Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Infore Environment Technology Group Co.,
Ltd.
2023 Annual Report
April 2024
1
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
2023 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 officers 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 on 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 2023 final dividend plan, a cash dividend of RMB 1.25
(tax inclusive) per 10 shares will be distributed to the shareholders, with no
capitalization of the capital reserve to share capital.
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Contents
Part I Important Notice, Table of Contents and Definitions..................................................................................2
Part II Company Profile and Principal Financial Indicators................................................................................ 6
Part III Management Discussion and Analysis......................................................................................................12
Part IV Corporate Governance...............................................................................................................................42
Part V Environmental and Social Responsibility.................................................................................................. 64
Part VI Significant Events....................................................................................................................................... 73
Part VII Share Changes and Shareholder Information....................................................................................... 85
Part VIII Information on Preference Shares......................................................................................................... 93
Part IX Information on Bonds................................................................................................................................ 94
Part X Financial Report...........................................................................................................................................97
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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 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.
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Definitions
Term means Definition
Company, the Company, Infore Enviro means Infore Environment Technology Group Co., Ltd.
Changsha Zoomlion Environmental Industry Co.,
Zoomlion Environmental means
Ltd.
Infore Technology means Guangdong Infore Technology Co., Ltd.
Shenzhen Green Oriental Environmental
Green Oriental Company means
Protection Co., Ltd.
CSRC means China Securities Regulatory Commission
SZSE means Shenzhen Stock Exchange
General Meetings of Shareholders of Infore
General Meetings of Shareholders means
Environment Technology Group Co., Ltd.
Board of Directors of Infore Environment
Board of Directors, the Board means
Technology Group Co., Ltd.
Board of Supervisors of Infore Environment
Board of Supervisors means
Technology 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
Articles of Association means
Technology Group Co., Ltd.
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Part II Company Profile and Principal Financial Indicators
I. Company Information
Stock abbreviation Infore Enviro Stock code 000967
Shares 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
English name (if any) Infore Environment Technology Group Co., Ltd.
Legal representative Ma Gang
1818 Renmin West Road, Dongguan Street, Shangyu District, Shaoxing City, Zhejiang Province,
Registered address
China
Postal code 312300
On February 29, 2016, the Company changed its registered address to 1818 Renmin West Road,
Historical updates to
Dongguan Street, Shangyu District, Shaoxing City, Zhejiang Province, China, from Shangpu
registered address
Town, Shangyu City, Zhejiang Province.
23/F, Infore Center, 7-8 Yixing Road, Xincheng Area, Beijiao Town, Shunde District, Foshan
Office address
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, 7-8 Yixing Road,
23/F, Infore Center, 7-8 Yixing Road, Xincheng
Xincheng Area, Beijiao Town, Shunde
Address Area, Beijiao Town, Shunde District, Foshan City,
District, Foshan City, Guangdong
Guangdong Province
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, Securities Times, Securities Daily, Shanghai Securities
report is published Journal, and Cninfo (http://www.cninfo.com.cn/)
Securities Department, 23/F, Infore Center, 7-8 Yixing Road, Xincheng Area, Beijiao
Place where the report is lodged
Town, Shunde District, Foshan City
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
IV. Changes to Registered Information
Unified Social Credit Code 913300006096799222
Since it went public in 2000, the Company has changed its business scope 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: R&D, maintenance, and operation services of environmental monitoring
instruments, development, consulting, and services of environmental management
technologies, operation services of environmental management facilities; design and
construction of environmental engineering, environmental engineering, municipal
engineering, and water conservancy and other water-related projects, technological
development and services for water pollution control, water treatment, and ecological
restoration; R&D, sales, and technical consulting services of communication
products, network products, mechatronic products, automatic control products,
intelligent building and community products, as well as software products; design,
development, investment, operation management, and technical consulting services
of relevant supporting facilities for the disposal and recycle of municipal waste and
Changes to the Company's principal solid waste; sales of ventilators and air-cooled, water-cooled, and air conditioning
activities since its listing (if any) equipment; operation of import and export businesses; industrial investment,
investment management, asset management, and investment consultation; On May
18, 2016, "investment, the operation of import and export business, 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: R&D, manufacturing, sales, technical consultation, maintenance and
operation services of sanitation equipment, special operation robots, new energy
vehicles (NEV), environmental monitoring equipment, special equipment for
environmental protection, car charging equipment and parts; equipment leasing;
design, operations management, technological development and technical services of
supporting facilities relating to disposal and recycling of municipal garbage and solid
waste; design, construction, operations management, technological development,
technical services of environmental engineering, municipal engineering, garden
engineering, electric power engineering, water conservancy engineering, water
pollution treatment engineering, air pollution treatment engineering, and soil
remediation engineering; operational cleaning, collection, transportation and
treatment services of urban household garbage (operating with license);
development, technical consultation and technical services of environmental
protection, IoT and Internet technologies; software development and sales; sales of
ventilators, air cooling, water cooling and air conditioning equipment; import and
export business and investment consultation.
1. In 2000, the Company went public, and its largest shareholder was Zhejiang
Fan & Air-cooled 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,
Changes to the Company's controlling Guangdong Infore Group Co., Ltd. changed its name to "Guangdong Infore Holding
shareholders since its incorporation (if Investment Group Co., Ltd." 4. On September 30, 2010, Guangdong Infore Holding
any) Investment Group Co., Ltd. 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.
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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,
Office address of accounting firm
Hangzhou 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
Supervisory
Sponsor Sponsor's office address Representative
period
Huaxing Securities Huaxing Securities, 2301, Raffles City The Bund East Tower, Li Zeming, Zheng
2023
Co., Ltd. No. 1089 Dongdaming Road, Hongkou District, Shanghai Zaoshun
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
2023 2022 YoY change 2021
Operating revenue
12,631,050,967.34 12,255,992,938.42 3.06% 11,866,291,611.45
(RMB)
Net profit attributable
to the listed company's 498,383,730.00 418,794,179.13 19.00% 752,792,198.66
shareholders (RMB)
Net profit attributable
to the listed company's
shareholders after non- 444,753,430.22 324,753,411.18 36.95% 557,050,456.60
recurring gains and
losses (RMB)
Net cash flows from
operating activities 1,385,556,509.49 1,662,482,287.71 -16.66% 809,218,720.13
(RMB)
Basic earnings per
0.16 0.13 23.08% 0.24
share (RMB/share)
Diluted earnings per
0.16 0.13 23.08% 0.24
share (RMB/share)
Weighted average
2.88% 2.41% 0.47% 4.51%
return on equity
December 31, 2023 December 31, 2022 YoY change December 31, 2021
Total assets (RMB) 29,048,201,560.36 29,271,291,859.98 -0.76% 28,362,883,652.30
Net assets attributable
to the listed company's 17,437,509,156.73 17,288,602,018.09 0.86% 16,927,565,990.33
shareholders (RMB)
The lower of net profit before and after non-recurring gains and losses is negative for the most recent three fiscal years, and the latest
auditor's report shows there is uncertainty as to the Company's ability to continue as a going concern.
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
□Yes No
The lower of 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 Chinese 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 Chinese Accounting Standards and Overseas Accounting
Standards
□Applicable Not Applicable
No such differences during the reporting period.
VIII. Quarterly Key Financial Indicators
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 2,671,198,594.33 3,461,432,009.54 2,857,777,560.35 3,640,642,803.12
Net profit attributable
to the listed company's 156,375,931.23 216,592,838.32 230,043,358.95 -104,628,398.50
shareholders
Net profit attributable
to the listed company's
shareholders after non- 132,592,018.43 194,972,218.23 216,119,614.54 -98,930,420.98
recurring gains and
losses
Net cash flows from
-372,981,710.55 482,209,744.40 213,560,033.15 1,062,768,442.49
operating 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 Amount in 2023 2022 2021 Note
Gain or loss for the
disposal of non-current
assets (inclusive of -4,146,549.53 -2,289,681.16 6,337,251.97 -
provisions to write off
impaired assets)
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Government subsidies
recognized as gain or
loss during the
reporting period
(exclusive of
government subsidies
given in the Company's
ordinary course of 52,966,550.75 80,268,041.82 55,341,877.03 -
business based on the
established criteria and
having a continuous
impact on the
Company's gain or loss
as per the government
policies or regulations)
Gain or loss arising
from changes in fair
value of financial
assets and financial
liabilities held by non-
financial enterprises as
well as from the
- 0.00 -79,222,823.84 -
disposal of financial
assets and financial
liabilities (exclusive of
effective hedges that
arise in relation to the
Company's ordinary
business operations)
Capital collected from
non-financial
enterprises that was
52,623.28 1,280,730.46 3,173,551.55
recognized as gain or
loss during the
reporting period
Gain or loss on
Income from wealth
entrusting other parties
12,111,406.99 19,091,108.25 29,170,261.66 management products:
with investment or
RMB 12,111,406.99.
asset management
Reversal of provisions
for impaired
receivables that have 484,240.00 - - -
been individually
tested for impairment
Gain/loss on debt
-3,130,560.92 -5,380,200.00 - -
restructuring
Operating revenue and
expenses other than the 9,532,774.64 2,164,235.04 2,598,028.75 -
above items
Other gains and losses
that fall into the
definition of non- - 19,785,940.63 172,459,718.81 -
recurring gains and
losses
Tax rebates, reductions - 1,004,379.44 3,768,945.18 -
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
and exemptions
granted ultra vires or
without official
documents of approval
Less: Income tax 11,730,712.09 22,153,064.81 -8,007,245.43 -
Minority interest
2,509,473.34 -269,278.28 5,892,314.48 -
affected (after tax)
Total 53,630,299.78 94,040,767.95 195,741,742.06 --
Details on other gains and losses that fall into the definition of non-recurring gain/loss:
□Applicable Not Applicable
No such cases during the reporting period.
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
No such cases during the reporting period.
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Part III Management Discussion and Analysis
I. Industry Performance During Reporting Period
1. Industry overview
Infore Enviro is a leading investor and operator in the smart urban service industry, primarily engaging in two areas: urban
cleaning services and environmental protection equipment. Urban cleaning services refer to the comprehensive activities of collecting,
comprehensively treating and recycling domestic and industrial waste, and managing related social activities to minimize the
environmental impact of urban waste and ensure a clean and hygienic working and living environment for city dwellers. Specifically,
these services include cleaning, maintenance and watering of urban roads, squares, and other public spaces; collecting and
transporting domestic waste from residential areas and public spaces; construction, maintenance, and service of sanitation facilities
such as public toilets, waste bins, and garbage transfer stations; terminal harmless treatment of urban waste and special waste;
planning, construction, and maintenance of urban landscapes and green spaces.
2. Development trends
2023 marked the beginning of full implementation of the guiding principles of the 20th CPC National Congress, and was a
crucial year for implementing China's 14th Five-Year Plan. 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, decline in government's fiscal payment capacity, and downturn in
customers' budgets.
Increase in annual amount and total amount of urban services contracts in the past eight years:
Total sales of environmental protection equipment, and sales of pure-electric environmental protection equipment in the past
eight years:
Urban service is an essential item of government spending, as it is closely related to people's livelihoods. The sector's long-term
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
growth is not entirely connected with short-term economic volatility, and it is tied with long-term economic trends, policy directives,
environmental requirements, and people's living standards, without notable seasonal and regional features.
As the existing sanitation equipment gradually enters a replacement cycle and the supportive policies for new energy increase in
2024, the new energy sanitation market in China will reach an economic inflection point. With the introduction of franchise
management measures and supportive policies, the sanitation franchise market will fully expand. It is expected that the overall growth
trend of the sanitation industry will remain unchanged.
3. Development priorities
(1) Comprehensive adoption of new energy-powered and smart environmental protection equipment
As China advances ecological construction, achieving carbon peak and neutrality has been included in the national plan for
ecological endeavors. Against this backdrop, more and more cities are launching large-scale initiatives to transition their
environmental protection equipment toward new energy sources, particularly the increased adoption of low-noise and less-emissions
new energy-powered sanitation vehicles. The penetration rate of new energy solutions in the environmental protection equipment
sector reached 8.4% in 2023. As the market scales up and costs decrease, the life-cycle cost of new energy sanitation vehicles has
become significantly lower than that of oil-powered vehicles. This signifies that the comprehensive transition of environmental
protection equipment to new energy sources is entering a phase of rapid acceleration.
The traditional sanitation industry is characterized by its labor-intensive nature. With the aging population and the changing
career preferences of younger generations, labor demand is skyrocketing, and labor costs remain high. This has given rise to the
development of smart environmental protection equipment. Sanitation cleaning and maintenance is a low-growth area of application,
and the technology is relatively mature and has begun to show economic viability. Current autonomous sanitation vehicles can
replace certain human operations on closed and semi-closed roads. They can automatically perform scheduled cleaning tasks during
off-peak hours of traffic in parks and other areas. Managers can remotely monitor the status of the robots in real time. This
significantly reduces the workload of sanitation workers, and minimizes their exposure to harsh working environment while reducing
management costs and alleviating labor shortages. As a significant part of the optimization of urban management models, the future
of urban/rural services is increasingly steered towards one that is smart, and requires less or even no human labor, signifying a vast
development space and application prospects in this sector.
(2) Smart urban services
As urbanization accelerates, the gradual transition from traditional "sanitation integration" to a smarter, more precise, and more
efficient "urban steward" model has become a consensus in the new round of urban service reform. Traditional sanitation
management models can no longer meet the demand for modern urban development. The emergence of smart urban services offers a
solution for sustainable urban development. By leveraging Internet of Things (IoT) and mobile Internet, smart urban services enable
full-process and real-time monitoring of all environmental sanitation service personnel, vehicles, objects, and events, assist in
rationally designing sanitation management models, boosting operating quality, reducing operating costs, and making sanitation
management effective through statistical data and assessments. All smart urban services are deployed on the Smart Urban
Management Cloud and connected to the Smart City Network, and are provided to managers and workers in a cloud-based manner
anytime. As technology continues to advance and applications continue to expand, smart urban services will play a more important
role in the future, driving cities towards a greener, lower-carbon, and more sustainable future.
Drawing on its insights into the current state of the environmental protection industry, Infore Enviro began its foray into the field
of urban stewardship in 2021 with a forward-looking perspective. Incorporating sophisticated technologies in "intelligent equipment,
smart services, and Smart Sanitation Cloud Platform", Infore Enviro has created an "Infore Mode" encompassing "full series of
intelligent equipment + full-scenario smart urban services". The Company's 5G intelligent cleaning robots can work through human-
machine collaboration and auto driving, and have strong cleaning capabilities. They can complete high-precision automated cleaning
tasks, based on real-time positioning, autonomous navigation, obstacle avoidance and detour, and autonomous safe operation, on
complex outdoor roads and under dynamically changing scenarios. In collaboration with the new digital and intelligent management
model and the remote monitoring and management model of the Smart Sanitation Cloud Platform, they are capable of 24/7, all-round,
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
seamless, precise, and efficient operation, maintenance, supervision, and management of service personnel, vehicles, objects, and
events. On top of these strengths, the Company provides customers with tailored smart solutions to urban services including "smart
supervision, smart operation, smart service", as well as a new model featuring "management + service + operation" for the whole
process of urban public space, public resources, and public projects, which enables real transition from management to service, and
from governance to operation, to meet the needs for refined urban management.
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
In terms of urban service business, Infore Enviro has created an "Infore Mode" encompassing "full series of intelligent
equipment + full-scenario smart urban services" by incorporating sophisticated technologies in "intelligent equipment, smart services,
and Smart Sanitation Cloud Platform". The services range from road cleaning and maintenance, snow and ice removal, waste
collection and transportation, waste sorting, municipal infrastructure maintenance, urban landscaping, water area cleaning to marine
sanitation. The Company also offers customers one-stop services including planning, design, investment, construction, and operation
of environmental sanitation projects. In terms of business scope, the Company implements an "urban steward + sanitation
integration" dual strategy. Regarding business model, the Company pursues diversification through "government procurement",
"franchising", and "equity cooperation". As such, it has consistently maintained its industry-leading position in the long-cycle urban
service market.
In 2023, the Company ranked No.2 for increase in annual amount of urban service contracts, and ranked No.3 for total amount
of urban service contracts. The Company ranked No.1 in terms of sales of environmental protection equipment in 2023 for the 23rd
consecutive year in China.
2. Principal products
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 nationwide sales network, the Company forged a most comprehensive
suite of environmental protection equipment of over 400 models within the industry, providing customers with a wide range of
solutions including various 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 cleaning and maintenance equipment,
waste collection and transportation equipment, waste compression station equipment, kitchen food waste recycling equipment,
municipal and landscaping equipment, to emergency snow and ice removal equipment. An industry leader in intelligent equipment
R&D, the Company developed 5G intelligent cleaning robots, autonomous sanitation vehicles, small smart cleaning robots, smart
energy storage equipment for industrial and commercial use, etc.
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Smart Sanitation Cloud Platform is a big data smart urban service cloud platform developed in-house and a pioneering platform
in China's sanitation industry that encompasses the full industrial chain. The platform, with an investment of nearly RMB 200 million,
supported by over 25 smart urban service-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 80,000 products of customers across China, with over 40,000
daily active users. In the future, the Company will continue to apply digital technologies and create innovative intelligent equipment
and smart services. Moreover, through in-depth integration into smart city development, it will continuously boost the application of
smart corporate cloud platforms to become a leader and enabler in the digital transformation of the environmental sanitation sector by
dint of intelligence.
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 operational data and
automatic business 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
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Infore Enviro's R&D team of environmental protection equipment comprises experts from national research institutions, who
have a long track record in scientific research. Based on China's status of environmental governance, the Company has built the most
comprehensive environmental industry system in China, providing customers with complete sets of equipment and solutions for road
cleaning and maintenance, solid waste collection and transportation, municipal emergency rescue, landscaping and maintenance,
snow and ice removal, kitchen food waste treatment, environmental governance and water treatment. The Company's advanced
technologies in environmental protection equipment powered by new energy and hydrogen energy are at the forefront of the industry.
The Company owns 1,155 patents, including 599 utility patents, 447 utility model patents, and 109 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
Model Enterprise, and 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 intelligent cleaning robot innovators.
During the reporting period, the Company invested RMB 353 million in R&D for continuous improvement and innovation in
product tech, with 353 patent applications, including 95 utility patents, 197 utility model patents, and 61 design patents. It has made
remarkable R&D results and is leading the industry in this regard.
(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 dispatch, 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. The Company established a digital operation
and management system for smart services, which, through smart and safe operation that requires less human labor and
energy consumption, enables it to develop competitive advantages with smart services.
The platform is supported by over 20 urban service-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 80,000 products of customers.
(3) Leader in new energy
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. Over 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
(NEV) for cleaning, washing, waste collection and urban sanitation. The Company's nearly 200 vehicle models form the most
comprehensive suite of new energy-powered sanitation vehicles in China. 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
16
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
has reduced system costs by 9% while increasing system performance by 15%, leading the innovative development of new energy
sanitation. This helps customers lower purchasing and operating costs. The Company sold 1,974 pure-electric powered sanitation
vehicles in 2023, with a market share of 32.4%, ranking No.1 in the industry, according to the motor vehicle accident liability
insurance data released by the National Financial Regulatory Administration.
(4) Pioneer in intelligent cleaning robots
The Company has independently developed over 10 models of intelligent cleaning robots (both basic and 5G smart models are
available) and offers the most comprehensive suite of cutting-edge intelligent cleaning 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, 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 operations and smart navigation of intelligent cleaning robots 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 + Intelligent Cleaning 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 remarkable economic and social benefits for the community and economy.
The Company's 5G intelligent cleaning robot crew has been deployed in Shenzhen, Changsha and Suzhou. The crew has become
a new benchmark for smart urban services 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. Product sales are the main business operations, 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).
The Company's ventilation machinery manufacturing covers ventilators, mufflers, dampers, refrigerators, magnetic levitation fans,
blowers and nuclear-grade dampers for nuclear power, subways, tunnels, rail transportation, industrial and civil construction and
other areas. Its fans are mainly sold via a combination of direct sales and retailers.
III. Analysis of Core Competitiveness
1. Industry leader in sanitation equipment
The Company sold 1,974 pure-electric powered sanitation vehicles in 2023, with a market share of 32.4%, ranking No.1 in the
industry, according to the motor vehicle accident liability insurance data released by the National Financial Regulatory
Administration. As a leader in China's sanitation equipment sector, ranking No.1 in terms of sales of sanitation equipment for the
23rd consecutive year, the Company owns state-of-the-art technologies and offers the most comprehensive range of environmental
protection equipment. In terms of R&D, the Company has mastered industry-leading technologies in new energy-powered
environmental protection equipment, intelligent cleaning robots and autonomous environmental sanitation vehicles, and obtained the
17
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
first drive test license in environmental sanitation from the government. The Company developed the world's first intelligent cleaning
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 intelligent cleaning 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 demand across the country. 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 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 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 urban services.
From 2016 to 2023, the Company recorded a contract amount 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, RMB 9.251 billion, and RMB 7.652 billion respectively and an annual
service contract amount 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, and RMB 1.553 billion, respectively for urban services. The Company's operating revenue from
urban services increased by 35.38% YoY to RMB 5.63 billion in 2023.
3. "Direct repair+" 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.
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
equipment and services with cleaning robots at its core. After years of efforts, the Company has deeply incorporated the core
elements of its corporate culture into operations. 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 programs as well as set up
team management frameworks for cornerstone partnerships, senior partnerships and general partnerships, gathering a group of
18
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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 2023 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 urban services based on its
established R&D advantages in environmental protection equipment.
In 2023, the Company generated RMB 498,383,700 in net profit attributable to the listed company's shareholders and RMB
12,631,051,000 in operating revenue. As at the end of the reporting period, the Company reported RMB 29,048,201,600 in total
assets and RMB 17,437,509,200 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 No.2 for increase in annual amount of urban service contracts in 2023
According to Huanjing Sinan, Infore Enviro signed 82 urban service projects across 18 Chinese provinces in 2023. These new
contracts have an annual amount of RMB 1.553 billion, ranking No.2 in the industry, and a total amount of RMB 7.652 billion,
ranking No.3 in the industry. The Company's operating revenue from urban services increased by 35.38% YoY to RMB 5.63 billion.
As at the end of the reporting period, Infore Enviro was running 263 urban service projects. These contracts have an annual amount
of RMB 6.567 billion and a total amount of RMB 60.018 billion. The Company's executory contracts total RMB 43.809 billion. The
Company performed well in terms of sustainable operation.
2. Ranked No.1 in terms of sales of sanitation equipment in 2023
The Company sold 12,319 pieces of environmental protection equipment in 2023, according to the motor vehicle accident
liability insurance data released by the National Financial Regulatory Administration. The sales of environmental protection
equipment amounted to RMB 5.085 billion, ranking No.1 in the industry in China for the 23rd consecutive year.
3. Ranked No.1 in terms of sales of new energy-powered environmental protection equipment in 2023
The Company sold 1,974 pure-electric powered sanitation vehicles in 2023, with a market share of 32.4%, ranking No.1 in the
industry, according to the motor vehicle accident liability insurance data released by the National Financial Regulatory
Administration.
4. Improvement in quality and efficiency, and high-quality development
With the key goal of "achieving high-quality development", centering on all steps of production and operation, the Company
explored multiple methods for improving its asset operation capabilities to reduce existing assets and control incremental assets. It
dismissed high-risk orders, strengthened the classification and accountability mechanisms for contract risks, enhanced recovery of
corporate sales revenue, and accelerated operational turnover efficiency. In 2023, the Company recorded RMB 1,385,556,500 in net
cash flows from operating activities, and YoY increase of 1.79% and 1.23% in gross profit margin from the two core business
segments: intelligent equipment and smart services, leading to the improvement in operational quality ultimately, improvement in
quality and efficiency, and effectively driving high-quality sustainable development.
5. Digital transformation and the setup of a highly efficient operating system
Infore Enviro continued to digitalize value chains as digitalization has been one of its core transformation strategies. The Company
fully digitalized all applications and processes across value chains using one system and platform under Infore Enviro. By expanding
online coverage and enhancing standardization and information technology, it advanced the comprehensive digitalization and
visualization for decision-making support across all segments, supported operations management with data, accelerated the
19
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
monetization of data assets, improved its refined process management, enhanced control capabilities, reduced costs and risks, and
empowered operations. It eventually managed to cut costs and increase efficiencies.
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 2023 profit distribution plan (proposed) approved at the six
meeting of the Tenth Board of Directors, a cash dividend of RMB 1.25 (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 396 million (tax inclusive) is expected to be distributed, accounting for 79.43% of the net profit
attributable to the listed company's shareholders in 2023. As the proposed plan is awaiting the approval of the General Meeting of
Shareholders, the actual dividend amount will be disclosed by the Company in the relevant announcements.
In the past three years (2021–2023), the Company has paid RMB 1.056 billion in cash dividends, accounting for 41.45%,
83.18% and 79.43% 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 2023, while seeking business growth, the Company fulfilled its social responsibility as it got involved in poverty alleviation
and disaster relief efforts. In terms of poverty alleviation, the Company took an active part in various initiatives, including making
donations, such as the Shangyu Fourth Round Poverty Alleviation and Assistance Charity Fund, the "Warmth of the Ancient City"
Relief and Assistance Foundation, and other charity funds or foundations, including those supporting individuals with disabilities.
These monetary contributions are used for a wide range of purposes, including poverty alleviation, education, medical and elder care,
disaster relief, innovative poverty reduction efforts, and public welfare projects. The Company also readily responds to emergency
situations. In response to floods caused by typhoons and continued heavy rainfall, particularly in Beijing and Hebei, the Company
swiftly put in place an emergency rescue mechanism with local partners and customers and sent dedicated teams to ensure the proper
functioning of equipment through around-the-clock personnel and vehicle services. Its service engineers worked tirelessly to keep
sanitation vehicle functioning properly and deliver essential supplies promptly, becoming key contributors to the post-disaster
reconstruction efforts.
2. Revenue and cost
(1) Breakdown of operating revenue
Unit: RMB
2023 2022
As a percentage of As a percentage of YoY change
Amount Amount
operating revenue operating revenue
Total revenue 12,631,050,967.34 100% 12,255,992,938.42 100% 3.06%
Sector
Smart urban
10,715,122,532.51 84.83% 10,242,746,845.77 83.57% 4.61%
service
Others 1,915,928,434.83 15.17% 2,013,246,092.65 16.43% -4.83%
Product
Intelligent
5,085,372,879.14 40.26% 6,084,414,800.17 49.64% -16.42%
equipment
Smart service 5,629,749,653.37 44.57% 4,158,332,045.60 33.93% 35.38%
Others 1,915,928,434.83 15.17% 2,013,246,092.65 16.43% -4.83%
Region
Domestic 12,584,153,957.04 99.63% 12,237,181,369.71 99.85% 2.84%
Overseas 46,897,010.30 0.37% 18,811,568.71 0.15% 149.30%
Wholesale
20
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Direct sales 11,172,859,318.43 88.46% 10,735,356,968.50 87.59% 4.08%
Retail 1,458,191,648.91 11.54% 1,520,635,969.92 12.41% -4.11%
(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
urban 10,715,122,532.51 8,366,738,029.64 21.92% 4.61% 4.28% 0.25%
service
Others 1,915,928,434.83 1,378,744,058.28 28.04% -4.83% -4.67% -0.13%
Product
Intelligent
5,085,372,879.14 3,675,986,033.73 27.71% -16.42% -18.44% 1.79%
equipment
Smart
5,629,749,653.37 4,690,751,995.91 16.68% 35.38% 33.41% 1.23%
service
Others 1,915,928,434.83 1,378,744,058.28 28.04% -4.83% -4.67% -0.13%
Region
Domestic 12,584,153,957.04 9,712,142,988.74 22.82% 2.84% 2.73% 0.07%
Overseas 46,897,010.30 33,339,099.18 28.91% 149.30% 109.52% 13.50%
Wholesale
Direct
11,172,859,318.43 8,647,595,286.40 22.60% 4.08% 4.35% -0.21%
sales
Retail 1,458,191,648.91 1,097,886,801.52 24.71% -4.11% -7.16% 2.48%
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 2023 2022 YoY change
Sales Unit 14,903 17,674 -15.68%
Intelligent
Production Unit 15,216 16,221 -6.20%
equipment
Inventory Unit 1,947 1,634 19.16%
Explanation of data with YoY differences that exceed 30%
□Applicable Not Applicable
(4) Fulfillment of material sales/procurement contracts signed during the reporting period
□Applicable Not Applicable
(5) Breakdown of operating costs
Sector
21
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Unit: RMB
2023 2022
YoY
Sector Item As a percentage As a percentage
Amount Amount change
of operating cost of operating cost
Smart urban
Raw materials 3,578,986,019.54 42.78% 4,021,886,417.92 50.13% -11.01%
service
Smart urban
Labor expense 1,762,380,063.07 21.06% 1,056,998,188.36 13.17% 66.73%
service
Smart urban
Depreciation 504,195,683.78 6.03% 423,631,356.77 5.28% 19.02%
service
Smart urban
Utilities 403,490,139.16 4.82% 463,060,371.23 5.77% -12.86%
service
Other
Smart urban
manufacturing 2,117,686,124.09 25.31% 2,057,720,725.63 25.65% 2.91%
service
overhead
Others Raw materials 596,485,884.08 43.27% 729,321,140.14 50.43% -18.21%
Others Labor expense 125,343,062.94 9.09% 97,064,385.84 6.71% 29.13%
Others Depreciation 163,979,538.70 11.89% 140,507,354.03 9.72% 16.71%
Others Utilities 24,003,170.66 1.74% 26,661,871.00 1.84% -9.97%
Other
Others manufacturing 468,932,401.90 34.01% 452,659,020.35 31.30% 3.60%
overhead
Note
Labor costs in relation to smart urban services rose significantly over the previous year, primarily because revenue from smart
service increased during the current period, resulting in a corresponding increase in supporting facilities, labor costs, and labor
outsourcing costs.
(6) Changes in the scope of consolidated financial statements for the reporting period
Yes □No
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 Statements.
(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) 768,801,478.51
Total sales to top five customers as a percentage of annual total
6.09%
sales
Total sales to related parties among top five customers as a
0.00%
percentage of annual total sales
Top five customers
As a percentage of annual
No. Customer Sales revenue (RMB)
total sales
22
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
1 Customer A 184,221,542.53 1.46%
2 Customer B 159,156,813.97 1.26%
3 Customer C 151,343,512.56 1.20%
4 Customer D 139,862,294.97 1.11%
5 Customer E 134,217,314.48 1.06%
Total -- 768,801,478.51 6.09%
Other information about major customers
□Applicable Not Applicable
Major suppliers of the Company
Total purchases from top five suppliers (RMB) 1,548,979,382.34
Total purchases from top five suppliers as a percentage of
19.85%
annual total purchases
Total purchases from related parties among top five suppliers as
0.00%
a percentage of annual total purchases
Top five suppliers
Purchase during the reporting As a percentage of total
No. Supplier
period (RMB) purchases
1 Supplier A 625,907,194.69 8.02%
2 Supplier B 448,675,120.98 5.75%
3 Supplier C 245,457,742.48 3.15%
4 Supplier D 128,693,061.92 1.65%
5 Supplier E 100,246,262.27 1.28%
Total -- 1,548,979,382.34 19.85%
Other information about major suppliers
□Applicable Not Applicable
3. Expenses
Unit: RMB
2023 2022 YoY change Reason for material change
Selling expenses 794,334,952.02 762,970,847.95 4.11% --
Mainly due to increase in
revenue from smart service
Administrative during the current period,
726,159,237.45 609,601,680.23 19.12%
expenses resulting in a corresponding
increase in remuneration of
management members.
Mainly due to increase in
deposit interest income and
Financial Expenses 75,321,084.87 101,839,423.91 -26.04% decrease in loan interest
expenses during the current
period.
R&D expenses 344,030,239.33 340,775,707.34 0.96% --
4. R&D investments
Applicable □Not applicable
23
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Expected impact on
Name of major R&D
Objectives Progress Proposed goals future development of
projects
the Company
Intelligent Magnetic
Levitation Turbine This helps the
To industrialize the
Centrifugal To explore and expand Mass-produced and Company improve its
result and generate
Compressor Equipment the segment launched on the market key competitive
market orders
for Blower and advantages
Vacuum Systems
This helps the
To industrialize the
Nuclear-grade To explore and expand Mass-produced and Company improve its
result and generate
Centrifugal Roof Fan the segment launched on the market key competitive
market orders
advantages
To meet the energy This helps the
Three-phase To industrialize the
efficiency requirements Mass-produced and Company improve its
Centrifugal Blower for result and generate
of centrifugal blower launched on the market key competitive
Nuclear Islands market orders
for nuclear islands advantages
To expand the product
To develop a type of
Automatic Online range for the online This helps the
automatic online water
Water Quality Monitor monitoring of thallium Mass-produced and Company improve its
quality monitor for the
for the Content of Total in domestic sewage launched on the market key competitive
content of total
Thallium and industrial advantages
thallium
wastewater
To develop new To develop a type of
products suitable for pretreatment
pretreatment for equipment for surface
This helps the
surface water stations, water stations, i.e.,
Automatic Water Mass-produced and Company improve its
with functions such as sampler with functions
Sampler launched on the market key competitive
retention of non- such as retention of
advantages
compliant samples and non-compliant samples
synchronous sample and synchronous
retention sample retention
To expand the product This helps the
To develop a type of
range for the online Company improve its
Ozone Analyzer R&D completed highly accurate ozone
monitoring of ambient key competitive
analyzer
atmospheric ozone advantages
To expand the product To develop a type of This helps the
Pollution Source CO2 range for the online online automatic Company improve its
R&D completed
Analyzer monitoring of polluting monitor of CO2 key competitive
greenhouse gases emissions advantages
To expand the range of
Continuous Monitoring scientific instruments, To develop a set of This helps the
System for Volatile enabling online online monitoring Company improve its
R&D completed
Organic Compounds in monitoring of 116 system of 116 types of key competitive
Ambient Air types of VOCs in VOCs advantages
ambient air
To successfully This helps the
Autonomous To develop a type of
develop a type of Company improve its
Unmanned Sweeping unmanned sweeping R&D completed
unmanned sweeping key competitive
Robot robot
robot advantages
To conduct specialized
technology
Outdoor Unmanned To successfully This helps the
development for
Driving Operating develop the outdoor Company improve its
outdoor unmanned R&D completed
System R&D (Phase unmanned driving key competitive
driving technology to
II) technology (phase II) advantages
enhance technical
capabilities
24
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Research on Pneumatic
This helps the
Noise Control and To further reduce To reduce energy
Company improve its
Energy-Saving product energy R&D completed consumption and noise
key competitive
Pneumatic Conveying consumption and noise of existing products
advantages
Technology
1. To solve the problem
of low loading capacity
of the existing product;
2. To solve the To develop a wet waste
problems of material collection and
Third-generation This helps the
accumulation and compression truck with
Leakage-free Company improve its
scattering on the top of R&D completed features such as full
Compression Garbage key competitive
the garbage bin in the sealing, no leakage,
Truck advantages
existing product; and large loading
3. To solve the problem capacity
of odor leakage due to
the unsealed open end
of the existing product.
To address energy This helps the
18-ton Pure-Electric To improve the
consumption, noise, Company improve its
Dual-fan Road R&D completed performance of the
and other problems of key competitive
Cleaners existing product
the product advantages
To expand the product To develop a
range for landscape specialized vehicle
maintenance, such as with front-mounted
the trimming, boom arm and quick-
collection of green change system for This helps the
18-ton Front Collection belts on highways, ring transitions between Company improve its
R&D completed
Green Hedge Trimmer road expressways, and various landscaping key competitive
urban roads, the tools to manage advantages
pruning of high trimming tasks in a
branches of bush on variety of settings,
roadside, and slope including green belts,
mowing roadsides, and slopes
Information about R&D personnel
2023 2022 Change
Number of R&D personnel 1,212 1,415 -14.35%
R&D personnel as a
5.99% 8.23% -2.24%
percentage of total staff
Education background of R&D personnel
Bachelor's degree 802 995 -19.40%
Master's degree 358 374 -4.28%
Doctoral degree 11 12 -8.33%
College degree 41 34 20.59%
Age composition of R&D personnel
< 30 years 471 662 -28.85%
30~40 years 560 641 -12.64%
> 40 years 181 112 61.61%
Information about R&D investments
2023 2022 Change
R&D investments (RMB) 352,849,905.78 364,237,563.22 -3.13%
R&D investments as a 2.79% 2.97% -0.18%
25
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
percentage of operating
revenue
Capitalized R&D investments
8,819,666.45 23,461,855.88 -62.41%
(RMB)
Capitalized R&D investments
as a percentage of total R&D 2.50% 6.44% -3.94%
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
The capitalization rate of R&D investment decreased by 3.94% YoY, mainly due to the decrease in the investment in R&D projects
under development during the reporting period.
5. Cash flow
Unit: RMB
Item 2023 2022 YoY change
Subtotal of cash inflows from
14,265,101,402.26 14,255,237,258.75 0.07%
operating activities
Subtotal of cash outflows
12,879,544,892.77 12,592,754,971.04 2.28%
from operating activities
Net cash flows from operating
1,385,556,509.49 1,662,482,287.71 -16.66%
activities
Subtotal of cash inflows from
1,691,155,211.72 5,558,632,508.54 -69.58%
investing activities
Subtotal of cash outflows
2,766,885,333.81 6,696,412,810.26 -58.68%
from investing activities
Net cash flows from investing
-1,075,730,122.09 -1,137,780,301.72 5.45%
activities
Subtotal of cash inflows from
1,486,267,737.80 2,381,374,197.63 -37.59%
financing activities
Subtotal of cash outflows
2,462,201,245.03 2,447,214,731.68 0.61%
from financing activities
Net cash flows from financing
-975,933,507.23 -65,840,534.05 -1,382.27%
activities
Net increase in cash and cash
-664,519,991.45 461,918,360.27 -243.86%
equivalents
Explanation of main impact factor of material change of the data YoY
Applicable □Not applicable
The cash inflows from investing activities decreased by 69.58% YoY, and the cash outflows from investing activities declined by
58.68% YoY, mainly due to the YoY decrease in the purchase and redemption of wealth management products during the reporting
period.
26
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
The cash inflows from financing activities decreased by 37.59% YoY, and the net cash flows from financing activities dropped by
1,382.27% YoY, mainly due to optimization of the debt mix during the reporting period, resulting in more repayments of loans than
new borrowings.
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 4,960,692.79 is
the returns on long-term
equity investments
Investment income -51,597,205.92 -8.46% -- calculated using the
equity method, which is
recurrent; the other
portion is non-recurrent.
Gain or loss on
0.00% -- No
changes in fair value
Mainly due to provision
Impairment of assets -123,390,769.02 -20.23% of goodwill impairment No
loss
Non-operating revenue 19,846,705.60 3.25% -- No
Non-operating
13,031,066.19 2.14% -- No
expenses
VI. Assets and Liabilities
1. Material changes of asset items
Unit: RMB
December 31, 2023 January 1, 2023
Reason for
As a percentage As a percentage Change
Amount Amount material change
of total assets of total assets
Cash and cash 4,411,376,583. 4,728,203,530.
15.19% 16.15% -0.96% --
equivalents 78 46
Accounts 5,867,669,476. 5,625,792,472.
20.20% 19.22% 0.98% --
receivable 86 37
Contract assets 74,803,489.48 0.26% 101,023,854.33 0.35% -0.09% --
Inventories 971,229,637.15 3.34% 881,038,036.95 3.01% 0.33% --
Investment
1,138,868.60 0.00% 27,105,435.03 0.09% -0.09% --
properties
Long-term
equity 681,629,084.69 2.35% 676,829,959.84 2.31% 0.04% --
investment
27
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
2,338,316,124. 2,268,287,202.
Fixed assets 8.05% 7.75% 0.30% --
14 01
Construction in
288,057,018.89 0.99% 41,073,267.68 0.14% 0.85% --
progress
Right-of-use
25,125,671.95 0.09% 31,859,454.24 0.11% -0.02% --
assets
Short-term
126,939,855.26 0.44% 440,103,105.44 1.50% -1.06% --
borrowings
Contract
306,777,173.57 1.06% 274,289,978.25 0.94% 0.12% --
liabilities
Long-term 1,884,356,851. 1,922,306,226.
6.49% 6.57% -0.08% --
borrowings 73 32
Lease liabilities 16,170,790.76 0.06% 23,255,624.30 0.08% -0.02% --
Intangible 5,984,348,824. 6,048,114,364.
20.60% 20.66% -0.06% --
assets 39 49
Offshore assets account for high proportion
□Applicable Not Applicable
2. Assets and liabilities measured at fair value
Applicable □Not applicable
Unit: RMB
Gain/loss on Cumulative
Accrual of Purchase Sales
changes in changes in
Opening impairment amount amount Other Closing
Item 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
15,352,97 15,352,971.
in other entity
1.01 01
instruments
Subtotal of
15,352,97 15,352,971.
financial
1.01 01
assets
15,352,97 15,352,971.
Total
1.01 01
Financial
0.00 0.00
liabilities
Other changes
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
Unit: RMB
Items Closing balance Carrying amounts at Type of restriction Reason for restriction
28
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
the end of the period
Deposits, escrow
Cash and cash equivalents 495,231,329.24 495,231,329.24 Guarantee, freeze, etc. accounts, frozen due to
litigation preservation
Notes receivable - bank Endorsement or Endorsed or discounted
4,472,210.78 4,472,210.78
acceptance discount but undue
Notes receivable - trade Endorsement or Endorsed or discounted
407,749.04 349,861.59
acceptance discount but undue
Accounts receivable 357,237,223.82 338,232,491.18 Pledged Pledged
Receivable financing 55,280,364.20 55,280,364.20 Pledged Pledged
Long-term accounts
Factoring financing and Factoring financing and
receivable and non-current 66,695,425.00 61,841,516.63
pledge with recourse pledge with recourse
assets due within one year
Fixed assets 72,439,458.40 27,881,359.42 Mortgaged Mortgaged
Intangible assets 84,779,751.51 77,778,795.88 Mortgaged Mortgaged
100% equity interest in
Biyang Fenghe New Energy 105,047,950.25 105,047,950.25 Pledged
Power Co., Ltd.
100% equity interest in Funan
78,720,044.41 78,720,044.41 Pledged
Company
Mortgaged [Note]
100% equity interest in
Poyang Greenlander 76,768,690.77 76,768,690.77 Pledged
Renewable Energy Co., Ltd.
75% equity interest in
112,692,107.66 112,692,107.66 Pledged
Lianjiang Company
25% equity interest in Frozen for litigation
37,564,035.89 37,564,035.89 Freeze
Lianjiang Company preservation
Total 1,547,336,340.97 1,471,860,757.90
[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 period Investment amount for the prior period
Change
(RMB) (RMB)
7,056,438.75 106,000,002.00 -93.34%
2. Material equity investments made during the reporting period
□Applicable Not Applicable
3. Material non-equity investments ongoing during the reporting period
□Applicable Not Applicable
29
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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 from fundraising activities
Applicable □Not applicable
(1) Overall use of proceeds
Applicable □Not applicable
Unit: RMB 10,000
Total
amount
Total Accumul
of Share of
amount ative Total
Accumula proceeds accumula
Net of amount amount Purpose and Proceeds
Total tive with tive
Fundraising amount proceeds of of tracking of left idle
Year amount of amount of change of proceeds
type of used proceeds unused unused for over 2
proceeds proceeds use with
proceeds during with proceed proceeds years
used during change of
the change of s
the use
period use
reporting
period
RMB 1
billion will
temporarily
replenish
working
Public
capital, and
offering of
147,618.9 145,733. 107,743 the
2020 convertible 3,956.73 38,836.42 0 0 0.00% 0
6 62 .13 remaining
corporate
amount will
bonds
be used to
implement
recent
investment
projects.
147,618.9 145,733. 107,743
Total -- 3,956.73 38,836.42 0 0 0.00% -- 0
6 62 .13
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. (Z.J.X.K. [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%
30
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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 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, 2023, the accumulated use of fundraising proceeds was RMB 388,364,200, and the total amount of
fundraising proceeds not yet used was RMB 1,077,431,300.
(2) Projects with committed investment of proceeds
Applicable □Not applicable
Unit: RMB 10,000
Accumulat
Whether Investment Date when
Committed ive Whether
projects Investmen progress as the Benefits Whether
investment Adjusted investment there are
have been Total t amount at the end projects realized the
projects and total amount as material
changed amount of during the of the are ready during the estimated
investment investment at the end changes in
(including proceeds reporting reporting for their reporting return is
of excessive amount (1) of the the project
partial period period intended period realized
proceeds reporting feasibility
change) (3)=(2)/(1) use
period (2)
Committed investment projects
The project
of the
comprehens
129,638. December Not
ive smart No 129,638.49 3,956.73 22,741.29 17.54% 8,757.61 No
49 31, 2024 applicable
sanitation
allocation
center
Replenishm
No benefit
ent of 16,095.1 Not Not
No 16,095.13 0 16,095.13 100.00% generated No
working 3 applicable applicable
separately
capital
Subtotal of
committed 145,733.
-- 145,733.62 3,956.73 38,836.42 -- -- 8,757.61 -- --
investment 62
projects
Investment of excessive proceeds
Not
applicable
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 -- -- -- --
of excessive
proceeds
31
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
145,733.
Total -- 145,733.62 3,956.73 38,836.42 -- -- 8,757.61 -- --
62
On April 26, 2024, 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 sixth meeting of the Tenth Board of Directors
and the sixth meeting of the Tenth Board of Supervisors. The Company agreed to
adjust the investment progress by changing the date for the intended use of the
Project-by-project details and reasons for
above projects to December 31, 2026. The adjustment was made because the
failure to realize planned progress and
investment progress of the project of the comprehensive smart sanitation
expected return (including the reasons for
allocation center was mainly based on the current business size of the Company's
choosing "N/A" for "Whether the expected
sanitation service projects. The project's investment progress fell short of
return is realized")
expectations due to the impact of the overall decline in demand for sanitation
equipment and the designation of or restrictions on sanitation equipment
suppliers for some projects on the number of orders. 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
Not applicable
project feasibility
Amount, purpose, and progress of excessive
Not applicable
proceeds
Location changes in the implementation of
Not applicable
investment projects of the proceeds
Adjustments to the implementation method of
Not applicable
investment projects of the proceeds
Early investment and placement of the
Not applicable
investment projects of the proceeds
Applicable
The Proposal on Using Part of the Idle Fundraising 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
fundraising 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 Fundraising Proceeds
for Temporary Replenishment of Working Capital on October 25, 2023, in which
Temporary replenishment of working capital the Company returned all the RMB 1 billion of proceeds for temporary
with idle proceeds replenishment of working capital to the relevant designated account for proceeds
on October 24, 2023 for a period not exceeding 12 months.
The Proposal on Using Part of the Idle Fundraising Proceeds to Replenish
Working Capital was deliberated and approved at the Fourth Meeting of the
Tenth Board of Directors and the Fourth Meeting of the Tenth Board of
Supervisors held on October 28, 2023, allowing the Company to use idle
fundraising 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 its principal 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. As at December 31, 2023, the balance of the idle fundraising
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
Not applicable
the proceeds from the project implementation
Purpose and tracking of the unused proceeds The Proposal on Using Part of the Idle Fundraising Proceeds to Replenish
32
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Working Capital was deliberated and approved at the Fourth Meeting of the
Tenth Board of Directors and the Fourth Meeting of the Tenth Board of
Supervisors held on October 28, 2023, allowing the Company to use idle
fundraising 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 its principal 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. As at December 31, 2023, the balance of the idle fundraising
proceeds used by the Company for temporary replenishment of working capital
was RMB 1,000,000,000. The other unused proceeds of RMB 77,431,300 were
kept in the designated proceeds account in the form of demand deposits to be
used for the construction of the corresponding investment projects.
Problems in the use of proceeds and
Not applicable
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 Principal Registered Operating Operating
Company name Total assets Net assets Net profit
company activities capital revenue profit
Changsha
Zoomlion
Smart urban 2,351,529,8 17,721,351,6 8,074,408,45 10,689,866,5 815,342,983. 712,220,602.
Environmental Subsidiary
service 00 11.36 5.97 67.16 52 56
Industry Co.,
Ltd.
Acquisition and disposal of subsidiaries during the reporting period
Applicable □Not applicable
Acquisition and disposal
Company name of subsidiaries during the Effects on the overall operations and performance
reporting period
Hubei Yingling Testing Technology Service Business combination not
Positive effects on the Company's business
Co., Ltd. under common control
33
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Liaocheng Chiping Yingsheng Environmental
Incorporation Positive effects on the Company's business
Sanitation Service Co., Ltd.
Jiangmen Lvying Urban Environmental Service
Incorporation Positive effects on the Company's business
Co., Ltd.
Fuzhou Changle Yingsheng Urban
Incorporation Positive effects on the Company's business
Environmental Service Co., Ltd.
Chongqing Banan Yinghe Urban
Incorporation Positive effects on the Company's business
Environmental Service Co., Ltd.
Guangzhou Yingtai Urban Management Service
Incorporation Positive effects on the Company's business
Co., Ltd.
Foshan Shunde Yingchuang Urban
Incorporation Positive effects on the Company's business
Environmental Service Co., Ltd.
Puning Honglian Environmental Service Co.,
Incorporation Positive effects on the Company's business
Ltd.
Hefei Yingsheng Urban Environmental Service
Incorporation Positive effects on the Company's business
Co., Ltd.
Fengyang Yinghe Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Sanya Yinglian Urban Environmental Service
Incorporation Positive effects on the Company's business
Co., Ltd.
Fuzhou Yinghe Environmental Development
Incorporation Positive effects on the Company's business
Co., Ltd.
Chuzhou Tongying Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Yongxin Yinghe Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Lianjiang Yinglian Urban Environmental
Incorporation Positive effects on the Company's business
Service Co., Ltd.
Guangzhou Yingzhi Urban Environmental
Incorporation Positive effects on the Company's business
Sanitation Service Co., Ltd.
Shenzhen Longgang Yinglian Environmental
Incorporation Positive effects on the Company's business
Service Co., Ltd.
Shenzhen Yinglian Landscaping Engineering
Incorporation Positive effects on the Company's business
Co., Ltd.
Yangjiang Yinghe Urban Environmental
Incorporation Positive effects on the Company's business
Service Co., Ltd.
Renshou Yinghe Urban and Rural Sanitation
Incorporation Positive effects on the Company's business
Service Co., Ltd.
Chibi Yinglian Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Shenzhen Longgang Yingji Urban Service Co.,
Incorporation Positive effects on the Company's business
Ltd.
Wuyi Yinghe Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Xuchang Jian'an Tongying Environmental
Incorporation Positive effects on the Company's business
Sanitation Management Co., Ltd.
Foshan Shunde Yinglian Urban Environmental
Incorporation Positive effects on the Company's business
Service Co., Ltd.
Taizhou Yinghe Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Changsha Yinghe Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Huichang Yingmao Environmental
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Tangshan Yinglian Environmental Management
Incorporation Positive effects on the Company's business
Co., Ltd.
Yongfeng Yinghe Environmental Sanitation Incorporation Positive effects on the Company's business
34
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Management Co., Ltd.
Nanjing Yinglian Environmental Technology
Incorporation Positive effects on the Company's business
Co., Ltd.
Suzhou Wujiang Yinghe Environmental
Incorporation Positive effects on the Company's business
Sanitation Management Co., Ltd.
Xiajiang Yinghe Environmental Sanitation
Incorporation Positive effects on the Company's business
Management Co., Ltd.
Longquan Tongying Environmental Sanitation
Incorporation Positive effects on the Company's business
Service Co., Ltd.
Xinhua Yinglian Modern Environmental
Incorporation Positive effects on the Company's business
Service Co., Ltd.
Guangxi Luocheng Yingxin Urban
Incorporation Positive effects on the Company's business
Environmental Service Co., Ltd.
Suzhou Yingfen Environmental Industry Co.,
Incorporation Positive effects on the Company's business
Ltd.
Renshou Zhongying Sanitation Service Co.,
Incorporation Positive effects on the Company's business
Ltd.
Nantong Lianying Environmental Service Co.,
Incorporation Positive effects on the Company's business
Ltd.
Huazhou Liansheng Urban Environmental
Incorporation Positive effects on the Company's business
Service Co., Ltd.
Heyuan Zijin Liansheng Urban Environmental
Incorporation Positive effects on the Company's business
Service Co., Ltd.
Tangshan Yingxing Sanitation Equipment
Incorporation Positive effects on the Company's business
Manufacturing Co., Ltd.
Quanzhou Yingxin Urban Environmental
Incorporation Positive effects on the Company's business
Service Co., Ltd.
Zhejiang Yolsh Intelligent Emergency
Incorporation Positive effects on the Company's business
Equipment Co., Ltd.
Heyang Yinghe Urban Environmental Service
Incorporation Positive effects on the Company's business
Co., Ltd.
Xuzhou Tongying Environmental Sanitation
Incorporation Positive effects on the Company's business
Service Co., Ltd.
Asset optimization; No material impact on the
Meishan Pengshan Zhongfeng Environmental
De-registration Company's production, operation and
Industry Co., Ltd.
performance
Asset optimization; No material impact on the
Chengdu Yinglian Environmental Management
De-registration Company's production, operation and
Co., Ltd.
performance
Asset optimization; No material impact on the
Guangxi Guiping Yinghe Environmental
De-registration Company's production, operation and
Sanitation Management Co., Ltd.
performance
Asset optimization; No material impact on the
Shengzhou Yinghe Environmental Sanitation
De-registration Company's production, operation and
Management Co., Ltd.
performance
Asset optimization; No material impact on the
Chongyang Yinglian Environmental Protection
De-registration Company's production, operation and
Co., Ltd.
performance
Asset optimization; No material impact on the
Yiyang Yinglian Environmental Sanitation
De-registration Company's production, operation and
Management Co., Ltd.
performance
Asset optimization; No material impact on the
Wanning Yinglian Environmental Industry Co.,
De-registration Company's production, operation and
Ltd.
performance
Asset optimization; No material impact on the
Shenzhen Longhua District Yinglian Urban
De-registration Company's production, operation and
Service Co., Ltd.
performance
35
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Asset optimization; No material impact on the
Guangdong Infore Smart Technology Co., Ltd. De-registration Company's production, operation and
performance
Asset optimization; No material impact on the
Anhua Yingsheng Environmental Sanitation
De-registration Company's production, operation and
Service Co., Ltd.
performance
Asset optimization; No material impact on the
Gucheng Yinglian Urban Environmental
Transfer Company's production, operation and
Service Co., Ltd.
performance
Asset optimization; No material impact on the
Zaozhuang Yinglian Urban Environmental
Transfer Company's production, operation and
Service Co., Ltd.
performance
Asset optimization; No material impact on the
Yichun Yinglian Urban Environmental Service
Transfer Company's production, operation and
Co., Ltd.
performance
Asset optimization; No material impact on the
Chongqing Yinglian Urban Environmental
Transfer Company's production, operation and
Sanitation Service Co., Ltd.
performance
Asset optimization; No material impact on the
Huaibei Zhongfeng Urban Environmental
Transfer Company's production, operation and
Service Co., Ltd.
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 2023 national policies are favorable for the development of the sanitation industry
On January 30, the Ministry of Industry and Information Technology, together with other seven state departments issued the
Notice on Organizing the Pilot Program of Pilot Zones for Full Electrification of Public Service Vehicles, requiring 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 fueled by new energy. This policy is
favorable for the development of the industry.
The Opinions of the Central Committee of the CPC and the State Council on Fulfilling the Key Work of Comprehensively
Promoting Rural Revitalization in 2023, which was issued on February 13, requires that efforts should be made to solidly advance the
improvements in the rural living environment and increase the intensity of improvements in the village public space. This directly
benefits the waste collection and transportation equipment sector.
On May 17, the National Development and Reform Commission (NDRC) issued the Guidelines on Accelerating the
Construction of Charging Infrastructure to Better Support New Energy Vehicle Purchases in the Countryside and Rural
Revitalization. This policy encourages regions with suitable conditions to increase support for the adoption of new energy vehicles
(NEV) in public transport, road passenger transport, taxis, law enforcement, sanitation, and logistics.
The State Council, at a policy briefing held on June 21, announced a pilot program for the full electrification of public vehicles.
This program involves an implementation plan for heavy-duty truck electrification, and acceleration of the electrification of urban
buses, logistics vehicles, taxis, sanitation vehicles, and heavy trucks.
36
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
On June 30, the General Office of NDRC and other departments issued the Notice on Addressing Shortcomings in Public
Sanitation and Environmental Facilities and Carrying Out Clean-up and Rectification in Urban and Rural Environmental Sanitation.
This notice sets out initiatives to improve urban environmental sanitation and rural living environments, and address deficiencies in
urban and rural waste and sewage treatment.
On July 25, the NDRC issued the Notice on the Action Plan for Upgrading Environmental Infrastructure Construction (2023-
2025). This plan calls for accelerating improvements in domestic waste sorting facilities and systems, reasonably blueprinting the
construction of collection points, stations, and transfer compression stations, and enhancing collection and transportation networks.
This document also aims to address the shortage of domestic waste incineration capacity in county-level regions by encouraging the
use of the model of collection at villages, transportation in towns, and processing in counties or nearby to promote the construction of
facilities in towns with established status and rural areas.
On July 31, the NDRC and other departments issued the Notice on Several Measures to Promote Automobile Consumption. This
policy encourages the purchase of new energy vehicles for government agencies, public transport, taxis, postal services, sanitation,
and landscaping in appropriate areas when new vehicles are needed or old vehicles need to be upgraded.
On August 25, the Ministry of Industry and Information Technology and six other departments issued the Notice on the Work
Plan for Stabilizing Growth in the Automobile Industry (2023-2024). This plan requires organizing the pilot program of pilot zones
for full electrification of public service vehicles, accelerating the adoption of new energy buses, taxis, sanitation, postal and express
delivery, and urban logistics vehicles, studying, exploring and promoting pilot projects for zero-emission heavy-duty truck in regional
freight transport to further increase the electrification level of public service vehicles. It also calls for comprehensively promoting the
demonstration of fuel cell vehicles and steadily increasing the applications of fuel cell vehicles.
On October 24, the sixth meeting of the 14th Standing Committee of the National People's Congress adopted a resolution on the
issuance by the State Council of additional government bonds and the plan to adjust the 2023 central budget. The central government
issued an additional RMB 1 trillion of 2023 government bonds in the fourth quarter. These funds were allocated directly to local
governments through transfer payments, for them to focus on rebuilding disaster-stricken areas and addressing deficiencies in disaster
prevention and relief infrastructure.
On November 15, the Ministry of Industry and Information Technology, the Ministry of Transport, and six other departments
issued the Notice on Launching the First Batch of Pilot Program of Pilot Zones for the Full Electrification of Public Service Vehicles.
This notice identifies fifteen cities, namely Beijing, Shenzhen, Chongqing, Chengdu, Zhengzhou, Ningbo, Xiamen, Jinan,
Shijiazhuang, Tangshan, Liuzhou, Haikou, Changchun, Yinchuan and Ordos, as pilot zones to explore replicable experiences and
models, to play a demonstrative and leading role in the full market expansion of NEVs and the development of a green and low-
carbon transport system. The document sets out a pilot program that focuses on promoting NEVs in various sectors, including
government vehicles, city buses, sanitation trucks, taxis, postal and delivery vehicles, urban logistics vehicles, airport vehicles, and
heavy-duty trucks for specific applications, and the goal is to deploy over 600,000 NEVs.
On November 21, the third round of central ecological and environmental inspection commenced, with five inspection teams
dispatched to Fujian, Henan, Hainan, Gansu, and Qinghai for a month-long inspection. The inspections focused on environmental
issues in implementation of major regional strategies, major ecological damage, environmental pollution, environmental risks, and
related responses; environmental infrastructure construction and operation; rectification of issues, ecological and environmental
issues that have been raised by the people as major concerns; and the implementation of the principle that both Party committees and
governments take responsibility, and officials perform their duties while also taking responsibility for ecological and environmental
protection.
On November 30, the State Council issued the Notice on the Action Plan for Continuous Improvement of Air Quality. This plan
sets out targets of reducing PM2.5 concentrations by 10% compared to 2020 levels, and limiting the proportion of days with severe or
severer air pollution to less than 1% in all prefecture-level and above cities; reducing PM2.5 concentrations by 20% in the Beijing-
Tianjin-Hebei Region and surrounding areas, and 15% in Fenwei Plain, and achieving overall compliance with national standards on
PM2.5 concentration in Yangtze River Delta Region, and maintaining Beijing's PM2.5 concentration below 32 micrograms per cubic
37
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
meter. In key regions, at least 80% of newly added or updated public buses, taxis, urban logistics vehicles, and light sanitation
vehicles should be fueled by new energy. In prefecture-level and above cities, the mechanical cleaning rate of roads within the built-
up area should reach around 80%, and the mechanical cleaning rate of roads in counties should reach around 70%.
On December 25, the Ministry of Ecology and Environment issued the Notice on Issuing the Comprehensive Action Plan for
Tackling Air Pollution in the Beijing-Tianjin-Hebei Region and Surrounding Areas and the Fenwei Plain during the Autumn and
Winter of 2023-2024. This plan requires that by the end of December 2023, the construction or renovation of VOCs treatment
facilities should be completed at 1,040 enterprises, and VOCs fugitive emissions should be addressed at 1,217 enterprises. At least
80% of newly added or updated public service vehicles, such as public buses, taxis, logistics vehicles, and light sanitation vehicles,
should be fueled by new energy.
2. The demand 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 characterized 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". From 2015 to 2022, the area of road cleaning in China's cities and counties increased from 9.678 billion
square meters to 13.337 billion square meters, 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%, according to the statistics from the
National Bureau of Statistics and the Ministry of Housing and Urban-Rural Development. Driven by urbanization, the release of
urban service demand is constantly facilitated 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.
(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 demand
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 NEVs in incremental and upgraded vehicles in pilot areas, with an 80% level in terms of buses, taxis, sanitation, postal
38
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
and express delivery, and urban logistics vehicles 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 2022 Urban and Rural Construction Statistical
Yearbook, at the end of 2022, the mechanical cleaning space of roads in cities across the country reached 11.1 billion square meters,
with a mechanization rate of 79.7%; the mechanical cleaning space of roads in counties across the country reached 2.4 billion square
meters, with a mechanization rate of 78.4%. This indicates that 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
urban service model have increased the business pressure on sanitation operation enterprises. Furthermore, China's elderly population
reached 297 million at the end of 2023, accounting for 21.1% of the nation's total population, according to the State Statistics Bureau.
The aging trend will exacerbate the workforce deficit in the urban service 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 for 2023
In 2023, the Company closely revolved around its development strategy and annual business plan, focusing on its core strategic
business. It improved internal operations, and actively promoted smart urban services, achieving its business plan relatively well for
2023. The Company's business targets set at the beginning of the year were: RMB 80 billion in the planned cumulative contract
amount of smart urban services and RMB 6.5 billion in annual revenue. The actual planned cumulative contract amount of smart
urban services reached RMB 60.018 billion, while annual revenue posted RMB 5.63 billion.
In 2023, the Company failed to accomplish its annual revenue target of RMB 6.5 billion for smart services, with an achievement
rate of 86.62%. It also failed to accomplish its operating target of RMB 80 billion in total contract amount, with an achievement rate
of 75.02%. The reason for the Company's failure to achieve the operating target of the total contract amount is a decrease in orders
with long cycles of more than 5 years in the market, resulting in a slight decrease in the total contract amount of orders obtained by
the Company. In 2024, the Company will take into account the market trends, diversify its operations and actively attract short- and
medium-cycle projects.
2024 operating target: to achieve a cumulative contract amount of RMB 100 billion for smart urban service solutions, and to
realize an annual revenue of RMB 10 billion; from 2020 to 2024, the planned cumulative contract amount 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.
39
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
In 2024, the Company will continue to follow its strategy of technology and product leadership, with further focus on its core
business – smart urban services. 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
2024 is a key period for the Company's rapid development. Given its big demand for funding, the Company will make a funding
supply and demand plan that fits its development. Apart from making full use of its own funds, the Company will also further
strengthen the management of accounts receivable while optimizing the financial structure to enable strong financial guarantees for
its business development and control financial risks. The main funding sources are diverse, including any and combination of
issuance of financing bills, medium-term notes, 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 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.
XII. Visits Paid to the Company for Purposes of Research, Communication, and Interview
during the Reporting Period
Applicable □Not applicable
Main content of
Visitor Reference of the study's
Time Venue Method Visitor discussion and
type basic information
materials provided
April 24, Foshan, By phone Institution Harvest Fund, China Operating status For details, please refer to
40
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
2023 Guangdong Future Capital, Haitong and R&D direction the Record Sheet Investor
Province Securities, Greenwoods of the Company Relations Activities
Asset Management, GF disclosed by the Company
Securities, Changjiang on April 24, 2023 on
Securities, Huatai Cninfo
Securities, Huatai (www.cninfo.com.cn)
Securities Asset
Management, China
Merchants Securities,
National Green
Development Fund,
Tianfeng Securities,
Soochow Securities,
Industrial Securities,
Guotai Junan Securities,
Everbright Securities,
Huachuang Securities,
etc.
"Interactive For details, please refer to
Business
Platform for the Record Sheet of
Online development status
Investor Investor Relations
May 12, communication and future business
Relations" Others Investors Activities disclosed by the
2023 on Internet strategy of the
on Company on May 12, 2023
platform Company's
Panorama on Cninfo
segments
Network (www.cninfo.com.cn)
Changjiang Securities,
Northeast Securities,
For details, please refer to
CITIC Securities, Harvest Market situation
the Investor Relations
Foshan, Fund, Penghua Fund and core
December Activities disclosed by the
Guangdong By phone Institution Management, China Life competitiveness of
17, 2023 Company on December 18,
Province Asset, Minsheng Royal the Company's
2023 on Cninfo
Fund, Orient Fund, ABC- products
(www.cninfo.com.cn)
CA Fund Management,
etc.
XIII. Implementation of the Action Plan for Quality and Return Improvements
Whether the Company disclosed the Action Plan for Quality and Return Improvements.
□Yes No
41
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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. 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 as duty performance and actions of directors and senior officers, thus safeguarding the legitimate
rights and interests of the Company and all shareholders. The Management of the Company strictly implements the resolutions of
General Meetings of Shareholders and Meetings of the Board of Directors and executes decisions. All functional departments and
subsidiaries of the Company are responsible for day-to-day operations.
3. During the reporting period, in order to regulate 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 in strict 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, there was no change in the stock price arising from leakage of inside information of the Company.
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
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.
42
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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 officers 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 policy dedicated to 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
Meeting Type Date of the meeting Disclosure date Meeting resolution
participation ratio
The Announcement on the
Resolutions of the First
Extraordinary General Meeting of
The first Shareholders in 2023
extraordinary Extraordinary (Announcement No.: 2023-004)
general general was published on the Securities
45.17% January 12, 2023 January 13, 2023
meeting of meeting of Daily, the Securities Times, the
shareholders shareholders China Securities Journal, and
in 2023 Cninfo (http://www.cninfo.com.cn),
which are the media designated by
the Company for information
disclosure.
The 2022 Annual The Announcement on the
72.23% May 22, 2023 May 23, 2023
Annual General Resolutions of the 2022 Annual
43
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
General Meeting of General Meeting of Shareholders
Meeting of Shareholders (Announcement No.: 2023-030)
Shareholders was published on the Securities
Daily, the Securities Times, the
China Securities Journal, and
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 officers
1. Basic information
Number Number of
Beginning Ending Reasons
of shares shares
Incumbent/ Start of End of number of Other number for share
Name Gender Age Position increased decreased
Former tenure tenure shares changes of shares increase/d
during the during the
held held ecrease
period period
Chairman
of the Board December January 1,654,60
Ma Gang Male 45 Incumbent 1,654,600 0 0 0 N/A
and 4, 2014 11, 2026 0
President
September January
Su Bin Male 46 Director Incumbent 0 0 0 0 0 N/A
6, 2021 11, 2026
Kuang January January
Male 45 Director Incumbent 0 0 0 0 0 N/A
Guangxiong 30, 2019 11, 2026
January January
Shen Ke Male 53 Director Incumbent 0 0 0 0 0 N/A
30, 2019 11, 2026
Independent December January
Zhang Yu Male 46 Incumbent 0 0 0 0 0 N/A
Director 26, 2019 11, 2026
Independent December January
Li Ruidong Male 47 Incumbent 0 0 0 0 0 N/A
Director 26, 2019 11, 2026
Independent January January
Li Yingzhao Male 62 Incumbent 0 0 0 0 0 N/A
Director 12, 2023 11, 2026
Chairman
of the Board November January
Jiao Wanjiang Male 43 Incumbent 308,692 0 0 0 308,692 N/A
of 14, 2016 11, 2026
Supervisors
December January
Liu Kan Male 40 Supervisor Incumbent 0 0 0 0 0 N/A
26, 2019 11, 2026
Employee November January
Lin Meiling Female 39 Incumbent 0 0 0 0 0 N/A
Supervisor 14, 2016 11, 2026
Vice
April 29, January
Wang Qingbo Male 48 President & Incumbent 800 0 0 0 800 N/A
2022 11, 2026
CFO
Vice
President December January
Jin Taotao Male 41 Incumbent 0 0 0 0 0 N/A
and 26, 2019 11, 2026
Secretary of
44
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
the Board of
Directors
1,964,09
Total -- -- -- -- -- -- 1,964,092 0 0 0 --
2
Whether any director or supervisor left office or any senior officer was dismissed during their tenure during the reporting period
□Yes No
Changes of the Company's directors, supervisors and senior officers
Applicable □Not applicable
Name Position held Type Date Reason
Li Yingzhao Independent Director Elected January 12, 2023 New member election
2. Position and biographical information
Professional backgrounds, major work experience and current posts in the Company of the incumbent directors, supervisors and
senior officers:
1. Mr. Ma Gang, born in 1979, holding a master's degree, is Chairman of the Tenth Board of Directors of Infore Enviro. Starting
in December 2014, he has been serving as President of the Company. He joined Midea Group in June 2001, and held successively 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, holding a Master's degree, is Director of the Tenth Board of Directors of Infore Enviro. Starting in
October 2020, he has been Vice President of Infore Group Co., Ltd. From March 2013 to October 2020, he held successively 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.
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
from October 2018 till now. From July 2002 to October 2018, he held successively 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 Director of the Tenth Board of Directors of Infore Enviro. He has
been Vice President of Zoomlion Heavy Industry Science and Technology Co., Ltd. from September 2020 till now. 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 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 till now, and
held the position of Assistant Professor at University of California, Irvine from 2008 to 2015.
6. Mr. Li Ruidong, born in 1977, holding a bachelor's degree, is 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 till now. He served as
Assistant to General Manager of Environmental Protection Magazine Co., Ltd. from February 2012 to November 2013, and Director
of the Office of the Environmental Protection Magazine from March 2008 to January 2012.
45
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
7. Mr. Li Yingzhao, born in 1962, holding a doctorate degree, is Professor of Accounting at School of Business Administration,
South China University of Technology, and he 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 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, holding a master's degree, is Vice President and Board Secretary of Infore Enviro. He held the
positions of Engineer at the Environmental Planning Institute of the Ministry of Ecology and Environment (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 Taotao joined the SZSE board secretaries training program 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 Headquarters.
11. Mr. Liu Kan, born in 1984, holding a bachelor's degree, is Supervisor of the Tenth Board of Supervisors of Infore Enviro. He
has served the Company since February 2016 till now, 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 Universtar Science & Technology (Shenzhen) Co., Ltd. from 2016 to 2017, and Rice
Cooker Product Planning Manager at Midea Small Domestic Appliance Shenzhen Branch and Midea Small Domestic Appliance
Division from 2006 to 2015.
12. Ms. Lin Meiling, born in 1985, holding a bachelor's degree, is 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. Starting in 2010, she has been
responsible for the administration and HR affairs of the Company.
Positions held in shareholder entities:
Applicable □Not applicable
Receiving
Name of the remuneration or
Position held at the
personnel holding Shareholder entity Start of tenure End of tenure allowance from the
shareholder entity
position shareholding entity
or not
Infore Group Co.,
Ma Gang Director March 6, 2018 April 1, 2024 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
Shen Ke Industry Science Vice President June 29, 2015 - Yes
and Technology
46
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Co., Ltd.
Statements on
positions held in
-
shareholder
entities
Positions held in other entities:
Applicable □Not applicable
Name of the Receiving
personnel Position held in End of remuneration or
Name of other entity Start of tenure
holding other entity tenure allowance from
position other entities or not
Su Bin Beijing Baination Pictures Co Ltd. Director March 18, 2021 - No
Su Bin KUKA Home Co., Ltd. Director February 2, 2024 - No
Guangzhou Holly's International
Su Bin Director August 5, 2021 - No
Auction Co., Ltd.
Ningbo Infore Equity Investment Fund Manager, Executive
Su Bin April 21, 2021 - No
Management Co., Ltd. Director
Nanjing Kele Composite Materials Co.,
Su Bin General Manager March 6, 2017 - No
Ltd.
Zhuhai Aofei Infore Private Equity General Manager,
Su Bin September 27, 2022 - No
Fund Management Co., Ltd. Chairman
Shenzhen Hongfeng Business
Su Bin Vice Chairman September 25, 2023 - No
Management Co., Ltd.
Su Bin Shanghai Fudehui Trading Co., Ltd. Unknown April 1, 2023 - No
Kuang Guangdong Infore Finance Connect
Director July 6, 2020 - No
Guangxiong Small Loan Co., Ltd.
Kuang
KUKA Home Co., Ltd. Director February 2, 2024 - No
Guangxiong
Kuang
Guangzhou Baopu Investment Co., Ltd. Director April 22, 2022 - No
Guangxiong
Kuang Guangdong Infore Material Technology
Chairman October 9, 2023 - No
Guangxiong Co., Ltd.
Kuang
Infore Capital Management Co., Ltd. Director March 14, 2019 - No
Guangxiong
Kuang Yinghe (Shenzhen) Robotics and
Director August 5, 2020 - No
Guangxiong Automation Technology Co., Ltd.
Bichamp Cutting Technology (Hunan)
Shen Ke Director July 5, 2014 - No
Co., Ltd.
Chasing Jixiang Life Insurance
Shen Ke Director October 31, 2012 - No
Company Limited
Shen Ke Zoomlion Capital Co., Ltd. Director October 22, 2015 - No
Zoomlion Earth Working Machinery Executive Director,
Shen Ke July 29, 2020 - No
Co., Ltd. Manager
Shen Ke Zoomlion Finance Co., Ltd. Director May 28, 2015 - No
Shaanxi Zoomlion West Earthmoving
Shen Ke Executive Director July 30, 2020 - No
Machinery Co., Ltd.
Zoomlion Purong Financial Leasing
Shen Ke Director April 12, 2016 - No
Co., Ltd.
Shen Ke Zoomlion Agriculture Co., Ltd. Director October 31, 2023 - No
Shen Ke Hunan Teli Hydraulic Co., Ltd. Supervisor March 11, 2020 - No
47
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Shen Ke Hunan Fangsheng Company Limited Supervisor January 30, 2018 - No
Zoomlion Intelligent Agriculture Co.,
Shen Ke Director November 5, 2020 - No
Ltd.
Zoomlion Business Factoring (China)
Shen Ke Director October 11, 2023 - No
Co., Ltd.
Hunan Xiangjiang Private Equity Fund
Shen Ke Director April 28, 2021 - No
Management Co., Ltd.
Hunan Zoomlion Emergency Device
Shen Ke Director August 17, 2017 - No
Co., Ltd.
Hunan Zoomlion International Trade
Shen Ke Director September 23, 2002 - No
Co., Ltd.
Zoomlion Heavy Machinery Zhejiang
Shen Ke Chairman November 8, 2023 - No
Co., Ltd.
Chongqing Zoomlion Shenghong
Shen Ke Executive Director January 5, 2024 - No
Machinery Manufacturing Co., Ltd.
Hunan Zhongchen Rolled Steel
Shen Ke Director May 20, 2020 - No
Manufacturing Engineering Co., Ltd.
Beijing Junlai Capital Management.
Shen Ke Director June 22, 2018 - No
Company Limited
Changsha Zhonglian Zhitong
Shen Ke Director April 13, 2009 - No
Trenchless Technology Co., Ltd.
China Europe International Business
Zhang Yu Professor July 1, 2015 - Yes
School
Independent
Zhang Yu Guangzhou MINO Equipment Co., Ltd. July 28, 2020 - Yes
Director
Aidite (Qinhuangdao) Technology Co.,
Zhang Yu Director February 1, 2022 - Yes
Ltd.
President and
Li Ruidong China Environment Magazine November 1, 2013 - Yes
Editor-in-chief
Li Yingzhao Jiangxi Green Recycling Co., Ltd. Director November 19, 2020 - Yes
Guangdong TLOONG Technology Independent
Li Yingzhao July 21, 2022 - Yes
Group Co., Ltd. Director
China Broadnet Guangzhou Network Independent
Li Yingzhao April 27, 2021 - Yes
Co., Ltd. Director
Jiao Guangdong Shunkong Environmental
Director November 9, 2016 - No
Wanjiang Investment Co., Ltd.
Wang Guangdong Shunkong Environmental
Supervisor February 23, 2023 - No
Qingbo Investment Co., Ltd.
Statements
on positions
held in -
other
entities
Punishments imposed in the past three years by the securities regulator on the incumbent directors, supervisors and senior officers as
well as those who left office during the reporting period:
□Applicable Not Applicable
3. Remuneration of directors, supervisors and senior officer
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and senior officers
The remunerations of the directors, supervisors and senior officers of the Company for 2023 are strictly in compliance with the
Remuneration Plan for Directors, Supervisors and Senior Officers in 2023 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
48
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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 officers 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 officers is partly on a monthly basis, and the part linked to the Company's performance is
paid at year-end.
Remuneration of directors, supervisors and senior officers of the Company during the reporting period
Unit: RMB 10,000
Receiving
Total pre-tax
remuneration
Incumbent remuneration
Name Gender Age Position from the
/Former from the
Company's related
Company
parties or not
Chairman of the Board and
Ma Gang Male 45 Incumbent 290.17 No
President
Su Bin Male 46 Director Incumbent 0 Yes
Kuang
Male 45 Director Incumbent 0 Yes
Guangxiong
Shen Ke Male 53 Director Incumbent 0 Yes
Li Yingzhao Male 62 Independent Director Incumbent 10 No
Zhang Yu Male 46 Independent Director Incumbent 10 No
Li Ruidong Male 47 Independent Director Incumbent 10 No
Chairman of the Board of
Jiao Wanjiang Male 43 Incumbent 88.34 No
Supervisors
Liu Kan Male 40 Supervisor Incumbent 122.12 No
Lin Meiling Female 39 Employee Supervisor Incumbent 16.12 No
Wang Qingbo Male 48 Vice President & CFO Incumbent 80.1 No
Vice President and Secretary
Jin Taotao Male 41 Incumbent 75.44 No
of the Board of Directors
Total -- -- -- -- 702.29 --
Other information
□Applicable Not Applicable
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 First Meeting of the Tenth
The 1st meeting
Board of Directors (Announcement No.: 2023-002) was published on
of the Tenth
January 12, 2023 January 13, 2023 the Securities Daily, the Securities Times, the China Securities Journal,
Board of
and Cninfo (www.cninfo.com.cn), which are the media designated by
Directors
the Company for information disclosure.
The Announcement on the Resolutions of the Second Meeting of the
The 2nd
Tenth Board of Directors (Announcement No.: 2023-009) was
meeting of the
April 24, 2023 April 25, 2023 published in the Securities Daily, the Securities Times, the China
Tenth Board of
Securities Journal, and Cninfo (www.cninfo.com.cn), which are the
Directors
media designated by the Company for information disclosure.
The 3rd The Announcement on the Resolutions of the Third Meeting of the
meeting of the Tenth Board of Directors (Announcement No.: 2023-038) was
August 25, 2023 August 26, 2023
Tenth Board of published in the Securities Daily, the Securities Times, the China
Directors Securities Journal, and Cninfo (www.cninfo.com.cn), which are media
49
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
the designated by the Company for information disclosure.
The Announcement on the Resolutions of the Fourth Meeting of the
The 4th meeting
Tenth Board of Directors (Announcement No.: 2023-045) was
of the Tenth
October 27, 2023 October 28, 2023 published in the Securities Daily, the Securities Times, the China
Board of
Securities Journal, and Cninfo (www.cninfo.com.cn), which are the
Directors
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
Number of Having failed
Number of Number of Number of Number of
Number of Board to attend two
Board Board Board general
Director's Board meetings consecutive
meetings meetings meetings meetings of
name meetings attended by Board
attended on attended absent with shareholders
held way of meetings in
site through proxy apologies attended
telecoms person or not
Ma Gang 4 4 0 0 0 No 2
Su Bin 4 4 0 0 0 No 2
Kuang
4 4 0 0 0 No 2
Guangxiong
Shen Ke 4 4 0 0 0 No 2
Zhang Yu 4 4 0 0 0 No 2
Li Ruidong 4 4 0 0 0 No 2
Li Yingzhao 4 4 0 0 0 No 2
Explanation of failure to attend two consecutive Board meetings
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 as well as 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 of the Board during the Reporting Period
Name of the Members Number Date of Meeting contents Important Other Specific
50
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
committee of the opinions information information
meetings meeting and on on matters
held suggestions performance that
proposed of duties objections
were raised
(if any)
Li
Yingzhao, 1. Pre-approval of the Financial
Approved
Kuang Statements in 2022 Annual Report; 2.
January the relevant
Audit Guangxiong 2022 Annual Internal Control Self- Not
5 16, proposals of --
Committee , Li Assessment Report; 3. 2023 Internal applicable
2023 this
Ruidong Audit Work Plan Report; 4. Ex-ante
meeting.
and Zhang Communication of 2022 Annual Report.
Yu
1. 2022 Annual Report and its
summary; 2. 2022 Annual Final
Financial Accounting Report; 3. 2022
Profit Distribution Plan Proposal; 4.
2023 First Quarter Report; 5.
Assurance Report on the Placement
and Use of Fundraising Proceeds in
2022; 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 2022; 9. Proposal on
Estimated Routine Related Party
Transactions for 2023; 10. Proposal on
the 2023 Annual Plan for Entrusted
Li
Wealth Management with Self-owned
Yingzhao,
Funds; 11. Proposal on Guarantee Approved
Kuang
April Limits Provided by the Company to Its the relevant
Audit Guangxiong Not
5 21, Subsidiaries; 12. Proposal on the proposals of --
Committee , Li applicable
2023 Provision of Buyer's Credit Guarantees this
Ruidong
for Customers; 13. Proposal on the meeting.
and Zhang
Application for Comprehensive Credit
Yu
Lines from Banks and the Authorization
for the Chairman to Sign Bank Credit
Contracts; 14. Proposal on
Continuously Carrying out Accounts
Receivable Factoring; 15. Proposal on
Related Party Transactions for
Temporary Borrowing Funds Provided
by Infore Group Co., Ltd. to the
Company in 2023; 16. Proposal on
Professional Services for the
Procurement Information System and
Related Transactions; 17. Proposal on
the Reappointment of Accounting
Firms; 18. Summary Report of 2022
Auditor's Report by Pan-China
Certified Public Accountants LLP
(Special General Partnership); 19.
2022 Annual Internal Control Self-
51
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Assessment Report; 20. Proposal on
Revising Articles of Association.
1. Summary of Internal Audit for the
First Half of 2023; 2. 2023 Interim
Report and its summary; 3. Special
Report on the Placement and Use of
Li Fundraising Proceeds in the First Half
Approved
Yingzhao, of 2023; 4. Revised Procedure for
August the relevant
Audit Kuang Annual Report Work of Audit Not
5 24, proposals of --
Committee Guangxiong Committee; 5. Revised Internal Audit applicable
2023 this
and Li Management Policy; 6. Revised
meeting.
Ruidong Procedure for Annual Report Work of
Independent Directors; 7. Revised
Accountability Policy for Material
Errors in Annual Report Information
Disclosure.
Li 1. Internal Control Work Summary for
Approved
Yingzhao, the Third Quarter of 2023; 2. Third
October the relevant
Audit Kuang Quarter Report for 2023; 3. Proposal Not
5 26, proposals of --
Committee Guangxiong on the Use of Part of Idle Fundraising applicable
2023 this
and Li Proceeds to Temporarily Replenish
meeting.
Ruidong Working Capital.
Li
Yingzhao,
Approved
Kuang
Decemb the relevant
Audit Guangxiong Communication on Pre-approval of Not
5 er 11, proposals of --
Committee , Li 2023 Annual Report applicable
2023 this
Ruidong
meeting.
and Zhang
Yu
1. Reviewing the Performance of the
Company's Directors and Senior
Officers in Fulfilling Their Duties in
Li Ruidong, Approved
Remunerati 2022 and Conducting Annual
Kuang January the relevant
on & Performance Assessment Based on Not
Guangxiong 3 12, proposals of --
Appraisal Assessment Criteria and Remuneration applicable
and Zhang 2023 this
Committee Policies and Plans; 2. Implementation
Yu meeting.
of the Remuneration Plan for Directors,
Supervisors, and Senior Officers in
2022.
Li Ruidong, Approved
Remunerati
Kuang April Proposal on the Remuneration Plan for the relevant
on & Not
Guangxiong 3 21, Directors, Supervisors, and Senior proposals of --
Appraisal applicable
and Zhang 2023 Officers in 2023 this
Committee
Yu meeting.
Li Ruidong, Approved
Remunerati
Kuang August Proposal on the Adjustment of the the relevant
on & Not
Guangxiong 3 24, Exercise Price of the Third Stock proposals of --
Appraisal applicable
and Zhang 2023 Option Incentive Scheme this
Committee
Yu meeting.
1. Proposal on Electing Mr. Ma Gang
as Chairman of the Tenth Board of Approved
Zhang Yu,
January Directors; 2. Proposal on the the relevant
Nomination Ma Gang Not
1 12, Composition of the Special Committees proposals of --
Committee and Li applicable
2023 of the Tenth Board of Directors; 3. this
Yingzhao
Proposal on Appointing the Tenth meeting.
Senior Management Team; 4. Proposal
52
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
on Appointing Ms. Wang Fei as
Securities Representative of the
Company.
1. President's Work Report 2022; 2.
Proposal on the Delay of Part of the
Projects of Proceeds from the Public
Issuance of A-share Convertible
Approved
Corporate Bonds; 3. Proposal on the
Ma Gang, April the relevant
Strategy 2023 Annual Plan for Entrusted Wealth Not
Su Bin and 3 21, proposals of --
Committee Management with Self-owned Funds; 4. applicable
Shen Ke 2023 this
Proposal on Continuously Carrying out
meeting.
Accounts Receivable Factoring; 5.
Proposal on the Suspension of
Downward Revision of the Conversion
Price of Infore Convertible Bonds.
Approved
Ma Gang, August the relevant
Strategy Not
Su Bin and 3 24, Revised Working Rules for President proposals of --
Committee applicable
Shen Ke 2023 this
meeting.
Approved
Ma Gang, October Proposal on Using Part of the Idle the relevant
Strategy Not
Su Bin and 3 26, Fundraising Proceeds to Replenish proposals of --
Committee applicable
Shen Ke 2023 Working Capital 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.
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
196
end of the reporting period
Number of in-service employees of the major subsidiaries at
20,034
the end of the reporting period
Total number of in-service employees at the end of the
20,230
reporting period
Total number of paid employees during the reporting period 20,230
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 15,969
Sales personnel 1,220
Technical personnel 1,637
Finance personnel 173
53
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Administrative personnel 1,231
Total 20,230
Educational level
Types of educational level Number of people
Doctoral degree 11
Master's degree 474
Bachelor's degree 2,501
College 2,274
Below college 14,970
Total 20,230
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 is subject to dynamic adjustments based on 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. To support
employees through targeted and efficient training, Infore Enviro has put in place a 3-tier training system that covers the company
level, division level, and department level.
The Company has set up the Employee Skills Enhancement Center, focusing on improving the competence and capabilities of
employees while actively promoting corporate culture. By continuously strengthening the trainer team, and improving online learning
platforms and other key resources, while maintaining standardized training management processes, the Company is committed to
creating a collaborative and efficient organizational climate that empowers employees and promotes individual growth.
Its learning and development programs comprehensively cover three key areas: new skills, expertise, and leadership. Leadership
development is facilitated through a string of well-designed programs such as Ascent Program, Exploration Program, and Climbing
Program. These initiatives aim to guide employees in continuously scaling new heights in their professional growth and development.
Expertise programs, focusing on job-specific skills, are carried out in diverse forms such as specialized training camps, marketing and
R&D lectures in order to help employees meet job requirements and adapt to market changes. To better support new employees in
swiftly integrating into the Company and achieving a career transformation within 90 days, both from campus and social recruiting, a
wide range of training programs are carried out, such as the Young Talent Training Camp, Graduate Training Program, and programs
specific to new employees from social recruiting.
Moreover, a fair and competitive career development system for employees has been established to ensure that each individual
has opportunities for continuous growth and promotion. The Company regularly conducts comprehensive assessments to promote
employees, as part of its tangible actions to support career advances. In 2023, successful promotions for over three hundred
professional employees are not only a recognition of their hard work and talent, but also the outcomes of talent development strategy.
4. Labor outsourcing
Applicable □Not applicable
54
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Total hours of labor outsourced 65,861,146.46
Total payment for labor outsourcing (RMB) 789,175,464.30
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 on 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:
In the event that the Company does not distribute cash
dividends, it shall disclose the specific reasons and the next Not applicable
steps to elevate the level of return for investors.
Whether minority shareholders have the opportunity to fully
express their opinions and demand 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 were positive,
but no proposal for cash dividend distribution was put forward.
□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) 1.25
Total shares as the basis for the proposal for profit distribution
3,166,941,288.00
(share)
Cash dividends (RMB) (tax inclusive) 395,867,661.00
Cash dividends in other forms (such as share repurchase) 0.00
55
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
(RMB)
Total cash dividends (inclusive of those in other forms) (RMB) 395,867,661.00
Distributable profit (RMB) 786,431,614.32
Total cash dividends (inclusive of those in other forms) as a
50.34%
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 2023 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 2023 profit distribution plan, a cash dividend of RMB 1.25 (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 2022, the Company reported RMB 559,764,885.53 in profits available for distribution and RMB
211,401,343.85 in retained earnings after cash dividends. In 2023, the Company realized a net profit of RMB 63,892,252.27 and a
surplus reserve of RMB 63,892,252.27. As a result, profits available for distribution at the end of 2023 reached RMB
786,431,614.32. When the profit distribution plan for 2023 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 3,166,941,288, a cash dividend of
RMB 1.25 (tax inclusive) will be distributed for every 10 shares, totaling RMB 395,867,661. As a result, retained earnings after
cash dividends will be RMB 390,563,953.32. 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 0.125 (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 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 Exercise Prices of the Second 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 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 Exercise Price of the Third Stock Option Incentive
Scheme. 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 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
56
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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 Scheme 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.
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. On August 25, 2023, the 3rd meeting of the Tenth Board of Directors and the 3rd meeting of the Tenth Board of Supervisors
held by the Company deliberated and approved the Proposal for Adjustment of the Exercise Price of the Third Stock Option Incentive
Scheme. In view of the fact that the Company's 2022 annual equity distribution was completed on July 18, 2023, according to relevant
provisions on the adjustment of the 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 6.12 per share to RMB 6.01 per share.
7. On January 8, 2024, the Proposal on the Cancellation of Expired, Unexercised Stock Options for the Third Exercise Period of
the Third Stock Option Incentive Scheme was deliberated and approved at the 5th extraordinary meeting of the Tenth Board of
Directors. According to the provisions of the Third Stock Option Incentive Scheme (Revised Draft), the Board of Directors agreed to
cancel the 21,964,000 expired stock options of 209 recipients unexercised during the third exercise period. After the cancellation, the
Third Stock Option Incentive Scheme will be fully implemented.
For details, please refer to announcements published on April 23, 2021, August 21, 2022, August 25, 2022, October 27, 2022,
December 28, 2022, August 26, 2023, and January 9, 2024 on the media for information disclosure designated by the Company and
Cninfo (http://www.cninfo.com.cn).
Equity incentives granted to directors and senior officers of the Company:
□Applicable Not Applicable
Appraisal mechanism and incentives for senior officers
57
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
The Company has established a sound performance assessment and incentive system. The Board of Directors has the
Remuneration & Appraisal Committee as the administrative agency for the appointment and remuneration appraisal of the senior
officers of the Company, which shall be responsible for formulating remuneration standards and schemes for senior officers,
reviewing their performance of duties and formulating scientific and reasonable remuneration schemes and submitting to the Board
for review and discussion. The current senior officers of the Company shall be subject to comprehensive performance appraisal based
on their positions, the current remuneration policy 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 officers based on schedule. During the
reporting period, the senior officers 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 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 the total Source of funds
Number of Total number of
Scope of employees Changes share to implement
employees shares held
capital of the plan
the listed
company
Employees'
As at October 12, 2023, the lock-
legitimate
Directors (excluding up period for the Company's
remuneration,
independent directors), Second Employee Stock
self-raised
supervisors, senior officers, Ownership Plan expired, with
funds, and other
and backbone personnel 134 64,789,616 employees' cumulative holding of 2.04%
funds obtained
(technology, marketing, 64,789,616 shares of the
by means
production, etc.) of the Company, accounting for 2.04%
permitted by
Company. of the Company's total share
laws and
capital.
regulations.
Shareholding of directors, supervisors and senior officers 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 (share) reporting period (share) the listed company
Ma Gang Chairman & President 17,246,996 17,246,996 0.54%
Wang Qingbo Vice President & CFO 4,159,493 4,159,493 0.13%
Vice President & Board
Jin Taotao 2,462,005 2,462,005 0.08%
Secretary
Chairman of the Board of
Jiao Wanjiang 1,846,504 1,846,504 0.06%
Supervisors
Liu Kan Supervisor 155,495 155,495 0.00%
Changes in the asset management institution during the reporting period
□Applicable Not Applicable
Changes in equity arising from disposal of shares by holders during the reporting period
□Applicable Not Applicable
Exercise of shareholders' rights during the reporting period
58
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
NA
Other relevant circumstances and explanations of the employee stock ownership plan during the reporting period
□Applicable Not Applicable
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
Termination of the employee stock ownership plan during the reporting period
□Applicable Not Applicable
Other statements:
NA
3. Other employee incentive measures
□Applicable Not Applicable
XII. Establishment and Implementation of the Internal Control Policy during the Reporting
Period
1. Establishment and implementation of internal control
(1) Internal control development
Infore Enviro has established and improved 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 are in compliance with the provisions of the
relevant laws, regulations, the Articles of Association of the Company, the Rules of Procedures for the General Meeting of
Shareholders, the Rules of Procedures for the Board of Directors, and the Rules of Procedures for the Board of Supervisors.
Corresponding internal management policy with respect to such material issues as financial accounting, fundraising, external
investment, external guarantee, related party transactions and information disclosure has been established in Infore Enviro to ensure
the legality and compliance of day-to-day operations and decision-making procedures for material matters.
(2) Internal control implementation
(a) Execution of information disclosure management policies
Upon verification, the Company effectively complied with the Information Disclosure Management Policy in 2023, with good
performance in information disclosure, and was not subject to punishments by the securities regulatory authorities for violation of
rules on information disclosure.
(b) Implementation of financial internal control policies
Upon verification, with respect to finance and accounting, the Company has established the relevant internal management policy
in accordance with the requirements of the Accounting Standards for Enterprises, the Company Law and other relevant laws and
59
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
regulations, which can ensure the accuracy and reliability of the financial and accounting information and the security and
effectiveness of the financial and accounting systems.
(c) Implementation of other internal control policies
Upon verification, Infore Enviro complied with the provisions of the Articles of Association and the relevant rules and
regulations, performed necessary decision-making procedures, and implemented the internal control policy 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
Integration Problems in the Resolution Resolution Follow-up
Company name Integration plan
progress integration measures taken progress resolution plan
Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable
XIV. Assessment Report or Audit Report on Internal Control
1. Internal control assessment report
Date of full disclosure of the
April 29, 2024
internal control assessment report
Index to full disclosure of the For details, please refer to the Internal Control Assessment Report disclosed on Cninfo
internal 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 in the assessment as a
percentage of the revenue in the 100.00%
Company's consolidated financial
statements
Deficiency identification criteria
Category Related to financial reporting Unrelated to financial reporting
Material deficiencies: Material deficiencies: If the likelihood of
1. Fraud committed by directors, supervisors the deficiency is high, it could materially
and senior officers in relation to financial impair work efficiency or effectiveness,
reporting; materially increase uncertainty in
2. Material misstatement in financial outcomes, or result in a material
statements of the current period identified by deviation from expected targets.
CPAs, which was not identified in the course Significant deficiencies: If the likelihood
Qualitative criteria
of the functioning of internal controls; of the deficiency is medium, it could
3. Ineffective supervision over internal control significantly diminish work efficiency or
by the Audit Committee and internal audit effectiveness, significantly increase
agency of the Company; uncertainty in outcomes, or result in a
4. Lack of post qualification or obvious significant deviation from expected
incompetence of principal financial personnel; targets.
5. Ineffective compliance supervision and General deficiencies:
60
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
violations of regulations that could materially If the likelihood of the deficiency is low,
affect the reliability of financial statements; it could diminish work efficiency or
Significant deficiencies: effectiveness, increase uncertainty in
1. No anti-fraud procedures and controls have outcomes, or result in a deviation from
been established; expected targets.
2. Internal control over the selection and
application of accounting policy in line with
the generally accepted accounting standards
have not been implemented;
3. There are one or more deficiencies in the
controls over the year-end financial reporting
process, and it cannot reasonably ensure that
the financial statements are prepared to
achieve the objectives of authenticity and
completeness.
General deficiencies:
Other internal control deficiencies that do not
constitute material deficiencies or significant
deficiencies.
Material deficiencies:
1. The potentially misstated amount in the
profit statement is greater than or equal to 1%
of the revenue in the consolidated financial
statements of the Company for the most recent
fiscal year or 5% of the total pre-tax profit;
2. The potentially misstated amount in the
balance sheet is greater than or equal to 1% of
the total assets in the consolidated financial
statements of the Company for the most recent
fiscal year.
Significant deficiencies:
1. The potentially misstated amount in the
profit statement is greater than or equal to Material deficiencies: Direct property
0.5% of the Company's revenue or 3% of the loss amount is greater than or equal to
total pre-tax profit in the consolidated 1% of the Company's total assets (latest
financial statements for the most recent fiscal audited).
year but less than 1% of the Company's Significant deficiencies: Direct property
revenue or 5% of the total pre-tax profit in the loss amount is greater than or equal to
Quantitative criteria
consolidated financial statements for the most 0.5% of the Company's total assets (latest
recent fiscal year. audited) but less than 1% of the
2. The potentially misstated amount in the Company's total assets (latest audited).
balance sheet is greater than or equal to 0.5% General deficiencies: Direct property
of the total assets in the consolidated financial loss amount is less than 0.5% of the
statements of the Company for the most recent Company's total assets (latest audited).
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 for
the most recent fiscal year.
61
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Number of material deficiencies
0
related to financial reporting
Number of material deficiencies
0
unrelated to financial reporting
Number of significant deficiencies
0
related to financial reporting
Number of significant deficiencies
0
unrelated to financial reporting
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 related to financial reporting as at December 31, 2023,
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 29, 2024
For details, please refer to the Internal Control Audit Report
Index to the full audit report on internal control
disclosed on Cninfo (http://www.cninfo.com.cn)
Opinion type of the audit report on internal control Standard unqualified opinion
Whether any material deficiency unrelated to financial
No
reporting
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 facts and in strict accordance with
the Company Law, the Securities Law, Guidelines No. 1 of SZSE 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 SZSE 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 sound and functions in a standardized way, without no material issues or errors. The Company shall continue
to strengthen management in the following areas:
1. Further improving the internal control policy of the Company
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 policy and implement the corresponding examination and approval procedure on the revised and improved
relevant policies.
2. Further facilitating special committees of the Board to play their roles
62
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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 operations
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 know well the business of the Company, facilitate themselves to play their roles and
provide advice and suggestions on the Company's development planning, operations management, risk control, selection and
engagement of senior officers and back-up personnel, performance appraisal of senior officers, 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 day-to-day 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 errors and ensure the
quality of information disclosure and elevate the level of information disclosure. During the reporting period, the Company and its
relevant personnel disclosed information in strict accordance with the requirements of laws and regulations.
4. Further ramping up staff training in laws and regulations
By optimizing internal training programs and increasing 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 SZSE for Self-regulation of Listed Companies—Standardized Operation of Companies Listed on the Main Board.
Such training also helped the Company strictly comply with relevant regulations, manage its operations in a prudent manner, and
prevent violations.
63
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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 authorities
Yes □No
Environmental 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, Water Pollution Prevention and Control
Law of the People's Republic of China, Integrated Wastewater Discharge Standard, and Law of the People's Republic of China on the Prevention and Control of Air Pollution. It consistently improves its
management policies and optimizes pollutant treatment facilities and technologies to minimize the discharge of pollutants.
Environmental administrative licensing
The Company has been running all its key pollutant-discharging projects according to laws and regulations for many years. During the construction period, environmental impact assessment was
carried out for these projects under 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 acceptance inspection for the completed projects during pilot production, and simultaneously designed, constructed and put into use the supporting
environmental facilities and the main works.
Industry discharge standards and discharge of pollutants in production and operating activities
Types of
main Names of main Pollutant Total
Number of Discharge Total
Name of entity or pollutants pollutants and Way of discharge approved Excessive
discharge Layout of discharge outlets concentration/ discharge
subsidiary and characteristic discharge standards discharge discharge
outlets intensity volume
characteristi pollutants implemented volume
c pollutants
Foshan Shunde Continuous GB 18918-2002,
Wastewater COD 1 Beijiang River trunk stream waterway 10.5mg/L 388.37t 1606t/a N/A
Huaqingyuan Water discharge Class 1A
Environmental Ammonia Continuous GB 18918-2002,
Wastewater 1 Beijiang River trunk stream waterway 0.54mg/L 19.97t 200.75t/a N/A
Protection Co., Ltd. nitrogen discharge Class 1A
(Phases I and II Wastewater Total Continuous 1 Beijiang River trunk stream waterway 0.25mg/L GB 18918-2002, 9.25t 20.075t/a N/A
64
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
sewage stations by phosphorus discharge Class 1A
the gate), Foshan
Shunde Yuanrun
Water Environmental Continuous GB 18918-2002,
Wastewater Total nitrogen 1 Beijiang River trunk stream waterway 6.08mg/L 224.88t 602.25t/a N/A
Protection Co., Ltd. discharge Class 1A
(Phase III sewage
station by the gate)
80m
Waste gas Smoke 1 North side of the main plant 4.2mg/Nm GB18485-2014 2.316t 14.6t/a N/A
chimney
80m 40.059mg/N
Waste gas SO2 1 North side of the main plant GB18485-2014 24.543t 89.28t/a N/A
chimney m
80m 146.314mg/N
Waste gas NOx 1 North side of the main plant GB18485-2014 85.702t 96.72t/a N/A
chimney m
80m 35.987mg/N
Waste gas HCl 1 North side of the main plant GB18485-2014 21.406t / N/A
chimney m
Funan Greenlander
80m
Environmental Waste gas CO 1 North side of the main plant 15.09mg/Nm GB18485-2014 9.365t / N/A
chimney
Energy Co., Ltd.
80m 0.0146mg/N
Waste gas Pb 1 North side of the main plant GB18485-2014 / / N/A
chimney m
80m 0.0000945mg
Waste gas Cd 1 North side of the main plant GB18485-2014 / / N/A
chimney /Nm
80m 0.0048mg/N
Waste gas Hg 1 North side of the main plant GB18485-2014 / / N/A
chimney m
80m 0.057ng-
Waste gas Dioxins 1 North side of the main plant GB18485-2014 / / N/A
chimney TEQ/m
80m
Waste gas Smoke 1 West side of the main plant 2.4mg/Nm GB18485-2014 1.49t 12t/a N/A
chimney
80m
Waste gas SO2 1 West side of the main plant 43.39mg/Nm GB18485-2014 20.19t 70t/a N/A
chimney
80m 202.48mg/N
Shouxian Waste gas NOx 1 West side of the main plant GB18485-2014 123.53t 144t/a N/A
chimney m
Greenlander New
80m
Energy Co., Ltd. Waste gas HCl 1 West side of the main plant 51.97mg/Nm GB18485-2014 29.65t / N/A
chimney
80m
Waste gas CO 1 West side of the main plant 2.8mg/Nm GB18485-2014 3.74t / N/A
chimney
80m
Waste gas Pb 1 West side of the main plant 0.0016mg/m GB18485-2014 / / N/A
chimney
65
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
80m 0.000694mg/
Waste gas Cd 1 West side of the main plant GB18485-2014 / / N/A
chimney m
80m 0.00082mg/N
Waste gas Hg 1 West side of the main plant GB18485-2014 / / N/A
chimney m
80m 0.038ngTEQ/
Waste gas Dioxins 1 West side of the main plant GB18485-2014 / / N/A
chimney m
80m
Waste gas Smoke 1 East side of the main plant 1.1mg/Nm GB18485-2014 0.85t 6.78t/a N/A
chimney
80m
Waste gas SO2 1 East side of the main plant 28.6mg/Nm GB18485-2014 14.09t 26.06t/a N/A
chimney
80m
Waste gas NOx 1 East side of the main plant 151mg/Nm GB18485-2014 96.45t 104t/a N/A
chimney
80m 41.718mg/N
Waste gas HCl 1 East side of the main plant GB18485-2014 24.27t / N/A
chimney m
Lianjiang
80m
Greenlander New Waste gas CO 1 East side of the main plant 28.9mg/Nm GB18485-2014 20.36t / N/A
chimney
Energy Co., Ltd.
80m
Waste gas Pb 1 East side of the main plant / GB18485-2014 / / N/A
chimney
80m
Waste gas Cd 1 East side of the main plant / GB18485-2014 / / N/A
chimney
80m 0.0023mg/N
Waste gas Hg 1 East side of the main plant GB18485-2014 / / N/A
chimney m
80m 0.063ng-
Waste gas Dioxins 1 East side of the main plant GB18485-2014 / / N/A
chimney TEQ/m
80m
Waste gas Smoke 1 West side of the main plant 0.22mg/m GB18485-2014 0.109t / N/A
chimney
80m
Waste gas SO2 1 West side of the main plant 22.76mg/m GB18485-2014 16.52t 58t/a N/A
chimney
80m
Xiantao Greenlander Waste gas NOx 1 West side of the main plant 208.97mg/m GB18485-2014 118.29t 148.85t/a N/A
chimney
Environmental Power
80m
Generation Co., Ltd. Waste gas HCl 1 West side of the main plant 26.69mg/m GB18485-2014 15.3t / N/A
chimney
(1# furnace)
80m
Waste gas CO 1 West side of the main plant 2.77mg/m GB18485-2014 3.47t / N/A
chimney
80m
Waste gas Pb 1 West side of the main plant 0.0029mg/m GB18485-2014 / / N/A
chimney
Waste gas Cd 80m 1 West side of the main plant 0.00013mg/m GB18485-2014 / / N/A
66
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
chimney
80m
Waste gas Hg 1 West side of the main plant / GB18485-2014 / / N/A
chimney
80m 0.0014ngTEQ
Waste gas Dioxins 1 West side of the main plant GB18485-2014 / / N/A
chimney /m
80m
Waste gas Smoke 1 West side of the main plant 1.03mg/m GB18485-2014 0.59t / N/A
chimney
80m
Waste gas SO2 1 West side of the main plant 23.13mg/m GB18485-2014 9.96t 58t/a N/A
chimney
80m
Waste gas NOx 1 West side of the main plant 224.04mg/m GB18485-2014 81.9t 148.85t/a N/A
chimney
80m
Waste gas HCl 1 West side of the main plant 29.33mg/m GB18485-2014 9.78t / N/A
Xiantao Greenlander chimney
Environmental Power 80m
Waste gas CO 1 West side of the main plant 0.87mg/m GB18485-2014 1.76t / N/A
Generation Co., Ltd. chimney
(2# furnace) 80m
Waste gas Pb 1 West side of the main plant 0.0032mg/m GB18485-2014 / / N/A
chimney
80m 0.00014mg/m
Waste gas Cd 1 West side of the main plant GB18485-2014 / / N/A
chimney
80m
Waste gas Hg 1 West side of the main plant / GB18485-2014 / / N/A
chimney
80m 0.002ngTEQ/
Waste gas Dioxins 1 West side of the main plant GB18485-2014 / / N/A
chimney m
80m 0.7655
Waste gas Smoke 1 North side of the main plant GB18485-2014 0.457t 12t/a N/A
chimney mg/Nm
80m 40.0409mg/N
Waste gas SO2 1 North side of the main plant GB18485-2014 23.9035t 80t/a N/A
chimney m
80m 223.9976mg/
Waste gas NOx 1 North side of the main plant GB18485-2014 133.7214t 250t/a N/A
chimney Nm
Poyang Greenlander
80m 38.3231mg/N
Renewable Energy Waste gas HCl 1 North side of the main plant GB18485-2014 22.878t / N/A
chimney m
Co., Ltd.
80m
Waste gas CO 1 North side of the main plant 2.40mg/Nm GB18485-2014 1.433t / N/A
chimney
80m
Waste gas Pb 1 North side of the main plant 0.01mg/Nm GB18485-2014 / / N/A
chimney
80m 0.00015mg/N
Waste gas Cd 1 North side of the main plant GB18485-2014 / / N/A
chimney m
67
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
80m 0.000035mg/
Waste gas Hg 1 North side of the main plant GB18485-2014 / / N/A
chimney Nm
80m
Waste gas Dioxins 1 North side of the main plant 0.063ng/m GB18485-2014 / / N/A
chimney
80m
Waste gas Smoke 1 South side of the main plant 1.72mg/m GB18485-2014 0.524t 10.95t/a N/A
chimney
80m
Waste gas SO2 1 South side of the main plant 43.02mg/m GB18485-2014 25.406t 31.68t/a N/A
chimney
80m
Waste gas NOx 1 South side of the main plant 194.13mg/m GB18485-2014 119.737t 159.72t/a N/A
chimney
80m
Waste gas HCl 1 South side of the main plant 30.46mg/m GB18485-2014 18.663t / N/A
chimney
Biyang Fenghe New
80m
Energy Power Co., Waste gas CO 1 South side of the main plant 5.76mg/m GB18485-2014 1.817t / N/A
chimney
Ltd.
80m
Waste gas Pb 1 South side of the main plant 0.0642mg/m GB18485-2014 / / N/A
chimney
80m 0.000126mg/
Waste gas Cd 1 South side of the main plant GB18485-2014 / / N/A
chimney m
80m
Waste gas Hg 1 South side of the main plant 0.003mg/m GB18485-2014 / / N/A
chimney
80m 0.0078ngTEQ
Waste gas Dioxins 1 South side of the main plant GB18485-2014 / / N/A
chimney /Nm
Ammonia:
Discharge outlets for kitchen waste and
Ammonia and 1.5mg/Nm；
sludge at the end of the deodorization
Waste gas hydrogen Centralized 2 Hydrogen GB14554-93 None / N/A
system, with waste gas discharged
sulfide sulfide:
through the chimney
0.06mg/Nm
Smoke: Smoke: Smoke:
Xiantao Yinghe Discharge outlets of kitchen biogas 20mg/Nm； 0.00832t 0.241t；
Environmental Smoke, SO2 combustion at the end of the SO2： ；SO2： SO2：
Waste gas Centralized 1 GB13271-2014 N/A
Protection Co., Ltd. and NOX combustion system, with waste gas 50mg/Nm； 0t； 0.467t；
discharged through the chimney NOX： NOX： NOX：
200mg/Nm 0.0251t 1.809t
Sewage discharge outlets at the end of COD： COD： COD：
COD and
the sewage treatment facility, with 500mg/L； 1.969t； 4.2627t；
Wastewater ammonia Centralized 1 GB8978-1996 N/A
sewage discharged to the sewage plant Ammonia Ammonia Ammonia
nitrogen
in the west of the city after centralized nitrogen: nitrogen: nitrogen:
68
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
treatment 45mg/L 0.088t 0.427t
Emission
Standard of
Eastern exhaust outlet of waste gas Volatile Organic
from paint drying for whole-machine Compounds and
coating (longitude 112° 50' 14.28", Ni for Surface
latitude 28° 13' 59.99")/Western 0.03905 Coating
Waste gas Benzene Planned 2 0.038624t / N/A
exhaust outlet of waste gas from paint mg/m (Automobile
drying for whole-machine coating Manufacturing
(longitude 112° 50' 12.30", latitude 28° and Repair
13' 59.99") Industry)
(DB43/1356-
2017); 1 mg/m
Emission
Standard of
Eastern exhaust outlet of waste gas Volatile Organic
from paint drying for whole-machine Compounds and
coating (longitude 112° 50' 14.28", Ni for Surface
Changsha Zoomlion
latitude 28° 13' 59.99")/Western 0.0514175 Coating
Environmental Waste gas Toluene Planned 2 0.057679t / N/A
exhaust outlet of waste gas from paint mg/m (Automobile
Industry Co., Ltd.
drying for whole-machine coating Manufacturing
(longitude 112° 50' 12.30", latitude 28° and Repair
13' 59.99") Industry)
(DB43/1356-
2017); 3 mg/m
Emission
Standard of
Eastern exhaust outlet of waste gas Volatile Organic
from paint drying for whole-machine Compounds and
coating (longitude 112° 50' 14.28", Ni for Surface
latitude 28° 13' 59.99")/Western 0.300981 Coating
Waste gas Xylene Planned 2 0.27389t / N/A
exhaust outlet of waste gas from paint mg/m (Automobile
drying for whole-machine coating Manufacturing
(longitude 112° 50' 12.30", latitude 28° and Repair
13' 59.99") Industry)
(DB43/1356-
2017); 17 mg/m
69
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Emission
Standard of
Eastern exhaust outlet of waste gas Volatile Organic
from paint drying for whole-machine Compounds and
coating (longitude 112° 50' 14.28", Ni for Surface
Non-methane latitude 28° 13' 59.99")/Western 1.774702 Coating
Waste gas Planned 2 1.770279t 424.83t/a N/A
hydrocarbons exhaust outlet of waste gas from paint mg/m (Automobile
drying for whole-machine coating Manufacturing
(longitude 112° 50' 12.30", latitude 28° and Repair
13' 59.99") Industry)
(DB43/1356-
2017); 40 mg/m
Pollutant treatment
The Company values environmental protection and has established a management committee to coordinate its safety and environmental activities. Safety and environmental departments equipped
with management personnel have also been set up across key business segments. In recent years, the Company and its subsidiaries have been strengthening environmental policies and strictly regulating
the operating procedures and job responsibilities of environmental facilities to ensure their proper functioning. This has effectively controlled pollutant emissions, and no instances of exceeding discharge
standards have occurred. Throughout the routine production and operational processes, the environmental facilities integrated into the Company and its subsidiaries guarantee the uninterrupted
functioning of all environmental systems.
Environmental self-monitoring plan
The Company developed the 2023 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 authorities. It has also engaged a professional third-party inspection agency to carry out regular environmental
monitoring of the pollutants discharged by its projects.
Contingency plan for environmental emergencies
The Company engaged a professional third-party agency to develop a contingency plan for environmental emergencies for each of its key pollutant-discharging projects, and such plans have been
approved and filed for record. In 2023, the Company 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 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 philosophy into day-to-day management, the Company strives to become a resource-conserving and environmental friendly business. In
2023, it invested approximately RMB 26.246 million in environmental protection and paid approximately RMB 22,800 in environmental taxes under the relevant laws and regulations.
70
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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
Name of entity or production and
Reason Violation Penalty Rectification measures
subsidiary operation of the listed
company
1. Provided training for drivers in relevant legal
Susong Yinghe It had no material
provisions; 2. Strengthened the vehicle
Environmental Non- impact on the
Violation of Article 69 of the Highway Safety Protection A fine of RMB management policy to guarantee adherence to
Sanitation compliant production and
Regulations 200 loading protocols; 3. Carried out routine
Management Co., operation operation of the listed
inspections to guarantee the projects were
Ltd. company.
operated under established rules.
Violation of Article 33 of the Regulations on the
Administration of Pollutant Discharge Permit, Table 3-2, 1. A fine of RMB
Loudi Zoomlion
Table 2-2, Table 12-3 and Table 13 of Administrative 865,300 on the It had no material 1. Conducted training sessions for employees in
Huabao
Non- Penalty Discretion Standards of Hunan Province for Company; 2. A impact on the relevant legal provisions; 2. Formulated and
Environmental
compliant Ecological Environment Protection, Article 23 of the fine of RMB production and refined relevant rules and policies; 3.
Protection
operation Regulations on the Administration of Environmental 87,500 on directly operation of the listed Implemented routine inspections to ensure that
Technology Co.,
Protection of Construction Projects, and Article 38 of the accountable company. projects were operated in compliance with rules.
Ltd.
Measures for the Administration of Environmental persons.
Emergency Response
1. Conducted training sessions for project
It had no material
personnel in relevant legal provisions; 2.
Xiangtan Yinglian Non- Violation of Article 10 and Article 39 of the Water impact on the
Formulated and refined relevant rules and
Environmental compliant Pollution Prevention and Control Law of the People's RMB 670,000 production and
policies; 3. Implemented routine inspections to
Industry Co., Ltd. operation Republic of China. operation of the listed
ensure that projects were operated in compliance
company.
with rules.
Zhangjiagang Non- Violation of Articles 43 and 65 of the Regulations of It had no material 1. Conducted training sessions for employees in
A fine of 5,000
Zhongying compliant Jiangsu Province on the Administration of City Appearance impact on the relevant legal provisions; 2. Formulated and
RMB
Environmental operation and Environmental Sanitation. production and refined relevant rules and policies; 3.
71
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Development Co., operation of the listed Implemented routine inspections to ensure that
Ltd. company. projects were operated in compliance with rules.
Zhangjiagang It had no material 1. Conducted training sessions for employees in
Zhongying Non- Violation of Articles 43 and 65 of the Regulations of impact on the relevant legal provisions; 2. Formulated and
A fine of 5,000
Environmental compliant Jiangsu Province on the Administration of City Appearance production and refined relevant rules and policies; 3.
RMB
Development Co., operation and Environmental Sanitation. operation of the listed Implemented routine inspections to ensure that
Ltd. company. projects were operated in compliance with rules.
Other disclosable environmental information
The Company disclosed the environmental information of each of its key pollutant-discharging projects on the government's environmental information disclosure platform on a regular basis according to
the requirements of local environmental authorities.
Other environmental related information
NA
II. Corporate Social Responsibility
For details, please refer to the 2023 Sustainability Report disclosed at Cninfo (www.cninfo.com.cn).
III. Performance in Consolidating Achievements in Poverty Alleviation and Promoting Rural Revitalization
During the reporting period, the Company donated RMB 1,216,100 in money and materials to support poverty alleviation and rural revitalization efforts.
72
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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
I have no plan to relinquish
Undertaking Undertaking on not It is being
De facto control over the listed company
made at the to relinquish control January 3, properly
controller He in the next 60 months from the 60 months
time of asset over the listed 2019 fulfilled without
Jianfeng date of completion of this
restructuring company breach.
transaction.
Undertaking to
avoid horizontal
Undertaking to avoid horizontal
De facto competition,
Undertaking competition, regulate and It is being
controllers He regulate and reduce
made at the reduce related party August properly
Jianfeng, Ningbo related party Indefinitely
time of asset transactions, and maintain 15, 2018 fulfilled without
Infore, and Infore transactions, and
restructuring independence of the listed breach.
Group maintain
company
independence of the
listed company
Ningbo Infore,
Hongchuang Undertaking to
Undertaking Investment, avoid horizontal Undertaking to avoid horizontal It is being
made at the Zoomlion, competition, and competition, and regulate and August properly
Indefinitely
time of asset Ningbo Yingtai, regulate and reduce reduce related party 15, 2018 fulfilled without
restructuring Ningbo related party transactions breach.
Zhongfeng, transactions
Ningbo Liantai
Not fulfilled
properly. The
audited net
The accumulative total net profit (net profit
profit recorded by Lianjiang is the lower of
Greenlander New Energy Co., before or after
Ltd, Xiantao Greenlander deducting non-
Environmental Power recurring gains
Greenlander
Undertaking Generation Co., Ltd., Funan and losses) for
Investment
made at the Undertaking related Greenlander Environmental October the period from
Holding Co., Ltd. 48 months
time of asset to performance Energy Co., Ltd. and Shouxian 14, 2015 2016 to 2019 is
and Zheng
restructuring Greenlander New Energy Co., RMB
Weixian
Ltd. from 2016 to 2019 shall 2,156,500,
not be less than RMB 120 RMB -
million (net profit is subject to 24,424,500,
the lower after deducting non- RMB -
recurring gains and losses). 19,192,800, and
RMB -625,700
respectively;
and the
73
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
accumulated net
profit is RMB -
42,086,600
which is RMB
162,086,600
less than the
performance
commitment,
indicating a
failure to
achieve the
commitment in
respect of the
net profit for
2016 - 2019.
1. From 2016 to 2019, the
newly signed waste incineration
power generation BOT
agreements (subject to the
Not fulfilled
signing of franchise agreement)
properly. The
signed by Greenlander
newly signed
Environmental shall specify a
projects by
total daily disposal capacity of
Greenlander
not less than 6,500 tons (a
Environmental
Greenlander single project shall have a daily
Undertaking from 2016 to
Investment disposal capacity of not less
made at the Project October 2019 totaled
Holding Co., Ltd. than 500 tons, of which at least 48 months
time of asset undertakings 14, 2015 1,400 tons,
and Zheng one shall be more than 2,000
restructuring 5,100 tons less
Weixian tons). 2. Jiujiang Company
than the project
shall start construction and
undertaking.
obtain approval before 31
The project in
December 2020. If it fails to
Jiujian has not
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 RMB 5 million.
Whether the undertakings were
No
fulfilled on time
On July 18, 2022, the High People's Court of Guangdong Province ruled that Greenlander
If the undertaking is not fulfilled
Investment Holding Co., Ltd. and Zheng Weixian shall pay the Company RMB 113,406,600 for
on time, the specific reasons for
non-fulfillment of performance commitment. As at the date of this report, the Company received
non-fulfillment and the next steps
RMB 106,222,592.96 in proceeds from enforcement of the ruling, or RMB 99,229,334.96
plan shall be elaborated
excluding enforcement fees appraisal fees, service fees, applicable taxes, and costs.
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
74
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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 Policies, Accounting Estimates or Corrections of
Material Accounting Errors as Compared to the Financial Statements for the Prior Year
Applicable □Not applicable
1. Starting from January 1, 2023, the Company has adopted the regulations on accounting treatment that the exemption of initial
recognition shall not apply to the deferred income tax relating to assets and liabilities arising from a single transaction 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 Statements 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 Statements.
VIII. Engagement and Disengagement of Accounting Firm
Current 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
315
RMB 10,000)
Consecutive years of the domestic audit service provided by the 22
75
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
accounting firm
Names of the domestic certified public accountants from the
Bian Shanshan, Wei Xiaohui
accounting firm
Consecutive years of audit service provided by domestic
5 years and 2 years, respectively
certified public accountants from the accounting firm
Whether the accounting firm was changed during the current 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 Company's internal
control auditor, 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
X. Bankruptcy and Reorganization
□Applicable Not Applicable
No such cases during the reporting period.
XI. Material Litigation and Arbitration
□Applicable Not Applicable
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 466 million, which are not expected to incur any provision of
large amount.
XII. Punishments and Rectifications
□Applicable Not Applicable
No such cases during the reporting period.
XIII. Credit Standing 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 had good credit standing, 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
76
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
As a Available
Approved
Pricing Transaction percentage market
Type of Contents of Transa transaction Over
Related Related party principle of amount (in of Method of price for Disclosure Index to
related party related party ction limit (in approved
party relationship related party RMB10,00 transactions settlement transactions date disclosure
transaction transaction price RMB10,00 limit
transaction 0) of same of same
0)
type type
Shareholder
holding more
Zoomlion Goods or Goods or As per
than 5% of Market April 25, www.cnin
Heavy financial financial -- 8,116.42 17,000 No contractua --
the price 2023 fo.com.cn
Industry services services l terms
Company's
shares
Total -- -- 8,116.42 -- 17,000 -- -- -- -- --
Details of any large-amount sales return N/A
Give the actual fulfillment situation during the
Before the Company's routine related party transactions in 2023, subsidiaries comprehensively assessed and
reporting period (if any) where an estimate by
estimated their related party transactions. However, due to changes in the market and customer demand,
type had been made for the total amounts of
there were differences between the Company's related party transactions and the actual situation. This was
routine related party transactions to occur
regular business activity and had minimal impact on day-to-day operations and performance.
during the period
Reason for any significant difference between
the transaction price and the market reference Not applicable
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 current period
Maximum
Opening Total Ending balance
Related party daily deposit Range of
Related parties balance (in Total deposited withdrawn (in
relationship limit (in deposit rate amount (in
RMB10,000) amount (in RMB10,000)
RMB10,000) RMB10,000)
RMB10,000)
Related
company of
Zoomlion
shareholder No interest
Finance Co., 0 31 31
holding more accrued
Ltd.
than 5% of the
Company's
77
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
shares
Loan business
□Applicable Not Applicable
Credit or other financial business
□Applicable Not Applicable
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.
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 23rd floor of Yingfeng Business Building at 8 Yixing Road, Junlan Community, Beijiao
Town, Shunde District, Foshan City, as the business premises with a gross floor area of 1,578.68 sqm. The rent payable for 2023 was
RMB 1,348,100, and the actual payment was RMB 1,348,100. As at December 31, 2023, the above amounts have been settled.
Items that brought 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 profits or losses to the Company accounting for more than 10% of the gross profit of the Company
during the reporting period.
78
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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 of the Actual Actual Counter- Guarantee
Guaranteed Guarantee Guarantee Collateral Term of Completed
guarantee occurrence guarantee guarantee for a related
party limit
limit type (if any) guarantee or not
date amount (if any) party or not
announcement
Joint and
Buyer's credit April 25, August 31, several
1,687.47 1,687.47 N/A -- 4 years No No
business 2023 2021 liability
guarantee
Joint and
Buyer's credit April 25, June 27, several
687.85 687.85 N/A -- 3 years No No
business 2023 2022 liability
guarantee
Joint and
Buyer's credit April 25, September several
6,122.01 6,122.01 N/A -- 1 year No No
business 2023 18, 2022 liability
guarantee
Joint and
Buyer's credit April 25, September several
353.7 353.7 N/A -- 1 year No No
business 2023 9, 2022 liability
guarantee
Joint and
Buyer's credit April 25, June 30, several
4,306.24 4,306.24 N/A -- 3 years No No
business 2023 2021 liability
guarantee
Joint and
Buyer's credit April 25, September several
6,787.84 6,787.84 N/A -- 2 years No No
business 2023 5, 2022 liability
guarantee
Buyer's credit April 25,
85,054.89 -- -- --
business 2023
Total approved limit for Total actual amount of
external guarantee during the 105,000 external guarantee during 19,945.11
reporting period (A1) the reporting period (A2)
Total actual balance of
Total approved limit for
external guarantee at the
external guarantee at the end 105,000 19,945.11
end of the reporting
of the reporting period (A3)
period (A4)
Guarantees provided by the Company for its subsidiaries
Disclosure
date of the Actual Actual Counter- Guarantee
Guaranteed Guarantee Guarantee Collateral Term of Completed
guarantee occurrence guarantee guarantee for a related
party limit
limit type (if any) guarantee or not
date amount (if any) party or not
announcement
Zhejiang
Shangfeng Joint and
Special April 25, February 3, several
28,600 9,754.12 N/A -- 3 years No Yes
Blower 2023 2023 liability
Industrial guarantee
Co., Ltd.
Zhejiang April 25, May 22, Joint and
22,350 13,687.35 N/A -- 1 year No Yes
Shangfeng 2023 2023 several
79
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Special liability
Blower guarantee
Industrial
Co., Ltd.
Zhejiang
Shangfeng Joint and
Special April 25, October 31, several
30,000 2,596.74 N/A -- 1 year No Yes
Blower 2023 2023 liability
Industrial guarantee
Co., Ltd.
Zhejiang
Shangfeng Joint and
Special April 25, March 31, several
12,000 8,700 N/A -- 3 years No Yes
Blower 2023 2022 liability
Industrial guarantee
Co., Ltd.
Zhejiang
Shangfeng Joint and
Special April 25, July 24, several
15,000 8,105.96 N/A -- 1 year No Yes
Blower 2023 2023 liability
Industrial guarantee
Co., Ltd.
Guangdong Joint and
Infore April 25, March 1, several
4,000 12.72 N/A -- 1 year No Yes
Technology 2023 2021 liability
Co., Ltd. guarantee
Guangdong Joint and
Infore April 25, August 16, several
5,000 1,079.03 N/A -- 1 year No Yes
Technology 2023 2023 liability
Co., Ltd. guarantee
Guangdong
Joint and
Infore Smart
April 25, December several
Sanitation 2,000 N/A -- 4 years No Yes
2023 1, 2021 liability
Technology
guarantee
Co., Ltd.
Changsha
Joint and
Zhongbiao
April 25, September several
Environment 5,000 N/A -- 2 years No Yes
2023 11, 2021 liability
al Industry
guarantee
Co., Ltd.
Shenzhen
Green Joint and
Oriental February 2, August 25, several
13,000 2,795 N/A -- 8 years No Yes
Environment 2016 2016 liability
al Protection guarantee
Co., Ltd.
Shouxian Joint and
Greenlander April 30, November several
9,221 7,170.3 N/A -- 15 years No Yes
New Energy 2022 10, 2022 liability
Co., Ltd. guarantee
Xiantao
Greenlander Joint and
Environment April 30, June 7, several
27,870 25,210 N/A -- 13 years No Yes
al Power 2022 2022 liability
Generation guarantee
Co., Ltd.
Poyang August 25, 25,000 April 26, 25,000 Joint and N/A -- 10 years No Yes
80
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Greenlander 2022 2023 several
Renewable liability
Energy Co., guarantee
Ltd.
Maoming
Infore
Joint and
Environment
December 26, March 20, several
Water 15,000 9,435.05 N/A -- 15 years No Yes
2017 2018 liability
Treatment
guarantee
Technology
Co., Ltd.
Lianjiang Joint and
Greenlander April 30, November several
9,963 7,641.49 N/A -- 15 years No Yes
New Energy 2022 30, 2020 liability
Co., Ltd. guarantee
Lianjiang Joint and
Greenlander April 30, May 25, several
17,600 8,648.2 N/A -- 15 years No Yes
New Energy 2022 2022 liability
Co., Ltd. guarantee
Lu'an
Zhongfeng Joint and
Urban April 23, June 8, several
8,000 7,400 N/A -- 13 years No Yes
Environment 2021 2021 liability
al Service guarantee
Co., Ltd.
Tongshan
Joint and
Tongda Water
April 25, February 1, several
Treatment 6,000 925 N/A -- 18 years No Yes
2020 2021 liability
Technology
guarantee
Co., Ltd.
Changde
Joint and
Zelian
April 23, May 26, several
Environment 12,000 11,700 N/A -- 15 years No Yes
2021 2021 liability
al Service
guarantee
Co., Ltd.
Xiantao
Joint and
Yinghe
August 21, January 20, several
Environment 30,100 12,200 N/A -- 15 years No Yes
2020 2021 liability
al Protection
guarantee
Co., Ltd.
Biyang
Joint and
Fenghe New
April 25, May 23, several
Energy 22,000 21,426 N/A -- 14 years No Yes
2023 2022 liability
Power Co.,
guarantee
Ltd.
Changsha
Zoomlion Joint and
Changgao October 24, March 25, several
10,000 3,000 N/A -- 5 years No Yes
Environment 2019 2020 liability
al Industry guarantee
Co., Ltd.
Xiangtan
Joint and
Yinglian
April 30, several
Environment 15,000 July 5, 2022 4,000 N/A -- 10 years No Yes
2022 liability
al Industry
guarantee
Co., Ltd.
Tongren April 30, 14,300 August 19, 9,750 Joint and N/A -- 15 years No Yes
81
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Bijiang 2022 2022 several
District liability
Zhongfeng guarantee
Environment
al Industry
Co., Ltd.
Huai'an
Joint and
Yinghe
August 25, December several
Environment 15,000 5,595 N/A -- 15 years No Yes
2022 26, 2022 liability
Technology
guarantee
Co., Ltd.
Infore
Zoomlion Joint and
Urban April 25, November several
3,000 N/A -- 1 year No Yes
Environment 2023 19, 2023 liability
al Service guarantee
Co., Ltd.
Zhejiang
Shangfeng
Special April 25,
17,000 -- -- --
Blower 2023
Industrial
Co., Ltd.
Guangdong
Infore April 25,
1,000 -- -- --
Technology 2023
Co., Ltd.
Guangdong
Infore Smart
April 25,
Sanitation 1,000 -- -- --
2023
Technology
Co., Ltd.
Lianjiang
Greenlander April 25,
1,200 -- -- --
New Energy 2023
Co., Ltd.
Liling
Zhaoyang
April 25,
Environment 50,000 -- -- --
2023
al Protection
Co., Ltd.
Huai'an
Chenjie
Environment April 25,
5,000 -- -- --
al 2023
Engineering
Co., Ltd.
Other wholly-
April 25,
owned 7,000 -- -- --
2023
subsidiaries
Total actual guarantee
Total approved guarantee
amount for subsidiaries
limit for subsidiaries during 231,150 68,935.92
during the reporting
the reporting period (B1)
period (B2)
Total approved guarantee Total actual guarantee
limit for subsidiaries at the 518,204 balance for subsidiaries 205,831.96
end of the reporting period at the end of the reporting
82
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
(B3) period (B4)
Guarantees between subsidiaries
Disclosure date
Actual Actual Counter- Guarantee
Guaranteed of the Guarantee Guarantee Collateral Term of Completed
occurrence guarantee guarantee for a related
party guarantee limit limit type (if any) guarantee or not
announcement date amount (if any) party or not
Total actual guarantee
Total approved guarantee
amount for subsidiaries
limit for subsidiaries during 0 0
during the reporting
the reporting period (C1)
period (C2)
Total approved guarantee Total actual guarantee
limit for subsidiaries at the balance for subsidiaries
0 0
end of the reporting period at the end of the reporting
(C3) period (C4)
Total guarantee amount (total of the three kinds above)
Total actual guarantee
Total approved guarantee
amount during the
limit during the reporting 336,150 88,881.03
reporting period
period (A1+B1+C1)
(A2+B2+C2)
Total approved guarantee Total actual guarantee
limit at the end of the balance at the end of the
623,204 225,777.07
reporting period reporting period
(A3+B3+C3) (A4+B4+C4)
Total actual guarantees (A4+B4+C4) as a percentage
12.95%
of the Company's net assets
Of which:
Amount of guarantees provided for shareholders, the
0
actual controller and their related parties (D)
Balance of debt guarantees provided directly or
indirectly for the guaranteed party with a liability-to- 156,651.97
asset ratio over 70% (E)
Total of the three types of guarantees above (D+E+F) 156,651.97
Description of any cases during the reporting period
where unexpired guarantee contracts led to guarantee
liability or had indications that the Company may N/A
assume joint and several liabilities for compensation (if
applicable).
Description of composite guarantees
3. Entrusted cash management
(1) Entrusted wealth management
Applicable □Not applicable
Overview of entrusted wealth management during the reporting period
Unit: RMB 10,000
Accrued impairment
Entrusted Unrecovered
Type Funding source Undue amount amount for unrecovered
amount overdue amount
overdue wealth
83
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
management
Bank's wealth
Own funds 85,630 0 0 0
management product
Total 85,630 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, the proposal on the spin-off of Zhejiang Shangfeng Special Blower Industrial Co., Ltd. ("Shangfeng") for
listing on the ChiNext market of SZSE were deliberated and approved at the Company's 2021 Annual General Meeting of
Shareholders. For details, please refer to the announcement published on April 30, 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 IPO 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 High-tech
Special Wind Industrial Co., Ltd. for IPO and Listing on the ChiNext (S.H.H. [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 (S.H.H. [2022] No. 011129). Shangfeng
submitted its reply to the letter on March 17, 2023.
On July 21, 2023, SZSE rendered its decision (S.Z.S.S. [2023] No. 586) to terminate the review process for the intended IPO and
listing of Zhejiang Shangfeng Special Blower Industrial Co., Ltd. on the ChiNext.
84
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Part VII Share Changes and Shareholder Information
I. Share Changes
1. Share changes
Unit: Share
Before change Increase/decrease (+/-) After change
Shares as
Shares as dividend
dividend converted
Quantity Ratio New issues Others Sub-total Quantity Ratio
converted from
from profit capital
reserves
I. Restricted
1,838,140 0.06% 0 0 0 -365,671 -365,671 1,472,469 0.05%
Shares
1. Shares
held by the 0 0.00% 0 0 0 0 0 0 0.00%
State
2. Shares
held by state-
0 0.00% 0 0 0 0 0 0 0.00%
owned
corporations
3. Shares
held by other
1,838,140 0.06% 0 0 0 -365,671 -365,671 1,472,469 0.05%
domestic
investors
Including:
Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
domestic
corporations
Shares
held by
1,838,140 0.06% 0 0 0 -365,671 -365,671 1,472,469 0.05%
domestic
individuals
4. Shares
held by
0 0.00% 0 0 0 0 0 0 0.00%
overseas
investors
Including:
Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
overseas
corporations
Shares
held by
0 0.00% 0 0 0 0 0 0 0.00%
overseas
individuals
II. Unrestricted 3,177,667 3,178,034,2
99.94% 1,111 0 0 365,671 366,782 99.95%
Shares ,419 01
3,177,667 3,178,034,2
1. RMB- 99.94% 1,111 0 0 365,671 366,782 99.95%
,419 01
85
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
denominated
common shares
2.
Domestically
0 0.00% 0 0 0 0 0 0 0.00%
listed foreign
shares
3. Overseas
listed foreign 0 0.00% 0 0 0 0 0 0 0.00%
shares
4. Others 0 0.00% 0 0 0 0 0 0 0.00%
III. Total
3,179,505 3,179,506,6
Number of 100.00% 1,111 0 0 0 1,111 100.00%
,559 70
Shares
Reasons for share changes
Applicable □Not applicable
1. Upon the expiry of the lock-up period due to a change in the Company's senior officer positions, the lock-up on senior officer-
held shares was lifted, resulting in a decrease of 365,671 restricted shares and a commensurate rise of 365,671 unrestricted shares.
2. As at December 31, 2023, 16,944 shares in total were converted from the Infore Convertible Bonds issued by the Company. In
particular, 1,111 shares were converted in 2023, resulting in an increase in the Company's non-restricted shares by 1,111.
Approval of changes in share capital
Applicable □Not applicable
With the approval granted by the CSRC under Document Z.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. Per
approval of SZSE, the Company's convertible corporate bonds of RMB 1,476,189,600 have been listed for trading on SZSE, starting
on December 2, 2020. The Infore Convertible Bonds in this offering are convertible into the Company's shares from 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 1,111 shares converted from convertible corporate bonds.
Effects of share changes on basic earnings per share, diluted earnings per share, net asset value per share attributable to the Company's
common shareholders and other financial indicators of the prior year and the prior accounting period, respectively
□Applicable Not Applicable
Other information that the Company deems disclosable or disclosable as required by the securities regulatory authorities
□Applicable Not Applicable
2. Changes in restricted shares
Applicable □Not applicable
Unit: Share
Number of shares
Increase of restricted Decrease of Number of shares Reasons for
Name of held at the Date of lifting
shares during the restricted shares held at the end of trading
shareholder beginning of the trading restriction
period during the period the period restriction
period
Locked-up Annual restriction
Others 1,838,140 0 365,671 1,472,469 shares of lifting under
senior officers regulations
86
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Total 1,838,140 0 365,671 1,472,469 -- --
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 number of shares, shareholder structure and asset and liability structures
Applicable □Not applicable
1. Upon the expiry of the lock-up period due to a change in the Company's senior officer positions, the lock-up on senior officer-
held shares was lifted, resulting in a decrease of 365,671 restricted shares and a commensurate rise of 365,671 unrestricted shares.
2. With the approval granted by the CSRC under Document Z.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. Per approval of SZSE, the Company's convertible corporate bonds of RMB 1,476,189,600 have been listed for trading
on SZSE, starting on December 2, 2020. The Infore Convertible Bonds in this offering are convertible into the Company's shares from
May 10, 2021. On January 3, 2024, the Company disclosed the Announcement on Results of Conversion of Convertible Bonds and
Changes in Share Capital in the Fourth Quarter of 2023. As at December 31, 2023, 16,944 shares in total were converted from the
"Infore Convertible Bonds" issued by the Company. In particular, 1,111 shares were converted in 2023, resulting in an increase in non-
restricted shares by 1,111.
3. Existing internal employee shares
□Applicable Not Applicable
III. Controlling Shareholders and De Facto Controller
1. Number of shareholders and their shareholdings
Unit: Share
Number of
Number of preference
Number of
shareholders shareholders Number of preference
shareholders
at the end of with resumed shareholders with resumed
of common
the month voting power voting power at the end of
shares at the 35,253 34,412 0 0
prior to the at the end of the previous month prior to
end of the
disclosure the reporting the disclosure date of this
reporting
date of this period (if report (if any) (see Note 8)
period
report any) (see
Note 8)
Shareholders holding over 5% of total shares or top 10 shareholders
Shareholding Shares pledged, tagged or
Increase/decr
s at the end Number of Number of frozen
Name of Nature of Shareholding ease during
of the restricted unrestricted
shareholder shareholder ratio the reporting
reporting shares held shares held Share status Quantity
period
period
Ningbo Domestic 32.02% 1,017,997,38 0 0 1,017,997,38 Pledged 610,798,429
87
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Infore Asset non-state- 2 2
Management owned
Co., Ltd. corporation
Zoomlion
Heavy Domestic
Industry non-state- Not
12.56% 399,214,659 0 0 399,214,659 0
Science and owned applicable
Technology corporation
Co., Ltd.
Domestic
Infore Group non-state-
11.31% 359,609,756 0 0 359,609,756 Pledged 100,000,000
Co., Ltd. owned
corporation
Hongchuang
(Shenzhen) Domestic
Investment non-state- Not
9.76% 310,423,813 0 0 310,423,813 0
Center owned applicable
(Limited corporation
Partnership)
Infore
Environment
Technology
Group Co.,
Ltd.－The Not
Others 2.04% 64,789,616 0 0 64,789,616 0
Second applicable
Employee
Stock
Ownership
Plan
Domestic
Not
He Jianfeng natural 2.00% 63,514,690 0 0 63,514,690 0
applicable
person
Zara Green
Foreign Not
Hong Kong 1.72% 54,778,335 0 0 54,778,335 0
corporation applicable
Limited
Domestic
Not
Chen Liyuan natural 0.98% 31,018,000 0 0 31,018,000 0
applicable
person
Guangdong
Hengjian
Capital State-owned Not
0.88% 28,059,147 0 0 28,059,147 0
Management corporation applicable
Holding Co.,
Ltd.
Hong Kong
Securities
Foreign Not
Clearing 0.86% 27,190,851 10,888,577 0 27,190,851 0
corporation applicable
Company
Ltd.
Strategic investor/general
corporation becoming a top
Not applicable.
10 shareholder in a rights
issue (if any) (see Note 3)
Related party or acting-in- Ningbo Infore Asset Management Co., Ltd. and Infore Group Co., Ltd. share the same de facto
concert relationship among controller He Jianfeng, and they are persons acting in concert mutually. Apart from that, the Company
the aforementioned is not aware of any related party or acting-in-concert relationship (as defined in the Measures for the
shareholders Administration of the Takeover of Listed Companies) among other shareholders aforementioned.
88
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Shareholders above
entrusting/entrusted with or Not applicable.
waiving voting rights
Top 10 shareholders with
repurchase account (if any) NA
(see Note 10)
Shareholding of top 10 unrestricted shareholders
Number of Type of share
unrestricted shares at
Name of shareholder
the end of the Type of share Quantity
reporting period
RMB-dominated
Ningbo Infore Asset Management Co., Ltd. 1,017,997,382 1,017,997,382
common shares
RMB-dominated
Zoomlion Heavy Industry Science and Technology Co., Ltd. 399,214,659 399,214,659
common shares
RMB-dominated
Infore Group Co., Ltd. 359,609,756 359,609,756
common shares
Hongchuang (Shenzhen) Investment Center (Limited RMB-dominated
310,423,813 310,423,813
Partnership) common shares
Infore Environment Technology Group Co., Ltd.－The Second RMB-dominated
64,789,616 64,789,616
Employee Stock Ownership Plan common shares
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
RMB-dominated
Guangdong Hengjian Capital Management Holding Co., Ltd. 28,059,147 28,059,147
common shares
RMB-dominated
Hong Kong Securities Clearing Company Ltd. 27,190,851 27,190,851
common shares
Ningbo Infore Asset Management Co., Ltd. and Infore Group Co.,
Ltd. share the same de facto controller He Jianfeng, and they are
Related party or acting-in-concert relationship among top 10
persons acting in concert mutually. Apart from that, the Company
unrestricted public shareholders, as well as between top 10
is not aware of any related party or acting-in-concert relationship
unrestricted public shareholders and top 10 shareholders
(as defined in the Measures for the Administration of the Takeover
of Listed Companies) among other shareholders aforementioned.
Infore Environment Technology Group Co., Ltd. - Second
Top 10 common shareholders involved in securities margin
Employee Stock Ownership Plan holds 64,789,616 shares in the
trading (if any) (see Note 4)
Company through credit accounts.
Top ten common shareholders involved in securities lending through securities financing transactions
□Applicable Not Applicable
Changes in the top ten common shareholders compared to the previous period
Applicable □Not applicable
Unit: Share
Changes in the top ten common shareholders compared to the end of the previous period
Number of shares held in shareholders'
Outstanding balance of securities lent general and credit accounts, and securities
Addition/withdrawal through securities financing transactions at lent through securities financing
Name of shareholder during the reporting the end of the period transactions that have not been returned by
period the end of the period
Total number As a percentage of Total number As a percentage of
89
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
total share capital total share capital
Hong Kong
Securities Clearing Addition 0 0.00% 27,190,851 0.86%
Company Ltd.
Ningbo Yingtai
Investment
Withdrawal 0 0.00% 10,228,414 0.32%
Partnership (Limited
Partnership)
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 controlling shareholder: Natural person
Type of controlling shareholder: Corporation
Legal
Name of controlling Principal business
representative/Perso Date of incorporation Organization code
shareholder activities
n-in-charge
Asset management,
Ningbo Infore Asset industrial investment,
Wei Ting May 2, 2017 91330206MA290L5J3L
Management Co., Ltd. investment
management.
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.
3. De facto controller and persons acting in concert
Nature of de facto controller: Domestic natural person
Type of de facto controller: Natural person
Relationship with de facto Residency in other
Name of de facto controller: Nationality
controller country/region or not
He Jianfeng Himself China Yes
Main occupation and position Chairman of the Board and President of Infore Group Co., Ltd.
Controlling interests in other
Beijing Baination Pictures Co., Ltd. (Stock code: 300291) Jason Furniture(Hangzhou)Co., Ltd.
domestically and overseas listed
(Stock code: 603816)
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 the de facto controller of the Company.
90
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Ownership and control relationship between the de facto controller and the Company
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
5. Other corporate shareholders with a shareholding of more than 10%
Applicable □Not applicable
Legal
Name of
representative Date of Registered
corporate 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
Zoomlion of optical-electro-mechanical integration and provision of leasing and
Heavy after-sale technical services; Sales of building and decorative materials,
RMB
Industry August 31, vehicles for engineering and metal materials, chemical materials, and
Zhan Chunxin 8,677,992,2
Science and 1999 chemical products (excluding hazardous chemicals and monitoring
36
Technology products); Sales of lubricant oil, lubricating grease and hydraulic oil
Co., Ltd. (excluding hazardous chemicals); Retail of refined oil products
(operated by licensed subsidiaries only); Operation of commodity and
technology import and export businesses; Investment in real estate with
self-owned assets (without permit to carry out national financially
regulated and financial credit businesses such as absorbing deposits,
fund-raising and collection, entrusted loans, and issuing notes and
lending). Sales of used vehicles; Disassembly and recovery of disused
91
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
machinery equipment. (Business activities subject to approval under
laws shall not be carried out unless approval from competent
authorities has been obtained.)
Investment in various industries, investment management, investment
consultation, and asset management; Enterprise management and
enterprise consulting; 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
RMB (excluding the import and export of commodities and technologies that
Infore Group April 19,
He Jianfeng 4,450,000,0 are prohibited by the state or involve administrative review and
Co., Ltd. 2002
00 approval); R&D, 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 are operated by 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
IV. Repurchase of Shares during the Reporting Period
Progress of share repurchase
□Applicable Not Applicable
Progress of reducing the repurchased shares by way of centralized bidding:
□Applicable Not Applicable
92
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Part VIII Information on Preference Shares
□Applicable Not Applicable
During the reporting period, the Company had no preference shares.
93
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Part IX Information on Bonds
Applicable □Not applicable
I. Enterprise Bond
□Applicable Not Applicable
During the reporting period, the Company had no enterprise bonds.
II. Corporate Bond
□Applicable Not Applicable
During the reporting period, the Company had no corporate bonds.
III. Debt Financing Instruments of Non-financial Enterprises
□Applicable Not Applicable
During the reporting period, the Company had no debt financing instruments of non-financial enterprises.
IV. Convertible Corporate Bonds
Applicable □Not applicable
1. Previous adjustments to conversion price
With the approval granted by the CSRC under Document Z.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 Company's equity distribution for 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 took 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.
On July 18, 2023, the Company's equity distribution for 2022 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 8.09 per share to RMB 7.98 per share, effective on July 18,
2023. The adjusted conversion price took effect on July 18, 2023.
94
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
2. Information on cumulative conversion of bonds into shares
Applicable □Not applicable
The number
of shares
converted as
Unconverted
a percentage
Abbreviated Accumulated Accumulated amount as a
Start and end Total issued Total issued of the total Amount
name of conversion conversion percentage of
date of number amount issued shares unconverted
convertible amount number the total
conversion (sheet) (RMB) in the (RMB)
bond (RMB) (share) issued
Company
amount
before start
of
conversion
Infore
1,476,189,60 1,476,050,70
Convertible 2021-05-10 14,761,896 138,900.00 16,944 0.00% 99.99%
0.00 0.00
Bonds
3. Information on top 10 convertible bond holders
Number of
Amount of Proportion of
convertible
Nature of convertible bonds convertible bonds
bonds held at
No. Name of convertible bond holder convertible held at the end of held at the end of
the end of the
bond holder the reporting the reporting
reporting
period (RMB) period
period (sheet)
Renmin Stable, Double-Benefit Fixed-income Pension
1 Product - Industrial and Commercial Bank of China Others 510,449 51,044,900.00 3.46%
Limited
CNPC Enterprise Annuity Program - Industrial and
2 Others 469,484 46,948,400.00 3.18%
Commercial Bank of China Limited
CITIC Securities - Sany Heavy Industry Co., Ltd. -
3 CITIC Securities Sany Zunxiang Customized No. 1 Others 460,310 46,031,000.00 3.12%
Single Asset Management Program
Industrial and Commercial Bank of China Limited -
4 Aegon-industrial Hengyi Bond Securities Investment Others 360,000 36,000,000.00 2.44%
Fund
China AMC Yannianyishou Fixed-income Pension
5 Others 343,276 34,327,600.00 2.33%
Product - Agricultural Bank of China Limited
Fullgoal Fuyi Aggressive Fixed-income Pension
6 Product - Industrial and Commercial Bank of China Others 336,594 33,659,400.00 2.28%
Limited
China AMC - Hexie Health Insurance Co., Ltd. -
7 Universal Life Insurance - China AMC - Huajing Fixed Others 300,791 30,079,100.00 2.04%
Income No.1 Single Asset Management Program
CITIC Bank Corporation Limited - XinAo Credit Bond
8 Others 300,000 30,000,000.00 2.03%
Securities Investment Fund
9 National Social Security Fund 210 Portfolio Others 294,176 29,417,600.00 1.99%
CCB Corporation Enterprise Annuity Program -
10 Others 292,404 29,240,400.00 1.98%
Industrial and Commercial Bank of China Limited
4. Information on material changes in the profitability, asset status and credit standing of guarantor
□Applicable Not Applicable
95
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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 19, 2023, 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. (2023) (X.P.W.H.Z. [2023] Track
No.0566), assigning the Company a corporate credit rating of AA +, with stable rating outlook for the coming 12 to 18 months. For
details, please refer to the Follow-up Rating Report on Public Offering of Convertible Corporate Bonds by the Company disclosed by
the Company (2023) on June 21, 2023 on Cninfo (www.cninfo.com.cn).
The primary sources of funding 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 a good credit standing and a reasonable asset mix and can obtain financing
from banks and other avenues 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 1.75 1.67 4.79%
Liability-to-asset ratio 38.39% 39.40% -1.01%
Quick ratio 1.62 1.56 3.85%
The reporting period The prior year YoY change
Net profit after deducting non-
44,475.34 32,475.34 36.95%
recurring gains and losses
EBITDA/total liabilities 14.29% 12.30% 1.99%
Interest coverage ratio 4.63 3.79 22.16%
Cash/interest coverage ratio 13.68 14.07 -2.77%
EBITDA/interest coverage ratio 9.39 7.39 27.06%
Loan repayment rate 100.00% 100.00% 0.00%
Interest coverage ratio 100.00% 100.00% 0.00%
96
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Part X Financial Report
Audit Report
Type of audit opinions Standard unqualified opinion
Signing date of the auditor’s report April 26, 2024
Name of the auditor Pan-China Certified Public Accountants LLP (Special General Partnership)
No. of the auditor’s report PCCPAAR [2024] No. 4373
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 financial statements of Infore Environment Technology Group Co., Ltd. (the
“Company”), which comprise the consolidated and parent company balance sheets as at December
31, 2023, the consolidated and parent company income statements, consolidated and parent company
cash flow statements, and 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 accompanying financial statements present fairly, in all material respects, the
financial position of the Company as at December 31, 2023, and 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.
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(I) Revenue recognition
1. Key audit matters
Please refer to section III (XXVII) 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 2023, the operating revenue amounted to
12,631.05 million yuan, with year-over-year growth of 3.06%.
As operating revenue is one of the key performance indicators of the Company, the authenticity,
accuracy and completeness of revenue recognition have a significant impact on the Company’s
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,
customer, project, etc., so as to identify whether there are significant or abnormal fluctuations and
find out the reason;
(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, outbound delivery order, delivery note, delivery receipt, 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
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(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 (XII) and section V (I) 3, 9 and 11 of notes to the financial statements for
details.
As of December 31, 2023, the book balance of accounts receivable amounted to 6,647.08 million
yuan, with provision for bad debts of 779.41 million yuan, and the carrying amount amounted to
5,867.67 million yuan; the book balance of long-term receivables (including those due within one
year) amounted to 1,067.49 million yuan, with provision for bad debts of 92.31 million yuan, and the
carrying amount amounted to 975.18 million yuan. The carrying amount of accounts receivable and
long-term receivables (collectively referred to as “receivables”) totaled 6,842.85 million yuan.
Based on credit risk features of receivables, the Company’s management (the “Management”)
measures the loss allowance 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 ages, adjusts them based on historical credit risk
loss experience and forward-looking estimations, prepares the comparison table of 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
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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;
(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 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 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
(7) 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 (XXI) and section V (I) 20 of notes to the financial statements for details.
As of December 31, 2023, the cost of goodwill amounted to 6,268.85 million yuan, with provision
for impairment of 623.48 million yuan, and the carrying amount amounted to 5,645.37 million yuan,
accounting for 19.43% 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.
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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.
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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. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the
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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
i n t e r n a l c o n t r o l .
(II) Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.
(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Management.
(IV) Conclude on the appropriateness of the Management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Company to
cease to continue as a going concern.
(V) Evaluate the overall presentation, structure and content of the financial statements, and whether
the financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.
(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the
entities or business activities within the Company to express an opinion on the financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain sole
responsibility for our audit opinion.
We communicate with those charged with governance regarding the planned audit scope, time
schedule and significant audit findings, including any deficiencies in internal control of concern that
we identify during our audit.
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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:
(Engagement Partner)
Hangzhou China Chinese Certified Public Accountant:
Date of Report: April 26, 2024
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.
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Infore Environment Technology Group Co., Ltd.
Consolidated balance sheet as at December 31, 2023
(Expressed in Renminbi Yuan)
Note
Assets Closing balance December 31, 2022
No.
Current assets:
Cash and bank balances 1 4,411,376,583.78 4,728,203,530.46
Settlement funds
Loans to other banks
Held-for-trading financial assets
Derivative financial assets
Notes receivable 2 4,947,131.83 13,565,706.22
Accounts receivable 3 5,867,669,476.86 5,625,792,472.37
Receivables financing 4 146,814,501.64 107,316,593.41
Advances paid 5 140,241,046.66 192,360,542.24
Premiums receivable
Reinsurance accounts receivable
Reinsurance reserve receivable
Other receivables 6 316,661,073.26 385,622,271.00
Financial assets under reverse repo
Inventories 7 971,229,637.15 881,038,036.95
Contract assets 8 74,803,489.48 101,023,854.33
Assets held for sale
Non-current assets due within one year 9 552,082,464.00 476,505,825.28
Other current assets 10 523,880,405.80 497,450,797.42
Total current assets 13,009,705,810.46 13,008,879,629.68
Non-current assets:
Loans and advances
Debt investments
Other debt investments
Long-term receivables 11 423,098,527.59 932,130,871.82
Long-term equity investments 12 681,629,084.69 676,829,959.84
Other equity instrument investments 13 15,352,971.01 15,352,971.01
Other non-current financial assets
Investment property 14 1,138,868.60 27,105,435.03
Fixed assets 15 2,338,316,124.14 2,268,287,202.01
Construction in progress 16 288,057,018.89 41,073,267.68
Productive biological assets
Oil & gas assets
Right-of-use assets 17 25,125,671.95 31,859,454.24
Intangible assets 18 5,984,348,824.39 6,048,114,364.49
Development expenditures 19 30,338,218.08
Goodwill 20 5,645,365,375.67 5,739,602,679.79
Long-term prepayments 21 31,130,797.49 30,210,935.91
Deferred tax assets 22 116,448,305.64 114,577,132.19
Other non-current assets 23 488,484,179.84 306,929,738.21
Total non-current assets 16,038,495,749.90 16,262,412,230.30
Total assets 29,048,201,560.36 29,271,291,859.98
Legal representative: Officer in charge of accounting: Head of accounting department:
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Infore Environment Technology Group Co., Ltd.
Consolidated balance sheet as at December 31, 2023 (continued)
(Expressed in Renminbi Yuan)
Liabilities & Equity Note No. Closing balance December 31, 2022
Current liabilities:
Short-term borrowings 25 126,939,855.26 440,103,105.44
Central bank loans
Loans from other banks
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 26 2,294,276,551.46 2,515,229,293.17
Accounts payable 27 2,918,543,704.46 2,771,961,271.66
Advances received
Contract liabilities 28 306,777,173.57 274,289,978.25
Financial liabilities under repo
Absorbing deposit and interbank deposit
Deposits for agency security transaction
Deposits for agency security underwriting
Employee benefits payable 29 490,900,839.98 409,574,018.72
Taxes and rates payable 30 124,031,931.13 114,968,226.88
Other payables 31 709,941,824.77 657,122,287.53
Handling fees and commissions payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one year 32 405,027,444.29 561,019,099.59
Other current liabilities 33 36,931,126.97 31,616,947.24
Total current liabilities 7,413,370,451.89 7,775,884,228.48
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 34 1,884,356,851.73 1,922,306,226.32
Bonds payable 35 1,360,603,802.12 1,308,690,556.32
Including: Preferred shares
Perpetual bonds
Lease liabilities 36 16,170,790.76 23,255,624.30
Long-term payables 37 302,949,472.95 315,735,814.91
Long-term employee benefits payable
Provisions 38 1,994,511.41 4,575,049.22
Deferred income 39 115,340,494.42 120,890,710.04
Deferred tax liabilities 22 47,219,579.85 54,207,628.08
Other non-current liabilities 40 8,148,148.14 8,333,333.33
Total non-current liabilities 3,736,783,651.38 3,757,994,942.52
Total liabilities 11,150,154,103.27 11,533,879,171.00
Equity:
Share capital 41 3,179,506,670.00 3,179,505,559.00
Other equity instruments 42 266,914,714.33 266,916,341.80
Including: Preferred shares
Perpetual bonds
Capital reserve 43 9,661,398,721.27 9,662,511,254.48
Less: Treasury shares 44 94,132,795.17 94,132,795.17
Other comprehensive income 45 -4,630,000.00 -4,630,000.00
Special reserve 46
Surplus reserve 47 379,017,020.19 315,124,767.92
General risk reserve
Undistributed profit 48 4,049,434,826.11 3,963,306,890.06
Total equity attributable to the parent company 17,437,509,156.73 17,288,602,018.09
Non-controlling interest 460,538,300.36 448,810,670.89
Total equity 17,898,047,457.09 17,737,412,688.98
Total liabilities & equity 29,048,201,560.36 29,271,291,859.98
Legal representative: Officer in charge of accounting: Head of accounting department:
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Infore Environment Technology Group Co., Ltd.
Parent company balance sheet as at December 31, 2023
(Expressed in Renminbi Yuan)
Note
Assets Closing balance December 31, 2022
No.
Current assets:
Cash and bank balances 564,746,779.67 632,554,163.45
Held-for-trading financial assets
Derivative financial assets
Notes receivable
Accounts receivable
Receivables financing 43,226,079.68 118,400,000.00
Advances paid 450,233.21 638,924.48
Other receivables 1 4,470,847,162.66 4,492,807,441.80
Inventories
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets
Total current assets 5,079,270,255.22 5,244,400,529.73
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 2 16,970,439,351.38 17,076,616,871.15
Other equity instrument investments 15,352,971.01 15,352,971.01
Other non-current financial assets
Investment property
Fixed assets
Construction in progress
Productive biological assets
Oil & gas assets
Right-of-use assets 1,830,027.06 593,318.35
Intangible assets 744,535.28 1,749,936.60
Development expenditures
Goodwill
Long-term prepayments
Deferred tax assets
Other non-current assets
Total non-current assets 16,988,366,884.73 17,094,313,097.11
Total assets 22,067,637,139.95 22,338,713,626.84
Legal representative: Officer in charge of accounting: Head of accounting department:
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Infore Environment Technology Group Co., Ltd.
Parent company balance sheet as at December 31, 2023 (continued)
(Expressed in Renminbi Yuan)
Note
Liabilities & Equity Closing balance December 31, 2022
No.
Current liabilities:
Short-term borrowings 8,006,821.92 20,022,000.00
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 34,562,159.28 42,395,262.51
Accounts payable 1,137,507.93 1,137,507.93
Advances received
Contract liabilities
Employee benefits payable 3,603,061.04 4,221,817.88
Taxes and rates payable 6,535,689.77 6,259,662.49
Other payables 783,282,804.29 1,064,116,084.37
Liabilities held for sale
Non-current liabilities due within one year 12,180,055.74 311,902,807.73
Other current liabilities
Total current liabilities 849,308,099.97 1,450,055,142.91
Non-current liabilities:
Long-term borrowings 48,985,720.00 59,871,432.00
Bonds payable 1,360,603,802.12 1,308,690,556.32
Including: Preferred shares
Perpetual bonds
Lease liabilities 626,060.41
Long-term payables 3,000,000.00 3,000,000.00
Long-term employee benefits payable
Provisions 1,563,887.81 4,114,064.16
Deferred income
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 1,414,779,470.34 1,375,676,052.48
Total liabilities 2,264,087,570.31 2,825,731,195.39
Equity:
Share capital 3,179,506,670.00 3,179,505,559.00
Other equity instruments 266,914,714.33 266,916,341.80
Including: Preferred shares
Perpetual bonds
Capital reserve 15,324,662,735.39 15,324,654,061.79
Less: Treasury shares 94,132,795.17 94,132,795.17
Other comprehensive income -4,630,000.00 -4,630,000.00
Special reserve
Surplus reserve 344,796,630.77 280,904,378.50
Undistributed profit 786,431,614.32 559,764,885.53
Total equity 19,803,549,569.64 19,512,982,431.45
Total liabilities & equity 22,067,637,139.95 22,338,713,626.84
Legal representative: Officer in charge of accounting: Head of accounting department:
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Infore Environment Technology Group Co., Ltd.
Consolidated income statement for the year ended December 31, 2023
(Expressed in Renminbi Yuan)
Note
Items Current period cumulative Preceding period comparative
No.
I. Total operating revenue 1 12,631,050,967.34 12,255,992,938.42
Including: Operating revenue 1 12,631,050,967.34 12,255,992,938.42
Interest income
Premiums earned
Revenue from handling fees and commissions
II. Total operating cost 11,755,419,190.66 11,359,383,512.75
Including: Operating cost 1 9,745,482,087.92 9,469,510,831.27
Interest expenses
Handling fees and commissions
Surrender value
Net payment of insurance claims
Net provision of insurance policy reserve
Premium bonus expenditures
Reinsurance expenses
Taxes and surcharges 2 70,091,589.07 74,685,022.05
Selling expenses 3 794,334,952.02 762,970,847.95
Administrative expenses 4 726,159,237.45 609,601,680.23
R&D expenses 5 344,030,239.33 340,775,707.34
Financial expenses 6 75,321,084.87 101,839,423.91
Including: Interest expenses 156,635,777.38 170,568,834.86
Interest income 99,626,077.56 86,389,951.68
Add: Other income 7 119,986,816.29 119,564,678.48
Investment income (or less: losses) 8 -51,597,205.92 -41,466,125.62
Including: Investment income from associates and joint ventures 4,960,692.79 8,548,481.77
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)
Credit impairment loss 9 -216,352,591.11 -104,837,162.42
Assets impairment loss 10 -123,390,769.02 -312,998,494.66
Gains on asset disposal (or less: losses) 11 -1,191,825.82 532,796.72
III. Operating profit (or less: losses) 603,086,201.10 557,405,118.17
Add: Non-operating revenue 12 19,846,705.60 12,798,235.90
Less: Non-operating expenditures 13 13,031,066.19 13,947,988.82
IV. Profit before tax (or less: total loss) 609,901,840.51 556,255,365.25
Less: Income tax expenses 14 97,357,651.45 96,963,243.68
V. Net profit (or less: net loss) 512,544,189.06 459,292,121.57
(I) Categorized by the continuity of operations
1. Net profit from continuing operations (or less: net loss) 512,544,189.06 459,292,121.57
2. Net profit from discontinued operations (or less: net loss)
(II) Categorized by the portion of equity ownership
1. Net profit attributable to owners of parent company (or less: net loss) 498,383,730.00 418,794,179.13
2. Net profit attributable to non-controlling shareholders (or less: net loss) 14,160,459.06 40,497,942.44
VI. Other comprehensive income after tax -350,000.00
Items attributable to the owners of the parent company -350,000.00
(I) Not to be reclassified subsequently to profit or loss -350,000.00
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. 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 512,544,189.06 458,942,121.57
Items attributable to the owners of the parent company 498,383,730.00 418,444,179.13
Items attributable to non-controlling shareholders 14,160,459.06 40,497,942.44
VIII. Earnings per share (EPS):
(I) Basic EPS (yuan per share) 0.16 0.13
(II) Diluted EPS (yuan per share) 0.16 0.13
Legal representative: Officer in charge of accounting: Head of accounting department:
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Infore Environment Technology Group Co., Ltd.
Parent company income statement for the year ended December 31, 2023
(Expressed in Renminbi Yuan)
Note Preceding period
Items Current period cumulative
No. comparative
I. Operating revenue 1 156,799.03 818,861.05
Less: Operating cost 1 45,108.06 818,861.05
Taxes and surcharges 8,724.82 24,479.22
Selling expenses 188,548.41
Administrative expenses 32,795,434.31 37,210,341.13
R&D expenses
Financial expenses -46,439,991.45 -26,702,758.90
Including: Interest expenses 6,683,662.60 17,704,428.72
Interest income 114,151,812.97 105,355,828.68
Add: Other income 90,205.68 134,351.98
Investment income (or less: losses) 2 627,767,256.36 192,483,839.36
Including: Investment income from associates and joint ventures 32,220,248.17 25,737,537.83
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)
Credit impairment loss -4,535,721.98 304,725.02
Assets impairment loss
Gains on asset disposal (or less: losses)
II. Operating profit (or less: losses) 637,069,263.35 182,202,306.50
Add: Non-operating revenue 1,853,259.39 1,496,537.14
Less: Non-operating expenditures
III. Profit before tax (or less: total loss) 638,922,522.74 183,698,843.64
Less: Income tax expenses
IV. Net profit (or less: net loss) 638,922,522.74 183,698,843.64
(I) Net profit from continuing operations (or less: net loss) 638,922,522.74 183,698,843.64
(II) Net profit from discontinued operations (or less: net loss)
V. Other comprehensive income after tax -350,000.00
(I) Not to be reclassified subsequently to profit or loss -350,000.00
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. 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 638,922,522.74 183,348,843.64
VII. Earnings per share (EPS):
(I) Basic EPS (yuan per share)
(II) Diluted EPS (yuan per share)
Legal representative: Officer in charge of accounting: Head of accounting department:
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Infore Environment Technology Group Co., Ltd.
Consolidated cash flow statement for the year ended December 31, 2023
(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 12,453,986,179.20 11,979,875,703.49
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 fees and commissions
Net increase of loans from others
Net increase of repurchase
Net cash receipts from agency security transaction
Receipts of tax refund 30,441,488.60 178,294,936.92
Other cash receipts related to operating activities 1.(1) 1,780,673,734.46 2,097,066,618.34
Subtotal of cash inflows from operating activities 14,265,101,402.26 14,255,237,258.75
Cash payments for goods purchased and services received 7,623,799,094.31 7,399,369,111.76
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 fees and commissions
Cash payments for policy bonus
Cash paid to and on behalf of employees 2,522,411,850.58 2,062,334,468.26
Cash payments for taxes and rates 534,381,305.14 734,988,426.49
Other cash payments related to operating activities 1.(2) 2,198,952,642.74 2,396,062,964.53
Subtotal of cash outflows from operating activities 12,879,544,892.77 12,592,754,971.04
Net cash flows from operating activities 1,385,556,509.49 1,662,482,287.71
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments
Cash receipts from investment income 17,581,018.93 24,671,510.32
Net cash receipts from the disposal of fixed assets, intangible assets and other long-term assets 22,804,215.79 16,999,998.22
Net cash receipts from the disposal of subsidiaries & other business units 115,100,000.00
Other cash receipts related to investing activities 1.(3) 1,650,769,977.00 5,401,861,000.00
Subtotal of cash inflows from investing activities 1,691,155,211.72 5,558,632,508.54
Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets 1,119,006,242.88 1,083,515,734.97
Cash payments for investments 4,900,000.00 130,189,561.55
Net increase of pledged borrowings
Net cash payments for the acquisition of subsidiaries & other business units 43,472.96 83,807,513.74
Other cash payments related to investing activities 1.(4) 1,642,935,617.97 5,398,900,000.00
Subtotal of cash outflows from investing activities 2,766,885,333.81 6,696,412,810.26
Net cash flows from investing activities -1,075,730,122.09 -1,137,780,301.72
III. Cash flows from financing activities:
Cash receipts from absorbing investments 7,119,980.00 57,744,844.02
Including: Cash received by subsidiaries from non-controlling shareholders as investments 7,119,980.00 34,345,285.00
Cash receipts from borrowings 1,430,455,757.80 2,033,074,142.02
Other cash receipts related to financing activities 1.(5) 48,692,000.00 290,555,211.59
Subtotal of cash inflows from financing activities 1,486,267,737.80 2,381,374,197.63
Cash payments for the repayment of borrowings 1,946,364,301.72 1,732,314,139.87
Cash payments for distribution of dividends or profits and for interest expenses 471,087,036.44 451,503,767.45
Including: Cash paid by subsidiaries to non-controlling shareholders as dividend or profit 7,622,681.40 11,792,867.41
Other cash payments related to financing activities 1.(6) 44,749,906.87 263,396,824.36
Subtotal of cash outflows from financing activities 2,462,201,245.03 2,447,214,731.68
Net cash flows from financing activities -975,933,507.23 -65,840,534.05
IV. Effect of foreign exchange rate changes on cash and cash equivalents 1,587,128.38 3,056,908.33
V. Net increase in cash and cash equivalents -664,519,991.45 461,918,360.27
Add: Opening balance of cash and cash equivalents 4,580,665,245.99 4,118,746,885.72
VI. Closing balance of cash and cash equivalents 3,916,145,254.54 4,580,665,245.99
Legal representative: Officer in charge of accounting: Head of accounting department:
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Infore Environment Technology Group Co., Ltd.
Parent company cash flow statement for the year ended December 31, 2023
(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 118,392.43
Receipts of tax refund 1,008,139.39
Other cash receipts related to operating activities 448,771,549.67 622,328,508.84
Subtotal of cash inflows from operating activities 449,898,081.49 622,328,508.84
Cash payments for goods purchased and services received
Cash paid to and on behalf of employees 12,214,656.58 20,656,924.48
Cash payments for taxes and rates 19,920.85 24,479.22
Other cash payments related to operating activities 448,609,614.55 727,589,122.93
Subtotal of cash outflows from operating activities 460,844,191.98 748,270,526.63
Net cash flows from operating activities -10,946,110.49 -125,942,017.79
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments 115,100,000.00
Cash receipts from investment income 355,469,611.94 221,911,743.60
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 1,133,866,191.35 1,416,859,323.47
Subtotal of cash inflows from investing activities 1,489,335,803.29 1,753,871,067.07
Cash payments for the acquisition of fixed assets, intangible assets and other long-
term assets
Cash payments for investments 96,546,250.00
Net cash payments for the acquisition of subsidiaries & other business units
Other cash payments related to investing activities 1,020,256,248.67 1,441,321,272.72
Subtotal of cash outflows from investing activities 1,020,256,248.67 1,537,867,522.72
Net cash flows from investing activities 469,079,554.62 216,003,544.35
III. Cash flows from financing activities:
Cash receipts from absorbing investments 23,399,559.02
Cash receipts from borrowings 108,000,000.00 96,200,000.00
Other cash receipts related to financing activities 228,995,320.75
Subtotal of cash inflows from financing activities 108,000,000.00 348,594,879.77
Cash payments for the repayment of borrowings 430,885,712.00 155,585,856.00
Cash payments for distribution of dividends or profits and for interest expenses 367,220,162.26 340,633,373.24
Other cash payments related to financing activities 1,258,782.48 181,368,993.06
Subtotal of cash outflows from financing activities 799,364,656.74 677,588,222.30
Net cash flows from financing activities -691,364,656.74 -328,993,342.53
IV. Effect of foreign exchange rate changes on cash and cash equivalents
V. Net increase in cash and cash equivalents -233,231,212.61 -238,931,815.97
Add: Opening balance of cash and cash equivalents 631,351,957.34 870,283,773.31
VI. Closing balance of cash and cash equivalents 398,120,744.73 631,351,957.34
Legal representative: Officer in charge of accounting: Head of accounting department:
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Infore Environment Technology Group Co., Ltd.
Consolidated statement of changes in equity for the year ended December 31, 2023
(Expressed in Renminbi Yuan)
Current period cumulative
Equity attributable to parent company
Items Other equity instruments Other General Non-controlling
Less: Surplus Total equity
Share capital Preferred Perpetual Capital reserve comprehensive Special reserve risk Undistributed profit interest
Others Treasury shares reserve
shares bonds income reserve
I. Balance at the end of prior year 3,179,505,559.00 266,916,341.80 9,662,511,254.48 94,132,795.17 -4,630,000.00 315,124,767.92 3,963,306,890.06 448,810,670.89 17,737,412,688.98
Add: Cumulative changes of accounting policies
Error correction of prior period
Business combination under common control
Others
II. Balance at the beginning of current year 3,179,505,559.00 266,916,341.80 9,662,511,254.48 94,132,795.17 -4,630,000.00 315,124,767.92 3,963,306,890.06 448,810,670.89 17,737,412,688.98
III. Current period increase (or less: decrease) 1,111.00 -1,627.47 -1,112,533.21 63,892,252.27 86,127,936.05 11,727,629.47 160,634,768.11
(I) Total comprehensive income 498,383,730.00 14,160,459.06 512,544,189.06
(II) Capital contributed or withdrawn by owners 1,111.00 -1,627.47 -1,112,533.21 5,189,851.81 4,076,802.13
1. Ordinary shares contributed by owners 8,619,980.00 8,619,980.00
2. Capital contributed by holders of other equity
1,111.00 -1,627.47 8,673.60 8,157.13
instruments
3. Amount of share-based payment included in equity
4. Others -1,121,206.81 -3,430,128.19 -4,551,335.00
(III) Profit distribution 63,892,252.27 -412,255,793.95 -7,622,681.40 -355,986,223.08
1. Appropriation of surplus reserve 63,892,252.27 -63,892,252.27
2. Appropriation of general risk reserve
3. Appropriation of profit to owners -348,363,541.68 -7,622,681.40 -355,986,223.08
4. Others
(IV) Internal carry-over within equity
1. Transfer of capital reserve to capital
2. Transfer of surplus reserve to capital
3. Surplus reserve to cover losses
4. Changes in defined benefit plan carried over to retained
earnings
5. Other comprehensive income carried over to retained
earnings
6. Others
(V) Special reserve
1. Current period appropriation 8,608,843.62 8,608,843.62
2. Current period use -8,608,843.62 -8,608,843.62
(VI) Others
IV. Balance at the end of current period 3,179,506,670.00 266,914,714.33 9,661,398,721.27 94,132,795.17 -4,630,000.00 379,017,020.19 4,049,434,826.11 460,538,300.36 17,898,047,457.09
Legal representative: Officer in charge of accounting: Head of accounting department:
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Infore Environment Technology Group Co., Ltd.
Consolidated statement of changes in equity for the year ended December 31, 2023 (continued)
(Expressed in Renminbi Yuan)
Preceding period comparative
Equity attributable to parent company
Items Other equity instruments Other General Non-controlling
Less: Surplus Total equity
Share capital Preferred Perpetual Capital reserve comprehensive Special reserve risk Undistributed profit interest
Others Treasury shares reserve
shares bonds income reserve
I. Balance at the end of prior year 3,175,734,760.00 266,929,289.24 9,772,795,863.75 455,303,777.91 -4,280,000.00 296,754,883.56 3,874,934,971.69 357,221,037.38 17,284,787,027.71
Add: Cumulative changes of accounting policies
Error correction of prior period
Business combination under common control
Others
II. Balance at the beginning of current year 3,175,734,760.00 266,929,289.24 9,772,795,863.75 455,303,777.91 -4,280,000.00 296,754,883.56 3,874,934,971.69 357,221,037.38 17,284,787,027.71
III. Current period increase (or less: decrease) 3,770,799.00 -12,947.44 -110,284,609.27 -361,170,982.74 -350,000.00 18,369,884.36 88,371,918.37 91,589,633.51 452,625,661.27
(I) Total comprehensive income -350,000.00 418,794,179.13 40,497,942.44 458,942,121.57
(II) Capital contributed or withdrawn by owners 3,770,799.00 -12,947.44 -110,284,609.27 -361,170,982.74 60,341,209.93 314,985,434.96
1. Ordinary shares contributed by owners 3,761,991.00 -112,538,093.97 -361,170,982.74 46,970,675.00 299,365,554.77
2. Capital contributed by holders of other equity
8,808.00 -12,947.44 66,691.53 62,552.09
instruments
3. Amount of share-based payment included in equity 3,868,552.56 170,516.82 4,039,069.38
4. Others -1,681,759.39 13,200,018.11 11,518,258.72
(III) Profit distribution 18,369,884.36 -330,422,260.76 -9,249,518.86 -321,301,895.26
1. Appropriation of surplus reserve 18,369,884.36 -18,369,884.36
2. Appropriation of general risk reserve
3. Appropriation of profit to owners -312,052,376.40 -9,249,518.86 -321,301,895.26
4. Others
(IV) Internal carry-over within equity
1. Transfer of capital reserve to capital
2. Transfer of surplus reserve to capital
3. Surplus reserve to cover losses
4. Changes in defined benefit plan carried over to retained
earnings
5. Other comprehensive income carried over to retained
earnings
6. Others
(V) Special reserve
1. Current period appropriation 8,693,981.54 8,693,981.54
2. Current period use -8,693,981.54 -8,693,981.54
(VI) Others
IV. Balance at the end of current period 3,179,505,559.00 266,916,341.80 9,662,511,254.48 94,132,795.17 -4,630,000.00 315,124,767.92 3,963,306,890.06 448,810,670.89 17,737,412,688.98
Legal representative: Officer in charge of accounting: Head of accounting department:
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Infore Environment Technology Group Co., Ltd.
Parent company statement of changes in equity for the year ended December 31, 2023
(Expressed in Renminbi Yuan)
Current period cumulative
Other equity instruments Other
Items Less: Treasury Special
Share capital Preferred Perpetual Capital reserve comprehensive Surplus reserve Undistributed profit Total equity
Others shares reserve
shares bonds income
I. Balance at the end of prior year 3,179,505,559.00 266,916,341.80 15,324,654,061.79 94,132,795.17 -4,630,000.00 280,904,378.50 559,764,885.53 19,512,982,431.45
Add: Cumulative changes of accounting policies
Error correction of prior period
Others
II. Balance at the beginning of current year 3,179,505,559.00 266,916,341.80 15,324,654,061.79 94,132,795.17 -4,630,000.00 280,904,378.50 559,764,885.53 19,512,982,431.45
III. Current period increase (or less: decrease) 1,111.00 -1,627.47 8,673.60 63,892,252.27 226,666,728.79 290,567,138.19
(I) Total comprehensive income 638,922,522.74 638,922,522.74
(II) Capital contributed or withdrawn by owners 1,111.00 -1,627.47 8,673.60 8,157.13
1. Ordinary shares contributed by owners
2. Capital contributed by holders of other equity
1,111.00 -1,627.47 8,673.60 8,157.13
instruments
3. Amount of share-based payment included in equity
4. Others
(III) Profit distribution 63,892,252.27 -412,255,793.95 -348,363,541.68
1. Appropriation of surplus reserve 63,892,252.27 -63,892,252.27
2. Appropriation of profit to owners -348,363,541.68 -348,363,541.68
3. Others
(IV) Internal carry-over within equity
1. Transfer of capital reserve to capital
2. Transfer of surplus reserve to capital
3. Surplus reserve to cover losses
4. Changes in defined benefit plan carried over to
retained earnings
5. Other comprehensive income carried 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 period 3,179,506,670.00 266,914,714.33 15,324,662,735.39 94,132,795.17 -4,630,000.00 344,796,630.77 786,431,614.32 19,803,549,569.64
Legal representative: Officer in charge of accounting: Head of accounting department:
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Infore Environment Technology Group Co., Ltd.
Parent company statement of changes in equity for the year ended December 31, 2023 (continued)
(Expressed in Renminbi Yuan)
Preceding period comparative
Other equity instruments Other
Items Less: Treasury Special Undistributed
Share capital Preferred Perpetual Capital reserve comprehensive Surplus reserve Total equity
Others shares reserve profit
shares bonds income
I. Balance at the end of prior year 3,175,734,760.00 266,929,289.24 15,433,256,911.67 455,303,777.91 -4,280,000.00 262,534,494.14 706,488,302.65 19,385,359,979.79
Add: Cumulative changes of accounting policies
Error correction of prior period
Others
II. Balance at the beginning of current year 3,175,734,760.00 266,929,289.24 15,433,256,911.67 455,303,777.91 -4,280,000.00 262,534,494.14 706,488,302.65 19,385,359,979.79
III. Current period increase (or less: decrease) 3,770,799.00 -12,947.44 -108,602,849.88 -361,170,982.74 -350,000.00 18,369,884.36 -146,723,417.12 127,622,451.66
(I) Total comprehensive income -350,000.00 183,698,843.64 183,348,843.64
(II) Capital contributed or withdrawn by owners 3,770,799.00 -12,947.44 -108,602,849.88 -361,170,982.74 256,325,984.42
1. Ordinary shares contributed by owners 3,761,991.00 -112,538,093.97 -361,170,982.74 252,394,879.77
2. Capital contributed by holders of other equity
8,808.00 -12,947.44 66,691.53 62,552.09
instruments
3. Amount of share-based payment included in equity 3,868,552.56 3,868,552.56
4. Others
(III) Profit distribution 18,369,884.36 -330,422,260.76 -312,052,376.40
1. Appropriation of surplus reserve 18,369,884.36 -18,369,884.36
2. Appropriation of profit to owners -312,052,376.40 -312,052,376.40
3. Others
(IV) Internal carry-over within equity
1. Transfer of capital reserve to capital
2. Transfer of surplus reserve to capital
3. Surplus reserve to cover losses
4. Changes in defined benefit plan carried over to
retained earnings
5. Other comprehensive income carried 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 period 3,179,505,559.00 266,916,341.80 15,324,654,061.79 94,132,795.17 -4,630,000.00 280,904,378.50 559,764,885.53 19,512,982,431.45
Legal representative: Officer in charge of accounting: Head of accounting department:
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Infore Environment Technology Group Co., Ltd.
Notes to Financial Statements
For the year ended December 31, 2023
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. Headquartered in Shaoxing City, Zhejiang Province, the Company currently holds a
business license with unified social credit code of 913300006096799222. As of December 31, 2023, it has
registered capital of 3,179,505,559.00 yuan, and total share capital of 3,179,506,670.00 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 market regulation. According to the records in China Securities Depository and
Clearing Corporation Limited, as of December 31, 2023, the Company has restricted outstanding shares of
1,472,469 shares, and unrestricted outstanding shares of 3,178,034,201 shares, totaling 3,179,506,670.00 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, 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 sixth meeting of the tenth session of the
Board of Directors dated April 26, 2024.
The Company has brought 278 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 VII of notes to the financial statements for details.
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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 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) Determination method and basis for selection of materiality
The Company prepares and discloses financial statements in compliance with the principle of materiality. The items
disclosed in notes to the financial statements involving materiality judgements, determination method and basis for
selection of materiality are as follows:
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Disclosed items involving Determination method and basis for selection of
Note No.
materiality judgements materiality
Significant accounts receivable Accounts receivable with single amount in excess of
with provision for bad debts made V (I) 3 (2) 2) 0.3% of total assets are identified as significant
on an individual basis accounts receivable.
Accounts receivable written off with single amount in
Significant accounts receivable
V (I) 3 (4) 2) excess of 0.3% of total assets are identified as
written off
significant accounts receivable written off.
Advances paid with single amount in excess of 0.3%
Significant advances paid with
V (I) 5 (1) 2) of total assets are identified as significant advances
age over one year
paid.
Significant other receivables with Other receivables with single amount in excess of
provision for bad debts made on V (I) 6 (3) 2) 0.3% of total assets are identified as significant other
an individual basis receivables.
Other receivables written off with single amount in
Significant other receivables
V (I) 6 (5) 2) excess of 0.3% of total assets are identified as
written off
significant other receivables written off.
Construction in progress with single amount in excess
Significant construction in
V (I) 16 (2) of 0.3% of total assets are identified as significant
progress
construction in progress.
Accounts payable with single amount in excess of 0.3%
Significant accounts payable with
V (I) 27 (1) 2) of total assets are identified as significant accounts
age over one year
payable.
Contract liabilities with single amount in excess of
Significant contract liabilities
V (I) 28 (2) 0.3% of total assets are identified as significant contract
with age over one year
liabilities.
Other payables with single amount in excess of 0.3%
Significant other payables with
V (I) 31 (2) of total assets are identified as significant other
age over one year
payables.
Cash flows from investing activities with single
Significant cash flows from
V (III) 1 amount in excess of 10% of total assets are identified
investing activities
as significant cash flows from investing activities.
Capitalized R&D projects and outsourced R&D
Significant capitalized R&D
projects with single amount in excess of 0.3% of total
projects and outsourced R&D VI (II) 2
assets are identified as significant capitalized R&D
projects
projects and outsourced R&D projects.
Subsidiaries with total assets in excess of 15% of the
Significant subsidiaries, not group’s total assets are identified as significant
VII (I) 2
wholly-owned subsidiaries subsidiaries or significant not wholly-owned
subsidiaries.
Joint ventures and associates with the amount of
Significant joint ventures, single long-term equity investment in excess of 0.5%
VII (V)
associates and joint operations of the total assets are identified as significant joint
ventures, associates or joint operations.
(VI) Accounting treatments of business combination under and not under common control
1. Accounting treatment of business combination under common control
Assets and liabilities arising from business combination are measured at carrying amount of the combined party
included in the consolidated financial statements of the ultimate controlling party at the combination date.
Difference between carrying amount of the equity of the combined party included in the consolidated financial
statements of the ultimate controlling party and that of the combination consideration or total par value of shares
issued is adjusted to capital reserve, if the balance of capital reserve is insufficient to offset, any excess is adjusted
to retained earnings.
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2. Accounting treatment of business combination not under common control
When combination cost is in excess of the fair value of identifiable net assets obtained from the acquiree at the
acquisition date, the excess is recognized as goodwill; otherwise, the fair value of identifiable assets, liabilities and
contingent liabilities, and the measurement of the combination cost are reviewed, then the difference is recognized
in profit or loss.
(VII) Judgement criteria for control and compilation method of consolidated financial statements
1. Judgement of control
An investor controls an investee if and only if the investor has all the following: (1) power over the investee; (2)
exposure, or rights, to variable returns from its involvement with the investee; and (3) the ability to use its power
over the investee to affect the amount of the investor’s returns.
2. 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.
(VIII) 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.
(IX) 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.
(X) 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
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unchanged; non-cash items carried at fair value in foreign currency are translated at the spot exchange rate at the
date when the fair value was determined, with difference included in profit or loss or other comprehensive income.
2. Translation of financial statements measured in foreign currency
The assets and liabilities in the balance sheet are translated into RMB at the spot 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.
(XI) 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 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
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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 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
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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
for 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 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:
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(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
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
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instrument has increased significantly since initial recognition.
The Company may assume that the credit risk on a financial instrument has not increased significantly since initial
recognition if the financial instrument is determined to have relatively low credit risk at the balance sheet date.
The Company shall estimate expected credit risk and measure expected credit losses on an individual or a collective
basis. When the Company adopts the collective basis, financial instruments are grouped with similar credit risk
features.
The Company shall remeasure expected credit loss on each balance sheet date, and increased or reversed amounts
of loss allowance arising therefrom shall be included into profit or loss as impairment losses or gains. For a
financial asset measured at amortized cost, the loss allowance reduces the carrying amount of such financial asset
presented in the balance sheet; for a debt investment measured at fair value through other comprehensive income,
the loss allowance shall be recognized in other comprehensive income and shall not reduce the carrying amount of
such financial asset.
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.
(XII) Recognition criteria and accrual method for expected credit losses of receivables and contract assets
1. Receivables and contract assets with expected credit losses measured on a collective basis using similar credit
risk features
Basis for determination of Method for measuring expected credit loss
Categories
portfolio
Based on historical credit loss experience, the
Bank acceptance receivable current situation and the forecast of future
Type of notes economic conditions, the Company calculates
expected credit loss through exposure at
Trade acceptance receivable default and lifetime expected credit loss rate.
Based on historical credit loss experience, the
Accounts receivable – Portfolio
Balances due from related current situation and the forecast of future
grouped with balances due from
parties within the economic conditions, the Company calculates
related parties within the
consolidation scope expected credit loss through exposure at
consolidation scope
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 prepares
Accounts receivable – Portfolio
Ages the comparison table of ages and lifetime
grouped with ages
expected credit loss rate of accounts
receivable, so as to calculate expected credit
loss.
Accounts receivable – Portfolio Nature of receivables Based on historical credit loss experience, the
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Basis for determination of Method for measuring expected credit loss
Categories
portfolio
grouped with government current situation and the forecast of future
subsidies for new energy vehicles economic conditions, the Company calculates
expected credit loss through exposure at
default and lifetime expected credit loss rate.
Other receivables – Portfolio
Balances due from related
grouped with balances due from
parties within the Based on historical credit loss experience, the
related parties within the
consolidation scope current situation and the forecast of future
consolidation scope
economic conditions, the Company calculates
Other receivables – Portfolio
expected credit loss through exposure at
grouped with performance Nature of receivables
default and 12-month or lifetime expected
compensations
credit loss rate.
Other receivables – Portfolio
Nature of receivables
grouped with buyer’s credit
Based on historical credit loss experience, the
current situation and the forecast of future
Other receivables – Portfolio economic conditions, the Company prepares
Ages
grouped with ages the comparison table of ages and expected
credit loss rate of other receivables, so as to
calculate expected credit loss.
Long-term receivables –
Portfolio grouped with finance
Expected credit loss rates are calculated based
lease payment/ Long-term
on five-level classification of credit assets of
receivables – Portfolio grouped
non-bank financial institutions: 1.5% for pass
with receivables financing Nature of receivables
category, 3% for special-mention category,
factoring payment /Accounts
30% for substandard category, 60% for
receivable – Portfolio grouped
doubtful category, and 100% for loss category
with commercial factoring
payment
For long-term receivables within the credit
period that has not reached the contractual
payment deadline, provision for bad debts is
Long-term receivables – accrued at 5% of the balance. For long-term
Nature of receivables
Portfolio grouped with 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.
Based on historical credit loss experience, the
current situation and the forecast of future
Contract assets – Portfolio
Nature of the balance economic conditions, the Company calculates
grouped with warranty reserve
expected credit loss through exposure at
default and lifetime expected credit loss rate.
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2. Comparison table of ages and expected credit loss rate of portfolio grouped with ages
Expected credit Expected credit loss rate Expected credit Expected credit loss rate
loss rate of of accounts receivable of loss rate of of other receivables of
accounts ventilation equipment other ventilation equipment
Ages
receivable of manufacturing industry receivables of manufacturing industry
parent company and environmental parent company and environmental
(%) integrated industry (%) (%) integrated industry (%)
1-180 days (inclusive, the
0 5 0 5
same hereinafter)
180 days - 1 year 2 5 2 5
1-2 years 10 10 10 10
2-3 years 30 30 30 30
3-5 years 50 50 50 50
Over 5 years 80 100 80 100
Ages of accounts receivable, other receivables and long-term receivables are calculated from the month when such
receivables are accrued.
3. Recognition criteria for receivables and contract assets with expected credit losses measured on an individual
basis
For receivables and contract assets whose credit risk is significantly different from that of portfolios, the Company
accrues expected credit losses on an individual basis.
(XIII) 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 dispatched inventories
Inventories dispatched from storage are accounted for with weighted average method.
3. Inventory system
Perpetual inventory method is adopted.
4. 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.
5. Provision for inventory write-down
Recognition criteria and accrual method of provision for inventory write-down
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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.
(XIV) Non-current assets or disposal groups held for sale, discontinued operations
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 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. Accounting treatments 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
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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 meet 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: 1)
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 2) 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.
3. Recognition criteria of discontinued operations
A component of the Company that has been disposed of, or is classified as held for sale and can be clearly
distinguished is recognized as a discontinued operation when it fulfills any of the following conditions:
(1) it represents a separate major line of business or a separate geographical area of operations;
(2) it is part of a related plan to dispose of a separate major line of business or a separate geographical area of
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operations; or
(3) it is a subsidiary acquired exclusively with a review to resale.
4. Presentation method of discontinued operations
The Company presents gains or losses from continuing operations and gains or losses from discontinued operations
separately in the income statement. Operating gains or losses including impairment loss of discontinued operations
and its reversal amount, and gains or losses on disposal are presented as gains or losses from discontinued
operations. For discontinued operations presented in the current period, the information previously presented as
gains or losses from continuing operations is reclassified as gains or losses from discontinued operations for the
comparative period in the current financial statements. For discontinued operations that no longer meet criteria for
held for sale, the information previously presented as gains or losses from discontinued operations is reclassified as
gains or losses from continuing operations for the comparative period in the current financial statements.
(XV) Long-term equity investments
1. Judgment of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions
about the relevant activities require the unanimous consent of the parties sharing control. Significant influence is
the power to participate in the financial and operating policy decisions of the investee but is not control or joint
control of these policies.
2. Determination of investment cost
(1) For business combination under common control, if the consideration of the combining party is that it makes
payment in cash, transfers non-cash assets, assumes its liabilities or issues equity securities, on the date of
combination, it regards the share of the carrying amount of the equity of the combined party included in the
consolidated financial statements of the ultimate controlling party as the initial cost of the investment. The
difference between the initial cost of the long-term equity investments and the carrying amount of the combination
consideration paid or the par value of shares issued offsets capital reserve; if the balance of capital reserve is
insufficient to offset, any excess is adjusted to retained earnings.
When long-term equity investments are obtained through business combination under common control achieved in
stages, the Company determines whether it is a “bundled transaction”. If it is a “bundled transaction”, stages as a
whole are considered as one transaction in accounting treatment. If it is not a “bundled transaction”, on the date of
combination, investment cost is initially recognized at the share of the carrying amount of net assets of the
combined party included the consolidated financial statements of the ultimate controlling party. The difference
between the initial investment cost of long-term equity investments at the acquisition date and the carrying amount
of the previously held long-term equity investments plus the carrying amount of the consideration paid for the
newly acquired equity is adjusted to capital reserve; if the balance of capital reserve is insufficient to offset, any
excess is adjusted to retained earnings.
(2) For business combination not under common control, investment cost is initially recognized at the acquisition-
date fair value of considerations paid.
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When long-term equity investments are obtained through business combination not under common control
achieved in stages, the Company determined whether they are stand-alone financial statements or consolidated
financial statements in accounting treatment:
1) In the case of stand-alone financial statements, investment cost is initially recognized at the carrying amount of
the previously held long-term equity investments plus the carrying amount of the consideration paid for the newly
acquired equity.
2) In the case of consolidated financial statements, the Company determines whether it is a “bundled transaction”.
If it is a “bundled transaction”, stages as a whole are considered as one transaction in accounting treatment. If it is
not a “bundled transaction”, the carrying amount of the acquirer’s previously held equity interest in the acquiree is
remeasured at the acquisition-date fair value, and the difference between the fair value and the carrying amount is
recognized in investment income; when the acquirer’s previously held equity interest in the acquiree involves other
comprehensive income under equity method, the related other comprehensive income is reclassified as income for
the acquisition period, excluding other comprehensive income arising from changes in net liabilities or assets from
remeasurement of defined benefit plan of the acquiree.
(3) Long-term equity investments obtained through ways other than business combination: the initial cost of a long-
term equity investment obtained by making payment in cash is the purchase cost which is actually paid; that
obtained on the basis of issuing equity securities is the fair value of the equity securities issued; that obtained
through debt restructuring is determined according to “CASBE 12 – Debt Restructuring”; and that obtained through
non-cash assets exchange is determined according to “CASBE 7 – Non-cash Assets Exchange”.
3. Subsequent measurement and recognition method of profit or loss
For 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) Judgement principles of “bundled transaction”
For disposal of a subsidiary in stages resulting in the Company’s loss of control, the Company determines whether
it is a “bundled transaction” based on the agreement terms for each stage, disposal consideration obtained
separately, object of the equity sold, disposal method, disposal time point, etc. If the terms, conditions and
economic effect of each transaction meet one or more of the following conditions, these transactions are usually
considered as a “bundled transaction”:
1) these transactions are entered into at the same time or in contemplation of each other;
2) these transactions form a single transaction designed to achieve an overall commercial effect;
3) the occurrence of one transaction is dependent on the occurrence of at least one other transaction; and
4) one transaction considered on its own is not economically justified, but it is economically justified when
considered together with other transactions.
(2) Accounting treatments of non-bundled transactions
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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
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.
(3) Accounting treatment of bundled transaction
1) Stand-alone financial statements
Stages as a whole are considered as one transaction resulting in loss of control in accounting treatment. However,
before the Company loses control over a subsidiary, the difference between the disposal consideration at each stage
and the carrying amount of long-term equity investments corresponding to the disposed investments is recognized
as other comprehensive income at the stand-alone financial statements and reclassified as profit or loss in the period
when the Company loses control over such subsidiary.
2) Consolidated financial statements
Stages as a whole are considered as one transaction resulting in loss of control in accounting treatment. However,
before the Company loses control over a subsidiary, 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.
(XVI) 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.
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(XVII) 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
Depreciation Useful life Residual value Annual depreciation
Categories
method (years) proportion (%) rate (%)
Buildings and
Straight-line method 3-50 3.00-5.00 2.71-32.33
structures
Straight-line
General equipment 3-5 3.00-5.00 19.00-32.33
method
Straight-line
Special equipment 2-15 0.00-5.00 6.33-50.00
method
Straight-line
Transport facilities 3-15 3.00-5.00 6.33-32.33
method
Straight-line
Other equipment 3-10 5.00 9.50-31.67
method
(XVIII) 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 is 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.
Categories Standards and time point of transferring construction in progress to fixed assets
When the design requirements or acceptance criteria for use as specified in the
Machinery
contract are met after installation and commissioning
When the completion acceptance is finished and reaching the designed usable
Engineering construction
conditions
(XIX) Borrowing costs
1. Recognition principle of borrowing costs capitalization
Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and construction
or production of assets eligible for capitalization, it is capitalized and included in the costs of relevant assets; other
borrowing costs are recognized as expenses on the basis of the actual amount incurred, and are included in profit or
loss.
2. Borrowing costs capitalization period
(1) The borrowing costs are not capitalized unless the following requirements are all met: 1) the asset
disbursements have already incurred; 2) the borrowing costs have already incurred; and 3) the acquisition and
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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 excess of the accumulative capital
disbursements over the special borrowings by the capitalization rate of the general borrowing used.
(XX) 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 Useful life and determination basis Amortization method
Franchise Contractual term Straight-line method
35-50 years; useful life registered on the land
Land use right Straight-line method
use certificate
Patented technology 5-10 years; economic life cycle Straight-line method
Software 3-10 years; estimated economic life Straight-line method
Others 5 years; economic life cycle Straight-line method
3. Permitted scope of R&D costs
(1) Personnel costs
Personnel costs include wages and salaries, basic endowment insurance premiums, basic medical insurance
premiums, unemployment insurance premiums, occupational injuries premiums, maternity premiums and housing
provident funds for the Company’s R&D personnel, as well as labor costs for external R&D personnel.
If R&D personnel serve for multiple R&D projects at the same time, personnel costs are recognized based on their
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working hour records provided by the Company’s administrative department, and proportionately allocated among
different R&D projects.
If personnel directly engaged in R&D activities and external R&D personnel are engaged in non-R&D activities at
the same time, the Company, based on their working hour records at different positions, allocates personnel costs
actually incurred between R&D expenses and production and operating expenses using reasonable methods such as
the ratio of actual working hours.
(2) Direct input costs
Direct input costs refer to relevant expenses actually incurred by the Company for R&D activities, which include: 1)
materials, fuel and power costs directly consumed by R&D activities; 2) development and manufacturing costs of
molds and craft equipment used for intermediate tests and trial production, acquisition costs of samples, prototypes
and general testing methods that do not constitute fixed assets, and inspection costs of trial production; and 3)
operation and maintenance, adjustment, inspection, testing and repairing costs of instruments and equipment used
for R&D activities.
(3) Depreciation and long-term prepayments
Depreciation refers to the depreciation of instruments, equipment and in-use buildings used for R&D activities.
For instruments, equipment and in-use buildings both used for R&D activities and non-R&D activities, necessary
records shall be kept on their usage, and depreciation actually incurred is allocated between R&D expenses and
production and operating expenses in a reasonable manner based on the actual working hours, the usable area, etc.
Long-term prepayments refer to those incurred during renovation, modification, decoration and repairing of R&D
facilities, which are collected based on actual amount and amortized evenly over a specified period.
(4) Amortization of intangible assets
Amortization of intangible assets refer to the amortization of software, intellectual property, and non-patented
technology (proprietary technology, licenses, design and calculation methods, etc.) used for R&D activities.
(5) Design expenses
Design expenses refer to expenses incurred for the conception, development and manufacturing of new products
and techniques, design of processes, technical specifications, process specification formulation, operational
characteristics, etc., including expenses incurred for creative design activities to obtain innovative, creative and
breakthrough products.
(6) Equipment commissioning and testing expenses
Equipment commissioning expenses refer to expenses incurred for R&D activities during tooling preparation,
including expenses incurred for activities such as development of special and specialized production machines,
changes in production and quality control procedures, development of new methods and standards, etc.
Expenses incurred for routine tooling preparation and industrial engineering for the purpose of large-scale/mass and
commercial production are not included in the permitted scope.
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Testing expenses include clinical trial fees for new drug development, on-site testing fees for exploration and
production technologies, field testing fees, etc.
(7) R&D outsourcing expenses
R&D outsourcing expenses refer to expenses incurred for R&D activities outsourced to other domestic or foreign
organizations or individuals (outcomes of R&D activities are owned by the Company and closely related to the
Company’s main business operations).
(8) Other expenses
Other expenses refer to expenses other than those mentioned above that are directly related to R&D activities,
including technical books and materials fees, data translation fees, expert consultation fees, high-tech R&D
insurance premiums, R&D outcomes search, demonstration, evaluation, appraisal and acceptance fees, intellectual
property application, registration and agency fees, conference fees, business travelling fees, communication fees,
etc.
4. 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.
5. Criteria for distinguishing the research phase from the development phase of an internal project to create an
intangible asset:
The planned investigation phase for acquiring new technology and knowledge should be defined as the research
phase, which has the characteristics of planning and exploratory nature; before commercial production or use, when
the research results or other knowledge are applied to a certain plan or design with the intention to produce new or
substantially improved materials, devices, products, etc., such stage should be determined as the development phase,
which has the characteristics of pertinence and greater possibility of forming results. The Company divides the
research and development phases by forming the prototype drawing and starting the prototype trial production.
Expenditures in the research phase of internal research and development projects are included in profit or loss when
they incur. When the Company enters the development phase, project expenditures are first calculated by projects
under “development expenditure”, and if the capitalization conditions are met, they are 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.
(XXI) Impairment of part of long-term assets
For long-term assets such as long-term equity investments, investment property at cost model, fixed assets,
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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.
(XXII) 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.
(XXIII) 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;
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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 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.
(XXIV) 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.
(XXV) 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 fulfills certain performance conditions, at the balance
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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 fulfills 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 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.
(XXVI) Other financial instruments such as preferred shares and perpetual bonds
Pursuant to CASBEs on financial instruments and “Regulations on Accounting Treatments of Perpetual Bonds”
(Cai Kuai [2019] No. 2) issued by the Ministry of Finance, for financial instruments such as convertible bonds etc.,
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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.
(XXVII) 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 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
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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) Comprehensive environmental and sanitation management engineering is a performance obligation satisfied
over time. Revenue is recognized based on the performance progress according to the project progress confirmed
by the supervisor.
(4) 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.
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(5) For revenue recognition method of PPP business with BOT model, etc., please refer to section III (XXXV) 1 of
notes to the financial statements for details.
(XXVIII) Costs of obtaining a contract and costs to fulfill a contract
The Company recognizes as an asset the incremental costs of obtaining a contract if those costs are expected to be
recovered. The costs of obtaining a contract shall be included into profit or loss when incurred if the amortization
period of the asset is one year or less.
If the costs incurred in fulfilling a contract are not within the scope of standards related to inventories, fixed assets
or intangible assets, etc., the Company shall recognize the costs to fulfill 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.
(XXIX) 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.
(XXX) Government grants
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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 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.
(XXXI) 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 indicating 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.
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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.
5. Deferred tax assets and deferred tax liabilities shall offset each other and be presented on a net basis when the
following conditions are all met: (1) the Company has the legal right to settle off current tax assets against current
tax liabilities; (2) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same tax
authority on either: 1) the same taxable entity; or 2) different taxable entities which intend either to settle current
tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future
period in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
(XXXII) 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.
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
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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: 1) actual fixed payments; 2) amounts
expected to be payable under residual value guarantees; 3) an index or a rate used to determine lease payments; 4)
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 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
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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”.
(XXXIII) Work safety fund
The Company appropriates 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 the Ministry of Finance and the
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.
(XXXIV) 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.
(XXXV) 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
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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 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
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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).
(XXXV) Significant changes in accounting policies
Changes in accounting policies arising from changes in CASBEs
The Company has adopted the regulations about accounting for deferred tax related to assets and liabilities arising
from a single transaction to which the initial recognition exemption does not apply in the “Interpretation of China
Accounting Standards for Business Enterprises No. 16” issued by the Ministry of Finance since January 1, 2023,
and makes adjustments on such single transactions occurring between the beginning of the earliest comparative
period and the first adoption date accordingly. For taxable and deductible temporary differences associated with
lease liabilities and right-of-use assets, provisions associated with decommissioning obligations and corresponding
assets arising from such single transactions and presented at the beginning of the earliest comparative period, the
cumulative effect of initially applying such regulations and “CASBE 18 – Enterprise Income Tax” shall be adjusted
into retained earnings or other related items at the beginning of the earliest comparative period presented. 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
The output tax calculated based on the revenue
3%, 6%, 9%, 13%. Exported
from sales of goods or rendering of services in
goods are subject to “exemption,
Value-added tax (VAT) accordance with the tax law, net of the input
credit, refund” policies, with
tax that is allowed to be deducted in the
refund rate of 13%.
current period
For housing property levied on the basis of
price, housing property tax is levied at the rate
of 1.2% of the balance after deducting 30% of
Housing property tax 1.2%, 12%
the cost; for housing property levied on the
basis of rent, housing property tax is levied at
the rate of 12% of lease income.
Urban maintenance and
Turnover tax actually paid 7%, 5%
construction 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:
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Taxpayers Income tax rate
Infore Technology Company 15%
Guangdong Infore Intelligent Sanitation Technology Co., Ltd. 15%
Shangfeng Industrial Company 15%
Zoomlion Environmental Company 15%
Fengyun IoT Technology Co., Ltd. 15%
Huaian Chenjie Environmental Engineering Co., Ltd. 15%
Zhejiang Yolsh Electric Drive Technology Co., Ltd. (the “Yolsh
15%
Company”)
Xiantao Green Oriental Environmental Power Generation Co.,
15%
Ltd. (the “Xiantao Company”)
Foshan Shunde Huaqingyuan Environmental Protection Co., Ltd.
15%
(the “Huaqingyuan Company”)
Foshan Shunde District Huaying Environmental Water Co., Ltd. 15%
Lianjiang Green Oriental New Energy Co., Ltd. (the “Lianjiang
15%
Company”)
25%, 20% for small enterprises with
Taxpayers other than the above-mentioned
meager profit
(II) Tax preferential policies
1. Enterprise income tax
No. Entities Preferential policies
Zoomlion Environmental Company, Fengyun
IoT Technology Co., Ltd., Huaian Chenjie
Environmental Engineering Co., Ltd., Yolsh Pursuant to the preferential income tax policy for high-tech enterprises,
1
Company, Xiantao Company, Foshan Shunde enterprise income tax rate is reduced to 15% from 2023 to 2025.
District Huaying Environmental Water Co.,
Ltd.
Shangfeng Industrial Company, Infore
Technology Company, Huaqingyuan Company, Pursuant to the preferential income tax policy for high-tech enterprises,
2
Guangdong Infore Intelligent Sanitation enterprise income tax rate is reduced to 15% from 2022 to 2024.
Technology Co., Ltd., Lianjiang Company
Revenue from the production of non-restricted and non-prohibited
Huaqingyuan Company, Foshan Shunde
products that meet the relevant national and industry standards using
District Huaying Environmental Water Co.,
resources specified in the “Resources Comprehensive Utilization of
3 Ltd., Foshan Shunde District Yuanrun Water
Enterprise Income Tax Preferential Catalog (2008 Edition)” as the main
Environmental Protection Co., Ltd., Foshan
raw material will be reduced to 90% as taxable income for enterprise
Shunde Huabo Environmental Water Co., Ltd.
income tax in the current period.
Pursuant to the “Announcement of Ministry of Finance (MOF) and
State Taxation Administration (STA) on the Further Implementation of
the Enterprise Income Tax Preferential Policies for Small Enterprises
with Meager Profit and Individually-owned Businesses”
Subsidiaries and sub-subsidiaries including
(Announcement of MOF and STA [2022] No. 13), “Announcement of
Shenzhen Infore City Service Intelligent
MOF and STA on the Enterprises Income Tax Preferential Policies for
Technology Co., Ltd., Foshan Shunde Huabo
Small Enterprises with Meager Profit and Individually-owned
4 Environmental Water Co., Ltd., Foshan Shunde
Businesses” (Announcement of MOF and STA [2023] No. 6),and the
Yuanyi Water Environmental Protection Co.,
“Announcement of MOF and STA on Further Implementation of the
Ltd., Dingnan Zoomlion Environmental
Enterprises Income Tax Preferential Policies for Small Enterprises with
Industry Co., Ltd., etc.
Meager Profit and Individually-Owned Businesses” (Announcement
[2023] No. 12), from January 1, 2023 to December 31, 2027, the
enterprise income tax for the portion of the taxable income within 3
million yuan is levied at 20% based on 25% of that portion of income.
Subsidiaries and sub-subsidiaries including Pursuant to the “Law of the People’s Republic of China on Enterprise
Pingdingshan Yinghe Environmental Income Tax” and its implementation regulations, the “Notice of MOF,
5
Sanitation Management Co., Ltd., Heyang STA and National Development and Reform Commission (NDRC) on
Yinghe Urban Environmental Service Co., Publishing the Catalog of Enterprise Income Tax Preferences for
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
No. Entities Preferential policies
Ltd., Zhangjiajie Yinglian Environmental Environmental Protection, Energy Saving, and Water Saving Projects
Management Co., Ltd., Liling Zhaoyang (Trial)” (Cai Shui [2009] No. 166) (the “2009 Catalog”), the project
Environmental Protection Co., Ltd., etc. companies are entitled to enjoy the preferential policy of three-year
exemption from the first profit-making year, followed by three years of
50% reduction of enterprise income tax. 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 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
Ruili Yinglian Environmental Industry Co.,
6 authority of the region (40% of total enterprise income tax), i.e., they
Ltd.
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 2023, the subsidiaries
Zoomlion Environmental Company and Infore Technology Company are entitled to enjoy the VAT refund upon
collection policy for sale of their self-developed and self-produced software products.
(2) Pursuant to the “Announcement of MOF and STA on Clarifying Policies on VAT Reduction and Exemption, etc.
for Small-scale Taxpayers” (Announcement of MOF and STA [2023] No. 1), eligible taxpayers engaged in the life
services as met the provisions of the “Announcement of MOF and STA on Clarifying Extra VAT Deduction and
Exemption Policy for Life Service Industry” (Announcement of MOF and STA [2019] No. 87) are entitled to enjoy
an extra 10% VAT credit. In 2023, the subsidiaries Zoomlion Environmental Company and its certain subsidiaries,
Foshan Shunde Yuanyi Water Environmental Protection Co., Ltd. and Infore Zoomlion City Environmental Service
Co., Ltd. are entitled to enjoy such preferential policy.
(3) Pursuant to the “Notice of MOF and STA on Extra VAT Deduction Policy for Advanced Manufacturing
Enterprises” (Announcement of MOF and STA [2023] No. 43), from January 1, 2023 to December 31, 2027,
advanced manufacturing enterprises are eligible to enjoy an extra 5% VAT credit. In 2023, the subsidiaries
Zoomlion Environmental Company, Infore Technology Company, Shangfeng Industrial Company and Yolsh
Company are entitled to enjoy such preferential policy.
(4) Pursuant to Article 5 of the “Announcement of MOF and STA on Improving VAT Policy for Improving
Comprehensive Utilization of Resources” (Announcement of MOF and STA [2021] No. 40), since March 1, 2022,
enterprises rendering sewage treatment services are entitled to enjoy 70% VAT refund upon collection. In 2023, the
subsidiaries Huaqingyuan Company, Foshan Shunde District Huaying Environmental Water Co., Ltd., Foshan
Shunde District Yuanrun Water Environmental Protection Co., Ltd. are entitled to enjoy such preferential policy.
Pursuant to Article 4 of the “Notice of MOF and STA on Printing and Distributing the Announcement on VAT
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Policy for Improving Comprehensive Utilization of Resources” (Announcement of MOF and STA [2021] No. 40),
since March 1, 2022, enterprises rendering sewage treatment services are entitled to enjoy VAT refund upon
collection policy or VAT exemption policy. In 2023, 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.
(5) Pursuant to Article 2 of the “Announcement of MOF and STA on Improving VAT Policy for Improving
Comprehensive Utilization of Resources” (Announcement of MOF and STA [2021] No. 40), 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 subsidiaries Lianjiang
Company, Shouxian Green Oriental New Energy Co., Ltd. (the “Shouxian Company”) and Funan Green Oriental
Environmental Energy Co., Ltd. (the “Funan Company”) are entitled to enjoy such preferential policy.
(6) 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 2023, the subsidiary Shenzhen Dingzhu Environmental Technology Co., Ltd. meets the
condition and is exempt from VAT.
(7) Pursuant to the “Announcement of MOF, STA and Ministry of Veterans Affairs (MVA) on Tax Policies for
Further Supporting the Business Startup by and the Employment of Veterans Seeking Independent Employment”
(Announcement of MOF, STA and MVA [2023] No. 14), from January 1, 2023 to December 31, 2027, if an
enterprise enters into an employment contract with veteran seeking independent employment for a term of one year
or more and pays social insurance premiums in accordance with the law, it may enjoy a credit within the standard
quota against, in sequential order, VAT, urban maintenance and construction tax, educational surcharge, local
education surcharges and enterprise income tax according to the number of persons actually employed for three
years from the month when the employment contract is signed and the social premiums are paid. In 2023, the
subsidiary Zoomlion Environmental Company and its certain subsidiaries were entitled to enjoy such tax reduction
and exemption policy.
(8) Pursuant to the “Announcement of the MOF, SAT, Ministry of Hunman Resources and Social Security (MHR),
Ministry of Agriculture and Rural Affairs (MAR) on Tax Policies for Further Supporting the Business Startup by
and the Employment of Key Populations” (Announcement [2023] No. 15), from January 1, 2023 to December 31,
2027, if an enterprise enters into an employment contract with people who have been lifted out of poverty, as well
as people who have been registered as unemployed for more than six months at the public employment service
agency of MHR with an “Entrepreneurship Certificate” or “Unemployment Registration Certificate” (Indicated
“Enterprise Tax Absorption Policy”), for a term of one year or more and pays social insurance premiums in
accordance with the law, it may enjoy a credit within the standard quota against, in sequential order, VAT, urban
maintenance and construction tax, educational surcharge, local education surcharges and enterprise income tax
according to the number of persons actually employed for three years from the month when the employment
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
contract is signed and the social premiums are paid. In 2023, the subsidiary Zoomlion Environmental Company and
its certain subsidiaries were entitled to enjoy such tax reduction and exemption policy.
3. Reduction and exemption policy on six local taxes and two rates
Pursuant to the “Announcement of the MOF and SAT on Tax Policies for Further Supporting the Development of
Small Enterprises with Meager Profit and Individually-Owned Businesses” (Announcement of MOF and STA
[2023] No. 12), from January 1, 2023 to December 31, 2027, for VAT small-scale taxpayers, small enterprises with
meager profit and individually-owned businesses, resource tax (excluding water resources tax), urban maintenance
and construction tax, housing property tax, urban land use tax, stamp duty (excluding securities transaction stamp
duty) cultivated land occupation tax and education surcharge, local education surcharge will be halved. In 2023,
some subsidiaries of Zoomlion Environmental Company, Foshan Shunhe Environmental Protection Co., Ltd.,
Foshan Shunde Huabo Environmental Water Co., Ltd. and Foshan Shunde Yuanyi Water Environmental Protection
Co., Ltd. were eligible to enjoy such tax preferential policy.
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 310,688.91 84,414.54
Cash in bank 4,150,666,527.57 4,590,418,271.45
Other cash and bank balances 260,399,367.30 137,700,844.47
Total 4,411,376,583.78 4,728,203,530.46
Including: Deposited overseas 1,519,215.68 3,949,867.33
(2) Other remarks
1) Closing balance of cash in bank included funds frozen due to lawsuits of 5,100,869.89 yuan, engineering escrow
accounts not available for separate use of 154,141.05 yuan, frozen security deposits of 290,200.17 yuan and
certificates of deposit of 230,340,333.33 yuan, which was with use restrictions.
2) Closing balance of other cash and bank balances included deposits for notes of 179,001,533.41 yuan, deposits
for letters of guarantee of 77,546,493.49 yuan, engineering deposits of 929,734.93 yuan, ETC deposits of 3,000.00
yuan, deposits for buyer’s credit of 861,924.65 yuan and deposits for land reclamation of 1,003,098.32 yuan, which
was with use restrictions.
2. Notes receivable
(1) Details
Items Closing balance Opening balance
Bank acceptance 4,597,270.24 6,474,284.28
Trade acceptance 349,861.59 7,091,421.94
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Items Closing balance Opening balance
Total 4,947,131.83 13,565,706.22
(2) Provision for bad debts
1) Details on categories
Closing balance
Categories Book balance Provision for bad debts
Provision Carrying amount
Amount % to total Amount
proportion (%)
Receivables with provision for
bad debts made on a collective 5,005,019.28 100.00 57,887.45 1.16 4,947,131.83
basis
Including: Bank acceptance 4,597,270.24 91.85 4,597,270.24
Trade acceptance 407,749.04 8.15 57,887.45 14.20 349,861.59
Total 5,005,019.28 100.00 57,887.45 1.16 4,947,131.83
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Provision Carrying amount
Amount % to total Amount
proportion (%)
Receivables with provision for
bad debts made on a collective 15,111,625.30 100.00 1,545,919.08 10.23 13,565,706.22
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
2) Notes receivable with provision for bad debts made on a collective basis
Closing balance
Items Provision proportion
Book balance Provision for bad debts
(%)
Bank acceptance portfolio 4,597,270.24
Trade acceptance portfolio 407,749.04 57,887.45 14.20
Subtotal 5,005,019.28 57,887.45 1.16
(3) Changes in provision for bad debts
Increase Decrease
Opening Closing
Items Recovery or
balance Accrual Write-off Others balance
Reversal
Receivables with
provision for bad debts
1,545,919.08 -1,488,031.63 57,887.45
made on a collective
basis
Total 1,545,919.08 -1,488,031.63 57,887.45
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(4) No pledged notes at the balance sheet date.
(5) Endorsed or discounted but undue notes at the balance sheet date
Items Closing balance derecognized Closing balance not yet derecognized
Bank acceptance 4,472,210.78
Trade acceptance 407,749.04
Subtotal 4,879,959.82
(6) Notes receivable transferred to accounts receivable due to non-performance of issuer
Items Amount transferred
Trade acceptance 9,618,317.80
Subtotal 9,618,317.80
3. Accounts receivable
(1) Age analysis
Ages Closing book balance Opening book balance
Within 1 year 4,798,113,288.74 4,708,241,417.53
1-2 years 930,689,479.95 892,266,330.70
2-3 years 552,003,141.94 336,117,089.17
3-5 years 277,106,854.66 199,203,953.15
Over 5 years 89,167,772.76 74,219,972.77
Total 6,647,080,538.05 6,210,048,763.32
(2) Provision for bad debts
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 261,607,248.18 3.94 108,069,720.23 41.31 153,537,527.95
individual basis
Receivables with
provision made on a 6,385,473,289.87 96.06 671,341,340.96 10.51 5,714,131,948.91
collective basis
Total 6,647,080,538.05 100.00 779,411,061.19 11.73 5,867,669,476.86
(Continued)
Opening balance
Categories
Book balance Provision for bad debts Carrying amount
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Provision
Amount % to total Amount
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
2) Significant accounts receivable with provision made on an individual basis
Opening balance Closing balance
Debtors Basis for
Book Provision for Provision for bad Provision
Book balance provision
balance bad debts debts proportion (%)
made
Guangdong Tianshu New
Expected
Energy Technology Co., 189,921,071.39 56,976,321.42 30.00
credit losses
Ltd.
Subtotal 189,921,071.39 56,976,321.42 30.00
3) Accounts receivable with provision for bad debts made on a collective basis
Closing balance
Items Provision proportion
Book balance Provision for bad debts
(%)
Portfolio grouped with ages 6,050,614,468.43 659,820,086.32 10.91
Portfolio grouped with
294,408,028.59 11,521,254.64 3.91
commercial factoring receivable
Portfolio grouped with
government grants receivable for 40,450,792.85
new energy vehicles
Subtotal 6,385,473,289.87 671,341,340.96 10.51
4) Accounts receivable with provision made on a collective basis using age analysis method
Closing balance
Ages Provision proportion
Book balance Provision for bad debts
(%)
Within 1 year 4,404,011,770.14 220,200,588.57 5.00
1-2 years 824,904,402.24 82,490,440.22 10.00
2-3 years 476,520,031.86 142,956,009.56 30.00
3-5 years 262,010,432.44 131,005,216.22 50.00
Over 5 years 83,167,831.75 83,167,831.75 100.00
Subtotal 6,050,614,468.43 659,820,086.32 10.91
5) Commercial factoring portfolio grouped by five-level classification
Closing balance
Five-level
classification Unrealized financing Provision for bad Provision
Book balance
income debts proportion (%)
Pass 249,939,526.65 3,749,092.90 1.50
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Closing balance
Five-level
classification Unrealized financing Provision for bad Provision
Book balance
income debts proportion (%)
Special-mention 20,623,662.36 618,709.87 3.00
Substandard 23,844,839.58 7,153,451.87 30.00
Subtotal 294,408,028.59 11,521,254.64 3.91
(3) Changes in provision for bad debts
1) Details
Increase/Decrease
Closing
Items Opening balance Recovery or
Accrual Write-off Others balance
Reversal
Receivables with
provision made on 16,482,074.94 100,712,885.29 484,240.00 8,641,000.00 108,069,720.23
an individual basis
Receivables with
provision made on 567,774,216.01 151,514,611.64 835,452.64 47,112,034.05 671,341,340.96
a collective basis
Total 584,256,290.95 252,227,496.93 1,319,692.64 55,753,034.05 779,411,061.19
2) No significant provisions collected or reversed in the current period.
(4) Accounts receivable actually written off in the current period
1) Accounts receivable written off
Items Amount written off
Accounts receivable actually written off 55,753,034.05
2) No significant accounts receivable written off in the current period.
(5) Details of the top 5 debtors with largest balances of accounts receivable and contract assets
Closing book balance Proportion to the total Provision for bad
Contract assets balance of accounts debts of accounts
(including contracts receivable and contract assets receivable and
Debtors Accounts
assets presented under Subtotal (including contracts assets provision for
receivable presented under other non- impairment of
other non-current
assets) current assets) (%) contract assets
No. 1 189,921,071.39 189,921,071.39 2.75 56,976,321.42
No. 2 100,039,699.41 100,039,699.41 1.45 17,825,857.13
No. 3 74,592,738.95 74,592,738.95 1.08 5,958,563.47
No. 4 70,454,956.26 5,935,440.93 76,390,397.19 1.11 7,895,525.34
No. 5 64,715,567.52 64,715,567.52 0.94 3,235,778.38
Subtotal 499,724,033.53 5,935,440.93 505,659,474.46 7.33 91,892,045.74
4. Receivables financing
(1) Details
Items Closing balance Opening balance
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Items Closing balance Opening balance
Bank acceptance 146,814,501.64 107,316,593.41
Total 146,814,501.64 107,316,593.41
(2) Pledged receivables financing at the balance sheet date
Items Closing balance of pledged notes
Bank acceptance 55,280,364.20
Subtotal 55,280,364.20
(3) Endorsed or discounted but undue receivables financing at the balance sheet date
Items Closing balance derecognized
Bank acceptance 126,601,525.47
Subtotal 126,601,525.47
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
Ages Provision for
Book balance % to total Carrying amount
impairment
Within 1 year 131,172,209.02 93.53 131,172,209.02
1-2 years 8,100,756.68 5.78 8,100,756.68
2-3 years 327,684.83 0.23 327,684.83
Over 3 years 640,396.13 0.46 640,396.13
Total 140,241,046.66 100.00 140,241,046.66
(Continued)
Opening balance
Ages Provision for
Book balance % to total Carrying amount
impairment
Within 1 year 186,619,989.22 97.02 186,619,989.22
1-2 years 4,515,793.00 2.35 4,515,793.00
2-3 years 1,175,026.94 0.61 1,175,026.94
Over 3 years 49,733.08 0.02 49,733.08
Total 192,360,542.24 100.00 192,360,542.24
2) No material balance with age over one year.
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(2) Details of the top 5 debtors with largest balances
Proportion to the total balance of
Debtors Book balance
advances paid (%)
No. 1 7,896,200.00 5.63
No. 2 3,636,283.20 2.59
No. 3 2,387,925.65 1.70
No. 4 1,988,886.43 1.42
No. 5 1,980,000.00 1.41
Subtotal 17,889,295.28 12.75
6. Other receivables
(1) Other receivables categorized by nature
Nature of receivables Closing book balance Opening book balance
Temporary advance payment receivable and
163,429,454.84 189,730,555.74
petty cash
Security deposits 82,240,734.41 115,535,012.45
Performance compensation 113,460,620.00 113,460,620.00
Others 4,598,968.70 6,649,505.96
Total 363,729,777.95 425,375,694.15
(2) Age analysis
Ages Closing book balance Opening book balance
Within 1 year 117,612,450.57 195,949,031.83
1-2 years 65,555,129.46 171,544,892.21
2-3 years 149,623,905.77 27,310,051.83
3-4 years 10,558,177.00 22,981,433.06
4-5 years 14,053,059.51 3,490,125.62
Over 5 years 6,327,055.64 4,100,159.60
Total 363,729,777.95 425,375,694.15
(3) Provision for bad debts
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 made on a 363,729,777.95 100.00 47,068,704.69 12.94 316,661,073.26
collective basis
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Closing balance
Categories Book balance Provision for bad debts
Provision Carrying amount
Amount % to total Amount
proportion (%)
Total 363,729,777.95 100.00 47,068,704.69 12.94 316,661,073.26
(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 made on a 425,375,694.15 100.00 39,753,423.15 9.35 385,622,271.00
collective basis
Total 425,375,694.15 100.00 39,753,423.15 9.35 385,622,271.00
2) Other receivables with provision made on a collective basis
a. Other receivables with provision made on a collective basis – parent company
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
Portfolio grouped with
performance 113,460,620.00 2,179,342.69 1.92
compensation
Portfolio grouped with
24,127,705.88 4,857,450.12 20.13
buyer’s credit
Portfolio grouped with
4,995,936.39 1,713,840.08 34.30
ages
Including: 1-180 days 258,669.54
180 days-1 year 1,019,113.00 20,382.26 2.00
1-2 years 315,690.79 31,569.08 10.00
2-3 years 329,381.49 98,814.45 30.00
3-5 years 2,984,636.57 1,492,318.29 50.00
Over 5 years 88,445.00 70,756.00 80.00
Subtotal 142,584,262.27 8,750,632.89 6.14
Notes: For the portfolio grouped with performance compensation, expected credit losses are measured based on the
remaining balance after the mandatory enforcement after the balance sheet date. Please refer to section XIV (III) 1
of notes to the financial statements for details.
b. Ventilation equipment manufacturing industry and environmental integrated industry
Closing balance
Portfolios
Book balance Provision for bad debts Provision proportion (%)
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Closing balance
Portfolios
Book balance Provision for bad debts Provision proportion (%)
Portfolio grouped with ages 221,145,515.68 38,318,071.80 17.33
Including: Within 1 year 104,576,885.16 5,229,038.34 5.00
1-2 years 52,869,515.66 5,286,951.57 10.00
2-3 years 35,833,904.28 10,750,171.28 30.00
3-5 years 21,626,599.94 10,813,299.97 50.00
Over 5 years 6,238,610.64 6,238,610.64 100.00
Subtotal 221,145,515.68 38,318,071.80 17.33
(4) Changes in provision for bad debts
Stage 1 Stage 2 Stage 3
Items 12 month Lifetime expected Lifetime expected Subtotal
expected credit credit losses (credit credit losses (credit
losses not impaired) impaired)
Opening balance 8,420,041.44 5,808,427.22 25,524,954.49 39,753,423.15
Opening balance in the
current period
--Transferred to stage 2 -2,649,887.72 2,649,887.72
--Transferred to stage 3 -3,616,328.58 3,616,328.58
--Reversed to stage 2
--Reversed to stage 1
Provision made in the
-479,707.78 1,972,005.47 7,298,991.30 8,791,288.99
current period
Provision recovered or
reversed in the current 18,583.43 305,040.36 1,129,941.75 1,453,565.54
period
Provision written off in the
current period
Other changes [Note] -22,441.91 -22,441.91
Closing balance 5,249,420.60 6,508,951.47 35,310,332.62 47,068,704.69
Provision proportion (%) 4.96 9.93 19.56 12.94
Note: Other changes refer to balances transferred out due to the disposal of subsidiaries in the current period.
Division basis for each stages: ages of other receivables.
(5) Details of the top 5 debtors with largest balances
Proportion to the
Provision for bad
total balance of
Debtors Nature of receivables Closing book balance Ages debts at the balance
other receivables
sheet date
(%)
Performance
compensation and
No. 1 113,792,911.19 [Note] 31.29 2,362,244.28
temporary advance
payment receivable
Temporary advance
No. 2 9,707,040.68 1-2 years 2.67 2,912,112.20
payment receivable
Temporary advance 180 days-1
No. 3 8,550,000.00 2.35 855,000.00
payment receivable year
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Proportion to the
Provision for bad
total balance of
Debtors Nature of receivables Closing book balance Ages debts at the balance
other receivables
sheet date
(%)
No. 4 Security deposits 6,068,877.68 2-3 years 1.67 1,820,663.30
No. 5 Security deposits 5,325,411.20 4-5 years 1.46 2,662,705.60
Subtotal 143,444,240.75 39.44 10,612,725.38
Note: It includes 113,460,620.00 yuan as performance compensation with age of 2 to 3 years, 298,779.19 yuan as
temporary advance payment receivable with age of 3 to 5 years, and 33,512.00 yuan as temporary advance payment
receivable with age over 5 years.
7. Inventories
(1) Details
Closing balance Opening balance
Items Provision for write- Provision for write-
Book balance Carrying amount Book balance Carrying amount
down down
Raw materials 124,680,011.55 17,707,425.98 106,972,585.57 179,291,553.12 10,856,535.28 168,435,017.84
Work in process 185,705,546.49 5,117,048.20 180,588,498.29 177,447,500.50 2,633,928.18 174,813,572.32
Goods on hand 671,255,477.27 10,858,073.14 660,397,404.13 543,123,849.45 16,365,369.64 526,758,479.81
Materials on
consignment for 135,587.95 135,587.95 710,664.71 710,664.71
further processing
Costs to fulfill a
23,135,561.21 23,135,561.21 10,320,302.27 10,320,302.27
contract
Total 1,004,912,184.47 33,682,547.32 971,229,637.15 910,893,870.05 29,855,833.10 881,038,036.95
(2) Provision for inventory write-down
1) Details
Increase Decrease
Opening
Items Reversal or Closing balance
balance Accrual Others Others
write-off
Raw materials 10,856,535.28 9,203,927.63 2,353,036.93 17,707,425.98
Work in process 2,633,928.18 2,675,381.31 192,261.29 5,117,048.20
Goods on hand 16,365,369.64 3,963,683.30 9,470,979.80 10,858,073.14
Total 29,855,833.10 15,842,992.24 12,016,278.02 33,682,547.32
2) Determination basis of net realizable value and reasons for the reversal or write-off of provision for inventory
write-down
Determination basis of net realizable Reasons for write-off of provision for
Items
value inventory write-down
Estimated selling price of relevant
Inventories with provision for
finished goods less cost to be incurred
Raw materials, work in inventory write-down made at the
upon completion, estimated selling
process beginning of the period were used or
expenses, and relevant taxes and
sold in the current period.
surcharges
Estimated selling price of relevant Inventories with provision for
Goods on hand
finished goods less estimated selling inventory write-down made at the
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Determination basis of net realizable Reasons for write-off of provision for
Items
value inventory write-down
expenses, and relevant taxes and beginning of the period were sold in
surcharges the current period.
(3) Costs to fulfill a contract
Items Opening balance Increase Carried forward Closing balance
Township sewage delivery
project phase II of Hanshou 908,488.95 7,208,417.24 908,488.95 7,208,417.24
County
Kitchen project of Shangrao
4,533,540.92 4,533,540.92
Guangfeng District
Well-point equipment sales of
1,815,112.42 1,815,112.42
Leiyang City
Pretreatment equipment
procurement project of Duyun 1,681,363.40 1,681,363.40
project
Leachate delivery project of
1,117,852.48 1,117,852.48
Xi’an Chanba Transfer Station
Equipment sales of Yongshun
County, Xiangxi Tujia and Miao
1,450,156.90 1,450,156.90
Autonomous Prefecture -
township sewage (Wanping)
Leachate delivery project of
Fuzhou Qingliangshan Transfer 2,059,176.45 500,917.40 2,560,093.85
Station
Others 2,969,515.07 9,001,530.72 5,191,771.04 6,779,274.75
Subtotal 10,320,302.27 22,925,769.68 10,110,510.74 23,135,561.21
8. Contract assets
(1) Details
Closing balance
Items Provision for
Book balance Carrying amount
impairment
Quality guarantee deposits receivable 84,519,179.04 9,715,689.56 74,803,489.48
Total 84,519,179.04 9,715,689.56 74,803,489.48
(Continued)
Opening balance
Items Provision for
Book balance Carrying amount
impairment
Quality guarantee deposits receivable 116,355,489.32 15,331,634.99 101,023,854.33
Total 116,355,489.32 15,331,634.99 101,023,854.33
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(2) Details on provision for impairment
1) Details on categories
Closing balance
Categories Book balance Provision for impairment
Carrying
Provision proportion amount
Amount % to total Amount
(%)
Receivables with provision made on a
84,519,179.04 100.00 9,715,689.56 11.50 74,803,489.48
collective basis
Total 84,519,179.04 100.00 9,715,689.56 11.50 74,803,489.48
(Continued)
Opening balance
Categories Book balance Provision for impairment
Carrying
Provision proportion amount
Amount % to total Amount
(%)
Receivables with provision made on a
116,355,489.32 100.00 15,331,634.99 13.18 101,023,854.33
collective basis
Total 116,355,489.32 100.00 15,331,634.99 13.18 101,023,854.33
2) Contract assets with provision for impairment made on a collective basis
Closing balance
Items
Book balance Provision for impairment Provision proportion (%)
Portfolio grouped with
84,519,179.04 9,715,689.56 11.50
quality guarantee deposits
Subtotal 84,519,179.04 9,715,689.56 11.50
(3) Changes in provision for impairment
Increase/Decrease
Closing
Items Opening balance Recovery
Accrual Write-off Others balance
or reversal
Receivables with provision
for impairment made on a 15,331,634.99 -5,615,945.43 9,715,689.56
collective basis
Total 15,331,634.99 -5,615,945.43 9,715,689.56
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
328,993,341.47 6,469,240.60 15,965,200.41 306,558,900.46 4.20-4.30
installments
Payments for finance lease 46,826,104.16 2,749,700.41 1,354,452.95 42,721,950.80 4.20-4.30
Factoring of receivables
215,722,449.48 9,685,000.00 3,235,836.74 202,801,612.74 4.20-4.30
financing
Total 591,541,895.11 18,903,941.01 20,555,490.10 552,082,464.00
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
(Continued)
Opening 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
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, excess
513,175,804.36 513,175,804.36 482,764,023.99 482,764,023.99
input VAT credits
and prepaid taxes
Costs to obtain a
10,704,601.44 10,704,601.44 9,306,113.04 9,306,113.04
contract
Listing expenses
of subsidiary spun 5,380,660.39 5,380,660.39
off
Total 523,880,405.80 523,880,405.80 497,450,797.42 497,450,797.42
(2) Costs to obtain a contract
Provision for
Items Opening balance Increase Amortization Closing balance
impairment
Costs to obtain
9,306,113.04 35,876,372.11 34,477,883.71 10,704,601.44
a contract
Subtotal 9,306,113.04 35,876,372.11 34,477,883.71 10,704,601.44
11. Long-term receivables
(1) Details
Closing balance
Items
Unrealized finance Provision for bad Discount rate
Book balance Carrying amount
income debts range (%)
Sales of goods in
474,463,111.30 28,883,881.35 69,637,094.56 375,942,135.39 4.20-4.30
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 21,422,534.54 1,929,467.83 486,521.79 19,006,544.92 4.20-4.30
Factoring of receivables
1,391,000.00 20,865.00 1,370,135.00 4.20-4.30
financing
Total 529,423,434.83 34,573,086.44 71,751,820.80 423,098,527.59
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
(Continued)
Opening 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
(2) Changes in provision for bad debts
1) Details on categories
Closing balance
Categories Book balance Provision for impairment
Provision Carrying amount
Amount % to total Amount
proportion (%)
Receivables with provision for
impairment made on an individual 1,711,994.50 0.35 1,711,994.50 100.00
basis
Receivables with provision for
impairment made on an individual 493,138,353.89 99.65 70,039,826.30 14.20 423,098,527.59
basis
Total 494,850,348.39 100.00 71,751,820.80 14.50 423,098,527.59
(Continued)
Opening balance
Categories Book balance Provision for impairment
Provision Carrying amount
Amount % to total Amount
proportion (%)
Receivables with provision made
1,042,389,253.28 100.00 110,258,381.46 10.58 932,130,871.82
on a collective basis
Total 1,042,389,253.28 100.00 110,258,381.46 10.58 932,130,871.82
2) No significant long-term receivables with provision for bad debts made on an individual basis.
3) 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 106,097,455.52 5,304,872.78 5.00
Payments due 398,800,450.27 64,227,566.73 16.11
Subtotal 504,897,905.79 69,532,439.51 13.77
165
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
4) 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
21,422,534.54 486,521.79 2.27
finance lease payment
Portfolio grouped with
receivables financing 1,391,000.00 20,865.00 1.50
factoring payment
Subtotal 22,813,534.54 507,386.79 2.22
(3) Changes in provision for bad debts
Increase/Decrease
Opening
Items Recovery or Closing balance
balance Accrual Write-off Others
reversal
Receivables with provision for
impairment made on an 1,711,994.50 1,711,994.50
individual basis
Receivables with provision for
impairment made on a 110,258,381.46 -40,218,555.16 70,039,826.30
collective basis
Total 110,258,381.46 -38,506,560.66 71,751,820.80
12. Long-term equity investments
(1) Categories
Closing balance Opening balance
Items Provision for Provision for Carrying
Book balance Carrying amount Book balance
impairment impairment amount
Investments
681,629,084.69 681,629,084.69 676,829,959.84 676,829,959.84
in associates
Total 681,629,084.69 681,629,084.69 676,829,959.84 676,829,959.84
(2) Details
Increase/Decrease
Adjustment in
Investees Opening balance Investment income
Investments Investments other
recognized under
increased decreased comprehensive
equity method
income
Associates
Tengine Innovation (Beijing) Monitoring
29,631,523.07 -1,821,854.32
Instrument Co., Ltd.
Guangdong Shunkong Environmental
218,036,312.90 30,240,907.09
Investment Co., Ltd.
Guangdong Tianshu New Energy Technology
Co., Ltd. [Note 1]
Shantou Zoomlion Ruikang Environmental
21,960,846.16 2,546,071.11
Sanitation Service Co., Ltd.
Shantou Chaoyang District Zoomlion Ruikang
31,419,699.92 647,839.13
Environmental Sanitation Service Co., Ltd.
Changsha Cowa Zoomlion Intelligent
4,893,582.51 -222,073.44
Technology Co., Ltd.
Guangdong Liangke Environmental
32,695,599.98 203,520.80
Engineering Co., Ltd.
166
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Increase/Decrease
Adjustment in
Investees Opening balance Investment income
Investments Investments other
recognized under
increased decreased comprehensive
equity method
income
Guangxi Zoomlion Guilv Urban
2,361,751.84 260,465.40
Environmental Service Co., Ltd.
Shenzhen Yingmei City Housekeeper Co., Ltd. 28,165.29 41.05
Foshan Yingtong Electrical Materials Co., Ltd. 228,933,254.09 -26,979,326.27
China Urban Institute (Beijing) Environmental
97,387,146.22 3,801,154.35
Technology Co., Ltd.
Beijing Xingyun Zhixing Technology Co., Ltd. 9,482,077.86 -816,487.88
Guangdong Yingling Testing Technology
Service Co., Ltd. [Note 2]
Taizhou Jinzhong Environmental Industry Co.,
4,900,000.00 -2,899,564.23
Ltd.
Total 676,829,959.84 4,900,000.00 4,960,692.79
(Continued)
Increase/Decrease Closing balance
Investees Cash dividend/
Changes in Provision for Provision for
Profit declared for Others Carrying amount
other equity impairment impairment
distribution
Associates
Tengine Innovation (Beijing)
27,809,668.75
Monitoring Instrument Co., Ltd.
Guangdong Shunkong
Environmental Investment Co., 5,061,567.94 243,215,652.05
Ltd.
Guangdong Tianshu New Energy
Technology Co., Ltd. [Note 1]
Shantou Zoomlion Ruikang
Environmental Sanitation Service 24,506,917.27
Co., Ltd.
Shantou Chaoyang District
Zoomlion Ruikang Environmental 32,067,539.05
Sanitation Service Co., Ltd.
Changsha Cowa Zoomlion
4,671,509.07
Intelligent Technology Co., Ltd.
Guangdong Liangke
Environmental Engineering Co., 32,899,120.78
Ltd.
Guangxi Zoomlion Guilv Urban
2,622,217.24
Environmental Service Co., Ltd.
Shenzhen Yingmei City
28,206.34
Housekeeper Co., Ltd.
Foshan Yingtong Electrical
201,953,927.82
Materials Co., Ltd.
China Urban Institute (Beijing)
Environmental Technology Co., 101,188,300.57
Ltd.
Beijing Xingyun Zhixing
8,665,589.98
Technology Co., Ltd.
Guangdong Yingling Testing
Technology Service Co., Ltd. [Note
2]
Taizhou Jinzhong Environmental
2,000,435.77
Industry Co., Ltd.
Total 5,061,567.94 681,629,084.69
167
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Note 1: Long-term equity investments of 0.00 yuan in Guangdong Tianshu New Energy Technology 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.
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
Increase/Decrease
Gains or losses included
Items Opening balance Investments Investments into other comprehensive
Others
increased decreased income in the current
period
Zhejiang Shangyu Rural
Commercial Bank Co., 800,000.00
Ltd.
Shenzhen Infore
Environmental
Protection Industry 270,000.00
Fund Management Co.,
Ltd.
Shenzhen Infore
Environmental
Protection Industry
14,282,971.01
M&A Fund [Note]
Total 15,352,971.01
(Continued)
Accumulated gains or
Dividend income
losses included into other
Items Closing balance recognized in the
comprehensive income at
current period
the end of the period
Zhejiang Shangyu Rural Commercial
800,000.00 408,044.00
Bank Co., Ltd.
Shenzhen Infore Environmental
Protection Industry Fund Management 270,000.00
Co., Ltd.
Shenzhen Infore Environmental
14,282,971.01
Protection Industry M&A Fund [Note]
Total 15,352,971.01 408,044.00
Note: As of December 31, 2023, Shenzhen Infore Environmental Protection Industry M&A Fund is still in
liquidation.
14. Investment property
(1) Details
Items Buildings and structures Total
Cost
Opening balance 29,071,100.66 29,071,100.66
168
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Items Buildings and structures Total
Increase
Decrease 27,266,145.23 27,266,145.23
1) Disposal 360,965.00 360,965.00
2) Transferred out into fixed assets 26,905,180.23 26,905,180.23
Closing balance 1,804,955.43 1,804,955.43
Accumulated depreciation and amortization
Opening balance 1,965,665.63 1,965,665.63
Increase 88,593.04 88,593.04
1) Accrual or amortization 88,593.04 88,593.04
Decrease 1,388,171.84 1,388,171.84
1) Disposal 117,929.48 117,929.48
2) Transferred out into fixed assets 1,270,242.36 1,270,242.36
Closing balance 666,086.83 666,086.83
Closing carrying amount 1,138,868.60 1,138,868.60
Opening carrying amount 27,105,435.03 27,105,435.03
(2) Investment property with certificate of titles being unsettled
Items Carrying amount Reasons for unsettlement
Shangyu Wanda real estate 1,138,868.60 In processing
Subtotal 1,138,868.60
15. Fixed assets
(1) Details
Buildings and Transport Other
Items General equipment Special equipment Total
structures facilities equipment
Cost
Opening 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
Increase 52,284,572.68 15,914,123.88 298,543,607.90 1,856,706.52 1,470,994.40 370,070,005.38
1) Acquisition 3,474,388.92 10,351,560.25 251,273,170.38 1,856,706.52 1,470,994.40 268,426,820.47
2) Transferred in
from construction 21,905,003.53 5,411,810.98 37,441,177.36 64,757,991.87
in progress
3) Business
150,752.65 127,198.00 277,950.65
combination
4) Transferred in
9,702,062.16 9,702,062.16
from inventories
5) Transferred in
from investment 26,905,180.23 26,905,180.23
property
Decrease 14,500.00 4,184,733.91 36,311,332.14 8,206,633.02 1,883,665.88 50,600,864.95
1) Disposal/
4,131,399.40 35,268,132.12 8,206,633.02 1,776,065.88 49,382,230.42
Scrapping
2) Disposal of
14,500.00 53,334.51 1,043,200.02 107,600.00 1,218,634.53
subsidiaries
Closing balance 1,601,668,910.67 175,881,474.60 1,436,242,670.58 59,965,293.93 37,459,730.25 3,311,218,080.03
Accumulated
depreciation
169
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Buildings and Transport Other
Items General equipment Special equipment Total
structures facilities equipment
Opening 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
Increase 64,097,222.86 21,457,613.17 186,749,488.79 5,965,787.96 1,360,261.65 279,630,374.43
1) Accrual 62,826,980.50 21,314,398.19 186,697,080.47 5,965,787.96 1,360,261.65 278,164,508.77
2) Business
143,214.98 52,408.32 195,623.30
combination
3) Transferred in
from investment 1,270,242.36 1,270,242.36
property
Decrease 14,065.00 3,673,714.78 19,965,831.24 4,791,734.14 1,744,810.97 30,190,156.13
1) Disposal/
3,643,672.74 19,142,825.69 4,791,734.14 1,653,857.30 29,232,089.87
Scrapping
2) Disposal of
14,065.00 30,042.04 823,005.55 90,953.67 958,066.26
subsidiaries
Closing balance 276,038,235.20 83,084,198.21 576,531,948.13 19,776,609.96 17,470,964.39 972,901,955.89
Carrying amount
Closing balance 1,325,630,675.47 92,797,276.39 859,710,722.45 40,188,683.97 19,988,765.86 2,338,316,124.14
Opening 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
(2) No fixed assets temporarily idle at the balance sheet date.
(3) Fixed assets leased out under operating leases
Items Carrying amount
Buildings and structures 22,736,364.29
Subtotal 22,736,364.29
(4) Fixed assets with certificate of titles being unsettled
Items Carrying amount Reasons for unsettlement
Integration project plant 302,783,876.40 In processing
Employee dormitory in Lueryuan 135,358,752.00 In processing
Bottom renovation workshop in
21,125,640.93 In processing
Lueryuan
Lueryuan Exhibition Center 15,696,091.03 In processing
Staff canteen in Lueryuan 22,984,574.86 In processing
Subtotal 497,948,935.22
16. Construction in progress
(1) Details
Closing balance Opening balance
Projects Provision for Provision for Carrying
Book balance Carrying amount Book balance
impairment impairment amount
Infore Environment Shunde
Environmental Protection
256,519,519.36 256,519,519.36
Technology Industrial Park
(Phase II) Project
Equipment to be installed 19,134,556.95 19,134,556.95 16,211,018.08 16,211,018.08
Piecemeal projects 12,402,942.58 12,402,942.58 24,862,249.60 24,862,249.60
Total 288,057,018.89 288,057,018.89 41,073,267.68 41,073,267.68
(2) Changes in significant projects
170
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Opening Transferred to Transferred to Other Closing
Projects Budgets Increase
balance fixed assets intangible assets decreases balance
Infore Environment
Shunde Environmental
Protection Technology 483,333,200.00 256,519,519.36 256,519,519.36
Industrial Park (Phase
II) Project
Equipment to be
16,211,018.08 21,439,852.20 7,036,652.70 11,479,660.63 19,134,556.95
installed
Piecemeal projects 24,862,249.60 45,469,636.25 57,721,339.17 207,604.10 12,402,942.58
Total 41,073,267.68 323,429,007.81 64,757,991.87 11,687,264.73 288,057,018.89
(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 (%)
Infore Environment
Shunde Environmental Self-raised,
Protection Technology 54.95 54.95 2,716,000.00 2,716,000.00 0.73 long-term
Industrial Park (Phase II) borrowings
Project
Equipment to be
Self-raised
installed
Piecemeal projects Self-raised
Total 2,716,000.00 2,716,000.00
17. Right-of-use assets
Items Buildings and structures Total
Cost
Opening balance 46,849,639.86 46,849,639.86
Increase 2,440,036.08 2,440,036.08
1) Leased in 2,440,036.08 2,440,036.08
Decrease 9,387,245.15 9,387,245.15
1) Disposal 9,387,245.15 9,387,245.15
Closing balance 39,902,430.79 39,902,430.79
Accumulated depreciation
Opening balance 14,990,185.62 14,990,185.62
Increase 8,706,270.90 8,706,270.90
1) Accrual 8,706,270.90 8,706,270.90
Decrease 8,919,697.68 8,919,697.68
1) Disposal 8,919,697.68 8,919,697.68
Closing balance 14,776,758.84 14,776,758.84
Carrying amount
Closing balance 25,125,671.95 25,125,671.95
Opening balance 31,859,454.24 31,859,454.24
171
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
18. Intangible assets
(1) Details
Patented
Items Land use right Software Franchise Total
technology
Cost
Opening balance 657,565,927.37 70,369,281.83 6,775,246,738.14 459,379,594.21 7,962,561,541.55
Increase 7,152,320.00 14,940,796.49 659,915,003.74 32,917,511.29 714,925,631.52
1) Acquisition 7,152,320.00 3,253,531.76 659,915,003.74 670,320,855.50
2) Transferred in
from construction in 11,687,264.73 11,687,264.73
process
3) Independent R&D 32,917,511.29 32,917,511.29
Decrease 362,058,343.47 3,536,938.02 365,595,281.49
1) Disposal 24,255,438.09 3,536,938.02 27,792,376.11
2) Transferred out
into other non-current 337,802,905.38 337,802,905.38
assets
Closing balance 664,718,247.37 85,310,078.32 7,073,103,398.41 488,760,167.48 8,311,891,891.58
Accumulated
amortization
Opening balance 85,065,544.63 23,500,971.70 1,486,964,648.90 271,140,604.91 1,866,671,770.14
Increase 13,707,737.35 8,023,452.35 488,433,164.54 37,144,253.06 547,308,607.30
1) Accrual 13,707,737.35 8,023,452.35 488,433,164.54 37,144,253.06 547,308,607.30
Decrease 130,675,779.15 634,634.14 131,310,413.29
1) Disposal 20,113,600.89 634,634.14 20,748,235.03
2) Transferred out
into other non-current 110,562,178.26 110,562,178.26
assets
Closing balance 98,773,281.98 31,524,424.05 1,844,722,034.29 307,650,223.83 2,282,669,964.15
Provision for
impairment
Opening balance 24,687,522.85 23,087,884.07 47,775,406.92
Increase
Decrease 2,902,303.88 2,902,303.88
1) Disposal 2,902,303.88 2,902,303.88
Closing balance 24,687,522.85 20,185,580.19 44,873,103.04
Carrying amount
Closing balance 565,944,965.39 53,785,654.27 5,203,693,841.27 160,924,363.46 5,984,348,824.39
Opening balance 572,500,382.74 46,868,310.13 5,263,594,566.39 165,151,105.23 6,048,114,364.49
(2) No land use right with certificate of titles being unsettled at the balance sheet date.
19. Development expenditures
(1) Details
172
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Closing balance Opening balance
Items Provision for Carrying Provision for
Book balance Book balance Carrying amount
impairment amount impairment
Development
9,063,080.60 9,063,080.60 33,160,925.44 2,822,707.36 30,338,218.08
expenditures
Total 9,063,080.60 9,063,080.60 33,160,925.44 2,822,707.36 30,338,218.08
(2) Other remarks
Please refer to section VI of notes to the financial statements for details on development expenditures.
20. Goodwill
(1) Details
Investees or events Closing balance Opening balance
resulting in
goodwill Provision for Carrying Provision for
Book balance Book balance Carrying amount
impairment amount impairment
Zoomlion
5,714,428,315.9 618,097,980.8 5,096,330,335.1 5,714,428,315.9 528,229,356.5 5,186,198,959.4
Environmental
9 3 6 9 5 4
Company
Green Oriental
65,456,185.12 65,456,185.12 78,074,688.12 78,074,688.12
Company
Foshan Shunhe
Environmental
329,083,984.91 3,152,463.61 325,931,521.30 316,465,481.91 316,465,481.91
Protection Co., Ltd.
[Note]
Shangfeng
100,455,813.40 100,455,813.40 100,455,813.40 100,455,813.40
Industrial Company
Yolsh Company 13,389,232.61 13,389,232.61 13,389,232.61 13,389,232.61
Lianjiang Company 46,032,017.84 2,229,729.76 43,802,288.08 46,032,017.84 1,013,513.53 45,018,504.31
6,268,845,549.8 623,480,174.2 5,645,365,375.6 6,268,845,549.8 529,242,870.0 5,739,602,679.7
Total
7 0 7 7 8 9
Note: On December 25, 2023, the Company’s subsidiary Foshan Infore Environmental Water Treatment Co., Ltd.
changed its name to Foshan Shunhe Environmental Protection Co., Ltd.
(2) Cost
Investees or events resulting in
Opening balance Increase [Note] Decrease [Note] Closing balance
goodwill
Zoomlion Environmental Company 5,714,428,315.99 5,714,428,315.99
Green Oriental Company 78,074,688.12 12,618,503.00 65,456,185.12
Foshan Shunhe Environmental
316,465,481.91 12,618,503.00 329,083,984.91
Protection 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 6,268,845,549.87 12,618,503.00 12,618,503.00 6,268,845,549.87
Note: Pursuant to the “Equity Transfer Agreement” entered into in December 2023, Green Oriental Company
transferred 100% of equity of Funan Company to Foshan Shunhe Environmental Protection Co., Ltd., with
goodwill of 12,618,503.00 yuan transferred out accordingly, which is a portion of the goodwill of 78,074,688.12
173
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
yuan formerly formed in the Company’s acquisition of Green Oriental Company.
(3) Provision for impairment
Investees or events resulting in
Opening balance Increase Decrease Closing balance
goodwill
Zoomlion Environmental
528,229,356.55 89,868,624.28 618,097,980.83
Company [Note 1]
Lianjiang Company [Note 2] 1,013,513.53 1,216,216.23 2,229,729.76
Foshan Shunhe Environmental
3,152,463.61 3,152,463.61
Protection Co., Ltd. [Note 3]
Total 529,242,870.08 94,237,304.12 623,480,174.20
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 3,857,982.20 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 56,757,490.15 yuan. Impairment
loss of 86,010,642.08 yuan was recognized 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 561,340,490.68 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
1,216,216.23 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 2,229,729.76 yuan.
Note 3: Impairment loss of 2,161,796.44 yuan was recognized at the difference between the recoverable amount
and the carrying amount of water governance operation asset group, and the accumulated provision for impairment
of goodwill arising from this factor totaled 2,161,796.44 yuan. Impairment loss of 990,667.17 yuan was recognized
based on the difference between recoverable amount and carrying amount of Funan Company in the urban-rural
sanitation integrated operation asset group portfolio. The accumulated provision for impairment of goodwill arising
from this factor totaled 990,667.17 yuan.
(4) Related information of asset groups or asset group portfolios which include goodwill
1) Related information of asset groups or asset group portfolios
Whether asset groups or
asset group portfolios are
Composition of asset groups
Asset groups or asset group Operating segment and its consistent with those at
or asset group portfolios and
portfolios basis acquisition date/at goodwill
its basis
impairment testing date in
previous years
Operating long-term assets of Zoomlion Environmental
Zoomlion Environmental Company (manufacturing
Sanitation vehicles and Company (manufacturing and and sales of sanitation
equipment manufacturing and sales of sanitation vehicles vehicles and equipment) Yes
sales asset group and equipment), and and Changsha Zhongbiao
Changsha Zhongbiao Environmental Industry
Environmental Industry Co., Co., Ltd.
174
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Whether asset groups or
asset group portfolios are
Composition of asset groups
Asset groups or asset group Operating segment and its consistent with those at
or asset group portfolios and
portfolios basis acquisition date/at goodwill
its basis
impairment testing date in
previous years
Ltd.
Operating long-term assets of
Zoomlion Environmental
Zoomlion Environmental
Company (sanitation
Company (sanitation
integrated operation),
integrated operation), Green
Green Oriental Company,
Urban-rural sanitation Oriental Company, Funan
Funan Company, Huaian
integrated operation asset Company, Huaian Chenjie Yes [Note]
Chenjie Environmental
group portfolio Environmental Engineering
Engineering Co., Ltd.,
Co., Ltd., Biyang County
Biyang County Fenghe
Fenghe New Energy Power
New Energy Power Co.,
Co., Ltd., and Lianjiang
Ltd., Lianjiang Company
Company
Operating long-term assets of
Foshan Shunhe
Foshan Shunhe
Water governance operation Environmental Protection
Environmental Protection Co., Yes
asset group Co., Ltd. (water treatment
Ltd. (water treatment
business)
business)
Ventilation equipment Operating long-term assets of
Shangfeng Industrial
manufacturing and sales asset Shangfeng Industrial Yes
Company
group Company
Electrical equipment
Operating long-term assets of
manufacturing and sales asset Yolsh Company Yes
Yolsh Company
group
Note: 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 Company acquired Lianjiang Company through business combination not under common control in February
2022. After the 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.
(5) Specific method for determining recoverable amount
175
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
1) Recoverable amount determined based on the fair value less costs of disposal
Carrying amount of asset
groups or asset group Recoverable Provision for
Items
portfolios which include amount impairment
goodwill
Urban-rural sanitation
integrated operation asset 198,587,216.61 197,596,549.44 990,667.17
group portfolio
Water governance operation
433,349,512.21 431,187,715.77 2,161,796.44
asset group
Subtotal 631,936,728.82 628,784,265.21 3,152,463.61
(Continued)
Determination method of fair
Items Key parameters and determination basis
value and costs of disposal
Urban-rural sanitation Equity disposal price, disposal expenses
integrated operation asset Determined based on the incurred after the balance sheet date, non-
group portfolio subsequent disposal price of operating assets, liabilities, working capital,
Water governance the asset group etc. as stipulated in the “Equity Transfer
operation asset group Agreement” signed by the Company
2) Recoverable amount determined based on the present value of estimated future cash flows
Carrying amount of asset
groups or asset group Recoverable amount
Items Provision for impairment
portfolios which include [Note 2]
goodwill [Note 1]
Sanitation vehicles and
equipment manufacturing and 11,619,748,317.81 11,451,100,000.00 86,010,642.08
sales asset group
Urban-rural sanitation integrated
operation asset group portfolio 4,600,796,416.27 4,969,530,000.00
[Note 3]
Ventilation equipment
manufacturing and sales asset 302,264,770.42 447,883,111.44
group
Electrical equipment
manufacturing and sales asset 44,643,222.78 53,492,386.65
group
Subtotal 16,567,452,727.28 16,922.005,498.09 86,010,642.08
Note 1: The goodwill of the asset group portfolio has included the portion attributable to non-controlling
shareholders. Cost of original goodwill of Zoomlion Environmental Company of 5.714 billion yuan was reallocated
to the sanitation vehicles and equipment manufacturing and sales asset group and urban-rural sanitation integrated
operation asset group portfolio based on the percentages of gross profit contributed by the two businesses, with
5.636 billion yuan and 78 million yuan reallocated, respectively.
Note 2: The present value of estimated future cash flows (recoverable amount) of sanitation vehicles and equipment
manufacturing and sales asset group was based on the appraisal report numbered Zhong Rui Ping Bao Zi [2024]
300596 issued by Chungrui Worldunion Assets Appraisal Group Co., Ltd.
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 [2024] 300557
issued by Chungrui Worldunion Assets Appraisal Group Co., Ltd. and the appraisal report numbered Jun Rui Ping
176
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Bao Zi [2024] 065 issued by Shenzhen Junrui Assets Appraisals LLP.
Note 3: It does not include the portion of urban-rural sanitation integrated operation asset group, which has been
transferred out under equity transfer agreement after the balance sheet date.
(Continued)
Parameters including
Parameters including revenue Discount rate
Forecast revenue growth rate and
growth rate and gross margin and its
Items period gross margin for forecast
for stable period and their determination
(years) period and their
determination basis basis [Note 4]
determination basis
Sanitation vehicles and
equipment manufacturing and 5 [Note 1] The revenue growth rate is 0 10.71%
sales asset group
Urban-rural sanitation integrated
[Note 1] [Note 1] [Note 1] 8.95%-8.97%
operation asset group portfolio
Ventilation equipment
manufacturing and sales asset 5 [Note 2] The revenue growth rate is 0 11.01%
group
Electrical equipment
manufacturing and sales asset 5 [Note 3] The revenue growth rate is 0 12.93%
group
Note 1: 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 according to the budget approved by the
Management. The revenue growth rate of the product production and sales asset group in 2024 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.
Note 2: The revenue growth rate of ventilation equipment manufacturing and sales asset group during the forecast
period from 2024 to 2028 is 13.40%, 4.00%, 3.00%, 2.00% and 1.00%, respectively, which are determined based
on the Company’s historical annual operating performance, growth rates, existing orders, and the Management’s
expectations for market development.
Note 3: The revenue growth rate of electrical equipment manufacturing and sales asset group during the forecast
period from 2024 to 2028 is 105.08%, 25.00%, 30.00%, 35.00% and 40.00%, respectively, which are determined
based on the Company’s historical annual operating performance, growth rates, existing orders, and the
Management’s expectations for market development.
Note 4: Discount rate: determined based on weighted average cost of capital (WACC), cost of equity capital and
cost of liabilities.
21. Long-term prepayments
177
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Other
Items Opening balance Increase Amortization Closing balance
decreases
Expenditures on
improvement of
25,781,580.05 6,548,947.45 8,722,846.35 23,607,681.15
leased-in fixed
assets
Others 4,429,355.86 7,108,859.69 4,015,099.21 7,523,116.34
Total 30,210,935.91 13,657,807.14 12,737,945.56 31,130,797.49
22. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets before offset
Closing balance Opening balance
Items Deductible Deductible
Deferred tax Deferred tax
temporary temporary
assets assets
difference difference
Provision for impairment
697,808,362.88 107,271,372.72 668,318,234.13 102,350,161.93
of assets
Unrealized profit from
20,475,833.05 3,071,374.96 22,214,585.93 3,332,187.89
internal transactions
Deductible losses 47,114,527.25 8,894,435.03 47,115,916.60 8,894,782.37
Lease liabilities 26,136,462.82 4,103,472.14
Total 791,535,186.00 123,340,654.85 737,648,736.66 114,577,132.19
(2) Deferred tax liabilities before offset
Closing balance Opening balance
Items Taxable Taxable
Deferred tax Deferred tax
temporary temporary
liabilities liabilities
difference difference
Accelerated depreciation
26,637,066.56 4,698,936.18 24,481,935.20 3,672,290.28
of fixed assets
Assets appraisal
appreciation due to
267,111,526.85 45,461,139.37 448,250,679.76 50,535,337.80
business combination not
under common control
Right-of-use assets 25,125,671.95 3,951,853.51
Total 318,874,265.36 54,111,929.06 472,732,614.96 54,207,628.08
178
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
(3) Deferred tax assets or liabilities after offset
Closing balance Opening balance
Deferred tax Deferred tax
Items Deferred tax Deferred tax
assets offset by assets offset by
assets/liabilities after assets/liabilities after
deferred tax deferred tax
offset offset
liabilities liabilities
Deferred tax assets 6,892,349.21 116,448,305.64 114,577,132.19
Deferred tax liabilities 6,892,349.21 47,219,579.85 54,207,628.08
(4) Details of unrecognized deferred tax assets
Items Closing balance Opening balance
Deductible temporary difference 825,763,726.98 510,065,399.73
Deductible losses 749,514,337.17 596,581,457.35
Unrealized profit from internal
364,794,037.67 343,937,402.32
transactions
Total 1,940,072,101.82 1,450,584,259.40
(5) Maturity years of deductible losses of unrecognized deferred tax assets
Maturity years Closing balance Opening balance Remarks
Year 2023 24,742,029.97
Year 2024 86,322,391.77 82,954,604.70
Year 2025 187,721,684.90 206,033,354.21
Year 2026 94,150,648.91 97,279,157.08
Year 2027 175,149,966.49 185,572,311.39
Year 2028 206,169,645.10
Total 749,514,337.17 596,581,457.35
23. Other non-current assets
(1) Details
Closing balance
Items
Book balance Provision for impairment Carrying amount
Assets to be disposal of 227,240,727.12 227,240,727.12
Contract assets – Quality
164,081,168.47 21,618,229.88 142,462,938.59
guarantee deposit receivable
Advances for long-term assets 55,114,043.37 55,114,043.37
Costs to obtain a contract 63,666,470.76 63,666,470.76
Receivables for agent construction 8,518,174.25 8,518,174.25
Total 518,620,583.97 30,136,404.13 488,484,179.84
179
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
(Continued)
Opening balance
Items
Book balance Provision for impairment Carrying amount
Contract assets – Quality guarantee
154,548,259.36 17,968,552.02 136,579,707.34
deposit receivable
Advances for long-term assets 93,266,692.04 93,266,692.04
Costs to obtain a contract 68,565,164.58 68,565,164.58
Receivables for agent construction 8,518,174.25 8,518,174.25
Total 324,898,290.23 17,968,552.02 306,929,738.21
(2) Contract assets
1) Details
Closing balance
Items
Book balance Provision for impairment Carrying amount
Contract assets –
Quality guarantee 164,081,168.47 21,618,229.88 142,462,938.59
deposit receivable
Total 164,081,168.47 21,618,229.88 142,462,938.59
(Continued)
Opening balance
Items
Book balance Provision for impairment Carrying amount
Contract assets –
Quality guarantee 154,548,259.36 17,968,552.02 136,579,707.34
deposit receivable
Total 154,548,259.36 17,968,552.02 136,579,707.34
2) Details on provision for impairment
a. Details on categories
Closing balance
Categories Book balance Provision for impairment
Carrying amount
Provision
Amount % to total Amount
proportion (%)
Receivables with provision
164,081,168.47 100.00 21,618,229.88 13.18 142,462,938.59
made on a collective basis
Total 164,081,168.47 100.00 21,618,229.88 13.18 142,462,938.59
(Continued)
Opening balance
Categories Book balance Provision for impairment
Carrying amount
Provision
Amount % to total Amount
proportion (%)
Receivables with provision
154,548,259.36 100.00 17,968,552.02 11.63 136,579,707.34
made on a collective basis
Total 154,548,259.36 100.00 17,968,552.02 11.63 136,579,707.34
180
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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
quality guarantee 164,081,168.47 21,618,229.88 13.18
deposits
Subtotal 164,081,168.47 21,618,229.88 13.18
3) Changes in provision for impairment
a. Details
Increase/Decrease
Items Opening balance Closing balance
Recovery or
Accrual Write-off Others
reversal
Receivables with
provision for impairment
17,968,552.02 4,018,806.01 369,128.15 21,618,229.88
made on a collective
basis
Total 17,968,552.02 4,018,806.01 369,128.15 21,618,229.88
b. No significant provisions collected or reversed in the current period.
(3) Costs to obtain a contract
Opening Provision for
Items Increase Amortization Closing balance
balance impairment
Costs to obtain a
68,565,164.58 25,071,451.76 29,970,145.58 63,666,470.76
contract
Subtotal 68,565,164.58 25,071,451.76 29,970,145.58 63,666,470.76
24. Assets with title or use right restrictions
(1) Details
1) Details on assets with restrictions at the balance sheet date
Closing carrying
Items Closing book balance Type of restrictions Reasons for restrictions
amount
Deposits, escrow account,
Cash and bank balances 495,231,329.24 495,231,329.24 Guaranteed, frozen, etc. frozen due to litigation
preservation
Notes receivable – Bank Endorsed or discounted but
4,472,210.78 4,472,210.78 Endorsed or discounted
acceptance undue
Notes receivable – Trade Endorsed or discounted
407,749.04 349,861.59 Endorsed or discounted
acceptance but undue
Accounts receivable 357,237,223.82 338,232,491.18 Pledged Pledged
Receivables financing 55,280,364.20 55,280,364.20 Pledged Pledged
Long-term receivables and
Recourse factoring, Recourse factoring,
non-current assets due within 66,695,425.00 61,841,516.63
pledged pledged
one year
Fixed assets 72,439,458.40 27,881,359.42 Mortgaged Mortgaged
Intangible assets 84,779,751.51 77,778,795.88 Mortgaged Mortgaged
100% of equity of Biyang
County Fenghe New Energy 105,047,950.25 105,047,950.25 Pledged Pledged [Note]
Power Co., Ltd.
181
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Closing carrying
Items Closing book balance Type of restrictions Reasons for restrictions
amount
100% of equity of Funan
78,720,044.41 78,720,044.41 Pledged
Company
100% of equity of Poyang
Green Oriental Renewable 76,768,690.77 76,768,690.77 Pledged
Energy Co., Ltd.
75% of equity of Lianjiang
112,692,107.66 112,692,107.66 Pledged
Company
25% of equity of Lianjiang Frozen due to litigation
37,564,035.89 37,564,035.89 Frozen
Company preservation
Total 1,547,336,340.97 1,471,860,757.90
Note: The pledged amount refers to the Company’s proportionate share of net assets in these entities.
2) Details on assets with restrictions at the beginning of current period
Opening carrying Reasons for
Items Opening book balance Type of restrictions
amount restrictions
Security deposits,
Guaranteed, escrow account, frozen
Cash and bank balances 147,538,284.47 147,538,284.47
frozen, etc. due to litigation
preservation
Endorsed or Endorsed or
Notes receivable – Bank acceptance 2,732,733.00 2,732,733.00
discounted discounted but undue
Endorsed or Endorsed or
Notes receivable – Trade acceptance 5,422,499.62 4,836,352.06
discounted discounted but undue
Accounts receivable 276,390,131.13 273,691,152.48 Pledged Pledged
Receivables financing 42,293,141.00 42,293,141.00 Pledged Pledged
Long-term receivables and non- Recourse
66,716,222.75 60,356,875.95 Recourse factoring
current assets due within one year factoring
Fixed assets 561,518,592.09 477,655,980.05 Mortgaged Mortgaged
Intangible assets 56,073,651.51 47,082,404.81 Mortgaged Mortgaged
100% of equity of Funan Company 69,631,957.01 69,631,957.01 Pledged
100% of equity of Poyang Green
80,733,192.59 80,733,192.59 Pledged
Oriental Renewable Energy Co., Ltd.
Pledged [Note]
50% of equity of Lianjiang Company 68,922,363.62 68,922,363.62 Pledged
100% of equity of Biyang County
105,525,597.14 105,525,597.14 Pledged
Fenghe New Energy Power Co., Ltd.
Frozen due to litigation
25% of equity of Lianjiang Company 34,461,181.81 34,461,181.81 Frozen
preservation
Total 1,517,959,547.74 1,415,461,215.99
Note: The pledged amount refers to the Company’s proportionate share of net assets in these entities.
25. Short-term borrowings
Items Closing balance Opening balance
Guaranteed borrowings 66,077,658.34 281,942,622.11
Pledged borrowings 29,830,000.00
Mortgaged borrowings 18,018,500.00 18,020,900.00
Credit borrowings 8,006,821.92 140,139,583.33
Pledged and guaranteed borrowings 5,006,875.00
Total 126,939,855.26 440,103,105.44
182
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
26. Notes payable
Items Closing balance Opening balance
Trade acceptance 58,782,211.43 222,877,645.46
Bank acceptance 2,235,494,340.03 2,292,351,647.71
Total 2,294,276,551.46 2,515,229,293.17
27. Accounts payable
(1) Details
Items Closing balance Opening balance
Payments for goods 2,580,677,947.96 2,547,048,086.70
Payments for engineering and equipment 240,704,266.86 164,908,990.42
Others 97,161,489.64 60,004,194.54
Total 2,918,543,704.46 2,771,961,271.66
(2) No material closing balance with age over one year.
28. Contract liabilities
(1) Details
Items Closing balance Opening balance
Payments for goods received in advance 290,854,742.72 247,747,809.30
Rebate for customers 15,922,430.85 26,542,168.95
Total 306,777,173.57 274,289,978.25
(2) No material closing balance with age over one year.
29. Employee benefits payable
(1) Details
Items Opening balance Increase Decrease Closing balance
Short-term employee
405,398,080.74 2,467,413,107.42 2,385,539,192.67 487,271,995.49
benefits
Post-employment benefits -
1,991,692.81 119,076,238.47 118,435,010.78 2,632,920.50
defined contribution plan
Termination benefits 2,184,245.17 19,327,584.57 20,515,905.75 995,923.99
Total 409,574,018.72 2,605,816,930.46 2,524,490,109.20 490,900,839.98
(2) Details of short-term employee benefits
Items Opening balance Increase Decrease Closing balance
Wage, bonus, allowance
389,433,590.07 2,301,824,431.43 2,219,899,492.88 471,358,528.62
and subsidy
Employee welfare fund 767,326.06 60,407,067.82 59,534,554.49 1,639,839.39
183
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Items Opening balance Increase Decrease Closing balance
Social insurance premium 833,759.70 61,992,305.12 61,878,494.51 947,570.31
Including: Medicare
768,080.23 55,857,687.14 55,764,342.50 861,424.87
premium
Occupational injuries
65,679.47 6,134,617.98 6,114,152.01 86,145.44
premium
Housing provident fund 1,806,925.39 36,374,491.24 36,548,481.56 1,632,935.07
Trade union fund and
12,556,479.52 6,814,811.81 7,678,169.23 11,693,122.10
employee education fund
Subtotal 405,398,080.74 2,467,413,107.42 2,385,539,192.67 487,271,995.49
(3) Details of defined contribution plan
Closing
Items Opening balance Increase Decrease
balance
Basic endowment insurance
1,595,528.10 115,104,704.80 114,149,325.50 2,550,907.40
premium
Unemployment insurance
396,164.71 3,971,533.67 4,285,685.28 82,013.10
premium
Subtotal 1,991,692.81 119,076,238.47 118,435,010.78 2,632,920.50
30. Taxes and rates payable
Items Closing balance Opening balance
VAT 86,581,679.18 66,918,012.44
Enterprise income tax 27,900,731.55 36,440,528.78
Individual income tax withheld for tax
4,803,397.21 3,778,293.58
authorities
Urban maintenance and construction tax 506,023.66 1,991,056.41
Housing property tax 1,191,074.92 2,606,954.11
Land use tax 1,168,188.55 157,193.04
Stamp duty 1,433,178.29 1,661,333.48
Education surcharge 252,330.39 845,859.65
Local education surcharge 135,999.15 562,045.06
Others 59,328.23 6,950.33
Total 124,031,931.13 114,968,226.88
31. Other payables
(1) Details
Items Closing balance Opening balance
Recourse factoring of accounts receivable
22,660,825.00 66,789,887.39
[Note]
Temporary receipts payable 354,511,622.56 297,006,996.69
Security deposits 165,161,284.82 129,748,015.42
Others 167,608,092.39 163,577,388.03
184
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Items Closing balance Opening balance
Total 709,941,824.77 657,122,287.53
Note: The balance refers to the recourse factoring of accounts receivable 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 material closing balance with age over one year.
32. Non-current liabilities due within one year
Items Closing balance Opening balance
Long-term borrowings due within one
387,310,047.45 555,746,357.94
year
Lease liabilities due within one year 8,613,396.84 4,673,226.74
Long-term payables due within one year 9,104,000.00 599,514.91
Total 405,027,444.29 561,019,099.59
33. Other current liabilities
Items Closing balance Opening balance
Output VAT to be recognized 36,931,126.97 31,616,947.24
Total 36,931,126.97 31,616,947.24
34. Long-term borrowings
Items Closing balance Opening balance
Pledged borrowings 200,179,577.30 454,467,547.52
Mortgaged borrowings 154,000,000.00
Guaranteed borrowings 47,300,000.00 70,029,166.64
Credit borrowings 90,650,000.00 18,800,000.00
Mortgaged and guaranteed borrowings 150,000,000.00
Pledged and guaranteed borrowings 1,392,227,274.43 1,229,009,512.16
Total 1,884,356,851.73 1,922,306,226.32
35. Bonds payable
(1) Details
Items Closing balance Opening balance
Convertible corporate bonds 1,360,603,802.12 1,308,690,556.32
Total 1,360,603,802.12 1,308,690,556.32
(2) Current period movements (not including other financial instruments such as preferred shares/perpetual bonds
185
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
classified as financial liabilities)
Whether
Bonds Par value Coupon rate (%) Issuing date Maturity Amount outstanding
default
Infore convertible
100.00 [Note] 11/4/2020 6 years 1,476,189,600.00 No
bonds
Subtotal 100.00 1,476,189,600.00
(Continued)
Funds
Current Premium/ returned due
Par value Current period Converted
Bonds Opening balance period Discount to conversion Closing balance
interest repayment to shares
issuance amortization of bonds into
shares
Infore
11,808,996.0 1,360,603,802.
convertible 1,308,690,556.32 13,440,998.27 50,289,412.70 8,157.13 12.02
2 12
bonds
11,808,996.0 1,360,603,802.
Subtotal 1,308,690,556.32 13,440,998.27 50,289,412.70 8,157.13 12.02
2 12
Note: The coupon rate 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.
(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, 2020, 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, 2023, a total of 1,389 Infore convertible bonds had been converted to the Company’s ordinary
A shares, with a total of 16,944 shares converted. In the current period, capital reserve (share premium) of 8,673.60
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.
36. Lease liabilities
Items Closing balance Opening balance
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Items Closing balance Opening balance
Unpaid lease payments 17,036,813.59 24,948,023.12
Less: Unrecognized financing expenses 866,022.83 1,692,398.82
Total 16,170,790.76 23,255,624.30
37. Long-term payables
(1) Details
Items Closing balance Opening balance
Long-term payables 15,173,333.32
Special payables 287,776,139.63 315,735,814.91
Total 302,949,472.95 315,735,814.91
(2) Long-term payables
Items Closing balance Opening balance
Factoring funds payable 15,173,333.32
Subtotal 15,173,333.32
(3) Special payables
Items Opening balance Increase Decrease Closing balance Reasons for balance
Special funds for treasury Funds from conversion of
3,000,000.00 3,000,000.00
bond projects treasury bonds into loans.
Special funds for Jiayu Special government funds
176,015,774.58 9,475,977.00 27,203,971.75 158,287,779.83
Sewage Treatment Project for PPP projects.
Special funds for Tongshan Special government funds
136,720,040.33 3,144,000.00 13,375,680.53 126,488,359.80
Sewage Treatment Project for PPP projects.
Subtotal 315,735,814.91 12,619,977.00 40,579,652.28 287,776,139.63
38. Provisions
Items Closing balance Opening balance Reasons for balance
Guarantee for buyer’s
Credit guarantees 1,994,511.41 4,575,049.22
credit
Total 1,994,511.41 4,575,049.22
39. Deferred income
(1) Details
Opening
Items Increase Decrease Closing balance Reasons for balance
balance
Government Government grants
120,890,710.04 3,994,300.00 9,544,515.62 115,340,494.42
grants related to assets
Total 120,890,710.04 3,994,300.00 9,544,515.62 115,340,494.42
(2) Other remarks
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Please refer to section VIII (II) of notes to the financial statements for details on government grants included into
profit or loss.
40. Other non-current liabilities
Items Closing balance Opening balance
Central special construction funds 8,148,148.14 8,333,333.33
Total 8,148,148.14 8,333,333.33
41. Share capital
(1) Details
Movements
Items Opening balance Conversion of Closing balance
Issue of new Bonus
reserve to Others Subtotal
shares shares
shares
Total shares 3,179,505,559.00 1,111.00 1,111.00 3,179,506,670.00
(2) Other remarks
The Company converted convertible corporate bonds with par value of 9,000 yuan into the Company’s ordinary A
shares of 1,111 shares, with capital premium (share premium) recognized at 8,673.60 yuan.
42. Other equity instruments
(1) Please refer to section V (I) 35 of notes to financial statements for basic information of convertible corporate
bonds outstanding at the balance sheet date.
(2) Current period movements of financial instruments such as preferred shares or perpetual 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 14,760,597 266,916,341.80 90 1,627.47 14,760,507 266,914,714.33
bonds
Total 14,760,597 266,916,341.80 90 1,627.47 14,760,507 266,914,714.33
Note: As of December 31, 2023, convertible corporate bonds with par value of 9,000 yuan had been converted into
ordinary A shares, with other equity instruments decreased by 1,627.47 yuan accordingly.
43. Capital reserve
(1) Details
Items Opening balance Increase Decrease Closing balance
Capital premium (share
9,604,610,324.24 164,826.05 1,277,359.26 9,603,497,791.03
premium)
Other capital reserve 57,900,930.24 57,900,930.24
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Items Opening balance Increase Decrease Closing balance
Total 9,662,511,254.48 164,826.05 1,277,359.26 9,661,398,721.27
(2) Other remarks
1) Current increase of capital premium (share premium) was mainly due to:
a. the conversion of convertible corporate bonds with par value of 9,000 yuan into the Company’s ordinary A shares
of 1,111 shares, with capital premium (share premium) recognized at 8,673.60 yuan;
b. the difference of 156,152.45 yuan between the reduced registered capital of 38,423,985.00 yuan of the subsidiary
Xiantao Yinghe Environmental Protection Co., Ltd. based on the resolution of its shareholders’ meeting in
December 2023 and the proportionate share in net assets continuously calculated from the acquisition date or
combination date.
2) Current decrease of capital premium (share premium) was mainly due to the difference of 1,277,359.26 yuan
between the consideration for acquisition of 4% of equity of the subsidiary Huaian Chenjie Environmental
Engineering Co., Ltd. in June 2023 and the proportionate share in net assets continuously calculated from the
acquisition date or combination date.
44. Treasury shares
Items Opening balance Increase Decrease Closing balance
Treasury shares 94,132,795.17 94,132,795.17
Total 94,132,795.17 94,132,795.17
45. Other comprehensive income (OCI)
Current period cumulative
Net OCI after tax Less: OCI previously
Opening recognized but
Items Less: OCI transferred to retained Closing balance
balance previously
Current period Less: Attributable to Attributable to earnings in the current
recognized but
cumulative before Income tax parent non-controlling period (attributable to
transferred to
income tax expenses company shareholders parent company after
profit or loss in tax)
the current period
Items not to be
reclassified
-4,630,000.00 -4,630,000.00
subsequently to
profit or loss
Including: Changes
in fair value of
other equity -4,630,000.00 -4,630,000.00
instrument
investments
Total -4,630,000.00 -4,630,000.00
46. Special reserve
Items Opening balance Increase Decrease Closing balance
Work safety fund 8,608,843.62 8,608,843.62
Total 8,608,843.62 8,608,843.62
189
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47. Surplus reserve
(1) Details
Items Opening balance Increase Decrease Closing balance
Statutory surplus
315,124,767.92 63,892,252.27 379,017,020.19
reserve
Total 315,124,767.92 63,892,252.27 379,017,020.19
(2) Other remarks
Current increase of 63,892,252.27 yuan was due to the appropriation of statutory surplus reserve at 10% of net
profit generated by the parent company in the current period.
48. Undistributed profit
Current period Preceding period
Items
cumulative comparative
Opening balance 3,963,306,890.06 3,874,934,971.69
Add: Net profit attributable to owners of the
498,383,730.00 418,794,179.13
parent company
Less: Appropriation of statutory surplus reserve 63,892,252.27 18,369,884.36
Dividend payable on ordinary shares 348,363,541.68 312,052,376.40
Closing balance 4,049,434,826.11 3,963,306,890.06
(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 12,593,195,441.07 9,725,483,452.68 12,206,399,059.56 9,429,679,886.47
Other operations 37,855,526.27 19,998,635.24 49,593,878.86 39,830,944.80
Total 12,631,050,967.34 9,745,482,087.92 12,255,992,938.42 9,469,510,831.27
Including:
Revenue from
12,627,471,564.83 9,743,083,609.80 12,253,033,163.91 9,467,213,554.61
contracts with
customers
(2) Breakdown of revenue
1) Breakdown of revenue from contracts with customers by goods or services
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Intelligent sanitation 10,715,122,532.51 8,366,738,029.63 10,242,746,845.76 8,023,297,059.91
Other businesses 1,912,349,032.32 1,376,345,580.17 2,010,286,318.15 1,443,916,494.70
Subtotal 12,627,471,564.83 9,743,083,609.80 12,253,033,163.91 9,467,213,554.61
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2) Breakdown of revenue from contracts with customers by operating regions
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Domestic 12,580,574,554.53 9,709,744,510.62 12,234,221,595.20 9,451,301,571.85
Overseas 46,897,010.30 33,339,099.18 18,811,568.71 15,911,982.76
Subtotal 12,627,471,564.83 9,743,083,609.80 12,253,033,163.91 9,467,213,554.61
3) Breakdown of revenue from contracts with customers by time of transferring goods or rendering services
Items Current period cumulative Preceding period comparative
Recognized at a point in time 5,853,953,110.98 6,705,692,980.49
Recognized over time 6,773,518,453.85 5,547,340,183.42
Subtotal 12,627,471,564.83 12,253,033,163.91
2. Taxes and surcharges
Items Current period cumulative Preceding period comparative
Urban maintenance and
19,347,236.29 27,686,507.84
construction tax
Education surcharge 9,237,216.76 12,075,573.31
Housing property tax 16,056,747.97 9,759,719.80
Land use tax 9,274,170.36 8,282,959.61
Local education surcharge 4,897,252.61 7,807,835.47
Stamp duty 9,430,645.45 7,540,686.80
Vehicle and vessel use tax 1,791,754.71 1,481,678.21
Environmental protection tax 22,817.10 50,061.01
Others 33,747.82
Total 70,091,589.07 74,685,022.05
3. Selling expenses
Items Current period cumulative Preceding period comparative
Employee benefits 335,609,966.84 340,290,000.65
Marketing expenses and
265,269,393.83 221,534,865.64
agency fees
Business entertainment
48,124,800.71 47,320,675.86
expenses
Office expenses 44,084,358.46 39,159,155.49
Expenses for tendering and
23,714,813.45 33,479,432.56
bidding
Vehicle usage fees 26,437,459.78 27,886,649.81
Business travelling expenses 24,235,527.24 22,889,790.05
Depreciation and amortization 2,564,157.65 8,871,711.08
191
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Items Current period cumulative Preceding period comparative
After-sales service expenses 9,468,198.50 8,427,436.37
Share-based payments 789,290.58
Others 14,826,275.56 12,321,839.86
Total 794,334,952.02 762,970,847.95
4. Administrative expenses
Items Current period cumulative Preceding period comparative
Employee benefits 405,851,793.11 325,720,014.09
Depreciation and amortization 96,124,324.58 92,377,339.97
Office expenses 55,346,741.42 49,435,534.41
Business entertainment
57,420,506.69 47,088,220.88
expenses
Agency consulting fees 49,770,146.66 38,554,467.66
Vehicle usage fees 11,285,144.00 15,346,887.97
Business travelling expenses 12,998,629.92 9,732,527.31
Repair fees 3,476,335.42 2,863,363.74
Share-based payments 1,905,828.75
Others 33,885,615.65 26,577,495.45
Total 726,159,237.45 609,601,680.23
5. R&D expenses
Items Current period cumulative Preceding period comparative
Employee benefits 246,795,666.58 248,961,357.20
Direct inputs 34,669,099.04 40,506,455.35
Other expenses 62,565,473.71 50,336,437.55
Share-based payments 971,457.24
Total 344,030,239.33 340,775,707.34
6. Financial expenses
Items Current period cumulative Preceding period comparative
Interest expenses 156,635,777.38 170,568,834.86
Interest income -99,626,077.56 -86,389,951.68
Gains and losses on foreign
-1,587,128.38 -3,056,908.33
exchange
Others 19,898,513.43 20,717,449.06
Total 75,321,084.87 101,839,423.91
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7. Other income
Amount included in
Current period Preceding period
Items non-recurring profit
cumulative comparative
or loss
Government grants related
9,544,515.62 8,085,032.61 2,128,328.14
to assets
Government grants related
69,450,144.75 93,590,019.49 50,838,222.61
to income
Refund of handling fees for
withholding individual 424,735.51 429,102.26
income tax
VAT extra deductions 40,567,420.41 17,460,524.12
Total 119,986,816.29 119,564,678.48 52,966,550.75
8. Investment income
Items Current period cumulative Preceding period comparative
Investment income from long-
term equity investments under 4,960,692.79 8,548,481.77
equity method
Gains from fair value
remeasurement at the time of 51,896,314.25
obtaining control
Investment income from
12,111,406.99 19,091,108.25
financial products
Performance compensation -50,000,000.00
Losses from debt restructuring -3,130,560.92 -5,380,200.00
Gains from non-recurse
factoring of accounts -64,671,667.09 -65,918,373.23
receivable
Others -867,077.69 296,543.34
Total -51,597,205.92 -41,466,125.62
9. Credit impairment loss
Items Current period cumulative Preceding period comparative
Bad debts -218,933,128.92 -103,391,907.05
Credit guarantee loss 2,580,537.81 -1,445,255.37
Total -216,352,591.11 -104,837,162.42
10. Assets impairment loss
Items Current period cumulative Preceding period comparative
Inventory write-down loss -15,842,992.24 -15,053,708.82
Impairment loss of goodwill -94,237,304.12 -296,010,591.93
Impairment loss of other non-
-12,686,044.85 2,080,536.79
current assets
Impairment loss of contract 5,615,945.43 -1,192,023.34
193
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Items Current period cumulative Preceding period comparative
assets
Impairment loss of
-6,240,373.24 -2,822,707.36
development expenditures
Total -123,390,769.02 -312,998,494.66
11. Gains on asset disposal
Amount included in
Current period Preceding period
Items non-recurring profit or
cumulative comparative
loss
Gains on disposal of fixed
-661,936.68 301,250.20 -661,936.68
assets
Gains on disposal of
-529,889.14 10,073.29 -529,889.14
intangible assets
Gains on disposal of right-
221,473.23
of-use assets
Total -1,191,825.82 532,796.72 -1,191,825.82
12. Non-operating revenue
Amount included in
Current period Preceding period
Items non-recurring profit
cumulative comparative
or loss
Gains on damage or
retirement of non-current 428,721.52 8,797.04 428,721.52
assets
Penalty and confiscatory
14,363,825.53 9,298,430.37 14,363,825.53
income
Others 5,054,158.55 3,491,008.49 5,054,158.55
Total 19,846,705.60 12,798,235.90 19,846,705.60
13. Non-operating expenditures
Amount included in
Current period Preceding period
Items non-recurring profit
cumulative comparative
or loss
Donation expenditures 1,837,168.20 2,302,553.92 1,837,168.20
Losses on damage or
retirement of non-current 2,654,891.96 2,913,020.22 2,654,891.96
assets
Special funds for local water
490,964.79 409,764.78
conservancy construction
Penalty and confiscatory
6,546,510.22 6,695,894.28 6,546,510.22
expenses
Others 1,501,531.02 1,626,755.62 1,501,531.02
Total 13,031,066.19 13,947,988.82 12,540,101.40
14. Income tax expenses
(1) Details
194
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Items Current period cumulative Preceding period comparative
Current period income tax
106,216,873.13 110,132,217.76
expenses
Deferred income tax expenses -8,859,221.68 -13,168,974.08
Total 97,357,651.45 96,963,243.68
(2) Reconciliation of accounting profit to income tax expenses
Items Current period cumulative Preceding period comparative
Profit before tax 609,901,840.51 556,255,365.25
Income tax expenses based on
tax rate applicable to the parent 152,475,460.13 139,063,841.31
company
Effect of different tax rate
-108,201,596.08 -14,174,894.59
applicable to subsidiaries
Effect of prior income tax
10,458,266.74 2,488,907.40
reconciliation
Effect of non-taxable income -1,995,800.61 -10,408,754.85
Effect of non-deductible costs,
17,657,279.37 10,640,861.01
expenses and losses
Effect of utilization of
deductible losses not previously -13,171,099.82 -3,001,651.62
recognized as deferred tax assets
Effect of deducible temporary
differences or deductible losses
86,948,728.47 20,910,057.40
not recognized as deferred tax
assets in the current period
Effect of extra deduction -46,798,282.51 -49,866,353.99
Difference between deferred and
-15,304.24 1,311,231.61
current income tax rates
Income tax expenses 97,357,651.45 96,963,243.68
15. Other comprehensive income, net of income tax
Please refer to section V (I) 45 of notes to the financial statements for details.
(III) Notes to items of the consolidated cash flow statement
1. Other cash receipts or payments related to operating activities, investing activities and financing activities
(1) Other cash receipts related to operating activities
Items Current period cumulative Preceding period comparative
Receipts of deposits for notes,
letters of credit and letters of 167,737,972.76 385,183,093.29
guarantee
Receipts of government grants 58,010,336.36 112,106,818.35
Receipts of security deposits 111,742,962.57 109,630,599.89
Recovery of petty cash and
temporary advance payment 99,329,855.08 76,785,785.58
receivable
195
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Items Current period cumulative Preceding period comparative
Temporary receipts payable 180,665,554.52 152,028,816.71
Receipts of interest income 76,788,792.42 48,011,644.19
Receipts of factoring payment and
1,066,072,685.44 1,128,899,220.36
principal of finance lease
Receipt of principal and interest of
67,760,782.25
time deposits
Others 20,325,575.31 16,659,857.72
Total 1,780,673,734.46 2,097,066,618.34
(2) Other cash payments related to operating activities
Items Current period cumulative Preceding period comparative
Payments for deposits for notes,
letters of credit and letters of 285,090,684.20 130,498,826.74
guarantee
Operating period expenses 731,115,039.63 807,025,083.75
Payments for security deposits 63,056,515.55 64,966,788.26
Payments for petty cash and
temporary advance payment 60,967,713.23 120,806,495.16
receivable
Payments for factoring and
719,746,793.47 1,181,778,621.41
principal of finance lease
Time deposits 230,000,000.00
Temporary receipts payable 94,331,472.76 80,648,317.53
Others 14,644,423.90 10,338,831.68
Total 2,198,952,642.74 2,396,062,964.53
(3) Other cash receipts related to investing activities
Items Current period cumulative Preceding period comparative
Redemption of financial products 1,638,150,000.00 5,398,900,000.00
Receipts of special payables 12,619,977.00
Receipts of principal and interest
2,961,000.00
of call loans
Total 1,650,769,977.00 5,401,861,000.00
(4) Other cash payments related to investing activities
Items Current period cumulative Preceding period comparative
Purchase of financial products 1,638,150,000.00 5,398,900,000.00
Recovery of special payables 3,000,000.00
Cash outflows from disposal of
1,785,617.97
subsidiaries
Total 1,642,935,617.97 5,398,900,000.00
196
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(5) Other cash receipts related to financing activities
Items Current period cumulative Preceding period comparative
Receipts of call loans 48,692,000.00 44,250,000.00
Receipts of payments for
228,995,320.75
employee stock ownership plan
Recourse factoring of accounts
17,309,890.84
receivable
Total 48,692,000.00 290,555,211.59
(6) Other cash payments related to financing activities
Items Current period cumulative Preceding period comparative
Return of call loans 32,418,130.98 57,303,692.00
Payments for rents 10,331,775.89 6,227,752.76
Purchase of non-controlling
2,000,000.00
interest
Payments for factoring service
14,049,209.58
fees and handling fees
Payments for employee stock
180,112,670.02
ownership plan
Prepaid IPO listing expenses 5,703,500.00
Total 44,749,906.87 263,396,824.36
2. Supplementary information to the cash flow statement
Current period Preceding period
Supplementary information
cumulative comparative
(1) Reconciliation of net profit to cash flows from
operating activities:
Net profit 512,544,189.06 459,292,121.57
Add: Provision for assets impairment 339,743,360.13 417,835,657.08
Depreciation of fixed assets, oil and gas assets,
278,253,101.81 217,634,741.39
productive biological assets
Depreciation of right-of-use assets 8,706,270.90 7,064,171.89
Amortization of intangible assets 508,294,636.17 458,736,681.20
Amortization of long-term prepayments 12,737,945.56 8,520,526.60
Losses on disposal of fixed assets, intangible
1,104,586.11 -614,542.02
assets and other long-term assets (Less: gains)
Fixed assets retirement loss (Less: gains) 2,226,170.44 2,904,223.18
Losses on changes in fair value (Less: gains)
Financial expenses (Less: gains) 156,286,924.35 177,688,052.22
Investment losses (Less: gains) -17,097,464.58 -24,239,932.54
Decrease of deferred tax assets (Less: increase) -1,871,173.45 -4,814,568.19
Increase of deferred tax liabilities (Less:
-6,988,048.23 -8,354,405.89
decrease)
197
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Current period Preceding period
Supplementary information
cumulative comparative
Decrease of inventories (Less: increase) -115,741,461.68 226,633,956.56
Decrease of operating receivables (Less:
-217,119,189.86 -409,725,335.43
increase)
Increase of operating payables (Less: decrease) -75,523,337.24 129,881,870.69
Others 4,039,069.40
Net cash flows from operating activities 1,385,556,509.49 1,662,482,287.71
(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 3,916,145,254.54 4,580,665,245.99
Less: Cash at the beginning of the period 4,580,665,245.99 4,118,746,885.72
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 -664,519,991.45 461,918,360.27
3. Composition of cash and cash equivalents
(1) Details
Items Closing balance Opening balance
1) Cash 3,916,145,254.54 4,580,665,245.99
Including: Cash on hand 310,688.91 84,414.54
Cash in bank on demand for payment 3,914,780,983.13 4,580,210,453.03
Other cash and bank balances on demand
1,053,582.50 370,378.42
for payment
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 3,916,145,254.54 4,580,665,245.99
Including: Cash and cash equivalents of parent
company or subsidiaries with use restrictions
(2) Cash and cash equivalents with use restrictions
Reasons for use restrictions
Items Closing balance Opening balance and for considered as cash and
cash equivalents
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Reasons for use restrictions
Items Closing balance Opening balance and for considered as cash and
cash equivalents
Raised funds 77,431,277.37 115,338,436.21 Raised funds
Business funds
specifically used for 22,851,951.00 Special funds
project payments
Subtotal 100,283,228.37 115,338,436.21
(3) Cash and bank balances not considered as cash and cash equivalents
Reasons for not considered as
Items Closing balance Opening balance
cash and cash equivalents
Deposits for bank Unable to be withdrawn on
179,001,533.41 46,878,240.34
acceptance demand
Deposits for letters of Unable to be withdrawn on
77,546,493.49 87,619,095.60
guarantee demand
Unable to be withdrawn on
Engineering deposits 929,734.93 927,865.56
demand
Unable to be withdrawn on
ETC deposits 3,000.00 3,000.00
demand
Deposits for land Unable to be withdrawn on
1,003,098.32 1,000,832.05
reclamation demand
Deposits for buyer’s Unable to be withdrawn on
861,924.65 901,432.50
credit demand
Engineering escrow
Unable to be withdrawn on
accounts that are not 154,141.05 9,107,818.42
demand
available for separate use
Frozen bank deposits due Unable to be withdrawn on
5,100,869.89 1,100,000.00
to lawsuits demand
Time deposits and Unable to be withdrawn on
230,340,333.33
interests demand
Unable to be withdrawn on
Others 290,200.17
demand
Subtotal 495,231,329.24 147,538,284.47
4. Changes in liabilities related to financing activities
Increase Decrease
Items Opening balance Changes in non- Changes in non- Closing balance
Changes in cash Changes in cash
cash cash
Short-term
440,103,105.44 599,206,768.24 9,696,553.27 922,066,571.69 126,939,855.26
borrowings
Dividend payable 355,986,223.08 355,986,223.08
Other payables 29,093,805.32 21,380,000.00 2,040,387.09 28,714,555.94 23,799,636.47
Long-term
borrowings
(including long-
2,474,887,976.24 831,248,989.56 93,048,642.05 1,127,518,708.67 2,271,666,899.18
term borrowings
due within one
year)
Bonds payable
(including bonds
1,308,690,556.32 63,722,253.84 11,809,008.04 1,360,603,802.12
payable due within
one year)
199
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Increase Decrease
Items Opening balance Changes in non- Changes in non- Closing balance
Changes in cash Changes in cash
cash cash
Lease liabilities
(including lease
31,093,459.07 4,126,126.53 10,248,232.04 187,165.96 24,784,187.60
liabilities due
within one year)
Long-term
payables (including
long-term payables 27,312,000.00 2,703,662.62 4,175,192.30 1,563,137.00 24,277,333.32
due within one
year)
Subtotal 4,283,868,902.39 1,479,147,757.80 531,323,848.48 2,460,518,491.76 1,750,302.96 3,832,071,713.95
200
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
5. Significant activities not involving cash receipts and payments
Please refer to section V (III) 4 of notes to the financial statements for details on significant investing and financing
activities not involving cash receipts and payments.
(IV) Others
1. Monetary items in foreign currencies
Closing balance in RMB equivalent at
Items Exchange rate
foreign currencies the end of the period
Cash and bank balances 38,281,796.98
Including: USD 1,299,398.42 7.0827 9,203,249.19
EUR 3,577,091.77 7.8592 28,113,079.64
HKD 1,065,402.95 0.9062 965,468.15
Accounts receivable 17,855,293.19
Including: USD 164.00 7.0827 1,161.56
EUR 2,271,749.24 7.8592 17,854,131.63
2. Leases
(1) The Company as lessee
1) Please refer to section V (I) 17 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
19,527,703.71 10,884,849.01
leases
Expense relating to leases of low-
value assets (excluding short-term
leases)
Total 19,527,703.71 10,884,849.01
3) Profit or loss and cash flows related to leases
Items Current period cumulative Preceding period comparative
Interest expenses on lease
1,190,325.15 1,337,799.45
liabilities
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
29,859,479.60 17,112,601.77
leases
Gains or losses arising from sale
201
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Items Current period cumulative Preceding period comparative
and leaseback transactions
4) Please refer to section IX (II) of notes to the financial statements for details on maturity analysis of lease
liabilities and related liquidity risk management.
(2) The Company as lessor
1) Operating lease
a. Lease income
Items Current period cumulative Preceding period comparative
Lease income 3,249,127.28 1,855,150.51
Including: Income relating to
variable lease payments not
included in the measurement of
the lease liabilities
b. Assets leased out under operating leases
Items Closing balance December 31, 2022
Buildings and structures 23,875,232.89 27,105,435.03
Subtotal 23,875,232.89 27,105,435.03
Please refer to section V (I) 15 of notes to the financial statements for details on fixed assets leased out under
operating leases.
c. 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, 2022
Within 1 year 104,738.00 157,112.00
1-2 years 104,738.00 157,112.00
2-3 years 104,738.00 157,112.00
3-4 years 104,738.00 157,112.00
4-5 years 104,738.00 157,112.00
Over 5 years 157,112.00
Total 523,690.00 942,672.00
2) Finance lease
a. Profit or loss related to finance lease
Items Current period cumulative Preceding period comparative
Finance income on the net
2,245,842.84 5,464,955.41
investment in the lease
202
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Income relating to variable lease
payments not included in the
measurement of the net
investment in the lease
b. Reconciliation of undiscounted lease payments to net investment in the lease
Items Closing balance December 31, 2022
Undiscounted lease payments 68,248,638.70 99,676,989.33
Less: Unrealized finance income
4,679,168.24 5,140,906.34
relating to lease payments
Add: Present value of
unguaranteed residual value
Net investment in the lease 63,569,470.46 94,536,082.99
c. 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, 2022
Within 1 year 46,826,104.16 58,791,768.45
1-2 years 19,550,334.54 32,869,315.86
2-3 years 1,497,760.00 6,143,705.02
3-4 years 374,440.00 1,497,760.00
4-5 years 374,440.00
Total 68,248,638.70 99,676,989.33
VI. R&D costs
(I) R&D costs
Items Current period cumulative Preceding period comparative
Employee benefits 252,327,439.92 266,224,944.76
Direct inputs 37,083,931.61 44,582,928.01
Other expenses 63,438,534.25 52,458,233.21
Share-based payment 971,457.24
Total 352,849,905.78 364,237,563.22
Including: R&D costs to be
344,030,239.33 340,775,707.34
expensed
R&D costs to be capitalized 8,819,666.45 23,461,855.88
(II) Development expenditures
1. Changes in development expenditures
Increase Decrease
Opening Internal
Items Recognized as Transferred out Closing balance
balance development Others Others
intangible assets into profit or loss
expenditures
203
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Increase Decrease
Opening Internal
Items Recognized as Transferred out Closing balance
balance development Others Others
intangible assets into profit or loss
expenditures
R&D of indoor self-driving
765,552.19 765,552.19
operating system
Intelligent barreled garbage
662,327.79 662,327.79
transfer machine
Indoor sweeping robot 870,662.83 870,662.83
Deep cleaning machine 524,164.55 524,164.55
Research on wire control
technology for small self- 4,115,027.48 120,653.35 4,235,680.83
made chassis
R&D of outdoor self-
driving operating system 5,758,682.29 826,253.18 6,584,935.47
(Stage 2)
Research on aerodynamic
noise control and pneumatic
2,351,791.55 85,060.50 2,436,852.05
conveying energy-saving
technology
Pure electric road sweeper 1,565,839.40 1,565,839.40
Sanitation robot IoT
3,351,117.77 248,957.47 3,600,075.24
platform
Economical garbage
225,467.15 225,467.15
transfer truck
Development of cleaning
robot based on autonomous 1,325,659.13 734,617.23 2,060,276.36
unmanned system
Special funds for S2000
2,442,440.66 1,997,898.12 4,440,338.78
series top-selling products
Special funds for S18 series
4,283,010.42 3,193,424.27 7,476,434.69
top-selling product project
Brand new first generation
economical version of 470,115.54 1,612,802.33 2,082,917.87
rolling sweeper
Indoor floor washing robot 1,763,287.72 1,763,287.72
Pure electric small garbage
1,024,782.18 1,024,782.18
cleaning machine
Pure electric sidewalk
1,592,468.75 1,592,468.75
sweeper
Pure electric garbage
68,528.04 68,528.04
collector
Total 33,160,925.44 8,819,666.45 32,917,511.29 9,063,080.60
2. Impairment of development expenditures
(1) Changes in provision for impairment
Increase Decrease
Opening
Items Disposal/ Closing balance
balance Accrual Others Others
Scrapping
R&D of indoor self-driving
765,552.19 765,552.19
operating system
Intelligent barreled garbage
662,327.79 662,327.79
transfer machine
Indoor sweeping robot 870,662.83 870,662.83
Deep cleaning machine 524,164.55 524,164.55
204
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Increase Decrease
Opening
Items Disposal/ Closing balance
balance Accrual Others Others
Scrapping
Pure electric road sweeper 1,565,839.40 1,565,839.40
Economical garbage
225,467.15 225,467.15
transfer truck
Indoor floor washing robot 1,763,287.72 1,763,287.72
Pure electric small garbage
1,024,782.18 1,024,782.18
cleaning machine
Pure electric sidewalk
1,592,468.75 1,592,468.75
sweeper
Pure electric garbage
68,528.04 68,528.04
collector
Subtotal 2,822,707.36 6,240,373.24 9,063,080.60
(2) Impairment test on development expenditures
Recoverable Provision for
Items Carrying amount
amount impairment
R&D of indoor self-driving
operating system
Intelligent barreled garbage
transfer machine
Indoor sweeping robot
Deep cleaning machine
Pure electric road sweeper 1,565,839.40 1,565,839.40
Economical garbage transfer truck 225,467.15 225,467.15
Indoor floor washing robot 1,763,287.72 1,763,287.72
Pure electric small garbage
1,024,782.18 1,024,782.18
cleaning machine
Pure electric sidewalk sweeper 1,592,468.75 1,592,468.75
Pure electric garbage collector 68,528.04 68,528.04
Subtotal 6,240,373.24 6,240,373.24
(Continued)
Items Determination method of fair value and costs of disposal
Full provision for impairment is made as the Company
R&D of indoor self-driving
terminates R&D of the project due to its R&D resource
operating system
direction adjustment and changes of market demand.
Full provision for impairment is made as the Company
Intelligent barreled garbage
terminates R&D of the project due to its R&D resource
transfer machine
direction adjustment and changes of market demand.
Full provision for impairment is made as the Company
Indoor sweeping robot terminates R&D of the project due to its R&D resource
direction adjustment and changes of market demand.
Full provision for impairment is made as the Company
Deep cleaning machine terminates R&D of the project due to its R&D resource
direction adjustment and changes of market demand.
Full provision for impairment is made as the Company
Pure electric road sweeper terminates R&D of the project due to its R&D resource
direction adjustment and changes of market demand.
205
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Items Determination method of fair value and costs of disposal
Full provision for impairment is made as the Company
Economical garbage transfer truck terminates R&D of the project due to its R&D resource
direction adjustment and changes of market demand.
Full provision for impairment is made as the Company
Indoor floor washing robot terminates R&D of the project due to its R&D resource
direction adjustment and changes of market demand.
Full provision for impairment is made as the Company
Pure electric small garbage
terminates R&D of the project due to its R&D resource
cleaning machine
direction adjustment and changes of market demand.
Full provision for impairment is made as the Company
Pure electric sidewalk sweeper terminates R&D of the project due to its R&D resource
direction adjustment and changes of market demand.
Full provision for impairment is made as the Company
Pure electric garbage collector terminates R&D of the project due to its R&D resource
direction adjustment and changes of market demand.
Subtotal
VII. Interest in other entities
(I) Composition of the consolidation scope
1. The Company has brought 278 subsidiaries including Zoomlion Environmental Company, Shangfeng Industrial
Company, Infore Technology Company, and Green Oriental Company into the consolidation scope.
2. Basic information of significant subsidiaries
Main operating Holding proportion (%)
Subsidiaries Registered capital place and place Business nature Acquisition method
of registration Direct Indirect
Fan equipment Business combination
Shangfeng Industrial Shaoxing,
109.21 million yuan manufacturing 60.20 not under common
Company Zhejiang
and others control
Environmental
Business combination
Green Oriental Shenzheng, monitoring and
150 million yuan 70.00 not under common
Company Guangdong solid waste
control
disposal
Environmental
Business combination
monitoring and
Funan Company 87.50 million yuan Funan, Anhui 70.00 not under common
solid waste
control
disposal
Environmental
Business combination
Xiantao, monitoring and
Xiantao Company 125 million yuan 70.00 not under common
Hubei solid waste
control
disposal
Environmental
Business combination
Shouxian, monitoring and
Shouxian Company 87.50 million yuan 70.00 not under common
Anhui solid waste
control
disposal
Environmental
Xiantao Yinghe
Xiantao, monitoring and
Environmental 100.14 million yuan 70.32 5.35 Set up
Hubei solid waste
Protection Co., Ltd.
disposal
Environmental
Infore Technology Foshan, monitoring and
110 million yuan 100.00 Set up
Company Guangdong solid waste
disposal
Foshan Shunhe Environmental Business combination
Foshan,
Environmental 300 million yuan monitoring and 100.00 not under common
Guangdong
Protection Co., Ltd. solid waste control
206
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Main operating Holding proportion (%)
Subsidiaries Registered capital place and place Business nature Acquisition method
of registration Direct Indirect
disposal
Environmental
Business combination
Huaqingyuan Foshan, monitoring and
12 million yuan 100.00 not under common
Company Guangdong solid waste
control
disposal
Foshan Shunde Environmental
Business combination
District Huaying Foshan, monitoring and
3 million yuan 100.00 not under common
Environmental Water Guangdong solid waste
control
Co., Ltd. disposal
Foshan Shunde Environmental
Business combination
District Yuanrun Foshan, monitoring and
12 million yuan 100.00 not under common
Water Environmental Guangdong solid waste
control
Protection Co., Ltd. disposal
Foshan Shunde Environmental
Business combination
Huabo Foshan, monitoring and
1 million yuan 100.00 not under common
Environmental Water Guangdong solid waste
control
Co., Ltd. disposal
Zoomlion
Changsha, Smart city Business combination
Environmental 2,351.53 million yuan 100.00
Hunan services under common control
Company
Changsha Zoomlion
Changgao Changsha, Smart city
30 million yuan 100.00 Set up
Environmental Hunan services
Industry Co., Ltd.
Fujian Nan’an
Yinglian Urban Nan’an, Smart city
30 million yuan 80.00 Set up
Environmental Fujian services
Service Co., Ltd.
Zhangjiajie Yinglian
Zhangjiajie, Smart city
Environmental 8 million yuan 90.00 Set up
Hunan services
Management Co., Ltd.
Cili County
Zoomlion Huabao Smart city
6 million yuan Cili, Hunan 60.00 Set up
Environmental services
Industry Co., Ltd.
Hanshou Zoomlion
Hanshou, Smart city
Environmental 13 million yuan 90.00 Set up
Hunan services
Industry Co., Ltd.
Longhui County
Zoomlion Longhui, Smart city
1 million yuan 100.00 Set up
Environmental Hunan services
Industry Co., Ltd.
Shimen Zoomlion
Shimen, Smart city
Environmental 15 million yuan 90.00 Set up
Hunan services
Industry Co., Ltd.
Ningbo Infore
Ningbo,
Finance Lease Co., USD 72.60 million Finance lease 99.31 0.69 Set up
Zhejiang
Ltd.
(II) Business combination not under common control
1. Business combination not under common control in the current period
Equity Equity Proportion of equity Equity acquisition
Acquirees Acquisition date
acquisition date acquisition cost acquired (%) method
Hubei Yingling Testing
May 18, 2023 156,438.75 100.00 Acquisition May 18, 2023
Technology Service Co., Ltd.
(Continued)
Acquiree’s Acquiree’s net Acquiree’s cash flows from acquisition date to
Determination
income from profit from period end
Acquirees basis for
acquisition date acquisition date
acquisition date Net inflows Net inflows Net inflows
to period end to period end
207
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
from operating from investing from financing
activities activities activities
Hubei Yingling Testing Transfer of
86,770.44 -812,968.37 -87,733.23
Technology Service Co., Ltd. control
2. Combination costs and goodwill
Hubei Yingling Testing Technology Service
Items
Co., Ltd.
Combination costs
Cash 156,438.75
Total combination costs 156,438.75
Less: Share of fair value of net identifiable
156,438.75
assets acquired
Goodwill/Balance of fair value of net
identified assets acquired after deducting
combination costs
3. Acquisition-date identifiable assets and liabilities of acquirees
(1) Details
Hubei Yingling Testing Technology Service Co., Ltd.
Items
Acquisition-date fair value Acquisition-date carrying amount
Assets 410,344.64 410,344.64
Cash and bank balances 112,965.79 112,965.79
Accounts receivable 97,680.00 97,680.00
Advances paid 16,000.00 16,000.00
Other receivables 43,871.50 43,871.50
Fixed assets 82,327.35 82,327.35
Long-term prepayments 57,500.00 57,500.00
Liabilities 253,905.89 253,905.89
Accounts payable 104,920.44 104,920.44
Employee benefits
29,996.37 29,996.37
payable
Tax payable 1,006.22 1,006.22
Other payables 117,982.86 117,982.86
Net assets 156,438.75 156,438.75
Net assets acquired 156,438.75 156,438.75
(2) Fair value determination method on identifiable assets and liabilities
The carrying amount of assets and liabilities on the acquisition date of Hubei Yingling Testing Technology Service
Co., Ltd. is taken as the fair value of identifiable assets and liabilities.
208
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
(II) Disposal of subsidiaries
One-time disposal leading to loss of control over a subsidiary
Details
Difference between disposal
Equity
Equity Determination basis consideration and net assets
Equity disposal disposal Loss of control
Subsidiaries disposal for loss of control attributable to the Company at
consideration proportion date
method date the consolidated financial
(%)
statements level
Gucheng Yinglian
Substantial
Urban Environmental 500,000.00 100.00 Transfer 8/24/2023 -381,328.08
control transfer
Service Co., Ltd.
Zaozhuang Yinglian
Substantial
Urban Environmental 500,000.00 100.00 Transfer 3/1/2023 -7,097.77
control transfer
Service Co., Ltd.
Yichun Yinglian
Substantial
Urban Environmental 500,000.00 100.00 Transfer 8/8/2023 -235,810.55
control transfer
Service Co., Ltd.
Chongqing Yinglian
Substantial
City Sanitation 500,000.00 100.00 Transfer 12/6/2023 24,004.26
control transfer
Service Co., Ltd.
Huaibei Zhongfeng
Substantial
Urban Environmental 1.00 100.00 Transfer 9/13/2023 -215,560.78
control transfer
Service Co., Ltd.
(Continued)
Changes in other
Determination
Proportion of Fair value of Gains/Losses on comprehensive
Carrying amount method and major
remaining remaining fair value income/equity related
of remaining assumption on fair
Subsidiaries equity at the equity at the remeasurement to former subsidiary’s
equity at the loss value of remaining
loss of control loss of control of remaining equity investment
of control date equity at the loss of
date (%) date equity transferred to
control date
investment income
Gucheng Yinglian
Urban Environmental
Service Co., Ltd.
Zaozhuang Yinglian
Urban Environmental
Service Co., Ltd.
Yichun Yinglian
Urban Environmental
Service Co., Ltd.
Chongqing Yinglian
City Sanitation
Service Co., Ltd.
Huaibei Zhongfeng
Urban Environmental
Service Co., Ltd.
(III) Changes in the consolidation scope due to other reasons
1. Entities brought into the consolidation scope
Equity
Equity Holding
Entities acquisition Capital contribution
acquisition date proportion (%)
method
Liaocheng Chiping District
Yingsheng Environmental Set up 1/4/2023 100,000.00 100.00
Sanitation Service Co., Ltd.
Jiangmen Lvying Urban
Set up 2/3/2023 [Note] 100.00
Environmental Service Co., Ltd.
Fuzhou Changle District
Set up 2/8/2023 [Note] 100.00
Yingsheng Urban
209
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Equity
Equity Holding
Entities acquisition Capital contribution
acquisition date proportion (%)
method
Environmental Service Co., Ltd.
Chongqing Banan District
Yinghe Urban Environmental Set up 2/17/2023 300,000.00 100.00
Service Co., Ltd.
Guangzhou Yingtai Urban
Set up 2/22/2023 [Note] 100.00
Management Service Co., Ltd.
Foshan Shunde District
Yingchuang Urban Set up 3/1/2023 2,300,000.00 100.00
Environmental Service Co., Ltd.
Puning Honglian Environmental
Set up 3/7/2023 [Note] 100.00
Service Co., Ltd.
Hefei Yingsheng Urban
Set up 3/15/2023 200,000.00 100.00
Environmental Service Co., Ltd.
Fengyang Yinghe
Environmental Sanitation Set up 3/21/2023 500,000.00 100.00
Management Co., Ltd.
Sanya Lianying Urban
Set up 3/22/2023 100,000.00 100.00
Environmental Service Co., Ltd.
Fuzhou Yinghe Environmental
Set up 4/11/2023 [Note] 60.00
Development Co., Ltd.
Chuzhou Tongying
Environmental Sanitation Set up 4/11/2023 500,000.00 100.00
Management Co., Ltd.
Yongxin Yinghe Environmental
Sanitation Management Co., Set up 4/17/2023 500,000.00 100.00
Ltd.
Lianjiang Lianying Urban
Set up 4/21/2023 2,100,000.00 100.00
Environmental Service Co., Ltd.
Guangzhou Yingzhi Urban
Environmental Sanitation Set up 5/5/2023 [Note] 100.00
Service Co., Ltd.
Shenzhen Longgang Yinglian
Set up 6/2/2023 [Note] 100.00
Environmental Service Co., Ltd.
Shenzhen Yinglian Afforest
Set up 6/5/2023 [Note] 100.00
Engineering Co., Ltd.
Yangjiang Yinghe Urban
Set up 6/8/2023 10,000,000.00 100.00
Environmental Service Co., Ltd.
Renshou Yinghe Urban and
Rural Sanitation Service Co., Set up 6/13/2023 2,000,000.00 100.00
Ltd.
Chibi Lianying Environmental
Sanitation Management Co., Set up 6/27/2023 14,662,100.00 100.00
Ltd.
Shen Zhen Longgang District
Set up 7/5/2023 [Note] 100.00
Yingji City Service Co., Ltd.
Wuyi Yinghe Environmental
Sanitation Management Co., Set up 7/18/2023 [Note] 100.00
Ltd.
Xuchang Jian’an District
Tongying Environmental
Set up 7/18/2023 100,000.00 100.00
Sanitation Management Co.,
Ltd.
210
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Equity
Equity Holding
Entities acquisition Capital contribution
acquisition date proportion (%)
method
Foshan Shunde District
Lianying Urban Environmental Set up 7/20/2023 1,770,000.00 59.00
Service Co., Ltd.
Taizhou Yinghe Environmental
Sanitation Management Co., Set up 7/24/2023 [Note] 100.00
Ltd.
Changsha Yinghe
Environmental Sanitation Set up 7/24/2023 500,000.00 100.00
Management Co., Ltd.
Huichang Yingmao
Environmental Management Set up 7/25/2023 6,500,000.00 65.00
Co., Ltd.
Tangshan Yinglian
Environmental Management Set up 7/26/2023 [Note] 100.00
Co., Ltd.
Yongfeng Yinghe
Environmental Sanitation Set up 7/27/2023 500,000.00 100.00
Management Co., Ltd.
Nanjing Yinglian
Environmental Technology Co., Set up 8/1/2023 1,000,000.00 100.00
Ltd.
Suzhou Wujiang Yinghe
Environmental Sanitation Set up 8/4/2023 200,000.00 100.00
Management Co., Ltd.
Xiajiang Yinghe Environmental
Sanitation Management Co., Set up 8/14/2023 500,000.00 100.00
Ltd.
Longquan Tongying
Environmental Sanitation Set up 8/22/2023 100,000.00 100.00
Service Co., Ltd.
Xinhua Yinglian Modern
Set up 8/28/2023 10,879,960.00 80.00
Environmental Service Co., Ltd.
Guangxi Luocheng Yingxin
Urban Environmental Service Set up 9/25/2023 [Note] 51.00
Co., Ltd.
Suzhou Yingfen Environmental
Set up 10/30/2023 2,100,000.00 70.00
Industry Co., Ltd.
Renshou Zhongying Sanitation
Set up 11/3/2023 2,000,000.00 70.00
Service Co., Ltd.
Nantong Lianying
Set up 11/17/2023 100,000.00 100.00
Environmental Service Co., Ltd.
Huazhou Liansheng Urban
Set up 12/11/2023 8,000,000.00 100.00
Environmental Service Co., Ltd.
Heyuan Zijin Liansheng Urban
Set up 12/27/2023 [Note] 100.00
Environmental Service Co., Ltd.
Tangshan Yingxing Sanitation
Equipment Manufacturing Co., Set up 12/28/2023 [Note] 68.00
Ltd.
Quanzhou Yingxin Urban
Set up 12/29/2023 [Note] 100.00
Environmental Service Co., Ltd.
Zhejiang Yolsh Intelligent
Set up 12/13/2023 100,000,000.00 70.00
Emergency Equipment Co., Ltd.
Heyang Yinghe Urban Set up 4/26/2023 5,000,000.00 100.00
211
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Equity
Equity Holding
Entities acquisition Capital contribution
acquisition date proportion (%)
method
Environmental Service Co., Ltd.
Xuzhou Tongying Sanitation
Set up 12/5/2023 100,000.00 100.00
Service Co., Ltd.
Note: As of December 31, 2023, the Company has not paid contribution to these entities.
2. Entities excluded from the consolidation scope
Net profit from the
Equity disposal Equity disposal Disposal-date
Entities period beginning to
method date net assets
the disposal date
Meishan Pengshan
Zhongfeng Environmental Cancellation 10/10/2023 -287,156.36
Industry Co., Ltd.
Chengdu Yinglian
Environmental Cancellation 6/1/2023 -4,011.80
Management Co., Ltd.
Guangxi Guiping Yinghe
Environmental Sanitation Cancellation 8/18/2023 -43,942.03
Management Co., Ltd.
Shengzhou Yinghe
Environmental Sanitation Cancellation 7/12/2023 -65,689.18
Management Co., Ltd.
Chongyang Yinglian
Environmental Protection Cancellation 2/28/2023 0.04
Co., Ltd.
Yiyang Yinglian
Environmental Sanitation Cancellation 4/19/2023 25.21
Management Co., Ltd.
Wanning Yinglian
Environmental Industry Cancellation 4/4/2023 296,440.93
Co., Ltd.
Shenzhen Longhua
District Yinglian Urban Cancellation 10/14/2023 -203.21
Service Co., Ltd.
Guangdong Infore Smart
Cancellation 1/6/2023
Technology Co., Ltd.
Anhua Yingsheng
Environmental Sanitation Cancellation 9/20/2023 -10,713.04
Service Co., Ltd.
(IV) Transactions resulting in changes in subsidiaries’ equity but without losing control
1. Changes in subsidiaries’ equity
Holding proportion Holding proportion
Subsidiaries Date of change
before change after change
Huaian Chenjie Environmental
6/1/2023 96.00% 100.00%
Engineering Co., Ltd.
Xiantao Yinghe Environmental
12/25/2023 80.58% 75.67%
Protection Co., Ltd.
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2. Effect of transactions on non-controlling interest and equity attributable to parent company
Huaian Chenjie Environmental Xiantao Yinghe Environmental
Items
Engineering Co., Ltd. Protection Co., Ltd.
Acquisition costs/Disposal
considerations
Cash 2,000,000.00 35,872,650.00
Total acquisition costs/
2,000,000.00 35,872,650.00
disposal considerations
Less: Share in subsidiaries’
net assets based on acquired/ 722,640.74 35,716,497.55
disposed net assets proportion
Balance 1,277,359.26 156,152.45
Including: Capital reserve
1,277,359.26 156,152.45
adjusted
(V) Interest in joint ventures or associates
1. Significant joint ventures or associates
Main Holding proportion Accounting treatment
Place of (%)
Associates operating Business nature on investments in joint
registration
place 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/Current period Opening balance/Preceding
cumulative period comparative
Items
Foshan Yingtong Electrical Foshan Yingtong Electrical
Materials Co., Ltd. Materials Co., Ltd.
Current assets 1,111,710,931.09 1,089,506,862.74
Non-current assets 164,920,906.11 201,274,064.95
Total assets 1,276,631,837.20 1,290,780,927.69
Current liabilities 672,193,265.67 691,609,958.01
Non-current liabilities 55,400,000.00 520,544.08
Total liabilities 727,593,265.67 692,130,502.09
Non-controlling interest 66,338,530.17 68,425,663.17
Equity attributable to owners of
482,700,041.36 530,224,762.44
parent company
Proportionate share in net assets 236,523,020.27 259,810,133.60
Adjustments
Others -34,569,092.45 -30,876,879.51
Carrying amount of investments
201,953,927.82 228,933,254.09
in associates
Operating revenue 1,773,954,226.95 2,238,921,694.12
Net profit -49,874,177.08 -44,464,542.43
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
3. Aggregated financial information of insignificant joint ventures and associates
Closing balance/Current Opening balance/Preceding
Items
period cumulative period comparative
Associates
Total carrying amount of investments 479,675,156.87 447,896,705.75
Proportionate shares in the following
items
Net profit 31,940,019.06 31,671,037.49
Other comprehensive income
Total comprehensive income 31,940,019.06 31,671,037.49
VIII. Government grants
(I) Government grants increased in the current period
Items Amount
Government grants related to assets 3,994,300.00
Including: Included into deferred income 3,994,300.00
Government grants related to income 69,450,144.75
Including: Included into other income 69,450,144.75
Total 73,444,444.75
(II) Liabilities related to government grants
Amount included
Amount included
Items Opening balance Increase into non-operating
into other income
revenue
Deferred income 120,890,710.04 3,994,300.00 9,544,515.62
Subtotal 120,890,710.04 3,994,300.00 9,544,515.62
(Continued)
Amount Amount Related to
Other
Items offsetting offsetting Closing balance assets/Related to
changes
costs assets income
Deferred income 115,340,494.42 Related to assets
Subtotal 115,340,494.42
(III) Government grants included into profit or loss
Items Current period cumulative Preceding period comparative
Government grants included into
78,994,660.37 101,675,052.10
other income
Total 78,994,660.37 101,675,052.10
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
(IV) Government grants returned in the current period
Items Amounts returned Reason for return
Guangdong Infore Intelligent Sanitation
Special fund for promoting Technology Co., Ltd. failed to meet the
high-quality development of requirements of government grants as it
893,100.00
foreign investment in Foshan was transformed from a foreign-invested
of 2021 enterprise to a domestic-funded one, and
returned the government grants of 2021.
Total 893,100.00
IX. 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 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
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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, 4, 6, 8, 11 and 23 of notes to the financial statements for details on the
reconciliation table of opening balance and closing balance of loss allowances 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.
(2) Receivables and contract assets
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, 2023, 7.33%
(December 31, 2022: 9.38%) of the total accounts receivable and contract assets 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
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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
2,398,606,754.44 2,785,244,392.01 598,015,270.38 611,768,269.63 1,575,460,852.00
borrowings
Notes payable 2,294,276,551.46 2,294,276,551.46 2,294,276,551.46
Accounts
2,918,543,704.46 2,918,543,704.46 2,918,543,704.46
payable
Other payables 709,941,824.77 709,941,824.77 709,941,824.77
Lease liabilities 24,784,187.60 26,511,358.34 9,474,544.70 17,036,813.64
Long-term
312,053,472.95 312,053,472.95 9,104,000.00 15,173,333.32 287,776,139.63
payables
Bonds payable 1,360,603,802.12 1,566,237,165.60 11,809,516.80 22,142,844.00 1,532,284,804.80
Subtotal 10,018,810,297.80 10,612,808,469.59 6,551,165,412.57 666,121,260.59 3,395,521,796.43
(Continued)
December 31, 2022
Items Contract amount not
Carrying amount Within 1 year 1-3 years Over 3 years
yet discounted
Bank
2,918,155,689.70 3,064,480,800.96 795,179,666.92 725,728,644.01 1,543,572,490.03
borrowings
Notes payable 2,515,229,293.17 2,515,229,293.17 2,515,229,293.17
Accounts
2,771,961,271.66 2,771,961,271.66 2,771,961,271.66
payable
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
316,335,329.82 316,335,329.82 599,514.91 315,735,814.91
payables
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
(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 rates. The Company’s fair value interest risks arise from fixed-rate
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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, 2023, balance of borrowings with interest accrued at floating interest rate totaled
1,811,617,334.60 yuan (December 31, 2022: 1,755,696,317.89 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) 1 of notes to the financial statements for details on foreign currency financial assets
and liabilities at the end of the period.
X. 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 146,814,501.64 146,814,501.64
2. Other equity instrument
15,352,971.01 15,352,971.01
investments
Total assets at recurring fair value
162,167,472.65 162,167,472.65
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 value 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.
XI. Related party relationships and transactions
(I) Related party relationships
1. Parent company
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
(1) Details
Holding proportion Voting right
Place of Business Registered
Parent company over the Company proportion over the
registration nature capital
(%) 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% of equity of the Company, and indirectly
holds 32.02% of 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% of equity of the Company,
and indirectly holds 43.33% of 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 the current period or in preceding period but with balance in the current period are as follows:
Joint ventures or associates Relationships with the Company
Guangdong Tianshu New Energy Technology Co.,
Associate of the Company
Ltd.
Tengine Innovation (Beijing) Monitoring
Associate of the Company
Instrument Co., Ltd.
Guangdong Shunkong Environmental Investment
Associate of the Company
Co., Ltd.
Changsha Cowa Zoomlion Intelligent Technology Associate of the Company’s subsidiary Zoomlion
Co., Ltd. Environmental Company
Guangxi Zoomlion Guilv Urban Environmental Associate of the Company’s subsidiary Zoomlion
Service Co., Ltd. Environmental Company
Shantou Chaoyang District Zoomlion Ruikang Associate of the Company’s subsidiary Zoomlion
Environmental Sanitation Service Co., Ltd. Environmental Company
Shantou Zoomlion Ruikang Environmental Associate of the Company’s subsidiary Zoomlion
Sanitation Service Co., Ltd. Environmental Company
Associate of the Company’s subsidiary Zoomlion
Taizhou Jinzhong Environmental Industry Co., Ltd.
Environmental Company
Guangdong Liangke Environmental Engineering Associate of the Company’s subsidiary Guangdong
Co., Ltd. Infore Environmental Investment Co., Ltd.
Associate of the Company’s subsidiary Guangdong
Foshan Yingtong Electrical Materials Co., Ltd.
Infore Environmental Investment Co., Ltd.
Associate of the Company’s subsidiary Guangdong
Beijing Xingyun Zhixing Technology Co., Ltd.
Infore Environmental Investment Co., Ltd.
4. Other related parties of the Company
Related parties Relationships with the Company
Zoomlion Heavy Industry Co., Ltd. (the “Zoomlion Shareholder holding more than 5% of the Company’s
Heavy Industry Company”) shares
Shenzhen Infore Smart Technology Co., Ltd. Under control of the actual controller
Foshan Shunde District Yinghai Investment Co.,
Under control of the actual controller
Ltd.
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Related parties Relationships with the Company
Guangzhou Huayi International Aution Co., Ltd. Under control of the actual controller
Foshan Shunde District Midea Hotel Management Under control of immediate family of the actual
Co., Ltd. controller
Under control of immediate family of the actual
Ningbo Midea Property Management Co., Ltd.
controller
Under control of immediate family of the actual
Guangdong Bomei Property Service Co., Ltd.
controller
Under control of immediate family of the actual
Guangdong Midea HVAC Equipment Co., Ltd.
controller
Guangdong Welling Motor Manufacturing Co., Under control of immediate family of the actual
Ltd. controller
Under control of immediate family of the actual
Guangdong Midea Electric Co., Ltd.
controller
Guangdong Midea Refrigeration Equipment Co., Under control of immediate family of the actual
Ltd. controller
Under control of immediate family of the actual
Guangdong Midea Building Technologies Co., Ltd.
controller
Chongqing Midea General Refrigeration Under control of immediate family of the actual
Equipment Co., Ltd. controller
Under control of immediate family of the actual
Anhui Meizhi Refrigeration Equipment Co., Ltd.
controller
Under control of immediate family of the actual
Midea Group Co., Ltd.
controller
Guangdong Ferries New Energy Technology Co., Under control of the Company’s associate
Ltd. Foshan Yingtong Electrical Materials Co., Ltd.
Under control of the Company’s associate Foshan
Guangdong Weiqi Electrical Materials Co., Ltd.
Yingtong Electrical Materials Co., Ltd.
Under control of the Company’s associate Foshan
Liaoning Donggang Magnet Wire Co., Ltd.
Yingtong Electrical Materials Co., Ltd.
Under control of the Company’s associate Foshan
Anhui Weiqi Electrical Materials Co., Ltd.
Yingtong Electrical Materials Co., Ltd.
Associate of the Company’s shareholder Zoomlion
Zoomlion Hengtong Machinery Co., Ltd.
Heavy Industry Company
Green Oriental Investment Holdings Co., Ltd. (the
Non-controlling shareholder of the subsidiary
“Hong Kong Investment Company”)
Gucheng Yinglian Urban Environmental Service The former subsidiary of the Company’s subsidiary
Co., Ltd. [Note] Zoomlion Environmental Company
Yichun Yinglian Urban Environmental Service The former subsidiary of the Company’s subsidiary
Co., Ltd. [Note] Zoomlion Environmental Company
Note: The Company disposed of all the equity of Gucheng Yinglian Urban Environmental Service Co., Ltd. and
Yichun Yinglian Urban Environmental Service Co., Ltd., the former subsidiaries of Zoomlion Environmental
Company, in August 2023, which continued to be disclosed as related parties within one year after disposal, and the
current disclosure period of related party transactions was from September 2023 to December 2023.
(II) Related party transactions
1. Purchase and sale of goods, rendering and receiving of services
(1) Purchase of goods and receiving of services
Current period Preceding period
Related parties Content of transactions
cumulative comparative
Guangdong Tianshu New Energy Materials 8,393,506.88 7,638,710.54
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Current period Preceding period
Related parties Content of transactions
cumulative comparative
Technology Co., Ltd.
Tengine Innovation (Beijing) Monitoring
Materials 3,572,705.19 9,239,400.36
Instrument Co., Ltd.
Guangdong Ferries New Energy
Materials 518,435.64
Technology Co., Ltd.
Changsha Cowa Zoomlion Intelligent
Materials 150.98 10,847,784.36
Technology Co., Ltd.
Guangdong Shunkong Environmental
Labor services 10,692,550.78 9,909,911.14
Investment Co., Ltd.
Zoomlion Heavy Industry Company Materials 77,364,306.08 105,493,871.91
Information systems
Shenzhen Infore Smart Technology Co., and related
4,253,139.63
Ltd. implementation
services
Guangdong Liangke Environmental
Labor services 1,500,000.00 1,415,094.34
Engineering Co., Ltd.
Foshan Shunde District Midea Hotel
Labor services 116,702.94 180,887.93
Management Co., Ltd.
Ningbo Midea Property Management
Labor services 516,713.84
Co., Ltd.
Guangzhou Huayi International Aution
Labor services 801,033.29
Co., Ltd.
Guangdong Bomei Property Service Co.,
Labor services 1,191,467.15
Ltd.
Subtotal 108,403,998.56 145,242,374.42
(2) Sale of goods and rendering of services
Current period Preceding period
Related parties Content of transactions
cumulative comparative
Guangdong Liangke Environmental
Goods and factoring 1,706,918.19 781,333.30
Engineering Co., Ltd.
Guangdong Tianshu New Energy
Goods and factoring 4,572,082.14 90,942,152.84
Technology Co., Ltd.
Guangdong Weiqi Electrical Materials
Factoring 5,100,534.46 1,873,184.56
Co., Ltd.
Liaoning Donggang Magnet Wire Co.,
Factoring 2,843,034.34 124,354.60
Ltd.
Anhui Weiqi Electrical Materials Co.,
Goods and factoring 2,323,149.35 416,492.94
Ltd.
Foshan Yingtong Electrical Materials
Factoring 549,056.60 233,830.19
Co., Ltd.
Guangdong Ferries New Energy
Goods 32,674,315.93
Technology Co., Ltd.
Guangdong Midea HVAC Equipment
Goods 28,141.59 543,008.85
Co., Ltd.
Guangdong Welling Motor Goods and labor
233,895.50
Manufacturing Co., Ltd. services
Beijing Xingyun Zhixing Technology
Goods 943.40
Co., Ltd.
Taizhou Jinzhong Environmental
Labor services 22,021,147.55
Industry Co., Ltd.
Guangdong Bomei Property Service Co., Goods and labor 4,719,857.33 3,118,410.25
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Current period Preceding period
Related parties Content of transactions
cumulative comparative
Ltd. services
Guangxi Zoomlion Guilv Urban
Goods -141,215.31 6,862,177.99
Environmental Service Co., Ltd.
Zoomlion Heavy Industry Company Goods 3,780,395.53 1,995,580.83
Shantou Chaoyang District Zoomlion
Ruikang Environmental Sanitation Goods 94,726.56 589,792.61
Service Co., Ltd.
Shantou Zoomlion Ruikang
Environmental Sanitation Service Co., Goods 118,489.02 65,565.12
Ltd.
Subtotal 80,625,472.18 107,545,884.08
2. Related party leases
(1) The Company as the lessor
Types of assets Lease income for Lease income for the
Lessees
leased the current period preceding period
Plant and
Guangdong Tianshu New Energy
comprehensive 2,304,088.08 988,266.74
Technology Co., Ltd.
building
Guangdong Liangke Environmental
Office 15,600.00
Engineering Co., Ltd.
(2) The Company as the lessee
Current period cumulative
Lease of right-of-use assets recognized
Expenses for short-term leases and
Types of assets
Lessors leases of low-value assets with Lease expenses paid
leased Increased
simplified approach and variable (excluding variable lease Interest
principal of
lease payments not included in the payments not included in expenses
lease
measurement of lease liabilities the measurement of lease recognized
liabilities
liabilities)
Foshan Shunde District
Office building,
Yinghai Investment Co., 20,952.38 1,258,782.48 84,848.59
parking space
Ltd.
Shenzhen Infore Smart
Office building 695,812.82
Technology Co., Ltd.
(Continued)
Preceding period comparative
Lease of right-of-use assets recognized
Expenses for short-term leases and
Types of assets Lease expenses paid
Lessors leases of low-value assets with
leased (excluding variable
simplified approach and variable Increased Interest
lease payments not
lease payments not included in the principal of expenses
included in the
measurement of lease liabilities lease liabilities recognized
measurement of lease
liabilities)
Foshan Shunde District
Office building,
Yinghai Investment Co., 1,256,323.04 63,604.54
parking space
Ltd.
Shenzhen Infore Smart
Office building 840,509.43
Technology Co., Ltd.
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
3. Related party guarantees
(1) The Company and its subsidiaries did not act as guarantors in the current period.
(2) The Company and its subsidiaries did not act as guaranteed parties in the current period.
4. Temporary call loans between related parties
In 2023, Infore Group lent temporary funds to the Company and its subsidiaries, totaling 800 million yuan, which
were usually returned within one working day. Therefore, the two parties have not settled the interest on the funds
occupied.
5. Key management’s emoluments
Items Current period cumulative Preceding period comparative
Key management’s emoluments 7,022,866.00 6,500,407.42
6. Special agreement on continued implementation of sales contract signed in the name of Zoomlion Heavy
Industry Company
Since June 1, 2017, the sanitation business of Zoomlion Heavy Industry Company 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 Company, Zoomlion Environmental Company invoiced Zoomlion Heavy
Industry Company, which will then issue the invoice of the same amount to end customers. The tax-excluded
amount of income from such transactions in 2023 is -1,489,633.01 yuan. Zoomlion Environmental Company
related such transactions directly to end customers.
7. Other related party transactions
In 2023, the subsidiary Zoomlion Environmental Company carried out financing factoring business through
Zoomlion Heavy Industry Company and paid the financing factoring service fees of 19.5 thousand yuan.
(III) Balances due to or from related parties
1. Balances due from related parties
Closing balance Opening balance
Items Related parties Provision for bad Provision for bad
Book balance Book balance
debts debts
Guangdong Tianshu New
189,921,071.39 56,976,321.42 200,788,348.94 8,569,313.68
Energy Technology Co., Ltd.
Guangdong Weiqi Electrical
43,161,070.83 647,416.06 112,174,999.99 1,682,625.00
Materials Co., Ltd.
Liaoning Donggang Magnet
40,963,666.44 614,455.00 31,300,000.00 469,500.00
Wire Co., Ltd.
Accounts
Guangdong Ferries New
receivable 36,921,977.00 1,846,098.85
Energy Technology Co., Ltd.
Anhui Weiqi Electrical
21,157,622.95 317,364.34 30,586,839.62 458,802.59
Materials Co., Ltd.
Taizhou Jinzhong
Environmental Industry Co., 5,934,700.00 296,735.00
Ltd.
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Closing balance Opening balance
Items Related parties Provision for bad Provision for bad
Book balance Book balance
debts debts
Guangdong Shunkong
Environmental Investment 4,108,567.88 1,696,739.48 4,158,567.88 890,025.90
Co., Ltd.
Shantou Chaoyang District
Zoomlion Ruikang
4,048,556.31 1,185,488.39 4,017,898.31 401,789.83
Environmental Sanitation
Service Co., Ltd.
Gucheng Yinglian Urban
Environmental Service Co., 2,045,755.42 102,287.77
Ltd.
Guangxi Zoomlion Guilv
Urban Environmental 1,889,210.92 188,921.09 3,762,921.52 188,146.08
Service Co., Ltd.
Zoomlion Heavy Industry
1,150,774.01 237,645.17 665,051.93 126,337.58
Company
Guangdong Bomei Property
876,777.77 43,838.89 903,500.08 45,175.00
Service Co., Ltd.
Guangdong Welling Motor
85,215.05 4,260.75
Manufacturing Co., Ltd.
Shantou Zoomlion Ruikang
Environmental Sanitation 77,715.00 3,885.75 10,711.00 535.55
Service Co., Ltd.
Guangdong Midea HVAC
31,910.00 1,595.50 233,371.88 51,798.38
Equipment Co., Ltd.
Guangdong Midea Electric
54,018.62 54,018.62
Co., Ltd.
Guangdong Midea
Refrigeration Equipment 42,819.11 42,819.11
Co., Ltd.
Guangdong Midea Building
33,413.42 33,413.42
Technologies Co., Ltd.
Guangdong Liangke
Environmental Engineering 30,000,000.00 450,000.00
Co., Ltd.
Foshan Yingtong Electrical
20,486,000.00 307,290.00
Materials Co., Ltd.
Subtotal 352,374,590.97 64,163,053.46 439,218,462.30 13,771,590.74
Guangdong Tianshu New
3,776,800.00
Receivables Energy Technology Co., Ltd.
financing Zoomlion Heavy Industry
600,000.00 200,000.00
Company
Subtotal 4,376,800.00 200,000.00
Gucheng Yinglian Urban
Environmental Service Co., 500,000.00
Ltd.
Zoomlion Heavy Industry
155,660.67 85,768.19
Company
Advances paid Guangzhou Huayi
International Aution Co., 40,800.00
Ltd.
Chongqing Midea General
Refrigeration Equipment 31,500.00
Co., Ltd.
Subtotal 696,460.67 117,268.19
Gucheng Yinglian Urban
Environmental Service Co., 2,739,525.00 136,976.25
Other
Ltd.
receivables
Guangdong Shunkong
1,730,000.00 1,730,000.00 1,730,000.00 865,000.00
Environmental Investment
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Closing balance Opening balance
Items Related parties Provision for bad Provision for bad
Book balance Book balance
debts debts
Co., Ltd.
Shantou Chaoyang District
Zoomlion Ruikang
838,613.91 41,930.70
Environmental Sanitation
Service Co., Ltd.
Guangzhou Huayi
International Aution Co., 327,600.00 16,380.00
Ltd.
Foshan Shunde District
205,228.40 102,614.20 205,228.40 102,614.20
Yinghai Investment Co., Ltd.
Anhui Meizhi Refrigeration
5,000.00 250.00
Equipment Co., Ltd.
Zoomlion Heavy Industry
7,190,173.17 359,508.66
Company
Guangdong Midea HVAC
10,000.00 500.00
Equipment Co., Ltd.
Shenzhen Infore Smart
304,020.00 15,308.44
Technology Co., Ltd.
Guangdong Weiqi Electrical
337,565.30 168,782.65
Materials Co., Ltd.
Subtotal 5,845,967.31 2,028,151.15 9,776,986.87 1,511,713.95
Guangdong Midea HVAC
Contract assets 31,800.00 3,180.00
Equipment Co., Ltd.
and other non-
Zoomlion Heavy Industry
current assets 22,500.00 1,125.00 162,550.00 8,127.50
Company
Subtotal 54,300.00 4,305.00 162,550.00 8,127.50
Guangdong Tianshu New
5,037,500.00 1,511,250.00 5,137,500.01 77,062.50
Energy Technology Co., Ltd.
Long-term Shantou Zoomlion Ruikang
receivables and Environmental Sanitation 3,456,000.00 1,342,250.00 3,456,000.00 651,050.00
non-current Service Co., Ltd.
assets due within Shantou Chaoyang District
one year Zoomlion Ruikang
7,369,548.45 1,995,153.96 7,531,548.45 983,685.27
Environmental Sanitation
Service Co., Ltd.
Subtotal 15,863,048.45 4,848,653.96 16,125,048.46 1,711,797.77
2. Balances due to related parties
Items Related parties Closing balance Opening balance
Zoomlion Heavy Industry Company 33,784,532.87 55,248,477.35
Guangdong Tianshu New Energy
3,737,470.40 6,037,232.82
Technology Co., Ltd.
Tengine Innovation (Beijing)
2,963,838.75 6,033,821.63
Monitoring Instrument Co., Ltd.
Midea Group Co., Ltd. 587,507.93 587,507.93
Guangdong Shunkong Environmental
Accounts payable 585,700.00 993,522.02
Investment Co., Ltd.
Guangdong Ferries New Energy
519,697.82
Technology Co., Ltd.
Guangzhou Huayi International
327,600.00
Aution Co., Ltd.
Changsha Cowa Zoomlion Intelligent
26,733.52 7,253,459.78
Technology Co., Ltd.
Foshan Shunde District Midea Hotel
22,848.91 80,789.37
Management Co., Ltd.
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
Items Related parties Closing balance Opening balance
Guangdong Liangke Environmental
875,000.00
Engineering Co., Ltd.
Subtotal 42,555,930.20 77,109,810.90
Zoomlion Heavy Industry Company 51,685,972.00 59,153,632.35
Tengine Innovation (Beijing)
3,002,040.00
Monitoring Instrument Co., Ltd.
Notes payable Changsha Cowa Zoomlion Intelligent
471,035.00
Technology Co., Ltd.
Guangdong Tianshu New Energy
252,000.00 520,000.00
Technology Co., Ltd.
Subtotal 52,409,007.00 62,675,672.35
Zoomlion Heavy Industry Company 101,061.95 6,145,050.10
Guangdong Liangke Environmental
987,079.70 987,079.67
Engineering Co., Ltd.
Contract liabilities Guangdong Tianshu New Energy
13,296.46 1,681.42
Technology Co., Ltd.
Guangxi Zoomlion Guilv Urban
78,180.53
Environmental Service Co., Ltd.
Subtotal 1,101,438.11 7,211,991.72
Hong Kong Investment Company 32,958,498.54 21,875,000.00
Gucheng Yinglian Urban
3,480,000.00
Environmental Service Co., Ltd.
Taizhou Jinzhong Environmental
1,545,898.65
Industry Co., Ltd.
Guangxi Zoomlion Guilv Urban
1,525,315.33 403,654.00
Environmental Service Co., Ltd.
Zoomlion Heavy Industry Company 68,259.20 363,559.20
Other payables Yichun Yinglian Urban
63,965.82
Environmental Service Co., Ltd.
Tengine Innovation (Beijing)
50,000.00
Monitoring Instrument Co., Ltd.
Guangdong Bomei Property Service
5,000.00 5,000.00
Co., Ltd.
Zoomlion Hengtong Machinery Co.,
4,300.00 4,300.00
Ltd.
Guangdong Tianshu New Energy
2,700.00 2,700.00
Technology Co., Ltd.
Subtotal 39,703,937.54 22,654,213.20
Lease liabilities and
Foshan Shunde District Yinghai
non-current liabilities 1,845,892.92
Investment Co., Ltd.
due within one year
Subtotal 1,845,892.92
XII. Share-based payment
(I) Overall information
1. Details
Quantity and amount of equity instruments
Granted in the current Vested in the Unlocked in the
Objects Expired in the current period
period current period current period
Quantity Amount Quantity Amount Quantity Amount Quantity Amount
Management
10,420,000.00 7,312,289.83
personnel
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
R&D personnel 5,048,000.00 3,542,460.56
Sales personnel 4,380,000.00 3,073,688.05
Production
2,116,000.00 1,484,914.13
personnel
Total 21,964,000.00 15,413,352.57
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% 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 eligible 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 exercise
period of the phase III stock option incentive plan, the 19.143 million stock options granted but not yet exercised in
the first exercise 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-
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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.
Pursuant 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 dated August 20,
2020, it is agreed to revise the performance appraisal indicators of phase III stock option incentive plan.
Pursuant 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 controlled subsidiaries due to personal reasons were identified by the Company’s Board of Directors as
no longer eligible for incentives. According to the provisions of the “Phase III Stock Option Incentive Plan
(Revised 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 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 draft, if the Company has conversion of capital reserve
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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 eligible 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.
The “Proposal on Cancellation of Expired but Unexercised Stock Options for the Third Exercise Period of the
Phase III Stock Option Incentive Plan” was deliberated and approved by the fifth extraordinary meeting of the tenth
session of the Board of Directors dated January 8, 2024. As of November 25, 2023, the third exercise period of the
Company’s phase III stock option incentive plan has expired, and 21.964 million stock options held by 209
incentive objects for the third exercise period of the phase III stock option incentive plan have not been exercised.
According to the regulations of the phase III stock option incentive plan, incentive objects must exercise their
options within the valid exercise period. If the exercise conditions are not met, the current stock options shall not be
exercised and shall be canceled by the Company; if the exercise conditions are met, but the stock options are not
exercised within the valid exercise period, the stock options shall be canceled by the Company. Therefore, the
Company will cancel a total of 21.964 million stock options that have been granted to but not yet exercised by the
aforementioned 209 incentive objects during the third exercise period. After the completion of this cancellation, the
Company’s phase III stock option incentive plan has been fully implemented.
(II) Equity-settled share-based payment
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
1. Details
Stock options: Grant-date fair value
Determination method and key parameters of grant-date of the stock options was determined
fair value of equity instruments according to the Black-Scholes
option pricing model
It is expected that all incentive targets
Determination method for the number of equity
still hold positions with the Company
instruments expected to vest
by then will fully exercise their rights
Reasons for significant difference between the estimates
None
in the current period and preceding period
Capital reserve accumulated due to equity-settled share-
63,871,094.05
based payment
XIII. Commitments and contingencies
(I) Significant commitments
As of December 31, 2023, 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, Hong Kong Investment Company, 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, 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 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 Hong Kong Investment Company. 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 Hong Kong Investment
Company.
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 Hong Kong Investment Company 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 Hong
Kong Investment Company. 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
230
Infore Environment Technology Group Co., Ltd. 2023 Annual Report
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 Hong Kong Investment Company’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, Hong Kong Investment Company and Shenzhen Yongsheng Electric Power Equipment Co.,
Ltd. filed an appeal to the Shenzhen Intermediate People’s Court.
As of December 31, 2023, the Company has accrued other payables of 32,958,498.54 yuan due to Hong Kong
Investment Company.
2. Contingent liabilities incurred by providing debt guarantees for other entities and the financial effect
(1) Please refer to section XI 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, 2023, the Company’s maximum exposure to these guarantees is 121,356,312.99 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, 2023, the
Company’s maximum exposure to these guarantees is 78,094,828.01 yuan.
XIV. 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
According to the “Profit Distribution Plan of 2023” deliberated and approved by the sixth meeting of the tenth
session of the Board of Directors on April 26, 2024, the Company intends to distribute cash dividends of 1.25 yuan
(tax inclusive) per 10 shares based on the current total share capital of 3,166,941,288 shares (net of shares in the
Company’s special account for repurchase), with cash dividends distributed totaling 395,867,661.00 yuan.
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Infore Environment Technology Group Co., Ltd. 2023 Annual Report
(III) Other remarks
1. 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 of 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, 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, 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, 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, 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.
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In addition, in 2015, the Company and Hong Kong Investment Company entered into the equity pledge contract,
stipulating that 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 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 LLP
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 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
yua 
