profit or loss
Opening balance of net assets attributable to shareholders of ordinary
D 16,927,565,990.33
shares
Net assets attributable to shareholders of ordinary shares increased due to
E1 3,761,991.00
offering of new shares or conversion of debts into shares
Number of months counting from the next month when the net assets
F1 11
were increased to the end of the reporting period
Net assets attributable to shareholders of ordinary shares increased due to
E2 8,808.00
offering of new shares or conversion of debts into shares
Number of months counting from the next month when the net assets
F2 6
were increased to the end of the reporting period
Net assets attributable to shareholders of ordinary shares decreased due
G 312,052,376.40
to share repurchase or cash dividends appropriation
Number of months counting from the next month when the net assets
H 5
were decreased to the end of the reporting period
229
Items Symbols Current period cumulative
Net assets attributable to shareholders of ordinary shares
increased due to amortization of share-based payments I1 3,868,552.56
in the current period
Number of months counting from the next month when
the net assets were increased to the end of the reporting J1 6
period
Net assets increased due to the debt-to-equity swap I2 53,744.09
Number of months counting from the next month when
the net assets were increased or decreased to the end of J2 6
the reporting period
Net assets increased due to purchases of the Company’s
repurchased shares under employee stock ownership I3 228,995,320.75
plan
Number of months counting from the next month when
the net assets were increased or decreased to the end of J3 4
Others the reporting period
Net assets increased due to the vesting of the phase III
I4 19,637,568.02
stock options
Number of months counting from the next month when
the net assets were increased or decreased to the end of J4 11
the reporting period
Net assets increased due to acquisition of non-
I5 -1,681,759.39
controlling interest
Number of months counting from the next month when
the net assets were increased or decreased to the end of J5 8
the reporting period
Other equity instrument investments - Shenzhen Infore
I6 -350,000.00
Environmental Protection Industry M&A Fund
Number of months counting from the next month when
the net assets were increased or decreased to the end of J6 6
the reporting period
Number of months in the reporting period K 12
L=D+A/2+E×F/K-
Weighted average net assets 17,365,435,652.15
G×H/K±I×J/K
Weighted average ROE M=A/L 2.41%
Weighted average ROE after deducting non-recurring profit or loss N=C/L 1.87%
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 418,794,179.13
Non-recurring profit or loss B 94,040,767.95
Net profit attributable to shareholders of ordinary shares after deducting
C=A-B 324,753,411.18
non-recurring profit or loss
Opening balance of total shares D 3,175,734,760.00
Number of shares increased due to conversion of reserve to share capital
E
or share dividend appropriation
Number of shares increased due to offering of new shares or conversion
F 8,808.00
of debts into shares
Number of months counting from the next month when the shares were
G 6
increased to the end of the reporting period
Number of shares increased due to the vesting of stock options H 3,761,991.00
Number of months counting from the next month when the shares were
I 11
increased to the end of the reporting period
Number of months in the reporting period K 12
230
Items Symbols Current period cumulative
Weighted average of outstanding ordinary shares L=D+E+F×G/K+H×I/K 3,179,187,656
Basic EPS M=A/L 0.13
Basic EPS after deducting non-recurring profit or loss N=C/L 0.10
(2) Calculation process of diluted EPS
The calculation process of diluted EPS is the same as that of basic EPS.
Infore Environment Technology Group Co., Ltd.
April 24, 2023
231
