Infore Environment Technology Group
Co., Ltd.
2022 Annual Report
April 2023
2022 Annual Report
Part I Important Notice, Table of Contents and DefinitionsThe Board of Directors, the Board of Supervisors as well as the directors,supervisors and senior management of Infore Environment Technology GroupCo., Ltd. warrant that the information in this report contains nomisrepresentations, misleading statements or material omissions, and jointlyand severally accept liability for the truthfulness, accuracy and completenessof information in this report.
Ma Gang, the Company's legal representative, Wang Qingbo, theCompany's principal officer in charge of accounting, and Wu Shanshan, theprincipal 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 thisreport.
Any forward-looking statements such as future plans mentioned in thisreport shall not be considered as promises to investors. Investors are advised topay attention to possible investment risks.
The Board has approved a proposal for dividend plan as follows: based onthe total share capital (minus shares in the Company's repurchase account) onthe date of record for the 2022 final dividend plan, a cash dividend of RMB
1.10 (tax inclusive) per 10 shares will be distributed to the shareholders, withno bonus issue from either profit or capital reserves.
CONTENTS
Part I Important Notice, Table of Contents and Definitions ...... 1
Part II Company Profile and Principal Financial Indicators ...... 5
Part III Management Discussion and Analysis ...... 11
Part IV Corporate Governance ...... 44
Part V Environmental and Social Responsibility ...... 69
Part VI Significant Events ...... 81
Part VII Share Changes and Shareholder Information ...... 95
Part VIII Information on Preference Shares ...... 104
Part IX Information on Bonds ...... 105
Part X Financial Report ...... 109
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 bycertified public accountants (CPAs).(III) Originals of all corporate documents and announcements publicly disclosed on thewebsite designated by the China Securities Regulatory Commission (CSRC) during the reportingperiod.
The originals and legally effective photocopies of the aforesaid documents are available at theCompany and the stock exchange for inspection by investors.
Definitions
| Term | means | Definition |
| Company, the Company, Infore Enviro | means | Infore Environment Technology Group Co., Ltd. |
| Zoomlion Environmental | means | Changsha Zoomlion Environmental Industry Co., Ltd. |
| Infore Technology | means | Guangdong Infore Technology Co., Ltd. |
| Shangfeng, Shangfeng Industrial Company | means | Zhejiang Shangfeng Special Blower Industrial Co., Ltd. |
| Green Oriental Company | means | Shenzhen Green Oriental Environmental Protection Co., Ltd. |
| CSRC | means | China Securities Regulatory Commission |
| SZSE | means | Shenzhen Stock Exchange |
| General Meetings of Shareholders | means | General Meetings of Shareholders of Infore Environment Technology Group Co., Ltd. |
| Board of Directors, the Board | means | Board of Directors of Infore Environment Technology Group Co., Ltd. |
| Board of Supervisors | means | Board of Supervisors of Infore Environment 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 | means | Articles of Association of Infore Environment Technology Group Co., Ltd. |
Part II Company Profile and Principal Financial IndicatorsI. Company Profile
| Abbreviated stock name | Infore Enviro | Stock code | 000967 |
| Stocks listed on | Shenzhen Stock Exchange | ||
| Chinese name | 盈峰环境科技集团股份有限公司 | ||
| Chinese abbreviated name | 盈峰环境科技集团 | ||
| Foreign name (if any) | Infore Environment Technology Group Co., Ltd. | ||
| Legal representative | Ma Gang | ||
| Registered address | No. 1818 Renmin West Road, Dongguan Subdistrict, Shangyu District, Shaoxing City, Zhejiang Province | ||
| Postal code | 312300 | ||
| Historical updates to registered address | On February 29, 2016, the Company changed its registered address to No. 1818 Renmin Road West, Dongguan Subdistrict, Shangyu District, Shaoxing City, Zhejiang Province, from Shangpu Town, Shangyu City, Zhejiang Province. | ||
| Office address | 23/F, Infore Center, No. 7-8 Yixing Road, Xincheng Area, Beijiao Town, Shunde District, Foshan City, Guangdong Province | ||
| Postal code | 528300 | ||
| Company website | www.inforeenviro.com | ||
| inforeenviro@infore.com | |||
II. Contact Details
| Board Secretary | Securities Representative | |
| Name | Jin Taotao | Wang Fei |
| Address | 23/F, Infore Center, No. 7-8 Yixing Road, Xincheng Area, Beijiao Town, Shunde District, Foshan City, Guangdong Province | 23/F, Infore Center, No. 7-8 Yixing Road, Xincheng Area, Beijiao Town, Shunde District, Foshan City, Guangdong Province |
| Telephone | 0757-26335291 | 0757-26335291 |
| Fax | 0757-26330783 | 0757-26330783 |
| wangyf@infore.com | wangyf@infore.com |
III. Information Disclosure and Access
| Stock exchange website on which the report is published | Shenzhen Stock Exchange: http://www.szse.cn/ |
| Publications and websites on which the report is published | China Securities Journal, Shanghai Securities Journal, Securities Times, Securities Daily, and Cninfo (http://www.cninfo.com.cn/) |
| Place where the report is lodged | Securities Department, 23/F, Infore Center, No. 7-8 Yixing Road, Xincheng Area, Beijiao Town, Shunde District, Foshan City |
IV. Changes to Registered Information
| Unified Social Credit Code | 913300006096799222 |
| Changes to the Company's principal activities since its listing (if any) | Since its listing in 2000, the Company has changed the scope of its business five times. Scope of business as at November 18, 1993: the research, development and production of ventilators, air-cooling and water-cooling equipment, air conditioners, refrigerators, quick-freezing equipment, molds and power generators. Export (refer to the documents of approval from the Ministry of Foreign Trade and Economic Cooperation for details): on July 2, 2002, the scope of business expanded to include "metal and plastic-steel composite pipes and profiles". On November 14, 2003, the scope of business expanded to include "environmental engineering". On February 29, 2016, a strategic transformation led to an expansion of the Company's scope of business to: the R&D, maintenance and operation of environmental monitoring instruments; the development of as well as and consultancy and other services for environmental management technologies; the operation of environmental management facilities; environmental engineering; environmental conservation engineering; municipal engineering; the design and implementation of water conservancy and other water-related projects; the development of and services for technologies for water pollution control, water treatment and ecological restoration; the R&D, sales and relevant technology consultation for communication products, network products, mechatronic products, automation control products, buildings and smart community products; and the design, development, investment, operation, management and technical consultancy for the disposal and recycling of municipal and solid waste and relevant supporting facilities; the sales of ventilators, air-cooling and water-cooling equipment as well as air conditioners; the operation of import and export businesses, industrial investment, investment management, asset management and investment consulting. On May 18, 2016, "investment, the operation of import and export businesses, industrial investment, investment management and asset management" were removed from the Company's scope of business. On June 28, 2019, the Company's scope of business was updated to: the R&D, manufacturing, sales, technology consultation, maintenance and operation of sanitation equipment, specialized industrial robots, new energy vehicles, environmental monitoring equipment, special equipment for environmental protection and automobile charging equipment and parts; the leasing, design, operation, management, technological development and services for the disposal and recycling of municipal and solid waste and relevant supporting facilities; the design, construction, operation, management, technological development and services for environmental engineering, municipal engineering, landscape engineering, electrical engineering, water conservancy and other water-related projects, water pollution control, air pollution control and soil remediation; the commercial cleaning, collection, transportation and treatment (based on license) of urban solid waste; the development, technological consultation and services for environmental protection, IoT and Internet technologies; the R&D and sales of software; the sales of ventilators, air-cooling and water-cooling equipment as well as air conditioners; import and export businesses; and investment consultation. |
| Changes to the Company's controlling shareholders since its incorporation (if any) | 1. In 2000, the Company went public, and its largest shareholder was Zhejiang Fan and Air-cooling Equipment Co., Ltd. 2. On February 23, 2006, the former controlling shareholder of the Company, Zhejiang Shangfeng Industry Group Co., Ltd., and the Company's shareholder, Midea Group Co., Ltd., transferred their respective stocks of 9,575,027 shares and 24,897,984 shares to Guangdong Infore Group Co., Ltd. Guangdong Infore Group Co., Ltd. became the Company's largest shareholder. 3. On August 5, 2008, the Company's controlling shareholder, Guangdong Infore Group Co., Ltd. changed its name to "Guangdong Infore Holding Investment Group Co., Ltd." 4. On September 30, 2010, Guangdong Infore Holding 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. |
V. Other Relevant InformationThe accounting firm engaged by the Company
| Name of accounting firm | Pan-China Certified Public Accountants LLP (Special General Partnership) |
| Office address of accounting firm | 27/F, Run'ao Business Center (T2), Qianjiang Century CBD, Xiaoshan District, 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
| Sponsor | Sponsor's office address | Representative | Supervisory period |
| Huaxing Securities Co., Ltd. | Huaxing Securities, 2301, Raffles City The Bund East Tower, No. 1089 Dongdaming Road, Hongkou District, Shanghai | Li Zeming, Zheng Zaoshun | 2022 |
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 IndicatorsWhether the Company needs to retrospectively adjust or restate accounting data in previous years?Yes ?NoReasons for retrospective adjustment or restatementChanges in accounting policy
| 2022 | 2021 | YoY change | 2020 | |||
| Pre-adjustment | Post-adjustment | Post-adjustment | Pre-adjustment | Post-adjustment | ||
| Operating revenue (RMB) | 12,255,992,938.42 | 11,813,537,444.48 | 11,866,291,611.45 | 3.28% | 14,332,025,075.40 | 14,332,025,075.40 |
| Net profit attributable to the listed company's shareholders (RMB) | 418,794,179.13 | 728,467,910.42 | 752,792,198.66 | -44.37% | 1,386,476,099.73 | 1,386,476,099.73 |
| Net profit attributable to the listed company's shareholders after non-recurring gains and losses (RMB) | 324,753,411.18 | 532,726,168.36 | 557,050,456.60 | -41.70% | 1,432,219,046.72 | 1,432,219,046.72 |
| Net cash flows from operating activities (RMB) | 1,662,482,287.71 | 809,218,720.13 | 809,218,720.13 | 105.44% | 1,688,714,091.75 | 1,688,714,091.75 |
| Basic earnings per share (RMB/share) | 0.13 | 0.23 | 0.24 | -45.83% | 0.44 | 0.44 |
| Diluted earnings per share (RMB/share) | 0.13 | 0.23 | 0.24 | -45.83% | 0.44 | 0.44 |
| Weighted average return on equity | 2.41% | 4.33% | 4.51% | -2.10% | 8.62% | 8.62% |
| December 31, 2022 | December 31, 2021 | YoY change | December 31, 2020 | |||
| Pre-adjustment | Post-adjustment | Post-adjustment | Pre-adjustment | Post-adjustment | ||
| Total assets (RMB) | 29,271,291,859.98 | 28,332,009,628.13 | 28,362,883,652.30 | 3.20% | 30,110,536,990.88 | 30,110,536,990.88 |
| Net assets attributable to the listed company's shareholders (RMB) | 17,288,602,018.09 | 16,903,241,702.09 | 16,927,565,990.33 | 2.13% | 16,920,214,085.42 | 16,920,214,085.42 |
Reasons for changes in accounting policy and corrections of accounting errors
Starting from January 1, 2022, the Company has adopted the provisions on accounting for sales of products or by-productsproduced before the fixed asset is ready for its intended use or during the R&D process, set out in the Interpretation of ChinaAccounting Standards for Business Enterprises No. 15 issued by the MOF, and applied these provisions retrospectively to the salesof trial operation that occurred between the beginning of the earliest period presented in the financial statements and January 1,2022.
The lower of the net profit before and after non-recurring gains and losses is negative for the last three accounting years, andthe latest auditor's report shows there is uncertainty as to the Company's ability to continue as a going concern.?Yes ?NoThe lower of the net profit before and after non-recurring gains and losses is negative.?Yes ?NoVII. Accounting Data Differences Arising from Domestic/Overseas Accounting Standards
1. Differences in net profit and net assets under China Accounting Standards and InternationalAccounting Standards?Applicable ?Not ApplicableNo such differences during the reporting period.
2. Differences in net profit and net assets under China Accounting Standards and Overseas AccountingStandards
?Applicable ?Not ApplicableNo such differences during the reporting period.
VIII. Quarterly Key Financial Indicators
Unit: RMB
| Q1 | Q2 | Q3 | Q4 | |
| Operating revenue | 2,822,730,007.65 | 2,846,011,416.84 | 2,750,321,825.31 | 3,836,929,688.62 |
| Net profit attributable to the listed company's shareholders | 141,498,457.27 | 183,213,831.62 | 198,562,482.06 | -104,480,591.82 |
| Net profit attributable to the listed company's shareholders after non-recurring gains and losses | 119,491,513.27 | 168,617,465.61 | 177,023,669.56 | -140,379,237.26 |
| Net cash flows from operating activities | -533,382,264.09 | 725,338,426.88 | -25,714,879.22 | 1,496,241,004.14 |
Whether the financial indicators above or their sums differ materially from those in the Company's disclosed quarterly and interimreports?Yes ?NoIX. Non-recurring Gains and Losses Items and Amounts
?Applicable ?Not applicable
Unit: RMB
| Item | 2022 | 2021 | 2020 | Note |
| Gain or loss for the disposal of non-current assets (inclusive of provisions to write off impaired assets) | -2,289,681.16 | 6,337,251.97 | -42,036,810.26 | -- |
| Tax rebates, reductions and exemptions granted ultra vires or without official documents of approval | 1,004,379.44 | 3,768,945.18 | 621,422.30 | -- |
| Government subsidies recognized as gain or loss during the reporting period (exclusive of government subsidies given in the Company's ordinary course of business at fixed quotas or amounts as per the government's policies or regulations) | 80,268,041.82 | 55,341,877.03 | 42,047,479.15 | -- |
| Capital collected from non-financial enterprises that was recognized as gain or loss during the reporting period | 1,280,730.46 | 3,173,551.55 | 22,117,071.89 | -- |
| Gain or loss on entrusting other parties with investment or asset management | 19,091,108.25 | 29,170,261.66 | 23,771,715.03 | Income from wealth management products: RMB 19,091,108.25. |
| Gain/loss on debt restructuring | -5,380,200.00 | -- | ||
| Gain or loss arising from changes in fair value of financial assets and financial liabilities held for | -79,222,823.84 | -90,608,285.06 | -- |
| trading as well as the disposal of financial assets and financial liabilities held for trading and financial assets available for sale (exclusive of effective hedges that arise in relation to the Company's ordinary business operations) | ||||
| Operating revenue and expenses other than the above items | 2,164,235.04 | 2,598,028.75 | -7,514,468.68 | -- |
| Other gains and losses that fall into the definition of non-recurring gains and losses | 19,785,940.63 | 172,459,718.81 | 839,195.26 | -- |
| Less: Income tax | 22,153,064.81 | -8,007,245.43 | -8,391,224.21 | -- |
| Minority interest affected (after tax) | -269,278.28 | 5,892,314.48 | 3,371,490.83 | -- |
| Total | 94,040,767.95 | 195,741,742.06 | -45,742,946.99 | -- |
Details on other gains and losses that fall into the definition of non-recurring gain/loss:
?Applicable ?Not applicable
Other gains and losses are primarily gains of RMB 429,102.26 from the refund of personal income tax withholding fees,gains of RMB 17,460,524.12 from the additional deduction of input VAT, gains of RMB 51,896,314.25 from the re-measurementat fair value of the controlling stake in Lianjiang Green Oriental Environmental New Energy Co., Ltd., and losses of RMB50,000,000.00 from the reversal of performance compensation to the original shareholders of Green Oriental Company.Explanation of classification of non-recurring gains and losses listed in the Explanatory Announcement No. 1 on InformationDisclosure by Companies Offering Securities to the Public — Non-recurring Gains and Losses as recurring gains and losses?Applicable ?Not applicable
| Item | Amount Involved (RMB) | Reason |
| Value-added tax rebate | 18,822,951.14 | Regular government subsidies given in the Company's ordinary course of business at fixed quotas or amounts as per the government's policies or regulations |
| Subsidy for sludge disposal | 2,584,059.14 | Regular government subsidies given in the Company's ordinary course of business at fixed quotas or amounts as per the government's policies or regulations |
Part III Management Discussion and AnalysisI. Industry Performance During Reporting Period
1. Overview of the Smart Sanitation Industry
2022 marked the convening of the 20th CPC National Congress and was a crucial year for implementing China's 14
th Five-Year Plan. The CPC Central Committee, State Council, state ministries and commissions issued and refined a range of sanitation-related policies and standards, promoting the industry's marketization. The urban service market maintained robust momentumthanks to the sanitation marketization reform and the "urban steward" model. Driven by policy incentives, demand forenvironmental protection equipment remained high, indicating a positive outlook over the long term. However, the marketexperienced a continued decline from the previous year due to macroeconomic challenges.In 2023, the sanitation market is expected to further expand, as new energy sanitation approaches an economic inflectionpoint. Numerous policies and implementing plans are anticipated to facilitate municipal governments in sanitation, leading to fullmarketization of the sanitation sector. Smart sanitation is an essential item of government spending, as it is closely related topeople's livelihoods. The sector's long-term growth is not entirely connected with short-term economic volatility, and it is tied tolong-term economic trends, policy directives, environmental requirements, and people's living standards.
2. Development Trends
(1) Steady progress in marketization and gradual concentration of industry leaders
The marketization of China's urban service industry refers to municipal governments' gradual withdrawal from the actualmanagement and operation in the sanitation industry and a shift toward an operational model in which the government procuresservices from eligible service providers through open tenders. Under this model, local governments make use of the competitivemarket, exercise special supervision and use other means to effectively boost the service efficiency and quality of urban serviceproviders. The government's ongoing investment and introduction of favorable policies that promote urban environmentaldevelopment have expanded the domestic urban service industry's potential for growth.The marketization of China's domestic sanitation sector will further expand the industry's room for growth in the future.Players in the sanitation industry with competitive advantages such as good connections with the government, capital,management experience, strong brand effects and cost synergy are well positioned to seize the opportunities from the current waveof marketization, to achieve rapid growth. China's urban service industry is set for growth in the future. Increasing marketconcentration is also expected.
(2) Rapid development of IoT and increased adoption of smart sanitation
In addition to having huge growth potential, the sanitation industry has to cope with a wide range of challenges, includingchallenges in operating and supervising a great number of vehicles and equipment, managing numerous and dispersed personnel,managing infrastructure across districts, and monitoring and assessing widely-dispersed operating areas. The industry ischaracterized by numerous practitioners, wide service areas, and massive tasks. To overcome these challenges, it should prioritizeefforts to optimize its service portfolio, such as adopting sanitation facilities powered by IT. In this context, smart sanitation isemerging as a trend in the sanitation management industry. Through the IoT-powered Smart Sanitation Cloud Platform, theCompany monitors sanitation operations in real-time. It is capable of 24/7, all-round, seamless, precise, and efficient operation,maintenance, supervision, and management of service personnel, vehicles, objects, and events. This contributes to a holisticenhancement of urban governance and public services.
(3) New opportunities from environmental protection equipment powered by new energy and smart technologiesAs China advances ecological construction, achieving carbon peak and neutrality has been included in the national plan forecological endeavors. Against this backdrop, new energy-powered sanitation vehicles, an important segment of public servicevehicles, will drive industry growth by enabling low-noise, zero-emissions and effective environmental protection. The increasedadoption of 5G sanitation robots, autonomous sanitation vehicles, and small smart sanitation robots continues to expand thefrontiers of the environmental protection equipment sector, and these fields have a very promising market. The future ofurban/rural services is increasingly steered toward one that is smart, requires less or even no human labor. Small intelligentequipment and autonomous vehicles will present the next breakthrough. As the smart sanitation market expects environmentalprotection equipment to be increasingly intelligent and energy-efficient, companies with more technological achievements andstronger R&D capabilities will gain a bigger market share.
For a detailed analysis on the industry, please refer to Discussion and Analysis on the Future Development of the Company.
II. Principal Business During the Reporting Period
1. Principal activities
Infore Enviro is a leading investor and operator in the urban service industry. With "smart sanitation" at the core of itsbusiness, the Company employs a flexible business model for investment and operation and integrates new energy equipment,autonomous vehicles and other smart environmental protection equipment with a smart platform that is powered by IoT, big dataand advanced industry-specific technologies to improve segmented full cycle dynamic control. The Company provides customerswith integrated IoT applications and a smart platform for operations and services across the full life cycle in areas such as cleaningand disinfection in urban and rural areas, domestic waste sorting, collection, transportation and disposal of solid waste, personnelmanagement, collection and transportation of food waste, supervision of dirt transportation, leachate treatment and smart citydevelopment.In 2022, the Company rapidly enhanced its competitiveness in urban services, topping the industry rankings in terms ofannual increase in contract value. The Company also ranked first in terms of sales of environmental protection equipment for the
ndconsecutive year.
2. Principal products
In terms of intelligent equipment, leveraging its leading position in the environmental protection equipment industry, strongR&D and manufacturing capabilities and a well-established nation-wide sales network, the Company forged a comprehensive suiteof environmental protection equipment of over 400 models, providing customers with a wide range of solutions including a varietyof sanitation and cleaning equipment, waste collection and transportation equipment, and new and clean energy environmentalprotection equipment. The Company's range of products spans from 5G sanitation robots, autonomous sanitation vehicles, smallsmart sanitation robots, new energy-powered environmental protection equipment, waste collection and transportation equipment,separate stations to sanitation and cleaning equipment, showcasing its leading R&D capabilities in intelligent equipment.
Smart Sanitation Cloud Platform is a big data smart cloud platform developed in-house and a pioneering platform in China'ssanitation industry that encompasses the full industrial chain. The platform is worth RMB 180 million, supported by over 20 smartsanitation-related copyrighted software and patents and integrating 5G, AI, big data, cloud computing, edge computing and otheradvanced technologies to form an immersive framework and develop core technologies such as integrated IoT applications, datacommunication, video command and control, safe driving tests, IoT software and hardware compatible technologies and big dataapplications. Through the platform, the Company can monitor all environmental sanitation service personnel, vehicles, objects,and events on a real-time basis. The Company has designed robust sanitation management models to boost operating quality,reduce operating costs, and make sanitation management effective through statistical data and assessments.
At present, the platform is providing intelligent services for more than 70,000 products of customers across China, with over30,000 daily active users. In the future, the Company will continue to apply digital technologies and create innovative intelligentequipment and smart service. Moreover, through in-depth integration into smart city development, it will continuously boostapplication of smart corporate cloud platforms to become a leader and enabler in digital transformation of the environmentalsanitation sector by dint of intelligence.
In terms of smart services, the Company's "Environmental Sanitation APP" enables remote monitoring, data collection andprocedural approval for its line-up of smart equipment and products during operations. Through visualized data and automaticanalysis, 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 approachthroughout the entire sanitation process.
3. Technology accumulation and innovation
(1) Cumulative R&D capabilities
Infore Enviro's R&D team of environmental protection equipment comprises experts from national research institutions,having a powerful innovation DNA. The Company owns 944 patents, including 517 utility patents, 338 utility model patents, and89 design patents. It leads the industry in terms of the number of technical and utility patents. Many national, industry, and localstandards have been made under the direction of Infore Enviro. With provincial research centers, the Company has beenrecognized as a National Intellectual Property Competitive Enterprise and received numerous awards, including the China PatentExcellence Award, China Machinery Industry Science and Technology Award, Hunan Provincial Science and TechnologyProgress Award, and Huaxia Construction Science and Technology Award. It has obtained the first autonomous drive test licensein sanitation. Furthermore, the Company was identified by the Ministry of Industry and Information Technology (MIIT) as aleading enterprise with key tasks in new-generation AI industry innovation, making it a top player in China's AI domain and amember of the "national team" of smart sanitation robot innovators.
During the reporting period, the Company invested RMB 364 million in R&D, a 25.63% increase year-on-year (YoY). In2022, it continued to improve and innovate in product tech, with 231 patent applications, including 102 utility patents, 109 utilitymodel patents, and 20 design patents.
(2) Innovation of cloud platform
Smart Sanitation Cloud Platform is a big data smart cloud platform that was developed in-house by the Company. Byintegrating advanced underlying technologies such as big data, cloud computing, IoT, mobile Internet and AI into the platform, theCompany developed core technologies such as integrated IoT applications, data communication, video command and control, safedriving tests, IoT software and hardware compatible technologies and big data applications. The seamless integration ofenvironmental protection equipment and operations allows the platform to achieve real-time connectivity between urban servicepersonnel, vehicles, objects, and events as well as standardized, digitalized and smart operation and management. In terms ofsmart governance, the Company established a digital operation and management system for plants, stations and equipment on thecloud platform. Through smart and safe operation that requires less labor and energy consumption, the Company strives to developcompetitive advantages with smart governance.
The platform is supported by over 20 smart sanitation-related software copyrights and patents and has won accolades such asthe 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 andTransportation System Based on Image Recognition and CNN Deep Learning Algorithm and 2022 Changsha Torch Plan forIntelligent Vehicle Industry Ecosystem. The platform has provided smart services to over 70,000 products of customers.
(3) Leader in new energy
Pioneering the development of new energy in the sanitation industry, the Company offers the most comprehensive portfolioof new energy products in the industry. Infore Enviro started the research and development of new energy-powered environmentalprotection equipment in 2007 and successfully developed the first pure-electric sweeper truck in China in July 2008. TheCompany was tasked with the cleaning and sanitation of the streets during the 2008 Beijing Olympics. Three decades of sustainedR&D in sanitation vehicles and over a decade of hard work have led Infore Enviro into developing over 40 types of new energyvehicles for cleaning, washing, waste collection and urban sanitation. Its nearly 200 vehicle models form the most comprehensivesuite of new energy-powered sanitation vehicles in China.
During the reporting period, the Company launched its fifth generation of new energy-powered environmental protectionequipment, as the industry's most comprehensive range of products, including over 100 varieties that cover road sweeping andwashing, garbage transportation, urban landscape, solar power cleaning, and mobile charging. Additionally, it unveiled theindustry's first domain controller platform to fully integrate the chassis-control system of the chassis and upper installation, withplatformized hardware, integrated software, modular functionality and scene-based products. The Company has reduced systemcosts by 9% while increasing system performance by 15%, leading the innovative development of new energy sanitation. Thishelps customers cut lower purchasing and operating costs.
(4) Pioneer in smart sanitation robots
The Company has independently developed over 10 models of smart sanitation robots (both basic and 5G smart models areavailable) and offers the most comprehensive suite of cutting-edge smart sanitation robots in the market. The entire series ofproducts are integrated with core technologies such as green new energy, 5G+AIOT cluster control, AI, machine vision, and 360-degree image recognition and are equipped with sensors such as laser radar, ultrasonic radar, high precision differential GPS, 360-degree cameras, allowing for smart robotic operations and smart navigation as well as paving the way for a more diverseoperational capacity in a wide range of locations and scenarios. The Company's first "5G Cloud + Sanitation Robot" is a smartremote cluster model of operation that redefines how sanitation is carried out. By raising the standards of digitalization andefficiency in the industry drastically and reducing safety risks to sanitation personnel as well as labor costs, the new model ofoperation presents clear social benefits for the community and economy.
The Company's 5G smart sanitation robot crew has been deployed in Shenzhen, Changsha and Suzhou. The crew has becomea new benchmark for smart urban sanitation and has been repeatedly recognized by government agencies and other associations asa model for technological innovation that breathes new life into the traditional sanitation industry with AI. The 5G smart sanitationrobot crew digitalizes and informatizes urban sanitation, raises the capabilities for and standards of informatization in thesanitation industry and improves the standards of sophisticated management of urban public services, creating a better livingenvironment for the people.
Other businesses of the Company primarily include environmental monitoring, solid waste treatment, and ventilatorequipment manufacturing.
The Company's environmental monitoring business covers the monitoring of smoke, air quality, haze, water quality, waterconservation, soil and dust and the provision of an integrated one-stop service for environmental protection, water conservation,water supply and smart cities. The sales of products form the main part of the business and are supplemented by the provision ofservices 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 wastedisposal, 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 manufacturing of ventilation equipment extends mainly to the production of ventilators, mufflers, dampers,refrigerators, magnetic levitation fans, blowers and nuclear-grade dampers in the areas of nuclear power, subways, tunnels, railtransportation, industrial and civil construction. Its fans are mainly sold via direct sales and retailers.
III. Analysis of Core Competitiveness
1. Industry leader in sanitation equipment
As a leader in China's environmental protection equipment sector, the Company has state-of-the-art core technologies andoffers the most comprehensive range of environmental protection equipment in the industry. In terms of R&D, the Company hasmastered industry-leading technologies in new energy-powered environmental protection equipment, intelligent robots ofenvironmental sanitation and autonomous environmental sanitation vehicles, and obtained the first drive test license inenvironmental sanitation from the government. The Company developed the world's first smart sanitation robot crew andsuccessfully deployed the crew in Orange Isle, a 5A-level national scenic spot in Changsha City, Hunan Province. The Company's5G autonomous sanitation robot crew has also been deployed in the college town in Changsha. The Company has developed acomprehensive suite of environmental protection equipment that spans over 400 models and allows the Company to meet thediverse sanitation demands across the country. The Company has ranked first in sales in the domestic market for 22 consecutiveyears. As one of the pioneers in environmental protection equipment, the Company developed the first wet and dry vacuumsweeper truck, the first fully hydraulic mini road sweeper, the first tunnel road washer, the first pure-electric road sweeper and thefirst natural gas-powered road washer in China. The Company has extensive and proven experience in the environmentalsanitation 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+smartoperation+standardized service". With its new operational model, the Company aims for the centralized management of servicesand planning, visual monitoring of the entire process of sanitation, swift response to emergencies and a closed-loop management.With smart analysis performed on all data and improvements to management and controls that are based on evidence and rigorousscience, the Company strives to standardize services, refine sanitation management by virtue of smart technologies, grow businessrapidly, build key competitive advantages, and lead in the new era of smart sanitation.
From 2016 to 2022, the Company recorded a contract value of RMB 1.237 billion, RMB 5.561 billion, RMB 8.711 billion,RMB 9.72 billion, RMB 12.574 billion, RMB 8.435 billion, and RMB 9.251 billion, respectively and an annual service contractvalue of RMB 55 million, RMB 305 million, RMB 429 million, RMB 855 million, RMB 1.248 billion, RMB 1.228 billion, andRMB 1.819 billion, respectively for urban services, representing annual growth by 454.54%, 40.66%, 99.3%, 45.96%, -1.6%, and
48.13% respectively.
3. All-round, 24/7, and whole-process after-sales service
After-sales service is a critical touchpoint for companies to connect with customers, and high-quality after-sales service is acompany's core competitive edge. Based on product lifecycle management, the Company launched a "Speedy Service" Programthat follows the "1314" service standards—responding to customers within 15 minutes; departing within 30 minutes and arriving atmaterial service areas within 2 hours; addressing general faults within 1 day and material faults within 3 days; offering freeservices four times each quarter. For this service program, the Company has deployed resources, including one platform, 300service 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 keycompetitive advantages. With the corporate mission of "Cleaner World, Better Future", the company sticks to the corporatephilosophy of "simple and professional with quick execution" and the core values of "Our clients are vital to us; our employees areour partners in our endeavors; we aim to be achievement-oriented - competence beats mediocrity; and technology innovation is thebasis for our development." We adopt the development strategy with leading technology at the center, being order-driven as themeans, and motivating talent as the basis, and are committed to becoming a respected and trusted leader in providing intelligentenvironmental equipment and services with environmental sanitation robotics at its core. After years of efforts, the Company hasdeeply incorporated the core elements of its corporate culture into operating targets and routine affairs. These principles haveguided 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 thecorporate culture and shares the same management philosophy. Each member of the team complements the others' strengths andhas clearly defined responsibilities. As a whole, the team is united and possesses strong executive abilities. With abundant industryexperience and forward-looking vision, the team identifies industry trends with precision and speed and seizes marketopportunities promptly. For many years, the Company has promoted stock incentives and employee stock ownership as well as setup team management frameworks for cornerstone partnerships, senior partnerships and general partnerships, gathering a group ofpassionate trailblazers who share the Company's values, building a community for key employees in the Company and propellingthe Company towards stable, healthy and long-term growth.
IV. Analysis of Principal Business
1. Overview
Infore Enviro faced severe external challenges in 2022 amidst the macroeconomic situation. Despite that, the Companyremained committed to its development strategies and annual business plan, with a strong emphasis on its core "5115" strategy. Itsignificantly improved its internal operations by strengthening its key teams and intensifying technological innovation and productresearch and development. As a result, the Company maintained its position as an industry leader in smart sanitation based on itsestablished R&D advantages in environmental protection equipment.
In 2022, the Company generated RMB 418,794,200 in net profit attributable to the listed company's shareholders and RMB12,255,992,900 in operating revenue. As at the end of the reporting period, the Company reported RMB 29,271,291,900 in total
assets and RMB 17,288,602,000 in net assets attributable to the listed company's shareholders. During the reporting period, theCompany registered rapid growth in urban services while maintaining its leadership in the environmental protection equipmentsector.
1. Ranked first for annual increase in contract value of urban services in 2022
According to Huanjing Sinan, Infore Enviro signed 88 sanitation projects across 21 Chinese provinces in 2022. These newcontracts have a cumulative value of RMB 9.251 billion and an annual value of RMB 1.819 billion, the highest in the industry.The Company's operating revenue in urban services increased by 37.45% YoY to RMB 4.158 billion in 2022. As at the end of thereporting period, Infore Enviro was running 233 urban service projects. These contracts have an annual value of RMB 5.525billion and a cumulative value of RMB 54.165 billion. The Company's executory contracts total RMB 42.712 billion, ranking thirdin the industry. The Company performed well in terms of sustainable operation.
2. Ranked first in terms of sales of environmental protection equipment in 2022
According to the motor vehicle accident liability compulsory insurance data released by the China Banking and InsuranceRegulatory Commission, the Company sold 13,743 pieces of environmental protection equipment in 2022. The sales generatedrevenue of RMB 6.084 billion, ranking first in the industry for the 22
nd
consecutive year.
3. Ranked first in terms of sales of new energy-powered environmental protection equipment in 2022
In 2022, the Company sold 1,369 pure-electric sanitation vehicles, representing a market share of 29.3%, the highest amongall players in the industry. During the reporting period, the Company continued to expand its new energy-powered productportfolio, with solar power road washers and mobile charging vehicles to be launched. The new offerings are expected to bringnew opportunities and enhance the Company's competitiveness.
4. Improvement of quality and efficiency and continuous optimization of net cash generated from operating activities
With the key task of "achieving high-quality development", centering on production and operation links, the Companyexplored multiple methods for improving its asset operation capabilities to reduce existing assets and control incremental assets. Itabandoned high-risk orders, strengthened the mechanism for classification and responsibility regarding contract risks, enhancedreflow of corporate sales income, and accelerated operation turnover efficiency to improve cash flows from operating activities.As at the end of the reporting period of 2022, the Company recorded RMB 1,662,482,300 in cash flows from operating activities,up 105.44% from a year earlier. Increase in net cash generated from the operating activities of the Company led to theimprovement of operation quality ultimately. The Company improved quality and efficiency and supported its high-qualitysustainable development.
5. Digital transformation and the setup of a highly efficient operating system
Digitalization is a core transformation strategy of the Company. In 2022, Infore Enviro continued to digitalize value chains toempower business operations. By expanding online coverage and enhancing standardization and information technology, theCompany strengthened its business management capabilities and created new momentum for growth. During the reporting period,the Company completed the first phase of its IBS168 Digitalization Strategy, achieving the digitalization of all scenarios andbusiness processes across value chains using one system and platform under Infore Enviro. Fruitful results have beenaccomplished in smart environmental protection product R&D and delivery.
6. High cash dividends for shareholders
Valuing investor return, the Company has been implementing an active profit distribution policy. It has paid high cashdividends for many years in a row as return for its shareholders. According to the 2022 profit distribution plan (proposed)approved at the second meeting of the tenth Board of Directors, a cash dividend of RMB 1.10 (tax inclusive) per 10 shares will bedistributed to the shareholders, based on the total share capital (minus shares in the Company's repurchase account) on the date ofrecord for the plan. A total cash dividend of around RMB 348 million (tax included) is estimated to be distributed. As the proposedplan is awaiting the approval of the general meeting of shareholders, the actual dividend amount will be disclosed in theCompany's announcement. The amount accounts for 83.18% of the net profit attributable to the listed company's shareholders in2022.
In the past three years (2020–2022), the Company has paid RMB 1.033 billion in cash dividends, accounting for 26.87%,
41.45%, and 83.18% of the net profit attributable to the listed company's shareholders, respectively.
7. Active fulfillment of social responsibility as part of its corporate responsibility
In 2022, while seeking business growth, the Company fulfilled its social responsibility as it got involved in povertyalleviation and disaster relief efforts.The Company made targeted donations to the communities and towns in Guangning County of Zhaoqing City, Red Cross andSihekou Village of Xiantao City, Longhua District of Shenzhen City, and Zaoshi Town and Weixin Town of Shimen County,supporting families in need. It also purchased agricultural products from local poor households as part of its assistance program.These efforts were widely recognized by local public-interest organizations. To help with disaster relief, the Company promptlydispatched environmental protection vehicles to ensure smooth traffic flow during heavy snowfalls in some regions of China. InFebruary, when Beijing suffered heavy snowfalls, the Company sent out snow removal equipment for high-speed snow sweepingand pushing, solids spreading, and pre-wet spreading on the turns, steep slopes, and pedestrian paths in the Winter Olympics area,guaranteeing the smooth flow of the main roads of Yanqing District and the driveways for Winter Olympics. In response to theheavy snowfalls in Changsha and Xiangtan, a branch of Infore Enviro in Xiangtan promptly sent a snow and ice removal taskforce equipped with 241 vehicles. The team worked overnight, and as a result, bridges, roads, and pedestrian paths were reopenedby the next morning, ensuring safe traffic flow.
2. Revenue and cost
(1) Breakdown of operating revenue
Unit: RMB
| 2022 | 2021 | YoY change | |||
| Amount | As a percentage of operating revenue | Amount | As a percentage of operating revenue | ||
| Total revenue | 12,255,992,938.42 | 100% | 11,866,291,611.45 | 100% | 3.28% |
| Sector | |||||
| Smart sanitation | 10,242,746,845.77 | 83.57% | 9,237,262,348.48 | 77.84% | 10.89% |
| Others | 2,013,246,092.65 | 16.43% | 2,629,029,262.97 | 22.16% | -23.42% |
| Product | |||||
| Intelligent equipment | 6,084,414,800.17 | 49.64% | 6,211,980,162.80 | 52.35% | -2.05% |
| Smart service | 4,158,332,045.60 | 33.93% | 3,025,282,185.68 | 25.49% | 37.45% |
| Others | 2,013,246,092.65 | 16.43% | 2,629,029,262.97 | 22.16% | -23.42% |
| Region | |||||
| Domestic | 12,237,181,369.71 | 99.85% | 11,823,457,237.71 | 99.64% | 3.50% |
| Overseas | 18,811,568.71 | 0.15% | 42,834,373.74 | 0.36% | -56.08% |
| Wholesale | |||||
| Direct sales | 10,735,356,968.50 | 87.59% | 10,484,616,229.37 | 88.36% | 2.39% |
| Retail | 1,520,635,969.92 | 12.41% | 1,381,675,382.08 | 11.64% | 10.06% |
(2) Sectors, products, regions or sales models accounting for over 10% of operating revenue or profit?Applicable ?Not applicable
Unit: RMB
| Operating revenue | Operating cost | Gross profit margin | YoY change in operating revenue | YoY change in operating costs | YoY change in gross profit margin | |
| Sector | ||||||
| Smart sanitation | 10,242,746,845.77 | 8,023,297,059.91 | 21.67% | 10.89% | 10.58% | 0.22% |
| Others | 2,013,246,092.65 | 1,446,213,771.36 | 28.17% | -23.42% | -26.83% | 3.35% |
| Product | ||||||
| Intelligent equipment | 6,084,414,800.17 | 4,507,247,164.35 | 25.92% | -2.05% | -4.86% | 2.18% |
| Smart service | 4,158,332,045.60 | 3,516,049,895.56 | 15.45% | 37.45% | 39.61% | -1.30% |
| Others | 2,013,246,092.65 | 1,446,213,771.36 | 28.17% | -23.42% | -26.83% | 3.35% |
| Region | ||||||
| Domestic | 12,237,181,369.71 | 9,453,598,848.51 | 22.75% | 3.50% | 2.79% | 0.53% |
| Overseas | 18,811,568.71 | 15,911,982.76 | 15.41% | -56.08% | -55.04% | -1.97% |
| Wholesale | ||||||
| Direct sales | 10,735,356,968.50 | 8,286,953,862.97 | 22.81% | 2.39% | 1.68% | 0.55% |
| Retail | 1,520,635,969.92 | 1,182,556,968.30 | 22.23% | 10.06% | 9.31% | 0.53% |
The Company's main business data for the year was adjusted to take into account revised statistical standards that were updatedduring the reporting period?Applicable ?Not Applicable
(3) Whether revenue from goods sales higher than revenue from rendering services
?Yes ?No
| Sector | Item | Unit | 2022 | 2021 | YoY change |
| Intelligent sanitation | Sales | Unit | 17,674 | 18,689 | -5.43% |
| Production | Unit | 16,221 | 19,654 | -17.47% | |
| Inventory | Unit | 1,634 | 3,087 | -47.07% |
Explanation of data with YoY differences that exceed 30%?Applicable ?Not applicableInventory decreased by 47.07% compared to the end of the previous year, mainly due to the Company's enhanced inventorymanagement. Production reserve plans were based on sales plans to determine reasonable inventory mix and quantity.
(4) Fulfillment of material sales/procurement contracts signed during the reporting period?Applicable ?Not Applicable
(5) Breakdown of operating costs
Sector
Unit: RMB
| Sector | Item | 2022 | 2021 | YoY change | ||
| Amount | As a percentage of operating cost | Amount | As a percentage of operating cost | |||
| Smart sanitation | Raw materials | 4,021,886,417.92 | 50.13% | 4,554,862,117.93 | 62.77% | -11.70% |
| Smart sanitation | Labor expense | 1,056,998,188.36 | 13.17% | 760,855,544.92 | 10.49% | 38.92% |
| Smart sanitation | Depreciation | 423,631,356.77 | 5.28% | 340,775,770.93 | 4.70% | 24.31% |
| Smart sanitation | Utilities | 463,060,371.23 | 5.77% | 412,552,873.06 | 5.69% | 12.24% |
| Smart sanitation | Other manufacturing overhead | 2,057,720,725.63 | 25.65% | 1,186,613,371.99 | 16.35% | 73.41% |
| Others | Raw materials | 729,321,140.14 | 50.43% | 1,225,476,817.59 | 62.00% | -40.49% |
| Others | Labor expense | 97,064,385.84 | 6.71% | 106,315,926.43 | 5.38% | -8.70% |
| Others | Depreciation | 140,507,354.03 | 9.72% | 74,885,542.04 | 3.79% | 87.63% |
| Others | Utilities | 26,661,871.00 | 1.84% | 24,877,256.71 | 1.26% | 7.17% |
| Others | Other manufacturing overhead | 452,659,020.35 | 31.30% | 544,983,347.57 | 27.57% | -16.94% |
Note
Labor costs, depreciation, utilities and other manufacturing overhead in smart sanitation rose significantly on a YoY basis.This is primarily the result of increased revenue from smart services during the period, leading to a corresponding increase in costsof supporting facilities, labor and outsourced labor, as well as costs of construction and services for PPP projects.The costs of raw materials of other business and other manufacturing overhead dropped significantly on a YoY basis, mainlydue to the electromagnetic wire business in January and February 2021. Depreciation climbed notably YoY, primarily reflectingthe operations of several newly built power plants.
(6) Changes in the scope of consolidated financial statements for the reporting period
?Yes ?No
1. Business combination not involving enterprises under common control
| Acquiree | Date of acquisition | Equity acquisition cost (RMB) | Shareholding ratio (%) | Equity acquisition |
| Zhejiang Yolsh Electric Drive Technology Co., Ltd. | April 30, 2022 | 50,000,002.00 | 70 | Business combination not under common control |
| Lianjiang Greenlander New Energy Co., Ltd. | September 17, 2019 | 43,750,000.00 | 35 | Business combination not under common control |
| February 28, 2022 | 120,000,000.00 | 50 |
2. Other business combinations
| Company name | Mode of acquisition | Date of | Capital contribution | Shareholding ratio |
| acquisition | (RMB) | (%) | ||
| Shaodong Tongying Environmental Sanitation Management Co., Ltd. | Incorporation | January 7, 2022 | 283,200.00 | 100.00 |
| Xiangyin County Yingsheng Environmental Protection Co., Ltd. | Incorporation | January 24, 2022 | 500,000.00 | 100.00 |
| Shengzhou Yinglia Environmental Sanitation Management Co., Ltd. | Incorporation | January 19, 2022 | 100,000.00 | 100.00 |
| Guilin Yingsheng Environmental Sanitation Management Co., Ltd. | Incorporation | January 28, 2022 | [Note] | 100.00 |
| Guiyang Yinglian Environmental Equipment Co., Ltd. | Incorporation | February 11, 2022 | [Note] | 100.00 |
| Taicang Zhongying Environmental Technology Co., Ltd. | Incorporation | February 21, 2022 | [Note] | 100.00 |
| Baoding Yinghe Environmental Sanitation Management Co., Ltd. | Incorporation | February 28, 2022 | 500,000.00 | 100.00 |
| Wenshui County Yingsheng Environmental Sanitation Service Co., Ltd. | Incorporation | February 16, 2022 | 500,000.00 | 100.00 |
| Maoming Yinghe Urban Environmental Sanitation Service Co., Ltd. | Incorporation | January 4, 2022 | 7,000,000.00 | 100.00 |
| Wushan County Tongying Environmental Sanitation Service Co., Ltd. | Incorporation | February 14, 2022 | 500,000.00 | 100.00 |
| Harbin Tongying Environmental Sanitation Management Co., Ltd. | Incorporation | March 23, 2022 | 200,000.00 | 100.00 |
| Pengshui County Yingchuang Environmental Sanitation Service Co., Ltd. | Incorporation | March 11, 2022 | 500,000.00 | 100.00 |
| Bengbu Tongying Environmental Sanitation Management Co., Ltd. | Incorporation | January 29, 2022 | 200,000.00 | 100.00 |
| Daye Tongying Environmental Service Co., Ltd. | Incorporation | April 11, 2022 | 100,000.00 | 100.00 |
| Urumqi Lianying Urban Environmental Service Co., Ltd. | Incorporation | June 2, 2022 | 2,000,000.00 | 100.00 |
| Baoting Tongying Environmental Sanitation Service Co., Ltd. | Incorporation | June 8, 2022 | 100,000.00 | 100.00 |
| Zhaoqing Duanzhou District Zhongying Urban Environmental Management Co., Ltd. | Incorporation | May 25, 2022 | [Note] | 100.00 |
| Zhanjiang Development Zone Zhongying Urban Environmental Service Co., Ltd. | Incorporation | June 10, 2022 | 1,000,000.00 | 100.00 |
| Shaoxing Lianbao Environmental Sanitation Management Co., Ltd. | Incorporation | May 27, 2022 | 100,000.00 | 100.00 |
| Xingguo County Yinghe Environmental Sanitation Management Co., Ltd. | Incorporation | June 9, 2022 | 300,000.00 | 100.00 |
| Huaibei Tongying Environmental Sanitation Management Co., Ltd. | Incorporation | April 12, 2022 | 33,000,000.00 | 100.00 |
| Yongzhou Lingling District Tongying Environmental Sanitation Service Co., Ltd. | Incorporation | June 21, 2022 | [Note] | 100.00 |
| Shaoyang Tongying Environmental Sanitation Service Co., Ltd. | Incorporation | May 10, 2022 | 100,000.00 | 100.00 |
| Jianli Yinglian Environmental Sanitation Management Co., Ltd. | Incorporation | April 29, 2022 | 100,000.00 | 100.00 |
| Suzhou Gusu District Zhongying Environmental Industry Co., Ltd. | Incorporation | June 9, 2022 | [Note] | 100.00 |
| Guangzhou Zengcheng District Yinghe Urban Environmental Service Co., Ltd. | Incorporation | May 24, 2022 | [Note] | 100.00 |
| Baishan Yingyuan Environmental Service Engineering Co., Ltd. | Incorporation | June 9, 2022 | 200,000.00 | 100.00 |
| Shenzhen Longhua District Yinglian Urban Service Co., Ltd. | Incorporation | July 5, 2022 | 3,000,000.00 | 100.00 |
| Guzhang County Yinglian Environmental Sanitation Management Co., Ltd. | Incorporation | June 28, 2022 | 7,200,000.00 | 100.00 |
| Changshu Zhongying Environmental Sanitation Service Co., Ltd. | Incorporation | April 26, 2022 | [Note] | 100.00 |
| Suining Anju Yinglian Environmental Sanitation Service Co., Ltd. | Incorporation | July 7, 2022 | 200,000.00 | 100.00 |
| Jieyang Yingdong Urban Environmental | Incorporation | July 7, 2022 | [Note] | 100.00 |
| Management Co., Ltd. | ||||
| Tongdao Yinglian Jiamei Environmental Industry Co., Ltd. | Incorporation | July 5, 2022 | 2,652,000.00 | 51.00 |
| Heyang Yinglian Urban Environmental Service Co., Ltd. | Incorporation | July 19, 2022 | 1,000,000.00 | 100.00 |
| Ninghai County Tongying Environmental Sanitation Management Co., Ltd. | Incorporation | August 10, 2022 | 100,000.00 | 100.00 |
| Zhanjiang Potou District Yingsheng Environmental Sanitation Management Co., Ltd. | Incorporation | August 24, 2022 | [Note] | 100.00 |
| Liaoyang Yinglian Urban Environmental Sanitation Management Co., Ltd. | Incorporation | August 10, 2022 | 3,000,000.00 | 100.00 |
| Linqing Yinglian Urban Environmental Service Co., Ltd. | Incorporation | August 3, 2022 | 1,000,000.00 | 100.00 |
| Zhanjiang Xiashan District Yinghe Urban Environmental Management Co., Ltd. | Incorporation | August 8, 2022 | [Note] | 100.00 |
| Haicheng Zhongying Environmental Sanitation Management Co., Ltd. | Incorporation | September 8, 2022 | 8,000,000.00 | 100.00 |
| Foshan Shunde District Yingjia Urban Environmental Service Co., Ltd. | Incorporation | September 5, 2022 | 1,680,000.00 | 70.00 |
| Xiamen Yingsheng Environmental Service Co., Ltd. | Incorporation | September 8, 2022 | 500,000.00 | 100.00 |
| Nanfeng Yingniang Environmental Sanitation Management Co., Ltd. | Incorporation | September 15, 2022 | 255,000.00 | 51.00 |
| Tengchong Yinglian Environmental Protection Technology Co., Ltd. | Incorporation | September 22, 2022 | 200,000.00 | 100.00 |
| Chuzhou Yingsheng Environmental Sanitation Management Co., Ltd. | Incorporation | October 20, 2022 | 500,000.00 | 100.00 |
| Fuyang Yingsheng Environmental Sanitation Management Co., Ltd. | Incorporation | October 14, 2022 | 300,000.00 | 100.00 |
| Changsha Zhiying Environmental Sanitation Management Co., Ltd. | Incorporation | October 9, 2022 | 300,000.00 | 60.00 |
| Foshan Shunde District Yingzhi Smart City Environmental Service Co., Ltd. | Incorporation | December 14, 2022 | [Note] | 100.00 |
| Pingdingshan Yingsheng Environmental Sanitation Management Co., Ltd. | Incorporation | November 10, 2022 | [Note] | 100.00 |
| Chenzhou Zhongying Environmental Service Co., Ltd. | Incorporation | November 21, 2022 | 600,000.00 | 100.00 |
| Zhenfeng Yinglian Environmental Sanitation Management Co., Ltd. | Incorporation | December 6, 2022 | [Note] | 100.00 |
| Linfen Yaodu District Yingsheng Environmental Sanitation Management Co., Ltd. | Incorporation | December 12, 2022 | [Note] | 100.00 |
| Fuyang Zhiying Environmental Sanitation Management Co., Ltd. | Incorporation | November 24, 2022 | 300,000.00 | 100.00 |
| Chengdu Yinggang Urban Environmental Sanitation Service Co., Ltd. | Incorporation | December 7, 2022 | [Note] | 100.00 |
| Foshan Shunde District Yingteng Smart City Environmental Service Co., Ltd. | Incorporation | December 9, 2022 | 1,500,000.00 | 100.00 |
| Qingyang County Yinghe Environmental Sanitation Management Co., Ltd. | Incorporation | November 30, 2022 | [Note] | 100.00 |
| Changsha Fenglan Environmental Protection Technology Co., Ltd. | Incorporation | January 26, 2022 | [Note] | 100.00 |
| Changsha Infore Environmental Industry Co., Ltd. | Incorporation | January 6, 2022 | [Note] | 100.00 |
| Hubei Fenghe New Materials Co., Ltd. | Incorporation | September 26, 2022 | [Note] | 100.00 |
| Heyang Zhongying Environmental Sanitation Management Co., Ltd. | Incorporation | September 19, 2022 | [Note] | 100.00 |
| Lanling County Lianying Environmental Sanitation Service Co., Ltd. | Incorporation | November 4, 2022 | 1,000,000.00 | 100.00 |
| Pingdingshan Yinghe Environmental Sanitation Management Co., Ltd. | Incorporation | November 30, 2022 | [Note] | 100.00 |
| Shenzhen Infore City Service Intelligent Technology Co., Ltd. | Incorporation | March 25, 2022 | [Note] | 100.00 |
| Guangdong Infore Mobile Charging Technology Co., Ltd. | Incorporation | January 12, 2022 | [Note] | 100.00 |
| Guangdong Infore Intelligent Cleaning Technology Co., Ltd. | Incorporation | August 12, 2022 | 200,000.00 | 100.00 |
| Changfeng County Yinghe Environmental Sanitation Management Co., Ltd. | Incorporation | December 16, 2022 | [Note] | 100.00 |
Note: As at December 31, 2022, these companies' registered capitals have not been contributed.
3. Entities excluded from the consolidation scope
| Company name | Mode of equity disposal | Date of equity disposal |
| Zoomlion Heavy (Ningxia) Environmental Industry Co., Ltd. | De-registration | March 14, 2022 |
| Guangdong Yinglian Urban Environmental Management Co., Ltd. | De-registration | June 15, 2022 |
| Dali County Zoomlion Environmental Industry Co., Ltd. | De-registration | June 17, 2022 |
| Kunming Zhongfeng Environmental Sanitation Equipment Co., Ltd. | De-registration | July 26, 2022 |
| Changsha Fenglan Environmental Protection Technology Co., Ltd. | De-registration | July 25, 2022 |
| Foshan Yinghe Investment Co., Ltd | De-registration | November 18, 2022 |
(7) Material changes in the business, products or services during the reporting period
?Applicable ?Not Applicable
(8) Major customers and suppliers
Major customers of the Company
| Total sales to top five customers (RMB) | 534,551,857.64 |
| Total sales to top five customers as a percentage of annual total sales | 4.36% |
| Total sales to related parties among top five customers as a percentage of annual total sales | 0.74% |
Top five customers
| No. | Customer | Sales revenue (RMB) | As a percentage of annual total sales |
| 1 | Customer A | 128,261,956.19 | 1.05% |
| 2 | Customer B | 118,007,524.43 | 0.96% |
| 3 | Customer C | 108,597,119.74 | 0.89% |
| 4 | Customer D | 90,942,152.84 | 0.74% |
| 5 | Customer E | 88,743,104.44 | 0.72% |
| Total | -- | 534,551,857.64 | 4.36% |
Other information about major customers?Applicable ?Not ApplicableMajor suppliers of the Company
| Total purchases from top five suppliers (RMB) | 1,755,553,263.19 |
| Total purchases from top five suppliers as a percentage of annual total purchases | 23.96% |
| Total purchases from related parties among top five suppliers as | 0.00% |
a percentage of annual total purchases
Top five suppliers
| No. | Supplier | Purchase during the reporting period (RMB) | As a percentage of total purchases |
| 1 | Customer A | 1,112,860,451.33 | 15.19% |
| 2 | Customer B | 190,826,777.88 | 2.60% |
| 3 | Customer C | 175,161,894.72 | 2.39% |
| 4 | Customer D | 144,298,134.51 | 1.97% |
| 5 | Customer E | 132,406,004.75 | 1.81% |
| Total | -- | 1,755,553,263.19 | 23.96% |
Other information about major suppliers?Applicable ?Not Applicable
3. Expenses
Unit: RMB
| 2022 | 2021 | YoY change | Reason for material change | |
| Selling expenses | 762,970,847.95 | 738,833,571.05 | 3.27% | -- |
| Administrative expenses | 609,601,680.23 | 585,353,407.57 | 4.14% | -- |
| Financial Expenses | 101,839,423.91 | 58,604,804.53 | 73.77% | Mainly due to increase in interest expense and decrease in financing income |
| R&D expenses | 340,775,707.34 | 262,619,127.29 | 29.76% | Mainly due to further increase in R&D investments |
4. R&D investments
?Applicable ?Not applicable
| Name of major R&D projects | Objectives | Progress | Proposed goals | Expected impact on future development of the Company |
| Research and Application of Online Monitoring Technology for Comprehensive Toxicity of Water Quality | To develop new products to expand the biological indicator product portfolio, used for automatic online monitoring of the biological toxicity of surface water and certain polluted source water. | Mass-produced and launched on the market | To develop an online monitoring instrument to monitor the biological toxicity of water quality | It is conducive to the Company's continuous advancement towards high-tech innovative enterprises and breakthroughs in technical difficulties. |
| Ambient Air Automatic Online Monitoring Series Products | To expand the range of scientific instruments, enabling online monitoring of various VOCs in ambient air | R&D completed | To develop a set of online monitoring systems capable of monitoring 116 VOCs in all workplaces with | It is conducive to the Company's continuous advancement towards high-tech innovative enterprises and |
| VOCs emissions | breakthroughs in technical difficulties. | |||
| Third-generation Leakage-free Compression Garbage Truck | To solve the small capacity and airtightness challenge of leakage-free garbage trucks' trash containers | R&D completed | To develop a wet garbage collection and compression truck with full airtightness, no leakage, and large loading capacity | It is conducive to the Company's continuous advancement towards high-tech innovative enterprises and breakthroughs in technical difficulties. |
| 18-ton Pure-Electric Dual-fan Road Cleaners | To further reduce the energy consumption and noise of the existing model | R&D completed | To reduce the operational noise and energy consumption of the existing model | It is conducive to the Company's continuous advancement towards high-tech innovative enterprises and breakthroughs in technical difficulties. |
| 18-ton Front Collection Green Hedge Trimmer | To expand the product range for landscape maintenance, such as the trimming of green belts on highways and urban roads as well as the pruning of high branches on roadside | R&D completed | To develop a landscape trimming vehicle with a front arm and the feature of switching between tools quickly | It is conducive to the Company's continuous advancement towards high-tech innovative enterprises and breakthroughs in technical difficulties. |
| Nuclear-grade Centrifugal Roof Fan | To explore and expand the segment | Under R&D | To industrialize the result and generate market orders | This helps to improve the key competitive advantages of the Company |
| Low-noise Mist Gun Fan | To explore and expand the segment | R&D completed | To industrialize the result and generate market orders | This helps to improve the key competitive advantages of the Company |
| Large-scale urban transportation smart purification system | To explore and expand the segment | R&D completed | To industrialize the result and generate market orders | This helps to improve the key competitive advantages of the Company |
| Economic Garbage Transfer Vehicle | To meet the market demand for garbage collection and transportation equipment | Under R&D | To develop a small product for garbage transfers | It is conducive to the Company's continuous advancement towards high-tech innovative enterprises and breakthroughs in technical difficulties. |
| Economic Integrated Road Sweeper | To meet the market demand for auxiliary road garbage cleaning equipment | R&D completed | To develop an integrated road sweeper | It is conducive to the Company's continuous advancement towards high-tech innovative enterprises and breakthroughs in technical difficulties. |
| Electric Road Cleaner | To meet the market demand for road cleaning products | Under R&D | To develop a pure-electric cleaning machine | It is conducive to the Company's continuous advancement towards high-tech innovative enterprises and breakthroughs in technical difficulties. |
| Economic Roller Road Sweeper | To develop a road sweeper suitable for semi-enclosed scenes | R&D completed | To develop a road sweeper suitable for semi-enclosed scenes | It is conducive to the Company's continuous advancement towards high-tech innovative enterprises and breakthroughs in technical difficulties. |
Information about R&D personnel
| 2022 | 2021 | Change | |
| Number of R&D personnel | 1,415 | 1,407 | 0.57% |
| R&D personnel as a percentage of total staff | 8.23% | 10.53% | -2.30% |
| Education background of R&D personnel | |||
| Bachelor's degree | 995 | 1,064 | -6.48% |
| Master's degree | 374 | 303 | 23.43% |
| Doctoral degree | 12 | 6 | 100.00% |
| College degree | 34 | 34 | 0.00% |
| Age composition of R&D personnel | |||
| < 30 years | 662 | 647 | -3.86% |
| 30~40 years | 641 | 596 | 7.55% |
| > 40 years | 112 | 114 | 33.33% |
Information about R&D investments
| 2022 | 2021 | Change | |
| R&D investments (RMB) | 364,237,563.22 | 289,920,069.26 | 25.63% |
| R&D investments as a percentage of operating revenue | 2.97% | 2.44% | 0.53% |
| Capitalized R&D investments (RMB) | 23,461,855.88 | 27,300,941.97 | -14.06% |
| Capitalized R&D investments as a percentage of total R&D investments | 6.44% | 9.42% | -2.98% |
Reasons and impacts of material change in R&D personnel composition?Applicable ?Not ApplicableReasons for significant YoY change in total R&D investments as a percentage of operating revenue?Applicable ?Not ApplicableReasons and rationale for significant change in capitalization rate of R&D investment?Applicable ?Not Applicable
5. Cash flow
Unit: RMB
| Item | 2022 | 2021 | YoY change |
| Subtotal of cash inflows from operating activities | 14,255,237,258.75 | 14,872,489,012.69 | -4.15% |
| Subtotal of cash outflows from operating activities | 12,592,754,971.04 | 14,063,270,292.56 | -10.46% |
| Net cash flows from operating activities | 1,662,482,287.71 | 809,218,720.13 | 105.44% |
| Subtotal of cash inflows from investing activities | 5,558,632,508.54 | 5,412,369,009.46 | 2.70% |
| Subtotal of cash outflows from investing activities | 6,696,412,810.26 | 6,534,593,586.86 | 2.48% |
| Net cash flows from investing activities | -1,137,780,301.72 | -1,122,224,577.40 | -1.39% |
| Subtotal of cash inflows from financing activities | 2,381,374,197.63 | 2,901,823,101.45 | -17.94% |
| Subtotal of cash outflows from financing activities | 2,447,214,731.68 | 3,125,894,632.23 | -21.71% |
| Net cash flows from financing activities | -65,840,534.05 | -224,071,530.78 | 70.62% |
| Net increase in cash and cash equivalents | 461,918,360.27 | -539,079,213.51 | 185.69% |
Explanation of main impact factor of material change of the data YoY?Applicable ?Not applicable
(1) Net cash flows from operating activities increased by 105.44% on a YoY basis. This is primarily because eligible VATrefunds increased, and the notes payable for inventory purchases were not due during the reporting period.
(2) Net cash flows from financing activities rose by 70.62% on a YoY basis, mainly due to the cash payment of RMB 446million for stock repurchases in 2021 and no such payment in 2022.Explanation of reasons for the material difference between net cash flows from operating activities during the reporting period andnet profit for the year?Applicable ?Not ApplicableV. Analysis of Non-Core Business?Applicable ?Not applicable
Unit: RMB
| Amount | As a percentage of total profit | Reasons for generation | Recurrent or non-recurrent | |
| Investment income | -41,466,125.62 | -7.45% | -- | RMB 8,548,481.77 is the returns on long-term equity investments calculated using the equity method, which is recurrent; the other portion is non-recurrent. |
| Gain or loss on changes in fair value | 0.00 | 0.00% | -- | No |
| Impairment of assets | -312,998,494.66 | -56.27% | Mainly due to provision of goodwill impairment loss | No |
| Non-operating revenue | 12,798,235.90 | 2.30% | -- | No |
| Non-operating expenses | 13,947,988.82 | 2.51% | -- | No |
VI. Assets and Liabilities
1. Material changes of asset items
Unit: RMB
| December 31, 2022 | January 1, 2022 | Change | Reason for material change | |||
| Amount | As a percentage of total assets | Amount | As a percentage of total assets | |||
| Cash and cash equivalents | 4,728,203,530.46 | 16.15% | 4,583,245,371.02 | 16.16% | -0.01% | -- |
| Accounts receivable | 5,625,792,472.37 | 19.22% | 4,946,704,963.71 | 17.44% | 1.78% | -- |
| Contract assets | 101,023,854.33 | 0.35% | 140,367,802.53 | 0.49% | -0.14% | -- |
| Inventories | 881,038,036.95 | 3.01% | 1,124,149,719.01 | 3.96% | -0.95% | -- |
| Investment properties | 27,105,435.03 | 0.09% | 1,837,703.68 | 0.01% | 0.08% | -- |
| Long-term equity investment | 676,829,959.84 | 2.31% | 603,580,781.31 | 2.13% | 0.18% | -- |
| Fixed assets | 2,268,287,202.01 | 7.75% | 1,758,052,005.19 | 6.20% | 1.55% | -- |
| Construction in progress | 41,073,267.68 | 0.14% | 224,068,633.86 | 0.79% | -0.65% | -- |
| Right-of-use assets | 31,859,454.24 | 0.11% | 25,505,911.86 | 0.09% | 0.02% | -- |
| Short-term borrowings | 440,103,105.44 | 1.50% | 439,024,733.46 | 1.55% | -0.05% | -- |
| Contract liabilities | 274,289,978.25 | 0.94% | 210,432,628.98 | 0.74% | 0.20% | -- |
| Long-term borrowings | 1,922,306,226.32 | 6.57% | 1,697,742,767.72 | 5.99% | 0.58% | -- |
| Lease liabilities | 23,255,624.30 | 0.08% | 18,523,740.10 | 0.07% | 0.01% | -- |
| Intangible assets | 6,048,114,364.49 | 20.66% | 5,350,595,868.40 | 18.86% | 1.80% | -- |
Offshore assets account for high proportion?Applicable ?Not Applicable
2. Assets and liabilities measured at fair value
?Applicable ?Not applicable
Unit: RMB
| Item | Opening balance | Gain/loss on changes in fair value during the period | Cumulative changes in fair value included in equity | Accrual of impairment during the period | Purchase amount during the period | Sales amount during the period | Other changes | Closing balance |
| Financial assets | ||||||||
| 4. Investments in other entity instruments | 15,702,971.01 | 0.00 | 0.00 | 350,000.00 | 0.00 | 0.00 | 0.00 | 15,352,971.01 |
| Subtotal of financial assets | 15,702,971.01 | 0.00 | 0.00 | 350,000.00 | 0.00 | 0.00 | 0.00 | 15,352,971.01 |
| Total | 15,702,971.01 | 0.00 | 0.00 | 350,000.00 | 0.00 | 0.00 | 0.00 | 15,352,971.01 |
| Financial liabilities | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
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
| Items | Carrying amounts at the end of the period | Reason for restriction |
| Cash and cash equivalents | 147,538,284.47 | Deposits, escrow accounts, frozen due to litigation preservation |
| Accounts receivable | 276,390,131.13 | Pledged |
| Notes receivable - bank acceptance | 2,732,733.00 | Endorsed or discounted but undue |
| Notes receivable - trade acceptance | 5,422,499.62 | Endorsed or discounted but undue |
| Receivable financing | 42,293,141.00 | Pledged |
| Long-term account receivable and non-current assets due within one year | 66,716,222.75 | Factoring financing with recourse |
| Fixed assets | 477,655,980.05 | Mortgaged |
| Intangible assets | 47,082,404.81 | Mortgaged |
| 100% equity interest in Funan Green Oriental Environmental Energy Co., Ltd. | 69,631,957.01 | Mortgaged [Note] |
| 100% equity interest in Poyang Greenlander Renewable Energy Co., Ltd. | 80,733,192.59 | |
| 50% equity interest in Lianjiang Greenlander New Energy Co., Ltd. | 68,922,363.62 | |
| 100% equity interest in Biyang County Fenghe Power New Energy Co., Ltd. | 105,525,597.14 | |
| 25% equity interest in Lianjiang Greenlander New Energy Co., Ltd. | 34,461,181.81 | Frozen for litigation preservation |
| Total | 1,425,105,689.00 |
Note: The pledged amount refers to the Company's proportionate share in net assets of each entity.VII. Investments
1. Overview
?Applicable ?Not applicable
| Investment amount for the reporting period (RMB) | Investment amount for the prior period (RMB) | Change |
| 106,000,002.00 | 0.00 | 100.00% |
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
4. Financial investments
(1) Securities investments
?Applicable ?Not ApplicableNo such cases during the reporting period.
(2) Derivatives investments
?Applicable ?Not ApplicableNo such cases during the reporting period.
5. Use of proceeds
?Applicable ?Not applicable
(1) Overall use of proceeds
?Applicable ?Not applicable
Unit: RMB 10,000
| Year | Fund-raising type | Total amount of proceeds | Total amount of proceeds used during the period | Accumulative amount of proceeds used | Total amount of proceeds with change of use during the reporting period | Accumulative amount of proceeds with change of use | Share of accumulative proceeds with change of use | Total amount of unused proceeds | Purpose and tracking of unused proceeds | Proceeds left idle for over 2 years |
| 2020 | Public offering of convertible corporate bonds | 147,618.96 | 7,309.89 | 34,879.69 | 0 | 0 | 0.00% | 111,533.84 | RMB 1 billion will temporarily replenish working capital, and the remaining amount will be used to implement recent investment projects. | 0 |
| Total | -- | 147,618.96 | 7,309.89 | 34,879.69 | 0 | 0 | 0.00% | 111,533.84 | -- | 0 |
| Explanation of the overall use of proceeds | ||||||||||
| According to the Approval of the Public Offering of Convertible Corporate Bonds by Infore Environment Technology Group Co., Ltd. (CSRC Permit [2020] No. 2219) issued by the CSRC, the lead underwriter of the Company, Huaxing Securities Co., Ltd. (formerly known as Huajing Securities, hereinafter "Huaxing Securities") issued 14,761,896 convertible corporate bonds ("CBs") to the public with the offering price of RMB 100 and a par value of RMB 100 for each CB, raising a total of RMB 1,476,189,600.00. Specifically, priority allotment of 9,405,386 CBs were issued to original shareholders of the Company, accounting for 63.71% of the total amount of this public offering; 5,304,730 CBs were issued to public investors through online channels, accounting for 35.94% of the total amount of this public offering; 51,780 CBs were to be underwritten by the lead underwriter, accounting for 0.35% of the total amount of this | ||||||||||
public offering. Proceeds in this offering had been remitted to the Company's raised fund supervision account by the lead underwriterHuaxing Securities on November 10, 2020, and the amount actually received after deducting RMB 15,238,100 of underwriting andsponsorship fees (tax exclusive) was RMB 1,460,951,500. After deducting RMB 3,615,300 (tax exclusive) of external fees that weredirectly 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 wasRMB 1,457,336,200. The availability of the above-mentioned proceeds has been verified by Pan-China Certified Public AccountantsLLP in its Capital Verification Report (T.J.Y. [2020] No.490).As at December 31, 2022, the accumulated use of proceeds was RMB 348,796,900, and the total amount of proceeds not yet used wasRMB 1,115,338,400.
(2) Projects with committed investment of proceeds
?Applicable ?Not applicable
Unit: RMB 10,000
| Committed investment projects and investment of excessive proceeds | Whether projects have been changed (including partial change) | Total amount of proceeds | Adjusted total investment amount (1) | The investment amount during the reporting period | Accumulative investment amount as at the end of the reporting period (2) | Investment progress as at the end of the reporting period (3)=(2)/(1) | Date when the projects are ready for their intended use | Benefits realized during the reporting period | Whether the estimated return is realized | Whether there are material changes in the project feasibility |
| Committed investment projects | ||||||||||
| The project of the comprehensive smart sanitation allocation center | No | 129,638.49 | 129,638.49 | 7,309.89 | 18,784.56 | 14.49% | December 31, 2023 | 3,086.17 | N/A | No |
| Replenishment of working capital | No | 16,095.13 | 16,095.13 | 0 | 16,095.13 | 100.00% | December 31, 2020 | No benefit generated separately | N/A | No |
| Subtotal of committed investment projects | -- | 145,733.62 | 145,733.62 | 7,309.89 | 34,879.69 | -- | -- | 3,086.17 | -- | -- |
| Investment of excessive proceeds | ||||||||||
| N/A | ||||||||||
| Repayment of bank loans (if any) | -- | 0 | 0 | 0 | 0 | 0.00% | -- | -- | -- | -- |
| Replenishment of working capital (if any) | -- | 0 | 0 | 0 | 0 | 0.00% | -- | -- | -- | -- |
| Subtotal of investment of excessive proceeds | -- | 0 | 0 | 0 | 0 | -- | -- | 0 | -- | -- |
| Total | -- | 145,733.62 | 145,733.62 | 7,309.89 | 34,879.69 | -- | -- | 3,086.17 | -- | -- |
| Project-by-project details and reasons for failure to realize planned progress and expected return (including the reasons for choosing "N/A" for "Whether the expected return is realized") | On April 29, 2022, the Proposal on the Delay of Part of the Projects of Proceeds from the Public Issuance of A-share Convertible Corporate Bonds was deliberated and approved at the 18th meeting of the Ninth Board of Directors and the 17th meeting of the Ninth Board of Supervisors. The Company agreed to adjust the investment progress by changing the date for the intended use of the above projects to December 31, 2023. The adjustment was made because the investment progress of the project of the comprehensive smart sanitation allocation center was mainly based on the current business size and growth expectations of the Company's sanitation projects. The project's investment progress fell short of expectations due to the uneven development of sanitation projects and the delay in tendering for some sanitation projects caused by the macroeconomic situation. Therefore, the Company adjusted the project's investment progress to ensure the quality and full use of proceeds. |
| Explanations of the material changes in the project feasibility | N/A |
| Amount, purpose, and progress of excessive proceeds | N/A |
| Location changes in the implementation of investment projects of the proceeds | N/A |
| Adjustments to the implementation method of investment projects of the proceeds | N/A |
| Early investment and placement of the investment projects of the proceeds | N/A |
| Temporary replenishment of working capital with idle proceeds | Applicable |
| The Proposal on Using Part of the Idle Proceeds to Replenish Working Capital was deliberated and approved at the 10th Extraordinary Meeting of the Ninth Board of Directors and the 9th Extraordinary Meeting of the Ninth Board of Supervisors held by the Company on December 4, 2020, allowing the Company to use idle proceeds of no more than RMB 1 billion for temporary replenishment of working capital, which shall be used for the production and operation related to the Company's main businesses for a period of no more than 12 months as at the date when the Proposal was deliberated and approved by the Board of Directors. The Company issued the Announcement on the Early Return of Proceeds for Temporary Replenishment of Working Capital on October 21, 2021, in which the Company returned all the above-mentioned RMB 1 billion of proceeds for temporary replenishment of working capital to the relevant designated account for proceeds on October 20, 2021 in advance for a period not exceeding 12 months. The Proposal on Using Part of the Idle Proceeds to Replenish Working Capital was deliberated and approved at the 15th Meeting of the Ninth Board of Directors and the 14th Meeting of the Ninth Board of Supervisors held by the Company on October 22, 2021, allowing the Company to use idle proceeds of no more than RMB 1 billion for temporary replenishment of working capital, which shall be used for the production and operation related to the Company's main businesses with a tenor of no more than 12 months as at the date when the Proposal was deliberated and approved by the Board of Directors. The Company issued the Announcement on the Return of Proceeds for Temporary Replenishment of Working Capital on October 21, 2022, in which the Company returned all the above-mentioned RMB 1 billion of proceeds for temporary replenishment of working capital to the relevant designated account for proceeds on October 20, 2022 for a period not exceeding 12 months. The Proposal on Using Part of the Idle Proceeds to Replenish Working Capital was deliberated and approved at the 21st Meeting of the Ninth Board of Directors and the 19th Meeting of the Ninth Board of Supervisors held by the Company on October 26, 2022, allowing the Company to use idle proceeds of no more than RMB 1 billion for temporary replenishment of working capital, which shall be used for the production and operation related to the Company's main businesses with a tenor of no more than |
| 12 months as at the date when the Proposal was deliberated and approved by the Board of Directors. As at December 31, 2022, the balance of the idle proceeds used by the Company for temporary replenishment of working capital was RMB 1,000,000,000. | |
| The amount of and reasons for the balance of the proceeds from the project implementation | N/A |
| Purpose and tracking of the unused proceeds | The balance of the idle proceeds used by the Company for temporary replenishment of working capital was RMB 1,000,000,000. The other unused raised fund of RMB 115,338,400 were kept in the designated account for proceeds in the form of demand deposits to be used for the construction of the corresponding investment projects. |
| Problems in the use of proceeds and disclosure, or other cases | N/A |
(3) Changed projects of proceeds
?Applicable ?Not ApplicableNo such cases during the reporting period.VIII. Sale of Material Assets and Equity Investments
1. Sale of material assets
?Applicable ?Not ApplicableNo such cases during the reporting period.
2. Sale of material equity investments
?Applicable ?Not ApplicableIX. Analysis of Major Subsidiaries and Joint Stock Companies?Applicable ?Not applicableMain subsidiaries and joint stock companies with an over 10% influence on the Company's net profit
Unit: RMB
| Company name | Type of company | Principal activities | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Changsha Zoomlion Environmental Industry Co., Ltd. | Subsidiary | Smart sanitation | RMB 2,351.5298 million | 15,277,347,909.46 | 7,727,963,001.04 | 9,989,531,868.73 | 840,460,935.27 | 732,781,078.39 |
| Shenzhen Green Oriental Environmental Protection Co., Ltd. | Subsidiary | Others | RMB 150 million | 1,824,625,955.67 | 71,415,047.49 | 260,096,672.90 | -1,344,498.79 | -294,582.62 |
Acquisition and disposal of subsidiaries during the reporting period?Applicable ?Not applicable
| Company name | Acquisition and disposal of subsidiaries during | Effects on the overall operations and performance |
| the reporting period | ||
| Zhejiang Yolsh Electric Drive Technology Co., Ltd. | Business combination not under common control | Positive effects on the Company's business |
| Lianjiang Greenlander New Energy Co., Ltd. | Business combination not under common control | Positive effects on the Company's business |
| Shaodong Tongying Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Xiangyin County Yingsheng Environmental Protection Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Shengzhou Yinglia Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Guilin Yingsheng Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Guiyang Yinglian Environmental Equipment Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Taicang Zhongying Environmental Technology Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Baoding Yinghe Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Wenshui County Yingsheng Environmental Sanitation Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Maoming Yinghe Urban Environmental Sanitation Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Wushan County Tongying Environmental Sanitation Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Harbin Tongying Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Pengshui County Yingchuang Environmental Sanitation Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Bengbu Tongying Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Daye Tongying Environmental Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Urumqi Lianying Urban Environmental Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Baoting Tongying Environmental Sanitation Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Zhaoqing Duanzhou District Zhongying Urban Environmental Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Zhanjiang Development Zone Zhongying Urban Environmental Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Shaoxing Lianbao Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Xingguo County Yinghe Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Huaibei Tongying Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Yongzhou Lingling District Tongying Environmental Sanitation Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Shaoyang Tongying Environmental Sanitation Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Jianli Yinglian Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Suzhou Gusu District Zhongying Environmental Industry Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Guangzhou Zengcheng District Yinghe Urban Environmental Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Baishan Yingyuan Environmental Service Engineering Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Shenzhen Longhua District Yinglian Urban Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Guzhang County Yinglian Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Changshu Zhongying Environmental Sanitation Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Suining Anju Yinglian Environmental Sanitation Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Jieyang Yingdong Urban Environmental Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Tongdao Yinglian Jiamei Environmental Industry Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Heyang Yinglian Urban Environmental Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Ninghai County Tongying Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Zhanjiang Potou District Yingsheng Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Liaoyang Yinglian Urban Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Linqing Yinglian Urban Environmental Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Zhanjiang Xiashan District Yinghe Urban Environmental Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Haicheng Zhongying Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Foshan Shunde District Yingjia Urban Environmental Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Xiamen Yingsheng Environmental Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Nanfeng Yingniang Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Tengchong Yinglian Environmental Protection Technology Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Chuzhou Yingsheng Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Fuyang Yingsheng Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Changsha Zhiying Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Foshan Shunde District Yingzhi Smart City Environmental Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Pingdingshan Yingsheng Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Chenzhou Zhongying Environmental Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Zhenfeng Yinglian Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Linfen Yaodu District Yingsheng Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Fuyang Zhiying Environmental Sanitation | Incorporation | Positive effects on the Company's business |
| Management Co., Ltd. | ||
| Chengdu Yinggang Urban Environmental Sanitation Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Foshan Shunde District Yingteng Smart City Environmental Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Qingyang County Yinghe Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Hubei Fenghe New Materials Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Heyang Zhongying Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Lanling County Lianying Environmental Sanitation Service Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Pingdingshan Yinghe Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Shenzhen Infore City Service Intelligent Technology Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Guangdong Infore Mobile Charging Technology Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Guangdong Infore Intelligent Cleaning Technology Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Changsha Infore Environmental Industry Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Changfeng County Yinghe Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company's business |
| Zoomlion Heavy (Ningxia) Environmental Industry Co., Ltd. | De-registration | Asset optimization, no material impact on the Company's production, operation and performance |
| Dali County Zoomlion Environmental Industry Co., Ltd. | De-registration | Asset optimization, no material impact on the Company's production, operation and performance |
| Kunming Zhongfeng Environmental Sanitation Equipment Co., Ltd. | De-registration | Asset optimization, no material impact on the Company's production, operation and performance |
| Guangdong Yinglian Urban Environmental Management Co., Ltd. | De-registration | Asset optimization, no material impact on the Company's production, operation and performance |
| Foshan Yinghe Investment Co., Ltd | De-registration | Asset optimization, no material impact on the Company's production, operation and performance |
Fact sheet of major subsidiaries
X. Structured Entities Controlled by the Company
?Applicable ?Not ApplicableXI. Future Prospects of the Company(I) Market opportunities
1. The 2022 national policies are favorable for the development of the sanitation industry
On January 24, the State Council issued the Comprehensive Work Plan for Energy Conservation and Emission Reductionduring the 14
th
Five-Year Plan Period. The document sets out guiding requirements for eliminating vehicles with the national IIIemission standard, promoting new energy vehicles, and winning the battle against pollution, which is conducive to industrydevelopment.
On January 25, the Ministry of Ecology and Environment (MEE), the Ministry of Agriculture and Rural Affairs (MOARA),the Ministry of Housing and Urban-Rural Development (MOHURD), the Ministry of Water Resources, and the National RuralRevitalization Bureau jointly issued the Action Plan for the Battle Against Agricultural and Rural Pollution (2021–2025). Thedocument calls for substantial progress in rural environmental remediation, effective control of agricultural non-point source
pollution, and ongoing improvement of the rural ecological environment by 2025. Additionally, 80,000 administrative villages willcomplete environmental remediation, 40% of rural domestic sewage will be treated, and large-scale black and odorous waterbodies in rural areas will be eliminated.On February 9, the National Development and Reform Commission (NDRC), the MEE, the MOHURD, and the NationalHealth Commission released the Guiding Opinions on Accelerating the Construction of Urban Environmental Infrastructure. Thedocument specifies comprehensive arrangements for addressing the relevant issues to accelerate the development of the garbagecollection, transfer, and transportation system.
On February 11, the State Council issued the Plan for Advancing Agricultural and Rural Modernization during the 14
th
Five-Year Plan Period. The document urges relevant parties to steadily propel toilet renovation in economically underdeveloped, high-altitude, cold, and water-scarce areas, build manure and domestic sewage treatment facilities and comprehensive organic wastedisposal and utilization facilities based on local realities, support 600 counties to rectify rural living environments and createbeautiful and livable villages.On February 22, Central Document No. 1, Opinions of the CPC Central Committee and the State Council on EffectivelyImplementing the Key Task of Promoting Rural Revitalization in 2022, was unveiled. In terms of rural development andenvironmental improvement, the document outlined the priorities for enhancing rural living environments, such as toilet revolution,sewage treatment, and garbage management.
On March 9, the State Administration for Market Regulation and the National Standardization Management Committee ofChina released the Standards for Rural Environmental Sanitation and Cleaning Services. The document requires that ruralsanitation and cleaning services should be provided by professional organizations or individual contractors, and outlines therequirements that these two fields must meet. The document also specifies the content and quality requirements for the cleaningservices of garbage collection sites, roads, public toilets, public water areas, and other public facilities.
On March 17, the NDRC issued the Key Tasks for the Development of New Urbanization and Urban-Rural Integration in2022. The document calls for improving hazardous waste and medical waste centralized treatment facilities as well as thecomprehensive utilization system of bulk solid waste, advancing domestic waste classification actively and steadily, and closingthe gap in urban sewage treatment capacity at a faster pace. It also urged to repair and update old and damaged sewage pipelinenetworks and rainwater and sewage pipeline networks that cause waterlogging problems, launch "green life" campaigns, andencourage green transportation as well as green household and community development.
On March 24, the NDRC and the National Energy Administration issued the Mid- and Long-Term Development Plan for theHydrogen Energy Industry (2021–2035), which suggests piloting the use of fuel cell commercial vehicles in public services suchas urban buses, logistics delivery vehicles, and sanitation vehicles in areas where conditions permit. This is beneficial forpromoting the adoption of hydrogen fuel in the sanitation industry.
On April 1, the State Administration for Market Regulation and the National Standardization Management Committee ofChina released the Requirements for Urban and Rural Community Environmental Sanitation and Cleaning Services. According tothe standard, community sanitation and cleaning services cover a wide range of fields, including but not limited to the cleaning ofroads, indoor and outdoor public areas, agricultural markets, public toilets, and water areas, as well as garbage collection andtransportation and emergency operations.
On April 27, the MOHURD, the NDRC, and the Ministry of Water Resources jointly issued the Action Plan for theConstruction of Urban Drainage and Flood Control System during the 14
thFive-Year Plan Period. The Plan sets out requirementsto check urban drainage and flood control facilities, urban flood control engineering facilities, and urban natural retention space toassess disaster risks. It also urges the relevant parties to evaluate the emergency management capabilities of urban drainage andflood control and inspect flood control safety hazards in critical infrastructure such as water and gas supply. Furthermore, thedocument calls for the construction of drainage pipeline networks, pumping stations, and drainage channels, as well as measures toreduce rainwater at the source and rectify water accumulation points. These actions will promote systematic governance.
On May 29, the MOHURD, the MOARA, the NDRC, the MEE, the National Rural Revitalization Bureau, and the All-ChinaFederation of Supply and Marketing Cooperatives jointly issued the Notice on Further Strengthening the Construction andManagement of Rural Domestic Waste Collection, Transportation, and Disposal System. The document sets out the objectives for2025 and defined key tasks such as overall planning of the construction and operational management of rural domestic wastecollection, transportation, and disposal systems, promoting source classification and resource utilization, improving collection,transportation, and disposal systems, enhancing operational management, and establishing a mechanism for joint building,governance, and sharing. These measures will drive the growth of waste-related products in the rural environmental sanitationmarket.On June 17, the MEE, the NDRC, the MIIT, the MOHURD, the Ministry of Transport, the MOARA, and the NationalEnergy Administration jointly issued the Implementation Plan for Synergizing the Reduction of Pollution and Carbon Emissions.The Plan sets forth requirements to accelerate the development of new energy vehicles, promote the electrification of publictransportation in a phased manner, steadily replace old vehicles with new energy vehicles, and gradually adopt new and cleanenergy-powered non-road mobile machinery. It also calls for exploring the demonstration application and commercial operation ofmedium and heavy-duty electric and fuel cell trucks. By 2030, the sales of new energy vehicles in key areas of air pollutionprevention and control will rise to around 50% of the total vehicle sales.
On July 26, the Ministry of Civil Affairs, the NDRC, the MOHURD, and 13 other departments jointly issued the Opinions onImproving the Comprehensive Village-level Service Functions. The document sets forth requirements to accelerate theconstruction of household access roads to facilitate public travel and firefighting, advance the rural toilet revolution, speed up theclassification and resource utilization of domestic waste, comprehensively improve the management of rural domestic waste, andpropel the treatment of rural domestic sewage at a faster pace.
On July 29, the MOHURD and the NDRC jointly released the National Urban Infrastructure Construction Plan during the
th
Five-Year Plan Period. The Plan sets out requirements to increase the capacity for domestic waste classification, collection,and transportation by 200,000 tons daily, the capacity for domestic waste incineration by 200,000 tons daily, and the capacity forresource utilization of domestic waste by 30 million tons yearly during the 14
thFive-Year Plan period. In addition, 500 existingdomestic waste treatment facilities will be renovated.On September 14, the General Office of the Ministry of Transport announced the first batch of pilot projects for intelligenttransportation applications (autonomous driving and intelligent shipping). A total of 18 pilot projects were launched, many ofwhich involved autonomous driving in environmental sanitation. Among them, 14 self-driving pilot projects covered low-speedscenarios such as unmanned delivery, vending, shuttle, cleaning, and port driving, with more than 1,400 driverless vehiclesinvested.On November 10, the MEE, the NDRC, and 13 other departments issued the Action Plan for the Critical Battle AgainstSeverely Polluted Weather, Ozone Pollution, and Diesel Truck Pollution. The Plan urges the relevant parties to promote theelectrification of public service vehicles, ensuring no less than 80% of incremental or upgraded buses, taxis, and logistics deliveryand light-duty sanitation vehicles in key areas and national ecological civilization experimental zones are fueled by new energysources. This will significantly drive the adoption of new energy-powered sanitation vehicles.
2. The demands for urban services will keep increasing
The source of urban services revenue is the government budget with the nature of rigid expenditure and is less affected bymacroeconomic regulation factors. The business is featured by continuity and stability.
(1) The scale of demand for services driven by urbanization
As urbanization continues, the construction of urban roads will directly increase the area for road cleaning, urban housing,compound construction, and urban greening, hence increasing the demand for environmental protection equipment and urbancleaning services. Furthermore, sanitation is one of the prerequisites for each province, city, and district to construct urbanupgrades such as "national civilized cities", "national hygienic cities", "national model cities of environmental protection", and"national ecological garden cities". According to the National Bureau of Statistics and the MOHURD, statistics show that from
2015 to 2021, the area of road cleaning in China's cities and counties increased from 9.678 billion sqm to 13.337 billion sqm, anoverall increase of nearly 37.8%; the domestic waste removed and transported in cities and counties rose from 258 million tons to317 million tons, an overall growth of 22.9%. Driven by urbanization, in order to maintain the cleanliness and sanitation of urbanroads, residential compounds, and municipal gardens, as well as the normal transfer and treatment of domestic waste, the releaseof urban service demands are constantly facilitated.
(2) The "Beautiful Countryside" kick-started, and the rural sanitation market is gradually gaining momentumThe Five-Year Action Plan for the Remediation and Improvement of Rural Living Environment (2021-2025) requires that "therural 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" andboosting urban and rural sanitation integration, projects like promotion by all counties and comprehensive management haveemerged continuously and the rural sanitation market will enter a new stage for further rapid market expansion. This will createvast opportunities for urban services and the entire sanitation industry.
(3) Continued promotion of waste classification and the continued release of market demandsIn September 2020, President Xi Jinping chaired the meeting of the Central Comprehensively Deepening ReformsCommission, 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 andtransportation 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 andrenovation of traditional sanitation technology and equipment. Additionally, making the system smart requires increasedinvestment, spurring a continuous release of market demand.
(4) Full electrification of public service vehicles and increasing demand for new energy-powered environmental protectionequipmentOn January 30, 2023, the MIIT, together other seven other state departments issued the Notice on Organizing the PilotProgram of Pilot Zones for Full Electrification of Public Service Vehicles, setting out to launch nationwide pilot programs of pilotzones for full electrification of public service vehicles from 2023 to 2025. The document requires that there should be a significantrise in the proportion of new energy vehicles in incremental and upgraded vehicles in pilot areas, with an 80% level in terms ofbuses, taxis, sanitation, postal and express delivery, and urban logistics vehicles to be fueled by new energy. Since 2012, China hasmade a guiding policy to accelerate the cultivation of the new energy vehicle industry, and has successively released importantdocuments for its promotion. After a period of development, new energy-powered sanitation vehicles are poised for significantgrowth.
(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 thefinancial burden of governments and enterprises. With the expansion of China's urban and rural road cleaning areas, themechanization rate of the sanitation industry is gradually increasing. According to the statistics on urban and rural constructionreleased by MOHURD, at the end of 2021, the mechanical cleaning space of the road in cities across the country reached 10,342million square meters, with a mechanical cleaning rate of 78.41%; the mechanical cleaning space of the road in counties across thecountry reached 2.995 billion square meters, with a mechanical cleaning rate of 76.25%. In comparison, the mechanization rate ofsanitation industry in the urban area of developed countries can usually reach 80%. As such, there is still room for development interms of the mechanization level of sanitation industry in China. In the future, as labor costs continue to rise, the mechanization ofsanitation operations will become the main development direction of the domestic sanitation market, and it will cover roadcleaning, 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 operatingcosts 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 elderlypopulation is expected to reach 280 million by 2022, with an aging population of 19.8%, according to the National Committee onAging Population. The aging trend will exacerbate the workforce deficit in the sanitation industry. Meanwhile, with thediversification of job options, the number of young and middle-aged laborers who are willing to engage in sanitation work is alsodecreasing. Therefore, improving the mechanization rate of the sanitation industry and expanding the use of environmentalprotection equipment is not only a realistic need in the face of the labor market shortage, but also the requirement for thedevelopment 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 newopportunities. Small-sized smart devices and smart services will be the new bonanza, introducing new variables and increments forthe sector. Smart, less humanized, or even unmanned sanitation will be a general trend.(II) Business plan of 2022In 2022, the Company closely revolved around its development strategy and annual business plan, focusing on its corestrategic business. It strengthened technological innovation and product research and development, improved internal operations,and actively promoted smart sanitation, achieving its business plan relatively well for 2022. The business target set at thebeginning of the year was for the Company to achieve RMB 60 billion in the planned cumulative contract amount of its smarturban services and RMB 4. billion in its annual operating revenue; the actual planned cumulative contract amount of theCompany's smart urban services reached RMB 54.165 billion while its annual operating revenue recorded RMB 4.158 million.In 2022, the Company completed its annual revenue target of RMB 4 billion for smart services, with an achievement rate of
103.95%; It did not complete its operation target of RMB 60 billion in total contract value, with an achievement rate of 90.27%.The reason for the Company's failure to achieve the operating target of the total contract value is the decrease of orders with longcycles of more than 5 years in the market, resulting in a slight decrease of the total contract value of orders obtained by theCompany. In 2023, the Company will take into account the market development trend, diversify the business forms and activelyattract short- and medium-cycle projects.
2023 Operation target: to achieve a cumulative contract value of RMB 80 billion for the Company's smart urban servicesolutions, and to realize an annual revenue of RMB 6.5 billion; from 2020 to 2024, the planned cumulative contract value wouldbe 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 ofthe top-ranking enterprises in the industry in the next five years.
In 2023, the Company will continue to follow the strategy of technology and product leadership, with a further focus on smartsanitation. At the same time, it will expand its presence in new energy products, including solar panel brackets as well as energystorage products for industrial and commercial purposes.
(III) Plan for use of funds
2023 is a key period for the Company's rapid development. Given the relatively large demand for funds, the Company willformulate a funding supply and demand plan to match the Company's development. The Company will make full use of its ownfunds. It will also further strengthen the management of accounts receivable while optimizing the financial structure to providestrong financial guarantees for the Company's business development and control financial risks. The source of funds is theoptimization and combination of multiple channels including the issuance of commercial paper, medium-term note, cash flowsfrom operating activities, and bank loans.
(IV) Main risk factors that may adversely affect the achievement of the Company's future development strategies andbusiness objectives
1. Policy-related risks
As the state attaches more importance to environmental protection and environmental governance, unprecedenteddevelopment 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, environmentalindustry 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 againstpolicy-related risks, the Company will pay careful attention to changes in national macroeconomic policies and strengthenresearch 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 moresubsidiaries, its asset scale, personnel scale and organization scale are also undergoing rapid expansion, causing its organizationalstructure and management system to become more complex. Although the Company has formed a complete set of managementpolicies for internal control and improved it annually, the difficulties and risks in the management and control are still increasingdue to the differences in industry attributes, geographic distribution, cultural characteristics and corporate culture of its branchinstitutions.Countermeasures: the Company is concentrating on strengthening the management and risk control systems, furtherimproving the operation management system and business process, continuing to refine management, and strengthening the riskcontrol 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 andhas 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 itstechnological leadership in the industry and, as a result, solidify its market leadership.
Nothing in this report about future plans, performance forecasts, or other matters represents a commitment by the Company toany investors or other third parties. All investors and relevant persons shall remain adequately aware of risks.XII. Visits Paid to the Company for Purposes of Research, Communication, and Interviewduring the Reporting Period?Applicable ?Not applicable
| Time | Venue | Method | Visitor type | Visitor | Main content of discussion and materials provided | Reference of the study's basic information |
| May 10, 2022 | Shenzhen China | Field study | Institution | Guangfa Securities, Guotai Junan Securities, Dongxing Securities, Ping An Wealth Management, Huatai Asset Management, Kaifeng Investment, Hongta Hongtu Fund, Goldstate Securities, OH Bay, Evergrande Life, Everbright Securities, Natural Power Capital, Yingda Securities, Chasing Securities, and Penghua Fund | Business strategy and operating status of the Company | For details, please refer to the Record Sheet of Investor Relations Activities disclosed by the Company on May 11, 2022 on Cninfo (www.cninfo.com.cn) |
| May 25, 2022 | "Interactive Platform for Investor | Others | Others | Investors participated in the 2021 Infore Enviro online performance briefing | The Company's projects and market | For details, please refer to the Record Sheet |
| Relations" on Panorama Network | developments | Investor Relations Activities disclosed by the Company on May 25, 2022 on Cninfo (www.cninfo.com.cn) |
Part IV Corporate GovernanceI. General Information of Corporate Governance
1. The Company continuously perfects its corporate governance structure in strict accordance with the requirements of theCompany Law, the Securities Law and the relevant laws and regulations of the CSRC. The Board of Directors has four specialcommittees, 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 areprofessional and efficient.
2. The Company convenes the Annual General Meeting of Shareholders in strict accordance with the relevant provisions ofthe Articles of Association and Rules of Procedure for General Meeting of Shareholders of the Company. The Board of Directors,which is the decision-making body of the Company, conscientiously implements the resolutions of General Meetings ofShareholders. The Board of Supervisors exercises its supervisory authorities and powers in strict accordance with the regulations,and it supervises the financial affairs of the Company as well duty performance and actions of directors and senior managementmembers, thus safeguarding the legitimate rights and interests of the Company and all shareholders. The Management of theCompany strictly implements the resolutions of the General Meetings of Shareholders and the Meetings of the Board of Directorsand executes decisions. All functional departments and holding subsidiaries of the Company are responsible for the day-to-dayoperations.
3. During the reporting period, in order to standardize its insider information management, ensure confidentiality of insiderinformation and effective registration and management of insiders who have access to insider information, effectively preventsecurities violations of laws and regulations such as insider trading, maintain the fairness of information disclosure, and protect thelegitimate rights and interests of the general investors, the Company promptly, truthfully and fully recorded all the persons withaccess 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 relevantinformation archives regarding the content, time, place, basis and method, etc. for the insiders to know the insider information, andfile with the relevant regulatory authorities to strictly prevent the occurrence of insider trading, pursuant to the laws andregulations such as the Securities Law, the Measures for the Administration of Information Disclosure by Listed Companies, aswell as the relevant provisions of the Articles of Association, Information Disclosure Management Policy, and Policy on InternalReporting of Material Information of the Company.
4. The Company discloses information strictly in accordance with the provisions of the Company Law, the Securities Law, theRules Governing the Listing of Shares on SZSE, and other relevant laws, regulations and normative documents, as well as theInformation Disclosure Management Policy, to ensure that it makes true, accurate, complete, timely and fair informationdisclosure to increase the openness and transparency of its operations. The Company has received no disciplinary actions such ascriticism and reprimand from the stock exchange for issues relating to information disclosure. During the reporting period, therewere no governance irregularities such as the provision of undisclosed information to the controlling shareholder and the de factocontroller.
5. During the reporting period, when material events occurred in the Company, there was no abnormal fluctuation in the stockprice arising from leakage of inside information. As part of its next steps, the Company will constantly improve its corporategovernance structure, further standardize corporate operations, and raise the level of corporate governance pursuant to relevantlaws 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 andthe 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.
II. Independence of the Company from the Controlling Shareholder and De FactoController and on Ensuring Company's Assets, Personnel, Finance, Structure andBusinesses and Other AspectsThe Company is completely independent of the controlling shareholder in terms of businesses, personnel, assets, organization andfinance, 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 controllingshareholder and its affiliates are not engaged in any businesses in competition with the Company.
(2) Personnel separation: The personnel of the Company are independent of the controlling shareholder, and the President,CFO, Board Secretary and other senior management members of the Company do not hold positions other than directors in thecontrolling shareholder, the financial officers of the Company do not have a part-time job in affiliated companies. The Companyhas put in place independent policies on labor, personnel and remuneration management and established an independent labor andpersonnel 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 salessystems, and there is no horizontal competition between the Company and its controlling shareholder in the manufacturing andoperation of the same products. (4) Organizational independence: The Company is organizationally complete, and there is nosuperior-subordinate relationship between its controlling shareholder and functional departments thereof and the Company andfunctional departments thereof. The Company's Board of Directors, Board of Supervisors and other internal institutions operatefully independently.
(5) Financial separation: The Company's finance is entirely independent, with an independent financial department. It has alsoestablished an independent accounting system and financial accounting management system responsible for independentaccounting, 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 theReporting Period
1. General meetings of shareholders convened during the reporting period
| Meeting | Type | Investor participation ratio | Date of the meeting | Disclosure date | Meeting resolution |
| The 2021 Annual General Meeting of Shareholders | Annual General Meeting of Shareholders | 49.66% | May 24, 2022 | May 25, 2022 | The Announcement on the Resolutions of the 2021 Annual General Meeting of Shareholders (Announcement No.: 2022-043) published in the Securities Daily, the Securities Times, the China Securities Journal, the Shanghai Securities News and http://www.cninfo.com.cn, which are the media designated |
| by the Company for information disclosure. | |||||
| The first extraordinary general meeting of shareholders in 2022 | Extraordinary general meeting of shareholders | 47.33% | September 13, 2022 | September 14, 2022 | The Announcement on the Resolutions of the First Extraordinary General Meeting of Shareholders in 2022 (Announcement No.: 2022-075) published in the Securities Daily, the Securities Times, the China Securities Journal, the Shanghai Securities News 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 shareholderswith resumed voting rights
?Applicable ?Not ApplicableV. Information of directors, supervisors and senior management members
1. Basic information
| Name | Position | Incumbent/Former | Gender | Age | Start of tenure | End of tenure | Beginning number of shares held | Number of shares increased during the period | Number of shares decreased during the period | Other changes | Ending number of shares held | Reasons for share increase/decrease |
| Ma Gang | Chairman of the Board and President | Incumbent | Male | 44 | December 4,2014 | January 11, 2026 | 1,654,600 | 0 | 0 | 0 | 1,654,600 | N/A |
| Su Bin | Director | Incumbent | Male | 45 | September 6, 2021. | January 11, 2026 | 0 | 0 | 0 | 0 | 0 | N/A |
| Kuang Guangxiong | Director | Incumbent | Male | 44 | January 30, 2019. | January 11, 2026 | 0 | 0 | 0 | 0 | 0 | N/A |
| Shen Ke | Director | Incumbent | Male | 52 | January 30, 2019. | January 11, 2026 | 0 | 0 | 0 | 0 | 0 | N/A |
| Zhang Yu | Independent Director | Incumbent | Male | 45 | December 26, 2019. | January 11, 2026 | 0 | 0 | 0 | 0 | 0 | N/A |
| Li Ruidong | Independent Director | Incumbent | Male | 46 | December 26, 2019. | January 11, 2026 | 0 | 0 | 0 | 0 | 0 | N/A |
| Li Yingzhao | Independent Director | Incumbent | Male | 61 | January 12, 2023. | January 11, 2026 | 0 | 0 | 0 | 0 | 0 | N/A |
| Jiao Wanjiang | Chairman of the Board of Supervisors | Incumbent | Male | 42 | November 14, 2016. | January 11, 2026 | 308,692 | 0 | 0 | 0 | 308,692 | N/A |
| Liu Kan | Supervisor | Incumbent | Male | 39 | December 26, 2019. | January 11, 2026 | 0 | 0 | 0 | 0 | 0 | N/A |
| Lin Meiling | Employee Supervisor | Incumbent | Female | 38 | November 14, 2016. | January 11, 2026 | 0 | 0 | 0 | 0 | 0 | N/A |
| Wang Qingbo | Vice President & CFO | Incumbent | Male | 47 | April 29, 2022. | January 11, 2026 | 800 | 0 | 0 | 0 | 800 | N/A |
| Jin Taotao | Vice President and Board Secretary | Incumbent | Male | 40 | December 26, 2019 | January 11, 2026 | 0 | 0 | 0 | 0 | 0 | N/A |
| Shi Shuiping | Independent Director | Left office | Male | 48 | November 14, 2016 | December 26, 2022 | 0 | 0 | 0 | 0 | 0 | N/A |
| Lu Anfeng | Vice President & CFO | Left office | Male | 45 | November 8, 2013 | April 29, 2022 | 486,762 | 0 | 0 | 0 | 486,762 | N/A |
| Total | -- | -- | -- | -- | -- | -- | 2,450,854 | 0 | 0 | 0 | 2,450,854 | -- |
Whether any director or supervisor left office or any senior management member was dismissed during their tenure during thereporting period?Yes ?NoDuring the reporting period, the Ninth Board of Directors of the Company expired in December 2022, and Mr. Shi Shuiping,an independent director of the Ninth Board, also left office due to the expiration of his term. In addition, in April, Mr. Lu Anfeng,the former Vice President and CFO, resigned due to work-related reasons. His resignation took effect as from the date ofsubmission to the Board of Directors according to the Company Law, Guidelines No. 1 of Shenzhen Stock Exchange for Self-regulation of Listed Companies—Standardized Operation of Companies Listed on the Main Board, and Articles of Association. Mr.Lu directly holds 486,762 shares in the Company and has fulfilled the corresponding undertakings in accordance with relevantprovisions. The above changes will not adversely affect the production and operation of the Company.Changes of the company's directors, supervisors and senior management members?Applicable ?Not applicable
| Name | Position held | Type | Date | Reason |
| Shi Shuiping | Independent Director | Left office due to expiry of term | December 26, 2022 | Left office due to expiry of term |
| Lu Anfeng | Vice President & CFO | Dismissed | April 29, 2022 | Work-related reasons |
2. Position and biographical information
Professional backgrounds, major work experience and current posts in the Company of the incumbent directors, supervisors andsenior management members:
1. Mr. Ma Gang, born in 1979, with a master's degree, is Chairman of the tenth Board of Directors of Infore Environment.Starting from December 2014 till now, he has been serving as President of the Company. He joined Midea Group in June 2001,and successively held the positions of R&D Engineer, branch salesman and Regional Director at Midea Rice Cooker Division,General Manager at Midea Small Domestic Appliance Sales Company in China, President of China Marketing Headquarters ofMidea Daily Home Electric Appliance Group, Vice President and Domestic Sales General Manager at Midea Small DomesticAppliance Division, Vice President of Midea Small Domestic Appliance Division and General Manager at Midea Water MaterialProduct Company, and Deputy Director at Midea Domestic Market Department.
2. Mr. Su Bin, born in 1978, with a Master's degree, is the Director of the tenth Board of Directors of Infore Enviro. FromOctober 2020 till now, he has been Vice President of Infore Group Co., Ltd. From March 2013 to October 2020, he successivelyheld the positions of Executive President and President of Fosun Group's Energy and Environment Group, as well as the ExecutivePresident and Vice President of Fosun Capital, etc. He was a Partner of Mingli China Growth Fund from January 2009 to February2013 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 InternationalAccountant, in addition to Director of the tenth Board of Directors of Infore Enviro. He has been Vice President of Infore Groupsince October 2018. From July 2002 to October 2018, he successively held the positions of Financial Manager at Midea DailyHome Electric Appliance Group, Financial Manager at Midea subsidiary in the US, Financial Director at Midea KitchenAppliances Division, Financial Director at Midea Commercial Air Conditioner Division, and Financial Director at Midea-KUKAJoint Venture in China.
4. Mr. Shen Ke, born in 1971, holding a master's degree, is the Director of the tenth Board of Directors of Infore Enviro. He isVice President of Zoomlion Heavy Industry Science and Technology Co., Ltd. from September 2020 to the present. From July2003 to September 2020, he held the positions of Head of the Investment Development Department, Board Secretary, andInvestment Director at Zoomlion Heavy Industry Science and Technology Co., Ltd.
5. Mr. Zhang Yu, born in 1978, holding a doctorate degree, is an Independent Director of the tenth Board of Directors ofInfore Enviro. He has served as Associate Professor and Professor at China Europe International Business School since 2015, andheld the position of Assistant Professor at the University of California, Irvine from 2008 to 2015.
6. Mr. Li Ruidong, born in 1977, holding a bachelor's degree, is an Independent Director of the tenth Board of Directors ofInfore Enviro. He has been President and Editor-in-chief at the China Environment Magazine since November 2013. He served asAssistant to the General Manager of Environmental Protection Magazine Co., Ltd. from February 2012 to November 2013, andDirector of the Office of Environmental Protection from March 2008 to January 2012.
7. Mr. Li Yingzhao, born in 1962, holding a doctorate, is a Professor of Accounting at the School of Business Administration,South China University of Technology, and he currently serves as Independent Director of the tenth Board of Directors of InforeEnviro. He also currently serves as Independent Director at Guangdong TLOONG Technology Group Co., Ltd. and GuangzhouHaige Communications Group Co., Ltd., and External Supervisor of Nanhai Rural Commercial Bank Co., Ltd. He served asIndependent Director at such listed companies as Guangzhou Friendship Group Co., Ltd. and Shenzhen Zhongjin LingnanNonfemet 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 previouslyserved as Vice President and Vice President of Finance at Guangdong NVC Lighting Technology Co., Ltd., Vice President ofFinance at Guangdong Xinbang Logistics Co., Ltd., CFO at Midea Annto Logistics Division, Deputy CFO at Midea SmallDomestic Appliance Division, Financial Manager at Midea Industrial Design Company, and Financial Supervisor at Midea FanFactory.
9. Mr. Jin Taotao, born in 1983, a master's degree holder, is Vice President and Board Secretary of Infore Enviro. He held thepositions of Engineer at the Environmental Planning Institute of the MEE (formerly the Ministry of Environmental Protection)from September 2005 to April 2016, Vice President at Infore Environment Technology Group Co., Ltd from May 2016 to June2019, and Board Secretary at Stariver Environmental Technology Co., Ltd. from July 2019 to November 2019. Mr. Jin Tao joinedthe SZSE qualification training for Board Secretaries in November 2019 and obtained the qualification certificate for BoardSecretary.
10. Mr. Jiao Wanjiang, born in 1981, holding a master's degree, is Chairman of the tenth Board of Supervisors of InforeEnviro. He is currently the General Manager of the Business Department of Infore Environment Technology Group Co., Ltd. Hesuccessively served as Head of the Operation Management Department and General Manager of the Solid Waste TreatmentDepartment of Infore Environment Technology Group Co., Ltd. He joined Midea in July 2005. He successively held the positionsof Domestic Sales Branch Manager of Guangdong Midea Small Domestic Appliance Sales Company in China, Senior ProductPlanning Manager at Headquarters and Head of Brand & Marketing Department of Headquarter.
11. Mr. Liu Kan, born in 1984, holding a bachelor's degree, is the Supervisor of the tenth Board of Supervisors of InforeEnviro. He has served the Company since February 2016, and is currently Director of the Operation Management Department of asubsidiary. He held the positions of General Manager at Infore Network Technology Co., Ltd. from 2017 to November 2019,Director of the Operation Management Department of University Science & Technology (Shenzhen) Co., Ltd. from 2016 to 2017,
and Rice Cooker Product Planning Manager at Midea Small Domestic Appliance Shenzhen Branch and Midea Small DomesticAppliance Division from 2006 to 2015.
12. Ms. Lin Meiling, born in 1985, holding a bachelor's degree, is the Supervisor of the tenth Board of Supervisors of InforeEnviro. She is currently the Director of Human Resources at Infore Environment Technology Group Co., Ltd. From 2010 to now,she is responsible for the administration and human resources affairs of the Company.Positions held in shareholder entities:
?Applicable ?Not applicable
| Name of the personnel holding position | Shareholder entity | Position held at the shareholder entity | Start of tenure | End of tenure | Receiving remuneration or allowance from the shareholding entity or not |
| Ma Gang | Infore Group Co., Ltd. | Director | March 6, 2018 | - | No |
| Su Bin | Infore Group Co., Ltd. | Director and Co-President | November 13, 2020 | - | Yes |
| Kuang Guangxiong | Infore Group Co., Ltd. | Director and Co-President | October 1, 2018 | - | Yes |
| Shen Ke | Zoomlion Heavy Industry Science and Technology Co., Ltd. | Vice President | June 29, 2015 | - | Yes |
| Statements on positions held in shareholder entities | - | ||||
Positions held in other entities:
?Applicable ?Not applicable
| Name of the personnel holding position | Name of other entity | Position held in other entity | Start of tenure | End of tenure | Receiving remuneration or allowance from other entities or not |
| Shen Ke | Bichamp Cutting Technology (Hunan) Co., Ltd. | Director | July 5, 2014. | - | No |
| Zhang Yu | China Europe International Business School | Professor | July 1, 2015. | - | Yes |
| Li Ruidong | China Environment Magazine | President and Editor-in-chief | November 1, 2013 | - | Yes |
| Statements on positions held in other entities | - | ||||
Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors and seniormanagement members as well as those who left office during the reporting period:
?Applicable ?Not Applicable
3. Remuneration of directors, supervisors and senior management MembersDecision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and seniormanagement members
The remuneration of the directors, supervisors and senior management members of the Company for 2022 is strictly incompliance with the Remuneration Plan for Directors, Supervisors and Senior Management Members in 2022 deliberated andadopted by the Company, the Rules of Procedure for the Board of Directors formulated by the Company, the Rules of Procedurefor the Board of Supervisors and the Articles of Association of the Company, as well as the relevant provisions of the CompanyLaw. The remuneration of the Company's directors, supervisors and senior management members shall be determined on the basisof reasonable remuneration in the market and the Company's performance appraisal results. The actual remuneration of theindependent directors of the Company is paid on an annual basis. The actual remuneration of senior management is partly on amonthly basis, and the part linked to the Company's performance is paid at the end of the year.Remuneration of directors, supervisors and senior management members of the Company during the reporting period
Unit: RMB 10,000
| Name | Position | Gender | Age | Incumbent/Former | Total pre-tax remuneration from the Company | Receiving remuneration from the Company's related parties or not |
| Ma Gang | Chairman of the Board and President | Male | 44 | Incumbent | 194.37 | No |
| Su Bin | Director | Male | 45 | Incumbent | 0 | Yes |
| Kuang Guangxiong | Director | Male | 44 | Incumbent | 0 | Yes |
| Shen Ke | Director | Male | 52 | Incumbent | 0 | Yes |
| Shi Shuiping | Independent Director | Male | 48 | Left office | 10 | No |
| Zhang Yu. | Independent Director | Male | 45 | Incumbent | 10 | No |
| Li Ruidong. | Independent Director | Male | 46 | Incumbent | 10 | No |
| Jiao Wanjiang. | Chairman of the Board of Supervisors | Male | 42 | Incumbent | 83.18 | No |
| Liu Kan. | Supervisor | Male | 39 | Incumbent | 70.11 | No |
| Lin Meiling. | Employee Supervisor | Female | 38 | Incumbent | 14.78 | No |
| Wang Qingbo. | Vice President & CFO | Male | 47 | Incumbent | 97.90 | No |
| Jin Taotao | Vice President and Board Secretary | Male | 40 | Incumbent | 126.09 | No |
| Lu Anfeng | Vice President & CFO | Male | 45 | Left office | 33.61 | No |
| Total | -- | -- | -- | -- | 650.04 | -- |
VI. Performance of Duties by Directors during the Reporting Period
1. Information on the Board of Directors during the reporting period
| Meeting | Date of the meeting | Disclosure date | Meeting resolution |
| The 16th extraordinary meeting of the Ninth Board of Directors | January 14, 2022 | January 15, 2022 | The Announcement on the Resolutions of the 16th Extraordinary Meeting of the Ninth Board of Directors (Announcement No.: 2022-003) was published in the Securities Daily, the Securities Times, the China Securities Journal, the Shanghai Securities News and Cninfo (www.cninfo.com.cn), which are the media designated by the Company for information disclosure. |
| The 17th extraordinary meeting of the Ninth Board of Directors | March 17, 2022. | March 18, 2022. | The Announcement on the Resolutions of the 17th Extraordinary Meeting of the Ninth Board of Directors (Announcement No.: 2022-009) was published in the Securities Daily, the Securities Times, the China Securities Journal, the Shanghai Securities News and Cninfo (www.cninfo.com.cn), which are the media designated by the Company for information disclosure. |
| The 18th meeting of the Ninth Board of Directors | April 29, 2022 | April 30, 2022 | The Announcement on the Resolutions of the 18th Meeting of the Ninth Board of Directors (Announcement No.: 2022-018) was published in the Securities Daily, the Securities Times, the China Securities Journal, the Shanghai Securities News and Cninfo (www.cninfo.com.cn), which are media the designated by the Company for information disclosure. |
| The 19th meeting of the Ninth Board of Directors | August 24, 2022. | August 25, 2022. | The Announcement on the Resolutions of the 19th Meeting of the Ninth Board of Directors (Announcement No.: 2022-062) was published in the Securities Daily, the Securities Times, the China Securities Journal, the Shanghai Securities News and Cninfo (www.cninfo.com.cn), which are the media designated by the Company for information disclosure. |
| The 20th extraordinary meeting of the Ninth Board of Directors | September 08, 2022 | September 09, 2022 | The Announcement on the Resolutions of the 20th Extraordinary Meeting of the Ninth Board of Directors (Announcement No.: 2022-073) was published in the Securities Daily, the Securities Times, the China Securities Journal, the Shanghai Securities News and Cninfo (www.cninfo.com.cn), which are the media designated by the Company for information disclosure. |
| The 21st meeting of the Ninth Board of Directors | October 26, 2022. | October 27, 2022. | The Announcement on the Resolutions of the 21st Meeting of the Ninth Board of Directors (Announcement No.: 2022-080) was published in the Securities Daily, the Securities Times, the China Securities Journal, the Shanghai Securities News and Cninfo (www.cninfo.com.cn), which are the media designated by the Company for information disclosure. |
| The 22nd meeting of the Ninth Board of Directors | December 27, 2022 | December 28, 2022 | The Announcement on the Resolutions of the 22nd Meeting of the Ninth Board of Directors (Announcement No.: 2022-088) was published in the Securities Daily, the Securities Times, the China Securities Journal, the Shanghai Securities News and Cninfo (www.cninfo.com.cn), which are the media designated by the Company for information disclosure. |
2. Attendance of directors at Board meetings and general meetings of shareholders
| Attendance of directors at Board meetings and general meetings of shareholders | |||||||
| Director's name | Number of Board | Number of Board meetings | Number of Board meetings | Number of Board meetings | Number of Board meetings | Having failed to attend two consecutive | Number of general meetings of |
| meetings held | attended on site | attended by way of telecoms | attended through proxy | absent with apologies | Board meetings in person or not | shareholders attended | |
| Ma Gang. | 7 | 7 | 0 | 0 | 0 | No | 2 |
| Su Bin. | 7 | 4 | 3 | 0 | 0 | No | 2 |
| Kuang Guangxiong. | 7 | 4 | 3 | 0 | 0 | No | 2 |
| Shen Ke. | 7 | 1 | 6 | 0 | 0 | No | 2 |
| Zhang Yu. | 7 | 1 | 6 | 0 | 0 | No | 2 |
| Li Ruidong | 7 | 1 | 6 | 0 | 0 | No | 2 |
| Shi Shuiping | 7 | 3 | 4 | 0 | 0 | No | 2 |
Explanation of failure to attend two consecutive Board meetings
NA
3. Objections raised to relevant matters of the Company
Whether any directors raised an objection to any relevant matter of the Company?Yes ?NoDirectors 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 ?NoExplanation 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 attendedBoard meetings and general meetings of shareholders in strict compliance with provisions and requirements in the Articles ofAssociation of the Company, the Rules of Procedure for the Board of Directors of the Company and relevant laws and regulations.Based on the actual situation of the Company, the directors proposed relevant opinions on the Company's material governance andoperation decisions, reached a consensus through adequate communication and discussion, firmly supervised and promoted theexecution of resolutions of the Board of Directors, ensured the decision-making was scientific, timely and highly efficient andprotected the legitimate rights and interests of the Company and all shareholders.VII. Information on Special Committees under the Board during the Reporting Period
| Name of the committee | Members | Number of meetings held | Date of the meeting | Meeting contents | Important opinions and suggestions proposed | Other information on performance of duties | Specific information on matters that objections were raised (if any) |
| Audit Committee | Shi Shuiping, Kuang Guangxiong, Li Ruidong, Zhang Yu | 5 | February 14, 2022. | 1. Pre-approval of the Financial Statements in 2021 Annual Report; 2. 2021 Annual Internal Control Self-Assessment Report; 3. 2022 Internal Audit Work Plan Report; 4. Ex-ante Communication of 2021 Annual Report. | Agreed to pass the relevant proposals of this meeting. | -- | N/A |
| Shi Shuiping, Kuang Guangxiong, Li Ruidong, Zhang Yu | April 28, 2022 | 1. 2021 Annual Report and its summary; 2. 2021 Annual Final Financial Accounting Report; 3. 2021 Profit Distribution Plan Proposal; 4. 2022 First Quarter Report; 5. Assurance Report on the Placement and Use of Proceeds in 2021; 6. Proposal on the Delay of Part of the Projects of Proceeds from the Public Issuance of A-share Convertible Corporate Bonds; 7. Proposal on Changes to Accounting Policy of the Company and Its Subsidiaries; 8. Proposal on Provision for Impairment of Goodwill in 2021; 9. Proposal on the Increase in Financing Factoring Limit for Wholly-owned Subsidiaries and Equity Participating Subsidiaries; 10. Proposal on the 2022 Annual Plan for Entrusted Wealth Management with Self-owned Funds; 11. Proposal on Estimated Routine Related Party Transactions for 2022; 12. Proposal on Guarantee Limits Provided by the Company to Its Subsidiaries; 13. Proposal on Related Party Transactions for Temporary Borrowing Funds Provided by Infore Group Co., Ltd. to the Company in 2022; 14. Proposal on the Provision of Buyer's Credit Guarantees for Customers; 15. Proposal on the Conducting of Asset Pool Business; 16. Proposal on the Application for Comprehensive Credit Lines from Banks and the Authorization for the Chairman to Sign Bank Credit Contracts; 17. Proposal on the Reappointment of Accounting Firms; 18. Revised Management Policy for External Guarantees; 19. Revised Management Policy for Related Party Transactions; 20. Revised Work Policy for Independent Directors; 21. Revised Management Policy for Proceeds; 22. Revised Management Policy for Entrusted Wealth Management; 23. Revised Registration Policy for Insider Information Persons; 24. Revised Management Policy for Information Disclosure; 25. Revised Policy for Internal Reporting of Material Information. | Agreed to pass the relevant proposals of this meeting. | -- | N/A | |
| Shi Shuiping, Kuang Guangxiong, | August 23, 2022 | 1. Summary of Internal Audit for the First Half of 2022; 2. 2022 Interim Report and its summary; 3. Special | Agreed to pass the relevant | -- | N/A |
| Li Ruidong | Report on the Placement and Use of Proceeds in the First Half of 2022; 4. Proposal on Changes to Accounting Policy of the Company and Its Subsidiaries; 5. Proposal on the Increase in Guarantee Limits; 6. Proposal on the Increase in the Limits of Buyer's Credit Guarantees Provided to Customers; 7. Proposal on the Conducting of Factoring for Accounts Receivable. | proposals of this meeting. | |||||
| Shi Shuiping, Kuang Guangxiong, Li Ruidong | October 25, 2022 | 1. Internal Control Work Report in the Third Quarter of 2022; 2. Third Quarter Report in 2022; and 3. Proposal on the Use of Part of Idle Proceeds to Temporarily Supplement Working Capital. | Agreed to pass the relevant proposals of this meeting. | -- | N/A | ||
| Shi Shuiping, Kuang Guangxiong, Li Ruidong | December 26, 2022 | Proposal on Continuing Asset Pool Business in 2023. | Agreed to pass the relevant proposals of this meeting. | -- | N/A | ||
| Remuneration & Appraisal Committee | Li Ruidong, Kuang Guangxiong, Zhang Yu | 6 | January 14, 2022 | 1. Reviewing the Performance of the Company's Directors and Executives in Fulfilling Their Duties in 2021 and Conducting Annual Performance Assessment Based on Assessment Criteria and Remuneration Policies and Plans; 2. Proposal on Second Employee Stock Ownership Plan (Draft) and Its Summary; 3. Proposal on the Formulation of the Management Measures for the Second Employee Stock Ownership Plan; 4. Proposal on the Request for Authorization from the General Meeting of Shareholders for the Board of Directors to Handle Matters Related to the Company's Second Employee Stock Ownership Plan. | Agreed to pass the relevant proposals of this meeting. | -- | N/A |
| Li Ruidong, Kuang Guangxiong, Zhang Yu | March 16, 2022 | 1. Proposal on the Second Employee Stock Ownership Plan (Revised Draft) and Its Summary; 2. Proposal on the Management Measures for the Second Employee Stock Ownership Plan (Revised); 3. Proposal on the Request for Authorization from the General Meeting of Shareholders for the Board of Directors to Handle Matters Related to the Company's Second Employee Stock Ownership Plan; 4. Implementation of the Remuneration Plan for Directors, Supervisors, and Executives in 2021. | Agreed to pass the relevant proposals of this meeting. | -- | N/A | ||
| Li Ruidong, Kuang | April 28, 2022 | 1. Proposal on the Remuneration Plan for Directors, Supervisors, and | Agreed to pass the | -- | N/A |
| Guangxiong, Zhang Yu | Executives in 2022; 2. Proposal on the Cancellation of Expired, Unexercised Stock Options for the Third Exercise Period of the Third Stock Option Incentive Scheme). | relevant proposals of this meeting. | ||||
| Li Ruidong, Kuang Guangxiong, Zhang Yu | August 23, 2022 | 1. Proposal on the Adjustment of the Exercise Price of the Third Stock Option Incentive Scheme; 2. Proposal on the Change of the Asset Manager and the Adjustment of the Transaction Price of the Second Employee Stock Ownership Plan. | Agreed to pass the relevant proposals of this meeting. | -- | N/A | |
| Li Ruidong, Kuang Guangxiong, Zhang Yu | October 25, 2022 | 1. Proposal on the Adjustment of the Recipients and Exercise Quantity and Canceling Certain Stock Options of the Third Stock Option Incentive Scheme; 2. Proposal on Matters Related to the Exercise During the Third Exercise Period of the Third Stock Option Incentive Scheme. | Agreed to pass the relevant proposals of this meeting. | -- | N/A | |
| Li Ruidong, Kuang Guangxiong, Zhang Yu | December 26, 2022 |
Proposal on the Cancellation ofExpired, Unexercised Stock Optionsfor the Second Exercise Period of theThird Stock Option Incentive Scheme.
| Agreed to pass the relevant proposals of this meeting. | -- | N/A | |||||
| Nomination Committee | Zhang Yu, Ma Gang, Shi Shuiping | 2 | April 28, 2022 | Proposal on the Appointment of the Vice President and CFO of the Company | Agreed to pass the relevant proposals of this meeting. | -- | N/A |
| Zhang Yu, Ma Gang, Shi Shuiping | December 26, 2022 | Proposal on the Election of the New Board of Directors of the Company | Agreed to pass the relevant proposals of this meeting. | -- | N/A | ||
| Strategy Committee | Ma Gang, Su Bin, Shen Ke | 3 | April 28, 2022 | 1. Proposal on the Investment and Construction of Phase II Projects of the Company's Environmental Protection Technology Industrial Park in Shunde; 2. Proposal on the Spin-off of Subsidiaries to be Listed on the ChiNext Board in Compliance with Relevant Laws and Regulations; 3. Proposal on the Plan for the Spin-off of Zhejiang Shangfeng Special Blower Industrial Co., Ltd. to be Listed on the ChiNext Board; 4. Proposal on the Revised Plan of Infore Environment Technology Group Co., Ltd. for the Spin-off of Zhejiang Shangfeng Special Blower Industrial Co., Ltd. to be Listed on the ChiNext Board; 5. Proposal on the Spin-off of Subsidiaries to be | Agreed to pass the relevant proposals of this meeting. | -- | N/A |
| Listed in Compliance with the Rules for the Spin-off of Listed Companies (Trial); 6. Proposal on the Spin-off of Zhejiang Shangfeng Special Blower Industrial Co., Ltd. to be Listed on the ChiNext Board, Which Is Conducive to Protecting the Legitimate Rights and Interests of Shareholders and Creditors; 7. Proposal on the Company's Maintenance of Independence and Capabilities of Business Continuity; 8. Proposal on Zhejiang Shangfeng Special Blower Industrial Co., Ltd. Possessing Capabilities of Standardized Operations; 9. Proposal on the Explanation of the Completeness and Compliance of the Spin-off Procedures and the Validity of the Submitted Legal Documents; 10. Proposal on the Analysis of the Purpose, Commercial Rationality, Necessity, and Feasibility of the Spin-off; 11. Proposal on the Request for the Authorization from the General Meeting of Shareholders for the Board of Directors and its Authorized Personnel to Handle Matters Related to the Spin-off and Listing; 12. Revised Management Policy for Authorization; 13. Revised Management Policy for Investment; 14. Revised Management Policy for Subsidiaries; 15. Revised Management Policy for Securities Investment. | ||||||
| Ma Gang, Su Bin, Shen Ke | August 23, 2022 | Proposal on the Application for a Change from Foreign-invested Limited Liability Company to Domestic-invested Limited Liability Company. | Agreed to pass the relevant proposals of this meeting. | -- | N/A | |
| Ma Gang, Su Bin, Shen Ke | September 7, 2022 | Proposal on the Suspension of Downward Revision of the Conversion Price of Infore Convertible Bonds. | Agreed to pass the relevant proposals of this meeting. | -- | N/A |
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 ?NoThe 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 end of the reporting period | 232 |
| Number of in-service employees of the major subsidiaries at the end of the reporting period | 16,954 |
| Total number of in-service employees at the end of the reporting period | 17,186 |
| Total number of paid employees during the reporting period | 17,186 |
| Number of retirees to whom the parent company or its major subsidiaries need to pay retirement pensions | 0 |
| Specialty | |
| Specialty category | Number of people in the specialty |
| Production personnel | 12,864 |
| Sales personnel | 1,168 |
| Technical personnel | 1,691 |
| Finance personnel | 177 |
| Administrative personnel | 1,286 |
| Total | 17,186 |
| Educational level | |
| Types of educational level | Number of people |
| Doctoral degree | 12 |
| Master's degree | 528 |
| Bachelor's degree | 2,788 |
| College | 2,280 |
| Below college | 11,578 |
| Total | 17,186 |
2. Remuneration policy
The remuneration of employees is paid on time according to the remuneration policy of the Company. The fixedremuneration of employees is determined by the Company according to the position value and individual performance, and thefloating salary of employees is determined according to the Company's individual performance assessment results. The Companyswings the weight of salary payment towards strategic professionals to ensure that the income level of core talent is competitive inthe market. The employee remuneration policy will be dynamically adjusted according to regional conditions, talent supply, staffturnover, the extent of changes in the industry environment and the corporate payment capacity.
3. Training plan
The Company pursues a talent strategy of high quality, high incentives, high performance, and high cultural identity. In 2022,Infore Enviro reconstructed its talent development and learning map, using the employee capability charging station as the mainplatform to offer a diverse and hierarchical talent development system. The Company launched seven new training programs and
optimized two existing ones, with a focus on leadership, expertise, general skills, and new employees. Leadership programsemphasized developing senior leadership and building a talent pool. Expertise programs enhanced job-specific skills throughroutine training and marketing and R&D lectures. In terms of general skills, senior executives shared strategic consensus, industrytrends, or business priorities every month to improve employees' career skills. To better support new employees, both fromcampus and social recruitment, a range of training programs were carried out, such as the Young Talent Training Camp, DualMentor Plan, Graduate Training Program, and 90-day Transition for New Employees from Social Recruitment. Moreover, theCompany provided career paths for both managers and experts and offered opportunities for job rotation and internal recruitment.These measures have encouraged the comprehensive development of various talents, helping employees grow with the Company.
4. Labor outsourcing
?Applicable ?Not applicable
| Total hours of labor outsourced | 59,917,325.06 |
| Total payment for labor outsourcing (RMB) | 624,155,450.00 |
X. Company's Profit Distribution and Converting Capital Reserve into Share CapitalFormulation, execution or adjustments of profit distribution policy, especially cash dividend policy during the reporting period?Applicable ?Not applicableAccording to the Articles of Association, while satisfying the conditions of cash dividend and ensuring the Company's normaloperation and long-term development, the Company shall in principle pay cash dividend on an annual basis. The Board ofDirectors may propose interim cash dividends depending on the Company's profit status, cash flow status, development stage andcapital requirements. The Company shall maintain the continuity and stability of the profit distribution policy. When theconditions 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 ofAssociation and fully protected the legitimate rights and interests of small and medium investors. Independent directors havevoiced their opinions on the proposal for the annual profit distribution of the Company.
| Special remarks on the cash dividend policy | |
| Whether it complies with the Company's Articles of Association or resolutions of the general meetings of shareholders: | Yes |
| Whether dividend distribution standards and ratio are explicit and clear: | Yes |
| Whether the decision-making procedure and mechanism are complete: | Yes |
| Whether independent directors diligently performed their duties and played their due role: | Yes |
| Whether minority shareholders have the opportunity to fully express their opinions and demands and whether their legal rights and interests are adequately protected: | Yes |
| In case of adjusting or changing the cash dividend policy, whether the conditions and procedures involved are in compliance with applicable regulations and transparent: | Yes |
The Company made profits during the reporting period and the parent company's profits distributable to shareholders was positive,but no proposal for cash dividend distribution was put forward.
?Applicable ?Not Applicable
2. Profit distribution and converting capital surplus into share capital for the reporting period?Applicable ?Not applicable
| Bonus shares per 10 shares (share) | 0 |
| Dividend per 10 shares (RMB) (tax inclusive) | 1.10 |
| Total shares as the basis for the proposal for profit distribution (share) | 3,166,940,177.00 |
| Cash dividends (RMB) (tax inclusive) | 348,363,419.47 |
| Cash dividends in other forms (such as share repurchase) (RMB) | 0.00 |
| Total cash dividends (inclusive of those in other forms) (RMB) | 348,363,419.47 |
| Distributable profit (RMB) | 559,764,885.53 |
| Total cash dividends (inclusive of those in other forms) as a percentage of total distributed profit | 62.23% |
| Information on this cash dividend | |
| Others | |
| Details about the proposal for profit distribution and converting capital reserve into share capital | |
| The profit distribution plan for 2022 is as follows: based on the total share capital (minus company shares in the Company's repurchase account) on the date of record for the 2022 profit distribution plan, a cash dividend of RMB 1.10 (tax inclusive) per 10 shares will be distributed to the shareholders, with no bonus issue from either profit or capital reserves. At the end of 2021, the Company reported RMB 706,488,302.65 in profits available for distribution and RMB 394,435,926.25 in retained earnings after cash dividends. In 2022, the Company realized a net profit of RMB 183,698,843.64 and a surplus reserve of RMB 18,369,884.36. As a result, profits available for distribution at the end of 2022 reached RMB 559,764,885.53. When the profit distribution plan for 2022 is implemented, if the total share capital (minus shares in the Company's repurchase account) on the date of record for the plan remains unchanged, which is 3,166,940,177, a cash dividend of RMB 1.10 (tax inclusive) will be distributed for every 10 shares, totaling RMB 348,363,419.47. As a result, retained earnings after cash dividends will be RMB 211,401,466.06. On the other hand, if the total share capital changes due to reasons such as the conversion of convertible bonds, share repurchases, stock incentive exercise, and the listing of new shares from refinancing before the plan is implemented, the Company will maintain the policy of distributing RMB 0.11 (tax inclusive) per share and adjust the total cash dividends accordingly. | |
XI. Company's Implementation of Stock Option Incentive Scheme and Employee StockOwnership Plan or Other Employee Incentive Measures?Applicable ?Not applicable
1. Stock incentive
Overview of the Second Stock Option Incentive Scheme:
1. On March 11, 2022, the third exercise period of the Company's Second Stock Option Incentive Scheme expired, with4,100,000 outstanding stock options of 40 recipients. The Company would cancel the 4,100,000 stock options that were grantedand were not exercised during the third exercise period of the Second Stock Option Incentive Scheme, in accordance with theapplicable laws and regulations.
2. On April 29, 2022, the Proposal on the Cancellation of Expired, Unexercised Stock Options for the Third Exercise Periodof the Second Stock Option Incentive Scheme was deliberated and approved at the 18
th
meeting of the Ninth Board of Directors andthe 17
thmeeting of the Ninth Board of Supervisors. According to the provisions of the Second Stock Option Incentive Scheme
(Draft), the Board of Directors agreed to cancel the 4,100,000 expired stock options of 40 recipients unexercised during the thirdexercise period. After the cancellation, the Second Stock Option Incentive Scheme will be fully implemented.
For more information, please refer to the announcements published on April 30, 2022 on the media for information disclosuredesignated by the Company, including Securities Daily, Securities Times, China Securities Journal, and Shanghai Securities News,as well as Cninfo (http://www.cninfo.com.cn).Overview of the Third Stock Option Incentive Scheme:
1. On April 22, 2021, the Proposal on Matters Related to the Exercise in the Second Exercise Period of the Third StockOption Incentive Scheme was deliberated and approved at the 13
th meeting of the Ninth Board of Directors and the 12
thmeeting ofthe Ninth Board of Supervisors. A total of 17,814,000 stock options of the Third Stock Option Incentive Scheme were deemed fitto be exercised at RMB 6.34 per share voluntarily in the second exercise period. Prior to the exercise of stock option, if theCompany has dividend distribution, capital reserve transferred to share capital, distribution of share bonus, share split, sharereduction or increase issue in stocks, etc., the exercise price of stock options will be adjusted accordingly.
2. On August 19, 2021, the 14
th
meeting of the Ninth Board of Directors and the 13
th
meeting of the Ninth Board ofSupervisors held by the Company deliberated and approved the Proposal for Adjustment of the Option Exercise Prices of Phase IIand Third Stock Option Incentive Schemes. In view of the fact that the Company's 2020 annual equity distribution was completedon July 8, 2021, according to relevant provisions on the adjustment of the stock option exercise price of the Third Stock OptionIncentive 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 ofstock options will be adjusted accordingly. After the implementation of this equity distribution, the exercise price of the ThirdStock Option Incentive Scheme will be adjusted from RMB 6.34 per share to RMB 6.22 per share.
3. On August 24, 2022, the 19
th
meeting of the Ninth Board of Directors and the 18
th
meeting of the Ninth Board ofSupervisors held by the Company deliberated and approved the Proposal for Adjustment of the Option Exercise Prices of the ThirdStock Option Incentive Schemes. In view of the fact that the Company's 2021 annual equity distribution was completed on July 20,2022, according to relevant provisions on the adjustment of the stock option exercise price of the Third Stock Option IncentiveScheme (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 ofstock options will be adjusted accordingly. After the implementation of this equity distribution, the exercise price of the ThirdStock Option Incentive Scheme will be adjusted from RMB 6.22 per share to RMB 6.12 per share.
4. On October 26, 2022, the 21
st Meeting of the Ninth Board of Directors and the 19
th
meeting of the Ninth Board ofSupervisors held by the Company deliberated and approved the Proposal for the Adjustment of the Eligible Participants and theNumber of Options to Be Exercised under the Third Stock Option Incentive Schemes and Cancellation of Partial Stock Optionsand the Proposal for Matters Relating to Option Exercise during the Third Exercise Period of the Third Stock Option IncentiveScheme of the Company.
(1) The Company's 22 recipients resigned and were identified by the Company's Board of Directors as no longer suitable forincentives. According to the Third Stock Option Incentive Scheme (Revised Draft), their 1,788,000 stock options in total werecanceled for the second and third exercise periods. After the adjustments, the number of recipients of the Third Stock OptionIncentive Scheme was adjusted from the original 231 to 209, and the number of locked stock options granted was adjusted from23,752,000 to 21,964,000.
(2) The exercise conditions for the third exercise period under the Third Stock Option Incentive Scheme have been met, andthe total number of exercisable options is 21,964,000, which are exercised by individual exercise at the price of RMB 6.12 pershare. 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 beadjusted accordingly.
5. On December 27, 2022, the Proposal on the Cancellation of Expired, Unexercised Stock Options for the Second ExercisePeriod of the Third Stock Option Incentive Scheme was deliberated and approved at the 22
ndmeeting of the Ninth Board ofDirectors and the 20
th
meeting of the Ninth Board of Supervisors. The 231 recipients exercised 16,409,380 stock options, with1,404,620 unexercised during the second exercise period of the Third Stock Option Incentive Scheme. According to the ThirdStock Option Incentive Scheme (Revised Draft), the Board of Directors agreed to cancel the 1,404,620 expired stock options. Afterthe completion of the cancellation, the Company's Third Stock Option Incentive Scheme will continue to be implemented inaccordance with the requirements.
6. As at December 31, 2022, when the second exercise period of the Third Stock Option Incentive Scheme expired,16,409,380 stock options had been exercised; no stock options were exercised during the third exercise period of the Third StockOption Incentive Scheme because the market price was lower than the exercise price.For more information, please refer to announcements published on 23 April 2021, 21 August 2022 25 August 2022, 27October 2022 and 28 December 2022 on the media for information disclosure designated by the Company and Cninfo(http://www.cninfo.com.cn).Equity incentives granted to directors and senior management members of the Company:
?Applicable ?Not ApplicableAppraisal mechanism and incentives for senior management members
The Company has established a sound performance assessment and incentive system. The Board of Directors of the Companyestablished the Remuneration & Appraisal Committee as the administrative institution for the appointment and remunerationappraisal of the senior management members of the Company, which shall be responsible for formulating remuneration standardsand schemes for the senior management members, reviewing their performance of duties and formulating scientific and reasonableremuneration scheme and submitting to the board for review and discussion. The senior management members currently serving inthe Company shall be subject to comprehensive performance appraisal based on their positions, the current remuneration system ofthe Company, the Company's actual operating performance, individual performance, performance of duties and achievement ofresponsibilities and goals, and the result of such appraisal shall serve as the basis to determine their remunerations. The Companypays the remunerations of senior management members based on schedule. During the reporting period, the senior managementmembers of the Company conscientiously performed their duties in strict accordance with the Company Law, the Articles ofAssociation and the relevant laws and regulations, actively implemented relevant resolutions of the general meetings ofShareholders and Board meetings, and completed various tasks of the year in a quite good way.
2. Implementation of the employee stock ownership plan
?Applicable ?Not applicableInformation on all effective employee stock ownership plans during the reporting period
| Scope of employees | Number of employees | Total number of shares held | Changes | As a percentage of the total share capital of the listed company | Source of funds to implement the plan |
| Directors (excluding independent directors), supervisors, middle and senior level management personnel, key elite personnel (technology, marketing, production, etc.) of the Company. | 136 | 0 | As at May 9, 2022, the First Employee Stock Ownership Plan was completed, with all 36,211,560 shares (accounting for 1.14% of the Company's total share capital) sold through centralized bidding. | 0.00% | Employees' legitimate remuneration, self-raised funds and other funds obtained by legitimate and compliant means. |
| Directors (excluding | 134 | 64,789,616 | As at October 12, 2022, stock | 2.04% | Employees' |
| independent directors), supervisors, senior level management personnel, and key elite personnel (technology, marketing, production, etc.) of the Company. | purchases were completed in the Second Employee Stock Ownership Plan, with a total of 64,789,616 shares (accounting for 2.04% of the Company's total share capital) purchased. All the shares purchased have entered the lock-up period. | legitimate remuneration, self-raised funds, and other funds obtained by means permitted by laws and regulations. |
Shareholding of directors, supervisors and senior management members in the employee stock ownership plan during thereporting period
| Name | Position | Number of shares held at the beginning of the reporting period | Number of shares held at the end of the reporting period | As a percentage of the total share capital of the listed company |
| Ma Gang | Chairman & President | 128,795 | 17,246,996 | 0.54% |
| Wang Qingbo | Vice President & CFO | 0 | 4,159,493 | 0.13% |
| Jin Taotao | Vice President & Board Secretary | 6,104 | 2,462,005 | 0.08% |
| Jiao Wanjiang | Chairman of the Board of Supervisors | 18,908 | 1,846,504 | 0.06% |
| Liu Kan | Supervisor | 0 | 155,495 | 0.00% |
Changes in the asset management institution during the reporting period?Applicable ?Not applicable
On August 24, 2022, the Proposal on the Change of the Asset Manager and the Adjustment of the Transaction Price of theSecond Employee Stock Ownership Plan was deliberated and approved at the 19
thmeeting of the Ninth Board of Directors. Inaccordance with laws and regulations and based on the realities during the implementation of the plan, the Company decided toreplace the former asset manager, Guangfa Securities Asset Management (Guangdong) Co., Ltd., with the ManagementCommittee of the Second Employee Stock Ownership Plan to manage the plan.Changes in equity arising from the disposal of shares by holders during the reporting period?Applicable ?Not applicable
During the reporting period, the First Employee Stock Ownership Plan was completed after the lock-up period expired, withall 36,211,560 shares (1.14% of the Company's total share capital) sold through centralized bidding from November 11, 2021, toMay 9, 2022. The actual shareholding period was consistent with the duration disclosed in the First Employee Stock OwnershipPlan (Draft). The Management Committee carried out property liquidation and distribution according to the First Employee StockOwnership Plan (Draft) and the relevant provisions of the asset management plan. Therefore, the equity distribution of the FirstEmployee Stock Ownership Plan was completed.Exercise of shareholders' rights during the reporting periodNAOther relevant circumstances and explanations of the employee stock ownership plan during the reporting period?Applicable ?Not applicable
On August 24, 2022, the Proposal on the Change of the Asset Manager and the Adjustment of the Transaction Price of theSecond Employee Stock Ownership Plan was deliberated and approved at the 19
thmeeting of the Ninth Board of Directors. Inaccordance with laws and regulations and based on the realities during the implementation of the plan, the Company decided toappoint the Management Committee of the Second Employee Stock Ownership Plan to manage the plan. Moreover, the Board of
Directors agreed to adjust the transfer price of the Second Employee Stock Ownership Plan to RMB 4.94 per share from RMB
5.04 per share after the Company's equity distribution for 2021 was completed on July 20, 2022.Change of the members of the employee stock ownership plan management committee?Applicable ?Not ApplicableThe financial impact of the employee stock ownership plan on the listed company during the reporting period and relevantaccounting treatment?Applicable ?Not applicableThe Company's Second Employee stock ownership plan was completed in 2022 through the transfer of shares in theCompany's repurchase special security account and centralized bidding in the secondary market, and 46,410,852 shares weretransferred from the Company's repurchase special security account, resulting in the decrease of capital reserve of RMB132,175,661.99.Termination of the employee stock ownership plan during the reporting period?Applicable ?Not applicableDuring the reporting period, the First Employee Stock Ownership Plan was fully implemented, with the completion ofproperty liquidation and distribution. The gains enjoyed by the participants of this employee stock ownership plan have beendistributed in proportion to their holdings of the underlying stocks after deducting taxes and fees.Other statements:
NA
3. Other employee incentive measures
?Applicable ?Not ApplicableXII. Establishment and Implementation of the Internal Control System during theReporting Period
1. Establishment and implementation of internal control
(1) Internal control development
Infore Enviro has established and improved various rules and regulations relating to corporate governance and internalcontrol in accordance with the requirements of the Company Law, the Securities Law, the Basic Standard for Enterprise InternalControl, the Rules Governing the Listing of Shares on SZSE and other statutory documents. The operations of the General Meetingof Shareholders, the Board of Directors and the Board of Supervisors in Infore Enviro comply with the provisions of the relevantlaws, regulations, the Articles of Association of the Company, the Rules of Procedure for the General Meeting of Shareholders, theRules of Procedure for the Board of Directors, and the Rules of Procedure for the Board of Supervisors. Corresponding internalmanagement systems with respect to such material issues as financial accounting, fundraising, external investment, externalguarantee, related party transactions and information disclosure have been established in Infore Enviro to ensure the legality andcompliance of day-to-day operations and decision-making procedures concerning material matters.
(2) Internal control implementation
(a) Execution of information disclosure management policies
As verified, the Company effectively complied with the Information Disclosure Management Policy in 2022, with goodperformance in information disclosure, and was not subjected to punishment by the securities regulatory authorities for violation ofrules regarding information disclosure.
(b) Execution of financial internal control policiesAs verified, with respect to finance and accounting, the Company has established the relevant internal management system inaccordance with the requirements of the Accounting Standards for Enterprises, the Company Law and other relevant laws andregulations, which can ensure the accuracy and reliability of the financial and accounting information and the safety andeffectiveness of the financial and accounting systems.
(c) Execution of other internal control policiesAs verified, Infore Enviro complied with the provisions of the Articles of Association of the Company and the relevant rulesand regulations, performed necessary decision-making procedures, and implemented the internal control system quite well.
2. Details of material internal control deficiencies identified during the reporting period
?Yes ?NoXIII. Management and Control of the Company over the Subsidiaries during the ReportPeriod
| Company name | Integration plan | Integration progress | Problems in the integration | Resolution measures taken | Resolution progress | Follow-up resolution plan |
| Zhejiang Yolsh Electric Drive Technology Co., Ltd. | Conducting unified control over human resources, financial resources, performance targets, and corporate culture to optimize resource allocation and enhance business collaboration; assigning core management personnel to serve as directors and senior management of subsidiaries to improve management efficiency and economic benefits and help subsidiaries achieve operational objectives. | Completed | N/A | N/A | N/A | N/A |
| Lianjiang Greenlander New Energy Co., Ltd. | Assigning directors and senior management and overseeing critical matters related to operations, finance, audit, material investments, legal affairs, and human resources to improve management efficiency and economic benefits and help subsidiaries achieve operational objectives. | Completed | N/A | N/A | N/A | N/A |
XIV. Self-assessment Report or Audit Report on Internal Control
1. Internal control self-assessment report
| Date of full disclosure of the internal control assessment report | April 25, 2023 |
| Index of full disclosure of the internal control assessment report | For details, see the 2022 Internal Control Self-Assessment Report disclosed at http://www.cninfo.com.cn |
| The total assets of the organization included in the assessment as a percentage of the total assets in the Company's consolidated financial statements | 100.00% |
| The revenue of the organization included | 100.00% |
| in the assessment as a percentage of the revenue in the Company's consolidated financial statements | ||
| Deficiency identification criteria | ||
| Category | Financial reports | Non-financial reports |
| Qualitative criteria | Material deficiencies: 1. Fraud committed by directors, supervisors and senior management members; 2. Enterprise's correction of a financial report published or reported; 3. Material misstatement during the period's financial report identified by CPAs, which was not identified in the course of the functioning of internal controls; 4. Ineffective supervision over internal control by the Audit Committee and internal audit agency of enterprise; 5. Lack of post qualification or obvious incompetence of principal financial personnel; 6. Ineffective compliance supervision and violations of regulations that could materially affect the reliability of financial reports; 7. The management's failure to correct significant deficiency after a reasonable period of being aware of the deficiency. Significant deficiencies: 1. Anti-fraud procedures and controls; 2. Internal control over unconventional or unsystematic transactions; 3. Internal control over the selection and application of accounting policy with reference to the generally accepted accounting standards; 4. Internal control over the financial reporting procedures at the end of the reporting period. | Material deficiencies: 1. Violations of national laws and regulations, e.g., environmental pollution, serious damage to the local ecological environment, failure to report or disclose information as regulations; 2. Loss of more than 30% of middle and senior managers and senior technical personnel without timely replenishment, affecting the normal operations of the Company; 3. Failure to take timely and active response measures against frequent negative media reports, which involve a wide range of subjects, leading to a material negative impact on the Company; 4. Failure to address the findings of internal control assessments, particularly material or significant deficiencies. 5. Absence of policy control or systematic failure of critical businesses; 6. Unreasonable decision-making procedures of enterprise, e.g., decision-making mistakes, resulting in unsuccessful M&A; 7. Losses suffered by the enterprise in consecutive years for reasons apart from policy reasons, posing challenges to the Company's ability to continue as a going concern; 8. Lack of internal controls in subsidiaries, leading to poor management. Significant deficiencies: 1. Fraud committed by middle-level managers; 2. Negative reports published by influential media in that year; 3. Failure to remedy general deficiencies identified in the prior year, without reasonable explanation; 4. Incompetency of some managers or operators. General deficiencies: 1. Fraud committed by general employees; 2. Failure to remedy general deficiencies identified in the prior year, but with reasonable explanation; |
| Quantitative criteria | 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 | Material deficiencies: Direct property loss of RMB 10 million or above or punishment by government authorities at the national level, officially disclosed with a negative effect on the |
| 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 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 but less than 1% of the Company's revenue or 5% of the total pre-tax profit in the consolidated financial statements for the most recent fiscal year. 2. The potentially misstated amount in the balance sheet is greater than or equal to 0.5% of the total assets in the consolidated financial statements of the Company for the most recent fiscal year but less than 1% of the total assets in the consolidated financial statements for the most recent fiscal year. General deficiencies: 1. The potentially misstated amount in the profit statement is less than 0.5% of the Company's revenue or 3% of the total pre-tax profit in the consolidated financial statements for the most recent fiscal year; 2. The potentially misstated amount in the balance sheet is less than 0.5% of the consolidated total assets of the Company in the most recent financial year. | Company's periodic reporting; Significant deficiencies: Direct property loss of between RMB 5 million (inclusive) and RMB 10 million or punishment by government authorities at the provincial level or higher, without a negative effect on the Company's periodic reporting; General deficiencies: Direct property loss of less than RMB 5 million or punishment by government authorities below the provincial level, without a negative effect on the Company's periodic reporting. | |
| Number of material deficiencies in financial reports | 0 | |
| Number of material deficiencies in non-financial reports | 0 | |
| Number of significant deficiencies in financial reports | 0 | |
| Number of significant deficiencies in non-financial reports | 0 | |
2. Audit report on internal control
?Applicable ?Not applicable
| The Opinion paragraph in the audit report on internal control | |
| Infore Enviro maintained, in all material respects, effective internal control over financial reporting as at December 31, 2022, in accordance with the Basic Standard for Enterprise Internal Control and other applicable rules. | |
| Disclosure status of the audit report on internal control | Disclosed |
| Disclosure date of the full audit report on internal control | April 25, 2023 |
| Index to the full audit report on internal control | PCCPAAR [2023] No. 4801 |
| Opinion type of the audit report on internal control | Standard unqualified opinion |
| Whether any material deficiency in the non-financial reports | No |
Whether the accounting firm has issued the audit report with modified opinion on the Company's internal control?Yes ?NoWhether the auditor's report on the Company's internal control is consistent with the self-assessment report issued by theCompany's Board of Directors?Yes ?NoXV. Rectification of Self-Detected Problems through the Special Campaign to ImproveGovernance of Listed CompaniesAccording to the system of the CSRC for filling and reporting the special self-examination list for the governance of listedcompanies, the Company conducted self-examination work during the special campaign based on the principle of seeking truthfrom facts and in strict accordance with the Company Law, the Securities Law, Guidelines No. 1 of Shenzhen Stock Exchange forSelf-regulation of Listed Companies—Standardized Operation of Companies Listed on the Main Board and other relevant lawsand regulations as well as its internal rules and regulations, carefully sorted out the issues and filled in the forms. Through thisself-examination, the Company believes that its corporate governance complies with the requirements of the Company Law, theSecurities Law, Guidelines No. 1 of Shenzhen Stock Exchange for Self-regulation of Listed Companies—Standardized Operationof Companies Listed on the Main Board and other laws and regulations, and that its corporate governance structure is relativelysound, the operations are standardized, and there is no material problems or mistakes. The Company shall continue to enhancemanagement in the following areas:
1. Further refining internal control policies
The Company shall systemically sort out and improve its corporate governance and internal control in accordance with thelatest laws and regulations and combined with the requirements of the regulatory authorities and its self-examination result, furtherperfect its internal control system and implement the corresponding examination and approval procedure on the revised andimproved relevant systems.
2. Further leveraging the roles of special committees under the Board of Directors
During the reporting period, the Company maintained special committees in strict accordance with the relevant laws andregulations, and the special committees conducted on-site inspection and supervised and guided the Company's operation andmanagement and the execution of resolutions of the Board of Directors. In the future, the Company shall continue to createconditions for members of the special committees to familiarize themselves with the business of the Company, facilitate them toplay their roles and provide advice and suggestions on the Company's development planning, operation and management, riskcontrol, selection and engagement of senior management members and back-up personnel, performance appraisal of seniormanagement members, internal control and internal audit, etc., to further improve the scientific decision-making capacity and riskprevention 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 Affairsand in combination with its own situation. In daily information disclosure management, the Company shall conduct informationdisclosure in a concise and easy-to-understand manner on the premise that the Company, its shareholders and other informationdisclosure obligors shall ensure the authenticity, accuracy, completeness, timeliness and fairness of information disclosure. Therelevant personnel of information disclosure shall treat the information disclosure in a diligent manner, prevent mistakes andensure the quality of information disclosure and promote the level of information disclosure. During the reporting period, theCompany and relevant personnel completed the information disclosure work in strict accordance with the requirements of lawsand regulations.
4. Further increasing the training in laws and regulations
By optimizing the internal training program and intensifying training, the Company helped its staff better understand laws,regulations, and normative documents such as the Securities Law, the Rules Governing the Listing of Shares on SZSE, and theGuidelines No. 1 of Shenzhen Stock Exchange for Self-regulation of Listed Companies—Standardized Operation of CompaniesListed on the Main Board. , and continuously strengthen relevant study, strictly observe relevant provisions, manage its operationsin a prudent manner and eradicate violations.
Part V Environmental and Social Responsibility
I. Material Environmental IssuesWhether the listed company and its subsidiaries are major pollutant emitters announced by national environmental protectionauthorities?Yes ?NoEnvironmental protection policies and industry standardsThe Company strictly abides by the laws, regulations, and emission standards, such as the Environmental Protection Law ofthe People's Republic of China, Law of the People's Republic of China on Prevention and Control of Water Pollution, IntegratedWastewater Discharge Standard, and Law of the People's Republic of China on the Prevention and Control of Air Pollution. It hasconsistently improved its management policies and optimized treatment facilities and technologies to minimize the discharge ofpollutants.Environmental protection administrative licensingThe Company has been running all its key pollutant discharge projects according to laws and regulations for many years.During the construction period, environmental impact assessment was carried out for these projects in accordance with relevantlaws and regulations such as the Environmental Protection Law of the People's Republic of China and Law of the People'sRepublic of China on Environmental Impact Assessment, and environmental impact assessment documents were approved byenvironmental authorities. Besides, the Company obtained approval from environmental authorities before pilot production,organized environmental protection acceptance inspection for the completed project during pilot production, and simultaneouslydesigned, constructed and put into use the supporting environmental protection facilities and the main works.Industry discharge standards and discharge of pollutants in production and operating activities
| Name of company or subsidiary | Types of main pollutants and characteristic pollutants | Names of main pollutants and characteristic pollutants | Way of discharge | Number of discharge outlets | Layout of discharge outlets | Discharge concentration/intensity | Pollutant discharge standards implemented | Total discharge volume | Total approved discharge volume | Excessive discharge |
| Foshan Shunde Huaqingyuan Water Environmental Protection Co., Ltd. (Phases I and II sewage stations by the gate), Foshan Shunde Yuanrun Water Environmental Protection Co., Ltd. (Phase III sewage station by the gate) | Wastewater | COD | Continuous discharge | 1 | Beijiang River trunk stream waterway | 10.5mg/L | GB 18918-2002, Class 1A | 423.83t | 1606t/a | N/A |
| Foshan Shunde Huaqingyuan Water Environmental Protection Co., Ltd. (Phases I and II sewage stations by the gate), Foshan Shunde Yuanrun Water Environmental Protection Co., Ltd. | Wastewater | Ammonia nitrogen | Continuous discharge | 1 | Beijiang River trunk stream waterway | 0.52mg/L | GB 18918-2002, Class 1A | 20.99t | 200.75t/a | N/A |
| (Phase III sewage station by the gate) | ||||||||||
| Foshan Shunde Huaqingyuan Water Environmental Protection Co., Ltd. (Phases I and II sewage stations by the gate), Foshan Shunde Yuanrun Water Environmental Protection Co., Ltd. (Phase III sewage station by the gate) | Wastewater | Total phosphorus | Continuous discharge | 1 | Beijiang River trunk stream waterway | 0.25mg/L | GB 18918-2002, Class 1A | 10.09t | 20.075t/a | N/A |
| Foshan Shunde Huaqingyuan Water Environmental Protection Co., Ltd. (Phases I and II sewage stations by the gate), Foshan Shunde Yuanrun Water Environmental Protection Co., Ltd. (Phase III sewage station by the gate) | Wastewater | Total nitrogen | Continuous discharge | 1 | Beijiang River trunk stream waterway | 6.15mg/L | GB 18918-2002, Class 1A | 248.24t | 602.25t/a | N/A |
| Funan Green Oriental Environmental Protection Energy Co., Ltd. | Waste gas | Smoke | 80m chimney | 1 | North side of the main plant | 4.199mg/Nm? | GB18485-2014 | 2.602t | 14.6t/a | N/A |
| Funan Green Oriental Environmental Protection Energy Co., Ltd. | Waste gas | SO2 | 80m chimney | 1 | North side of the main plant | 41.814mg/Nm? | GB18485-2014 | 26.548t | 89.28t/a | N/A |
| Funan Green Oriental Environmental Protection Energy Co., Ltd. | Waste gas | NOx | 80m chimney | 1 | North side of the main plant | 150.85mg/Nm? | GB18485-2014 | 94.538t | 96.72t/a | N/A |
| Funan Green Oriental Environmental Protection Energy Co., Ltd. | Waste gas | HCl | 80m chimney | 1 | North side of the main plant | 38.343mg/Nm? | GB18485-2014 | 23.831t | / | N/A |
| Funan Green Oriental Environmental Protection Energy Co., Ltd. | Waste gas | CO | 80m chimney | 1 | North side of the main plant | 14.684mg/Nm? | GB18485-2014 | 9.174t | / | N/A |
| Funan Green Oriental Environmental Protection Energy Co., Ltd. | Waste gas | Pb | 80m chimney | 1 | North side of the main plant | 0.0146mg/Nm? | GB18485-2014 | / | / | N/A |
| Funan Green | Waste gas | Cd | 80m | 1 | North side of | 0.0000945mg/Nm? | GB18485 | / | / | N/A |
| Oriental Environmental Protection Energy Co., Ltd. | chimney | the main plant | -2014 | |||||||
| Funan Green Oriental Environmental Protection Energy Co., Ltd. | Waste gas | Hg | 80m chimney | 1 | North side of the main plant | 0.0048mg/Nm? | GB18485-2014 | / | / | N/A |
| Funan Green Oriental Environmental Protection Energy Co., Ltd. | Waste gas | Dioxins | 80m chimney | 1 | North side of the main plant | 0.057ng-TEQ/m3 | GB18485-2014 | / | / | N/A |
| Shouxian Greenlander New Energy Co., Ltd. | Waste gas | Smoke | 80m chimney | 1 | West side of the main plant | 2.8mg/Nm? | GB18485-2014 | 1.55t | 12t/a | N/A |
| Shouxian Greenlander New Energy Co., Ltd. | Waste gas | SO2 | 80m chimney | 1 | West side of the main plant | 29.0mg/Nm? | GB18485-2014 | 23.7t | 70.8t/a | N/A |
| Shouxian Greenlander New Energy Co., Ltd. | Waste gas | NOx | 80m chimney | 1 | West side of the main plant | 184.3mg/Nm? | GB18485-2014 | 138.27t | 144t/a | N/A |
| Shouxian Greenlander New Energy Co., Ltd. | Waste gas | HCl | 80m chimney | 1 | West side of the main plant | 44.1mg/Nm? | GB18485-2014 | 32.46t | / | N/A |
| Shouxian Greenlander New Energy Co., Ltd. | Waste gas | CO | 80m chimney | 1 | West side of the main plant | 3.4mg/Nm? | GB18485-2014 | 4.03t | / | N/A |
| Shouxian Greenlander New Energy Co., Ltd. | Waste gas | Pb | 80m chimney | 1 | West side of the main plant | 0.029mg/m3 | GB18485-2014 | / | / | N/A |
| Shouxian Greenlander New Energy Co., Ltd. | Waste gas | Cd | 80m chimney | 1 | West side of the main plant | 0.00096mg/m3 | GB18485-2014 | / | / | N/A |
| Shouxian Greenlander New Energy Co., Ltd. | Waste gas | Hg | 80m chimney | 1 | West side of the main plant | 0.000043mg/Nm? | GB18485-2014 | / | / | N/A |
| Shouxian Greenlander New Energy Co., Ltd. | Waste gas | Dioxins | 80m chimney | 1 | West side of the main plant | 0.038ngTEQ/m3 | GB18485-2014 | / | / | N/A |
| Lianjiang Greenlander New Energy Co., Ltd. | Waste gas | Smoke | 80m chimney | 1 | East side of the main plant | 2.8mg/Nm? | GB18485-2014 | 0.885t | 6.78t/a | N/A |
| Lianjiang Greenlander New Energy Co., Ltd. | Waste gas | SO2 | 80m chimney | 1 | East side of the main plant | 29.0mg/Nm? | GB18485-2014 | 14.689t | 26.06t/a | N/A |
| Lianjiang Greenlander New Energy Co., Ltd. | Waste gas | NOx | 80m chimney | 1 | East side of the main plant | 184.3mg/Nm? | GB18485-2014 | 101.252t | 104t/a | N/A |
| Lianjiang Greenlander New Energy Co., Ltd. | Waste gas | HCI | 80m chimney | 1 | East side of the main plant | 44.1mg/Nm? | GB18485-2014 | 25.205t | / | N/A |
| Lianjiang Greenlander New Energy Co., Ltd. | Waste gas | CO | 80m chimney | 1 | East side of the main plant | 3.4mg/Nm? | GB18485-2014 | 21.473t | / | N/A |
| Lianjiang | Waste gas | Pb | 80m | 1 | East side of | 0.029mg/m3 | GB18485 | 0.885t | / | N/A |
| Greenlander New Energy Co., Ltd. | chimney | the main plant | -2014 | |||||||
| Lianjiang Greenlander New Energy Co., Ltd. | Waste gas | Cd | 80m chimney | 1 | East side of the main plant | 0.00096mg/m3 | GB18485-2014 | / | / | N/A |
| Lianjiang Greenlander New Energy Co., Ltd. | Waste gas | Hg | 80m chimney | 1 | East side of the main plant | 0.000043mg/Nm? | GB18485-2014 | / | / | N/A |
| Lianjiang Greenlander New Energy Co., Ltd. | Waste gas | Dioxins | 80m chimney | 1 | East side of the main plant | 0.038ngTEQ/m3 | GB18485-2014 | / | / | N/A |
| Xiantao Green Oriental Environmental Protection Power Co., Ltd. (1# furnace) | Waste gas | Smoke | 80m chimney | 1 | West side of the main plant | 0.22mg/m? | GB18485-2014 | 0.2t | / | N/A |
| Xiantao Green Oriental Environmental Protection Power Co., Ltd. (1# furnace) | Waste gas | SO2 | 80m chimney | 1 | West side of the main plant | 29.36mg/m? | GB18485-2014 | 29.3t | 58t/a | N/A |
| Xiantao Green Oriental Environmental Protection Power Co., Ltd. (1# furnace) | Waste gas | NOx | 80m chimney | 1 | West side of the main plant | 189.1mg/m? | GB18485-2014 | 121.4t | 148.85t/a | N/A |
| Xiantao Green Oriental Environmental Protection Power Co., Ltd. (1# furnace) | Waste gas | HCl | 80m chimney | 1 | West side of the main plant | 22.5mg/m? | GB18485-2014 | 15.4t | / | N/A |
| Xiantao Green Oriental Environmental Protection Power Co., Ltd. (1# furnace) | Waste gas | CO | 80m chimney | 1 | West side of the main plant | 5.6mg/m? | GB18485-2014 | 3.56t | / | N/A |
| Xiantao Green Oriental Environmental Protection Power Co., Ltd. (1# furnace) | Waste gas | Pb | 80m chimney | 1 | West side of the main plant | 0.0029mg/m? | GB18485-2014 | / | / | N/A |
| Xiantao Green Oriental Environmental Protection Power Co., Ltd. (1# furnace) | Waste gas | Cd | 80m chimney | 1 | West side of the main plant | 0.00013mg/m? | GB18485-2014 | / | / | N/A |
| Xiantao Green Oriental Environmental Protection Power | Waste gas | Hg | 80m chimney | 1 | West side of the main plant | ND | GB18485-2014 | / | / | N/A |
| Co., Ltd. (1# furnace) | ||||||||||
| Xiantao Green Oriental Environmental Protection Power Co., Ltd. (1# furnace) | Waste gas | Dioxins | 80m chimney | 1 | West side of the main plant | 0.0012ngTEQ/m3 | GB18485-2014 | / | / | N/A |
| Xiantao Green Oriental Environmental Protection Power Co., Ltd. (2# furnace) | Waste gas | Smoke | 80m chimney | 1 | West side of the main plant | 1.4mg/m? | GB18485-2014 | 0.6t | / | N/A |
| Xiantao Green Oriental Environmental Protection Power Co., Ltd. (2# furnace) | Waste gas | SO2 | 80m chimney | 1 | West side of the main plant | 21.5mg/m? | GB18485-2014 | 10.2t | 58t/a | N/A |
| Xiantao Green Oriental Environmental Protection Power Co., Ltd. (2# furnace) | Waste gas | NOx | 80m chimney | 1 | West side of the main plant | 186.5mg/m? | GB18485-2014 | 86.7t | 148.85t/a | N/A |
| Xiantao Green Oriental Environmental Protection Power Co., Ltd. (2# furnace) | Waste gas | HCI | 80m chimney | 1 | West side of the main plant | 22.1mg/m? | GB18485-2014 | 10.33t | / | N/A |
| Xiantao Green Oriental Environmental Protection Power Co., Ltd. (2# furnace) | Waste gas | CO | 80m chimney | 1 | West side of the main plant | 0.87mg/m? | GB18485-2014 | 1.99t | / | N/A |
| Xiantao Green Oriental Environmental Protection Power Co., Ltd. (2# furnace) | Waste gas | Pb | 80m chimney | 1 | West side of the main plant | 0.0032mg/m? | GB18485-2014 | / | / | N/A |
| Xiantao Green Oriental Environmental Protection Power Co., Ltd. (2# furnace) | Waste gas | Cd | 80m chimney | 1 | West side of the main plant | 0.00014mg/m? | GB18485-2014 | / | / | N/A |
| Xiantao Green Oriental Environmental Protection Power Co., Ltd. (2# furnace) | Waste gas | Hg | 80m chimney | 1 | West side of the main plant | ND | GB18485-2014 | / | / | N/A |
| Xiantao Green | Waste gas | Dioxins | 80m | 1 | West side of | 0.002ngTEQ/m3 | GB18485 | / | / | N/A |
| Oriental Environmental Protection Power Co., Ltd. (2# furnace) | chimney | the main plant | -2014 | |||||||
| Poyang Greenlander Renewable Energy Co., Ltd. | Waste gas | Smoke | 80m chimney | 1 | North side of the main plant | 0.7655 mg/Nm3 | GB18485-2014 | 0.517t | 12t/a | N/A |
| Poyang Greenlander Renewable Energy Co., Ltd. | Waste gas | SO2 | 80m chimney | 1 | North side of the main plant | 40.0409mg/Nm3 | GB18485-2014 | 26.413t | 80t/a | N/A |
| Poyang Greenlander Renewable Energy Co., Ltd. | Waste gas | NOx | 80m chimney | 1 | North side of the main plant | 223.9976mg/Nm3 | GB18485-2014 | 148.984t | 250t/a | N/A |
| Poyang Greenlander Renewable Energy Co., Ltd. | Waste gas | HCI | 80m chimney | 1 | North side of the main plant | 38.3231mg/Nm3 | GB18485-2014 | 25.622t | / | N/A |
| Poyang Greenlander Renewable Energy Co., Ltd. | Waste gas | CO | 80m chimney | 1 | North side of the main plant | 2.40mg/Nm3 | GB18485-2014 | 1.452t | / | N/A |
| Poyang Greenlander Renewable Energy Co., Ltd. | Waste gas | Pb | 80m chimney | 1 | North side of the main plant | 0.01mg/Nm3 | GB18485-2014 | / | / | N/A |
| Poyang Greenlander Renewable Energy Co., Ltd. | Waste gas | Cd | 80m chimney | 1 | North side of the main plant | 0.00015mg/Nm3 | GB18485-2014 | / | / | N/A |
| Poyang Greenlander Renewable Energy Co., Ltd. | Waste gas | Hg | 80m chimney | 1 | North side of the main plant | 0.000035mg/Nm3 | GB18485-2014 | / | / | N/A |
| Poyang Greenlander Renewable Energy Co., Ltd. | Waste gas | Dioxins | 80m chimney | 1 | North side of the main plant | 0.063ng/m3 | GB18485-2014 | / | / | N/A |
| Biyang Fenghe New Energy Power Co., Ltd. | Waste gas | Smoke | 80m chimney | 1 | South side of the main plant | 1.658mg/Nm3 | GB18485-2014 | 0.585t | 10.95t/a | N/A |
| Biyang Fenghe New Energy Power Co., Ltd. | Waste gas | SO2 | 80m chimney | 1 | South side of the main plant | 42.092mg/Nm3 | GB18485-2014 | 29.186t | 31.68t/a | N/A |
| Biyang Fenghe New Energy Power Co., Ltd. | Waste gas | NOx | 80m chimney | 1 | South side of the main plant | 193.750mg/Nm3 | GB18485-2014 | 131.695t | 159.72t/a | N/A |
| Biyang Fenghe New Energy Power Co., Ltd. | Waste gas | HCl | 80m chimney | 1 | South side of the main plant | 30.925mg/Nm3 | GB18485-2014 | 20.758t | / | N/A |
| Biyang Fenghe New Energy Power Co., Ltd. | Waste gas | CO | 80m chimney | 1 | South side of the main plant | 5.392mg/Nm3 | GB18485-2014 | 2.161t | / | N/A |
| Biyang Fenghe New Energy Power Co., Ltd. | Waste gas | Pb | 80m chimney | 1 | South side of the main plant | 0.059mg/Nm3 | GB18485-2014 | / | / | N/A |
| Biyang Fenghe New Energy Power Co., Ltd. | Waste gas | Cd | 80m chimney | 1 | South side of the main plant | 0.0002mg/Nm3 | GB18485-2014 | / | / | N/A |
| Biyang Fenghe New Energy Power Co., Ltd. | Waste gas | Hg | 80m chimney | 1 | South side of the main plant | 0.004mg/Nm3 | GB18485-2014 | / | / | N/A |
| Biyang Fenghe New | Waste gas | Dioxins | 80m | 1 | South side of | 0.0058ng/m | GB18485 | / | / | N/A |
| Energy Power Co., Ltd. | chimney | the main plant | 3 | -2014 | ||||||
| Liling Zhaoyang Environmental Protection Co., Ltd. | Wastewater | COD | Intermittent discharge | 1 | Lujiang River trunk stream waterway | 6.66mg/L | Table 2 in GB 16889-2008 | 7.944 t | / | N/A |
| Liling Zhaoyang Environmental Protection Co., Ltd. | Wastewater | Ammonia nitrogen | Intermittent discharge | 1 | Lujiang River trunk stream waterway | 7.135mg/L | Table 2 in GB 16889-2008 | 1.986 t | / | N/A |
| Xiantao Yinghe Environmental Protection Co., Ltd. | Waste gas | Ammonia and hydrogen sulfide | Centralized | 2 | Discharge outlets of kitchen waste and sludge were set at the end of the deodorization system, and waste gas was discharged through the chimney | Ammonia: 1.5 mg/Nm? Hydrogen sulfide: 0.06 mg/Nm? | GB14554-93 | Ammonia: 1.031 t Hydrogen sulfide: 0.04012 t | / | N/A |
| Xiantao Yinghe Environmental Protection Co., Ltd. | Waste gas | Smoke, SO2 and NOX | Centralized | 1 |
Dischargeoutlets ofkitchen biogascombustionwere set at theend of thecombustionsystem, andwaste gas wasdischargedthrough thechimney
| Smoke: 20 mg/Nm3. SO2: 50 mg/Nm3 NOX: 200 mg/Nm3 | GB13271-2014 | Smoke: 0.0496 t SO2: 0.0718 t NOX: 0.7218 t | Smoke: 0.241 t; SO2: 0.467 t; NOX: 1.809 t | N/A | ||||||
| Xiantao Yinghe Environmental Protection Co., Ltd. | Wastewater | COD and ammonia nitrogen | Centralized | 1 | Sewage discharge outlets were set at the end of the sewage treatment facility, and sewage was discharged to the sewage plant in the west of the city after centralized treatment | COD: 500mg/L Ammonia nitrogen: 45 mg/L | GB8978-1996 | COD: 2.1376 t Ammonia nitrogen: 0.1131 t | COD:4.2627t; Ammonia nitrogen: 0.427 t | N/A |
| Changsha Zoomlion Environmental Industry Co., Ltd. | Waste gas | Benzene | Planned | 2 | Eastern exhaust outlet of waste gas from paint drying for whole-vehicle coating (longitude 112° 50' 14.28", | 0.03905 mg/m? | Emission Standard of Volatile Organic Compounds and Ni for Surface Coating | 0.038624t | / | N/A |
| latitude 28° 13' 59.99") / Western exhaust outlet of waste gas from paint drying for whole-vehicle coating (longitude 112° 50' 12.30", latitude 28° 13' 59.99") | (Automobile Manufacturing and Repair Industry) (DB43/1356-2017); 1 mg/m? | |||||||||
| Changsha Zoomlion Environmental Industry Co., Ltd. | Waste gas | Toluene | Planned | 2 | Eastern exhaust outlet of waste gas from paint drying for whole-vehicle coating (longitude 112° 50' 14.28", latitude 28° 13' 59.99") / Western exhaust outlet of waste gas from paint drying for whole-vehicle coating (longitude 112° 50' 12.30", latitude 28° 13' 59.99") | 0.0514175 mg/m? | Emission Standard of Volatile Organic Compounds and Ni for Surface Coating (Automobile Manufacturing and Repair Industry) (DB43/1356-2017); 3 mg/m? | 0.057679t | / | N/A |
| Changsha Zoomlion Environmental Industry Co., Ltd. | Waste gas | Xylene | Planned | 2 | Eastern exhaust outlet of waste gas from paint drying for whole-vehicle coating (longitude 112° 50' 14.28", latitude 28° 13' 59.99") / Western exhaust outlet of waste gas from paint drying for whole-vehicle coating (longitude | 0.300981 mg/m? | Emission Standard of Volatile Organic Compounds and Ni for Surface Coating (Automobile Manufacturing and Repair Industry) (DB43/1356-2017); 17 mg/m? | 0.27389t | / | N/A |
| 112° 50' 12.30", latitude 28° 13' 59.99") | ||||||||||
| Changsha Zoomlion Environmental Industry Co., Ltd. | Waste gas | Non-methane hydrocarbons | Planned | 2 | Eastern exhaust outlet of waste gas from paint drying for whole-vehicle coating (longitude 112° 50' 14.28", latitude 28° 13' 59.99") / Western exhaust outlet of waste gas from paint drying for whole-vehicle coating (longitude 112° 50' 12.30", latitude 28° 13' 59.99") | 1.774702 mg/m? | Emission Standard of Volatile Organic Compounds and Ni for Surface Coating (Automobile Manufacturing and Repair Industry) (DB43/1356-2017); 40 mg/m? | 1.770279t | 424.83t/a | N/A |
| Chongqing Tongliang Fenglan Environmental Protection Technology Co., Ltd. | Wastewater | Ammonia nitrogen | Intermittent discharge | 1 | Longitude 106° 2' 26.20" Latitude 29° 56' 4.16" | 8.86mg/L | Standard for Pollution Control on the Landfill Site of Municipal Solid Waste (GB16889-2008); 25 mg/L | 0.9746t | / | N/A |
| Chongqing Tongliang Fenglan Environmental Protection Technology Co., Ltd. | Wastewater | COD | Intermittent discharge | 1 | Longitude 106° 2' 26.20" Latitude 29° 56' 4.16" | 9.81mg/L | Standard for Pollution Control on the Landfill Site of Municipal Solid Waste (GB16889-2008); 100 mg/L | 0.9989t | / | N/A |
Pollutant treatment
The Company values environmental protection and has established a management division to coordinate its safety andenvironmental protection. Safety and environmental protection departments equipped with management personnel have also beenset up across key business segments. In recent years, the Company and its subsidiaries have consistently strengthenedenvironmental protection policies and strictly regulated the operating procedures and job responsibilities of environmentalprotection facilities to ensure proper operation.Environmental self-monitoring planThe Company developed the 2022 Environmental Self-Monitoring Plan for each of its key pollutant-discharging projects inaccordance with environmental impact assessment requirements and relevant laws and regulations, and filed them with localecological and environmental protection authorities. It also engaged a professional third-party inspection institution to carry outregular environmental monitoring of the pollutants discharged by the projects.Contingency plan for environmental emergenciesThe Company engaged a professional third-party organization to develop a contingency plan for environmental emergenciesfor each of its key pollutant discharge projects, which was approved and filed for record. In 2022, it carried out regular trainingand drills among its employees in different projects according to the requirements and contents of the contingency plans to enablethem to timely and accurately deal with environmental pollution emergencies.Investment in environmental governance and protection payment of environmental protection taxesThe Company's commitment to green development and environmental protection underpins its sustained efforts in cleanproduction, energy conservation, consumption reduction, emission reduction, and efficiency improvement. By incorporating itsenvironmental protection philosophy into daily management, the Company strives to become a resource-conserving andenvironmentally friendly business. In 2022, it invested RMB 20,830,700 in environmental protection and paid RMB 50,100 inenvironmental protection taxes in accordance with laws and regulations.Measures adopted during the reporting period to reduce carbon emissions and their effects?Applicable ?Not applicable
The Company made rational use of waste resources and effectively reduced environmental carbon emissions throughenvironmental protection industrial modes such as domestic waste incineration for power generation, kitchen waste resourceutilization and sewage treatment. In terms of the project of domestic waste incineration for power generation, the greenhouse gasemission 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
| Name of company or subsidiary | Reason | Violation | Penalty | Impact on the production and operation of the listed company | Rectification measures |
| Huaibei Zhongfeng Urban Environmental Service Co., Ltd. | Non-compliant operation | Article 49(2) of the Law of the People's Republic of China on Prevention and Control of Environmental Pollution by Solid Waste | RMB 50,000 on Huaibei Zhongfeng Urban Environmental Service Co., Ltd. | There is no material impact on the production and operation of the listed company. | 1. Carried out legal and regulatory training and exams regarding garbage transportation across project companies; 2. Transported garbage to qualified landfills in strict accordance with laws and regulations; kept transportation records with the signatures of each person in charge of garbage transportation; carried out inspections from time to time. |
| Fengxian Zhongying Urban Environmental Sanitation Management Co., Ltd. | Non-compliant operation | Violation of Article 20 of Urban Drainage and Wastewater Treatment Regulations | Administrative penalties of RMB 100,000 | There is no material impact on the production and operation of the listed company. | 1. Released and organized the implementation of the Management Policy for Environmental Pollution Control of Sanitation Projects to specify the management standards for environmental protection of sanitation projects; 2. Checked the implementation of the aforesaid policy across projects during the safety, health, and environmental assessment in the second quarter. |
| Zhaoqing Duanzhou District Zhongying Urban Environmental Management Co., Ltd. (the actual punished subjects were individuals) | Non-compliant operation | Violation of Article 21(3) of the Measures for the Administration of Municipal Domestic Garbage | RMB 6,000 and correction before September 8, 2022 | There is no material impact on the production and operation of the listed company. | Provided pre-employment training and strictly followed work requirements |
| Liling Zhaoyang Environmental Protection Co., Ltd. | Non-compliant operation | Violation of Article 28(4) of the Measures for the Administration of Municipal Domestic Garbage | RMB 50,000 | There is no material impact on the production and operation of the listed company. | Improved diversion of rainwater and sewage, inspected and repaired pile surface, conducted temporary and daily cover to reduce rainwater infiltration. |
| Liling Zhaoyang Environmental Protection Co., Ltd. | Non-compliant operation | Violation of Item 2 of Article 28 of the Measures for the Administration of Municipal Domestic Garbage | RMB 99,000 | There is no material impact on the production and operation of the listed company. | Strengthened the inspection of routine equipment to prevent leakage. |
| Liling Zhaoyang Environmental Protection Co., Ltd. | Non-compliant operation | Violation of Article 42(4) of Environmental Protection Law and Articles 10 and 39 of Law on Prevention and Control of Water Pollution | Administrative penalties of RMB 750,000 | There is no material impact on the production and operation of the listed company. | 1. Project companies rectified their ways of treatment; 2. The Company conducted inspections from time to time. |
Other environmental information to be disclosedThe Company disclosed the environmental information of each of its key pollutant discharge projects on the government'senvironmental information disclosure platform on a regular basis according to the requirements of local environmental authorities.Other information related to environmental protectionNA
II. Corporate Social ResponsibilityFor details, please refer to the 2022 Corporate Social Responsibility Report disclosed at Cninfo (www.cninfo.com.cn).
III. Performance in Consolidating Achievements of Poverty Alleviation and PromotingRural RevitalizationThe Company donated RMB 437,300 to poverty alleviation endeavors during the reporting period.
Part VI Significant EventsI. Performance of undertakings
1. Undertakings of the Company's de facto controller, shareholders, related parties, and acquirer, as wellas the Company and other commitment makers fulfilled during the reporting period or ongoing at theperiod-end?Applicable ?Not applicable
| Undertaking | Party | Type | Content | Date | Term of undertakings | Fulfillment of undertakings |
| Undertakings made in asset restructuring | De facto controller: He Jianfeng | Undertaking on not to relinquish the control of the listed company | I have no plan to relinquish the control of the listed company within 60 months from the date of completion of this transaction. | January 3, 2019 | 60 months | It is being properly fulfilled without breach of such undertaking. |
| Ningbo Infore Asset Management Co., Ltd. | Undertaking on trading restrictions | 1. The shares in the listed company acquired from this transaction shall not be transferred within 36 months from the closing date of issuance. 2. Within 6 months from the completion of this transaction, in case the closing price of the listed company's stock is lower than its issue price for 20 consecutive trading days, or the closing price by the end of the sixth month from the completion of this transaction is lower than the issue price, the lock-up period of Ningbo Infore holding shares in the listed company shall automatically extend for at least 6 months. | January 3, 2019 | 42 months | The undertaking has been fulfilled and strictly observed by the undertaking parties. | |
| Counterparties Ningbo Yingtai, Ningbo Zhongfeng, Ningbo Liantai | Undertaking on trading restrictions | The shares in the listed company acquired from this transaction shall not be transferred within 36 months from the closing date of issuance. | January 3, 2019 | 36 months | The undertaking has been fulfilled and strictly observed by the undertaking parties. | |
| De facto controllers He Jianfeng, Ningbo Infore, and Infore Group | Undertaking to avoid horizontal competition, regulate and reduce related party transactions, and independence of listed companies | Undertaking to avoid horizontal competition, regulate and reduce related party transactions, and independence of listed companies | August 15, 2018 | Indefinitely | It is being properly fulfilled without breach of such undertaking. | |
| Ningbo Infore, Hongchuang Investment, Zoomlion, Ningbo Yingtai, Ningbo Zhongfeng, Ningbo Liantai | Undertaking to avoid horizontal competition, and regulate and reduce related party transactions | Undertaking to avoid horizontal competition, and regulate and reduce related party transactions | August 15, 2018 | Indefinitely | It is being properly fulfilled without breach of such undertaking. |
| Greenlander Investment Holding Co., Ltd. and Zheng Weixian | Undertaking related to performance | The accumulative total net profit recorded by Lianjiang Greenlander New Energy Co., Ltd, Xiantao Green Oriental Environmental Protection Power Co., Ltd., Funan Green Oriental Environmental Energy Co., Ltd.and Shouxian Greenlander New Energy Co., Ltd. from 2016 to 2019 shall not be less than RMB 120 million (net profit is subject to the lower after deducting non-recurring profit or loss). | October 14, 2015 | 48 months | Not fulfilled properly. The audited net profit (net profit is the lower of before or after deducting non-recurring profit or loss) for the period from 2016 to 2019 is RMB 2,156,500, RMB -24,424,500, RMB -19,192,800, and RMB -625,700 respectively; and the 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. | |
| Greenlander Investment Holding Co., Ltd. and Zheng Weixian | Project undertakings | 1. From 2016 to 2019, Green Oriental Company signed a new BOT Agreement on Waste Incineration Power Generation (subject to the signing of franchise agreement), with an agreed daily disposal capacity of no less than 6,500 tons (the daily disposal capacity of a single project shall be no less than 500 tons, and at least one shall be more than 2000 tons). 2. Jiujiang Company must start construction and obtain approval before 31 December 2020. If it fails to start construction or the construction is recovered by the government, it shall compensate the listed company at a consideration of no less than RMB5 million. | October 14, 2015 | 48 months | Not fulfilled properly. The newly signed projects by Green Oriental Company from 2016 to 2019 totaled 1,400 tons, 5,100 tons less than the project undertaking. The project in Jiujian has not commenced construction. | |
| Whether the undertakings were fulfilled on time | No | |||||
| If the undertaking is overdue, the specific reasons for not fulfilling it and the next work plan shall be elaborated | The main cause is that the project construction progress was slower than expected. On July 18, 2022, the High People's Court of Guangdong Province ruled that Greenlander Investment Holding Co., Ltd. and Zheng Weixian shall pay the Company RMB 113,460,600 for the unfulfilled performance commitment and supported the Company to enjoy the priority of compensation within RMB 200 million for the 30% of equity interest in Shenzhen Greenland Environmental Protection Co., Ltd. held by the Greenlander Investment Holding Co., Ltd. As Greenlander Investment Holding Co., Ltd. and Zheng Weixian have not carried out the effective judgment, Infore Environment Technology Group Co., Ltd. has applied to the Intermediate People's Court of Foshan City, Guangdong Province for compulsory enforcement, and received the notice of acceptance of the enforcement case numbered (2022) Yue 06 Zhi 1500 on August 4, 2022. | |||||
2. Where any earnings forecast was made for any of the Company's assets or projects and the reportingperiod is still within the forecast period, the Company shall explain whether the performance of the assetor project reaches the earnings forecast and why
?Applicable ?Not ApplicableII. Occupation of the Company's Capital by the Controlling Shareholder or Other RelatedParties for Non-Operating Purposes
?Applicable ?Not ApplicableNo such cases during the reporting period.
III. Illegal Provision of Guarantees for External Parties
?Applicable ?Not ApplicableNo 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 ApplicableV. Explanation of the Board of Directors, the Board of Supervisors, and IndependentDirectors (If Any) Regarding the "Modified Audit Opinion" for the Reporting Period?Applicable ?Not Applicable
VI. Reason for Changes in Accounting Policy, Accounting Estimates or Corrections ofMaterial Accounting Errors as Compared to the Financial Report for the Prior Year
?Applicable ?Not Applicable
1. Starting from January 1, 2022, the Company has adopted the regulations about accounting for sales of products or by-products produced by fixed assets before intended use or during the R&D process, as stipulated in the Interpretation of ChinaAccounting Standards for Business Enterprises No. 15 issued by the MOF, and applied these regulations retrospectively to thesales of trial operation that occurred between the beginning of the earliest period presented in the financial statements and January1, 2022. Details are set out below:
| Financial statement items significantly affected | Dec. 31, 2021/2021 (before retrospective adjustment) | Amounts affected | Dec. 31, 2021/ 2021 (after retrospective adjustment) |
| Items of balance sheet as at December 31, 2021 | |||
| Intangible assets | 5,319,721,844.23 | 30,874,024.17 | 5,350,595,868.40 |
| Minority interests | 350,671,301.45 | 6,549,735.93 | 357,221,037.38 |
| Retained profits | 3,850,610,683.45 | 24,324,288.24 | 3,874,934,971.69 |
| Items of income statement of 2021 | |||
| Operating revenue | 11,813,537,444.48 | 52,754,166.97 | 11,866,291,611.45 |
| Operating cost | 9,210,318,426.37 | 21,880,142.80 | 9,232,198,569.17 |
2. Starting from January 1, 2022, the Company has adopted the regulations about judgment on onerous contracts in theInterpretation of China Accounting Standards for Business Enterprises No. 15 issued by the MOF, 2022. This change inaccounting policy has no impact on the Company's financial statements.
3. Starting from November 30, 2022, the Company has adopted the regulations about accounting for income taxconsequences of dividends on a financial instrument classified by the issuer as an equity instrument in the Interpretation of ChinaAccounting Standards for Business Enterprises No. 16 issued by the MOF. This change in accounting policy has no effect on theCompany's financial statements.
4. Starting from November 30, 2022, the Company has adopted the regulations about accounting for modifications of share-based payment transactions from cash-settled to equity-settled in the Interpretation of China Accounting Standards for BusinessEnterprises 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 tothe Financial Report for the Prior Year?Applicable ?Not applicableFor details of the changes in the scope of the consolidated financial statements during the reporting period, please refer to Note 8"Changes in the Scope of Consolidation" in Part X Financial Report.VIII. Engagement and Disengagement of Accounting Firm
Incumbent accounting firm
| Name of the domestic accounting firm | Pan-China Certified Public Accountants LLP (Special General Partnership) |
| The Company's payment to the domestic accounting firm (in RMB 10,000) | 310 |
| Consecutive years of the domestic audit service provided by the accounting firm | 21 |
| Names of the domestic certified public accountants from the accounting firm | Bian Shanshan, and Wei Xiaohui |
| Consecutive years of audit service provided by domestic certified public accountants from the accounting firm | 4 years and 1 year, respectively |
Whether the accounting firm was changed during the period?Yes ?NoEngagement of any accounting firm for internal control audit, financial advisor, or sponsor?Applicable ?Not applicableDuring the year, Pan-China Certified Public Accountants LLP (Special General Partnership) was appointed as the accounting firmfor the Company's internal control audit, and Huaxing Securities Co., Ltd. was appointed as the Company's sponsor.IX. Possibility of Delisting after the Disclosure of This Report?Applicable ?Not Applicable
X. Bankruptcy and Reorganization?Applicable ?Not ApplicableNo such cases during the reporting period.XI. Material Litigation and Arbitration?Applicable ?Not ApplicableNo such cases during the reporting period.During the reporting period, other lawsuits that did not meet the disclosure criteria for material litigation primarily includedpurchase and sales contract disputes, with a total amount of approximately RMB 375 million, which are not expected to incur anyprovision of a large amount.XII. Punishments and Rectifications
?Applicable ?Not ApplicableNo such cases during the reporting period.XIII. Credit Quality of the Company as well as Its Controlling Shareholder and De FactoController?Applicable ?Not ApplicableDuring the reporting period, the Company as well as its controlling shareholder and de facto controller were of good credit quality,with no such cases as non-fulfillment of effective court judgments or outstanding debts of large amounts due and unpaid.XIV. Material Related Party Transactions
1. Related party transactions in relation to day-to-day operations
?Applicable ?Not applicable
| Related party | Related party relationship | Type of related party transaction | Contents of related party transaction | Pricing principle of related party transaction | Transaction price | Transaction amount (RMB10,000) | As a percentage of similar transactions | Approved transaction limit (RMB10,000) | Over the approved limit | Method of settlement | Available market price for similar transactions | Disclosure date | Disclosure document |
| ZoomlionHeavy Industry | Shareholder holding more than 5% of the Company's shares | Goods or financial services | Goods or financial services | Market price | -- | 10,782.4 | 22,061 | No | As per contractual terms | -- | April 30, 2022 | www.cninfo.com.cn | |
| Total | -- | -- | 10,782.4 | -- | 22,061 | -- | -- | -- | -- | -- | |||
| Details of any large-amount sales return | N/A | ||||||||||||
| Give the actual fulfillment situation during the reporting period (if any) where an estimate by type had been made for the total amounts of daily | Before the Company's routine related party transactions in 2022, subsidiaries comprehensively assessed and estimated their related party transactions. However, due to changes in the market and customer demand, there were differences between the Company's related party transactions and the actual situation. This was regular business activity and had minimal impact on day-to-day operations and performance. | ||||||||||||
| related party transactions to occur during the period | |
| Reason for any significant difference between the transaction price and the market reference price (if applicable) | N/A |
2. Related party transactions regarding purchase or sales of assets or equity interests?Applicable ?Not ApplicableNo such cases during the reporting period.
3. Related party transactions regarding joint investments in external parties?Applicable ?Not ApplicableNo such cases during the reporting period.
4. Current associated rights of credit and liabilities
?Applicable ?Not ApplicableNo such cases during the reporting period.
5. Transactions with finance companies with related party relationships
?Applicable ?Not applicableDeposit business
| Related parties | Related party relationship | Maximum daily deposit limit (in RMB 10,000) | Range of deposit rate | Opening balance (in RMB 10,000) | Amount of the period | Ending balance (in RMB 10,000) | |
| Total deposited amount (in RMB 10,000) | Total withdrawn amount (in RMB 10,000) | ||||||
| Zoomlion Finance Co., Ltd. | Related company to a shareholder holding more than 5% of the Company's shares | 0 | No interest accrued | 0 | 31 | 0 | 31 |
6. Transactions between the finance company controlled by the Company and related parties
?Applicable ?Not ApplicableThere is no deposit, loan, credit, or other financial business between the finance company controlled by the Company and relatedparties.
7. Other material related party transactions
?Applicable ?Not ApplicableNo such cases during the reporting period.
XV. Material Contracts and Execution Thereof
1. Trusts, subcontracts, and leases
(1) Trusts
?Applicable ?Not ApplicableNo such cases during the reporting period.
(2) Subcontracts
?Applicable ?Not ApplicableNo such cases during the reporting period.
(3) Leases
?Applicable ?Not applicableDescription of leases
In accordance with the Property Lease Contract signed between the Company and the related party Foshan Shunde YinghaiInvestment Co., Ltd., the Company leased the 23
rdfloor of Yingfeng Business Building at 8 Yixin Road, Junlan Community,Beijiao Town, Shunde District, Foshan City, as the business premises with a construction area of 1,578.68 sqm. The rent payablefor 2022 was RMB 1,345,100, and the actual payment was RMB 1,345,100. As at December 31, 2022, the above amounts havebeen settled.Items that brought about profits or losses to the Company accounting for more than 10% of the gross profit of the Company duringthe reporting period?Applicable ?Not ApplicableNo leasing items brought about profits or losses to the Company accounting for more than 10% of the gross profit of the Companyduring the reporting period.
2. Material guarantees
?Applicable ?Not applicable
Unit: RMB 10,000
| Guarantees provided by the Company and its subsidiaries for external parties (excluding those for subsidiaries) | ||||||||||
| Guaranteed party | Disclosure date of the guarantee limit announcement | Guarantee limit | Actual occurrence date | Actual guarantee amount | Guarantee type | Collaterals (if any) | Counter-guarantees (if any) | Term of guarantee | Completed or not | Guarantee for a related party or not |
| Buyer's credit business | August 25, 2022 | 9,762.75 | May 14, 2022 | 9,762.75 | Joint and several liability guarantee | N/A | -- | 1 year | No | No |
| Buyer's credit business | August 25, 2022 | 2,935.95 | June 08, 2022 | 2,935.95 | Joint and several liability guarantee | N/A | -- | 2 years | No | No |
| Buyer's credit business | August 25, 2022 | 38,980.89 | September 18, 2022 | 38,980.89 | Joint and several liability guarantee | N/A | -- | 1 year | No | No |
| Buyer's credit business | August 25, 2022 | 1,115 | July 26, 2022 | 1,115 | Joint and several liability | N/A | -- | 1 year | No | No |
| guarantee | ||||||||||
| Buyer's credit business | August 25, 2022 | 2,000.57 | July 19, 2022 | 2,000.57 | Joint and several liability guarantee | N/A | -- | 1 year | No | No |
| Buyer's credit business | August 25, 2022 | 21,609.85 | June 30, 2021 | 21,609.85 | Joint and several liability guarantee | N/A | -- | 3 years | No | No |
| Buyer's credit business | August 25, 2022 | 4,114.54 | September 05, 2022 | 4,114.54 | Joint and several liability guarantee | N/A | -- | 2 years | No | No |
| Guangdong Wellkey Electric Material Co., Ltd. | January 30, 2021 | 14,000 | January 01, 2021 | 0 | Joint and several liability guarantee | N/A | -- | 5 years | Yes | Yes |
| Guangdong Wellkey Electric Material Co., Ltd. | January 30, 2021 | 2,000 | June 02, 2021 | 0 | Joint and several liability guarantee | N/A | -- | 2 years | Yes | Yes |
| Liaoning Donggang Magnetic Wire Co., Ltd. | January 30, 2021 | 500 | July 22, 2022 | 500 | Joint and several liability guarantee | N/A | -- | 3 years | No | Yes |
| Liaoning Donggang Magnetic Wire Co., Ltd. | January 30, 2021 | 1,000 | August 22, 2022 | 1,000 | Joint and several liability guarantee | N/A | -- | 3 years | No | Yes |
| Anhui Wellkey Electric Material Co., Ltd. | January 30, 2021 | 4,000 | June 28, 2022 | 4,000 | Joint and several liability guarantee | N/A | -- | 1 year | No | Yes |
| Anhui Wellkey Electric Material Co., Ltd. | January 30, 2021 | 2,000 | June 21, 2022 | 2,000 | Joint and several liability guarantee | N/A | -- | 1 year | No | Yes |
| Anhui Wellkey Electric Material Co., Ltd. | January 30, 2021 | 3,000 | May 10, 2023 | 3,000 | Joint and several liability guarantee | N/A | -- | 1 year | No | Yes |
| Anhui Wellkey Electric Material Co., Ltd. | January 30, 2021 | 2,000 | February 17, 2022 | 2,000 | Joint and several liability guarantee | N/A | -- | 1 year | No | Yes |
| Liaoning Donggang Magnetic Wire Co., Ltd. | January 30, 2021 | 23,500 | -- | -- | -- | -- | -- | -- | -- | -- |
| Guangdong Wellkey | January 30, 2021 | 18,000 | -- | -- | -- | -- | -- | -- | -- | -- |
| Electric Material Co., Ltd. | ||||||||||
| Anhui Wellkey Electric Material Co., Ltd. | January 30, 2021 | 1,000 | -- | -- | -- | -- | -- | -- | -- | -- |
| Buyer's credit business | August 25, 2022 | 24,480.45 | -- | -- | -- | -- | -- | -- | -- | -- |
| Total approved limit for external guarantee during the reporting period (A1) | 105,000 | Total actual amount of external guarantee during the reporting period (A2) | 93,019.55 | |||||||
| Total approved limit for external guarantee at the end of the reporting period (A3) | 176,000 | Total actual balance of external guarantee at the end of the reporting period (A4) | 93,019.55 | |||||||
| Guarantees provided by the Company for its subsidiaries | ||||||||||
| Guaranteed party | Disclosure date of the guarantee limit announcement | Guarantee limit | Actual occurrence date | Actual guarantee amount | Guarantee type | Collaterals (if any) | Counter-guarantees (if any) | Term of guarantee | Completed or not | Guarantee for a related party or not |
| Zhejiang Shangfeng Special Blower Industrial Co., Ltd. | April 30, 2022 | 22,000 | November 13, 2020 | 16,766.59 | Joint and several liability guarantee | N/A | -- | 1 year | No | Yes |
| Zhejiang Shangfeng Special Blower Industrial Co., Ltd. | April 30, 2022 | 22,350 | January 4, 2022 | 11,606.43 | Joint and several liability guarantee | N/A | -- | 2 years | No | Yes |
| Zhejiang Shangfeng Special Blower Industrial Co., Ltd. | April 30, 2022 | 30,000 | November 8, 2022 | 18,276.68 | Joint and several liability guarantee | N/A | -- | 1 year | No | Yes |
| Zhejiang Shangfeng Special Blower Industrial Co., Ltd. | April 30, 2022 | 7,500 | March 3, 2021 | 525 | Joint and several liability guarantee | N/A | -- | 5 years | No | Yes |
| Zhejiang Shangfeng Special Blower Industrial Co., Ltd. | April 30, 2022 | 12,000 | March 31, 2022 | 9,000 | Joint and several liability guarantee | N/A | -- | 2 years | No | Yes |
| Zhejiang Shangfeng Special Blower Industrial Co., Ltd. | April 30, 2022 | 10,000 | February 28, 2022 | 1,297.82 | Joint and several liability guarantee | N/A | -- | 3 years | No | Yes |
| Guangdong Infore Technology Co., Ltd. | April 30, 2022 | 5,000 | June 17, 2020 | 0 | Joint and several liability guarantee | N/A | -- | 1 year | No | Yes |
| Guangdong Infore Technology Co., Ltd. | April 30, 2022 | 4,000 | March 1, 2021 | 1,512.72 | Joint and several liability guarantee | N/A | -- | 3 years | No | Yes |
| Guangdong Infore Technology Co., Ltd. | April 30, 2022 | 3,000 | June 17, 2022 | 1,313.3 | Joint and several liability guarantee | N/A | -- | 1 year | No | Yes |
| Guangdong Infore Technology Co., Ltd. | April 30, 2022 | 12,000 | February 24, 2022 | 2,662.3 | Joint and several liability guarantee | N/A | -- | 1 year | No | Yes |
| Guangdong Infore Technology Co., Ltd. | December 26, 2017 | 15,000 | December 26, 2018 | 4,923.08 | Joint and several liability guarantee | N/A | -- | 5 years | No | Yes |
| Guangdong Infore Smart Sanitation Technology Co., Ltd. | April 30, 2022 | 2,000 | January13, 2022 | 1,400 | Joint and several liability guarantee | N/A | -- | 5 years | No | Yes |
| Changsha Zhongbiao Environmental Industry Co., Ltd. | April 30, 2022 | 5,000 | September 11, 2021 | 0 | Joint and several liability guarantee | N/A | -- | 1 year | No | Yes |
| Shenzhen Green Oriental Environmental Protection Co., Ltd. | February 2, 2016 | 13,000 | August 25, 2016 | 4,485 | Joint and several liability guarantee | N/A | -- | 8 years | No | Yes |
| Shouxian Greenlander New Energy Co., Ltd. | April 30, 2022 | 9,221 | November 10, 2022 | 7,701.21 | Joint and several liability guarantee | N/A | -- | 15 years | No | Yes |
| Xiantao Green Oriental Environmental Power Generation Co., Ltd. | April 30, 2022 | 27,870 | June 7, 2022 | 26,900 | Joint and several liability guarantee | N/A | -- | 13 years | No | Yes |
| Poyang Greenlander Renewable Energy Co., Ltd. | August 21, 2020 | 28,000 | January21, 2021 | 27,000 | Joint and several liability guarantee | N/A | -- | 10 years | No | Yes |
| Maoming Infore Environment Water Treatment | December 26, 2017 | 15,000 | March 20, 2018 | 10,428.05 | Joint and several liability guarantee | N/A | -- | 15 years | No | Yes |
| Technology Co., Ltd. | ||||||||||
| Lianjiang Greenlander New Energy Co., Ltd. | April 30, 2022 | 9,963 | November 30, 2020 | 8,278.29 | Joint and several liability guarantee | N/A | -- | 15 years | No | Yes |
| Lianjiang Greenlander New Energy Co., Ltd. | April 30, 2022 | 17,600 | May 25, 2022 | 2,148.61 | Joint and several liability guarantee | N/A | -- | 15 years | No | Yes |
| Lu'an Zhongfeng Urban Environmental Service Co., Ltd. | April 23, 2021 | 8,000 | June 8, 2021 | 7,700 | Joint and several liability guarantee | N/A | -- | 13 years | No | Yes |
| Tongshan Tongda Water Treatment Technology Co., Ltd. | April 25, 2020 | 6,000 | February 1, 2021 | 970 | Joint and several liability guarantee | N/A | -- | 18 years | No | Yes |
| Changde Zelian Environmental Service Co., Ltd. | April 23, 2021 | 12,000 | May 26, 2021 | 12,000 | Joint and several liability guarantee | N/A | -- | 15 years | No | Yes |
| Xiantao Yinghe Environmental Protection Co., Ltd. | August 21, 2020 | 30,100 | January20, 2021 | 13,800 | Joint and several liability guarantee | N/A | -- | 15 years | No | Yes |
| Biyang Fenghe New Energy Power Co., Ltd. | April 23, 2021 | 15,000 | April 29, 2022 | 14,422.85 | Joint and several liability guarantee | N/A | -- | 13 years | No | Yes |
| Changsha Zoomlion Changgao Environmental Industry Co., Ltd. | October 24, 2019 | 10,000 | March 25, 2020 | 5,000 | Joint and several liability guarantee | N/A | -- | 5 years | No | Yes |
| Xiangtan Yinglian Environmental Industry Co., Ltd. | April 30, 2022 | 15,000 | July 5, 2022 | 4,000 | Joint and several liability guarantee | N/A | -- | 10 years | No | Yes |
| Tongren Bijiang District Zhongfeng Environmental Industry Co., Ltd. | April 30, 2022 | 14,300 | August 19, 2022 | 12,350 | Joint and several liability guarantee | N/A | -- | 15 years | No | Yes |
| Huai' an Yinghe Environment | August 25, 2022 | 15,000 | December 26, 2022 | 1,595 | Joint and several liability guarantee | N/A | -- | 15 years | No | Yes |
| Technology Co., Ltd. | ||||||||||
| Biyang Fenghe New Energy Power Co., Ltd. | April 23, 2021 | 9,000 | -- | -- | -- | -- | -- | -- | -- | -- |
| Zhejiang Shangfeng Special Blower Industrial Co., Ltd. | April 30, 2022 | 19,500 | -- | -- | -- | -- | -- | -- | -- | -- |
| Guangdong Infore Technology Co., Ltd. | April 30, 2022 | 3,000 | -- | -- | -- | -- | -- | -- | -- | -- |
| Guangdong Infore Smart Sanitation Technology Co., Ltd. | April 30, 2022 | 6,000 | -- | -- | -- | -- | -- | -- | -- | -- |
| Changsha Zhongbiao Environmental Industry Co., Ltd. | April 30, 2022 | 2,000 | -- | -- | -- | -- | -- | -- | -- | -- |
| Anlong Ninghe Environmental Protection Technology Co., Ltd. | April 30, 2022 | 4,400 | -- | -- | -- | -- | -- | -- | -- | -- |
| Xiantao Green Oriental Environmental Power Generation Co., Ltd. | April 30, 2022 | 130 | -- | -- | -- | -- | -- | -- | -- | -- |
| Poyang Greenlander Renewable Energy Co., Ltd. | August 25, 2022 | 28,000 | -- | -- | -- | -- | -- | -- | -- | -- |
| Huaibei Tongying Environmental Sanitation Management Co., Ltd. | August 25, 2022 | 11,000 | -- | -- | -- | -- | -- | -- | -- | -- |
| Huai'an Chenjie Environmental Engineering Co., Ltd. | August 25, 2022 | 7,000 | -- | -- | -- | -- | -- | -- | -- | -- |
| Other holding | August 25, | 10,000 | -- | -- | -- | -- | -- | -- | -- | -- |
| subsidiaries | 2022 | ||||||||||||
| Total approved guarantee limit for subsidiaries during the reporting period (B1) | 329,852.5 | Total actual guarantee amount for subsidiaries during the reporting period (B2) | 228,062.93 | ||||||||||
| Total approved guarantee limit for subsidiaries at the end of the reporting period (B3) | 495,934 | Total actual guarantee balance for subsidiaries at the end of the reporting period (B4) | 228,062.93 | ||||||||||
| Guarantees between subsidiaries | |||||||||||||
| Guaranteed party | Disclosure date of the guarantee limit announcement | Guarantee limit | Actual occurrence date | Actual guarantee amount | Guarantee type | Collaterals (if any) | Counter-guarantees (if any) | Term of guarantee | Completed or not | Guarantee for a related party or not | |||
| Total approved guarantee limit for subsidiaries during the reporting period (C1) | 0 | Total actual guarantee amount for subsidiaries during the reporting period (C2) | 0 | ||||||||||
| Total approved guarantee limit for subsidiaries at the end of the reporting period (C3) | 0 | Total actual guarantee balance for subsidiaries at the end of the reporting period (C4) | 0 | ||||||||||
| Total guarantee amount (total of the three kinds above) | |||||||||||||
| Total approved guarantee limit during the reporting period (A1+B1+C1) | 434,852.5 | Total actual guarantee amount during the reporting period (A2+B2+C2) | 321,082.48 | ||||||||||
| Total approved guarantee limit at the end of the reporting period (A3+B3+C3) | 671,934 | Total actual guarantee balance at the end of the reporting period (A4+B4+C4) | 321,082.48 | ||||||||||
| Total actual guarantees (A4+B4+C4) as a percentage of the Company's net assets | 18.57% | ||||||||||||
| Of which: | |||||||||||||
| Balance of debt guarantees provided directly or indirectly for the guaranteed party with a liability-to-asset ratio over 70% (E) | 196,271.03 | ||||||||||||
| Total of the three types of guarantees above (D+E+F) | 196,271.03 | ||||||||||||
| Provision of external guarantees in breach of the prescribed procedures (if any) | N/A | ||||||||||||
3. Entrusted cash management
(1) Entrusted wealth management
?Applicable ?Not applicableOverview of entrusted wealth management during the reporting period
Unit: RMB 10,000
| Type | Funding source | Entrustment amount | Undue amount | Unrecovered overdue amount | Accrued impairment amount for unrecovered overdue |
| wealth management | |||||
| Bank's wealth management product | Own funds | 163,320 | 0 | 0 | 0 |
| Total | 163,320 | 0 | 0 | 0 | |
High-risk entrusted wealth management with a material single amount or low security and low liquidity?Applicable ?Not ApplicableEntrusted wealth management with expected irrecoverable principal or other circumstances that may lead to impairment?Applicable ?Not Applicable
(2) Entrusted loans
?Applicable ?Not ApplicableNo such cases during the reporting period.
4. Other material contracts
?Applicable ?Not ApplicableNo such cases during the reporting period.
XVI. Other Material Events?Applicable ?Not ApplicableNo such cases during the reporting period.XVII. Material Events of Subsidiaries
?Applicable ?Not applicableOn April 29, 2022, the Proposal on the Revised Plan of Infore Environment Technology Group Co., Ltd. for the Spin-off ofZhejiang Shangfeng Special Blower Industrial Co., Ltd. to be Listed on the ChiNext Board was deliberated and approved at the
thmeeting of the Ninth Board of Directors.On May 24, 2022, relevant proposals on the spin-off of the subsidiary Shangfeng for listing on the ChiNext market of SZSEwere deliberated and approved by the Company's 2021 Annual General Meeting of Shareholders. For more information, pleaserefer to the announcement published on 30 April 2022 on the media for information disclosure designated by the Company andCninfo (www.cninfo.com.cn).On June 30, 2022, SZSE accepted the application for the initial public offering of shares and listing on the ChiNext submittedby Shangfeng.On July 25, 2022, SZSE issued the Letter on Review and Inquiry of the Application Documents of Zhejiang ShangfengSpecial Blower Industrial Co., Ltd. for IPO and Listing on the ChiNext (Review Letter [2022] No. 010721). Shangfeng submittedits 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 ofZhejiang Shangfeng Special Blower Industrial Co., Ltd. for IPO and Listing on the ChiNext (Review Letter [2022] No. 011129).Shangfeng is preparing its reply to the letter and advancing its spin-off and listing in an orderly manner.
Part VII Share Changes and Shareholder InformationI. Share Changes
1. Share changes
Unit: Share
| Before | Increase/decrease during the period (+/-) | After | |||||||
| Quantity | Ratio | New issues | Shares as dividend converted from profit | Shares as dividend converted from capital reserves | Others | Sub-total | Quantity | Ratio | |
| I. Restricted Shares | 1,139,599,318 | 35.84% | 0 | 0 | 0 | -1,137,761,178 | -1,137,761,178 | 1,838,140 | 0.06% |
| 1.1 Shares held by the State | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 1.2 Shares held by state-owned corporations | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 1.3 Shares held by other domestic investors | 1,139,599,318 | 35.84% | 0 | 0 | 0 | -1,137,761,178 | -1,137,761,178 | 1,838,140 | 0.06% |
| Including: Shares held by domestic corporations | 1,137,761,778 | 35.78% | 0 | 0 | 0 | -1,137,761,778 | -1,137,761,778 | 0 | 0.00% |
| Shares held by domestic individuals | 1,837,540 | 0.06% | 0 | 0 | 0 | 600 | 600 | 1,838,140 | 0.06% |
| 4. Shares held by overseas investors | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Including: Shares held by overseas corporations | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Shares held by overseas individuals | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| II. Unrestricted Shares | 2,039,872,433 | 64.16% | 33,808 | 0 | 0 | 1,137,761,178 | 1,137,794,986 | 3,177,667,419 | 99.94% |
| 1. RMB-denominated ordinary shares | 2,039,872,433 | 64.16% | 33,808 | 0 | 0 | 1,137,761,178 | 1,137,794,986 | 3,177,667,419 | 99.94% |
| 2. Domestically listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 3. Overseas listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 4. Others | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| III. Total Number of Shares | 3,179,471,751 | 100.00% | 33,808 | 0 | 0 | 0 | 33,808 | 3,179,505,559 | 100.00% |
Reasons for share changes?Applicable ?Not applicable
1. On December 29, 2021, the Company disclosed the Prompt Announcement on the Lifting of the Restricted Shares forMaterial Asset Restructuring. The assets acquired by the Company's non-public offering of shares were listed on SZSE on January4, 2019. The shares were issued to eight subscribers, including Ningbo Yingtai Investment Partnership (L.P.), Ningbo ZhongfengInvestment Partnership (L.P.), and Ningbo Liantai Investment Partnership (L.P.) On January 4, 2022, a total of 119,764,396 shares(3.77% of the Company's total shares) placed with three of the aforesaid shareholders, namely, Ningbo Yingtai InvestmentPartnership (L.P.), Ningbo Zhongfeng Investment Partnership (L.P.), and Ningbo Liantai Investment Partnership (L.P.), becamepublicly tradable upon the expiration of a 36-month lockup, as the conditions for lifting the sale restrictions were met.
2. On June 30, 2022, the Company disclosed the Prompt Announcement on the Lifting of the Restricted Shares for MaterialAsset Restructuring. The assets acquired by the Company's non-public offering of shares were listed on SZSE on January 4, 2019.The shares were issued to eight subscribers, including Ningbo Infore Asset Management Co., Ltd. On July 4, 2022, a total of1,017,997,382 shares (32.02% of the Company's total shares) placed with Ningbo Infore Asset Management Co., Ltd. becamepublicly tradable upon the expiration of a 42-month lockup, the conditions for lifting the sales restrictions were met.
3. Due to a change in the Company's executive positions, Mr. Wang Qingbo, the current Vice President and CFO, directlyheld 800 shares of Infore Enviro. According to the provisions of SZSE, 600 of these shares were locked up. Therefore, restrictedshares increased by 600 during the reporting period.
4. As at November 25, 2022, the second exercise period of the Third Stock Option Incentive Scheme has ended, with acumulative 16,409,380 options exercised. In particular, 25,000 options were exercised in the second exercise period of the ThirdStock Option Scheme, increasing the Company's unrestricted shares by 25,000.
5. As at December 31, 2022, 15,833 shares in total were converted from the Infore Convertible Bonds issued by the Company.In particular, 8,808 shares were converted in 2022, increasing the Company's unrestricted shares by 8,808.
In summary, the Company's total share capital rose to 3,179,505,559 from 3,179,471,751 shares.Approval of changes in share capital?Applicable ?Not applicable
1. On April 22, 2021, the Company convened the 13
thMeeting of the Ninth Board of Directors. Upon discussion, the meetingapproved the Proposal on Matters Related to the Exercise in the 2
nd Exercise Period of the 3
rdStock Option Incentive Scheme. Atotal of 231 recipients of the 3
rdStock Option Incentive Scheme were deemed fit to exercise their 17,814,000 stock optionsvoluntarily in the 2
ndexercise period before November 25, 2022.
2. With the approval granted by the CSRC under Document ZH.J.X.K [2020] No. 2219, the Company publicly issued14,761,896 convertible corporate bonds on November 4, 2020, each with a par value of RMB 100 and the total issued amount isRMB 1,476,189,600. Approved by the SZSE, the Company's convertible corporate bonds of RMB 1,476,189,600 have been listedfor trading on the SZSE since December 2, 2020. The Infore Convertible Bonds in this offering have been convertible into theCompany's shares since May 10, 2021.Transfer of shares?Applicable ?Not applicable
During the reporting period, China Securities Depository and Clearing (Shenzhen) Corporation Limited handled the shareregistration procedures for 25,000 exercised stock options in the Third Stock Option Incentive Scheme and 8,808 shares convertedfrom the convertible corporate bonds.Effects of share changes on the basic earnings per share, diluted earnings per share, equity per share attributable to the Company'sordinary shareholders and other financial indicators of the prior year and the prior accounting period, respectively?Applicable ?Not ApplicableOther information that the Company deems necessary or required to be disclosed by the securities regulatory authorities?Applicable ?Not Applicable
2. Changes in restricted shares
?Applicable ?Not applicable
Unit: Share
| Name of shareholders | Number of shares held at the beginning of the period | Increase of restricted shares during the period | Decrease of restricted shares during the period | Number of shares held at the end of the period | Reasons for trading restriction | Date of lifting trading restriction |
| Ningbo Infore Asset Management Co., Ltd. | 1,017,997,382 | 0 | 1,017,997,382 | 0 | Restricted shares in private placement | July 4, 2022 |
| Ningbo Yingtai Investment Partnership (Limited Partnership) | 40,913,514 | 0 | 40,913,514 | 0 | Restricted shares in private placement | January 4, 2022 |
| Ningbo Zhongfeng Investment Partnership (Limited Partnership) | 40,141,033 | 0 | 40,141,033 | 0 | Restricted shares in private placement | January 4, 2022 |
| Ningbo Liantai Investment Partnership (Limited Partnership) | 38,709,849 | 0 | 38,709,849 | 0 | Restricted shares in private placement | January 4, 2022 |
| Others | 1,837,540 | 600 | 0 | 1,838,140 | Locked-up shares of senior management | 25% of the total shareholdings are unlocked annually |
| Total | 1,139,599,318 | 600 | 1,137,761,778 | 1,838,140 | -- | -- |
II. Issuance and Listing of Securities
1. Issuance of securities (exclusive of preference shares) during the reporting period?Applicable ?Not Applicable
2. Changes in total shares, shareholder structure and asset and liability structures
?Applicable ?Not applicable
1. On December 29, 2021, the Company disclosed the Prompt Announcement on the Lifting of the Restricted Shares forMaterial Asset Restructuring. The assets acquired by the Company's non-public offering of shares were listed on SZSE on January4, 2019. The shares were issued to eight subscribers, including Ningbo Yingtai Investment Partnership (L.P.), Ningbo ZhongfengInvestment Partnership (L.P.), and Ningbo Liantai Investment Partnership (L.P.) The 119,764,396 shares placed with three of theshareholders above, namely, Ningbo Yingtai Investment Partnership (L.P.), Ningbo Zhongfeng Investment Partnership (L.P.), andNingbo Liantai Investment Partnership (L.P.), not allowed to be transferred within 36 months from the date the issuance wascompleted, became publicly tradable on January 4, 2022.
2. On June 30, 2022, the Company disclosed the Prompt Announcement on the Lifting of the Restricted Shares for MaterialAsset Restructuring. The assets acquired by the Company's non-public offering of shares were listed on SZSE on January 4, 2019.The shares were issued to eight subscribers, including Ningbo Infore Asset Management Co., Ltd. The 1,017,997,382 sharesplaced with Ningbo Infore Asset Management Co., Ltd., not allowed to be transferred within 42 months from the date the issuancewas completed, became publicly tradable on July 4, 2022.
3. Due to a change in the Company's executive positions, Mr. Wang Qingbo, the current Vice President and CFO, directlyheld 800 shares of Infore Enviro. According to the provisions of SZSE, 600 of these shares were locked up. The restricted sharesincreased by 600 in 2022;
4. On April 22, 2021, the Company convened the 13
thMeeting of the Ninth Board of Directors. Upon discussion, the meetingapproved the Proposal on Matters Related to the Exercise in the Second Exercise Period of the Third Stock Option IncentiveScheme. A total of 231 recipients of the Third Stock Option Incentive Scheme were deemed fit to exercise their 17,814,000 stockoptions voluntarily in the second exercise period before November 25, 2022. As at November 25, 2022, a cumulative 16,409,380options were exercised in the second exercise period of the Third Stock Option Incentive Scheme, as the exercise conditions weremet. In particular, 25,000 options were exercised in 2022, adding 25,000 shares to the Company's unrestricted shares.
5. With the approval granted by the CSRC under Document ZH.J.X.K. [2020] No. 2219, the Company publicly issued14,761,896 convertible corporate bonds on November 4, 2020, each with a par value of RMB 100, and the total issued amount wasRMB 1,476,189,600. Approved by the SZSE, the Company's convertible corporate bonds of RMB 1,476,189,600 have been listedfor trading on the SZSE since December 2, 2020. The Infore Convertible Bonds in this offering have been convertible into theCompany's shares since May 10, 2021. On January 4, 2023, the Company disclosed the Announcement on Results of Conversion ofConvertible Bonds and Changes in Share Capital in the Fourth Quarter of 2022. As at December 31, 2022, 15,833 shares in totalwere converted from the "Infore Convertible Bonds" issued by the Company. In particular, 8,808 shares were converted in 2022,increasing non-restricted shares by 8,808.
3. Existing internal employee shares
?Applicable ?Not ApplicableIII. Controlling Shareholders and De Facto Controller
1. Shareholders and their shareholdings
Unit: Share
| Shareholders of common shares at the end of the reporting period | 40,314 | Shareholders at the end of the previous month prior to the disclosure date of this report | 37,882 | Preference shareholders with resumed voting power at the end of the reporting period (if any) (see Note 8) | 0 | Preference shareholders with resumed voting power at the end of the previous month prior to the disclosure date of this report (if any) (see Note 8) | 0 | |
| Shareholders with over 5% of total shares or top 10 shareholders | ||||||||
| Name of shareholders | Nature of shareholders | Shareholding ratio | Shareholdings at the end of the reporting period | Increase/decrease during the reporting period | Restricted shares held | Unrestricted shares held | Shares pledged, tagged or frozen | |
| Status | Quantity | |||||||
| Ningbo Infore Asset Management Co., Ltd. | Domestic non-state-owned legal person | 32.02% | 1,017,997,382 | 0 | 0 | 1,017,997,382 | Pledged | 610,798,429 |
| Zoomlion Heavy Industry Science and Technology Co., Ltd. | Domestic non-state-owned legal person | 12.56% | 399,214,659 | 0 | 0 | 399,214,659 | - | - |
| Infore Group Co., Ltd. | Domestic non-state-owned legal person | 11.31% | 359,609,756 | 0 | 0 | 359,609,756 | Pledged | 100,000,000 |
| Hongchuang (Shenzhen) Investment Center | Domestic non-state-owned legal person | 9.76% | 310,423,813 | 0 | 0 | 310,423,813 | - | - |
| (Limited Partnership) | |||||||||
| Infore Environment Technology Group Co., Ltd.－The Second Employee Stock Ownership Plan | Others | 2.04% | 64,789,616 | 64,789,616 | 0 | 64,789,616 | - | - | |
| He Jianfeng | Domestic natural person | 2.00% | 63,514,690 | 0 | 0 | 63,514,690 | - | - | |
| Zara Green Hong Kong Limited | Foreign legal persons | 1.72% | 54,778,335 | 0 | 0 | 54,778,335 | - | - | |
| Chen Liyuan | Domestic natural person | 0.98% | 31,018,000 | 0 | 0 | 31,018,000 | - | - | |
| Guangdong Hengjian Investment Holding Co., Ltd. | State-owned corporation | 0.88% | 28,059,147 | 0 | 0 | 28,059,147 | - | - | |
| Ningbo Yingtai Investment Partnership (Limited Partnership) | Domestic non-state-owned legal person | 0.80% | 25,570,914 | -15,342,600 | 0 | 25,570,914 | - | - | |
| Strategic investor/general legal person becoming a top 10 shareholder in a rights issue (if any) (see note 3) | Not applicable. | ||||||||
| Related party or acting-in-concert relationship among the aforementioned shareholders | Ningbo Infore Asset Management Co., Ltd. and Infore Group Co., Ltd. share the same de facto controller—He Jianfeng, and they are persons acting in concert mutually. Apart from that, the Company is not aware of any related party or acting-in-concert relationship (as defined in the Methods for the Acquisition and Management of Listed Companies) among other shareholders aforementioned. | ||||||||
| Shareholders above entrusting/entrusted with or waiving voting rights | Not applicable. | ||||||||
| Top 10 shareholders with repurchase account (if any) (see note 10) | NA | ||||||||
| Shareholding of top 10 unrestricted shareholders | |||||||||
| Name of shareholders | Unrestricted shares at the end of the reporting period | Type of shares | |||||||
| Type of shares | Quantity | ||||||||
| Ningbo Infore Asset Management Co., Ltd. | 1,017,997,382 | RMB-dominated common shares | 1,017,997,382 | ||||||
| Zoomlion Heavy Industry Science and Technology Co., Ltd. | 399,214,659 | RMB-dominated common shares | 399,214,659 | ||||||
| Infore Group Co., Ltd. | 359,609,756 | RMB-dominated common shares | 359,609,756 | ||||||
| Hongchuang (Shenzhen) Investment Center (Limited Partnership) | 310,423,813 | RMB-dominated common shares | 310,423,813 | ||||||
| Infore Environment Technology Group Co., Ltd.－The Second Employee Stock Ownership Plan | 64,789,616 | RMB-dominated common shares | 64,789,616 | ||||||
| He Jianfeng | 63,514,690 | RMB-dominated common shares | 63,514,690 | ||||||
| Zara Green Hong Kong Limited | 54,778,335 | RMB-dominated common shares | 54,778,335 | ||||||
| Chen Liyuan | 31,018,000 | RMB-dominated common shares | 31,018,000 | ||||||
| Guangdong Hengjian Investment Holding Co., Ltd. | 28,059,147 | RMB-dominated common shares | 28,059,147 |
| Ningbo Yingtai Investment Partnership (Limited Partnership) | 25,570,914 | RMB-dominated common shares | 25,570,914 |
| Related party or acting-in-concert relationship among top 10 unrestricted public shareholders, as well as between top 10 unrestricted public shareholders and top 10 shareholders | Ningbo Infore Asset Management Co., Ltd. and Infore Group Co., Ltd. share the same de facto controller—He Jianfeng, and they are persons acting in concert mutually. Apart from that, the Company is not aware of any related party or acting-in-concert relationship (as defined in the Methods for the Acquisition and Management of Listed Companies) among other shareholders aforementioned. | ||
| Top 10 common shareholders involved in securities margin trading (if any) (see note 4) | Infore Environment Technology Group Co., Ltd. -- Second Employee Stock Ownership Plan holds 64,789,616 shares in the Company through credit accounts. | ||
Whether any top 10 common shareholders or top 10 unrestricted common shareholders of the Company conducted any agreedrepurchase transactions during the reporting period?Yes ?NoNo such cases during the reporting period.
2. Controlling shareholder
Nature of the controlling shareholder: Natural personType of the controlling shareholder: Legal person
| Name of the controlling shareholder | Legal representative/person-in-charge | Date of incorporation | Organization code | Principal business activities |
| Ningbo Infore Asset Management Co., Ltd. | Wei Ting | May 2, 2017 | 91330206MA290L5J3L | Asset management, industrial investment, investment management. (The Company shall not engage in financial businesses such as deposit taking, financing guarantee, entrusted wealth management, and fund-raising from the public without the approval of regulatory authorities such as financial regulators.) (Business activities subject to approval under laws shall not be carried out without the approval of relevant authorities.) |
| Other domestically and overseas listed companies as controlling shareholders and equity participants during the reporting period | Not applicable. | |||
Changes in controlling shareholders during the reporting period?Applicable ?Not ApplicableDuring the reporting period, there was no change in controlling shareholders of the Company.
3. De facto controller and persons acting in concert
Nature of the de facto controller: Domestic natural personType of the de facto controller: Natural person
| Name of the de facto controller: | Relationship with the de facto controller | Nationality | Residency in other countries or regions or not |
| He Jianfeng | The de facto controller himself | China | Yes |
| Main occupation and position | Chairman of the Board and President of Infore Group Co., Ltd. | ||
| Controlling interests in other domestically and overseas listed companies in the past 10 years | Beijing Baination Pictures Co., Ltd. (Stock code: 300291) | ||
Change in de facto controller during the reporting period?Applicable ?Not ApplicableDuring the reporting period, there was no change in de facto controller of the Company.Ownership and control relationship between the de facto controller and the Company
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 personsacting in concert account for 80% of their total shareholdings
?Applicable ?Not Applicable
Infore Environment Technology Group Co., Ltd.
Ningbo Infore Asset Management Co., Ltd.
Ningbo Infore Asset Management Co., Ltd.
Infore Group Co., Ltd.
Infore Group Co., Ltd.
Haikou ChaozhiEnterprise ManagementPartnership (Limited
Partnership)
Haikou ChaozhiEnterprise ManagementPartnership (Limited
Partnership)
Foshan Infore Trading
Co., Ltd.
Foshan Infore Trading
Co., Ltd.He Jianfeng
He Jianfeng
Haikou ChaoyuEnterprise ManagementPartnership (Limited
Partnership)
5. Other institutional shareholders with a shareholding of more than 10%
?Applicable ?Not applicable
| Name of institutional shareholder | Legal representative/person-in-charge | Date of incorporation | Registered capital | Principal business or management activities |
| Zoomlion Heavy Industry Science and Technology Co., Ltd. | Zhan Chunxin | August 31, 1999 | RMB 8,677,992,236 | Development, production, and sales of engineering machinery, agricultural machinery, sanitation machinery, crane trucks and exclusive chassis, fire engines and exclusive chassis, aerial work machines, emergency and rescue equipment, mining machinery, machinery in coal mines, material transportation facilities, other machinery, metal and non-metal materials, and new high-tech products of optical-electro-mechanical integration and provision of leasing and after-sale technical services. Sales of building and decorative materials, vehicles for engineering and metal materials, chemical materials, and chemical products (excluding hazardous chemicals and monitoring products). Sales of lubricant oil, lubricating grease and hydraulic oil (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 (the Company shall not engage in national financial regulation and financial credit businesses such as absorbing deposits, fund-raising and collection, entrusted loans, and issuing notes and loans). Sales of second-hand vehicles. Disassembly and recovery of disused machinery equipment. (Business activities subject to approval in accordance with laws shall not be carried out until approval from competent authorities has been obtained.) |
| Infore Group Co., Ltd. | He Jianfeng | April 19, 2002 | RMB 4,450,000,000 | Investment in various industries, investment management, investment consultation, and asset management. Enterprise management and enterprise consulting services. Computer information services and software services. Film production and planning (based on validated licenses). Advertising planning and production. Appraisal and consultancy services of artwork (excluding ivory and ivory products) and collectibles. Planning of culture and art exhibitions. Sales of maternal and baby products and clothing. Supply and marketing of domestic business and goods except for the above items. Business information consulting services. Import and export of commodities or technologies (excluding the import and export of commodities and technologies that are prohibited by the state or involve administrative review and 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 shall be operated by the company's subsidiaries) (Business activities subject to approval under laws shall not be carried out without the approval of relevant authorities.) |
6. Limitations on shareholding reduction by the Company's controlling shareholder, de facto controller,reorganizer and other commitment makers?Applicable ?Not Applicable
IV. Repurchase of Shares during the Reporting PeriodThe progress of share repurchase?Applicable ?Not ApplicableProgress on reducing the repurchased shares by way of centralized bidding:
?Applicable ?Not Applicable
Part VIII Information on Preference Shares?Applicable ?Not ApplicableDuring the reporting period, the Company had no preference shares.
Part IX Information on Bonds?Applicable ?Not applicableI. Enterprise Bond?Applicable ?Not ApplicableDuring the reporting period, the Company had no enterprise bond.II. Corporate Bond
?Applicable ?Not ApplicableDuring the reporting period, the Company had no corporate bond.III. Debt Financing Instruments of Non-financial Enterprises?Applicable ?Not ApplicableDuring the reporting period, the Company had no debt financing instruments for non-financial enterprisesIV. Convertible Corporate Bonds?Applicable ?Not applicable
1. Previous adjustments of the conversion price
With the approval granted by the CSRC under Document ZH.J.X.K. [2020] No. 2219, the Company publicly issued14,761,896 convertible corporate bonds on November 4, 2020, with a par value of RMB 100 and a total amount of RMB1,476,189,600. The initial conversion price of this tranche of convertible bonds is RMB 8.31 per share. In case of distribution ofbonus shares, increase of share capital through conversion, issuance of new shares (excluding the increased share capital due to theconversion of convertible corporate bonds issued this time), allotment of shares and distribution of cash dividends, the conversionprice will be adjusted accordingly pursuant to relevant laws and regulations.On July 8, 2021, the distribution of the Company's equity interests in 2020 was completed. In accordance with the issuanceterms 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 Bondswas adjusted from the original RMB 8.31 per share to RMB 8.19 per share since July 8, 2021. The adjusted conversion price willtake effect on July 8, 2021.On July 20, 2022, the Company's equity distribution for 2021 was completed. In accordance with the relevant requirements ofthe Prospectus for Public Offering of Convertible Corporate Bonds by Infore Environment Technology Group Co., Ltd., theconversion price of Infore Convertible Bonds was adjusted from the original RMB 8.19 per share to RMB 8.09 per share, effectiveon July 20, 2022. The adjusted conversion price took effect as from July 20, 2022.
2. Information on cumulative conversion of bonds into shares
?Applicable ?Not applicable
| Abbreviated name of convertible bond | Commencement and end date of share conversion | Total issued number (sheet) | Total issued amount (RMB) | Accumulated share conversion amount (RMB) | Accumulated share conversion number | The number of shares converted as a percentage of the total issued shares in the Company before start of conversion | Amount unconverted (RMB) | The unconverted amount as a percentage of the total issued amount |
| Infore Convertible Bonds | 2021-05-10 | 14,761,896 | 1,476,189,600.00 | 129,900.00 | 15,833 | 0.00% | 1,476,059,700.00 | 99.99% |
3. Information on top 10 convertible bond holders
| No. | Name of convertible bond holders | Nature of convertible bond holders | Number of convertible bonds held at the end of the reporting period (sheet) | Amount of convertible bonds held at the end of the reporting period (RMB) | Proportion of convertible bonds held at the end of the reporting period |
| 1 | Renmin stable and double-benefit fixed-income pension product -- Industrial and Commercial Bank of China Co., Ltd. | Others | 510,449 | 51,044,900.00 | 3.46% |
| 2 | CITIC Securities - Sany Heavy Industry Co., Ltd. - CITIC Securities Sany Zunxiang Customized No. 1 Single Asset Management Plan | Others | 464,080 | 46,408,000.00 | 3.14% |
| 3 | Industrial and Commercial Bank of China Co., Ltd -- Aegon-industrial Hengyi Bond Securities Investment Fund | Others | 447,180 | 44,718,000.00 | 3.03% |
| 4 | CNPC Enterprise Annuity Program -- Industrial and Commercial Bank of China Limited | Others | 444,071 | 44,407,100.00 | 3.01% |
| 5 | Fullgoal Fuyi aggressive fixed-income pension product -- Industrial and Commercial Bank of China Co., Ltd | Others | 316,414 | 31,641,400.00 | 2.14% |
| 6 | Taiping Pension Insurance Co., Ltd. -- Taiping Jinshi Bond Portfolio | Others | 258,723 | 25,872,300.00 | 1.75% |
| 7 | ICBC Credit Suisse Tianfeng convertible bond fixed income pension product - Bank of China Limited | Others | 247,205 | 24,720,500.00 | 1.67% |
| 8 | Yinhua Kunli No.2 fixed income pension product -- CITIC Bank Co., Ltd. | Others | 239,028 | 23,902,800.00 | 1.62% |
| 9 | PICC Asset stable value fixed income pension product - Industrial and Commercial Bank of China Co., Ltd. | Others | 200,000 | 20,000,000.00 | 1.35% |
| 10 | Basic Pension Insurance Fund Portfolio 102 | Others | 197,639 | 19,763,900.00 | 1.34% |
4. Information on material changes in the profitability, asset status and credit standing of guarantor?Applicable ?Not Applicable
5. Change in the Company's liabilities and credit standing, and cash arrangements for debt repayment incoming years at the end of the reporting periodOn June 23, 2022, China Chengxin International Credit Rating Co., Ltd. issued the Follow-up Rating Report on the PublicOffering of Convertible Corporate Bonds by Infore Environment Technology Group Co., Ltd. (2022) (X.P.W.H. [2022] TrackingNo.0895), maintaining the corporate credit rating of the Company at AA +, maintaining the credit rating of Infore ConvertibleBonds at AA +, with a rating outlook as stable. For details, please refer to the Follow-up Rating Report on Public Offering ofConvertible Corporate Bonds by the Company disclosed by the Company on June 30, 2022 on Cninfo (www.cninfo.com.cn).The primary sources of funds for the Company to pay the principal and interest of the convertible bonds in the future are asfollows: (1) The Company seeks organic growth by strengthening financial management and increasing net cash inflows and netprofits from operating activities; (2) The Company has good credit standing and a reasonable asset structure and can obtainfinancing from banks and other channels to reasonably arrange for redemption funds.
V. During the Reporting Period, the Loss in the Scope of Consolidated StatementsOutstripped 10% of the Net Assets at the End of the Previous Year?Applicable ?Not ApplicableVI. 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 asat the End of the Reporting Period
Unit: RMB 10,000
| Item | At the end of the reporting period | At the end of last year | YoY change |
| Current ratio | 1.67 | 1.70 | -1.76% |
| Liabilities-to-assets ratio | 39.40% | 39.10% | 0.30% |
| Quick ratio | 1.56 | 1.55 | 0.65% |
| The reporting period | The prior year | YoY change | |
| Net profit after deducting non-recurring profit and loss | 32,475.34 | 55,705.05 | -41.70% |
| EBITDA/total liabilities | 12.30% | 14.03% | -1.73% |
| Interest coverage ratio | 3.79 | 6.02 | -37.04% |
| Cash/interest coverage ratio | 14.07 | 9.46 | 48.73% |
| EBITDA/interest coverage ratio | 7.39 | 9.15 | -19.23% |
| Loan repayment rate | 100.00% | 100.00% | 0.00% |
| Interest coverage ratio | 100.00% | 100.00% | 0.00% |
Part X Financial ReportI. Audit Report
| Type of audit opinions | Standard unqualified opinion |
| Signing date of the auditor’s report | April 24, 2023 |
| Name of the auditor | Pan-China Certified Public Accountants LLP (Special General Partnership) |
| No. of the auditor’s report | PCCPAAR [2023] No. 4798 |
| Names of certified public accountants | Bian Shanshan, and Wei Xiaohui |
Main body of the auditor's reportTo the Shareholders of Infore Environment Technology Group Co., Ltd.:
I. Audit Opinion
We have audited the accompanying financial statements of Infore Environment Technology Group Co., Ltd. (the “Company”),which comprise the consolidated and parent company balance sheets as at December 31, 2022, the consolidated and parent companyincome statements, the consolidated and parent company cash flow statements, and the consolidated and parent company statementsof changes in equity for the year then ended, as well as notes to financial statements.In our opinion, the attached financial statements present fairly, in all material respects, the financial position of the Company asat December 31, 2022, and of its financial performance and its cash flows for the year then ended in accordance with ChinaAccounting Standards for Business Enterprises.II. Basis for Audit OpinionWe conducted our audit in accordance with China Standards on Auditing. Our responsibilities under those standards are furtherdescribed in the Certified Public Accountant’s Responsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the China Code of Ethics for Certified Public Accountants, and we have fulfilledother ethical responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour 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 financialstatements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, andin forming our opinion thereon, and we do not express a separate opinion on these matters.
(I) Revenue recognition
1. Key audit matters
Please refer to section III (XXVI) and section V (II) 1 of notes to the financial statements for details.
The Company is mainly engaged in sales of environmental and sanitation machinery and ventilation equipment as well assanitation operation service. In 2022, the operating revenue amounted to 12,255,992,938.42 yuan, with year-over-year growth of
3.28%.
Sales of environmental and sanitation machinery and ventilation equipment are performance obligations satisfied at a point intime. Revenue is recognized when the Company has delivered goods to the designated address as agreed by contract and suchdelivered goods have been verified for acceptance by customers, and the Company has collected the payments or has obtained theright to the payments, and related economic benefits are highly probable to flow to the Company. The sanitation operation service isa performance obligation satisfied over time. Revenue is recognized based on the service assessment statement confirmed by thelabor receiving party, etc.
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 akey 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 assessedwhether the revenue recognition method conformed to China Accounting Standards for Business Enterprises;
(3) We performed analysis procedure on operating revenue and gross margin by month, product, client, project, etc., so as toidentify whether there are significant or abnormal fluctuations and find out the reason of fluctuations;
(4) For revenue from sales of environmental and sanitation machinery, ventilation equipment, etc., we checked supportingdocuments related to revenue recognition by sampling method, including sales contracts, sales invoices, delivery lists, shippingdocuments, client acceptance receipts, etc. For revenue from sanitation operation service, we checked supporting documents relatedto 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 operationservice 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 theoperating revenue was recognized in the appropriate period; and
(7) We checked whether information related to operating revenue had been presented appropriately in the financial statements.
(II) Impairment of accounts receivable and long-term receivables
1. Key audit matters
Please refer to section III (X) and section V (I) 3, 9 and 11 of notes to the financial statements for details.
As of December 31, 2022, the book balance of accounts receivable amounted to 6,210,048,763.32 yuan, with provision for baddebts of 584,256,290.95 yuan, and the carrying amount amounted to 5,625,792,472.37 yuan; the book balance of long-termreceivables (including those due within one year) amounted to 1,541.22 million yuan, with provision for bad debts of 132.59 millionyuan, and the carrying amount amounted to 1,408.64 million yuan. The carrying amount of accounts receivable and long-termreceivables (collectively referred to as “receivables”) totaled 7,034.43 million yuan.
Based on credit risk features of receivables, the Company’s management (the “Management”) measures the provision for baddebts at the amount of lifetime expected credit losses, either on an individual basis or on a collective basis. For receivables withexpected credit losses measured on an individual basis, the Management estimates the expected cash flows, so as to identify theprovision 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 expectedcredit losses measured on a collective basis, the Management classifies portfolios on the basis of overdue days or ages, adjusts thembased on historical credit risk loss experience and forward-looking estimations, prepares the comparison table of overdue days orages 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, wehave 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, determinedwhether they had been executed, and tested the effectiveness of the operation;
(2) We reviewed receivables with provision for bad debts made in previous periods for their subsequent write-off or reversal,and assessed the accuracy of historical estimations made by the Management;
(3) We reviewed the consideration of the Management on credit risk assessment of receivables and objective evidence, andassessed 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’sestimations on the expected future cash flows, assessed the reasonableness of key assumptions and the accuracy of data adopted inthe 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 portfolioclassification on the basis of credit risk features; we assessed the reasonableness of the comparison table of overdue days or ages andexpected credit loss rate of receivables prepared by the Management based on the historical credit loss experience of portfolios withsimilar credit risk features and forward-looking estimations; we tested the accuracy and completeness of data used by theManagement (including overdue days, ages, etc.) and whether the calculation of provision for bad debts was accurate;
(6) We checked the subsequent collection of receivables and assessed the reasonableness of provision for bad debts made by theManagement; and
(6) We checked whether information related to impairment of receivables had been presented appropriately in the financialstatements.
(III) Impairment of goodwill
1. Key audit matters
Please refer to section III (XX) and section V (I) 20 of notes to the financial statements for details.
As of December 31, 2022, the cost of goodwill amounted to 6,268,845,549.87 yuan, with provision for impairment of529,242,870.08 yuan, and the carrying amount amounted to 5,739,602,679.79 yuan, accounting for 19.61% of total assets.
The Management will perform impairment test on goodwill together with related asset groups or asset group portfolios whenthere 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 offuture cash flows. Key assumptions adopted in the impairment test include: revenue growth rate in detailed forecast period, growthrate for stable income, profit margin, pre-tax discount rate, etc.
As the amount of goodwill is significant and impairment test involves significant judgment of the Management, we haveidentified 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 operatingresults, 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 appraisersengaged by the Management;
(4) We assessed the competency, professional quality and objectivity of external appraisers engaged by us and theappropriateness 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 assumptionswere 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 inkey 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 theinternal 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 financialstatements.
IV. Other InformationThe Management is responsible for the other information. The other information comprises the information included in theCompany’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 assuranceconclusion 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 auditor 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 arerequired to report that fact. We have nothing to report in this regard.V. Responsibilities of the Management and Those Charged with Governance for the FinancialStatements
The Management is responsible for preparing and presenting fairly the financial statements in accordance with ChinaAccounting Standards for Business Enterprises, as well as designing, implementing and maintaining internal control relevant to thepreparation 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 goingconcern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless theManagement 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 materialmisstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a highlevel of assurance, but is not a guarantee that an audit conducted in accordance with China Standards on Auditing will always detecta material misstatement when it exists. Misstatement can arise from fraud or error and are considered material if, individually or inthe aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financialstatements.
We exercise professional judgment and maintain professional skepticism throughout the audit performed in accordance withChina 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 andperform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, asfraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(II) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate inthe circumstances.
(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and relateddisclosures 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 auditevidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on theCompany’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attentionin our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events orconditions 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 activitieswithin the Company to express an opinion on the financial statements. We are responsible for the direction, supervision andperformance 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 auditfindings, including any deficiencies in internal control of concern that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical requirementsregarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear onour independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in ourauditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, wedetermine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably beexpected to outweigh the public interest benefits of such communication.
Pan-China Certified Public Accountants LLP Chinese Certified Public Accountant: Bian Shanshan(Engagement Partner)Hangzhou · China Chinese Certified Public Accountant: Wei Xiaohui
Date of Report: April 24, 2023
The auditor’s report and the accompanying financial statements are English translations of the Chinese auditor’s report andstatutory financial statements prepared under accounting principles and practices generally accepted in the People’s Republic ofChina. These financial statements are not intended to present the financial position and financial performance and cash flows inaccordance with accounting principles and practices generally accepted in other countries and jurisdictions. In case the Englishversion does not conform to the Chinese version, the Chinese version prevails.
Infore Environment Technology Group Co., Ltd.Consolidated balance sheet as at December 31, 2022(Expressed in Renminbi Yuan)
| Assets | Note No. | Closing balance | December 31, 2021 |
| Current assets: | |||
| Cash and bank balances | 1 | 4,728,203,530.46 | 4,583,245,371.02 |
| Settlement funds | |||
| Loans to other banks | |||
| Held-for-trading financial assets | |||
| Derivative financial assets | |||
| Notes receivable | 2 | 13,565,706.22 | 54,402,653.25 |
| Accounts receivable | 3 | 5,625,792,472.37 | 4,946,704,963.71 |
| Receivables financing | 4 | 107,316,593.41 | 296,379,694.57 |
| Advances paid | 5 | 192,360,542.24 | 128,604,382.66 |
| Premiums receivable | |||
| Reinsurance accounts receivable | |||
| Reinsurance reserve receivable | |||
| Other receivables | 6 | 385,622,271.00 | 509,164,126.27 |
| Financial assets under reverse repo | |||
| Inventories | 7 | 881,038,036.95 | 1,124,149,719.01 |
| Contract assets | 8 | 101,023,854.33 | 140,367,802.53 |
| Assets held for sale | |||
| Non-current assets due within one year | 9 | 476,505,825.28 | 739,917,866.53 |
| Other current assets | 10 | 497,450,797.42 | 492,705,381.17 |
| Total current assets | 13,008,879,629.68 | 13,015,641,960.72 | |
| Non-current assets: | |||
| Loans and advances | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | 11 | 932,130,871.82 | 1,017,246,537.53 |
| Long-term equity investments | 12 | 676,829,959.84 | 603,580,781.31 |
| Other equity instrument investments | 13 | 15,352,971.01 | 15,702,971.01 |
| Other non-current financial assets | |||
| Investment property | 14 | 27,105,435.03 | 1,837,703.68 |
| Fixed assets | 15 | 2,268,287,202.01 | 1,758,052,005.19 |
| Construction in progress | 16 | 41,073,267.68 | 224,068,633.86 |
| Productive biological assets | |||
| Oil & gas assets | |||
| Right-of-use assets | 17 | 31,859,454.24 | 25,505,911.86 |
| Intangible assets | 18 | 6,048,114,364.49 | 5,350,595,868.40 |
| Development expenditures | 19 | 30,338,218.08 | 15,682,278.17 |
| Goodwill | 20 | 5,739,602,679.79 | 5,976,192,021.27 |
| Long-term prepayments | 21 | 30,210,935.91 | 15,733,757.32 |
| Deferred tax assets | 22 | 114,577,132.19 | 109,565,926.15 |
| Other non-current assets | 23 | 306,929,738.21 | 233,477,295.83 |
| Total non-current assets | 16,262,412,230.30 | 15,347,241,691.58 |
Total assets
| Total assets | 29,271,291,859.98 | 28,362,883,652.30 |
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
Infore Environment Technology Group Co., Ltd.Consolidated balance sheet as at December 31, 2022 (continued)(Expressed in Renminbi Yuan)
| Liabilities & Equity | Note No. | Closing balance | December 31, 2021 |
Current liabilities:
| Current liabilities: | |||
| Short-term borrowings | 24 | 440,103,105.44 | 439,024,733.46 |
| Central bank loans | |||
| Loans from other banks | |||
| Held-for-trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | 25 | 2,515,229,293.17 | 2,468,799,189.71 |
| Accounts payable | 26 | 2,771,961,271.66 | 2,960,061,508.33 |
Advances received
| Advances received | |||
| Contract liabilities | 27 | 274,289,978.25 | 210,432,628.98 |
| Financial liabilities under repo | |||
| Absorbing deposit and interbank deposit | |||
| Deposit for agency security transaction | |||
| Deposit for agency security underwriting | |||
| Employee benefits payable | 28 | 409,574,018.72 | 310,701,572.37 |
Taxes and rates payable
| Taxes and rates payable | 29 | 114,968,226.88 | 139,494,861.08 |
| Other payables | 30 | 657,122,287.53 | 683,714,082.05 |
| Handling fee and commission payable | |||
| Reinsurance accounts payable | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | 31 | 561,019,099.59 | 378,610,951.81 |
| Other current liabilities | 32 | 31,616,947.24 | 62,964,777.60 |
| Total current liabilities | 7,775,884,228.48 | 7,653,804,305.39 |
Non-current liabilities:
| Non-current liabilities: | |||
| Insurance policy reserve | |||
| Long-term borrowings | 33 | 1,922,306,226.32 | 1,697,742,767.72 |
| Bonds payable | 34 | 1,308,690,556.32 | 1,254,962,176.00 |
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Lease liabilities | 35 | 23,255,624.30 | 18,523,740.10 |
| Long-term payables | 36 | 315,735,814.91 | 315,735,814.91 |
Long-term employee benefits payable
| Long-term employee benefits payable | |||
| Provisions | 37 | 4,575,049.22 | 3,129,793.85 |
| Deferred income | 38 | 120,890,710.04 | 101,635,992.65 |
| Deferred tax liabilities | 22 | 54,207,628.08 | 32,562,033.97 |
| Other non-current liabilities | 39 | 8,333,333.33 | |
| Total non-current liabilities | 3,757,994,942.52 | 3,424,292,319.20 | |
| Total liabilities | 11,533,879,171.00 | 11,078,096,624.59 | |
| Equity: |
Share capital
| Share capital | 40 | 3,179,505,559.00 | 3,175,734,760.00 |
| Other equity instruments | 41 | 266,916,341.80 | 266,929,289.24 |
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Capital reserve | 42 | 9,662,511,254.48 | 9,772,795,863.75 |
| Less: Treasury shares | 43 | 94,132,795.17 | 455,303,777.91 |
| Other comprehensive income | 44 | -4,630,000.00 | -4,280,000.00 |
| Special reserve | 45 |
Surplus reserve
| Surplus reserve | 46 | 315,124,767.92 | 296,754,883.56 |
| General risk reserve | |||
| Undistributed profit | 47 | 3,963,306,890.06 | 3,874,934,971.69 |
| Total equity attributable to the parent company | 17,288,602,018.09 | 16,927,565,990.33 | |
| Non-controlling interest | 448,810,670.89 | 357,221,037.38 | |
| Total equity | 17,737,412,688.98 | 17,284,787,027.71 |
Total liabilities & equity
| Total liabilities & equity | 29,271,291,859.98 | 28,362,883,652.30 |
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
nfore Environment Technology Group Co., Ltd.Parent company balance sheet as at December 31, 2022(Expressed in Renminbi Yuan)
| Assets | Note No. | Closing balance | December 31, 2021 |
| Current assets: | |||
| Cash and bank balances | 632,554,163.45 | 920,283,773.31 | |
| Held-for-trading financial assets | |||
| Derivative financial assets | |||
| Notes receivable | 2,964,486.88 | ||
| Accounts receivable | |||
| Receivables financing | 118,400,000.00 | 221,756,340.36 | |
| Advances paid | 638,924.48 | 601,403.69 | |
| Other receivables | 1 | 4,492,807,441.80 | 3,884,005,093.84 |
| Inventories | |||
| Contract assets | |||
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | |||
| Total current assets | 5,244,400,529.73 | 5,029,611,098.08 | |
| Non-current assets: | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | 2 | 17,076,616,871.15 | 16,956,047,890.72 |
| Other equity instrument investments | 15,352,971.01 | 15,702,971.01 | |
| Other non-current financial assets | |||
| Investment property | |||
| Fixed assets | |||
| Construction in progress | |||
| Productive biological assets | |||
| Oil & gas assets | |||
| Right-of-use assets | 593,318.35 | 1,779,955.11 | |
| Intangible assets | 1,749,936.60 | 2,755,338.15 | |
| Development expenditures | |||
| Goodwill | |||
| Long-term prepayments | |||
| Deferred tax assets | |||
| Other non-current assets | |||
| Total non-current assets | 17,094,313,097.11 | 16,976,286,154.99 | |
| Total assets | 22,338,713,626.84 | 22,005,897,253.07 |
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
Infore Environment Technology Group Co., Ltd.Parent company balance sheet as at December 31, 2022 (continued)
(Expressed in Renminbi Yuan)
| Liabilities & Equity | Closing balance | December 31, 2021 |
Current liabilities:
| Current liabilities: | ||
| Short-term borrowings | 20,022,000.00 | 150,165,000.00 |
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 42,395,262.51 | |
| Accounts payable | 1,137,507.93 | 1,137,507.93 |
| Advances received | ||
| Contract liabilities | ||
| Employee benefits payable | 4,221,817.88 | 3,357,619.13 |
| Taxes and rates payable | 6,259,662.49 | 10,278,606.48 |
| Other payables | 1,064,116,084.37 | 892,387,560.66 |
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 311,902,807.73 | 1,539,297.15 |
| Other current liabilities | ||
| Total current liabilities | 1,450,055,142.91 | 1,058,865,591.35 |
| Non-current liabilities: | ||
| Long-term borrowings | 59,871,432.00 | 300,000,000.00 |
| Bonds payable | 1,308,690,556.32 | 1,254,962,176.00 |
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 579,712.08 | |
| Long-term payables | 3,000,000.00 | 3,000,000.00 |
| Long-term employee benefits payable | ||
| Provisions | 4,114,064.16 | 3,129,793.85 |
| Deferred income | ||
| Deferred tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 1,375,676,052.48 | 1,561,671,681.93 |
| Total liabilities | 2,825,731,195.39 | 2,620,537,273.28 |
| Equity: | ||
| Share capital | 3,179,505,559.00 | 3,175,734,760.00 |
| Other equity instruments | 266,916,341.80 | 266,929,289.24 |
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 15,324,654,061.79 | 15,433,256,911.67 |
| Less: Treasury shares | 94,132,795.17 | 455,303,777.91 |
| Other comprehensive income | -4,630,000.00 | -4,280,000.00 |
| Special reserve | ||
| Surplus reserve | 280,904,378.50 | 262,534,494.14 |
| Undistributed profit | 559,764,885.53 | 706,488,302.65 |
| Total equity | 19,512,982,431.45 | 19,385,359,979.79 |
| Total liabilities & equity | 22,338,713,626.84 | 22,005,897,253.07 |
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
Infore Environment Technology Group Co., Ltd.Consolidated income statement for the year ended December 31, 2022(Expressed in Renminbi Yuan)
| Items | Note No. | Current period cumulative | Preceding period comparative |
| I. Total operating revenue | 12,255,992,938.42 | 11,866,291,611.45 | |
| Including: Operating revenue | 1 | 12,255,992,938.42 | 11,866,291,611.45 |
| Interest income | |||
| Premiums earned | |||
| Revenue from handling charges and commission | |||
| II. Total operating cost | 11,359,383,512.75 | 10,931,753,295.05 | |
| Including: Operating cost | 1 | 9,469,510,831.27 | 9,232,198,569.17 |
| Interest expenses | |||
| Handling charges and commission expenditures | |||
| Surrender value | |||
| Net payment of insurance claims | |||
| Net provision of insurance policy reserve | |||
| Premium bonus expenditures | |||
| Reinsurance expenses | |||
| Taxes and surcharges | 2 | 74,685,022.05 | 54,143,815.44 |
| Selling expenses | 3 | 762,970,847.95 | 738,833,571.05 |
| Administrative expenses | 4 | 609,601,680.23 | 585,353,407.57 |
| R&D expenses | 5 | 340,775,707.34 | 262,619,127.29 |
| Financial expenses | 6 | 101,839,423.91 | 58,604,804.53 |
| Including: Interest expenses | 170,568,834.86 | 149,868,429.63 | |
| Interest income | 86,389,951.68 | 107,324,690.38 | |
| Add: Other income | 7 | 119,564,678.48 | 83,541,172.51 |
| Investment income (or less: losses) | 8 | -41,466,125.62 | 239,933,995.59 |
| Including: Investment income from associates and joint ventures | 8,548,481.77 | 36,885,135.08 | |
| Gains from derecognition of financial assets at amortized cost | |||
| Gains on foreign exchange (or less: losses) | |||
| Gains on net exposure to hedging risk (or less: losses) | |||
| Gains on changes in fair value (or less: losses) | 9 | -73,074,674.05 | |
| Credit impairment loss | 10 | -104,837,162.42 | -98,375,820.02 |
| Assets impairment loss | 11 | -312,998,494.66 | -230,940,495.92 |
| Gains on asset disposal (or less: losses) | 12 | 532,796.72 | -1,161,842.22 |
| III. Operating profit (or less: losses) | 557,405,118.17 | 854,460,652.29 | |
| Add: Non-operating revenue | 13 | 12,798,235.90 | 10,028,024.42 |
| Less: Non-operating expenditures | 14 | 13,947,988.82 | 11,786,454.06 |
| IV. Profit before tax (or less: total loss) | 556,255,365.25 | 852,702,222.65 | |
| Less: Income tax expenses | 15 | 96,963,243.68 | 53,503,488.11 |
| V. Net profit (or less: net loss) | 459,292,121.57 | 799,198,734.54 | |
| (I) Categorized by the continuity of operations | |||
| 1. Net profit from continuing operations (or less: net loss) | 459,292,121.57 | 792,171,037.03 | |
| 2. Net profit from discontinued operations (or less: net loss) | 7,027,697.51 | ||
| (II) Categorized by the portion of equity ownership | |||
| 1. Net profit attributable to owners of parent company (or less: net loss) | 418,794,179.13 | 752,792,198.66 | |
| 2. Net profit attributable to non-controlling shareholders (or less: net loss) | 40,497,942.44 | 46,406,535.88 | |
| VI. Other comprehensive income after tax | 16 | -350,000.00 | -4,280,000.00 |
| Items attributable to the owners of the parent company | -350,000.00 | -4,280,000.00 | |
| (I) Not to be reclassified subsequently to profit or loss | -350,000.00 | -4,280,000.00 | |
| 1. Remeasurements of the net defined benefit plan | |||
| 2. Items under equity method that will not be reclassified to profit or loss | |||
| 3. Changes in fair value of other equity instrument investments | -350,000.00 | -4,280,000.00 | |
| 4. Changes in fair value of own credit risk | |||
| 5. Others | |||
| (II) To be reclassified subsequently to profit or loss | |||
| 1. Items under equity method that may be reclassified to profit or loss | |||
| 2. Changes in fair value of other debt investments | |||
| 3. Profit or loss from reclassification of financial assets into other comprehensive income | |||
| 4. Provision for credit impairment of other debt investments | |||
| 5. Cash flow hedging reserve | |||
| 6. Translation reserve | |||
| 7. Others | |||
| Items attributable to non-controlling shareholders | |||
| VII. Total comprehensive income | 458,942,121.57 | 794,918,734.54 | |
| Items attributable to the owners of the parent company | 418,444,179.13 | 748,512,198.66 | |
| Items attributable to non-controlling shareholders | 40,497,942.44 | 46,406,535.88 | |
| VIII. Earnings per share (EPS): | |||
| (I) Basic EPS (yuan per share) | 0.13 | 0.24 | |
| (II) Diluted EPS (yuan per share) | 0.13 | 0.24 |
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
Infore Environment Technology Group Co., Ltd.Parent company income statement for the year ended December 31, 2022
(Expressed in Renminbi Yuan)
| Items | Note No. | Current period cumulative | Preceding period comparative |
| I. Operating revenue | 1 | 818,861.05 | 487,932.74 |
| Less: Operating cost | 1 | 818,861.05 | 487,932.74 |
| Taxes and surcharges | 24,479.22 | 227,340.60 | |
| Selling expenses | 188,548.41 | 562,853.92 | |
| Administrative expenses | 37,210,341.13 | 24,147,760.09 | |
| R&D expenses | |||
| Financial expenses | -26,702,758.90 | -17,684,273.22 | |
| Including: Interest expenses | 17,704,428.72 | 23,111,838.20 | |
| Interest income | 105,355,828.68 | 83,393,551.31 | |
| Add: Other income | 134,351.98 | 184,301.81 | |
| Investment income (or less: losses) | 2 | 192,483,839.36 | 697,535,882.88 |
| Including: Investment income from associates and joint ventures | 25,737,537.83 | 24,398,494.78 | |
| Gains from derecognition of financial assets at amortized cost | |||
| Gains on net exposure to hedging risk (or less: losses) | |||
| Gains on changes in fair value (or less: losses) | -73,120,883.39 | ||
| Credit impairment loss | 304,725.02 | -11,011,665.82 | |
| Assets impairment loss | |||
| Gains on asset disposal (or less: losses) | |||
| II. Operating profit (or less: losses) | 182,202,306.50 | 606,333,954.09 | |
| Add: Non-operating revenue | 1,496,537.14 | 1,877,643.88 | |
| Less: Non-operating expenditures | 36,656.80 | ||
| III. Profit before tax (or less: total loss) | 183,698,843.64 | 608,174,941.17 | |
| Less: Income tax expenses | -32,354,461.28 | ||
| IV. Net profit (or less: net loss) | 183,698,843.64 | 640,529,402.45 | |
| (I) Net profit from continuing operations (or less: net loss) | 183,698,843.64 | 640,529,402.45 | |
| (II) Net profit from discontinued operations (or less: net loss) | |||
| V. Other comprehensive income after tax | -350,000.00 | -4,280,000.00 | |
| (I) Not to be reclassified subsequently to profit or loss | -350,000.00 | -4,280,000.00 | |
| 1. Remeasurements of the net defined benefit plan | |||
| 2. Items under equity method that will not be reclassified to profit or loss | |||
| 3. Changes in fair value of other equity instrument investments | -350,000.00 | -4,280,000.00 | |
| 4. Changes in fair value of own credit risk | |||
| 5. Others | |||
| (II) To be reclassified subsequently to profit or loss | |||
| 1. Items under equity method that may be reclassified to profit or loss | |||
| 2. Changes in fair value of other debt investments | |||
| 3. Profit or loss from reclassification of financial assets into other comprehensive income | |||
| 4. Provision for credit impairment of other debt investments | |||
| 5. Cash flow hedging reserve | |||
| 6. Translation reserve | |||
| 7. Others | |||
| VI. Total comprehensive income | 183,348,843.64 | 636,249,402.45 | |
| VII. Earnings per share (EPS): | |||
| (I) Basic EPS (yuan per share) | |||
| (II) Diluted EPS (yuan per share) |
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
Infore Environment Technology Group Co., Ltd.Consolidated cash flow statement for the year ended December 31, 2022(Expressed in Renminbi Yuan)
| Items | Note No. | Current period cumulative | Preceding period comparative |
I. Cash flows from operating activities:
| I. Cash flows from operating activities: | |||
| Cash receipts from sale of goods or rendering of services | 11,979,875,703.49 | 11,921,988,281.60 | |
| Net increase of client deposit and interbank deposit | |||
| Net increase of central bank loans | |||
| Net increase of loans from other financial institutions | |||
| Cash receipts from original insurance contract premium | |||
| Net cash receipts from reinsurance | |||
| Net increase of policy-holder deposit and investment |
Cash receipts from interest, handling charges and commission
| Cash receipts from interest, handling charges and commission | |||
| Net increase of loans from others | |||
| Net increase of repurchase | |||
| Net cash receipts from agency security transaction | |||
| Receipts of tax refund | 178,294,936.92 | 26,261,970.67 | |
| Other cash receipts related to operating activities | 1 | 2,097,066,618.34 | 2,924,238,760.42 |
| Subtotal of cash inflows from operating activities | 14,255,237,258.75 | 14,872,489,012.69 | |
| Cash payments for goods purchased and services received | 7,399,369,111.76 | 9,223,061,869.14 |
Net increase of loans and advances to clients
| Net increase of loans and advances to clients | |||
| Net increase of central bank deposit and interbank deposit | |||
| Cash payments for insurance indemnities of original insurance contracts | |||
| Net increase of loans to others | |||
| Cash payments for interest, handling charges and commission | |||
| Cash payments for policy bonus | |||
| Cash paid to and on behalf of employees | 2,062,334,468.26 | 1,604,759,059.51 | |
| Cash payments for taxes and rates | 734,988,426.49 | 628,578,908.13 |
Other cash payments related to operating activities
| Other cash payments related to operating activities | 2 | 2,396,062,964.53 | 2,606,870,455.78 |
| Subtotal of cash outflows from operating activities | 12,592,754,971.04 | 14,063,270,292.56 | |
| Net cash flows from operating activities | 1,662,482,287.71 | 809,218,720.13 | |
| II. Cash flows from investing activities: | |||
| Cash receipts from withdrawal of investments | 56,196,352.10 | ||
| Cash receipts from investment income | 24,671,510.32 | 42,698,349.08 | |
| Net cash receipts from the disposal of fixed assets, intangible assets and other long-term assets | 16,999,998.22 | 17,760,470.09 | |
| Net cash receipts from the disposal of subsidiaries & other business units | 115,100,000.00 | 445,597,313.96 |
Other cash receipts related to investing activities
| Other cash receipts related to investing activities | 3 | 5,401,861,000.00 | 4,850,116,524.23 |
| Subtotal of cash inflows from investing activities | 5,558,632,508.54 | 5,412,369,009.46 | |
| Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets | 1,083,515,734.97 | 1,734,581,869.14 | |
| Cash payments for investments | 130,189,561.55 | 10,130,000.00 | |
| Net increase of pledged borrowings | |||
| Net cash payments for the acquisition of subsidiaries & other business units | 83,807,513.74 | ||
| Other cash payments related to investing activities | 4 | 5,398,900,000.00 | 4,789,881,717.72 |
| Subtotal of cash outflows from investing activities | 6,696,412,810.26 | 6,534,593,586.86 |
Net cash flows from investing activities
| Net cash flows from investing activities | -1,137,780,301.72 | -1,122,224,577.40 | |
| III. Cash flows from financing activities: | |||
| Cash receipts from absorbing investments | 57,744,844.02 | 96,777,104.58 | |
| Including: Cash received by subsidiaries from non-controlling shareholders as investments | 34,345,285.00 | 17,943,815.00 | |
| Cash receipts from borrowings | 2,033,074,142.02 | 2,571,966,000.32 | |
| Other cash receipts related to financing activities | 5 | 290,555,211.59 | 233,079,996.55 |
| Subtotal of cash inflows from financing activities | 2,381,374,197.63 | 2,901,823,101.45 |
Cash payments for the repayment of borrowings
| Cash payments for the repayment of borrowings | 1,732,314,139.87 | 2,180,619,133.00 | |
| Cash payments for distribution of dividends or profits and for interest expenses | 451,503,767.45 | 491,122,899.60 | |
| Including: Cash paid by subsidiaries to non-controlling shareholders as dividend or profit | 11,792,867.41 | 339,454.75 | |
| Other cash payments related to financing activities | 6 | 263,396,824.36 | 454,152,599.63 |
| Subtotal of cash outflows from financing activities | 2,447,214,731.68 | 3,125,894,632.23 | |
| Net cash flows from financing activities | -65,840,534.05 | -224,071,530.78 | |
| IV. Effect of foreign exchange rate changes on cash & cash equivalents | 3,056,908.33 | -2,001,825.46 | |
| V. Net increase in cash and cash equivalents | 461,918,360.27 | -539,079,213.51 |
Add: Opening balance of cash and cash equivalents
| Add: Opening balance of cash and cash equivalents | 4,118,746,885.72 | 4,657,826,099.23 | |
| VI. Closing balance of cash and cash equivalents | 4,580,665,245.99 | 4,118,746,885.72 |
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
Infore Environment Technology Group Co., Ltd.Parent company cash flow statement for the year ended December 31, 2022
(Expressed in Renminbi Yuan)
| Items | Current period cumulative | Preceding period comparative |
| I. Cash flows from operating activities: | ||
| Cash receipts from sale of goods and rendering of services | 728,741.14 | |
| Receipts of tax refund | ||
| Other cash receipts related to operating activities | 622,328,508.84 | 1,467,056,243.50 |
| Subtotal of cash inflows from operating activities | 622,328,508.84 | 1,467,784,984.64 |
| Cash payments for goods purchased and services received | 1,743,599.35 | |
| Cash paid to and on behalf of employees | 20,656,924.48 | 16,185,831.90 |
| Cash payments for taxes and rates | 24,479.22 | 383,530.02 |
| Other cash payments related to operating activities | 727,589,122.93 | 1,235,268,785.97 |
| Subtotal of cash outflows from operating activities | 748,270,526.63 | 1,253,581,747.24 |
| Net cash flows from operating activities | -125,942,017.79 | 214,203,237.40 |
| II. Cash flows from investing activities: | ||
| Cash receipts from withdrawal of investments | 115,100,000.00 | 549,259,519.99 |
| Cash receipts from investment income | 221,911,743.60 | 509,652,357.10 |
Net cash receipts from the disposal of fixed assets, intangible assets and other long-
term assets
| Net cash receipts from the disposal of fixed assets, intangible assets and other long-term assets | ||
| Net cash receipts from the disposal of subsidiaries & other business units | ||
| Other cash receipts related to investing activities | 1,416,859,323.47 | 2,165,423,619.03 |
| Subtotal of cash inflows from investing activities | 1,753,871,067.07 | 3,224,335,496.12 |
Cash payments for the acquisition of fixed assets, intangible assets and other long-
term assets
| Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets | 513,101.79 | |
| Cash payments for investments | 96,546,250.00 | 436,550,000.00 |
| Net cash payments for the acquisition of subsidiaries & other business units | ||
| Other cash payments related to investing activities | 1,441,321,272.72 | 3,012,636,177.10 |
| Subtotal of cash outflows from investing activities | 1,537,867,522.72 | 3,449,699,278.89 |
| Net cash flows from investing activities | 216,003,544.35 | -225,363,782.77 |
| III. Cash flows from financing activities: | ||
| Cash receipts from absorbing investments | 23,399,559.02 | 78,833,289.58 |
| Cash receipts from borrowings | 96,200,000.00 | 650,000,000.00 |
| Other cash receipts related to financing activities | 228,995,320.75 | 580,000,000.00 |
| Subtotal of cash inflows from financing activities | 348,594,879.77 | 1,308,833,289.58 |
| Cash payments for the repayment of borrowings | 155,585,856.00 | 800,000,000.00 |
| Cash payments for distribution of dividends or profits and for interest expenses | 340,633,373.24 | 393,783,090.74 |
| Other cash payments related to financing activities | 181,368,993.06 | 447,594,655.11 |
| Subtotal of cash outflows from financing activities | 677,588,222.30 | 1,641,377,745.85 |
| Net cash flows from financing activities | -328,993,342.53 | -332,544,456.27 |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | ||
| V. Net increase in cash and cash equivalents | -238,931,815.97 | -343,705,001.64 |
| Add: Opening balance of cash and cash equivalents | 870,283,773.31 | 1,213,988,774.95 |
| VI. Closing balance of cash and cash equivalents | 631,351,957.34 | 870,283,773.31 |
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
Infore Environment Technology Group Co., Ltd.Consolidated statement of changes in equity for the year ended December 31, 2022
(Expressed in Renminbi Yuan)
| Items | Current period cumulative | ||||||||||||
| Equity attributable to parent company | Non-controlling interest | Total equity | |||||||||||
| Share capital | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | ||||||
| Other equity instruments | |||||||||||||
| Preferred shares | Perpetual bonds | Others | |||||||||||
I. Balance at the end of prioryear
| 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
| 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)
| 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 hol
ders of other equity instruments
| 2. Capital contributed by holders of other equity instruments | 8,808.00 | -12,947.44 | 66,691.53 | 62,552.09 | |||||||||
| 3. Amount of share-based payment included in equity | 3,868,552.56 | 170,516.82 | 4,039,069.38 |
4. Others
| 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
| 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
| 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 retainedearnings
| 4. Changes in defined benefit plan carried over to retained earnings |
5. Other comprehensive inco
me carried over to retained earnings
| 5. Other comprehensive income carried over to retained earnings |
6. Others
| 6. Others | |||||||||||||
| (V) Special reserve |
1. Current period appropriati
on
| 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
| 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: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
Infore Environment Technology Group Co., Ltd.Consolidated statement of changes in equity for the year ended December 31, 2022 (continued)
(Expressed in Renminbi Yuan)
| Items | Preceding period comparative | ||||||||||||
| Equity attributable to parent company | Non-controlling interest | Total equity | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||
I. Balance at the end of prioryear
| I. Balance at the end of prior year | 3,163,062,146.00 | 266,939,831.65 | 9,707,741,876.49 | 8,920,597.83 | 232,701,943.56 | 3,558,688,885.55 | 350,806,096.48 | 17,271,020,181.90 | |||||
| Add: Cumulative changes of accounting policies | |||||||||||||
| Error correction of prior period | |||||||||||||
| Business combination under common control |
Others
| Others | |||||||||||||
| II. Balance at the beginning of current year | 3,163,062,146.00 | 266,939,831.65 | 9,707,741,876.49 | 8,920,597.83 | 232,701,943.56 | 3,558,688,885.55 | 350,806,096.48 | 17,271,020,181.90 |
III. Current period increase(or less: decrease)
| III. Current period increase (or less: decrease) | 12,672,614.00 | -10,542.41 | 65,053,987.26 | 446,383,180.08 | -4,280,000.00 | 64,052,940.00 | 316,246,086.14 | 6,414,940.90 | 13,766,845.81 | ||||
| (I) Total comprehensive income | -4,280,000.00 | 752,792,198.66 | 46,406,535.88 | 794,918,734.54 | |||||||||
| (II) Capital contributed or withdrawn by owners | 12,672,614.00 | -10,542.41 | 65,053,987.26 | 446,383,180.08 | -39,652,140.23 | -408,319,261.46 | |||||||
| 1. Ordinary shares contributed by owners | 12,665,589.00 | 66,167,700.58 | 17,943,815.00 | 96,777,104.58 |
2. Capital contributed by hol
ders of other equity instruments
| 2. Capital contributed by holders of other equity instruments | 7,025.00 | -10,542.41 | 52,079.08 | 48,561.67 | |||||||||
| 3. Amount of share-based payment included in equity | 10,348,242.29 | 388,939.63 | 10,737,181.92 |
4. Others
| 4. Others | -11,514,034.69 | 446,383,180.08 | -57,984,894.86 | -515,882,109.63 | |||||||||
| (III) Profit distribution | 64,052,940.00 | -436,546,112.52 | -339,454.75 | -372,832,627.27 | |||||||||
| 1. Appropriation of surplus reserve | 64,052,940.00 | -64,052,940.00 | |||||||||||
| 2. Appropriation of general risk reserve |
3. Appropriation of profit to
owners
| 3. Appropriation of profit to owners | -372,493,172.52 | -339,454.75 | -372,832,627.27 | ||||||||||
| 4. Others | |||||||||||||
| (IV) Internal carry-over within equity |
1. Transfer of capital reserve
to capital
| 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 retainedearnings
| 4. Changes in defined benefit plan carried over to retained earnings |
5. Other comprehensive inco
me carried over to retained earnings
| 5. Other comprehensive income carried over to retained earnings |
6. Others
| 6. Others | |||||||||||||
| (V) Special reserve |
1. Current period appropriati
on
| 1. Current period appropriation | 7,434,025.58 | 7,434,025.58 | |||||||||||
| 2. Current period use | -7,434,025.58 | -7,434,025.58 | |||||||||||
| (VI) Others |
IV. Balance at the end of current period
| IV. Balance at the end of current period | 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 |
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
Infore Environment Technology Group Co., Ltd.Parent company statement of changes in equity for the year ended December 31, 2022(Expressed in Renminbi Yuan)
| Items | Current period cumulative | ||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Total equity | |||
| Preferred shares | Perpetual bonds | Others | |||||||||
| 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
| 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)
| 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
| 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 instruments | 8,808.00 | -12,947.44 | 66,691.53 | 62,552.09 | |||||||
| 3. Amount of share-based payment included in equity | 3,868,552.56 | 3,868,552.56 |
4. Others
| 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
| 3. Others | |||||||||||
| (IV) Internal carry-over within equity |
1. Transfer of capital reserve to c
apital
| 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 pla
n carried over to retained earnings
| 4. Changes in defined benefit plan carried over to retained earnings | |||||||||||
| 5. Other comprehensive income carried over to retained earnings |
6. Others
| 6. Others |
(V) Special reserve
| (V) Special reserve | |||||||||||
| 1. Current period appropriation |
2. Current period use
| 2. Current period use |
(VI) Others
| (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: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
Infore Environment Technology Group Co., Ltd.Parent company statement of changes in equity for the year ended December 31, 2022 (continued)(Expressed in Renminbi Yuan)
| Items | Preceding period comparative | ||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Total equity | |||
| Preferred shares | Perpetual bonds | Others | |||||||||
| I. Balance at the end of prior year | 3,163,062,146.00 | 266,939,831.65 | 15,356,688,889.72 | 8,920,597.83 | 198,481,554.14 | 502,505,012.72 | 19,478,756,836.40 | ||||
Add: Cumulative changes of accounting policies
| Add: Cumulative changes of accounting policies | |||||||||||
| Error correction of prior period |
Others
| Others | |||||||||||
| II. Balance at the beginning of current year | 3,163,062,146.00 | 266,939,831.65 | 15,356,688,889.72 | 8,920,597.83 | 198,481,554.14 | 502,505,012.72 | 19,478,756,836.40 | ||||
| III. Current period increase (or less: decrease) | 12,672,614.00 | -10,542.41 | 76,568,021.95 | 446,383,180.08 | -4,280,000.00 | 64,052,940.00 | 203,983,289.93 | -93,396,856.61 |
(I) Total comprehensive income
| (I) Total comprehensive income | -4,280,000.00 | 640,529,402.45 | 636,249,402.45 | ||||||||
| (II) Capital contributed or withdrawn by owners | 12,672,614.00 | -10,542.41 | 76,568,021.95 | 446,383,180.08 | -357,153,086.54 | ||||||
| 1. Ordinary shares contributed by owners | 12,665,589.00 | 66,167,700.58 | 446,383,180.08 | -367,549,890.50 | |||||||
| 2. Capital contributed by holders of other equity instruments | 7,025.00 | -10,542.41 | 52,079.08 | 48,561.67 |
3. Amount of share-based payment
included in equity
| 3. Amount of share-based payment included in equity | 10,348,242.29 | 10,348,242.29 | |||||||||
| 4. Others | |||||||||||
| (III) Profit distribution | 64,052,940.00 | -436,546,112.52 | -372,493,172.52 |
1. Appropriation of surplus reserve
| 1. Appropriation of surplus reserve | 64,052,940.00 | -64,052,940.00 | |||||||||
| 2. Appropriation of profit to owners | -372,493,172.52 | -372,493,172.52 |
3. Others
| 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
| 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
| 6. Others |
(V) Special reserve
| (V) Special reserve | |||||||||||
| 1. Current period appropriation |
2. Current period use
| 2. Current period use |
(VI) Others
| (VI) Others | |||||||||||
| IV. Balance at the end of current period | 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 |
Legal representative: Ma Gang Officer in charge of accounting: Wang Qingbo Head of accounting department: Wu Shanshan
Infore Environment Technology Group Co., Ltd.
Notes to Financial StatementsFor the year ended December 31, 2022
Monetary unit: RMB YuanI. Company profileInfore 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 ShareSystem Pilot Work Coordination Group with document of approval numbered Zhe Gu [1993] 51, the Company was established byZhejiang Fan Air Cooling Equipment Co., Ltd., the main initiator, and Shangyu Fan Factory and Shaoxing Fluid EngineeringResearch Institute, the joint initiators, through targeted fundraising. It is headquartered in Shaoxing City, Zhejiang Province. TheCompany currently holds a business license with unified social credit code of 913300006096799222. As of December 31, 2022, ithas registered capital of 3,179,474,144.00 yuan, and total share capital of 3,179,505,559.00 yuan. The difference between theregistered capital and share capital is because the change related to new share capital has not been registered at the administration forindustry and commerce. According to the records in China Securities Depository and Clearing Corporation Limited, as of December31, 2022, the Company has restricted outstanding shares of 1,838,140 shares, and unrestricted outstanding shares of 3,177,667,419shares, totaling 3,179,505,559 shares. The Company’s shares were listed on the Shenzhen Stock Exchange on March 30, 2000.The Company belongs to the ecological protection and environmental management industry. The main business activitiesinclude R&D, maintenance and operation services of environmental monitoring instruments and environmental protectionequipment, environmental treatment technology development, consulting and services, operation services of environmental treatmentfacilities, environmental engineering, environmental protection engineering, urban engineering, sale of ventilators, air-cooling, andwater-cooling and air-conditioning equipment, etc. Its revenue is mainly from sales of environmental and sanitation machinery,ventilation equipment, and sanitation operation service.The financial statements were approved and authorized for issue by the second meeting of the tenth session of the Board ofDirectors dated April 24, 2023.
The Company has brought 247 subsidiaries including Changsha Zoomlion Environmental Industry Co., Ltd. (the “ZoomlionEnvironmental 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 ProtectionCo., Ltd. (the “Green Oriental Company”) into the consolidation scope. Please refer to section VI and VII of notes to the financialstatements for details.
II. Preparation basis of the financial statements
(I) Preparation basis
The financial statements have been prepared on the basis of going concern.
(II) Assessment of the ability to continue as a going concern
The Company has no events or conditions that may cast significant doubts upon the Company’s ability to continue as a goingconcern 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 offinancial instruments, depreciation of fixed assets, depreciation of right-of-use assets, amortization of intangible assets, revenuerecognition, 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 theCompany.
(II) Accounting periodThe accounting year of the Company runs from January 1 to December 31 under the Gregorian calendar.(III) Operating cycleThe Company has a relatively short operating cycle for its business, an asset or a liability is classified as current if it is expectedto be realized or due within 12 months.
(IV) Functional currencyThe Company’s functional currency is Renminbi (RMB) Yuan.(V) Accounting treatments of business combination under and not under common control
1. Accounting treatment of business combination under common control
Assets and liabilities arising from business combination are measured at carrying amount of the combined party included in theconsolidated financial statements of the ultimate controlling party at the combination date. Difference between carrying amount ofthe equity of the combined party included in the consolidated financial statements of the ultimate controlling party and that of thecombination consideration or total par value of shares issued is adjusted to capital reserve, if the balance of capital reserve isinsufficient to offset, any excess is adjusted to retained earnings.
2. Accounting treatment of business combination not under common control
When combination cost is in excess of the fair value of identifiable net assets obtained from the acquiree at the acquisition date,the excess is recognized as goodwill; otherwise, the fair value of identifiable assets, liabilities and contingent liabilities, and themeasurement of the combination cost are reviewed, then the difference is recognized in profit or loss.
(VI) Compilation method of consolidated financial statements
The parent company brings all its controlled subsidiaries into the consolidation scope. The consolidated financial statements arecompiled by the parent company according to “CASBE 33 – Consolidated Financial Statements”, based on relevant information andthe financial statements of the parent company and its subsidiaries.
(VII) Classification of joint arrangements and accounting treatment of joint operations
1. Joint arrangements include joint operations and joint ventures.
2. When the Company is a joint operator of a joint operation, it recognizes the following items in relation to its interest in a jointoperation:
(1) its assets, including its share of any assets held jointly;
(2) its liabilities, including its share of any liabilities incurred jointly;
(3) its revenue from the sale of its share of the output arising from the joint operation;
(4) its share of the revenue from the sale of the assets by the joint operation; and
(5) its expenses, including its share of any expenses incurred jointly.
(VIII) Recognition criteria of cash and cash equivalents
Cash as presented in cash flow statement refers to cash on hand and deposit on demand for payment. Cash equivalents refer toshort-term, highly liquid investments that can be readily converted to cash and that are subject to an insignificant risk of changes invalue.
(IX) Foreign currency translation
1. Translation of transactions denominated in foreign currency
Transactions denominated in foreign currency are translated into RMB yuan at the spot exchange rate at the transaction date atinitial recognition. At the balance sheet date, monetary items denominated in foreign currency are translated at the spot exchange rateat the balance sheet date with difference, except for those arising from the principal and interest of exclusive borrowings eligible forcapitalization, included in profit or loss; non-cash items carried at historical costs are translated at the spot exchange rate at thetransaction date, with the RMB amounts unchanged; non-cash items carried at fair value in foreign currency are translated at the spotexchange 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; theequity items, other than undistributed profit, are translated at the spot exchange rate at the transaction date; the revenues and expensesin the income statement are translated into RMB at the spot exchange rate at the transaction date. The difference arising from theaforementioned foreign currency translation is included in other comprehensive income.(X) Financial instruments
1. Classification of financial assets and financial liabilities
Financial assets are classified into the following three categories when initially recognized: (1) financial assets at amortizedcost; (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 fairvalue through profit or loss; (2) financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition orwhen 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) financialliabilities at amortized cost.
2. Recognition criteria, measurement method and derecognition condition of financial assets and financial liabilities
(1) Recognition criteria and measurement method of financial assets and financial liabilities
When the Company becomes a party to a financial instrument, it is recognized as a financial asset or financial liability. Thefinancial assets and financial liabilities initially recognized by the Company are measured at fair value; for the financial assets andliabilities at fair value through profit or loss, the transaction expenses thereof are directly included in profit or loss; for othercategories of financial assets and financial liabilities, the transaction expenses thereof are included into the initially recognizedamount. However, at initial recognition, for accounts receivable that do not contain a significant financing component or incircumstances where the Company does not consider the financing components in contracts within one year, they are measured at thetransaction 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 financialassets that are measured at amortized cost and are not part of hedging relationships shall be included into profit or loss when thefinancial assets are derecognized, reclassified, amortized using effective interest method or recognized with impairment loss.
2) Debt instrument investments at fair value through other comprehensive income
The Company measures its debt instrument investments at fair value. Interests, impairment gains or losses, and gains and losseson foreign exchange that calculated using effective interest method shall be included into profit or loss, while other gains or lossesare included into other comprehensive income. Accumulated gains or losses that initially recognized as other comprehensive incomeshould 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 ofinvestment cost recovery) shall be included into profit or loss, while other gains or losses are included into other comprehensiveincome. Accumulated gains or losses that initially recognized as other comprehensive income should be transferred out into retainedearnings 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 interestsand 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 atfair value. The amount of changes in the fair value of the financial liabilities that are attributable to changes in the Company’s owncredit risk shall be included into other comprehensive income, unless such treatment would create or enlarge accounting mismatchesin profit or loss. Other gains or losses on those financial liabilities (including interests, changes in fair value that are attributable toreasons other than changes in the Company’s own credit risk) shall be included into profit or loss, except for financial liabilities thatare part of hedging relationships. Accumulated gains or losses that originally recognized as other comprehensive income should betransferred 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 continuinginvolvement approach appliesThe 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 impairmentrequirements of financial instruments; b. the amount initially recognized less the amount of accumulated amortization recognized inaccordance 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 financialliabilities that are measured at amortized cost and are not part of hedging relationships shall be included into profit or loss when thefinancial 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 bederecognized 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, itderecognizes the financial asset, and any right or liability arising from such transfer is recognized independently as an asset or aliability. If it retained substantially all of the risks and rewards related to the ownership of the financial asset, it continues recognizingthe financial asset. Where the Company does not transfer or retain substantially all of the risks and rewards related to the ownershipof a financial asset, it is dealt with according to the circumstances as follows respectively: (1) if the Company does not retain itscontrol over the financial asset, it derecognizes the financial asset, and any right or liability arising from such transfer is recognizedindependently as an asset or a liability; (2) if the Company retains its control over the financial asset, according to the extent of itscontinuing involvement in the transferred financial asset, it recognizes the related financial asset and recognizes the relevant liabilityaccordingly.
If the transfer of an entire financial asset satisfies the conditions for derecognition, the difference between the amounts of thefollowing two items is included in profit or loss: (1) the carrying amount of the transferred financial asset as of the date ofderecognition; (2) the sum of consideration received from the transfer of the financial asset, and the accumulative amount of thechanges of the fair value originally included in other comprehensive income proportionate to the transferred financial asset (financialassets transferred refer to debt instrument investments at fair value through other comprehensive income). If the transfer of financialasset partially satisfies the conditions to derecognition, the entire carrying amount of the transferred financial asset is, between theportion which is derecognized and the portion which is not, apportioned according to their respective relative fair value, and thedifference between the amounts of the following two items is included into profit or loss: (1) the carrying amount of the portionwhich 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 portionwhich is derecognized (financial assets transferred refer to debt instrument investments at fair value through other comprehensiveincome).
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 informationare available to measure fair value. The inputs to valuation techniques used to measure fair value are arranged in the followinghierarchy and used accordingly:
(1) Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access atthe measurement date;
(2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, eitherdirectly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices foridentical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the assetor 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 andcannot be corroborated by observable market data at commonly quoted intervals, historical volatility, future cash flows to be paid tofulfill the disposal obligation assumed in business combination, financial forecast developed using the Company’s own data, etc.
5. Impairment of financial instruments
(1) Measurement and accounting treatment
The Company, on the basis of expected credit loss, recognizes loss allowances of financial assets at amortized cost, debtinstrument investments at fair value through other comprehensive income, contract assets, leases receivable, loan commitments otherthan financial liabilities at fair value through profit or loss, financial guarantee contracts not belong to financial liabilities at fair valuethrough profit or loss or financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or whenthe continuing involvement approach applies.
Expected credit losses refer to the weighted average of credit losses with the respective risks of a default occurring as theweights. Credit loss refers to the difference between all contractual cash flows that are due to the Company in accordance with thecontract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at the original effectiveinterest rate. Among which, purchased or originated credit-impaired financial assets are discounted at the credit-adjusted effectiveinterest rate.
At the balance sheet date, the Company shall only recognize the cumulative changes in the lifetime expected credit losses sinceinitial 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 creditlosses.
For financial assets other than the above, on each balance sheet date, the Company shall assess whether the credit risk on thefinancial instrument has increased significantly since initial recognition. The Company shall measure the loss allowance for thefinancial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument hasincreased significantly since initial recognition; otherwise, the Company shall measure the loss allowance for that financialinstrument 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 onthe financial instrument as at the balance sheet date with the risk of a default occurring on the financial instrument as at the date ofinitial recognition, so as to assess whether the credit risk on the financial instrument has increased significantly since initialrecognition.
The Company may assume that the credit risk on a financial instrument has not increased significantly since initial recognition ifthe 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 lossallowance arising therefrom shall be included into profit or loss as impairment losses or gains. For a financial asset measured atamortized cost, the loss allowance reduces the carrying amount of such financial asset presented in the balance sheet; for a debtinvestment measured at fair value through other comprehensive income, the loss allowance shall be recognized in othercomprehensive income and shall not reduce the carrying amount of such financial asset.
(2) Financial instruments with expected credit risk assessed on a collective basis and expected credit losses measured usingthree-stage model
| Items | Basis for determination of portfolio | Method for measuring expected credit loss |
| Other receivables – Portfolio grouped with balances due from related parties within the consolidation scope | Balances due from related parties within the consolidation scope | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates expected credit loss through exposure at default and 12-month or lifetime expected credit loss rate. |
| Other receivables – Portfolio grouped with performance compensations | Nature of the balance | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates expected credit loss through exposure at default and 12-month or lifetime expected credit loss rate. |
| Other receivables – Portfolio grouped with ages | Ages | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates expected credit loss through exposure at default and 12-month or lifetime expected credit loss rate. |
| Long-term receivables – Portfolio grouped with finance lease payment/ Long-term receivables – Portfolio grouped with receivables financing factoring payment /Accounts receivable – Portfolio grouped with commercial factoring payment | Nature of the balance | Expected credit loss rates are calculated based on five-level classification of credit assets of non-bank financial institutions: 1.5% for pass category, 3% for special-mention category, 30% for substandard category, 60% for doubtful category, and 100% for loss category |
(3) Accounts receivable and contract assets with expected credit losses measured on a collective basis using simplified approach
1) Specific portfolios and method for measuring expected credit loss
| Items | Basis for determination of portfolio | Method for measuring expected credit loss |
| Bank acceptance receivable | Type of notes | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates expected credit loss through exposure at default and lifetime expected credit loss rate. |
| Trade acceptance receivable | ||
| Accounts receivable – Portfolio grouped with balances due from related parties within the consolidation scope | Balances due from related parties within the consolidation scope | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates expected credit loss through exposure at default and lifetime expected credit loss rate. |
| Accounts receivable – Portfolio grouped with ages | Ages | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company prepares the comparison table of overdue days/ages and lifetime expected credit loss rate of accounts receivable, so as to calculate expected credit loss. |
| Accounts receivable – Portfolio grouped with government subsidies for new energy vehicles | Nature of the balance | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company |
| Items | Basis for determination of portfolio | Method for measuring expected credit loss |
| prepares the comparison table of overdue days/ages and lifetime expected credit loss rate of accounts receivable, so as to calculate expected credit loss. | ||
| Contract assets – Portfolio grouped with warranty reserve | Nature of the balance | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates expected credit loss through exposure at default and lifetime expected credit loss rate. |
| Long-term receivables – Portfolio grouped with ages | Nature of the balance | For long-term receivables within the credit period that has not reached the contractual payment deadline, provision for bad debts is accrued at 5% of the balance. For long-term receivables that have exceeded the contractual payment deadline and have not yet been paid, provision for bad debts is accrued based on the age of the balance. |
2)Accounts receivable – comparison table of ages and lifetime expected credit loss rate of portfolio grouped with agesa. Parent company
| Ages | Expected credit loss rate of accounts receivable (%) |
| 1-180 days (inclusive, the same hereinafter) | 0 |
| 180 days - 1 year | 2 |
| 1-2 years | 10 |
| 2-3 years | 30 |
| 3-5 years | 50 |
| Over 5 years | 80 |
b. Ventilation equipment manufacturing industry and environmental integrated industry
| Ages | Expected credit loss rate of accounts receivable (%) |
| Within 1 year (inclusive, the same hereinafter) | 5 |
| 1-2 years | 10 |
| 2-3 years | 30 |
| 3-5 years | 50 |
| Over 5 years | 100 |
6. Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are presented separately in the balance sheet and are not offset. However, the Companyoffsets 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 torealize 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 andthe associated liability.
(XI) Inventories
1. Classification of inventories
Inventories include finished goods or goods held for sale in the ordinary course of business, work in process in the process ofproduction, materials, supplies, etc. to be consumed in the production process or in the rendering of services.
2. Accounting method for dispatching inventories:
Inventories dispatched from storage are accounted for with weighted average method.
3. Basis for determining net realizable value
At the balance sheet date, inventories are measured at the lower of cost and net realizable value; provisions for inventory write-down are made on the excess of its cost over the net realizable value. The net realizable value of inventories held for sale isdetermined based on the amount of the estimated selling price less the estimated selling expenses and relevant taxes and surchargesin the ordinary course of business; the net realizable value of inventories to be processed is determined based on the amount of theestimated selling price less the estimated costs of completion, selling expenses and relevant taxes and surcharges in the ordinarycourse of business; at the balance sheet date, when only part of the same item of inventories have agreed price, their net realizablevalue are determined separately and are compared with their costs to set the provision for inventory write-down to be made orreversed.
4. Inventory system
Perpetual inventory method is adopted.
5. Amortization method of low-value consumables and packages
(1) Low-value consumables
Low-value consumables are amortized with one-off method.
(2) Packages
Packages are amortized with one-off method.
(XII) Contract costs
Assets related to contract costs include costs of obtaining a contract and costs to fulfil a contract.
The Company recognizes as an asset the incremental costs of obtaining a contract if those costs are expected to be recovered.
If the costs incurred in fulfilling a contract are not within the scope of standards related to inventories, fixed assets or intangibleassets, etc., the Company shall recognize the costs to fulfil a contract as an asset if all the following criteria are satisfied:
1. The costs relate directly to a contract or to an anticipated contract, including direct labor, direct materials, manufacturingoverhead cost (or similar cost), cost that are explicitly chargeable to the customer under the contract, and other costs that are onlyrelated 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, withamortization included into profit or loss.
The Company shall make provision for impairment and recognize an impairment loss to the extent that the carrying amount ofan asset related to contract costs exceeds the remaining amount of consideration that the Company expects to receive in exchange forthe goods or services to which the asset relates less the costs expected to be incurred. The Company shall recognize a reversal of animpairment loss previously recognized in profit or loss when the impairment conditions no longer exist or have improved. Thecarrying amount of the asset after the reversal shall not exceed the amount that would have been determined on the reversal date if noprovision for impairment had been made previously.
(XIII) Non-current assets or disposal groups held for sale
1. Classification of non-current assets or disposal groups held for sale
Non-current assets or disposal groups are accounted for as held for sale when the following conditions are all met: (1) the assetmust be available for immediate sale in its present condition subject to terms that are usual and customary for sales of such assets ordisposal groups; (2) its sales must be highly probable, i.e., the Company has made a decision on the sale plan and has obtained a firmpurchase 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 ordisposal group as held for sale at the acquisition date only if the requirement of “expected to be completed within one year” is met atthat 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 thefollowing reasons: (1) a buyer or others unexpectedly set conditions that will extend the sale period, while the Company has takentimely actions to respond to the conditions and expects a favorable resolution of the delaying factors within one year since thesetting; (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 theCompany has taken action necessary to respond to the circumstances during the initial one-year period and the criteria for held forsale are met.
2. Measurement of non-current assets or disposal groups held for sale
(1) Initial measurement and subsequent measurement
For initial measurement and subsequent measurement as at the balance sheet date of a non-current asset or disposal group heldfor sale, where the carrying amount is higher than the fair value less costs to sell, the carrying amount is written down to the fairvalue less costs to sell, and the write-down is recognized in profit or loss as assets impairment loss, meanwhile, provision forimpairment 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 ismeasured on initial recognition at the lower of its initial measurement amount had it not been so classified and fair value less costs tosell. Apart from the non-current asset or disposal group acquired through business combination, the difference arising from the initialrecognition 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 thedisposal group first, and then reduce its carrying amount based on the proportion of each non-current asset’s carrying amount in thedisposal group.
No provision for depreciation or amortization shall be made on non-current assets held for sale or non-current assets in disposalgroups held for sale, while interest and other expenses attributable to the liabilities of a disposal group held for sale shall continue tobe 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 beenrecognized 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, thewrite-down shall be recovered, and shall be reversed not in excess of the non-current assets impairment loss that has been recognizedafter the disposal group was classified as held for sale. The reversal shall be included into profit or loss. The reduced carrying amountof 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 carryingamount is increased based on the proportion of carrying amount of each non-current asset (excluding goodwill) in the disposal group.
(3) Non-current asset or disposal group that is no longer classified as held for sale and derecognized
A non-current asset or disposal group that does not met criteria for held for sale and no longer classified as held for sale, or anon-current asset that removed from a disposal group held for sale shall be measured at the lower of: a. its carrying amount before itwas classified as held for sale, adjusted for any depreciation, amortization or impairment that would have been recognized had it notbeen classified as held for sale; and b. its recoverable amount.
When a non-current asset or disposal group classified as held for sale is derecognized, unrecognized gains or losses shall beincluded into profit or loss.
(XIV) Long-term equity investments
1. Judgment of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about therelevant activities require the unanimous consent of the parties sharing control. Significant influence is the power to participate in thefinancial 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 incash, transfers non-cash assets, assumes its liabilities or issues equity securities, on the date of combination, it regards the share of thecarrying amount of the equity of the combined party included in the consolidated financial statements of the ultimate controllingparty as the initial cost of the investment. The difference between the initial cost of the long-term equity investments and the carryingamount of the combination consideration paid or the par value of shares issued offsets capital reserve; if the balance of capital reserveis 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, theCompany determines whether it is a “bundled transaction”. If it is a “bundled transaction”, stages as a whole are considered as onetransaction in accounting treatment. If it is not a “bundled transaction”, on the date of combination, investment cost is initiallyrecognized at the share of the carrying amount of net assets of the combined party included the consolidated financial statements ofthe ultimate controlling party. The difference between the initial investment cost of long-term equity investments at the acquisitiondate and the carrying amount of the previously held long-term equity investments plus the carrying amount of the consideration paidfor the newly acquired equity is adjusted to capital reserve; if the balance of capital reserve is insufficient to offset, any excess isadjusted to retained earnings.
(2) For business combination not under common control, investment cost is initially recognized at the acquisition-date fair valueof considerations paid.
When long-term equity investments are obtained through business combination not under common control achieved in stages,the Company determined whether they are stand-alone financial statements or consolidated financial statements in accountingtreatment:
1) In the case of stand-alone financial statements, investment cost is initially recognized at the carrying amount of the previouslyheld 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 “bundledtransaction”, 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 theacquirer’s previously held equity interest in the acquiree involves other comprehensive income under equity method, the related othercomprehensive income is reclassified as income for the acquisition period, excluding other comprehensive income arising fromchanges 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 equityinvestment obtained by making payment in cash is the purchase cost which is actually paid; that obtained on the basis of issuingequity 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 equityinvestment with joint control or significant influence relationship, it is accounted for with equity method.
4. Disposal of a subsidiary in stages resulting in the Company’s loss of control
(1) Stand-alone financial statements
The difference between the carrying amount of the disposed equity and the consideration obtained thereof is recognized in profitor loss. If the disposal does not result in the Company’s loss of significant influence or joint control, the remained equity is accountedfor with equity method; however, if the disposal results in the Company’s loss of control, joint control, or significant influence, theremained equity is accounted for according to “CASBE 22 – Financial Instruments: Recognition and Measurement”.
(2) Consolidated financial statements
1) Disposal of a subsidiary in stages not qualified as “bundled transaction” resulting in the Company’s loss of control
Before the Company’s loss of control, the difference between the disposal consideration and the proportionate share of net assetsin the disposed subsidiary from acquisition date or combination date to the disposal date is adjusted to capital reserve (capitalpremium), 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 valueof disposal consideration and the fair value of the remained equity, less the share of net assets in the disposed subsidiary held beforethe disposal from the acquisition date or combination date to the disposal date is recognized in investment income in the period whenthe Company loses control over such subsidiary, and meanwhile goodwill is offset correspondingly. Other comprehensive incomerelated to equity investments in former subsidiary is reclassified as investment income upon the Company’s loss of control.
2) Disposal of a subsidiary in stages qualified as “bundled transaction” resulting in the Company’s loss of control
In case of “bundled transaction”, stages as a whole are considered as one transaction resulting in loss of control in accountingtreatment. However, before the Company loses control, the difference between the disposal consideration at each stage and theproportionate share of net assets in the disposed subsidiary is recognized as other comprehensive income at the consolidated financialstatements and reclassified as profit or loss in the period when the Company loses control over such subsidiary.
(XV) Investment property
1. Investment property includes land use right of leased-out property and of property held for capital appreciation and buildingsthat have been leased out.
2. The initial measurement of investment property is based on its cost, and subsequent measurement is made using the costmodel, the depreciation or amortization method is the same as that of fixed assets and intangible assets.
(XVI) Fixed assets
1. Recognition principles of fixed assets
Fixed assets are tangible assets held for use in the production of goods or rendering of services, for rental to others, or foradministrative purposes, and expected to be used during more than one accounting year. Fixed assets are recognized if, and only if, itis probable that future economic benefits associated with the assets will flow to the Company and the cost of the assets can bemeasured reliably.
2. Depreciation method of different categories of fixed assets
| Categories | Depreciation method | Useful life (years) | Residual value proportion (%) | Annual depreciation rate (%) |
| Buildings and structures | Straight-line method | 3-35 | 3.00-5.00 | 2.71-32.33 |
| General equipment | Straight-line method | 3-5 | 3.00-5.00 | 19.00-32.33 |
| Special equipment | Straight-line method | 2-15 | 0.00-5.00 | 6.33-50.00 |
| Transport facilities | Straight-line method | 3-15 | 3.00-5.00 | 6.33-32.33 |
| Other equipment | Straight-line method | 3-10 | 5.00 | 9.50-31.67 |
(XVII) Construction in progress
1. Construction in progress is recognized if, and only if, it is probable that future economic benefits associated with the item willflow to the Company, and the cost of the item can be measured reliably. Construction in progress is measured at the actual costincurred 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. Whenthe auditing of the construction in progress was not finished while reaching the designed usable conditions, it is transferred to fixedassets using estimated value first, and then adjusted accordingly when the actual cost is settled, but the accumulated depreciation isnot to be adjusted retrospectively.
(XVIII) Borrowing costs
1. Recognition principle of borrowing costs capitalization
Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and construction orproduction 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 havealready incurred; 2) the borrowing costs have already incurred; and 3) the acquisition and construction or production activities whichare 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 interruptedabnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs is suspended; theborrowing costs incurred during such period are recognized as expenses, and are included in profit or loss, till the acquisition andconstruction or production of the asset restarts.
(3) Ceasing of capitalization: when the qualified asset under acquisition and construction or production is ready for the intendeduse 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 ordiscount based on effective interest method) of the special borrowings in the current period less the interest income on the unusedborrowings as a deposit in the bank or as a temporary investment; where a general borrowing is used for the acquisition andconstruction or production of assets eligible for capitalization, the Company calculates and determines the to-be-capitalized amountof interests on the general borrowing by multiplying the weighted average asset disbursement of the part of the accumulative assetdisbursements less the general borrowing by the capitalization rate of the general borrowing used.
(XIX) Intangible assets
1. Intangible assets include land use right, patent right, non-patented technology, etc. The initial measurement of intangibleassets is based on its cost.
2. For intangible assets with finite useful lives, their amortization amounts are amortized within their useful lives systematicallyand reasonably, if it is unable to determine the expected realization pattern reliably, intangible assets are amortized by the straight-line method with details as follows:
| Items | Amortization period (years) |
| Franchise | Contractual term |
| Land use right | 35-50 |
| Patented technology | Economic life cycle |
| Software | 3-10 |
| Other | 5 |
3. Expenditures on the research phase of an internal project are recognized as profit or loss when they are incurred. Anintangible asset arising from the development phase of an internal project is recognized if the Company can demonstrate all of thefollowings: (1) the technical feasibility of completing the intangible asset so that it will be available for use or sale; (2) its intention tocomplete the intangible asset and use or sell it; (3) how the intangible asset will generate probable future economic benefits, amongother things, the Company can demonstrate the existence of a market for the output of the intangible asset or the intangible assetitself or, if it is to be used internally, the usefulness of the intangible asset; (4) the availability of adequate technical, financial andother resources to complete the development and to use or sell the intangible asset; and (5) its ability to measure reliably theexpenditure attributable to the intangible asset during its development.
Criteria for distinguishing the research phase from the development phase of an internal project to create an intangible asset:
The planned investigation phase for acquiring new technology and knowledge should be defined as the research phase, whichhas the characteristics of planning and exploratory nature; before commercial production or use, when the research results or otherknowledge 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 andgreater possibility of forming results. The Company divides the research and development phases by forming the prototype drawingand starting the prototype trial production. Expenditures in the research phase of internal research and development projects areincluded in profit or loss when they incur. When the Company enters the development phase, project expenditures are first calculatedby projects under “development expenditure”, and if the capitalization conditions are met, they are presented as developmentexpenditures in the financial statements. The project will be transferred to intangible assets when the project has the conditions forsale or mass production.(XX) Impairment of part of long-term assetsFor long-term assets such as long-term equity investments, investment property at cost model, fixed assets, construction inprogress, right-of-use assets, intangible assets with finite useful lives, etc., if at the balance sheet date there is indication ofimpairment, the recoverable amount is to be estimated. For goodwill recognized in business combination and intangible assets withindefinite useful lives, no matter whether there is indication of impairment, impairment test is performed annually. Impairment teston 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 asprovision for assets impairment through profit or loss.(XXI) Long-term prepaymentsLong-term prepayments are expenses that have been recognized but with amortization period over one year (excluding oneyear). They are recorded with actual cost, and evenly amortized within the beneficiary period or stipulated period. If items of long-term prepayments fail to be beneficial to the following accounting periods, residual values of such items are included in profit or loss.(XXII) Employee benefits
1. Employee benefits include short-term employee benefits, post-employment benefits, termination benefits and other long-termemployee benefits.
2. Short-term employee benefits
The Company recognizes, in the accounting period in which an employee provides service, short-term employee benefitsactually 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 adefined 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 toestimate related demographic variables and financial variables, measure the obligations under the defined benefit plan, and determinethe periods to which the obligations are attributed. Meanwhile, the Company discounts obligations under the defined benefit plan todetermine 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 definedbenefit plan assets from the present value of the defined benefit plan obligation as a net defined benefit plan liability or net definedbenefit plan asset. When a defined benefit plan has a surplus, the Company measures the net defined benefit plan asset at the lower ofthe surplus in the defined benefit plan and the asset ceiling;
3) At the end of the period, the Company recognizes the following components of employee benefits cost arising from definedbenefit plan: a. service cost; b. net interest on the net defined benefit plan liability (asset); and c. changes as a result ofremeasurement of the net defined benefit liability (asset). Item a and item b are recognized in profit or loss or the cost of a relevantasset. Item c is recognized in other comprehensive income and is not to be reclassified subsequently to profit or loss. However, theCompany 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 theoffer of termination benefits because of an employment termination plan or a curtailment proposal; or (2) when the Companyrecognizes 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 definedcontribution plan, those benefits are accounted for in accordance with the requirements relating to defined contribution plan, whileother benefits are accounted for in accordance with the requirements relating to defined benefit plan. The Company recognizes thecost of employee benefits arising from other long-term employee benefits as the followings: (1) service cost; (2) net interest on thenet liability or net assets of other long-term employee benefits; and (3) changes as a result of remeasurement of the net liability or netassets of other long-term employee benefits. As a practical expedient, the net total of the aforesaid amounts is recognized in profit orloss or included in the cost of a relevant asset.(XXIII) Provisions
1. Provisions are recognized when fulfilling the present obligations arising from contingencies such as providing guarantee forother parties, litigation, products quality guarantee, onerous contract, etc., may cause the outflow of the economic benefit and suchobligations can be reliably measured.
2. The initial measurement of provisions is based on the best estimated expenditures required in fulfilling the presentobligations, and its carrying amount is reviewed at the balance sheet date.
(XXIV) Share-based payment
1. Types of share-based payment
Share-based payment consists of equity-settled share-based payment and cash-settled share-based payment.
2. Accounting treatment for settlements, modifications and cancellations of share-based payment plans
(1) Equity-settled share-based payment
For equity-settled share-based payment transaction with employees, if the equity instruments granted vest immediately, the fairvalue of those equity instruments is measured at grant date and recognized as transaction cost or expense, with a correspondingadjustment in capital reserve; if the equity instruments granted do not vest until the counterparty completes a specified period ofservice or fulfils certain performance conditions, at the balance sheet date within the vesting period, the fair value of those equityinstruments measured at grant date based on the best estimate of the number of equity instruments expected to vest is recognized astransaction 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 receivedcan be measured reliably, the fair value is measured at the date the Company receives the service; if the fair value of the servicesreceived cannot be measured reliably, but that of equity instruments can be measured reliably, the fair value of the equity instrumentsgranted measured at the date the Company receives the service is referred to, and recognized as transaction cost or expense, with acorresponding 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 valueof the liability incurred as the acquisition of services is measured at grant date and recognized as transaction cost or expense, with acorresponding increase in liabilities; if share appreciation rights do not vest until the employees have completed a specified period ofservice or fulfils certain performance conditions, the liability is measured, at each balance sheet date until settled, at the fair value ofthe share appreciation rights measured at grant date based on the best estimate of the number of share appreciation right expected tovest.
(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 valuegranted 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 theadditional 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, theCompany 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 thatdecrease in fair value and continue to measure the amount recognized for services received as consideration for the equityinstruments based on the grant date fair value of the equity instruments granted; if the modification reduces the number of equityinstruments granted to an employee, that reduction is accounted for as a cancellation of that portion of the grant; if the Companymodifies the vesting conditions in a manner that is not beneficial to the employee, the Company does not take the modified vestingconditions into account.
If the Company cancels or settles a grant of equity instruments during the vesting period (other than that cancelled when thevesting conditions are not satisfied), the Company accounts for the cancellation or settlement as an acceleration of vesting, andtherefore recognizes immediately the amount that otherwise would have been recognized for services received over the remainder ofthe vesting period.(XXV) Other financial instruments such as preferred shares and perpetual bondsPursuant to CASBEs on financial instruments and the “Regulations on Accounting Treatments of Perpetual Bonds” (Cai Kuai[2019] No. 2), for financial instruments such as convertible bonds etc., the Company classifies a financial instrument or itscomponents at initial recognition as a financial asset or liability or equity instrument, based on contract terms and economic essenceit 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 dividenddistribution is treated as profit distribution, and share repurchase and cancelation are treated as changes in equity; for a financialinstrument classified as a financial liability, its interest expenditure or dividend distribution is treated as borrowing expense, and gainor loss on repurchase or redemption is included in profit or loss.(XXVI) Revenue
1. Revenue recognition principles
At contract inception, the Company shall assess the contracts and shall identify each performance obligation in the contracts,and determine whether the performance obligation should be satisfied over time or at a point in time.
The Company satisfies a performance obligation over time if one of the following criteria is met, otherwise, the performanceobligation is satisfied at a point in time: (1) the customer simultaneously receives and consumes the economic benefits provided bythe Company’s performance as the Company performs; (2) the customer can control goods as they are created by the Company’sperformance; (3) goods created during the Company’s performance have irreplaceable uses and the Company has an enforceableright 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 progresstowards 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 revenueonly to the extent of the costs incurred until it can reasonably measure the progress. For each performance obligation satisfied at apoint 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) theCompany has a present right to payments for the goods, i.e., the customer is presently obliged to pay for the goods; (2) the Companyhas transferred the legal title of the goods to the customer, i.e., the customer has legal title to the goods; (3) the Company hastransferred physical possession of the goods to the customer, i.e., the customer has physically possessed the goods; (4) the Companyhas transferred significant risks and rewards of ownership of the goods to the customer, i.e., the customer has obtained significantrisks and rewards of ownership of the goods; (5) the customer has accepted the goods; (6) other evidence indicating the customer hasobtained 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 transactionprice is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a
customer, excluding amounts collected on behalf of third parties and those expected to be refunded to the customer.
(2) If the consideration promised in a contract includes a variable amount, the Company shall confirm the best estimate ofvariable consideration at expected value or the most likely amount. However, the transaction price that includes the amount ofvariable consideration only to the extent that it is high probable that a significant reversal in the amount of cumulative revenuerecognized 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 thetransaction price based on the price that a customer would have paid for if the customer had paid cash for obtaining control overthose goods or services. The difference between the transaction price and the amount of promised consideration is amortized undereffective interest method over contractual period. The effects of a significant financing component shall not be considered if theCompany expects, at the contract inception, that the period between when the customer obtains control over goods or services andwhen 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 atcontract inception of the distinct good underlying each performance obligation and allocate the transaction price to each performanceobligation 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 sanitationoperation service.
(1) Sale of ventilation equipment is a performance obligation satisfied at a point in time. Revenue from domestic sales ofproducts that do not require installation is recognized when the Company has delivered goods to the designated address as agreed bycontract 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 flowto the Company. For products that need to be installed, revenue is recognized when the products are delivered and qualified forinstallation, commissioning and acceptance. Revenue from overseas sales is recognized when the Company has declared goods to thecustoms based on contractual agreements and has obtained a bill of lading, and the Company has collected the payments or hasobtained 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, andrevenue is recognized when customers receive and consume the products, and the Company has collected the payments or hasobtained the right to the payments, and related economic benefits are highly probable to flow to the Company.
(3) Sanitation operation service is a performance obligation satisfied over time. Revenue is recognized based on the serviceassessment statement confirmed by the labor receiving party, etc.
(4) For revenue recognition method of PPP business with BOT models, please refer to section III (XXXIII) of notes to thefinancial statements for details.
(XXVII) Government grants
1. Government grants shall be recognized if, and only if, the following conditions are all met: (1) the Company will comply withthe conditions attaching to the grants; (2) the grants will be received. Monetary government grants are measured at the amountreceived or receivable. Non-monetary government grants are measured at fair value, and can be measured at nominal amount in thecircumstance 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 acquireslong-term assets under requirements of government. In the circumstances that there is no specific government requirement, theCompany shall determine based on the primary condition to acquire the grants, and government grants related to assets aregovernment grants whose primary condition is to construct or otherwise acquire long-term assets. They offset carrying amount ofrelevant assets, or they are recognized as deferred income. If recognized as deferred income, they are included in profit or loss on asystematic basis over the useful lives of the relevant assets. Those measured at notional amount are directly included into profit orloss. 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 thatcontain both parts related to assets and parts related to income, in which those two parts are blurred, they are thus collectivelyclassified as government grants related to income. For government grants related to income used for compensating the related futurecost, expenses or losses, they are recognized as deferred income and included in profit or loss or used to offset relevant cost duringthe period in which the relevant cost, expenses or losses are recognized; for government grants related to income used forcompensating the related cost, expenses or losses incurred to the Company, they are directly included in profit or loss or used tooffset relevant cost.
4. Government grants related to the ordinary course of business shall be included into other income or used to offset relevantcost based on business nature, while those not related to the ordinary course of business shall be included into non-operating revenueor expenditures.
(XXVIII) Contract assets, contract liabilities
The Company presents contract assets or contract liabilities in the balance sheet based on the relationship between itsperformance obligations and customers’ payments. Contract assets and contract liabilities under the same contract shall offset eachother 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 considerationis due) as a receivable, and presents a right to consideration in exchange for goods that it has transferred to a customer (which isconditional 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 theamount is due) from the customer as a contract liability.
(XXIX) Deferred tax assets/Deferred tax liabilities
1. Deferred tax assets or deferred tax liabilities are calculated and recognized based on the difference between the carryingamount and tax base of assets and liabilities (and the difference of the carrying amount and tax base of items not recognized as assetsand liabilities but with their tax base being able to be determined according to tax laws) and in accordance with the tax rateapplicable 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 whichcan be deducted from the deductible temporary difference. At the balance sheet date, if there is any exact evidence that it is probablethat future taxable income will be available against which deductible temporary differences can be utilized, the deferred tax assetsunrecognized in prior periods are recognized.
3. At the balance sheet date, the carrying amount of deferred tax assets is reviewed. The carrying amount of a deferred tax assetis reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow the benefit of thedeferred tax asset to be utilized. Such reduction is subsequently reversed to the extent that it becomes probable that sufficient taxableincome 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, excludingthose arising from the following circumstances: (1) business combination; and (2) the transactions or items directly recognized inequity.
(XXX) Leases
1. The Company as lessee
At the commencement date, the Company recognizes a lease that has a lease term of 12 months or less as a short-term lease,which shall not contain a purchase option; the Company recognizes a lease as a lease of a low-value asset if the underlying asset is oflow value when it is new. If the Company subleases an asset, or expects to sublease an asset, the head lease does not qualify as alease 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-linemethod over the lease term.
Apart from the above-mentioned short-term leases and leases of low-value assets with simplified approach, the Companyrecognizes 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 leaseliabilities; 2) any lease payments made at or before the commencement date, less any lease incentives received; 3) any initial directcosts incurred by the lessee; and 4) an estimate of costs to be incurred by the lessee in dismantling and removing the underlyingasset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditionsof the lease.
The Company depreciates the right-of-use asset using the straight-line method. If it is reasonable to be certain that theownership of the underlying asset can be acquired by the end of the lease term, the Company depreciates the right-of-use asset fromthe commencement date to the end of the useful life of the underlying asset. Otherwise, the Company depreciates the right-of-useasset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.
(2) Lease liabilities
At the commencement date, the Company measures the lease liability at the present value of the lease payments that are not paidat that date, discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the Company’sincremental borrowing rate shall be used. Unrecognized financing expenses, calculated at the difference between the lease paymentand its present value, are recognized as interest expenses over the lease term using the discount rate which has been used todetermine the present value of lease payment and included in profit or loss. Variable lease payments not included in the measurementof lease liabilities are included in profit or loss in the periods in which they are incurred.
After the commencement date, if there is a change in the following items: (a) actual fixed payments; (b) amounts expected to bepayable under residual value guarantees; (c) an index or a rate used to determine lease payments; (d) assessment result or exercise ofpurchase option, extension option or termination option, the Company remeasures the lease liability based on the present value oflease payments after changes, and adjusts the carrying amount of the right-of-use asset accordingly. If the carrying amount of theright-of-use asset is reduced to zero but there shall be a further reduction in the lease liability, the remaining amount shall berecognized 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 rewardsincidental 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 becapitalized, amortized on the same basis as the recognition of lease income, and included into profit or loss by installments. Variablelease payments related to operating lease which are not included in the lease payment are charged as profit or loss in the periods inwhich they are incurred.
(2) Finance lease
At the commencement date, the Company recognizes the finance lease payment receivable based on the net investment in thelease (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 calculatesand 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 theperiods 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 inthe 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 the rights transferred to the lessor.
Otherwise, the Company continues the recognition of the transferred assets, and recognizes a financial liability equal to theamount of transfer income in accordance with the “CASBE 22 – Financial Instruments: Recognition and Measurement” at the sametime.
(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 inthe 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 accordancewith 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 transferincome in accordance with the “CASBE 22 – Financial Instruments: Recognition and Measurement”.
(XXXI) Work safety fund
The Company accrues work safety fund in accordance with the “Circular on Management Measures on the Appropriation andUse of Work Safety Fund” (Cai Zi [2022] No. 136) issued by Ministry of Finance (MOF) and Ministry of Emergency Management.Standard work safety fund is included in the cost or profit or loss, meanwhile accounted for under “special reserve”. When worksafety fund is used as an expense, it is to offset special reserve directly. When work safety fund is qualified to be included in the costof fixed assets, it is accounted for under “construction in progress” and transferred to fixed assets when related safety projects reachthe designed useful conditions; meanwhile, the cost included in fixed assets is to offset “special reserve”, and accumulateddepreciation shall be recognized at the same amount. Such fixed assets shall not be depreciated in future periods.
(XXXII) Segment reporting
Operating segments are determined based on the structure of the Company’s internal organization, management requirementsand 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 tothe segment and to assess its performance; and
3. for which accounting information regarding financial position, financial performance and cash flows is available throughanalysis.
(XXXIII) Other significant accounting policies and estimates
1. PPP business
The Company adopts the build-operate-transfer approach (PPP projects, mainly using BOT, TOT, etc.) to participate in thepublic infrastructure business. The project company obtains the franchise of public infrastructure projects from governmentdepartments and participates in the construction and operation of the project. After the franchise expires, the project company needsto 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 constructionservices of PPP projects as well as post-completion operation services and maintenance services), the Company identifies eachperformance obligation in the contracts in accordance with the provisions of “CASBE 14 – Revenues”, and allocates the transactionprice to each performance obligation on the basis of the relative stand-alone selling prices. If the stand-alone selling price cannot bedirectly observed, or if there is a lack of similar market prices, the Company will take into account market conditions, specific factorsof 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. Constructionservices are performance obligations satisfied over time. Revenue from construction services is recognized by the percentage ofcompletion of the performance obligations, which is determined based on the proportion of the incurred costs to the estimated totalcosts. In the circumstance that the percentage of completion cannot be measured reasonably, but the incurred costs are expected to berecovered, 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 withthe PPP project contracts. However, if the amount of the fees is uncertain, such right does not constitute an unconditional right toreceive cash, and the consideration or construction revenue of the relevant PPP project assets is recognized as intangible assets whenthe PPP project assets reach the designed useful conditions, which shall be accounted for in accordance with “CASBE 6 – IntangibleAssets”.If the Company is qualified to have the right to receive a determinable amount of cash (or other financial assets) during theoperation of the project in accordance with the PPP project contracts, such amount is recognized as accounts receivable when theCompany has the right to such consideration (the right depends only on the factor of the passage of time) and is accounted for inaccordance with “CASBE 22 – Financial Instruments: Recognition and Measurement”. The Company recognizes the differencebetween the consideration or construction revenue of the relevant PPP project assets and the determinable amount of cash (or otherfinancial 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 recognizedduring the relevant construction period are presented under “intangible assets” in the balance sheet; for other contract assetsrecognized during the construction period, they are presented under “contract assets”, or “other non-current assets” in the balancesheet 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 servicesin accordance with “CASBE 14 – Revenues”.
2. Accounting treatment related to share repurchase
When the Company repurchases its shares for the purpose of reducing its registered capital or rewarding its employees, if thepurchased shares are to be kept as treasury shares, the treasury shares are recorded at the cash distributed to existing shareholders forrepurchase; if the purchased shares are to be retired, the difference between the total book value of shares retired and the cashdistributed to existing shareholders for repurchase is to reduce capital reserve, or retained earnings when the capital reserve is notenough to reduce. If the Company repurchases vested equity instruments in equity-settled share-based payment transactions withemployees, cost of treasury shares granted to employees and capital reserve (other capital reserve) accumulated within the vestingperiod are to be written off on the payment made to employees, with a corresponding adjustment in capital reserve (share premium).
(XXXIV) Significant changes in accounting policies
Changes in accounting policies arising from changes in CASBEs
1. The Company has adopted the regulations about accounting for sales of products or by-products produced by fixed assetsbefore intended use or during the R&D process as stipulated the “Interpretation of China Accounting Standards for BusinessEnterprises No. 15” issued by the MOF since January 1, 2022. Details on retroactive adjustments on trial sales occurring between thebeginning of the earliest period presented in the financial statements in which the Company adopts the above regulations and January1, 2022 are as follows:
| Financial statement items significantly affected | Dec. 31, 2021/ Year 2021 (before retroactive adjustments) | Amounts affected | Dec. 31, 2021/ Year 2021 (after retroactive adjustments) |
| Items of balance sheet as of December 31, 2021 | |||
| Intangible assets | 5,319,721,844.23 | 30,874,024.17 | 5,350,595,868.40 |
| Non-controlling interest | 350,671,301.45 | 6,549,735.93 | 357,221,037.38 |
| Undistributed profit | 3,850,610,683.45 | 24,324,288.24 | 3,874,934,971.69 |
| Items of income statement of 2021 | |||
| Operating revenue | 11,813,537,444.48 | 52,754,166.97 | 11,866,291,611.45 |
| Operating cost | 9,210,318,426.37 | 21,880,142.80 | 9,232,198,569.17 |
2. The Company has adopted the regulations about judgment on onerous contracts in the “Interpretation of China Accounting
Standards for Business Enterprises No. 15” issued by the MOF since January 1, 2022. Such change in accounting policies has noimpact on the Company’s financial statements.
3. The Company has adopted the regulations about accounting for income tax consequences of dividends on a financialinstrument classified by the issuer as an equity instrument in the “Interpretation of China Accounting Standards for BusinessEnterprises No. 16” issued by the MOF since November 30, 2022. Such change in accounting policies has no impact on theCompany’s financial statements.
4. The Company has adopted the regulations about accounting for modifications of share-based payment transactions from cash-settled to equity-settled in the “Interpretation of China Accounting Standards for Business Enterprises No. 16” issued by the MOFsince November 30, 2022. Such change in accounting policies has no impact on the Company’s financial statements.
IV. Taxes
(I) Main taxes and tax rates
| Taxes | Tax bases | Tax rates |
| Value-added tax (VAT) | The output tax calculated based on the revenue from sales of goods or rendering of services in accordance with the tax law, net of the input tax that is allowed to be deducted in the current period | 3%, 6%, 9%, 13%. Exported goods are subject to “exemption, credit, refund” policies, with refund rate of 13%. |
| Housing property tax | 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 the cost; for housing property levied on the basis of rent, housing property tax is levied at the rate of 12% of lease income. | 1.2%, 12% |
| Urban maintenance and construction tax | Turnover tax actually paid | 7%, 5% |
| Education surcharge | Turnover tax actually paid | 3% |
| Local education surcharge | Turnover tax actually paid | 2%, 1% |
| Enterprise income tax | Taxable income | 15%, 20%, 25% |
Different enterprise income tax rates applicable to different taxpayers:
| Taxpayers | Income tax rate |
| Infore Technology Company | 15% |
| Shangfeng Industrial Company | 15% |
| Zoomlion Environmental Company | 15% |
| Foshan Shunde Huaqingyuan Environmental Protection Co., Ltd. (the “Huaqingyuan Company”) | 15% |
| Fengyun IoT Technology Co., Ltd. | 15% |
| Zhejiang Yolsh Electric Drive Technology Co., Ltd. (the “Yolsh Company”) | 15% |
| Guangdong Infore Intelligent Sanitation Technology Co., Ltd. | 15% |
| Lianjiang Green Oriental New Energy Co., Ltd. (the “Lianjiang Company”) | 15% |
| Taxpayers other than the above-mentioned | 25%, 20% for small enterprises with meager profit |
(II) Tax preferential policies
1. Enterprise income tax
| No. | Entities | Preferential policies |
| 1 | Zoomlion Environmental Company, Fengyun IoT Technology Co., Ltd., Yolsh Company | Pursuant to the preferential income tax policy for high-tech enterprises, enterprise income tax rate is reduced to 15% from 2020 to 2022. |
| 2 | Shangfeng Industrial Company, Infore Technology Company, Huaqingyuan Company, | Pursuant to the preferential income tax policy for high-tech enterprises, enterprise income tax rate is reduced to 15% from 2022 to 2024. |
| No. | Entities | Preferential policies |
| Guangdong Infore Intelligent Sanitation Technology Co., Ltd., Lianjiang Company | ||
| 3 | Funan Green Oriental Environmental Energy Co., Ltd. (the “Funan Company”), Hanshou Zoomlion Environmental Industry Co., Ltd., Cili County Zoomlion Huabao Environmental Industry Co., Ltd., etc. | Pursuant to the “Law of the People’s Republic of China on Enterprise Income Tax” and its implementation regulations, the “Notice of MOF, State Taxation Administration (STA) and National Development and Reform Commission (NDRC) on Publishing the Catalog of Enterprise Income Tax Preferences for Environmental Protection, Energy Saving, and Water Saving Projects (Trial)” (Cai Shui [2009] No. 166) (the “2009 Catalog”), the project 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. |
| 4 | Foshan Shunde Huabo Environmental Water Co., Ltd., Foshan Shunde Yuanyi Water Environmental Protection Co., Ltd., Dingnan Zoomlion Environmental Industry Co., Ltd., etc. | Pursuant to the “Announcement of MOF and STA on the Implementation of the Tax Relief Policy for Small Enterprises with Meager Profit and Individually-owned Businesses” (No. 12, 2021), from January 1, 2021 to December 31, 2022, the enterprise income tax for the portion of the taxable income within 1 million yuan is levied at 20% based on 12.5% of that portion of income; pursuant to the “Announcement of MOF and STA on Further Implementation of the Tax Relief Policy for Small Enterprises with Meager Profit” (Announcement No. 13, 2022), from January 1, 2022 to December 31, 2024, the enterprise income tax for the portion of the taxable income exceeding 1 million yuan but within 3 million yuan is levied at 20% based on 25% of that portion of income. |
| 5 | Huaqingyuan Company, Foshan Shunde District Huaying Environmental Water Co., Ltd., Foshan Shunde District Yuanrun Water Environmental Protection Co., Ltd., Foshan Shunde District Huabo Environmental Protection Co., Ltd. | Revenue from the production of non-restricted and non-prohibited products that meet the relevant national and industry standards using resources specified in the “Resources Comprehensive Utilization of Enterprise Income Tax Preferential Catalog (2008 Edition)” as the main raw material will be reduced to 90% as taxable income for enterprise income tax in the current period. |
| 6 | Ruili Yinglian Environmental Industry Co., Ltd. | 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 authority of the region (40% of total enterprise income tax), i.e., they enjoy enterprise income tax exemption from 2021 to 2025, and enjoy a 50% reduction in income from 2026 to 2030, while for the enterprise income tax shared by central government (60%), they enjoy the preferential policy as small enterprises with meager profit. |
2. VAT
(1) Pursuant to the “Notice of MOF and STA on VAT Policies for Software Products” (Cai Shui [2011] No. 100), general VATtaxpayers who sell software products developed and produced by themselves are subject to VAT refund upon collection for theamount exceeding 3% of their actual VAT burdens. In 2022, the subsidiary Zoomlion Environmental Company is entitled to enjoy theVAT refund upon collection policy for sale of its self-developed and self-produced software products, and the VAT refunds receivedin the current period amount to 14,240,650.62 yuan.
(2) Pursuant to the “Announcement of MOF and STA on Clarifying Extra VAT Deduction Policy for Life Service Industry”(Announcement No. 87, 2019 of MOF and STA), eligible taxpayers can apply to their competent tax authorities for extra tax credit.In 2022, the subsidiaries Zoomlion Environmental Company, Foshan Shunde Yuanyi Water Environmental Protection Co., Ltd.,Infore Technology Company, and Infore Zoomlion City Environmental Service Co., Ltd. are engaged in life services, and extra taxcredit they enjoy in the current period amounts to 17,344,728.48 yuan, 59,918.88 yuan, 34,500.00 yuan, and 21,376.76 yuanrespectively.
(3) Pursuant to Article 5 of the “Notice of MOF and STA on Printing and Distributing the ‘VAT Preferential Catalog of Productsand Services for Comprehensive Utilization of Resources’” (Cai Shui [2015] No. 78), since July 1, 2015, enterprises rendering
sewage treatment services are entitled to enjoy 70% VAT refund upon collection. In 2022, the subsidiaries Huaqingyuan Company,Foshan Shunde District Huaying Environmental Water Co., Ltd., and Foshan Shunde District Yuanrun Water EnvironmentalProtection Co., Ltd. received VAT refund upon collection of 1,518,783.05 yuan, 524,860.77 yuan, and 978,122.98 yuan respectively.Pursuant to Article 4 of the “Notice of MOF and STA on Printing and Distributing the ‘Announcement on VAT Policy forImproving Comprehensive Utilization of Resources’” (Announcement No. 40, 2021 of MOF and STA), since March 1, 2022,enterprises rendering sewage treatment services are entitled to enjoy VAT refund upon collection policy or VAT exemption policy.The subsidiaries Huaqingyuan Company, Foshan Shunde District Huaying Environmental Water Co., Ltd., Foshan Shunde DistrictYuanrun Water Environmental Protection Co., Ltd. and Foshan Shunde Huabo Environmental Water Co., Ltd. have adopted VATexemption policy since March 1, 2022.
(4) Pursuant to Article 2 of the “Notice of MOF and STA on Printing and Distributing the ‘VAT Preferential Catalog of Productsand Services for Comprehensive Utilization of Resources’” (Cai Shui [2015] No. 78), enterprises producing electricity and heatproducts with fuel from garbage and biogas resources produced by garbage fermentation are entitled to enjoy 100% VAT refund uponcollection. Pursuant to Article 5, enterprises rendering garbage treatment and sewage treatment services are entitled to enjoy 70%VAT refund upon collection. The subsidiary Lianjiang Company received VAT refund upon collection of 1,560,533.72 yuan.
(5) Pursuant to the “Measures for the Implementation of the Pilot Implementation of VAT Reform for the TransportationIndustry and Certain Modern Service Industries” (Cai Shui [2011] No. 111), revenue from technology transfer, technologydevelopment, and related technical consulting, and technical service businesses is exempt from VAT. In 2022, the subsidiaryShenzhen Dingzhu Environmental Technology Co., Ltd. meets the condition and is exempt from VAT.
3. Urban land use tax
Pursuant to the “Several Opinions on Deepening the Reform of Optimal Allocation of Resource Factors in ManufacturingEnterprises” issued by the Office of the People’s Government of Zhejiang Province (Zhe Zheng Ban Fa [2019] No. 62), theCompany’s subsidiary Shangfeng Industrial Company meets the conditions of tax incentives and enjoys 100% exemption for landuse tax in 2022.
V. Notes to items of consolidated financial statements
(I) Notes to items of the consolidated balance sheet
1. Cash and bank balances
(1) Details
| Items | Closing balance | Opening balance |
| Cash on hand | 84,414.54 | 89,806.02 |
| Cash in bank | 4,590,418,271.45 | 4,190,857,415.70 |
| Other cash and bank balances | 137,700,844.47 | 392,298,149.30 |
| Total | 4,728,203,530.46 | 4,583,245,371.02 |
| Including: Deposited overseas | 3,949,867.33 | 4,464,479.35 |
(2) Other remarks
1) At the balance sheet date, cash in bank included funds frozen due to lawsuits of 1,100,000.00 yuan and engineering escrowaccounts not available for separate use of 9,107,818.42 yuan, which was with use restrictions.
2) At the balance sheet date, other cash and bank balances included deposits for notes of 46,878,240.34 yuan, deposits for lettersof guarantee of 87,619,095.60 yuan, engineering deposits of 927,865.56 yuan, ETC deposits of 3,000.00 yuan, deposits for buyer’scredit of 901,432.50 yuan and deposits for land reclamation of 1,000,832.05 yuan, which were with use restrictions.
2. Notes receivable
(1) Details
1) Details on categories
| Categories | Closing balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion (%) | ||
| Receivables with provision for bad debts made on a collective basis | 15,111,625.30 | 100.00 | 1,545,919.08 | 10.23 | 13,565,706.22 |
| Including: Bank acceptance | 6,474,284.28 | 42.84 | 6,474,284.28 | ||
| Trade acceptance | 8,637,341.02 | 57.16 | 1,545,919.08 | 17.90 | 7,091,421.94 |
| Total | 15,111,625.30 | 100.00 | 1,545,919.08 | 10.23 | 13,565,706.22 |
(Continued)
| Categories | Opening balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion (%) | ||
| Receivables with provision for bad debts made on a collective basis | 57,247,027.23 | 100.00 | 2,844,373.98 | 4.97 | 54,402,653.25 |
| Including: Bank acceptance | 6,412,054.79 | 11.20 | 6,412,054.79 | ||
| Trade acceptance | 50,834,972.44 | 88.80 | 2,844,373.98 | 5.60 | 47,990,598.46 |
| Total | 57,247,027.23 | 100.00 | 2,844,373.98 | 4.97 | 54,402,653.25 |
2) Notes receivable with provision for bad debts made on a collective basis
| Items | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion (%) | |
| Bank acceptance portfolio | 6,474,284.28 | ||
| Trade acceptance portfolio | 8,637,341.02 | 1,545,919.08 | 17.90 |
| Subtotal | 15,111,625.30 | 1,545,919.08 | 10.23 |
(2) Changes in provision for bad debts
1) Details
| Items | Opening balance | Increase | Decrease | Closing balance | ||||
| Accrual | Recovery | Others | Reversal | Write-off | Others | |||
| Trade acceptance portfolio | 2,844,373.98 | -1,298,454.90 | 1,545,919.08 | |||||
| Total | 2,844,373.98 | -1,298,454.90 | 1,545,919.08 | |||||
2) No provision for bad debts collected or reversed in the current period.
(3) Endorsed or discounted but undue notes at the balance sheet date
| Items | Closing balance derecognized | Closing balance not yet derecognized |
| Bank acceptance | 2,732,733.00 | |
| Trade acceptance | 5,422,499.62 | |
| Subtotal | 8,155,232.62 |
Due to the fact that the acceptor of bank acceptance is commercial bank, which is of high credit level, there is very little
possibility of failure in recoverability when it is due. Based on this fact, the Company derecognized the endorsed or discounted bankacceptance. However, if any bank acceptance is not recoverable when it is due, the Company still holds joint liability on suchacceptance, according to the China Commercial Instrument Law.
(4) Notes receivable transferred to accounts receivable due to non-performance of issuer
| Items | Amount transferred |
| Trade acceptance | 10,308,511.28 |
| Subtotal | 10,308,511.28 |
3. Accounts receivable
(1) Details
1) Details on categories
| Categories | Closing balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion (%) | ||
| Receivables with provision made on an individual basis | 26,702,254.77 | 0.43 | 16,482,074.94 | 61.73 | 10,220,179.83 |
| Receivables with provision made on a collective basis | 6,183,346,508.55 | 99.57 | 567,774,216.01 | 9.18 | 5,615,572,292.54 |
| Total | 6,210,048,763.32 | 100.00 | 584,256,290.95 | 9.41 | 5,625,792,472.37 |
(Continued)
| Categories | Opening balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion (%) | ||
| Receivables with provision made on an individual basis | 5,544,902.60 | 0.10 | 5,544,902.60 | 100.00 | |
| Receivables with provision made on a collective basis | 5,418,868,812.39 | 99.90 | 472,163,848.68 | 8.71 | 4,946,704,963.71 |
| Total | 5,424,413,714.99 | 100.00 | 477,708,751.28 | 8.81 | 4,946,704,963.71 |
2) Accounts receivable with provision made on an individual basis
| Debtors | Book balance | Provision for bad debts | Provision proportion (%) | Reasons |
| Jilin Yongle Environmental Protection Technology Co., Ltd. | 9,196,000.00 | 4,598,000.00 | 50.00 | Expected credit losses. |
| Changchun Kunhong Construction Machinery Co., Ltd. | 6,680,359.67 | 3,340,179.84 | 50.00 | Expected credit losses. |
| Jiangsu Provincial Construction Group Co., Ltd. | 4,564,000.00 | 2,282,000.00 | 50.00 | Expected credit losses |
| Maanshan Ruiheng Material Trading Co., Ltd. | 2,137,100.00 | 2,137,100.00 | 100.00 | Expected to be irrecoverable. |
| Kunming Jialize Characteristic Town Real Estate Co., Ltd. | 1,330,000.00 | 1,330,000.00 | 100.00 | Expected to be irrecoverable. |
| Others | 2,794,795.10 | 2,794,795.10 | 100.00 | Expected to be irrecoverable. |
| Subtotal | 26,702,254.77 | 16,482,074.94 | 61.73 |
3) Accounts receivable with provision for bad debts made on a collective basis
| Items | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion (%) | |
| Portfolio grouped with ages | 5,637,281,540.29 | 560,509,940.46 | 9.94 |
| Portfolio grouped with commercial factoring receivable | 470,296,266.41 | 7,264,275.55 | 1.54 |
| Portfolio grouped with government grants receivable for new energy vehicles | 75,768,701.85 | ||
| Subtotal | 6,183,346,508.55 | 567,774,216.01 | 9.18 |
4) Accounts receivable with provision made on a collective basis using age analysis method
| Ages | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion (%) | |
| Within 1 year | 4,234,275,752.50 | 211,713,787.59 | 5.00 |
| 1-2 years | 808,922,667.80 | 80,892,266.78 | 10.00 |
| 2-3 years | 325,458,501.17 | 97,637,550.35 | 30.00 |
| 3-5 years | 196,716,566.15 | 98,358,283.07 | 50.00 |
| Over 5 years | 71,908,052.67 | 71,908,052.67 | 100.00 |
| Subtotal | 5,637,281,540.29 | 560,509,940.46 | 9.94 |
5) Commercial factoring portfolio grouped by five-level classification
| Five-level classification | Closing balance | |||
| Book balance | Unrealized financing income | Provision for bad debts | Provision proportion (%) | |
| Pass | 456,307,495.83 | 6,844,612.44 | 1.50 | |
| Special-mention | 13,988,770.58 | 419,663.11 | 3.00 | |
| Subtotal | 470,296,266.41 | 7,264,275.55 | 1.54 | |
(2) Age analysis
| Ages | Closing book balance |
| Within 1 year | 4,708,241,417.53 |
| 1-2 years | 892,266,330.70 |
| 2-3 years | 336,117,089.17 |
| 3-5 years | 199,203,953.15 |
| Over 5 years | 74,219,972.77 |
| Total | 6,210,048,763.32 |
(3) Changes in provision for bad debts
| Items | Opening balance | Increase | Decrease | Closing balance | ||||
| Accrual | Recovery | Others [Note] | Reversal | Write-off | Others | |||
| Receivables with provision made on an individual basis | 5,544,902.60 | 10,937,172.34 | 16,482,074.94 | |||||
| Receivables with provision made on a collective | 472,163,848.68 | 98,799,645.29 | 3,554,130.25 | 6,743,408.21 | 567,774,216.01 | |||
| Items | Opening balance | Increase | Decrease | Closing balance | ||||
| Accrual | Recovery | Others [Note] | Reversal | Write-off | Others | |||
| basis | ||||||||
| Total | 477,708,751.28 | 109,736,817.63 | 3,554,130.25 | 6,743,408.21 | 584,256,290.95 | |||
Note: Other increase refers to balance transferred in due to business combination of Yolsh Company and Lianjiang Company inthe current period.
(4) Accounts receivable written off in the current period
1) Accounts receivable actually written off in the current period totaled 6,732,408.21 yuan.
2) Significant accounts receivable written off in the current period
| Debtors | Nature of receivables | Amount written off | Reasons for write-off | Write-off procedures performed | Whether arising from related party transactions |
| Shenzhen Sustained Way Environmental Industry Co., Ltd. | Payments for goods | 3,268,000.00 | Expected to be irrecoverable. | Approval of the Management. | No |
| Shenzhen Jieya Environmental Protection Industry Co., Ltd. | Payments for goods | 573,432.50 | Expected to be irrecoverable. | Approval of the Management. | No |
| Jinan Lijie Cleaning Co., Ltd. | Payments for goods | 483,700.00 | Expected to be irrecoverable. | Approval of the Management. | No |
| Xiamen Xiang’an Municipal Group Environmental Engineering Co., Ltd. | Payments for goods | 450,000.00 | Expected to be irrecoverable. | Approval of the Management. | No |
| Shenzhen EIT Intelligent City Operation Group Co., Ltd. | Payments for goods | 390,000.00 | Expected to be irrecoverable. | Approval of the Management. | No |
| Shenzhen SYS Environmental Industry Group Co., Ltd. | Payments for goods | 325,500.00 | Expected to be irrecoverable. | Approval of the Management. | No |
| Chengdu Shiyang Environmental Sanitation Service Co., Ltd | Payments for goods | 230,400.00 | Expected to be irrecoverable. | Approval of the Management. | No |
| Subtotal | 5,721,032.50 |
(5) Details of the top 5 debtors with largest balances
| Debtors | Book balance | Proportion to the total balance of accounts receivable (%) | Provision for bad debts |
| No. 1 | 200,788,348.94 | 3.23 | 8,569,313.68 |
| No. 2 | 112,174,999.99 | 1.81 | 1,682,625.00 |
| No. 3 | 97,577,518.13 | 1.57 | 5,742,670.82 |
| No. 4 | 96,146,633.46 | 1.55 | 11,195,690.69 |
| No. 5 | 75,768,701.85 | 1.22 | |
| Subtotal | 582,456,202.37 | 9.38 | 27,190,300.19 |
(6) Accounts receivable derecognized due to financial assets transfer
| Items | Amount derecognized | Gains or losses related to derecognition | Ways of financial assets transfer |
| Sales of ventilation equipment | 6,864,481.85 | -401,852.13 | Factoring of accounts receivable without recourse right. |
| Sales of sanitation vehicles | 727,566,841.07 | -65,516,521.10 | Factoring of accounts receivable without recourse right. |
| Subtotal | 734,431,322.92 | -65,918,373.23 |
4. Receivables financing
(1) Details
| Items | Closing balance | Opening balance | ||
| Carrying amount | Accumulated provision for credit impairment | Carrying amount | Accumulated provision for credit impairment | |
| Bank acceptance | 107,316,593.41 | 296,379,694.57 | ||
| Total | 107,316,593.41 | 296,379,694.57 | ||
(2) Pledged notes at the balance sheet date
| Items | Closing balance of pledged notes |
| Bank acceptance | 42,293,141.00 |
| Subtotal | 42,293,141.00 |
(3) Endorsed or discounted but undue notes at the balance sheet date
| Items | Closing balance derecognized |
| Bank acceptance | 128,363,287.12 |
| Subtotal | 128,363,287.12 |
Due to the fact that the acceptor of bank acceptance is commercial bank, which is of high credit level, there is very littlepossibility of failure in recoverability when it is due. Based on this fact, the Company derecognized the endorsed or discounted bankacceptance. However, if any bank acceptance is not recoverable when it is due, the Company still holds joint liability on suchacceptance, according to the China Commercial Instrument Law.
5. Advances paid
(1) Age analysis
1) Details
| Ages | Closing balance | Opening balance | ||||||
| Book balance | % to total | Provision for impairment | Carrying amount | Book balance | % to total | Provision for impairment | Carrying amount | |
| Within 1 year | 186,619,989.22 | 97.01 | 186,619,989.22 | 124,131,454.89 | 96.52 | 124,131,454.89 | ||
| 1-2 years | 4,515,793.00 | 2.35 | 4,515,793.00 | 3,969,968.37 | 3.09 | 3,969,968.37 | ||
| 2-3 years | 1,175,026.94 | 0.61 | 1,175,026.94 | 67,855.05 | 0.05 | 67,855.05 | ||
| Over 3 years | 49,733.08 | 0.03 | 49,733.08 | 435,104.35 | 0.34 | 435,104.35 | ||
| Total | 192,360,542.24 | 100.00 | 192,360,542.24 | 128,604,382.66 | 100.00 | 128,604,382.66 | ||
2) No unsettled significant advances paid with age over one year.
(2) Details of the top 5 debtors with largest balances
| Debtors | Book balance | Proportion to the total balance of advances paid (%) |
| No. 1 | 9,352,256.00 | 4.86 |
| No. 2 | 6,600,000.00 | 3.43 |
| No. 3 | 5,940,000.00 | 3.09 |
| No. 4 | 4,133,064.10 | 2.15 |
| No. 5 | 3,116,814.17 | 1.62 |
| Debtors | Book balance | Proportion to the total balance of advances paid (%) |
| Subtotal | 29,142,134.27 | 15.15 |
6. Other receivables
(1) Details
1) Details on categories
| Categories | Closing balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion (%) | ||
| Receivables with provision made on an individual basis | |||||
| Receivables with provision made on a collective basis | 425,375,694.15 | 100.00 | 39,753,423.15 | 9.35 | 385,622,271.00 |
| Total | 425,375,694.15 | 100.00 | 39,753,423.15 | 9.35 | 385,622,271.00 |
(Continued)
| Categories | Opening balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion (%) | ||
| Receivables with provision made on an individual basis | |||||
| Receivables with provision made on a collective basis | 541,370,425.50 | 100.00 | 32,206,299.23 | 5.95 | 509,164,126.27 |
| Total | 541,370,425.50 | 100.00 | 32,206,299.23 | 5.95 | 509,164,126.27 |
2) Other receivables with provision made on a collective basis
a. Parent company
| Ages | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion (%) | |
| Portfolio grouped with performance compensation | 113,460,620.00 | ||
| Portfolio grouped with ages | 33,439,539.20 | 1,664,734.56 | 4.98 |
| Including: 1-180 days | 27,553,285.28 | ||
| 1-2 years | 829,381.49 | 82,938.15 | 10.00 |
| 2-3 years | 4,763,199.03 | 1,428,959.71 | 30.00 |
| 3-5 years | 273,673.40 | 136,836.70 | 50.00 |
| Over 5 years | 20,000.00 | 16,000.00 | 80.00 |
| Subtotal | 146,900,159.20 | 1,664,734.56 | 1.13 |
b. Ventilation equipment manufacturing industry and environmental integrated industry
| Ages | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion (%) | |
| Portfolio grouped with ages | 278,475,534.95 | 38,088,688.59 | 13.68 |
| Ages | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion (%) | |
| Including: Within 1 year | 168,395,746.55 | 8,420,041.44 | 5.00 |
| 1-2 years | 57,254,890.72 | 5,725,489.07 | 10.00 |
| 2-3 years | 22,546,852.80 | 6,764,055.84 | 30.00 |
| 3-5 years | 26,197,885.28 | 13,098,942.64 | 50.00 |
| Over 5 years | 4,080,159.60 | 4,080,159.60 | 100.00 |
| Subtotal | 278,475,534.95 | 38,088,688.59 | 13.68 |
(2) Changes in provision for bad debts
| Items | Stage 1 | Stage 2 | Stage 3 | Subtotal |
| 12?month expected credit losses | Lifetime expected credit losses (credit not impaired) | Lifetime expected credit losses (credit impaired) | ||
| Opening balance | 10,946,143.63 | 4,064,577.60 | 17,195,578.00 | 32,206,299.23 |
| Opening balance in the current period | ||||
| --Transferred to stage 2 | -2,879,332.17 | 2,879,332.17 | ||
| --Transferred to stage 3 | -2,731,005.18 | 2,731,005.18 | ||
| --Reversed to stage 2 | ||||
| --Reversed to stage 1 | ||||
| Provision made in the current period | 353,229.98 | 1,595,522.63 | 3,099,831.78 | 5,048,584.39 |
| Provision recovered in the current period | ||||
| Provision reversed in the current period | ||||
| Provision written off in the current period | 75,000.00 | 75,000.00 | ||
| Other changes [Note] | 2,573,539.53 | 2,573,539.53 | ||
| Closing balance | 8,420,041.44 | 5,808,427.22 | 25,524,954.49 | 39,753,423.15 |
Note: Other increase refers to balance transferred in due to business combination of Yolsh Company and Lianjiang Company inthe current period.
(3) Other receivables actually written off in the current period totaled 75,000.00 yuan.
(4) Other receivables categorized by nature
| Nature of receivables | Closing balance | Opening balance |
| Temporary advance payment receivable and petty cash | 189,730,555.74 | 108,556,330.04 |
| Security deposits | 115,535,012.45 | 129,986,238.82 |
| Performance compensation | 113,460,620.00 | 163,460,620.00 |
| Call loans receivable | 13,046,550.18 | |
| Equity transfer payments | 115,100,000.00 | |
| Debt transfer payments | 9,000,000.00 | |
| Others | 6,649,505.96 | 2,220,686.46 |
| Total | 425,375,694.15 | 541,370,425.50 |
(5) Details of the top 5 debtors with largest balances
| Debtors | Nature of receivables | Book balance | Ages | Proportion to the total balance of other receivables (%) | Provision for bad debts |
| No. 1 | Performance compensation and temporary advance payment receivable | 113,792,911.19 | [Note 1] | 26.75 | 166,145.60 |
| No. 2 | Temporary advance payment receivable and petty cash | 9,960,076.90 | 1-180 days | 2.34 | |
| No. 3 | Security deposits | 8,675,600.00 | [Note 2] | 2.04 | 2,135,180.00 |
| No. 4 | Temporary advance payment receivable and petty cash | 7,323,619.46 | 1-180 days | 1.72 | |
| No. 5 | Temporary advance payment receivable and petty cash | 7,190,173.17 | Within 1 year | 1.69 | 359,508.66 |
| Subtotal | 146,942,380.72 | 34.54 | 2,660,834.26 |
Note 1: It includes 113,460,620.00 yuan as performance compensation with age of 1 to 2 years and 332,291.19 yuan astemporary advance payment receivable with age of 3 to 5 years.Note 2: It includes 1,870,000.00 yuan as security deposits with age within 1 year and 6,805,600.00 yuan as security depositswith age of 2 to 3 years.
7. Inventories
(1) Details
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for write-down | Carrying amount | Book balance | Provision for write-down | Carrying amount | |
| Raw materials | 179,291,553.12 | 10,856,535.28 | 168,435,017.84 | 147,473,632.02 | 10,760,156.11 | 136,713,475.91 |
| Work in process | 177,447,500.50 | 2,633,928.18 | 174,813,572.32 | 181,227,151.81 | 2,023,841.04 | 179,203,310.77 |
| Goods on hand | 543,123,849.45 | 16,365,369.64 | 526,758,479.81 | 809,403,199.63 | 18,453,429.33 | 790,949,770.30 |
| Materials on consignment for further processing | 710,664.71 | 710,664.71 | 2,741,520.48 | 2,741,520.48 | ||
| Cost to fulfill a contract | 10,320,302.27 | 10,320,302.27 | 14,541,641.55 | 14,541,641.55 | ||
| Total | 910,893,870.05 | 29,855,833.10 | 881,038,036.95 | 1,155,387,145.49 | 31,237,426.48 | 1,124,149,719.01 |
(2) Provision for inventory write-down
1) Details
| Items | Opening balance | Increase | Decrease | Closing balance | ||
| Accrual | Others | Reversal or write-off | Others | |||
| Raw materials | 10,760,156.11 | 5,916,565.11 | 5,820,185.94 | 10,856,535.28 | ||
| Work in process | 2,023,841.04 | 2,419,415.75 | 1,809,328.61 | 2,633,928.18 | ||
| Goods on hand | 18,453,429.33 | 8,449,741.13 | 10,537,800.82 | 16,365,369.64 | ||
| Total | 31,237,426.48 | 16,785,721.99 | 18,167,315.37 | 29,855,833.10 | ||
2) Determination basis of net realizable value and reasons for the reversal or write-off of provision for inventory write-down
| Items | Determination basis of net realizable value | Reasons for write-off of provision for inventory write-down |
| Items | Determination basis of net realizable value | Reasons for write-off of provision for inventory write-down |
| Raw materials, work in process | Estimated selling price of relevant finished goods less cost to be incurred upon completion, estimated selling expenses, and relevant taxes and surcharges | Inventories with provision for inventory write-down made at the beginning of the period were used or sold in the current period. |
| Goods on hand | Estimated selling price of relevant finished goods less estimated selling expenses, and relevant taxes and surcharges | Inventories with provision for inventory write-down made at the beginning of the period were sold in the current period. |
(3) Cost to fulfill a contract
| Items | Opening balance | Increase | Carried forward | Closing balance |
| Kitchen delivery project of Futian District, Shenzhen City | 7,541,198.74 | 1,713,298.79 | 9,254,497.53 | |
| MVR concentrated solution project of Liling City | 2,382,149.87 | 404,351.39 | 2,786,501.26 | |
| Leachate full-scale quantitative treatment emergency operation project of Qingyuan City | 1,242,114.60 | 175,849.38 | 1,417,963.98 | |
| Township sewage delivery project phase II of Hanshou County | 907,876.13 | 4,740.90 | 4,128.08 | 908,488.95 |
| Leachate delivery project of Xi’an Chanba Transfer Station | 769,578.05 | 362,875.63 | 14,601.20 | 1,117,852.48 |
| Leachate delivery project of Jin’an District, Fuzhou City | 449,012.13 | 449,012.13 | ||
| Leachate delivery project of Fuzhou Qingliangshan Transfer Station | 2,063,811.25 | 4,634.80 | 2,059,176.45 | |
| Well-point equipment sales of Leiyang City | 1,815,112.42 | 1,815,112.42 | ||
| Equipment sales of Yongshun County, Xiangxi Tujia and Miao Autonomous Prefecture - township sewage (Wanping) | 1,450,156.90 | 1,450,156.90 | ||
| Others | 1,249,712.03 | 9,812,255.53 | 8,092,452.49 | 2,969,515.07 |
| Subtotal | 14,541,641.55 | 17,802,452.19 | 22,023,791.47 | 10,320,302.27 |
8. Contract assets
(1) Details
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Quality guarantee deposits receivable | 116,355,489.32 | 15,331,634.99 | 101,023,854.33 | 154,503,581.34 | 14,135,778.81 | 140,367,802.53 |
| Total | 116,355,489.32 | 15,331,634.99 | 101,023,854.33 | 154,503,581.34 | 14,135,778.81 | 140,367,802.53 |
(2) No significant changes in carrying amount of contract assets in the current period.
(3) Details on provision for impairment of contract assets
1) Details
| Items | Opening balance | Increase | Decrease | Closing balance | |||
| Accrual | Others | Reversal | Write-off | Others | |||
| On a collective basis | 14,135,778.81 | 1,195,856.18 | 15,331,634.99 | ||||
| Total | 14,135,778.81 | 1,195,856.18 | 15,331,634.99 | ||||
2) Contract assets with provision for impairment made on a collective basis
| Items | Closing balance | ||
| Book balance | Provision for impairment | Provision proportion (%) | |
| Portfolio grouped with quality guarantee deposits | 116,355,489.32 | 15,331,634.99 | 13.18 |
| Subtotal | 116,355,489.32 | 15,331,634.99 | 13.18 |
9. Non-current assets due within one year
| Items | Closing balance | ||||
| Book balance | Unrecognized finance income | Provision for bad debts | Carrying amount | Discount rate range (%) | |
| Sales of goods in installments | 433,440,778.60 | 8,785,866.67 | 21,166,538.93 | 403,488,373.00 | 4.30-4.65 |
| 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 financing | 17,823,638.14 | 171,119.36 | 267,354.57 | 17,385,164.21 | 4.30-4.65 |
| Total | 510,056,185.19 | 11,220,619.36 | 22,329,740.55 | 476,505,825.28 | |
(Continued)
| Items | Opening balance | ||||
| Book balance | Unrecognized finance income | Provision for bad debts | Carrying amount | Discount rate range (%) | |
| Sales of goods in installments | 549,703,610.72 | 12,319,023.60 | 27,555,680.53 | 509,828,906.59 | 4.75 |
| Payments for finance lease | 170,788,078.94 | 4,223,522.86 | 2,561,821.18 | 164,002,734.90 | 4.75 |
| Factoring of receivables financing | 83,062,917.65 | 15,730,748.85 | 1,245,943.76 | 66,086,225.04 | 4.75 |
| Total | 803,554,607.31 | 32,273,295.31 | 31,363,445.47 | 739,917,866.53 | |
10. Other current assets
(1) Details
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Input VAT to be credited and excess input VAT credits | 482,764,023.99 | 482,764,023.99 | 477,804,757.55 | 477,804,757.55 | ||
| Cost to obtain a contract | 9,306,113.04 | 9,306,113.04 | 14,900,623.62 | 14,900,623.62 | ||
| Listing expenses of subsidiary spun off | 5,380,660.39 | 5,380,660.39 | ||||
| Total | 497,450,797.42 | 497,450,797.42 | 492,705,381.17 | 492,705,381.17 | ||
(2) Costs to obtain a contract
| Items | Opening balance | Increase | Amortization | Provision for impairment | Closing balance |
| Costs to obtain a contract | 14,900,623.62 | 40,082,864.75 | 45,677,375.33 | 9,306,113.04 | |
| Subtotal | 14,900,623.62 | 40,082,864.75 | 45,677,375.33 | 9,306,113.04 |
11. Long-term receivables
(1) Details
| Items | Closing balance | ||||
| Book balance | Unrealized finance income | Provision for bad debts | Carrying amount | Discount rate range (%) | |
| Sales of goods in installments | 607,626,695.18 | 28,919,805.27 | 101,644,682.13 | 477,062,207.78 | 4.30-4.65 |
| Guaranteed collection amount for BOT projects | 32,146,788.99 | 3,759,737.26 | 1,607,339.45 | 26,779,712.28 | 4.30-4.65 |
| 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 financing | 421,616,855.59 | 24,329,491.82 | 6,324,252.83 | 390,963,110.94 | 4.30-4.65 |
| Total | 1,102,275,560.64 | 59,886,307.36 | 110,258,381.46 | 932,130,871.82 | |
(Continued)
| Items | Opening balance | ||||
| Book balance | Unrealized finance income | Provision for bad debts | Carrying amount | Discount rate range (%) | |
| Sales of goods in installments | 784,543,617.37 | 38,122,001.69 | 105,634,590.61 | 640,787,025.07 | 4.75 |
| Guaranteed collection amount for BOT projects | 165,505,733.94 | 21,853,615.22 | 8,275,286.70 | 135,376,832.02 | 4.75 |
| Payments for finance lease | 58,523,840.64 | 1,784,539.32 | 877,857.61 | 55,861,443.71 | 4.75 |
| Factoring of receivables financing | 212,483,560.05 | 24,075,069.92 | 3,187,253.40 | 185,221,236.73 | 4.75 |
| Total | 1,221,056,752.00 | 85,835,226.15 | 117,974,988.32 | 1,017,246,537.53 | |
(2) Changes in provision for bad debts
1) Details
| Items | Opening balance | Increase | Decrease | Closing balance | ||||
| Accrual | Recovery | Others | Reversal | Write-off | Others | |||
| Provision made on a collective basis | 117,974,988.32 | -7,716,606.86 | 110,258,381.46 | |||||
| Total | 117,974,988.32 | -7,716,606.86 | 110,258,381.46 | |||||
2) Long-term receivables with provision for bad debts made on a collective basis using age analysis method
| Ages | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion (%) | |
| Payments undue | 221,372,398.91 | 11,068,619.95 | 5.00 |
| Payments due | 418,401,085.26 | 92,183,401.63 | 22.03 |
| Subtotal | 639,773,484.17 | 103,252,021.58 | 16.14 |
3) Long-term receivables with provision for bad debts using the five-level classification
| Items | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion (%) | |
| Portfolio grouped with finance lease payment | 40,885,220.88 | 682,107.05 | 1.67 |
| Portfolio grouped with factoring of receivables financing | 421,616,855.59 | 6,324,252.83 | 1.50 |
| Subtotal | 462,502,076.47 | 7,006,359.88 | 1.51 |
12. Long-term equity investments
(1) Categories
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Investments in associates | 676,829,959.84 | 676,829,959.84 | 603,580,781.31 | 603,580,781.31 | ||
| Total | 676,829,959.84 | 676,829,959.84 | 603,580,781.31 | 603,580,781.31 | ||
(2) Details
| Investees | Opening balance | Increase/Decrease | |||
| Investments increased | Investments decreased | Investment income recognized under equity method | Adjustment in other comprehensive income | ||
| Associates | |||||
| Lianjiang Company | 44,578,478.42 | 208,271,314.25 | 1,283,929.81 | ||
| Tengine Innovation (Beijing) Monitoring Instrument Co., Ltd. | 30,205,115.36 | -573,592.29 | |||
| Guangdong Shunkong Environmental Investment Co., Ltd. | 195,130,199.37 | 28,071,555.60 | |||
| Guangdong Tianshu New Energy Technology Co., Ltd. | 2,688,700.75 | -2,688,700.75 | |||
| Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. | 19,550,920.59 | 2,409,925.57 | |||
| Shantou Chaoyang District Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. | 19,433,725.73 | 11,843,311.55 | 142,662.64 | ||
| Changsha Cowa Zoomlion Intelligent Technology Co., Ltd. | 5,429,199.88 | -535,617.37 | |||
| Guangdong Liangke Environmental Engineering Co., Ltd. | 34,109,839.80 | -1,414,239.82 | |||
| Guangxi Zoomlion Guilv Urban Environmental Service Co., Ltd. | 2,136,327.10 | 225,424.74 | |||
| Shenzhen Yingmei City Housekeeper Co., Ltd. | 30,000.00 | -1,834.71 | |||
| Foshan Yingtong Electrical Materials Co., Ltd. | 250,288,274.31 | -21,355,020.22 | |||
| China Urban Institute (Beijing) Environmental Technology Co., Ltd. | 96,346,250.00 | 1,040,896.22 | |||
| Beijing Xingyun Zhixing Technology Co., Ltd. | 10,000,000.00 | -517,922.14 | |||
| Guangdong Yingling Testing Technology Service Co., Ltd. [Note 2] | |||||
| Total | 603,580,781.31 | 326,460,875.80 | 6,087,467.28 | ||
(Continued)
| Investees | Increase/Decrease | Closing balance | Closing balance of provision for impairment | |||
| Changes in other equity | Cash dividend/ Profit declared for distribution | Provision for impairment | Others | |||
| Associates | ||||||
| Lianjiang Company [Note 1] | 51,330.46 | 2,543,348.57 | 251,641,704.37 | |||
| Tengine Innovation (Beijing) Monitoring Instrument Co., Ltd. | 29,631,523.07 | |||||
| Guangdong Shunkong | 5,165,442.07 | 218,036,312.90 | ||||
| Investees | Increase/Decrease | Closing balance | Closing balance of provision for impairment | |||
| Changes in other equity | Cash dividend/ Profit declared for distribution | Provision for impairment | Others | |||
| Environmental Investment Co., Ltd. | ||||||
| Guangdong Tianshu New Energy Technology Co., Ltd. | ||||||
| Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. | 21,960,846.16 | |||||
| Shantou Chaoyang District Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. | 31,419,699.92 | |||||
| Changsha Cowa Zoomlion Intelligent Technology Co., Ltd. | 4,893,582.51 | |||||
| Guangdong Liangke Environmental Engineering Co., Ltd. | 32,695,599.98 | |||||
| Guangxi Zoomlion Guilv Urban Environmental Service Co., Ltd. | 2,361,751.84 | |||||
| Shenzhen Yingmei City Housekeeper Co., Ltd. | 28,165.29 | |||||
| Foshan Yingtong Electrical Materials Co., Ltd. | 228,933,254.09 | |||||
| China Urban Institute (Beijing) Environmental Technology Co., Ltd. | 97,387,146.22 | |||||
| Beijing Xingyun Zhixing Technology Co., Ltd. | 9,482,077.86 | |||||
| Guangdong Yingling Testing Technology Service Co., Ltd. [Note 2] | ||||||
| Total | 51,330.46 | 7,708,790.64 | 251,641,704.37 | 676,829,959.84 | ||
Note 1: The Company acquired 50% of equity of Lianjiang Company through its subsidiary Guangdong Infore EnvironmentalInvestment Co., Ltd. in February 2022 and included Lianjiang Company into the consolidation scope since March 2022. Since then,the Company changed the accounting method for long-term equity investments in Lianjiang Company from equity method to costmethod.Note 2: Long-term equity investments of 0.00 yuan in Guangdong Yingling Testing Technology Service Co., Ltd. was due to itslong-term loss. The carrying amount of such long-term equity investment was adjusted to 0.00 yuan by the Company under theequity method.
13. Other equity instrument investments
| Items | Closing balance | Opening balance | Dividend income | Accumulated amount of gains or losses transferred from other comprehensive income to retained earnings | |
| Amount | Reasons | ||||
| Zhejiang Shangyu Rural Commercial Bank Co., Ltd. | 800,000.00 | 800,000.00 | 414,960.00 | ||
| Shenzhen Infore Environmental Protection Industry Fund Management Co., Ltd. | 270,000.00 | 270,000.00 | |||
| Shenzhen Infore Environmental Protection Industry M&A Fund [Note] | 14,282,971.01 | 14,632,971.01 | |||
| Subtotal | 15,352,971.01 | 15,702,971.01 | 414,960.00 | ||
Note: As of December 31, 2022, Shenzhen Infore Environmental Protection Industry M&A Fund is still in liquidation.
14. Investment property
(1) Details
| Items | Buildings and structures | Total |
| Cost | ||
| Opening balance | 2,528,684.43 | 2,528,684.43 |
| Increase | 26,905,180.23 | 26,905,180.23 |
| 1) Transferred in from fixed assets | 26,905,180.23 | 26,905,180.23 |
| Decrease | 362,764.00 | 362,764.00 |
| 1) Disposal | 362,764.00 | 362,764.00 |
| Closing balance | 29,071,100.66 | 29,071,100.66 |
| Accumulated depreciation and amortization | ||
| Opening balance | 690,980.75 | 690,980.75 |
| Increase | 1,388,918.95 | 1,388,918.95 |
| 1) Accrual or amortization | 118,676.59 | 118,676.59 |
| 2) Transferred in from fixed assets | 1,270,242.36 | 1,270,242.36 |
| Decrease | 114,234.07 | 114,234.07 |
| 1) Disposal | 114,234.07 | 114,234.07 |
| Closing balance | 1,965,665.63 | 1,965,665.63 |
| Carrying amount | ||
| Closing balance | 27,105,435.03 | 27,105,435.03 |
| Opening balance | 1,837,703.68 | 1,837,703.68 |
(2) Investment property with certificate of titles being unsettled
| Items | Carrying amount | Reasons for unsettlement |
| Shangyu Wanda real estate | 1,470,497.16 | In processing. |
| Subtotal | 1,470,497.16 |
15. Fixed assets
(1) Details
| Items | Buildings and structures | General equipment | Special equipment | Transport facilities | Other equipment | Total |
| Cost | ||||||
| Opening balance | 1,234,214,194.53 | 147,773,153.57 | 781,618,637.79 | 63,065,547.32 | 34,399,532.35 | 2,261,071,065.56 |
| Increase | 342,986,037.45 | 18,836,436.00 | 415,794,459.71 | 8,694,113.65 | 3,562,521.63 | 789,873,568.44 |
| 1) Acquisition | 3,645,851.54 | 14,375,711.91 | 294,827,428.84 | 6,368,917.72 | 3,562,521.63 | 322,780,431.64 |
| 2) Transferred in from construction in progress | 339,340,185.91 | 3,039,068.79 | 62,325,777.62 | 404,705,032.32 | ||
| 3) Business combination | 1,401,645.46 | 36,101,829.37 | 2,325,195.93 | 39,828,670.76 |
| Items | Buildings and structures | General equipment | Special equipment | Transport facilities | Other equipment | Total |
| 4) Transferred in from inventories | 20,009.84 | 22,539,423.88 | 22,559,433.72 | |||
| Decrease | 27,801,393.99 | 2,457,504.94 | 23,402,702.68 | 5,444,440.54 | 89,652.25 | 59,195,694.40 |
| 1) Disposal/ Scrapping | 896,213.76 | 2,457,504.94 | 20,508,595.90 | 5,444,440.54 | 89,652.25 | 29,396,407.39 |
| 2) Transferred out into intangible assets | 2,894,106.78 | 2,894,106.78 | ||||
| 3) Transferred out into investment property | 26,905,180.23 | 26,905,180.23 | ||||
| Closing balance | 1,549,398,837.99 | 164,152,084.63 | 1,174,010,394.82 | 66,315,220.43 | 37,872,401.73 | 2,991,748,939.60 |
| Accumulated depreciation | ||||||
| Opening balance | 162,890,147.66 | 44,876,760.79 | 262,836,971.23 | 15,024,913.91 | 17,390,266.78 | 503,019,060.37 |
| Increase | 50,428,941.64 | 22,384,289.60 | 157,794,175.67 | 7,033,369.62 | 509,506.92 | 238,150,283.45 |
| 1) Accrual | 50,428,941.64 | 21,202,568.76 | 140,020,345.68 | 5,328,021.03 | 509,506.92 | 217,489,384.03 |
| 2) Business combination | 1,181,720.84 | 17,453,188.23 | 1,705,348.59 | 20,340,257.66 | ||
| 3) Others | 320,641.76 | 320,641.76 | ||||
| Decrease | 1,364,011.96 | 1,960,750.57 | 10,882,856.32 | 3,455,727.39 | 44,259.99 | 17,707,606.23 |
| 1) Disposal/ Scrapping | 93,769.60 | 1,960,750.57 | 10,755,095.90 | 3,455,727.39 | 44,259.99 | 16,309,603.45 |
| 2) Transferred out into intangible assets | 127,760.42 | 127,760.42 | ||||
| 3) Transferred out into investment property | 1,270,242.36 | 1,270,242.36 | ||||
| Closing balance | 211,955,077.34 | 65,300,299.82 | 409,748,290.58 | 18,602,556.14 | 17,855,513.71 | 723,461,737.59 |
| Provision for impairment | ||||||
| Opening balance | ||||||
| Increase | ||||||
| Decrease | ||||||
| Closing balance | ||||||
| Carrying amount | ||||||
| Closing balance | 1,337,443,760.65 | 98,851,784.81 | 764,262,104.24 | 47,712,664.29 | 20,016,888.02 | 2,268,287,202.01 |
| Opening balance | 1,071,324,046.87 | 102,896,392.78 | 518,781,666.56 | 48,040,633.41 | 17,009,265.57 | 1,758,052,005.19 |
(2) No fixed assets temporarily idle at the balance sheet date.
(3) No fixed assets leased out under operating leases at the balance sheet date.
(4) Fixed assets with certificate of titles being unsettled
| Items | Carrying amount | Reasons for unsettlement |
| Integration project plant | 300,293,498.89 | In processing. |
| Employee dormitory in Lueryuan | 141,972,601.77 | In processing. |
| Items | Carrying amount | Reasons for unsettlement |
| Bottom renovation workshop in Lueryuan | 21,647,559.63 | In processing. |
| Lueryuan Exhibition Center | 26,765,381.16 | In processing. |
| Staff canteen in Lueryuan | 23,701,199.56 | In processing. |
| Subtotal | 514,380,241.01 |
16. Construction in progress
(1) Details
| Projects | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Integrated construction of intelligent equipment and intelligent sanitation services | 189,748,878.58 | 189,748,878.58 | ||||
| Equipment to be installed | 16,211,018.08 | 16,211,018.08 | 5,468,920.80 | 5,468,920.80 | ||
| Piecemeal projects | 24,862,249.60 | 24,862,249.60 | 28,850,834.48 | 28,850,834.48 | ||
| Total | 41,073,267.68 | 41,073,267.68 | 224,068,633.86 | 224,068,633.86 | ||
2) Changes in significant projects
| Projects | Budgets | Opening balance | Increase | Transferred to fixed assets | Transferred to intangible assets | Closing balance |
| Integrated construction of intelligent equipment and intelligent sanitation services | 300,000,000.00 | 189,748,878.58 | 147,501,302.90 | 337,250,181.48 | ||
| Equipment to be installed | 5,468,920.80 | 47,603,237.91 | 12,661,983.80 | 24,199,156.83 | 16,211,018.08 | |
| Piecemeal projects | 28,850,834.48 | 50,815,966.29 | 54,792,867.04 | 11,684.13 | 24,862,249.60 | |
| Total | 224,068,633.86 | 245,920,507.10 | 404,705,032.32 | 24,210,840.96 | 41,073,267.68 |
(Continued)
| Projects | Accumulated input to budget (%) | Completion percentage (%) | Accumulated amount of borrowing cost capitalization | Amount of borrowing cost capitalization in the current period | Annual capitalization rate (%) | Fund source |
| Integrated construction of intelligent equipment and intelligent sanitation services | Self-raised | |||||
| Equipment to be installed | Self-raised | |||||
| Piecemeal projects | Self-raised | |||||
| Total |
17. Right-of-use assets
(1) Details
| Items | Buildings and structures | Other equipment | Total |
| Cost | |||
| Opening balance | 28,646,420.80 | 2,789,202.39 | 31,435,623.19 |
| Items | Buildings and structures | Other equipment | Total |
| Increase | 18,533,774.47 | 18,533,774.47 | |
| 1) Leased in | 12,740,668.64 | 12,740,668.64 | |
| 2) Business combination | 5,793,105.83 | 5,793,105.83 | |
| Decrease | 330,555.41 | 2,789,202.39 | 3,119,757.80 |
| 1) Disposal | 330,555.41 | 2,789,202.39 | 3,119,757.80 |
| Closing balance | 46,849,639.86 | 46,849,639.86 | |
| Accumulated depreciation | |||
| Opening balance | 4,608,299.09 | 1,321,412.24 | 5,929,711.33 |
| Increase | 10,436,979.07 | 489,263.38 | 10,926,242.45 |
| 1) Accrual | 6,574,908.51 | 489,263.38 | 7,064,171.89 |
| 2) Business combination | 3,862,070.56 | 3,862,070.56 | |
| Decrease | 55,092.54 | 1,810,675.62 | 1,865,768.16 |
| 1) Disposal | 55,092.54 | 1,810,675.62 | 1,865,768.16 |
| Closing balance | 14,990,185.62 | 14,990,185.62 | |
| Carrying amount | |||
| Closing balance | 31,859,454.24 | 31,859,454.24 | |
| Opening balance | 24,038,121.71 | 1,467,790.15 | 25,505,911.86 |
18. Intangible assets
(1) Details
| Items | Land use right | Software | Franchise | Patented technology | Total |
| Cost | |||||
| Opening balance | 587,639,227.37 | 42,482,834.75 | 5,680,343,377.63 | 434,557,655.81 | 6,745,023,095.56 |
| Increase | 69,926,700.00 | 28,203,758.40 | 1,101,341,090.79 | 24,821,938.40 | 1,224,293,487.59 |
| 1) Acquisition | 69,926,700.00 | 3,857,244.58 | 843,596,123.76 | 260,000.00 | 917,640,068.34 |
| 2) Transferred in from construction in process | 24,210,840.96 | 24,210,840.96 | |||
| 3) Business combination | 135,672.86 | 254,850,860.25 | 18,578,729.79 | 273,565,262.90 | |
| 4) Transferred in from fixed assets | 2,894,106.78 | 2,894,106.78 | |||
| 5) Internal research and development | 5,983,208.61 | 5,983,208.61 | |||
| Decrease | 317,311.32 | 6,437,730.28 | 6,755,041.60 | ||
| 1) Disposal | 317,311.32 | 6,437,730.28 | 6,755,041.60 | ||
| Closing balance | 657,565,927.37 | 70,369,281.83 | 6,775,246,738.14 | 459,379,594.21 | 7,962,561,541.55 |
| Accumulated amortization | |||||
| Opening balance | 72,559,037.10 | 15,226,121.11 | 1,038,620,552.82 | 223,148,413.09 | 1,349,554,124.12 |
| Items | Land use right | Software | Franchise | Patented technology | Total |
| Increase | 12,506,507.53 | 8,487,398.02 | 454,508,759.62 | 47,992,191.82 | 523,494,856.99 |
| 1) Accrual | 12,506,507.53 | 8,377,643.38 | 404,599,253.49 | 33,486,365.77 | 458,969,770.17 |
| 2) Business combination | 109,754.64 | 49,781,745.71 | 14,505,826.05 | 64,397,326.40 | |
| 3) Transferred in from fixed assets | 127,760.42 | 127,760.42 | |||
| Decrease | 212,547.43 | 6,164,663.54 | 6,377,210.97 | ||
| 1) Disposal | 212,547.43 | 6,164,663.54 | 6,377,210.97 | ||
| Closing balance | 85,065,544.63 | 23,500,971.70 | 1,486,964,648.90 | 271,140,604.91 | 1,866,671,770.14 |
| Provision for impairment | |||||
| Opening balance | 24,687,522.85 | 20,185,580.19 | 44,873,103.04 | ||
| Increase | 2,902,303.88 | 2,902,303.88 | |||
| 1) Business combination | 2,902,303.88 | 2,902,303.88 | |||
| Decrease | |||||
| Closing balance | 24,687,522.85 | 23,087,884.07 | 47,775,406.92 | ||
| Carrying amount | |||||
| Closing balance | 572,500,382.74 | 46,868,310.13 | 5,263,594,566.39 | 165,151,105.23 | 6,048,114,364.49 |
| Opening balance | 515,080,190.27 | 27,256,713.64 | 4,617,035,301.96 | 191,223,662.53 | 5,350,595,868.40 |
(2) No land use right with certificate of titles being unsettled at the balance sheet date.
19. Development expenditures
(1) Details
| Items | Opening balance | Increase | Decrease | Closing balance | |||
| Internal development expenditures | Others | Recognized as intangible assets | Transferred to profit or loss | Others [Note] | |||
| Development expenditures | 15,682,278.17 | 23,461,855.88 | 5,983,208.61 | 2,822,707.36 | 30,338,218.08 | ||
| Total | 15,682,278.17 | 23,461,855.88 | 5,983,208.61 | 2,822,707.36 | 30,338,218.08 | ||
Note: Other decrease refers to provision for impairment made in the current period.
(2) Other remarks
Development expenditures of 2022 mainly refer to expenditures for development of environmental protection equipment,automated production line, etc., and the supporting documents for capitalization include project proposal, project schedule andperiodic summary report.
20. Goodwill
(1) Details
| Investees or events resulting in goodwill | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Investees or events resulting in goodwill | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Zoomlion Environmental Company | 5,714,428,315.99 | 528,229,356.55 | 5,186,198,959.44 | 5,714,428,315.99 | 233,232,278.15 | 5,481,196,037.84 |
| Green Oriental Company | 78,074,688.12 | 78,074,688.12 | 78,074,688.12 | 78,074,688.12 | ||
| Foshan Infore Environmental Water Treatment Co., Ltd. | 316,465,481.91 | 316,465,481.91 | 316,465,481.91 | 316,465,481.91 | ||
| Shangfeng Industrial Company | 100,455,813.40 | 100,455,813.40 | 100,455,813.40 | 100,455,813.40 | ||
| Yolsh Company | 13,389,232.61 | 13,389,232.61 | ||||
| Lianjiang Company | 46,032,017.84 | 1,013,513.53 | 45,018,504.31 | |||
| Total | 6,268,845,549.87 | 529,242,870.08 | 5,739,602,679.79 | 6,209,424,299.42 | 233,232,278.15 | 5,976,192,021.27 |
(2) Cost
| Investees or events resulting in goodwill | Opening balance | Due to business combination in the current period | Decrease due to disposal of subsidiaries | Closing balance |
| Zoomlion Environmental Company | 5,714,428,315.99 | 5,714,428,315.99 | ||
| Green Oriental Company | 78,074,688.12 | 78,074,688.12 | ||
| Foshan Infore Environmental Water Treatment Co., Ltd. | 316,465,481.91 | 316,465,481.91 | ||
| Shangfeng Industrial Company | 100,455,813.40 | 100,455,813.40 | ||
| Yolsh Company | 13,389,232.61 | 13,389,232.61 | ||
| Lianjiang Company | 46,032,017.84 | 46,032,017.84 | ||
| Total | 6,209,424,299.42 | 59,421,250.45 | 6,268,845,549.87 |
(3) Provision for impairment
| Investees or events resulting in goodwill | Opening balance | Increase | Decrease due to disposal of subsidiaries | Closing balance |
| Zoomlion Environmental Company [Note 1] | 233,232,278.15 | 294,997,078.40 | 528,229,356.55 | |
| Lianjiang Company [Note 2] | 1,013,513.53 | 1,013,513.53 | ||
| Total | 233,232,278.15 | 296,010,591.93 | 529,242,870.08 |
Note 1: For impairment loss of goodwill of Zoomlion Environmental Company, as the goodwill of 92,031,026.04 yuan wasrecognized at the time of the acquisition of Zoomlion Environmental Company through deferred tax liabilities due to appraisalappreciation at the date of business combination not under common control, provision for impairment of 6,884,864.15 yuan wasmade along with changes in deferred tax liabilities in the current period. The accumulated provision for impairment of goodwill
arising from this factor totaled 52,899,507.95 yuan. Provision for impairment of 288,112,214.25 yuan was made at the differencebetween the recoverable amount and the carrying amount of equipment asset group portfolio of Zoomlion Environmental Company,and the accumulated provision for impairment of goodwill arising from this factor totaled 475,329,848.60 yuan.
Note 2: For impairment loss of goodwill of Lianjiang Company, as the goodwill of 30,000,000.00 yuan was recognized at thetime of the acquisition of Lianjiang Company through deferred tax liabilities due to appraisal appreciation at the date of businesscombination not under common control, provision for impairment of 1,013,513.53 yuan was made along with changes in deferred taxliabilities in the current period. The accumulated provision for impairment of goodwill arising from this factor totaled 1,013,513.53yuan.
(4) Impairment test process
1) Related information of asset group or asset group portfolios which include goodwill
| Asset groups or asset group portfolios | Legal entities | Carrying amount of goodwill allocated to the asset groups or asset group portfolios | Carrying amount of asset groups or asset group portfolios | Carrying amount of asset groups or asset group portfolios that include goodwill |
| Sanitation vehicles and equipment manufacturing and sales asset group | Zoomlion Environmental Company (manufacturing and sales of sanitation vehicles and equipment), Changsha Zhongbiao Environmental Industry Co., Ltd., etc. | 10,684,300,240.09 | 1,497,825,670.20 | 12,182,125,910.29 |
| Urban-rural sanitation integrated operation asset group portfolio | Zoomlion Environmental Company (sanitation integrated operation), Green Oriental Company, Huaian Chenjie Environmental Engineering Co., Ltd., Biyang County Fenghe New Energy Power Co., Ltd., Lianjiang Company | 352,487,404.73 | 4,367,010,686.04 | 4,719,498,090.77 |
| Water governance operation asset group | Foshan Infore Environmental Water Treatment Co., Ltd., etc. | 316,465,481.91 | 148,814,220.56 | 465,279,702.47 |
| Ventilation equipment manufacturing and sales asset group | Shangfeng Industrial Company | 159,547,374.49 | 149,261,344.26 | 308,808,718.75 |
| Electrical equipment manufacturing and sales asset group | Yolsh Company | 19,127,475.16 | 28,249,030.31 | 47,376,505.47 |
Note 1: Goodwill amortized to sanitation vehicles and equipment manufacturing and sales asset group and urban-rural sanitationintegrated operation asset group portfolio included the portion attribution to non-controlling shareholders.
Note 2: In December 2018, Zoomlion Environmental Company, which was acquired under business combination under commoncontrol by the Company, had two asset groups, i.e., sanitation vehicles and equipment manufacturing and sales asset group andurban-rural sanitation integrated operation asset group (including waste transfer, landfill and treatment). Data of original goodwill atthe formation of Zoomlion Environmental Company was based on the fair value of the identifiable net assets as at the end of June2017 under asset-based method in the appraisal report numbered Zhong Rui Ping Bao Zi [2017] 110731042, without considering thesynergy between the urban-rural sanitation integrated operation asset group of Zoomlion Environmental Company and the wasteincineration power generation operation asset group of former Green Oriental Company. After the business combination of ZoomlionEnvironmental Company, as its urban-rural sanitation integrated operation asset group and the waste incineration power generationoperation 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 groupswere identified as the urban-rural sanitation integrated operation asset group portfolio.
The cost of original goodwill of Zoomlion Environmental Company of 5.714 billion was re-allocated to the sanitation vehiclesand equipment manufacturing and sales asset group and urban-rural sanitation integrated operation asset group portfolio based on thegross profit ratio contributed by the two businesses, in amount of 5.636 billion yuan and 78 million yuan, respectively.
Note 3: The Company acquired Lianjiang Company through business combination not under common control. After the
business combination of Lianjiang Company, as its asset group and urban-rural sanitation integrated operation asset group and thewaste incineration power generation operation asset group of the Company were similar in terms of business acquisition, productionand operation activities, and cash return realization methods, and the Management had carried out integrated management, the assetgroup of Lianjiang Company was identified as the urban-rural sanitation integrated operation asset group portfolio.
2) Impairment test process, method and conclusion of goodwill impairment loss
a. Determination method of recoverable amountThe recoverable amount of asset groups and asset group portfolios is estimated based on the business characteristics of differentasset groups or asset group portfolios, which is based on the budget approved by the Management. The revenue growth rate of theproduct production and sales asset group in 2022 is based on the existing orders, historical data and operating budget, while theexpense 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 largedifference in income and gross profit margin between the investment period and period of maturity of PPP operating projects, theexpected growth rate, stable period growth rate and profit rate of the asset groups and asset group portfolios show an irregulardistribution when multiple projects are run in parallel, and the income, costs and expenses are estimated based on the time to matureoperation and design capacity of each specific project.
The recoverable amount of groups and asset group portfolios is calculated based on the discounted expected future operatingcash flows of operating long-term assets excluding non-operating assets and liabilities, initial working capital, surplus assets andinterest-bearing liabilities.
b. Key parameter information for adopting future cash flow discount method
| Asset groups or asset group portfolios | Forecast period | Forecast period growth rate | Stable period growth rate | Profit margin | Pre-tax discount rate |
| Sanitation vehicles and equipment manufacturing and sales asset group | 5 years | [Note 1] | 0.00% | 14.12%- 14.80 % | 11.21% |
| Urban-rural sanitation integrated operation asset group portfolio | [Note 1] | [Note 1] | [Note 1] | [Note 1] | 8.86%-9.96% |
| Water governance operation asset group | [Note 1] | [Note 1] | [Note 1] | [Note 1] | 9.80% |
| Ventilation equipment manufacturing and sales asset group | 5 years | [Note 2] | 0.00% | 10.04%- 10.31% | 11.59% |
| Electrical equipment manufacturing and sales asset group | 5 years | [Note 3] | 0.00% | 5.24%- 10.14% | 13.68% |
Note 1: Please refer to the determination method of recoverable amount for details.
Note 2: The revenue growth rate of ventilation equipment manufacturing and sales asset group during the forecast period from2023 to 2027 is 4.77%, 4.00%, 3.00%, 2.00% and 1.00% respectively.
Note 3: The revenue growth rate of electrical equipment manufacturing and sales asset group during the forecast period from2023 to 2027 is 128.86%, 20.00%, 25.00%, 30.00% and 35.00% respectively.
c. Conclusion of goodwill impairment test
| Asset group or asset group portfolios | Recoverable amount asset group or asset group portfolios that include goodwill | Carrying amount of asset group or asset group portfolios that include goodwill | Goodwill impairment loss attributable to the Company |
| Sanitation vehicles and equipment manufacturing and sales asset group | 11,617,200,000.00 | 12,182,125,910.29 | 288,112,214.25 |
| Urban-rural sanitation integrated operation asset group portfolio | 4,927,567,225.59 | 4,719,498,090.77 | |
| Water governance operation asset group | 479,400,000.00 | 465,279,702.47 | |
| Ventilation equipment manufacturing and sales asset group | 786,909,446.86 | 308,808,718.75 | |
| Electrical equipment manufacturing and sales asset group | 48,436,242.27 | 47,376,505.47 |
Note 1: The present value of estimated future cash flows (recoverable amount) of sanitation vehicles and equipment
manufacturing and sales asset group was based on the appraisal report numbered Zhong Rui Ping Bao Zi [2023] 000545 issued byChungrui Worldunion Assets Appraisal Group Co., Ltd.Note 2: The present value of estimated future cash flows (recoverable amount) of urban-rural sanitation integrated operationasset group portfolio was based on the appraisal report numbered Zhong Rui Ping Bao Zi [2023] 000550 issued by ChungruiWorldunion Assets Appraisal Group Co., Ltd. and the appraisal report numbered Jun Rui Ping Bao Zi [2023] 016 issued by ShenzhenJunrui Assets Appraisals LLP.Note 3: The present value of estimated future cash flows (recoverable amount) of water governance operation asset group wasbased on the appraisal report numbered Jun Rui Ping Bao Zi [2023] 017 issued by Shenzhen Junrui Assets Appraisals LLP.
21. Long-term prepayments
| Items | Opening balance | Increase | Amortization | Other decreases | Closing balance |
| Expenditures on improvement of leased-in fixed assets | 11,253,726.52 | 20,965,713.65 | 6,159,422.60 | 278,437.52 | 25,781,580.05 |
| Others | 4,480,030.80 | 2,310,429.06 | 2,361,104.00 | 4,429,355.86 | |
| Total | 15,733,757.32 | 23,276,142.71 | 8,520,526.60 | 278,437.52 | 30,210,935.91 |
22. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets before offset
| Items | Closing balance | Opening balance | ||
| Deductible temporary difference | Deferred tax assets | Deductible temporary difference | Deferred tax assets | |
| Provision for impairment of assets | 668,318,234.13 | 102,350,161.93 | 636,152,868.76 | 97,253,128.24 |
| Unrealized profit from internal transactions | 22,214,585.93 | 3,332,187.89 | 22,789,085.85 | 7,986,502.74 |
| Deductible losses | 47,115,916.60 | 8,894,782.37 | 47,114,527.25 | 4,326,295.17 |
| Total | 737,648,736.66 | 114,577,132.19 | 706,056,481.86 | 109,565,926.15 |
(2) Deferred tax liabilities before offset
| Items | Closing balance | Opening balance | ||
| Taxable temporary difference | Deferred tax liabilities | Taxable temporary difference | Deferred tax liabilities | |
| Accelerated depreciation of fixed assets | 24,481,935.20 | 3,672,290.28 | 27,522,123.27 | 4,128,318.49 |
| Assets appraisal appreciation due to business combination not under common control | 448,250,679.76 | 50,535,337.80 | 361,902,254.82 | 28,433,715.48 |
| Total | 472,732,614.96 | 54,207,628.08 | 389,424,378.09 | 32,562,033.97 |
(3) Details of unrecognized deferred tax assets
| Items | Closing balance | Opening balance |
| Deductible temporary difference | 510,065,399.73 | 381,701,381.09 |
| Deductible losses | 596,581,457.35 | 430,013,174.82 |
| Unrealized profit from internal transactions | 343,937,402.32 | 313,377,877.13 |
| Subtotal | 1,450,584,259.40 | 1,125,092,433.04 |
(4) Maturity years of deductible losses of unrecognized deferred tax assets
| Maturity years | Closing balance | Opening balance | Remarks |
| Maturity years | Closing balance | Opening balance | Remarks |
| Year 2022 | 6,812,010.93 | ||
| Year 2023 | 24,742,029.97 | 43,809,247.32 | |
| Year 2024 | 82,954,604.70 | 93,695,529.33 | |
| Year 2025 | 206,033,354.21 | 214,803,545.16 | |
| Year 2026 | 97,279,157.08 | 70,892,842.08 | |
| Year 2027 | 185,572,311.39 | ||
| Subtotal | 596,581,457.35 | 430,013,174.82 |
23. Other non-current assets
(1) Details
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Contract assets | 154,548,259.36 | 17,968,552.02 | 136,579,707.34 | 177,652,059.17 | 19,320,439.53 | 158,331,619.64 |
| Advances for long-term assets | 93,266,692.04 | 93,266,692.04 | 48,695,481.45 | 48,695,481.45 | ||
| Receivables for agent construction | 8,518,174.25 | 8,518,174.25 | 8,518,174.25 | 8,518,174.25 | ||
| Cost to obtain a contract | 68,565,164.58 | 68,565,164.58 | 17,932,020.49 | 17,932,020.49 | ||
| Total | 324,898,290.23 | 17,968,552.02 | 306,929,738.21 | 252,797,735.36 | 19,320,439.53 | 233,477,295.83 |
(2) Contract assets
1) Details
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Quality guarantee deposit receivable | 154,548,259.36 | 17,968,552.02 | 136,579,707.34 | 177,652,059.17 | 19,320,439.53 | 158,331,619.64 |
| Subtotal | 154,548,259.36 | 17,968,552.02 | 136,579,707.34 | 177,652,059.17 | 19,320,439.53 | 158,331,619.64 |
2) No significant changes in carrying amount of contract assets in the current period.
3) Details on provision for impairment of contract assets
a. Details
| Items | Opening balance | Increase | Decrease | Closing balance | |||
| Accrual | Others | Reversal | Write-off | Others | |||
| On a collective basis | 19,320,439.53 | -1,351,887.51 | 17,968,552.02 | ||||
| Subtotal | 19,320,439.53 | -1,351,887.51 | 17,968,552.02 | ||||
b. Contract assets with provision for impairment made on a collective basis
| Portfolios | Closing balance | ||
| Book balance | Provision for impairment | Provision proportion (%) | |
| Portfolio grouped with ages | 154,548,259.36 | 17,968,552.02 | 11.63 |
| Subtotal | 154,548,259.36 | 17,968,552.02 | 11.63 |
(3) Cost to obtain a contract
| Items | Opening balance | Increase | Amortization | Provision for impairment | Closing balance |
| Cost to obtain a contract | 17,932,020.49 | 64,824,178.55 | 14,191,034.46 | 68,565,164.58 | |
| Subtotal | 17,932,020.49 | 64,824,178.55 | 14,191,034.46 | 68,565,164.58 |
24. Short-term borrowings
| Items | Closing balance | Opening balance |
| Credit borrowings | 140,139,583.33 | 150,165,000.00 |
| Guaranteed borrowings | 281,942,622.11 | 276,091,575.54 |
| Mortgaged borrowings | 18,020,900.00 | 6,959,699.59 |
| Guaranteed and mortgaged borrowings | 4,005,800.00 | |
| Mortgaged and pledged borrowings | 1,802,658.33 | |
| Total | 440,103,105.44 | 439,024,733.46 |
25. Notes payable
| Items | Closing balance | Opening balance |
| Trade acceptance | 222,877,645.46 | 187,465,744.62 |
| Bank acceptance | 2,292,351,647.71 | 2,281,333,445.09 |
| Total | 2,515,229,293.17 | 2,468,799,189.71 |
26. Accounts payable
(1) Details
| Items | Closing balance | Opening balance |
| Payments for goods | 2,547,048,086.70 | 2,688,599,026.21 |
| Payments for engineering and equipment | 164,908,990.42 | 158,035,096.31 |
| Others | 60,004,194.54 | 113,427,385.81 |
| Total | 2,771,961,271.66 | 2,960,061,508.33 |
(2) No significant accounts payable with age over one year at the balance sheet date.
27. Contract liabilities
(1) Details
| Items | Closing balance | Opening balance |
| Payments for goods | 247,747,809.30 | 210,432,628.98 |
| Rebate for customers | 26,542,168.95 | |
| Total | 274,289,978.25 | 210,432,628.98 |
(2) No significant changes in the carrying amount of contract liabilities in the current period.
28. Employee benefits payable
(1) Details
| Items | Opening balance | Increase | Decrease | Closing balance |
| Short-term employee benefits | 309,821,227.12 | 2,044,442,686.63 | 1,948,865,833.01 | 405,398,080.74 |
| Post-employment benefits - defined contribution plan | 656,757.53 | 100,746,200.60 | 99,411,265.32 | 1,991,692.81 |
| Termination benefits | 223,587.72 | 18,160,542.17 | 16,199,884.72 | 2,184,245.17 |
| Total | 310,701,572.37 | 2,163,349,429.40 | 2,064,476,983.05 | 409,574,018.72 |
(2) Details of short-term employee benefits
| Items | Opening balance | Increase | Decrease | Closing balance |
| Wage, bonus, allowance and subsidy | 298,907,271.54 | 1,891,746,076.66 | 1,801,219,758.13 | 389,433,590.07 |
| Employee welfare fund | 589,365.95 | 52,609,348.34 | 52,431,388.23 | 767,326.06 |
| Social insurance premium | 354,306.41 | 55,738,677.77 | 55,259,224.48 | 833,759.70 |
| Including: Medicare premium | 333,668.77 | 50,699,785.65 | 50,265,374.19 | 768,080.23 |
| Occupational injuries premium | 20,637.64 | 5,038,892.12 | 4,993,850.29 | 65,679.47 |
| Housing provident fund | 1,505,062.18 | 32,305,406.40 | 32,003,543.19 | 1,806,925.39 |
| Trade union fund and employee education fund | 8,465,221.04 | 12,043,177.46 | 7,951,918.98 | 12,556,479.52 |
| Subtotal | 309,821,227.12 | 2,044,442,686.63 | 1,948,865,833.01 | 405,398,080.74 |
(3) Details of defined contribution plan
| Items | Opening balance | Increase | Decrease | Closing balance |
| Basic endowment insurance premium | 644,163.94 | 96,600,105.01 | 95,648,740.85 | 1,595,528.10 |
| Unemployment insurance premium | 12,593.59 | 4,146,095.59 | 3,762,524.47 | 396,164.71 |
| Subtotal | 656,757.53 | 100,746,200.60 | 99,411,265.32 | 1,991,692.81 |
29. Taxes and rates payable
| Items | Closing balance | Opening balance |
| VAT | 66,918,012.44 | 55,281,814.33 |
| Enterprise income tax | 36,440,528.78 | 64,521,114.98 |
| Individual income tax withheld for tax authorities | 3,778,293.58 | 5,611,096.21 |
| Urban maintenance and construction tax | 1,991,056.41 | 5,322,911.41 |
| Housing property tax | 2,606,954.11 | 3,075,518.72 |
| Land use tax | 157,193.04 | 165,374.75 |
| Stamp duty | 1,661,333.48 | 1,713,517.40 |
| Education surcharge | 845,859.65 | 2,282,093.47 |
| Local education surcharge | 562,045.06 | 1,519,623.59 |
| Others | 6,950.33 | 1,796.22 |
| Total | 114,968,226.88 | 139,494,861.08 |
30. Other payables
(1) Details
| Items | Closing balance | December 31, 2021 |
| Factoring of accounts receivable with recourse right [Note] | 66,789,887.39 | 49,479,996.55 |
| Temporary receipts payable | 297,006,996.69 | 175,580,442.10 |
| Employee stock ownership plan | 180,075,747.64 | |
| Security deposits | 129,748,015.42 | 114,857,152.31 |
| Others | 163,577,388.03 | 163,720,743.45 |
| Total | 657,122,287.53 | 683,714,082.05 |
Note: The balance refers to the factoring of accounts receivable with recourse right made by Zoomlion Environmental Companyto the non-bank financial institutions. However, as non-bank financial institutions have the right to request Zoomlion EnvironmentalCompany to repurchase the accounts receivable if they are overdue, the accounts receivable shall not be derecognized, and thereceipts of factoring shall be recognized as other payables.
(2) No significant other payables with age over one year at the balance sheet date.
31. Non-current liabilities due within one year
| Items | Closing balance | Opening balance |
| Long-term borrowings due within one year | 555,746,357.94 | 373,296,214.00 |
| Lease liabilities due within one year | 4,673,226.74 | 5,314,737.81 |
| Long-term payables due within one year | 599,514.91 | |
| Total | 561,019,099.59 | 378,610,951.81 |
32. Other current liabilities
| Items | Closing balance | Opening balance |
| Output VAT to be recognized | 31,616,947.24 | 27,205,068.15 |
| Rebate for customers | 35,759,709.45 | |
| Total | 31,616,947.24 | 62,964,777.60 |
33. Long-term borrowings
| Items | Closing balance | Opening balance |
| Credit borrowings | 18,800,000.00 | 300,000,000.00 |
| Guaranteed borrowings | 70,029,166.64 | 171,964,611.10 |
| Pledged borrowings | 454,467,547.52 | 293,820,000.00 |
| Guaranteed and mortgaged borrowings | 150,000,000.00 | 49,230,775.77 |
| Guaranteed and pledged borrowings | 1,229,009,512.16 | 738,727,380.85 |
| Guaranteed, pledged and mortgaged borrowings | 144,000,000.00 | |
| Total | 1,922,306,226.32 | 1,697,742,767.72 |
34. Bonds payable
(1) Details
| Items | Closing balance | Opening balance |
| Items | Closing balance | Opening balance |
| Convertible corporate bonds | 1,308,690,556.32 | 1,254,962,176.00 |
| Total | 1,308,690,556.32 | 1,254,962,176.00 |
(2) Current period movements (not including other financial instruments such as preferred shares/perpetual bonds classified asfinancial liabilities)
| Bonds | Issuing date | Maturity | Par value | Amount outstanding |
| Infore convertible bonds | 11/4/2020 | 6 years | 100.00 | 1,476,189,600.00 |
| Subtotal | 100.00 | 1,476,189,600.00 |
(Continued)
| Bonds | Opening balance | Current period issuance | Par value interest | Premium/ Discount amortization | Current period repayment | Converted to shares | Funds returned due to conversion of bonds into shares | Closing balance |
| Infore convertible bonds | 1,254,962,176.00 | 8,084,435.38 | 53,086,819.12 | 7,380,303.50 | 62,552.09 | 18.59 | 1,308,690,556.32 | |
| Subtotal | 1,254,962,176.00 | 8,084,435.38 | 53,086,819.12 | 7,380,303.50 | 62,552.09 | 18.59 | 1,308,690,556.32 |
(3) Converting conditions and time of convertible bonds
Under the “Approval of the Public Offering of Convertible Bonds by Infore Environment Technology Group Co., Ltd.” issuedby China Securities Regulatory Commission (Zheng Jian Xu Ke [2020] 2219) dated September 10, 2020, on November 4, theCompany 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 oncea year, and principal and the last year’s interest are paid at maturity. The Company will redeem all convertible bonds not convertedby investors at the 110% of the par value (including the last year’s interest) within 5 trading days upon maturity of the convertiblebonds 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 toNovember 3, 2026. The initial conversion price of the convertible bonds issued this time is 8.31 yuan/share; the conversion period ofthe convertible bonds issued this time starts from the first trading day (May 10, 2021) after the expiration of six months from the enddate of the issuance on November 10, 2020 to the maturity date of the convertible bonds (November 3, 2026).
As of December 31, 2022, a total of 1,299 Infore convertible bonds had been converted to the Company’s ordinary A shares,with a total of 15,833 shares converted. In the current period, capital reserve (share premium) of 66,691.53 yuan was recognized atthe difference between the carrying amount of the convertible bonds actually converted and other equity instruments and sharecapital increased due to actual conversion of bonds into shares.
35. Lease liabilities
| Items | Closing balance | Opening balance |
| Unpaid lease payments | 24,948,023.12 | 20,701,888.38 |
| Less: Unrecognized financing expenses | 1,692,398.82 | 2,178,148.28 |
| Total | 23,255,624.30 | 18,523,740.10 |
36. Long-term payables
(1) Details
| Items | Closing balance | Opening balance |
| Items | Closing balance | Opening balance |
| Special payables | 315,735,814.91 | 315,735,814.91 |
| Total | 315,735,814.91 | 315,735,814.91 |
(2) Special payables
| Items | Opening balance | Increase | Decrease | Closing balance | Reasons for balance |
| Special funds for treasury bond projects | 3,000,000.00 | 3,000,000.00 | Funds from conversion of treasury bonds into loans. | ||
| Special funds for Jiayu Sewage Treatment Project | 176,015,774.58 | 176,015,774.58 | Special government funds for PPP projects. | ||
| Special funds for Tongshan Sewage Treatment Project | 136,720,040.33 | 136,720,040.33 | Special government funds for PPP projects. | ||
| Subtotal | 315,735,814.91 | 315,735,814.91 |
37. Provisions
| Items | Closing balance | Opening balance |
| Credit guarantees | 4,575,049.22 | 3,129,793.85 |
| Total | 4,575,049.22 | 3,129,793.85 |
38. Deferred income
(1) Details
| Items | Opening balance | Increase | Decrease | Closing balance | Reasons for balance |
| Government grants | 101,635,992.65 | 37,339,750.00 | 18,085,032.61 | 120,890,710.04 | Government grants related to assets/income |
| Total | 101,635,992.65 | 37,339,750.00 | 18,085,032.61 | 120,890,710.04 |
(2) Details of government grants
| Items | Opening balance | Increase | Grants included into other income [Note] | Other decrease | Closing balance | Related to assets/income |
| Investment plan on the construction of ecological civilization of 2020 within the central budget | 2,200,000.00 | 880,000.00 | 94,189.60 | 2,985,810.40 | Related to assets | |
| No. 2 Sewage Treatment Plant and supporting pipe network projects in Daban Town, Bahrain Right Banner | 7,660,000.00 | 7,660,000.00 | Related to assets | |||
| Special subsidies for Xiantao waste power generation project | 9,936,051.24 | 726,531.48 | 9,209,519.76 | Related to assets | ||
| Shouxian domestic waste incineration power plant project | 13,034,666.58 | 1,002,666.73 | 12,031,999.85 | Related to assets | ||
| Urban sewage and garbage treatment | 4,456,150.42 | 441,822.07 | 4,014,328.35 | Related to assets |
| Items | Opening balance | Increase | Grants included into other income [Note] | Other decrease | Closing balance | Related to assets/income |
| facilities and sewage pipe network engineering projects | ||||||
| Development, demonstration and application of time of flight mass spectrometry for soft ionization-high resolution on-line detection of atmospheric VOCS | 354,166.67 | 141,666.72 | 212,499.95 | Related to assets | ||
| Research and application of water quality and environment monitoring technology | 1,400,000.00 | 466,666.68 | 933,333.32 | Related to assets | ||
| R&D and application project of water quality comprehensive toxicity rapid monitoring instrument based on electrochemically active microorganisms | 2,320,000.00 | 890,000.00 | 1,430,000.00 | Related to assets | ||
| Urban and rural domestic waste transfer, kitchen waste resource utilization and harmless treatment projects | 10,847,931.04 | 388,620.69 | 10459310.35 | Related to assets | ||
| Xiantao sludge harmless treatment plant | 17,700,000.00 | 610,344.83 | 17,089,655.17 | Related to assets | ||
| Subsidies for enterprise technological transformation | 714,285.72 | 142,857.14 | 571,428.58 | Related to assets | ||
| Subsidies for key projects of enterprise intelligent transformation of 2018 and 2020 | 1,527,957.44 | 203,061.88 | 1,324,895.56 | Related to assets | ||
| Funds for provincial “Kunpeng Action” plan | 1,055,749.60 | 800,000.00 | 360,917.96 | 1,494,831.64 | Related to assets | |
| Incremental tax incentives for technological transformation | 7,586,240.00 | 948,280.00 | 6,637,960.00 | Related to assets | ||
| The second batch of awards for rental housing in the high-tech zone | 5,743,156.33 | 165,270.68 | 5,577,885.65 | Related to assets | ||
| The third batch of municipal subsidies for technological transformation of industrial enterprises | 4,562,500.00 | 500,000.00 | 4,062,500.00 | Related to assets | ||
| The fifth batch of special funds for raising manufacturing power in Hunan Province | 1,000,000.00 | 297,520.66 | 702,479.34 | Related to assets | ||
| Special funds for air pollution prevention and control | 800,000.00 | 100,000.00 | 700,000.00 | Related to assets | ||
| Special subsidies for construction and application of industrial | 416,444.76 | 94,781.44 | 321,663.32 | Related to assets |
| Items | Opening balance | Increase | Grants included into other income [Note] | Other decrease | Closing balance | Related to assets/income |
| Internet platform | ||||||
| The third batch of special funds for raising manufacturing power in Hunan Province of 2021 | 416,444.76 | 94,781.44 | 321,663.32 | Related to assets | ||
| The fourth batch of special funds for raising manufacturing power in Hunan Province of 2021 | 129,558.22 | 13,381.99 | 116,176.23 | Related to assets | ||
| Special funds for provincial modern service industry of Hi-tech District | 94,689.87 | 28,569.01 | 66,120.86 | Related to assets | ||
| Integrated construction of intelligent equipment and intelligent sanitation services of Infore Zoomlion | 30,400,000.00 | 304,680.09 | 30,095,319.91 | Related to assets | ||
| The second batch of subsidized loans for industrial technology transformation in Changsha of 2021 | 1,939,750.00 | 68,421.52 | 1,871,328.48 | Related to assets | ||
| The fifth batch of special funds for raising manufacturing power in Hunan Province of 2022 | 1,000,000.00 | 1,000,000.00 | Related to assets | |||
| Central special construction supporting funds for Kaili PPP Project | 10,000,000.00 | 10,000,000.00 | Related to income | |||
| Total | 101,635,992.65 | 37,339,750.00 | 8,085,032.61 | 10,000,000.00 | 120,890,710.04 |
Note: Please refer to section V (IV) 3 of notes to the financial statements for details on government grants included into profit orloss.
39. Other non-current liabilities
| Items | Closing balance | Opening balance |
| Central special construction funds | 8,333,333.33 | |
| Total | 8,333,333.33 |
40. Share capital
(1) Details
| Items | Opening balance | Movements | Closing balance | ||||
| Issue of new shares | Bonus shares | Reserve transferred to shares | Others | Subtotal | |||
| Total share | 3,175,734,760.00 | 3,770,799.00 | 3,770,799.00 | 3,179,505,559.00 | |||
(2) Other remarks
Current increase was due to:
1) the subscription of 3,761,991 shares by a total of 107 equity incentive targets according to the “Proposal on Matters Relatedto the Second Exercise Period of the Phase III Stock Option Incentive Plan” implemented by the Company in the current period. Asof December 31, 2022, the Company had actually received payments for subscription of 23,399,331.66 yuan from equity incentivetargets, with share capital increased by 3,761,991 yuan, capital reserve (share premium) increased by 19,637,568.02 yuan and
financial expenses increased by 227.36 yuan.
2) conversion of convertible corporate bonds with par value of 71,600 yuan into the Company’s ordinary A shares of 8,808shares, with capital premium (share premium) recognized at 66,691.53 yuan.
41. Other equity instruments
(1) Please refer to section V (I) 34 of notes to financial statements for basic information of convertible corporate bondsoutstanding at the balance sheet date.
(2) Current period movements of convertible corporate bonds outstanding at the balance sheet date
| Items | Opening balance | Increase | Decrease | Closing balance | ||||
| Quantity | Carrying amount | Quantity | Carrying amount | Quantity | Carrying amount | Quantity | Carrying amount | |
| Convertible corporate bonds | 14,761,313 | 266,929,289.24 | 716 | 12,947.44 | 14,760,597 | 266,916,341.80 | ||
| Total | 14,761,313 | 266,929,289.24 | 716 | 12,947.44 | 14,760,597 | 266,916,341.80 | ||
Note: As of December 31, 2022, convertible corporate bonds with par value of 71,600 yuan had been converted into ordinary Ashares, with other equity instruments decreased by 12,947.44 yuan accordingly.
42. Capital reserve
(1) Details
| Items | Opening balance | Increase | Decrease | Closing balance |
| Capital premium (share premium) | 9,718,763,486.07 | 19,704,259.55 | 133,857,421.38 | 9,604,610,324.24 |
| Other capital reserve | 54,032,377.68 | 3,868,552.56 | 57,900,930.24 | |
| Total | 9,772,795,863.75 | 23,572,812.11 | 133,857,421.38 | 9,662,511,254.48 |
(2) Other remarks
1) Current increase of capital premium (share premium) was mainly due to:
a. increase of capital premium (share premium) of 19,637,568.02 yuan. Please refer to section V (I) 40 of notes to the financialstatements for details;
b. conversion of convertible corporate bonds with par value of 71,600 yuan into the Company’s ordinary A shares of 8,808shares, resulting in the recognition of capital premium (share premium) of 66,691.53 yuan;
2) Current decrease of capital premium (share premium) was mainly due to:
a. completion of the Company’s phase II employee stock ownership plan in 2022 through transfer of shares in the Company’srepurchase special security account and centralized bidding in secondary market, and 46,410,852 shares was transferred from theCompany’s repurchase special security account, resulting in the decrease of capital reserve of 132,175,661.99 yuan.
b. difference of -1,681,759.39 yuan between the consideration for acquisition of 5% of equity of the subsidiary Liling ZhaoyangEnvironmental Protection Co., Ltd. dated April 30, 2022 and the proportionate share in net assets continuously calculated from theacquisition date or combination date while acquiring long-term equity investments.
3) Current increase of other capital reserve was due to stock option incentive expenses of 4,039,069.40 yuan recognized basedon the equity incentive plan, with 3,868,552.56 yuan included in capital reserve – other capital reserve and 170,516.84 yuan includedin non-controlling interest. Please refer to section XI of notes to the financial statements for details.
43. Treasury shares
(1) Details
| Items | Opening balance | Increase | Decrease | Closing balance |
| Treasury shares | 455,303,777.91 | 361,170,982.74 | 94,132,795.17 | |
| Total | 455,303,777.91 | 361,170,982.74 | 94,132,795.17 |
(2) Other remarks
Pursuant to the 17th extraordinary meeting of the ninth session of the Board of Directors dated March 17, 2022 and the“Proposal on the ‘Phase II Employee Stock Ownership Plan (Revised Draft)’ and its Summary” deliberated and approved byshareholders’ meeting of 2021 dated May 24, 2022 and related proposals, the phase II employee stock ownership plan was planned toacquire shares of the Company through acquisition of repurchased shares, purchase from the secondary market (including but notlimited to centralized biding and block trading) and other method permitted by laws and regulations. In 2022, 46,410,852 shares weretransferred from the Company’s repurchase special security account, which resulted in the decrease of treasury shares of361,170,982.74 yuan.
44. Other comprehensive income (OCI)
| Items | Opening balance | Current period cumulative | Closing balance | |||||
| Net OCI after tax | Less: OCI previously recognized but transferred to retained earnings in the current period (attributable to parent company after tax) | |||||||
| Current period cumulative before income tax | Less: OCI previously recognized but transferred to profit or loss in the current period | Less: Income tax expenses | Attributable to parent company | Attributable to non-controlling shareholders | ||||
| OCI not to be reclassified subsequently to profit or loss | -4,280,000.00 | -350,000.00 | -350,000.00 | -4,630,000.00 | ||||
| Including: Changes in fair value of other equity instrument investments | -4,280,000.00 | -350,000.00 | -350,000.00 | -4,630,000.00 | ||||
| Total | -4,280,000.00 | -350,000.00 | -350,000.00 | -4,630,000.00 | ||||
45. Special reserve
| Items | Opening balance | Increase | Decrease | Closing balance |
| Work safety fund | 8,693,981.54 | 8,693,981.54 |
46. Surplus reserve
(1) Details
| Items | Opening balance | Increase | Decrease | Closing balance |
| Statutory surplus reserve | 296,754,883.56 | 18,369,884.36 | 315,124,767.92 | |
| Total | 296,754,883.56 | 18,369,884.36 | 315,124,767.92 |
(2) Other remarks
Current increase of 18,369,884.36 yuan was due to the appropriation of statutory surplus reserve at 10% of net profit generatedby the parent company in the current period.
47. Undistributed profit
| Items | Current period cumulative | Preceding period comparative |
| Opening balance | 3,874,934,971.69 | 3,558,688,885.55 |
| Add: Net profit attributable to owners of the parent company | 418,794,179.13 | 752,792,198.66 |
| Less: Appropriation of statutory surplus reserve | 18,369,884.36 | 64,052,940.00 |
| Dividend payable on ordinary shares | 312,052,376.40 | 372,493,172.52 |
| Closing balance | 3,963,306,890.06 | 3,874,934,971.69 |
(II) Notes to items of the consolidated income statement
1. Operating revenue/Operating cost
(1) Details
| Items | Current period cumulative | Preceding period comparative | ||
| Revenue | Cost | Revenue | Cost | |
| Main operations | 12,206,399,059.56 | 9,429,679,886.47 | 11,808,597,210.09 | 9,196,610,154.21 |
| Other operations | 49,593,878.86 | 39,830,944.80 | 57,694,401.36 | 35,588,414.96 |
| Total | 12,255,992,938.42 | 9,469,510,831.27 | 11,866,291,611.45 | 9,232,198,569.17 |
| Including: Revenue from contracts with customers | 12,253,033,163.91 | 9,467,213,554.61 | 11,865,905,141.65 | 9,232,078,451.86 |
(2) Breakdown of revenue from contracts with customers by main categories
1) Breakdown of revenue by goods or services
| Items | Current period cumulative | Preceding period comparative | ||
| Revenue | Cost | Revenue | Cost | |
| Intelligent sanitation | 10,242,746,845.76 | 8,023,297,059.91 | 9,237,262,348.48 | 7,255,659,678.83 |
| Other businesses | 2,010,286,318.15 | 1,443,916,494.70 | 2,628,642,793.17 | 1,976,418,773.03 |
| Subtotal | 12,253,033,163.91 | 9,467,213,554.61 | 11,865,905,141.65 | 9,232,078,451.86 |
2) Breakdown of revenue by operating regions
| Items | Current period cumulative | Preceding period comparative | ||
| Revenue | Cost | Revenue | Cost | |
| Domestic | 12,234,221,595.20 | 9,451,301,571.85 | 11,823,070,767.91 | 9,196,686,878.55 |
| Overseas | 18,811,568.71 | 15,911,982.76 | 42,834,373.74 | 35,391,573.31 |
| Subtotal | 12,253,033,163.91 | 9,467,213,554.61 | 11,865,905,141.65 | 9,232,078,451.86 |
3) Breakdown of revenue by time of transferring goods or rendering services
| Items | Current period cumulative | Preceding period comparative |
| Recognized at a point in time | 6,705,692,980.49 | 7,936,363,900.72 |
| Recognized over time | 5,547,340,183.42 | 3,929,541,240.93 |
| Subtotal | 12,253,033,163.91 | 11,865,905,141.65 |
2. Taxes and surcharges
| Items | Current period cumulative | Preceding period comparative |
| Items | Current period cumulative | Preceding period comparative |
| Urban maintenance and construction tax | 27,686,507.84 | 20,078,805.96 |
| Education surcharge | 12,075,573.31 | 8,704,420.76 |
| Housing property tax | 9,759,719.80 | 6,991,844.08 |
| Land use tax | 8,282,959.61 | 8,241,902.89 |
| Local education surcharge | 7,807,835.47 | 5,684,439.06 |
| Stamp duty | 7,540,686.80 | 3,049,851.77 |
| Vehicle and vessel use tax | 1,481,678.21 | 1,380,035.94 |
| Environmental protection tax | 50,061.01 | 10,786.17 |
| Others | 1,728.81 | |
| Total | 74,685,022.05 | 54,143,815.44 |
3. Selling expenses
| Items | Current period cumulative | Preceding period comparative |
| Employee benefits | 340,290,000.65 | 320,344,321.96 |
| Marketing expenses and agency fees | 221,534,865.64 | 203,886,678.86 |
| Business entertainment | 47,320,675.86 | 45,787,322.29 |
| Office expenses | 39,159,155.49 | 52,439,230.50 |
| Expenses for tendering and bidding | 33,479,432.56 | 27,560,842.44 |
| Vehicle usage fees | 27,886,649.81 | 34,084,353.47 |
| Business travelling expenses | 22,889,790.05 | 29,426,404.02 |
| Depreciation and amortization | 8,871,711.08 | 1,634,177.49 |
| After-sales service expenses | 8,427,436.37 | 6,529,791.01 |
| Share-based payments | 789,290.58 | 2,009,420.94 |
| Others | 12,321,839.86 | 15,131,028.07 |
| Total | 762,970,847.95 | 738,833,571.05 |
4. Administrative expenses
| Items | Current period cumulative | Preceding period comparative |
| Employee benefits | 325,720,014.09 | 308,636,988.29 |
| Depreciation and amortization | 92,377,339.97 | 90,950,246.67 |
| Office expenses | 49,435,534.41 | 57,223,541.20 |
| Business entertainment | 47,088,220.88 | 44,724,844.78 |
| Agency consulting fees | 38,554,467.66 | 30,647,767.32 |
| Vehicle usage fees | 15,346,887.97 | 10,477,269.96 |
| Business travelling expenses | 9,732,527.31 | 13,652,785.76 |
| Repair fees | 2,863,363.74 | 2,929,951.84 |
| Items | Current period cumulative | Preceding period comparative |
| Share-based payments | 1,905,828.75 | 4,002,420.59 |
| Others | 26,577,495.45 | 22,107,591.16 |
| Total | 609,601,680.23 | 585,353,407.57 |
5. R&D expenses
| Items | Current period cumulative | Preceding period comparative |
| Employee benefits | 248,961,357.20 | 159,381,200.38 |
| Direct inputs | 40,506,455.35 | 58,423,533.28 |
| Other expenses | 50,336,437.55 | 41,705,479.82 |
| Share-based payments | 971,457.24 | 3,108,913.81 |
| Total | 340,775,707.34 | 262,619,127.29 |
6. Financial expenses
| Items | Current period cumulative | Preceding period comparative |
| Interest expenses | 170,568,834.86 | 149,868,429.63 |
| Interest income | -86,389,951.68 | -107,324,690.38 |
| Gains and losses on foreign exchange | -3,056,908.33 | 2,001,825.46 |
| Others | 20,717,449.06 | 14,059,239.82 |
| Total | 101,839,423.91 | 58,604,804.53 |
7. Other income
| Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
| Government grants related to assets [Note] | 8,085,032.61 | 4,481,738.05 | 8,085,032.61 |
| Government grants related to income [Note] | 93,590,019.49 | 76,124,682.16 | 72,183,009.21 |
| Refund of handling fees for withholding individual income tax | 429,102.26 | 748,344.55 | 429,102.26 |
| Extra deduction of input VAT | 17,460,524.12 | 2,186,407.75 | 17,460,524.12 |
| Total | 119,564,678.48 | 83,541,172.51 | 98,157,668.20 |
Note: Please refer to section V (IV) 3 of notes to the financial statements for details on government grants included into otherincome.
8. Investment income
| Items | Current period cumulative | Preceding period comparative |
| Investment income from long-term equity investments under equity method | 8,548,481.77 | 36,885,135.08 |
| Investment income from disposal of long-term equity investments | 8,040,787.90 | |
| Gains from fair value remeasurement at the time of obtaining control [Note] | 51,896,314.25 | |
| Investment income from financial products | 19,091,108.25 | 29,170,261.66 |
| Items | Current period cumulative | Preceding period comparative |
| Performance compensation | -50,000,000.00 | 163,460,620.00 |
| Losses from debt restructuring | -5,380,200.00 | |
| Gains of factoring of accounts receivable without recourse right | -65,918,373.23 | |
| Others | 296,543.34 | 2,377,190.95 |
| Total | -41,466,125.62 | 239,933,995.59 |
Note: It mainly refers to the combination of Lianjiang Company achieved in stages. For the equity of the acquiree held beforethe purchase date, it is remeasured at the fair value of the equity on the purchase date, with the difference between the fair value andits carrying amount recognized as current investment income.
9. Gains on changes in fair value
| Items | Current period cumulative | Preceding period comparative |
| Held-for-trading financial assets | -73,146,774.32 | |
| Gains or losses on ineffective portion of outstanding fair value hedges | 72,100.27 | |
| Total | -73,074,674.05 |
10. Credit impairment loss
| Items | Current period cumulative | Preceding period comparative |
| Bad debts | -103,391,907.05 | -95,707,579.99 |
| Credit guarantee loss | -1,445,255.37 | -2,668,240.03 |
| Total | -104,837,162.42 | -98,375,820.02 |
11. Assets impairment loss
| Items | Current period cumulative | Preceding period comparative |
| Inventory write-down loss | -15,053,708.82 | -21,599,097.67 |
| Impairment loss of goodwill | -296,010,591.93 | -194,617,014.59 |
| Impairment loss of other non-current assets (quality guarantee reserve) | 2,080,536.79 | -10,144,746.27 |
| Impairment loss of contract assets | -1,192,023.34 | -5,154,976.05 |
| Impairment loss of non-current assets due within one year (quality guarantee reserve) | 575,338.66 | |
| Impairment loss of development expenditures | -2,822,707.36 | |
| Total | -312,998,494.66 | -230,940,495.92 |
12. Gains on asset disposal
| Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
| Gains on disposal of fixed assets | 301,250.20 | -2,254,626.67 | 301,250.20 |
| Gains on disposal of intangible assets | 10,073.29 | 10,073.29 | |
| Gains on disposal of construction in progress | 1,092,784.45 | ||
| Gains on disposal of right-of-use assets | 221,473.23 | 221,473.23 |
| Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
| Total | 532,796.72 | -1,161,842.22 | 532,796.72 |
13. Non-operating revenue
| Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
| Gains on damage or retirement of non-current assets | 8,797.04 | 883,148.89 | 8,797.04 |
| Penalty and confiscatory income | 9,298,430.37 | 5,865,087.13 | 9,298,430.37 |
| Others | 3,491,008.49 | 3,279,788.40 | 3,491,008.49 |
| Total | 12,798,235.90 | 10,028,024.42 | 12,798,235.90 |
14. Non-operating expenditures
| Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
| Losses on damage or retirement of non-current assets | 2,913,020.22 | 1,424,842.60 | 2,913,020.22 |
| Donation expenditures | 2,302,553.92 | 2,446,175.58 | 2,302,553.92 |
| Local water conservancy construction special fund | 409,764.78 | 3,814,764.68 | |
| Penalty and confiscatory expenses | 6,695,894.28 | 3,454,356.96 | 6,695,894.28 |
| Others | 1,626,755.62 | 646,314.24 | 1,626,755.62 |
| Total | 13,947,988.82 | 11,786,454.06 | 13,538,224.04 |
15. Income tax expenses
(1) Details
| Items | Current period cumulative | Preceding period comparative |
| Current period income tax expenses | 110,132,217.76 | 102,531,906.08 |
| Deferred income tax expenses | -13,168,974.08 | -49,028,417.97 |
| Total | 96,963,243.68 | 53,503,488.11 |
(2) Reconciliation of accounting profit to income tax expenses
| Items | Current period cumulative | Preceding period comparative |
| Profit before tax | 556,255,365.25 | 852,702,222.65 |
| Income tax expenses based on tax rate applicable to the parent company | 139,063,841.31 | 213,175,555.66 |
| Effect of different tax rate applicable to subsidiaries | -14,174,894.59 | -120,536,448.40 |
| Effect of prior income tax reconciliation | 2,488,907.40 | -16,697,363.73 |
| Effect of non-taxable income | -10,408,754.85 | -14,748,654.06 |
| Effect of non-deductible costs, expenses and losses | 10,640,861.01 | 5,653,209.37 |
| Effect of utilization of deductible losses not previously recognized as deferred tax assets | -3,001,651.62 | -37,647,884.38 |
| Effect of deducible temporary differences or deductible losses not recognized as deferred tax assets in the current period | 20,910,057.40 | 57,511,538.80 |
| Effect of extra deduction | -49,866,353.99 | -33,206,465.15 |
| Items | Current period cumulative | Preceding period comparative |
| Difference between deferred and current income tax rates | 1,311,231.61 | |
| Income tax expenses | 96,963,243.68 | 53,503,488.11 |
16. Other comprehensive income, net of income tax
Please refer to section V (I) 44 of notes to the financial statements for details.
(III) Notes to items of the consolidated cash flow statement
1. Other cash receipts related to operating activities
| Items | Current period cumulative | Preceding period comparative |
| Receipts of deposits for notes, letters of credit and letters of guarantee | 385,183,093.29 | 528,970,066.36 |
| Receipts of government grants | 112,106,818.35 | 64,060,624.96 |
| Receipts of security deposits | 109,630,599.89 | 123,421,879.05 |
| Recovery of petty cash and temporary advance payment receivable | 76,785,785.58 | 47,474,118.30 |
| Temporary receipts payable | 152,028,816.71 | 77,741,104.34 |
| Receipts of interest income | 48,011,644.19 | 34,375,977.08 |
| Receipts of factoring payment and principal of finance lease | 1,128,899,220.36 | 1,177,976,505.96 |
| Receipt of principal and interest of time deposits | 67,760,782.25 | 714,576,527.78 |
| Recovery of current accounts from Foshan Yingtong Electrical Materials Co., Ltd. | 99,092,452.39 | |
| Others | 16,659,857.72 | 56,549,504.20 |
| Total | 2,097,066,618.34 | 2,924,238,760.42 |
2. Other cash payments related to operating activities
| Items | Current period cumulative | Preceding period comparative |
| Payments for deposits for notes, letters of credit and letters of guarantee | 130,498,826.74 | 386,586,903.23 |
| Operating period expenses | 807,025,083.75 | 564,282,900.37 |
| Payments for security deposits | 64,966,788.26 | 64,552,986.72 |
| Payments for petty cash and temporary advance payment receivable | 120,806,495.16 | 75,087,728.42 |
| Payments for factoring and principal of finance lease | 1,181,778,621.41 | 1,322,074,716.14 |
| Temporary receipts payable | 80,648,317.53 | 120,319,766.85 |
| Time deposits | 50,000,000.00 | |
| Others | 10,338,831.68 | 23,965,454.05 |
| Total | 2,396,062,964.53 | 2,606,870,455.78 |
3. Other cash receipts related to investing activities
| Items | Current period cumulative | Preceding period comparative |
| Redemption of financial products | 5,398,900,000.00 | 4,730,043,650.04 |
| Items | Current period cumulative | Preceding period comparative |
| Receipts of special government funds for PPP projects | 60,000,000.00 | |
| Receipts of futures margin | 12,531,843.01 | |
| Receipts of principal and interest of call loans | 2,961,000.00 | 47,541,031.18 |
| Total | 5,401,861,000.00 | 4,850,116,524.23 |
4. Other cash payments related to investing activities
| Items | Current period cumulative | Preceding period comparative |
| Purchase of financial products | 5,398,900,000.00 | 4,728,990,700.00 |
| Payments of margin for futures trading | 23,440,407.33 | |
| Payments for equity exchange deposit to Property Rights Exchange Center | 36,000,000.00 | |
| Net cash outflows from disposal of subsidiaries | 1,450,610.39 | |
| Total | 5,398,900,000.00 | 4,789,881,717.72 |
5. Other cash receipts related to financing activities
| Items | Current period cumulative | Preceding period comparative |
| Receipts of payments for employee stock ownership plan | 228,995,320.75 | 180,000,000.00 |
| Factoring of accounts receivable with recourse right | 17,309,890.84 | 49,479,996.55 |
| Receipts of call loans | 44,250,000.00 | 3,600,000.00 |
| Total | 290,555,211.59 | 233,079,996.55 |
6. Other cash payments related to financing activities
| Items | Current period cumulative | Preceding period comparative |
| Repurchase of treasury shares | 446,383,180.08 | |
| Payments for factoring service fees and handling fees | 14,049,209.58 | 1,059,316.17 |
| Payments for rents | 6,227,752.76 | 6,345,974.18 |
| Recovery of call loans | 57,303,692.00 | |
| Prepaid IPO listing expenses | 5,703,500.00 | |
| Payments for employee stock ownership plan | 180,112,670.02 | |
| Others | 364,129.20 | |
| Total | 263,396,824.36 | 454,152,599.63 |
7. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
| Supplementary information | Current period cumulative | Preceding period comparative |
| 1) Reconciliation of net profit to cash flows from operating activities: | ||
| Net profit | 459,292,121.57 | 799,198,734.54 |
| Supplementary information | Current period cumulative | Preceding period comparative |
| Add: Provision for assets impairment loss | 417,835,657.08 | 329,316,315.94 |
| Depreciation of fixed assets, oil and gas assets, productive biological assets | 217,634,741.39 | 169,587,581.86 |
| Depreciation of right-of-use assets | 7,064,171.89 | 5,929,711.33 |
| Amortization of intangible assets | 458,736,681.20 | 364,198,624.40 |
| Amortization of long-term prepayments | 8,520,526.60 | 12,295,429.49 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (Less: gains) | -614,542.02 | 1,161,842.22 |
| Fixed assets retirement loss (Less: gains) | 2,904,223.18 | 541,693.71 |
| Losses on changes in fair value (Less: gains) | 73,074,674.05 | |
| Financial expenses (Less: gains) | 177,688,052.22 | 133,836,548.78 |
| Investment losses (Less: gains) | -24,239,932.54 | -240,822,713.67 |
| Decrease of deferred tax assets (Less: increase) | -4,814,568.19 | -14,295,043.84 |
| Increase of deferred tax liabilities (Less: decrease) | -8,354,405.89 | -44,875,587.45 |
| Decrease of inventories (Less: increase) | 226,633,956.56 | -51,110,526.14 |
| Decrease of operating receivables (Less: increase) | -409,725,335.43 | 632,657,980.48 |
| Increase of operating payables (Less: decrease) | 129,881,870.69 | -1,398,299,495.83 |
| Others [Note] | 4,039,069.40 | 36,822,950.26 |
| Net cash flows from operating activities | 1,662,482,287.71 | 809,218,720.13 |
| 2) Significant investing and financing activities not related to cash receipts and payments: | ||
| Conversion of debt into capital | ||
| Convertible bonds due within one year | ||
| Fixed assets leased in under finance leases | ||
| 3) Net changes in cash and cash equivalents: | ||
| Cash at the end of the period | 4,580,665,245.99 | 4,118,746,885.72 |
| Less: Cash at the beginning of the period | 4,118,746,885.72 | 4,657,826,099.23 |
| Add: Cash equivalents at the end of the period | ||
| Less: Cash equivalents at the beginning of the period | ||
| Net increase of cash and cash equivalents | 461,918,360.27 | -539,079,213.51 |
Note: Others refer to share-based payments and unrealized finance income of long-term receivables.
(2) Net cash payments for acquisition of subsidiaries in the current period
| Items | Current period cumulative |
| Cash and cash equivalents paid in the current period as consideration for business combination in the current period | 94,000,002.00 |
| Including: Yolsh Company | 10,000,002.00 |
| Lianjiang Company | 84,000,000.00 |
| Less: Cash and cash equivalents held by subsidiaries on the purchase date | 10,192,488.26 |
| Items | Current period cumulative |
| Including: Yolsh Company | 5,299,149.95 |
| Lianjiang Company | 4,893,338.31 |
| Net cash payments for acquisition of subsidiaries in the current period | 83,807,513.74 |
(3) Net cash receipts from disposal of subsidiaries in the current period
| Items | Current period cumulative |
| Cash and cash equivalents received in the current period for subsidiary disposal in the current period | |
| Less: Cash and cash equivalents held by subsidiaries at the loss-of-control date | |
| Add: Cash and cash equivalents received in the current period for subsidiary disposal in prior periods | 115,100,000.00 |
| Including: Foshan Yingtong Electrical Materials Co., Ltd. | 115,100,000.00 |
| Net cash receipts from disposal of subsidiaries in the current period | 115,100,000.00 |
(4) Composition of cash and cash equivalents
| Items | Closing balance | Opening balance |
| 1) Cash | 4,580,665,245.99 | 4,118,746,885.72 |
| Including: Cash on hand | 84,414.54 | 89,806.02 |
| Cash in bank on demand for payment | 4,580,210,453.03 | 4,118,371,038.72 |
| Other cash and bank balances on demand for payment | 370,378.42 | 286,040.98 |
| Central bank deposit on demand for payment | ||
| Deposit in other banks | ||
| Loans to other banks | ||
| 2) Cash equivalents | ||
| Including: Bond investments maturing within three months | ||
| 3) Cash and cash equivalents at the end of the period | 4,580,665,245.99 | 4,118,746,885.72 |
| Including: Cash and cash equivalents of parent company or subsidiaries with use restrictions |
On December 31, 2022, balance of cash and bank balances amounted to 4,728,203,530.46 yuan, while balance of cash and cashequivalents amounted to 4,580,665,245.99 yuan. The difference of 147,538,284.47 yuan included deposit for notes of 46,878,240.34yuan, deposit for letters of guarantee of 87,619,095.60 yuan, engineering deposits of 927,865.56 yuan, ETC deposits of 3,000.00yuan, deposits for buyer’s credit of 901,432.50 yuan, deposits for land reclamation of 1,000,832.05 yuan, funds frozen due tolawsuits of 1,100,000.00 yuan and engineering escrow accounts that are not available for separate use of 9,107,818.42 yuan, whichwas not cash and cash equivalents.
(5) Amount of endorsed commercial acceptance not involving cash receipts and payments
| Items | Current period cumulative | Preceding period comparative |
| Amount of endorsed commercial acceptance | 1,631,967,302.20 | 498,785,469.51 |
| Including: Payments for goods | 1,463,149,825.79 | 411,289,567.42 |
| Payments for acquisition of long-term assets, such as fixed assets | 168,817,476.41 | 87,495,902.09 |
(IV) Others
1. Assets with title or use right restrictions
| Items | Closing carrying amount | Reasons for restrictions |
| Cash and bank balances | 147,538,284.47 | Deposits, escrow accounts, frozen due to litigation preservation |
| Accounts receivable | 276,390,131.13 | Pledged |
| Notes receivable – bank acceptance | 2,732,733.00 | Endorsed or discounted but undue |
| Notes receivable – trade acceptance | 5,422,499.62 | Endorsed or discounted but undue |
| Receivables financing | 42,293,141.00 | Pledged |
| Long-term receivables and non-current assets due within one year | 66,716,222.75 | Factoring financing with recourse right |
| Fixed assets | 477,655,980.05 | Mortgaged |
| Intangible assets | 47,082,404.81 | Mortgaged |
| 100% equity of Funan Company | 69,631,957.01 | Pledged [Note] |
| 100% equity of Poyang Green Oriental Renewable Energy Co., Ltd. | 80,733,192.59 | |
| 50% equity of Lianjiang Company | 68,922,363.62 | |
| 100% equity of Biyang County Fenghe New Energy Power Co., Ltd. | 105,525,597.14 | |
| 25% equity of Lianjiang Company | 34,461,181.81 | Frozen due to litigation preservation |
| Total | 1,425,105,689.00 |
Note: The pledged amount refers to the Company’s proportionate share in net assets of each entity.
2. Monetary items in foreign currencies
| Items | Closing balance in foreign currencies | Exchange rate | RMB equivalent at the end of the period |
| Cash and bank balances | |||
| Including: USD | 4,694,035.77 | 6.9646 | 32,692,081.52 |
| EUR | 3,015,012.99 | 7.4229 | 22,380,139.92 |
| HKD | 2,719,595.11 | 0.8933 | 2,429,414.31 |
| Accounts receivable | |||
| Including: EUR | 1,061,170.00 | 7.4229 | 7,876,958.79 |
3. Government grants
(1) Details
1) Government grants related to assets
| Items | Opening balance of deferred income | Increase | Amortization | Closing balance of deferred income | Amortization presented under | Remarks |
| Xiantao sludge harmless treatment plant | 17,700,000.00 | 610,344.83 | 17,089,655.17 | Other income | Pursuant to the documents numbered Xian Fa Gai Huan Zi [2019] 116 and [2019] 150. | |
| Investment plan on the construction of ecological civilization of 2020 within the central budget | 2,200,000.00 | 880,000.00 | 94,189.60 | 2,985,810.40 | Other income | Pursuant to the document numbered Zhu Fa Gai Tou Zi [2020] 204. |
| No. 2 Sewage Treatment Plant and supporting pipe network projects in Daban Town, Bahrain Right | 7,660,000.00 | 7,660,000.00 | Other income | Pursuant to the document numbered Chi Cai Zhi Zi Huan [2019] 814. |
| Items | Opening balance of deferred income | Increase | Amortization | Closing balance of deferred income | Amortization presented under | Remarks |
| Banner | ||||||
| Special subsidies for Xiantao waste power generation project | 9,936,051.24 | 726,531.48 | 9,209,519.76 | Other income | Pursuant to the documents numbered E Cai Jian Fa [2015] 199 and Huai Fa Gai Zi Huan [2016] 188. | |
| Shouxian domestic waste incineration power plant project | 13,034,666.58 | 1,002,666.73 | 12,031,999.85 | Other income | Pursuant to the documents numbered Huai Fa Gai Zi Huan [2016] 188 and Cai Jian [2017] 569. | |
| Urban sewage and garbage treatment facilities and sewage pipe network engineering projects | 4,456,150.42 | 441,822.07 | 4,014,328.35 | Other income | Pursuant to the document numbered Fa Gai Huan Zi [2015] 431. | |
| Development, demonstration and application of time of flight mass spectrometry for soft ionization-high resolution on-line detection of atmospheric VOCS | 354,166.67 | 141,666.72 | 212,499.95 | Other income | Pursuant to the document numbered Shun Ke Fa [2021] 29. | |
| Research and application of water quality and environment monitoring technology | 1,400,000.00 | 466,666.68 | 933,333.32 | Other income | Pursuant to the document numbered Fo Ke [2021] 27. | |
| R&D and application project of water quality comprehensive toxicity rapid monitoring instrument based on electrochemically active microorganisms | 2,320,000.00 | 890,000.00 | 1,430,000.00 | Pursuant to the document numbered Yue Ke Zi Zi [2022] 145. | ||
| Urban and rural domestic waste transfer, kitchen waste resource utilization and harmless treatment projects | 10,847,931.04 | 388,620.69 | 10,459,310.35 | Other income | Pursuant to the document numbered Xian Fa Gai Huan Zi [2020] 84. | |
| Subsidies for enterprise technological transformation | 714,285.72 | 142,857.14 | 571,428.58 | Other income | Pursuant to the document numbered Chang Gao Xin Guan Fa [2017] 33. | |
| Subsidies for key projects of enterprise intelligent transformation of 2018 - 2020 | 1,527,957.44 | 203,061.88 | 1,324,895.56 | Other income | Pursuant to the document numbered Qu Wei Ban [2019] 36. | |
| Funds for provincial “Kunpeng Action” plan | 1,055,749.60 | 800,000.00 | 360,917.96 | 1,494,831.64 | Other income | Pursuant to the document numbered Zhe Wei Ban Fa [2020] 8. |
| Incremental tax incentives for technological transformation | 7,586,240.00 | 948,280.00 | 6,637,960.00 | Other income | Pursuant to the document numbered Xiang Gong Xin Tou Zi [2019] 57. | |
| The second batch of awards for rental housing in the high-tech zone | 5,743,156.33 | 165,270.68 | 5,577,885.65 | Other income | Pursuant to the document numbered Chang Zhu Zu Tong [2020] 5. |
| Items | Opening balance of deferred income | Increase | Amortization | Closing balance of deferred income | Amortization presented under | Remarks |
| The third batch of municipal subsidies for technological transformation of industrial enterprises | 4,562,500.00 | 500,000.00 | 4,062,500.00 | Other income | Pursuant to the document numbered Chang Gong Xin Tou Zi Fa [2020] 72. | |
| The fifth batch of special funds for raising manufacturing power in Hunan Province | 1,000,000.00 | 297,520.66 | 702,479.34 | Other income | Pursuant to the document numbered Xiang Cai Qi Zhi [2019] 72. | |
| Special funds for air pollution prevention and control | 800,000.00 | 100,000.00 | 700,000.00 | Other income | Pursuant to the document numbered Chang Cai Zi Huan Zhi [2019] 41. | |
| Special subsidies for construction and application of industrial Internet platform | 416,444.76 | 94,781.44 | 321,663.32 | Other income | Pursuant to the document numbered Chang Cai Qi Zhi [2021] 62. | |
| The third batch of special funds for raising manufacturing power in Hunan Province of 2021 | 416,444.76 | 94,781.44 | 321,663.32 | Other income | Pursuant to the document numbered Chang Cai Qi Zhi [2021] 54. | |
| The fourth batch of special funds for raising manufacturing power in Hunan Province of 2021 | 129,558.22 | 13,381.99 | 116,176.23 | Other income | Pursuant to the document numbered Chang Cai Qi Zhi [2021] 55. | |
| Special funds for provincial modern service industry of Hi-tech District | 94,689.87 | 28,569.01 | 66,120.86 | Other income | Pursuant to the document numbered Chang Fa Gai Fu Wu [2020] 284. | |
| Integrated construction of intelligent equipment and intelligent sanitation services of Infore Zoomlion | 30,400,000.00 | 304,680.09 | 30,095,319.91 | Other income | Special funds for the integration of advanced manufacturing and modern service industries of 2021 from National Development and Reform Commission. | |
| The second batch of subsidized loans for industrial technology transformation in Changsha of 2021 | 1,939,750.00 | 68,421.52 | 1,871,328.48 | Other income | Pursuant to the document numbered Chang Cai Qi Zhi [2022] 15. | |
| The fifth batch of special funds for raising manufacturing power in Hunan Province of 2022 | 1,000,000.00 | 1,000,000.00 | Other income | Pursuant to the document numbered Chang Cai Qi Zhi [2022] 53. | ||
| Subtotal | 91,635,992.65 | 37,339,750.00 | 8,085,032.61 | 120,890,710.04 |
2) Government grants related to income and used to compensate future relevant costs, expenses or losses
| Items | Opening balance of deferred income | Increase | Amounts carried forward | Decrease | Closing balance of deferred income | Amounts carried forward presented under | Remarks |
| Central special construction supporting funds for Kaili PPP Project | 10,000,000.00 | 10,000,000.00 | Other non-current liabilities | Pursuant to the “Agreement on the Appropriation of Central Special Construction Funds for PPP Project Phase II of Kaili Municipal Domestic |
| Items | Opening balance of deferred income | Increase | Amounts carried forward | Decrease | Closing balance of deferred income | Amounts carried forward presented under | Remarks |
| Waste Collection and Transportation System”. | |||||||
| Subtotal | 10,000,000.00 | 10,000,000.00 |
2) Government grants related to income and used to compensate incurred relevant costs, expenses or losses
| Items | Amount | Presented under | Remarks |
| VAT refund | 18,822,951.14 | Other income | |
| Enterprise supporting funds | 15,420,000.00 | Other income | Pursuant to the document numbered Yong Mei Bao Jing [2019] 10. |
| Subsidies for new energy vehicles | 9,558,600.00 | Other income | Pursuant to the document numbered Chang Zheng Ban Han [2019] 11. |
| Subsidies for energy conservation and emission reduction of 2022 | 7,300,000.00 | Other income | Pursuant to the document numbered Chang Cai Qi Zhi [2022] 16. |
| Subsidies for “Kunpeng Action” plan | 6,200,000.00 | Other income | Pursuant to the document numbered Zhe Wei Ban Fa [2020] 8. |
| Subsidies for stabilizing employment | 3,850,018.51 | Other income | Pursuant to the document numbered Ren She Bu Fa [2022] 31. |
| Realization of industrial policies of Hi-tech District of 2021 | 3,600,000.00 | Other income | Pursuant to the “Notice on Applying for Supporting Items under Changsha Hi-tech District Policy in 2021”. |
| Funds for ecological torch plan of Changsha intelligent vehicle industry | 2,703,100.00 | Other income | Pursuant to the document numbered Chang Zheng Ban Fa [2020] 12. |
| Special funds for raising manufacturing power in Hunan Province | 2,500,000.00 | Other income | Pursuant to the document numbered Chang Cai Qi Zhi [2022] 45. |
| Subsidies for sludge treatment | 2,584,059.14 | Other income | Pursuant to the document numbered Shun Guan [2010] 238. |
| Awards for purchasing local auxiliary products | 2,100,000.00 | Other income | Pursuant to the document numbered Chang Cai Qi Zhi [2022] 50. |
| Promotion and application of new energy vehicles in 2020 and previous years | 2,000,000.00 | Other income | Pursuant to the document numbered Chang Cai Qi Zhi [2022] 54. |
| R&D fund awards | 1,692,000.00 | Other income | Pursuant to the document numbered Xiang Ke Ji [2021] 13. |
| Subsidies for stabilizing employment and entrepreneurship | 1,411,493.00 | Other income | Pursuant to the document numbered Yue Ren She Gui [2021] 12. |
| Subsidies for strong cluster chains | 1,000,000.00 | Other income | Pursuant to the document numbered Qu Wei Ban [2021] 57. |
| The second batch of awards for talent and science and technology | 1,000,000.00 | Other income | Pursuant to the document numbered Chang Ke Fa [2021] 3. |
| Subsidies for talent policy | 2,000,000.00 | Other income | Pursuant to the document numbered Qu Wei Ban [2021] 57. |
| Capital market supporting awards | 1,000,000.00 | Other income | Pursuant to the document numbered Qu Wei [2016] 53. |
| Awards for enterprises above designated scale | 950,000.00 | Other income | Pursuant to the documents numbered Fo Gong Xin Han [2021] 517, [2022] 439, [2021] 382, and Shun Jing Han [2022] 234, [2021] 629. |
| Awards for enterprise cultivation | 600,000.00 | Other income | Pursuant to the document numbered Qu Wei Ban [2021] 57. |
| Awards for military-civilian integration policy | 468,551.00 | Other income |
Pursuant to the document “Notice onCarrying Out the Implementation ofMilitary-civilian Integration Policy inShangyu District in 2021”.
| Subsidies for high-level talents | 359,982.22 | Other income | Pursuant to the document numbered Yu Qu Ren Ling [2017] 2. |
| Subsidies for stabilizing employment of Hi-tech District | 269,000.00 | Other income | Pursuant to the document numbered Chang Gao Xin Guan Fa [2022] 4. |
| Items | Amount | Presented under | Remarks |
| The second batch of subsidies and awards for accredited hi-tech enterprises in Changsha of 2020 | 200,000.00 | Other income | Pursuant to the document numbered Chang Ke Fa [2019] 51. |
| Provincial air quality ecological compensation funds | 200,000.00 | Other income | Pursuant to the document numbered E Cai Huan Fa [2021] 31. |
| Awards for Changsha green manufacturing system construction project of 2021 | 200,000.00 | Other income | Pursuant to the document numbered Chang Cai Qi Zhi [2022] 43. |
| Awards for frontrunner of average benefit per mu | 200,000.00 | Other income | Pursuant to the document numbered Qu Wei Ban [2021] 57. |
| Subsidies for vocational skill enhancement | 186,960.00 | Other income | Pursuant to the document numbered Shao Shi Ren She Fa [2020] 9. |
| Subsidies for talent program | 150,000.00 | Other income | Pursuant to the document numbered Fo Zu Tong [2022] 49. |
| Awards for academician workstations | 150,000.00 | Other income | Pursuant to the document numbered Shao Shi Ke Xie [2021] 10. |
| Awards for acceleration of scientific and technological innovation and modern service industry | 130,000.00 | Other income | Pursuant to the document numbered Qu Wei Ban [2021] 57. |
| Industrial and trade economic development incentives | 101,200.00 | Other income | Pursuant to the document numbered Cao Gong Wei [2019] 166. |
| Awards for accreditation projects under scientific and technological innovation policy | 90,000.00 | Other income | Pursuant to the document numbered Qu Wei Ban [2021] 57. |
| Subsidies for employment and internship of college students | 34,665.20 | Other income | Pursuant to the document numbered Qu Wei [2019] 52. |
| Enterprise supporting funds | 30,000.00 | Other income | Pursuant to the document numbered Zhu Fa Gai Tou Zi [2020] 204. |
| Other piecemeal subsidies | 4,527,439.28 | Other income | |
| Subtotal | 93,590,019.49 |
(2) In the current period, government grants included into profit or loss totaled 101,675,052.10 yuan.
VI. Changes in the consolidation scope(I) Business combination not under common control
1. Business combination not under common control in the current period
(1) Basic information
| Acquirees | Equity acquisition date | Equity acquisition cost | Proportion of equity acquired (%) | Equity acquisition method |
| Yolsh Company | 4/30/2022 | 50,000,002.00 | 70.00 | Business combination not under common control |
| Lianjiang Company | 9/17/2015 | 43,750,000.00 | 35.00 | Business combination not under common control |
| 2/28/2022 | 120,000,000.00 | 50.00 |
(Continued)
| Acquirees | Acquisition date | Determination basis for acquisition date | Acquiree’s income from acquisition date to period end | Acquiree’s net profit from acquisition date to period end |
| Yolsh Company | 4/30/2022 | The equity transfer is completed and relevant handover procedures are finished | 49,388,868.87 | -8,190,158.87 |
| Lianjiang Company | 2/28/2022 | 42,873,081.36 | 2,537,111.74 |
2. Combination costs and goodwill
(1) Details
| Items | Yolsh Company | Lianjiang Company |
| Combination costs | 50,000,002.00 | 240,000,000.00 |
| Cash | 50,000,002.00 | 120,000,000.00 |
| Acquisition-date fair value of equity held before the acquisition date | 120,000,000.00 | |
| Total combination costs | 50,000,002.00 | 240,000,000.00 |
| Less: Share of fair value of net identifiable assets acquired | 36,610,769.39 | 193,967,982.16 |
| Goodwill | 13,389,232.61 | 46,032,017.84 |
3. Acquisition-date identifiable assets and liabilities of acquirees
(1) Details
| Items | Yolsh Company [Note] | Lianjiang Company | ||
| Acquisition-date fair value | Acquisition-date carrying amount | Acquisition-date fair value | Acquisition-date carrying amount | |
| Assets | ||||
| Cash and bank balances | 5,299,149.95 | 5,299,149.95 | 4,893,338.31 | 4,893,338.31 |
| Notes receivable | 271,130.00 | 271,130.00 | ||
| Accounts receivable | 15,757,462.39 | 15,757,462.39 | 29,888,953.53 | 29,888,953.53 |
| Receivables financing | 840,948.31 | 840,948.31 | ||
| Advances paid | 562,705.85 | 562,705.85 | 66,217.14 | 66,217.14 |
| Other receivables | 7,910,153.57 | 7,910,153.57 | 4,615,314.47 | 4,615,314.47 |
| Inventories | 20,099,445.54 | 20,099,445.54 | 3,094,224.43 | 3,094,224.43 |
| Contract assets | 34,495.56 | 34,495.56 | ||
| Other current assets | 3,492,951.91 | 3,492,951.91 | ||
| Fixed assets | 17,428,908.65 | 17,428,908.65 | 2,186,840.34 | 2,186,840.34 |
| Construction in progress | 4,454,334.01 | 4,454,334.01 | 3,796,874.62 | 3,796,874.62 |
| Right-of-use assets | 1,931,035.27 | 1,931,035.27 | ||
| Intangible assets | 1,196,518.08 | 1,196,518.08 | 325,069,114.54 | 205,069,114.54 |
| Long-term prepayments | 512,670.00 | 512,670.00 | 2,798,988.13 | 2,798,988.13 |
| Deferred tax assets | 196,637.85 | 196,637.85 | ||
| Other non-current assets | 655,300.17 | 655,300.17 | 9,551.32 | 9,551.32 |
| Liabilities | ||||
| Short-term borrowings | 15,534,884.77 | 15,534,884.77 | ||
| Accounts payable | 21,185,688.75 | 21,185,688.75 | 36,364,819.11 | 36,364,819.11 |
| Contract liabilities | 2,412,975.42 | 2,412,975.42 | ||
| Employee benefits payable | 1,897,556.15 | 1,897,556.15 | 986,052.40 | 986,052.40 |
| Taxes and rates payable | 209,143.28 | 209,143.28 | 4,660,003.12 | 4,660,003.12 |
| Other payables | 41,383,842.93 | 41,383,842.93 | 25,979,380.96 | 25,979,380.96 |
| Other current liabilities | 313,686.80 | 313,686.80 | ||
| Items | Yolsh Company [Note] | Lianjiang Company | ||
| Acquisition-date fair value | Acquisition-date carrying amount | Acquisition-date fair value | Acquisition-date carrying amount | |
| Lease liabilities | 1,217,134.58 | 1,217,134.58 | ||
| Long-term payables | 2,368,245.54 | 2,368,245.54 | ||
| Long-term borrowings | 88,150,768.84 | 88,150,768.84 | ||
| Deferred tax liabilities | 30,000,000.00 | |||
| Capital increase by shareholders [Note] | 61,870,000.00 | |||
| Net assets | 52,301,099.13 | -9,568,900.87 | 193,967,982.16 | 103,967,982.16 |
| Less: Non-controlling interest | ||||
| Net assets acquired | 52,301,099.13 | -9,568,900.87 | 193,967,982.16 | 103,967,982.16 |
Note: On April 30, 2022, the Company’s subsidiary Guangdong Infore Environmental Investment Co., Ltd. acquired part of theequity of Yolsh Company at a consideration of 2 yuan, and increased its capital by 61.87 million yuan together with originalshareholders after the acquisition, which were considered as a bundled transaction, and these two transactions as a whole areconsidered as one transaction for obtaining the control in the accounting treatment.
4. Gains/Losses on fair value remeasurement of equity held before the acquisition date
| Acquirees | Acquisition-date carrying amount of equity held before the acquisition date | Acquisition-date fair value of equity held before the acquisition date | Gains/Losses on fair value remeasurement of equity held before the acquisition date | Determination method and major assumptions on acquisition-date fair value of equity held before the acquisition date | Changes in other comprehensive income/equity related to equity held before the acquisition date transferred to investment income/ retained earnings |
| Lianjiang Company | 32,103,685.75 | 84,000,000.00 | 51,896,314.25 | Purchase price |
(II) Changes in the consolidation scope due to other reasons
1. Entities brought into the consolidation scope
| No. | Entities | Equity acquisition method | Equity acquisition date | Capital contribution | Capital contribution proportion (%) |
| 1 | Shaodong Tongying Environmental Sanitation Management Co., Ltd. | Set up | 1/7/2022 | 283,200.00 | 100.00 |
| 2 | Xiangyin County Yingsheng Environmental Protection Co., Ltd. | Set up | 1/24/2022 | 500,000.00 | 100.00 |
| 3 | Shengzhou Yinglia Environmental Sanitation Management Co., Ltd. | Set up | 1/19/2022 | 100,000.00 | 100.00 |
| 4 | Guilin Yingsheng Environmental Sanitation Management Co., Ltd. | Set up | 1/28/2022 | [Note] | 100.00 |
| 5 | Guiyang Yinglian Environmental Equipment Co., Ltd. | Set up | 2/11/2022 | [Note] | 100.00 |
| 6 | Taicang Zhongying Environmental Technology Co., Ltd. | Set up | 2/21/2022 | [Note] | 100.00 |
| 7 | Baoding Yinghe Environmental Sanitation Management Co., Ltd. | Set up | 2/28/2022 | 500,000.00 | 100.00 |
| 8 | Wenshui County Yingsheng Environmental Sanitation Service Co., Ltd. | Set up | 2/16/2022 | 500,000.00 | 100.00 |
| 9 | Maoming Yinghe Urban Environmental Sanitation Service Co., Ltd. | Set up | 1/4/2022 | 7,000,000.00 | 100.00 |
| 10 | Wushan County Tongying Environmental Sanitation Service Co., Ltd. | Set up | 2/14/2022 | 500,000.00 | 100.00 |
| No. | Entities | Equity acquisition method | Equity acquisition date | Capital contribution | Capital contribution proportion (%) |
| 11 | Harbin Tongying Environmental Sanitation Management Co., Ltd. | Set up | 3/23/2022 | 200,000.00 | 100.00 |
| 12 | Pengshui County Yingchuang Environmental Sanitation Service Co., Ltd. | Set up | 3/11/2022 | 500,000.00 | 100.00 |
| 13 | Bengbu Tongying Environmental Sanitation Management Co., Ltd. | Set up | 1/29/2022 | 200,000.00 | 100.00 |
| 14 | Daye Tongying Environmental Service Co., Ltd. | Set up | 4/11/2022 | 100,000.00 | 100.00 |
| 15 | Urumqi Lianying Urban Environmental Service Co., Ltd. | Set up | 6/2/2022 | 2,000,000.00 | 100.00 |
| 16 | Baoting Tongying Environmental Sanitation Service Co., Ltd. | Set up | 6/8/2022 | 100,000.00 | 100.00 |
| 17 | Zhaoqing Duanzhou District Zhongying Urban Environmental Management Co., Ltd. | Set up | 5/25/2022 | [Note] | 100.00 |
| 18 | Zhanjiang Development Zone Zhongying Urban Environmental Service Co., Ltd. | Set up | 6/10/2022 | 1,000,000.00 | 100.00 |
| 19 | Shaoxing Lianbao Environmental Sanitation Management Co., Ltd. | Set up | 5/27/2022 | 100,000.00 | 100.00 |
| 20 | Xingguo County Yinghe Environmental Sanitation Management Co., Ltd. | Set up | 6/9/2022 | 300,000.00 | 100.00 |
| 21 | Huaibei Tongying Environmental Sanitation Management Co., Ltd. | Set up | 4/12/2022 | 33,000,000.00 | 100.00 |
| 22 | Yongzhou Lingling District Tongying Environmental Sanitation Service Co., Ltd. | Set up | 6/21/2022 | [Note] | 100.00 |
| 23 | Shaoyang Tongying Environmental Sanitation Service Co., Ltd. | Set up | 5/10/2022 | 100,000.00 | 100.00 |
| 24 | Jianli Yinglian Environmental Sanitation Management Co., Ltd. | Set up | 4/29/2022 | 100,000.00 | 100.00 |
| 25 | Suzhou Gusu District Zhongying Environmental Industry Co., Ltd. | Set up | 6/9/2022 | [Note] | 100.00 |
| 26 | Guangzhou Zengcheng District Yinghe Urban Environmental Service Co., Ltd. | Set up | 5/24/2022 | [Note] | 100.00 |
| 27 | Baishan Yingyuan Environmental Service Engineering Co., Ltd. | Set up | 6/9/2022 | 200,000.00 | 100.00 |
| 28 | Shenzhen Longhua District Yinglian Urban Service Co., Ltd. | Set up | 7/5/2022 | 3,000,000.00 | 100.00 |
| 29 | Guzhang County Yinglian Environmental Sanitation Management Co., Ltd. | Set up | 6/28/2022 | 7,200,000.00 | 100.00 |
| 30 | Changshu Zhongying Environmental Sanitation Service Co., Ltd. | Set up | 4/26/2022 | [Note] | 100.00 |
| 31 | Suining Anju Yinglian Environmental Sanitation Service Co., Ltd. | Set up | 7/7/2022 | 200,000.00 | 100.00 |
| 32 | Jieyang Yingdong Urban Environmental Management Co., Ltd. | Set up | 7/7/2022 | [Note] | 100.00 |
| 33 | Tongdao Yinglian Jiamei Environmental Industry Co., Ltd. | Set up | 7/5/2022 | 2,652,000.00 | 51.00 |
| 34 | Heyang Yinglian Urban Environmental Service Co., Ltd. | Set up | 7/19/2022 | 1,000,000.00 | 100.00 |
| 35 | Ninghai County Tongying Environmental Sanitation Management Co., Ltd. | Set up | 8/10/2022 | 100,000.00 | 100.00 |
| 36 | Zhanjiang Potou District Yingsheng Environmental Sanitation Management Co., Ltd. | Set up | 8/24/2022 | [Note] | 100.00 |
| 37 | Liaoyang Yinglian Urban Environmental Sanitation | Set up | 8/10/2022 | 3,000,000.00 | 100.00 |
| No. | Entities | Equity acquisition method | Equity acquisition date | Capital contribution | Capital contribution proportion (%) |
| Management Co., Ltd. | |||||
| 38 | Linqing Yinglian Urban Environmental Service Co., Ltd. | Set up | 8/3/2022 | 1,000,000.00 | 100.00 |
| 39 | Zhanjiang Xiashan District Yinghe Urban Environmental Management Co., Ltd. | Set up | 8/8/2022 | [Note] | 100.00 |
| 40 | Haicheng Zhongying Environmental Sanitation Management Co., Ltd. | Set up | 9/8/2022 | 8,000,000.00 | 100.00 |
| 41 | Foshan Shunde District Yingjia Urban Environmental Service Co., Ltd. | Set up | 9/5/2022 | 1,680,000.00 | 70.00 |
| 42 | Xiamen Yingsheng Environmental Service Co., Ltd. | Set up | 9/8/2022 | 500,000.00 | 100.00 |
| 43 | Nanfeng Yingniang Environmental Sanitation Management Co., Ltd. | Set up | 9/15/2022 | 255,000.00 | 51.00 |
| 44 | Tengchong Yinglian Environmental Protection Technology Co., Ltd. | Set up | 9/22/2022 | 200,000.00 | 100.00 |
| 45 | Chuzhou Yingsheng Environmental Sanitation Management Co., Ltd. | Set up | 10/20/2022 | 500,000.00 | 100.00 |
| 46 | Fuyang Yingsheng Environmental Sanitation Management Co., Ltd. | Set up | 10/14/2022 | 300,000.00 | 100.00 |
| 47 | Changsha Zhiying Environmental Sanitation Management Co., Ltd. | Set up | 10/9/2022 | 300,000.00 | 60.00 |
| 48 | Foshan Shunde District Yingzhi Smart City Environmental Service Co., Ltd. | Set up | 12/14/2022 | [Note] | 100.00 |
| 49 | Pingdingshan Yingsheng Environmental Sanitation Management Co., Ltd. | Set up | 11/10/2022 | [Note] | 100.00 |
| 50 | Chenzhou Zhongying Environmental Service Co., Ltd. | Set up | 11/21/2022 | 600,000.00 | 100.00 |
| 51 | Zhenfeng Yinglian Environmental Sanitation Management Co., Ltd. | Set up | 12/6/2022 | [Note] | 100.00 |
| 52 | Linfen Yaodu District Yingsheng Environmental Sanitation Management Co., Ltd. | Set up | 12/12/2022 | [Note] | 100.00 |
| 53 | Fuyang Zhiying Environmental Sanitation Management Co., Ltd. | Set up | 11/24/2022 | 300,000.00 | 100.00 |
| 54 | Chengdu Yinggang Urban Environmental Sanitation Service Co., Ltd. | Set up | 12/7/2022 | [Note] | 100.00 |
| 55 | Foshan Shunde District Yingteng Smart City Environmental Service Co., Ltd. | Set up | 12/9/2022 | 1,500,000.00 | 100.00 |
| 56 | Qingyang County Yinghe Environmental Sanitation Management Co., Ltd. | Set up | 11/30/2022 | [Note] | 100.00 |
| 57 | Changsha Fenglan Environmental Protection Technology Co., Ltd. | Set up | 1/26/2022 | [Note] | 100.00 |
| 58 | Changsha Infore Environmental Industry Co., Ltd. | Set up | 1/6/2022 | [Note] | 100.00 |
| 59 | Hubei Fenghe New Materials Co., Ltd. | Set up | 9/26/2022 | [Note] | 100.00 |
| 60 | Heyang Zhongying Environmental Sanitation Management Co., Ltd. | Set up | 9/19/2022 | [Note] | 100.00 |
| 61 | Lanling County Lianying Environmental Sanitation Service Co., Ltd. | Set up | 11/4/2022 | 1,000,000.00 | 100.00 |
| 62 | Pingdingshan Yinghe Environmental Sanitation Management Co., Ltd. | Set up | 11/30/2022 | [Note] | 100.00 |
| 63 | Shenzhen Infore City Service Intelligent Technology Co., Ltd. | Set up | 3/25/2022 | [Note] | 100.00 |
| No. | Entities | Equity acquisition method | Equity acquisition date | Capital contribution | Capital contribution proportion (%) |
| 64 | Guangdong Infore Mobile Charging Technology Co., Ltd. | Set up | 1/12/2022 | [Note] | 100.00 |
| 65 | Guangdong Infore Intelligent Cleaning Technology Co., Ltd. | Set up | 8/12/2022 | 200,000.00 | 100.00 |
| 66 | Changfeng County Yinghe Environmental Sanitation Management Co., Ltd. | Set up | 12/16/2022 | [Note] | 100.00 |
Note: As of December 31, 2022, these companies’ registered capitals have not been contributed.
2. Entities excluded from the consolidation scope
| Entities | Equity disposal method | Equity disposal date |
| Zoomlion Heavy (Ningxia) Environmental Industry Co., Ltd. | Cancellation | 3/14/2022 |
| Guangdong Yinglian Urban Environmental Management Co., Ltd. | Cancellation | 6/15/2022 |
| Dali County Zoomlion Environmental Industry Co., Ltd. | Cancellation | 6/17/2022 |
| Kunming Zhongfeng Environmental Sanitation Equipment Co., Ltd. | Cancellation | 7/26/2022 |
| Changsha Fenglan Environmental Protection Technology Co., Ltd. | Cancellation | 7/25/2022 |
| Foshan Yinghe Investment Co., Ltd. | Cancellation | 11/18/2022 |
VII. Interest in other entities(I) Interest in significant subsidiaries
1. Significant subsidiaries
| Subsidiaries | Main operating place | Place of registration | Business nature | Holding proportion (%) | Acquisition method | |
| Direct | Indirect | |||||
| Shangfeng Industrial Company | Shaoxing, Zhejiang | Shaoxing, Zhejiang | Fan equipment manufacturing and others | 60.20 | Business combination not under common control | |
| Green Oriental Company | Shenzhen, Guangdong | Shenzhen, Guangdong | Environmental monitoring and solid waste treatment | 70.00 | Business combination not under common control | |
| Funan Company | Funan, Anhui | Funan, Anhui | Environmental monitoring and solid waste treatment | 70.00 | Business combination not under common control | |
| Xiantao Green Oriental Environmental Power Generation Co., Ltd. (the “Xiantao Company”) | Xiantao, Hubei | Xiantao, Hubei | Environmental monitoring and solid waste treatment | 70.00 | Business combination not under common control | |
| Shouxian Green Oriental New Energy Co., Ltd. (the “Shouxian Company”) | Shouxian, Anhui | Shouxian, Anhui | Environmental monitoring and solid waste treatment | 70.00 | Business combination not under common control | |
| Xiantao Yinghe Environmental Protection Co., Ltd. | Xiantao, Hubei | Xiantao, Hubei | Environmental monitoring and solid waste treatment | 74.88 | 5.70 | Set up |
| Infore Technology Company | Foshan, Guangdong | Foshan, Guangdong | Environmental monitoring and solid waste treatment | 100.00 | Set up | |
| Foshan Infore Environmental Water Treatment Co., Ltd. | Foshan, Guangdong | Foshan, Guangdong | Environmental monitoring and solid waste treatment | 100.00 | Business combination not under common control | |
| Subsidiaries | Main operating place | Place of registration | Business nature | Holding proportion (%) | Acquisition method | |
| Direct | Indirect | |||||
| Huaqingyuan Company | Foshan, Guangdong | Foshan, Guangdong | Environmental monitoring and solid waste treatment | 100.00 | Business combination not under common control | |
| Foshan Shunde District Huaying Environmental Water Co., Ltd. | Foshan, Guangdong | Foshan, Guangdong | Environmental monitoring and solid waste treatment | 100.00 | Business combination not under common control | |
| Foshan Shunde District Yuanrun Water Environmental Protection Co., Ltd. | Foshan, Guangdong | Foshan, Guangdong | Environmental monitoring and solid waste treatment | 100.00 | Business combination not under common control | |
| Foshan Shunde Huabo Environmental Water Co., Ltd. | Foshan, Guangdong | Foshan, Guangdong | Environmental monitoring and solid waste treatment | 100.00 | Business combination not under common control | |
| Zoomlion Environmental Company | Changsha, Hunan | Changsha, Hunan | Smart sanitation | 100.00 | Business combination under common control | |
| Changsha Zoomlion Changgao Environmental Industry Co., Ltd. | Changsha, Hunan | Changsha, Hunan | Smart sanitation | 100.00 | Set up | |
| Fujian Nan’an Infore Urban Environmental Service Co., Ltd. | Changsha, Hunan | Changsha, Hunan | Smart sanitation | 80.00 | Set up | |
| Zhangjiajie Zoomlion Environmental Industry Co., Ltd. | Zhangjiajie, Hunan | Zhangjiajie, Hunan | Smart sanitation | 90.00 | Set up | |
| Cili County Zoomlion Huabao Environmental Industry Co., Ltd. | Cili, Hunan | Cili, Hunan | Smart sanitation | 60.00 | Set up | |
| Hanshou Zoomlion Environmental Industry Co., Ltd. | Hanshou, Hunan | Hanshou, Hunan | Smart sanitation | 90.00 | Set up | |
| Longhui County Zoomlion Environmental Industry Co., Ltd. | Longhui, Hunan | Longhui, Hunan | Smart sanitation | 100.00 | Set up | |
| Shimen Zoomlion Environmental Industry Co., Ltd. | Shimen, Hunan | Shimen, Hunan | Smart sanitation | 90.00 | Set up | |
| Ningbo Infore Finance Lease Co., Ltd. | Ningbo, Zhejiang | Ningbo, Zhejiang | Finance lease | 99.31 | 0.69 | Set up |
(II) Transactions resulting in changes in subsidiaries’ equity but without losing control
1. Changes in subsidiaries’ equity
| Subsidiaries | Date of change | Holding proportion before change | Holding proportion after change |
| Liling Zhaoyang Environmental Protection Co., Ltd. | April 2022 | 85.00% | 90.00% |
2. Effect of transactions on non-controlling interest and equity attributable to parent company
| Items | Liling Zhaoyang Environmental Protection Co., Ltd. |
| Acquisition costs | |
| Cash | 12,000,000.00 |
| Total acquisition costs | 12,000,000.00 |
| Less: Share in subsidiaries’ net assets based on acquired net assets proportion | 10,318,240.61 |
| Items | Liling Zhaoyang Environmental Protection Co., Ltd. |
| Balance | 1,681,759.39 |
| Including: Capital reserve adjusted | 1,681,759.39 |
(III) Interest in joint ventures or associates
1. Significant associates
| Associates | Main operating place | Place of registration | Business nature | Holding proportion (%) | Accounting treatment on investments in joint ventures or associates | |
| Direct | Indirect | |||||
| Foshan Yingtong Electrical Materials Co., Ltd. | Foshan | Foshan | manufacturing | 49.00 | Equity method | |
2. Main financial information of significant associates
| Items | Closing balance/ Current period cumulative | Opening balance/ March to December 2021 |
| Foshan Yingtong Electrical Materials Co., Ltd. | Foshan Yingtong Electrical Materials Co., Ltd. | |
| Current assets | 1,089,506,862.74 | 1,217,742,853.56 |
| Non-current assets | 201,274,064.95 | 207,896,682.32 |
| Total assets | 1,290,780,927.69 | 1,425,639,535.88 |
| Current liabilities | 691,609,958.01 | 785,232,779.36 |
| Non-current liabilities | 520,544.08 | 543,576.58 |
| Total liabilities | 692,130,502.09 | 785,776,355.94 |
| Non-controlling interest | 68,425,663.17 | 72,189,124.88 |
| Equity attributable to owners of parent company | 530,224,762.44 | 567,674,055.06 |
| Proportionate share in net assets | 259,810,133.60 | 278,160,286.98 |
| Adjustments | ||
| Others | -30,876,879.51 | -27,872,012.67 |
| Carrying amount of investments in associates | 228,933,254.09 | 250,288,274.31 |
| Operating revenue | 2,238,921,694.12 | 2,995,793,551.09 |
| Net profit | -44,464,542.43 | 13,526,119.01 |
3. Aggregated financial information of insignificant joint ventures and associates
| Items | Closing balance/ Current period cumulative | Opening balance/ Preceding period comparative |
| Associates | ||
| Total carrying amount of investments | 447,896,705.75 | 353,292,507.00 |
| Net profit | 31,671,037.49 | 31,596,860.77 |
| Other comprehensive income | ||
| Total comprehensive income | 31,671,037.49 | 31,596,860.77 |
VIII. Risks related to financial instruments
In risk management, the Company aims to seek the appropriate balance between the risks and benefits from its use of financial
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’srisk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits andcontrols, 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 riskCredit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to dischargean 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 significantlysince initial recognition. When assessing whether the credit risk has increased significantly since initial recognition, the Companytakes into account reasonable and supportable information, which is available without undue cost or effort, including qualitative andquantitative analysis based on historical data, external credit risk rating, and forward-looking information. The Company determinesthe changes in default risk of financial instruments during the estimated lifetime through comparison of the default risk at the balancesheet 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 followingqualitative 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 theremaining 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 orexpected changes in technology, market, economy or legal environment that will have significant adverse impact on the debtor’srepayment 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 isconsistent 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 tothe 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 todefault risk. The Company develops a model of the probability of default, loss given default, and exposure to default risk on the basisof quantitative analysis of historical data (e.g. counterparty rating, guarantee measures and collateral type, payment method, etc.) andforward-looking information.
3. Please refer to section V (I) 2, 3, 6, 8, 11, and 23 of the notes to the financial statements for details on the reconciliationstatement of opening balance and closing balance of provision for losses of financial instrument.
4. Exposure to credit risk and concentration of credit risk
The Company’s credit risk is primarily attributable to cash and bank balances and receivables. In order to control such risks, theCompany 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 creditlevels, hence, its credit risk is relatively low.
(2) Receivables
The Company performs credit assessment on customers using credit settlement on a regular basis. The Company selects credibleand well-reputed customers based on credit assessment result, and conducts ongoing monitoring on balance of receivables, to avoidsignificant risks in bad debts.As the Company’s credit risks fall into several business partners and customers, as of December 31, 2022, 9.38% (December 31,2021: 6.62%) of the total accounts receivable was due from the five largest customers of the Company. The Company has nosignificant central credit risk.The maximum amount of exposure to credit risk of the Company is the carrying amount of each financial asset at the balancesheet.(II) Liquidity riskLiquidity risk is the risk that the Company may encounter deficiency of funds in meeting obligations associated with cash orother financial assets settlement, which is possibly attributable to failure in selling financial assets at fair value on a timely basis, orfailure in collecting liabilities from counterparties of contracts, or early redemption of debts, or failure in achieving estimated cashflows.
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 betweenfinancing sustainability and flexibility. The Company has obtained credit limit from several commercial banks to meet workingcapital requirements and expenditures.
Financial liabilities classified based on remaining time period till maturity
| Items | Closing balance | ||||
| Carrying amount | Contract amount not yet discounted | Within 1 year | 1-3 years | Over 3 years | |
| Bank borrowings | 2,918,155,689.70 | 3,064,480,800.96 | 795,179,666.92 | 725,728,644.01 | 1,543,572,490.03 |
| Held-for-trading financial liabilities | |||||
| Notes payable | 2,515,229,293.17 | 2,515,229,293.17 | 2,515,229,293.17 | ||
| Accounts payable | 2,771,961,271.66 | 2,771,961,271.66 | 2,771,961,271.66 | ||
| Other payables | 657,122,287.53 | 657,122,287.53 | 657,122,287.53 | ||
| Lease liabilities | 31,093,459.06 | 33,953,751.30 | 9,005,728.14 | 16,755,133.25 | 8,192,889.91 |
| Long-term payables | 316,335,329.82 | 316,335,329.82 | 599,514.91 | 315,735,814.91 | |
| Bonds payable | 1,308,690,556.32 | 1,573,618,113.60 | 7,380,948.00 | 11,809,516.80 | 1,554,427,648.80 |
| Subtotal | 10,518,587,887.26 | 10,932,700,848.04 | 6,756,478,710.33 | 754,293,294.06 | 3,421,928,843.65 |
(Continued)
| Items | December 31, 2021 | ||||
| Carrying amount | Contract amount not yet discounted | Within 1 year | 1-3 years | Over 3 years | |
| Bank borrowings | 2,510,063,715.18 | 2,890,446,695.70 | 903,057,645.84 | 823,095,870.05 | 1,164,293,179.81 |
| Held-for-trading financial liabilities | |||||
| Notes payable | 2,468,799,189.71 | 2,468,799,189.71 | 2,468,799,189.71 | ||
| Accounts payable | 2,960,061,508.33 | 2,960,061,508.33 | 2,960,061,508.33 | ||
| Other payables | 683,714,082.05 | 683,714,082.05 | 683,714,082.05 | ||
| Lease liabilities | 23,838,477.91 | 26,991,613.43 | 5,689,725.04 | 9,207,622.33 | 12,094,266.06 |
| Items | December 31, 2021 | ||||
| Carrying amount | Contract amount not yet discounted | Within 1 year | 1-3 years | Over 3 years | |
| Long-term payables | 315,735,814.91 | 315,735,814.91 | 315,735,814.91 | ||
| Bonds payable | 1,254,962,176.00 | 1,573,618,113.60 | 7,380,948.00 | 11,809,516.80 | 1,554,427,648.80 |
| Subtotal | 10,217,174,964.09 | 10,919,367,017.73 | 7,028,703,098.97 | 844,113,009.18 | 3,046,550,909.58 |
(III) Market riskMarket risk is the risk that the Company may encounter fluctuation in fair value or future cash flows of financial instrumentsdue 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 dueto changes in market interest. The Company’s fair value interest risks arise from fixed-rate financial instruments, while the cash flowinterest risks arise from floating-rate financial instruments. The Company determines the proportion of fixed-rate financialinstruments and floating-rate financial instruments based on the market environment, and maintains a proper financial instrumentsportfolio through regular review and monitoring. The Company’s interest risk in cash flows relates mainly to bank borrowings withfloating interest rate.
As of December 31, 2022, balance of borrowings with interest accrued at floating interest rate totaled 1,755,696,317.89 yuan(December 31, 2021: 1,287,312,619.35 yuan). If interest rates had been 50 basis points higher/lower and all other variables were heldconstant, 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 fromchanges in exchange rate. The Company is mainly operated in mainland China, whose main activities are denominated in RMB,hence, the Company bears insignificant market risk arising from foreign exchange changes.
Please refer to section V (IV) 2 of notes to the financial statements for details on foreign currency financial assets and liabilitiesat the end of the period.
IX. Fair value disclosure
(I) Details of fair value of assets and liabilities at fair value at the balance sheet date
| Items | Fair value as at the balance sheet date | |||
| Level 1 fair value measurement | Level 2 fair value measurement | Level 3 fair value measurement | Total | |
| Recurring fair value measurement | ||||
| 1. Receivables financing | 107,316,593.41 | 107,316,593.41 | ||
| 2. Other equity instrument investments | 15,702,971.01 | 15,702,971.01 | ||
| Total assets at recurring fair value measurement | 123,019,564.42 | 123,019,564.42 | ||
(II) Qualitative and quantitative information of valuation technique(s) and key input(s) for level 3 fair value at recurring andnon-recurring fair measurement
1. For receivables financing, the Company uses specific valuation techniques to determine its fair value based on its par value.
2. For other equity instrument investments, the Company uses specific valuation techniques to determine its fair value.
X. Related party relationships and transactions
(I) Related party relationships
1. Parent company
(1) Details
| Parent company | Place of registration | Business nature | Registered capital | Holding proportion over the Company (%) | Voting right proportion over the Company (%) |
| Infore Group Co., Ltd. | Foshan, Guangdong | Industrial investment | 4.45 billion | 43.33 [Note] | 43.33 |
Note: Infore Group Co., Ltd. (the “Infore Group”) directly holds 11.31% equity of the Company, and indirectly holds 32.02%equity of the Company through its wholly-owned subsidiary Ningbo Infore Asset Management Co., Ltd.
(2) The Company’s ultimate controlling party is He Jianfeng, who directly holds 2.00% equity of the Company, and indirectlyholds 43.33% equity of the Company through Infore Group.
2. Please refer to section VII of notes to the financial statements for details on the Company’s subsidiaries.
3. Joint ventures and associates of the Company
Please refer to section VII of notes to the financial statements for details on the Company’s significant joint ventures andassociates. Details of other joint ventures or associates carrying out related party transactions with the Company in current period orin preceding period but with balance in current period are as follows:
| Joint ventures or associates | Relationships with the Company |
| Tengine Innovation (Beijing) Monitoring Instrument Co., Ltd. | Associate of the Company |
| Guangdong Shunkong Environmental Investment Co., Ltd. | Associate of the Company |
| Guangdong Tianshu New Energy Technology Co., Ltd. | Associate of the Company |
| Shenzhen Yingmei City Housekeeper Co., Ltd. | Associate of the Company |
| China Urban Institute (Beijing) Environmental Technology Co., Ltd. | Associate of the Company |
| Lianjiang Company | [Note 1] |
| Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. | Associate of the Company’s subsidiary Zoomlion Environmental Company |
| Shantou Chaoyang District Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. | Associate of the Company’s subsidiary Zoomlion Environmental Company |
| Changsha Cowa Zoomlion Intelligent Technology Co., Ltd. | Associate of the Company’s subsidiary Zoomlion Environmental Company |
| Chongqing Sanfeng Urban Environmental Service Co., Ltd. [Note 2] | Associate of the Company’s subsidiary Zoomlion Environmental Company |
| Yichun Development Investment Lianfeng Environmental Industry Co., Ltd. [Note 3] | Associate of the Company’s subsidiary Zoomlion Environmental Company |
| Guangdong Liangke Environmental Engineering Co., Ltd. | Associate of Guangdong Infore Environmental Investment Co., Ltd. |
| Foshan Yingtong Electrical Materials Co., Ltd. | Associate of Guangdong Infore Environmental Investment Co., Ltd. |
| Guangxi Zoomlion Guilv Urban Environmental Service Co., Ltd. | Associate of the Company’s subsidiary Zoomlion Environmental Company |
| Beijing Xingyun Zhixing Technology Co., Ltd. | Associate of Guangdong Infore Environmental Investment Co., Ltd. |
Note 1: In March 2022, the Company acquired 50% of the equity of Lianjiang Company, and it was changed from an associateto a subsidiary after then. Transactions with it from January 1, 2021 to February 28, 2022 are disclosed as related party transactions.
Note 2: Zoomlion Environmental Company disposed all the equity of Chongqing Sanfeng Urban Environmental Service Co.,Ltd. in July 2020, and it was still disclosed as a related party one year after its disposal. Transactions with it from January to July2021 were disclosed.
Note 3: Zoomlion Environmental Company disposed all the equity of Yichun Development Investment Lianfeng EnvironmentalIndustry Co., Ltd. in October 2020, and it was still disclosed as a related party one year after its disposal. Transactions with it fromJanuary to October 2021 were disclosed.
4. Other related parties of the Company
| Related parties | Relationships with the Company |
| Related parties | Relationships with the Company |
| Ningbo Infore Asset Management Co., Ltd. | Shareholder holding more than 5% of the Company’s shares, which is also under the control of the actual controller |
| Zoomlion Heavy Industry Co., Ltd. | Shareholder holding more than 5% of the Company’s shares |
| Guangdong Infore Material Technology Co., Ltd. | Controlled by the actual controller |
| Foshan Shunde District Yinghai Investment Co., Ltd. | Controlled by the actual controller |
| Shenzhen Infore Smart Technology Co., Ltd. | Controlled by the actual controller |
| Midea Group Co., Ltd. | Controlled by immediate family of the actual controller |
| Guangdong Midea Electric Co., Ltd. | Controlled by immediate family of the actual controller |
| Guangdong Midea Environmental Electrical Manufacturing Co., Ltd. | Controlled by immediate family of the actual controller |
| Guangdong Midea Refrigeration Equipment Co., Ltd. | Controlled by immediate family of the actual controller |
| Guangdong Midea Building Technologies Co., Ltd. | Controlled by immediate family of the actual controller |
| Guangdong Midea HVAC Equipment Co., Ltd. | Controlled by immediate family of the actual controller |
| Wuhu Welling Motor Sales Co., Ltd. | Controlled by immediate family of the actual controller |
| Foshan Shunde District Midea Electric Heating Appliance Manufacturing Co., Ltd. | Controlled by immediate family of the actual controller |
| Anhui Meizhi Precision Manufacturing Co., Ltd. | Controlled by immediate family of the actual controller |
| Anhui Meizhi Refrigeration Equipment Co., Ltd. | Controlled by immediate family of the actual controller |
| Foshan Welling Washing Motor Manufacturing Co., Ltd. | Controlled by immediate family of the actual controller |
| Guangdong Midea Kitchen Appliance Manufacturing Co., Ltd. | Controlled by immediate family of the actual controller |
| Guangdong Meizhi Precision Manufacturing Co., Ltd. | Controlled by immediate family of the actual controller |
| Guangdong Meizhi Refrigeration Equipment Co., Ltd. | Controlled by immediate family of the actual controller |
| Guangdong Welling Motor Manufacturing Co., Ltd. | Controlled by immediate family of the actual controller |
| Ande Zhilian Technology Co., Ltd. | Controlled by immediate family of the actual controller |
| Foshan Shunde District Midea Hotel Management Co., Ltd. | Controlled by immediate family of the actual controller |
| Chongqing Midea General Refrigeration Equipment Co., Ltd. | Controlled by immediate family of the actual controller |
| Wuxi Feiling Electronics Co., Ltd. | Controlled by immediate family of the actual controller |
| Guangdong Midea Kitchen and Bathroom Appliance Manufacturing Co., Ltd. | Controlled by immediate family of the actual controller |
| Guangdong Bomei Property Service Co., Ltd. | Controlled by immediate family of the actual controller |
| Ningbo Midea Property Management Co., Ltd. | Controlled by immediate family of the actual controller |
| Guangdong Weiqi Electrical Materials Co., Ltd. [Note] | Controlled by the Company’s associate Foshan Yingtong Electrical Materials Co., Ltd. |
| Liaoning Donggang Magnet Wire Co., Ltd. [Note] | Controlled by the Company’s associate Foshan Yingtong Electrical Materials Co., Ltd. |
| Anhui Weiqi Electrical Materials Co., Ltd. [Note] | Controlled by the Company’s associate Foshan Yingtong Electrical Materials Co., Ltd. |
| Zoomlion Hengtong Machinery Co., Ltd. | Associate of the Company’s shareholder Zoomlion Heavy Industry Co., Ltd. |
| Qianxi Jinjiang Sanitation Service Co., Ltd. | Investee of the Company’s subsidiary Zoomlion Environmental Company |
| Green Oriental Investment Holdings Co., Ltd. | Non-controlling shareholder of the subsidiary |
| Jin Taotao | Board Secretary |
Note: The Company disposed 51% of the equity of the former subsidiary Foshan Yingtong Electrical Materials Co., Ltd. (parent
company of Anhui Weiqi Electrical Materials Co., Ltd., Guangdong Weiqi Electrical Materials Co., Ltd., and Liaoning DonggangMagnet Wire Co., Ltd.) in February 2021, and it was changed from a subsidiary to an associate after then. Transactions with it fromMarch 1, 2021 to December 31, 2022 are disclosed as related party transactions.
(II) Related party transactions
1. Purchase and sale of goods, rendering and receiving of services
(1) Purchase of goods and receiving of services
| Related parties | Content of transaction | Current period cumulative | Preceding period comparative |
| Tengine Innovation (Beijing) Monitoring Instrument Co., Ltd. | Materials | 9,239,400.36 | 4,255,866.47 |
| Guangdong Shunkong Environmental Investment Co., Ltd. | Labor services | 9,909,911.14 | 10,008,420.70 |
| Changsha Cowa Zoomlion Intelligent Technology Co., Ltd. | Materials | 10,847,784.36 | 17,487,345.13 |
| Guangdong Tianshu New Energy Technology Co., Ltd. | Materials | 7,638,710.54 | 4,008,257.44 |
| Guangdong Liangke Environmental Engineering Co., Ltd. | Labor services | 1,415,094.34 | 825,471.70 |
| Zoomlion Heavy Industry Co., Ltd. | Materials | 105,493,871.91 | 165,728,113.90 |
| Ande Zhilian Technology Co., Ltd. | Labor services | 74,500.00 | |
| Foshan Shunde District Midea Hotel Management Co., Ltd. | Labor services | 180,887.93 | 875,868.89 |
| Ningbo Midea Property Management Co., Ltd. | Labor services | 516,713.84 | 101,650.94 |
| Subtotal | 145,242,374.42 | 203,365,495.17 |
(2) Sale of goods and rendering of services
| Related parties | Content of transaction | Current period cumulative | Preceding period comparative |
| Lianjiang Company | Goods and labor services | 2,071,112.39 | |
| Guangdong Tianshu New Energy Technology Co., Ltd. | Goods and factoring | 90,942,152.84 | 36,664,775.29 |
| Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. | Goods | 65,565.12 | 70,430.81 |
| Shantou Chaoyang District Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. | Goods | 589,792.61 | 3,516,958.41 |
| Chongqing Sanfeng Urban Environmental Service Co., Ltd. | Goods | 3,499,292.04 | |
| Changsha Cowa Zoomlion Intelligent Technology Co., Ltd. | Goods | 49,417.06 | |
| Guangdong Liangke Environmental Engineering Co., Ltd. | Goods and factoring | 781,333.30 | -9,569,059.05 |
| Zoomlion Heavy Industry Co., Ltd. | Goods | 1,995,580.83 | 4,446,362.79 |
| Guangdong Midea HVAC Equipment Co., Ltd. | Goods | 543,008.85 | |
| Guangdong Bomei Property Service Co., Ltd. | Goods and labor services | 3,118,410.25 | |
| Guangxi Zoomlion Guilv Urban Environmental Service Co., Ltd. | Goods and labor services | 6,862,177.99 | |
| Guangdong Infore Material Technology Co., Ltd. | Goods | 222,817.99 | |
| Guangdong Midea Environmental Electrical Manufacturing Co., Ltd. | Goods and labor services | 18,308,649.75 | |
| Foshan Shunde District Midea Electric Heating Appliance Manufacturing Co., Ltd. | Goods and labor services | 4,253,728.91 |
| Related parties | Content of transaction | Current period cumulative | Preceding period comparative |
| Anhui Meizhi Precision Manufacturing Co., Ltd. | Goods | 74,788,944.90 | |
| Anhui Meizhi Refrigeration Equipment Co., Ltd. | Goods | 8,273,640.64 | |
| Foshan Welling Washing Motor Manufacturing Co., Ltd. | Goods | 4,739,447.22 | |
| Guangdong Midea Kitchen Appliance Manufacturing Co., Ltd. | Goods | 8,689,087.00 | |
| Guangdong Meizhi Precision Manufacturing Co., Ltd. | Goods | 67,835,355.54 | |
| Guangdong Meizhi Refrigeration Equipment Co., Ltd. | Goods and labor services | 64,391,718.91 | |
| Guangdong Welling Motor Manufacturing Co., Ltd. | Goods | 143,985.09 | |
| Wuxi Feiling Electronics Co., Ltd. | Goods | 434,430.62 | |
| Qianxi Jinjiang Sanitation Service Co., Ltd. | Goods | 19,276.10 | |
| Yichun Development Investment Lianfeng Environmental Industry Co., Ltd. | Goods | 48,038,229.26 | |
| Anhui Weiqi Electrical Materials Co., Ltd. | Goods and factoring | 416,492.94 | 877,546.38 |
| Guangdong Weiqi Electrical Materials Co., Ltd. | Factoring | 1,873,184.56 | 1,824,062.44 |
| Liaoning Donggang Magnet Wire Co., Ltd. | Factoring | 124,354.60 | 1,947,698.76 |
| Foshan Yingtong Electrical Materials Co., Ltd. | Factoring | 233,830.19 | |
| Subtotal | 107,545,884.08 | 345,537,909.25 |
2. Related party leases
(1) The Company as the lessor
| Lessees | Types of assets leased | Lease income for the current period | Lease income for the preceding period |
| Guangdong Tianshu New Energy Technology Co., Ltd. | Plant and comprehensive building | 988,266.74 |
(2) The Company as the lessee
| Lessors | Types of assets leased | Current period cumulative | |||
| Expenses for short-term leases and leases of low-value assets with simplified approach and variable lease payments not included in the measurement of lease liabilities | Lease of right-of-use assets recognized | ||||
| Lease expenses paid (excluding variable lease payments not included in the measurement of lease liabilities) | Increased principal of lease liabilities | Interest expenses recognized | |||
| Foshan Shunde District Yinghai Investment Co., Ltd. | Office building, parking space | 1,256,323.04 | 63,604.54 | ||
| Shenzhen Infore Smart Technology Co., Ltd. | Office building | 840,509.43 | |||
(Continued)
| Lessors | Types of assets leased | Preceding period comparative | |||
| Expenses for short-term leases and leases of low-value assets with simplified approach and variable lease payments not included in the measurement of lease liabilities | Lease of right-of-use assets recognized | ||||
| Lease expenses paid (excluding variable lease payments not included in the measurement of lease liabilities) | Increased principal of lease liabilities | Interest expenses recognized | |||
| Lessors | Types of assets leased | Preceding period comparative | |||
| Expenses for short-term leases and leases of low-value assets with simplified approach and variable lease payments not included in the measurement of lease liabilities | Lease of right-of-use assets recognized | ||||
| Lease expenses paid (excluding variable lease payments not included in the measurement of lease liabilities) | Increased principal of lease liabilities | Interest expenses recognized | |||
| Foshan Shunde District Yinghai Investment Co., Ltd. | Office building, parking space | 1,211,475.03 | 3,095,959.57 | 17,392.41 | |
| Shenzhen Infore Smart Technology Co., Ltd. | Office building | 460,904.20 | |||
3. Related party guarantees
The Company and its subsidiaries as guaranteed parties
| Guaranteed parties | Amount guaranteed | Commencement date | Maturity date | Whether the guarantee is mature | Remarks |
| Anhui Weiqi Electrical Materials Co., Ltd. | 40,000,000.00 | 6/28/2022 | 6/28/2023 | No | None |
| Anhui Weiqi Electrical Materials Co., Ltd. | 20,000,000.00 | 6/21/2022 | 6/21/2023 | No | None |
| Anhui Weiqi Electrical Materials Co., Ltd. | 30,000,000.00 | 5/10/2022 | 5/10/2023 | No | None |
| Anhui Weiqi Electrical Materials Co., Ltd. | 20,000,000.00 | 2/17/2022 | 2/17/2023 | No | None |
| Liaoning Donggang Magnet Wire Co., Ltd. | 5,000,000.00 | 7/22/2022 | 7/21/2023 | No | [Note] |
| Liaoning Donggang Magnet Wire Co., Ltd. | 10,000,000.00 | 8/22/2022 | 8/21/2023 | No |
Note: These guaranteed loans were also provided with mortgaged guarantee by Liaoning Donggang Magnet Wire Co., Ltd. withits buildings and structures with cost of 30,603,925.53 yuan and net value of 8,306,077.76 yuan, and its land use right with cost of9,747,692.64 yuan and net value of 6,536,721.11 yuan.
4. Key management’s emoluments
| Items | Current period cumulative | Preceding period comparative |
| Key management’s emoluments | 6,500,407.42 | 9,318,141.11 |
5. Special agreement on continued implementation of sales contract signed in the name of Zoomlion Heavy Industry Co., Ltd.
Since June 1, 2017, the sanitation business of Zoomlion Heavy Industry Co., Ltd. was merged into Zoomlion EnvironmentalCompany. In order to continue the implementation of the sales contract originally signed in the name of Zoomlion Heavy IndustryCo., Ltd., Zoomlion Environmental Company invoiced Zoomlion Heavy Industry Co., Ltd., which will then issue the invoice of thesame amount to end customers. The tax-excluded amount of income from such transactions in 2022 is -3,077,570.96 yuan. ZoomlionEnvironmental Company related such transactions directly to end customers.
6. Temporary call loans between related parties
In 2022, Infore Group lent temporary funds to the Company and its subsidiaries, totaling 1.00 billion yuan, which were usuallyreturned within one working day. Therefore, the two parties have not settled the interest on the funds occupied.
(III) Balance due to or from related parties
1. Balance due from related parties
| Items | Related parties | Closing balance | Opening balance | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Accounts receivable | Guangdong Shunkong Environmental Investment Co., Ltd. | 4,158,567.88 | 890,025.90 | 4,202,907.51 | 420,290.75 |
| Guangdong Tianshu New Energy Technology Co., Ltd. | 200,788,348.94 | 8,569,313.68 | 46,417,357.14 | 1,431,117.86 | |
| Lianjiang Company | 378,000.00 | 18,900.00 | |||
| Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. | 10,711.00 | 535.55 | 7,095.00 | 354.75 | |
| Guangdong Liangke Environmental Engineering Co., Ltd. | 30,000,000.00 | 450,000.00 | |||
| Zoomlion Heavy Industry Co., Ltd. | 665,051.93 | 126,337.58 | 365,661.93 | 36,566.19 | |
| Guangdong Midea Electric Co., Ltd. | 54,018.62 | 54,018.62 | 54,018.62 | 54,018.62 | |
| Guangdong Midea Refrigeration Equipment Co., Ltd. | 42,819.11 | 42,819.11 | 42,819.11 | 42,819.11 | |
| Guangdong Midea Building Technologies Co., Ltd. | 33,413.42 | 33,413.42 | 33,413.42 | 33,413.42 | |
| Guangdong Midea HVAC Equipment Co., Ltd. | 233,371.88 | 51,798.38 | 42,241.88 | 42,241.88 | |
| Zoomlion Hengtong Machinery Co., Ltd. | 850,000.00 | 85,000.00 | |||
| Guangdong Weiqi Electrical Materials Co., Ltd. | 112,174,999.99 | 1,682,625.00 | 73,000,000.00 | 1,136,107.50 | |
| Shantou Chaoyang District Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. | 4,017,898.31 | 401,789.83 | 4,502,500.00 | 225,125.00 | |
| Changsha Cowa Zoomlion Intelligent Technology Co., Ltd. | 55,841.28 | 2,792.06 | |||
| Anhui Weiqi Electrical Materials Co., Ltd. | 30,586,839.62 | 458,802.59 | 34,300,000.00 | 530,355.75 | |
| Liaoning Donggang Magnet Wire Co., Ltd. | 31,300,000.00 | 469,500.00 | 31,000,000.00 | 485,227.50 | |
| Foshan Yingtong Electrical Materials Co., Ltd. | 20,486,000.00 | 307,290.00 | |||
| Guangdong Bomei Property Service Co., Ltd. | 903,500.08 | 45,175.00 | |||
| Guangxi Zoomlion Guilv Urban Environmental Service Co., Ltd. | 3,762,921.52 | 188,146.08 | |||
| Subtotal | 439,218,462.30 | 13,771,590.74 | 195,251,855.89 | 4,544,330.39 | |
| Notes receivable | Changsha Cowa Zoomlion Intelligent Technology Co., Ltd. | 300,000.00 | |||
| Guangdong Midea Kitchen and Bathroom Appliance Manufacturing Co., Ltd. | 749,469.98 | ||||
| Wuhu Welling Motor Sales Co., Ltd. | 111,985.59 | ||||
| Subtotal | 1,161,455.57 | ||||
| Receivables financing | Zoomlion Heavy Industry Co., Ltd. | 200,000.00 | |||
| Subtotal | 200,000.00 | ||||
| Advances paid | Changsha Cowa Zoomlion Intelligent Technology Co., Ltd. | 18,333.33 | |||
| Guangdong Tianshu New Energy Technology Co., Ltd. | 32,200.00 | ||||
| Shenzhen Yingmei City Housekeeper Co., Ltd. | 3,710.00 | ||||
| Chongqing Midea General Refrigeration Equipment Co., Ltd. | 31,500.00 | ||||
| Items | Related parties | Closing balance | Opening balance | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Zoomlion Heavy Industry Co., Ltd. | 85,768.19 | ||||
| Subtotal | 117,268.19 | 54,243.33 | |||
| Other receivables | Guangdong Shunkong Environmental Investment Co., Ltd. | 1,730,000.00 | 865,000.00 | 1,730,000.00 | 865,000.00 |
| Lianjiang Company | 12,245,069.06 | 1,562,903.45 | |||
| Zoomlion Heavy Industry Co., Ltd. | 7,190,173.17 | 359,508.66 | 1,160,821.56 | 58,041.08 | |
| Foshan Shunde District Yinghai Investment Co., Ltd. | 205,228.40 | 102,614.20 | 205,228.40 | 61,568.52 | |
| Jin Taotao | 1,000,000.00 | 20,000.00 | |||
| Guangdong Midea HVAC Equipment Co., Ltd. | 10,000.00 | 500.00 | |||
| Shenzhen Infore Smart Technology Co., Ltd. | 304,020.00 | 15,308.44 | |||
| Guangdong Weiqi Electrical Materials Co., Ltd. | 337,565.30 | 168,782.65 | |||
| Subtotal | 9,776,986.87 | 1,511,713.95 | 16,341,119.02 | 2,567,513.05 | |
| Contract assets | Zoomlion Heavy Industry Co., Ltd. | 162,550.00 | 8,127.50 | ||
| Subtotal | 162,550.00 | 8,127.50 | |||
| Long-term receivables and non-current assets due within one year | Guangdong Tianshu New Energy Technology Co., Ltd. | 5,137,500.01 | 77,062.50 | 8,666,666.67 | 137,425.00 |
| Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. | 3,456,000.00 | 651,050.00 | 3,376,732.97 | 378,762.50 | |
| Shantou Chaoyang District Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. | 7,531,548.45 | 983,685.27 | 16,598,713.91 | 1,656,232.00 | |
| Subtotal | 16,125,048.46 | 1,711,797.77 | 28,642,113.55 | 2,172,419.50 | |
2. Balance due to related parties
| Items | Related parties | Closing balance | Opening balance |
| Accounts payable | Tengine Innovation (Beijing) Monitoring Instrument Co., Ltd. | 6,033,821.63 | 750,887.68 |
| Guangdong Shunkong Environmental Investment Co., Ltd. | 993,522.02 | 310,000.00 | |
| Guangdong Tianshu New Energy Technology Co., Ltd. | 6,037,232.82 | 2,239,549.66 | |
| Changsha Cowa Zoomlion Intelligent Technology Co., Ltd. | 7,253,459.78 | 367,363.53 | |
| Guangdong Liangke Environmental Engineering Co., Ltd. | 875,000.00 | 825,471.70 | |
| Zoomlion Heavy Industry Co., Ltd. | 55,248,477.35 | 88,865,189.93 | |
| Midea Group Co., Ltd. | 587,507.93 | 587,507.93 | |
| Foshan Shunde District Midea Hotel Management Co., Ltd. | 80,789.37 | 105,413.51 | |
| Subtotal | 77,109,810.90 | 94,051,383.94 | |
| Notes payable | Tengine Innovation (Beijing) Monitoring Instrument Co., Ltd. | 3,002,040.00 | 668,890.00 |
| Guangdong Tianshu New Energy Technology Co., Ltd. | 520,000.00 | 2,644,400.00 |
| Items | Related parties | Closing balance | Opening balance |
| Changsha Cowa Zoomlion Intelligent Technology Co., Ltd. | 5,184,750.00 | ||
| Zoomlion Heavy Industry Co., Ltd. | 59,153,632.35 | 75,448,044.94 | |
| Subtotal | 62,675,672.35 | 83,946,084.94 | |
| Contract liabilities | Guangdong Tianshu New Energy Technology Co., Ltd. | 1,681.42 | |
| Guangdong Liangke Environmental Engineering Co., Ltd. | 987,079.67 | 987,079.70 | |
| Zoomlion Heavy Industry Co., Ltd. | 6,145,050.10 | 6,081,760.12 | |
| Guangxi Zoomlion Guilv Urban Environmental Service Co., Ltd. | 78,180.53 | ||
| Subtotal | 7,211,991.72 | 7,068,839.82 | |
| Other payables | Zoomlion Heavy Industry Co., Ltd. | 363,559.20 | 104,612.82 |
| Green Oriental Investment Holdings Co., Ltd. | 21,875,000.00 | 21,875,000.00 | |
| Guangdong Bomei Property Service Co., Ltd. | 5,000.00 | 5,000.00 | |
| Zoomlion Hengtong Machinery Co., Ltd. | 4,300.00 | ||
| Guangdong Tianshu New Energy Technology Co., Ltd. | 2,700.00 | 2,700.00 | |
| Guangxi Zoomlion Guilv Urban Environmental Service Co., Ltd. | 403,654.00 | ||
| Changsha Cowa Zoomlion Intelligent Technology Co., Ltd. | 100,000.00 | ||
| Subtotal | 22,654,213.20 | 22,087,312.82 |
XI. Share-based payment(I) Overall information
1. Details
| Total equity instruments granted in current period | |
| Total equity instruments vested in current period | 3,761,991.00 |
| Total equity instruments expired in current period | 5,504,620.00 |
| The range of exercise prices of stock options outstanding at the end of the period and the remaining contractual life | Phase III stock options: the exercise price is 6.12 yuan/share; after 12 months from the date of grant, if the exercise conditions are met, the incentive targets can exercise by three installments respectively at 30%, 30%, 40% within the next 36 months; as of the report date, the first installment of phase III has expired due to failure in meeting the performance indicators; in the second installment of phase III, 16,409,380.00 shares have been vested, while the rest has due and expired; and the third installment of phase III is still in the vesting period. |
| The range of exercise prices of other equity instruments at the end of the period and the remaining contractual life |
2. Other remarks
The decision-making procedures and approval status of the Company’s phase III stock option incentive planAccording to the “Proposal on the ‘Phase III Stock Option Incentive Plan (Draft)’ and Its Summary” approved by theCompany’s third extraordinary shareholders’ meeting of 2019 dated November 12, 2019, and the “Proposal on Adjusting the List ofIncentive Targets and the Number of Granted Stock Options for Phase III Stock Option Incentive Plan” deliberated and approved by32nd meeting of the eighth session of the Board of Directors dated November 26, 2019, the Company intends to implement stockoption 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 theexercise 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 IIIStock Option Incentive Plans” deliberated and approved by the fourth meeting of the ninth session of the Board of Directors and thethird meeting of the ninth session of the Board of Supervisors dated April 23, 2020, 5 employees who resigned due to personalreasons were identified by the Company’s Board of Directors as no longer suitable for incentives. According to the provisions of the“Phase III Stock Option Incentive Plan (Draft)”, their first, second, and third installments of stock options, a total of 1.28 million,were cancelled. After the adjustments, the incentive targets of phase III stock option incentive plan have been adjusted from theoriginal 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 FirstExercise Period and Cancellation of Part of the Stock Options” was deliberated and approved by the fourth meeting of the ninthsession of the Board of Directors and the third meeting of the ninth session of the Board of Supervisors. Given that the Company’sperformance did not reach the exercising conditions of the first period of the phase III stock option incentive plan, the 19.143 millionstock options granted but not yet exercised in the first period cannot be exercised. According to the relevant provisions of the “PhaseIII Stock Option Incentive Plan (Draft)”, the Company’s Board of Directors agreed to cancel the 19.143 million stock options grantedbut 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 forthis equity distribution is July 9, 2020, and the ex-rights and ex-dividend date is July 10, 2020. Given that the Company’s equitydistribution of 2019 has been implemented on July 10, 2020, according to provisions on the adjustment of the exercise price of thephase 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 stockoptions will be adjusted accordingly. After the implementation of this equity distribution, the exercise price of phase III stock optionincentive plan will be adjusted from 6.45 yuan per share to 6.34 yuan per share.
According to the “Proposal on Revising the Performance Appraisal Indicators of Phase III Stock Option Incentive Plan”deliberated and approved by the sixth meeting of the ninth session of the Board of Directors on August 20, 2020, it is agreed to revisethe performance appraisal indicators of phase III stock option incentive plan.
According to the “Proposal on Adjusting the Incentive Targets and the Number of Options Exercised and Cancellation of Part ofthe Stock Options in Phase II and Phase III Stock Option Incentive Plans” deliberated and approved by the 13th meeting of the ninthsession of the Board of Directors and the 12th meeting of the ninth session of the Board of Supervisors dated April 22, 2021, 13incentive targets who resigned from the Company or the Company’s holding subsidiaries due to personal reasons were identified bythe Company’s Board of Directors as no longer suitable for incentives. According to the provisions of the “Phase III Stock OptionIncentive Plan (Draft)”, their second and third installments of stock options, a total of 3.101 million, were cancelled. After theadjustments, the incentive targets of phase III stock option incentive plan have been adjusted from the original 244 to 231, and thenumber 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 sessionof the Board of Supervisors, given that the conditions for the second exercise period of the Company’s phase III stock optionincentive plan have been fulfilled, the phase III stock option incentive plan has determined and passed the assessment for a total of231 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 of58,976,234 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 datefor 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” wasdeliberated and approved by the 14th meeting of the ninth session of the Board of Directors and the 13th meeting of the ninth sessionof the Board of Supervisors on August 19, 2021. Given that the Company’s equity distribution of 2020 has been implemented on July8, 2021, according to provisions on the adjustment of the exercise price of the phase III stock option incentive plan drafts, if theCompany has conversion of capital reserve into share capital, distribution of share bonus, or share split, share reduction, dividenddistribution, and share allotments, the exercise price of stock options will be adjusted accordingly. After the adjustment, the exerciseprice 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 of58,976,234 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 allshareholders, with 0 bonus share (tax inclusive) and no conversion of capital reserve into share capital. The equity registration datefor 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 andapproved by the 19th meeting of the ninth session of the Board of Directors and the 18th meeting of the ninth session of the Board ofSupervisors on August 24, 2022. Given that the Company’s equity distribution of 2021 has been implemented on July 20, 2022, afterthe adjustment, the exercise price of phase III stock option incentive plan will be adjusted from 6.22 yuan per share to 6.12 yuan pershare.According to the “Proposal on Adjusting the Incentive Targets and the Number of Options Exercised and Cancellation of Part ofthe Stock Options in Phase III Stock Option Incentive Plan” deliberated and approved by the 21st meeting of the ninth session of theBoard of Directors and the 19th meeting of the ninth session of the Board of Supervisors dated October 26, 2022, 22 incentive targetswho resigned from the Company were identified by the Company’s Board of Directors as no longer suitable for incentives.According to the provisions of the “Phase III Stock Option Incentive Plan (Revised Draft)”, their third installments of stock options,a total of 1.788 million, were cancelled. After the adjustments, the incentive targets of phase III stock option incentive plan have beenadjusted from the original 231 to 209, and the number of locked stock options granted has been adjusted from 23.752 million to
21.964 million.
(II) Equity-settled share-based payment
| Determination method for grant-date fair value of equity instruments | Stock options: Fair value of the stock options at the grant date was determined according to the Black-Scholes option pricing model |
| Determination method for the number of equity instruments expected to vest | It is expected that all incentive targets still with the Company by then will fully exercise their rights |
| Reasons for significant difference between the estimates in current period and preceding period | None |
| Capital reserve accumulated due to equity-settled share-based payment | 63,871,094.05 |
| Total expenses incurred due to equity-settled share-based payment | 4,039,069.40 |
XII. Commitments and contingencies
(I) Significant commitments
As of December 31, 2022, the Company has no significant commitments to be disclosed.
(II) Contingencies
1. Contingent liabilities incurred by pending lawsuit/arbitration and the financial effect
On November 19, 2018, Green Oriental Investment Holdings Co., Ltd., the former shareholder of the Company’s 70%-controlled subsidiary Green Oriental Company, filed a civil complaint with the People’s Court of Qianhai Cooperation Zone,
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 forfreezing the 25% of equity of Lianjiang Company According to the Civil Judgment numbered [2018] Yue 0391 Min Chu 4117 issuedby the People’s Court of Qianhai Cooperation Zone, Shenzhen City, Guangdong Province on June 18, 2019, the subsidiary ShenzhenGreen Ark Investment Co., Ltd. shall pay 21.875 million yuan and interest thereof for the 25% equity acquisition of LianjiangCompany in 2016 to Green Oriental Investment Holdings Co., Ltd. On July 12, 2019, Shenzhen Green Ark Investment Co., Ltd. fileda civil appeal petition to Shenzhen Intermediate People’s Court, requesting to revoke the Civil Judgment numbered [2018] Yue 0391Min Chu 4117 in accordance with the law, and to dismiss all the claims made by Green Oriental Investment Holdings Co., Ltd.On May 20, 2021, the Shenzhen Intermediate People’s Court made the final judgement numbered (2019) Yue 03 Min Zhong24451. The court believed that although the Company and Shenzhen Green Ark Investment Co., Ltd. were related parties, they wereindependent of each other as corporations, thus did not support the Shenzhen Green Ark Investment Co., Ltd.’s unsafe right ofdefense against Green Oriental Investment Holdings Co., Ltd. based on the “Cooperation Framework Agreement”; meanwhile, asGreen Oriental Company and Shenzhen Green Ark Investment Co., Ltd. were also independent corporations, the court did notsupport Shenzhen Green Ark Investment Co., Ltd.’s claim for a set-off based on the reason that Green Oriental Company had thecreditor’s rights to Green Oriental Investment Holdings Co., Ltd. The civil judgment numbered (2019) Yue 03 Min Zhong 24451upheld the first-instance judgment. On January 8, 2021, Shenzhen Yongsheng Electric Power Equipment Co., Ltd. claimed that it hadacquired the creditor’s rights as confirmed by the civil judgment numbered (2019) Yue 03 Min Zhong 24451, and applied to thePeople’s Court of Qianhai Cooperation Zone, Shenzhen City, Guangdong Province for compulsory enforcement.
Later, Shenzhen Green Ark Investment Co., Ltd. raised an enforcement objection, which had been accepted by the court with thecase number of (2021) Yue 0391 Zhi Yi 240. According to the civil judgment numbered [2021] Yue 0391 Min Chu 5890 issued bythe People’s Court of Qianhai Cooperation Zone, Shenzhen City, Guangdong Province on July 31, 2022, the court ruled to revoke thedefendant Green Oriental Investment Holdings Co., Ltd.’s transfer of its creditor’s right including equity transfer funds of 21,875,000yuan and interest thereof, litigation fees of 172,535 yuan and preservation fees of 5,000 yuan to the defendant Shenzhen YongshengElectric Power Equipment Co., Ltd. On August 10, 2022, Green Oriental Investment Holdings Co., Ltd. and Shenzhen YongshengElectric Power Equipment Co., Ltd. filed an appeal to the Shenzhen Intermediate People’s Court.
As of December 31, 2022, the Company has accrued other payables of 21,875,000.00 yuan due to Green Oriental InvestmentHoldings Co., Ltd.
2. Contingent liabilities incurred by providing debt guarantees for other entities and the financial effect
(1) Please refer to section X of notes to the financial statements for details on guarantees provided by the Company to relatedparties.
(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 thearrangement of the agreement, the Company provides guarantees for such transactions. Meanwhile, the actual controller of theborrower provides a joint and several liability guarantee for the full amount of loans. As of December 31, 2022, the Company’smaximum exposure to these guarantees is 154,811,847.71 yuan.
2) Certain customers of the Company use finance lease services provided by third-party finance lease companies to finance theirpurchase from the Company. According to the arrangement of the agreement, the Company provides guarantees for third-partyfinance lease companies. If customers default, the Company will be required to compensate the third-party finance lease companiesfor the lease payment owed by customers. Meanwhile, the Company has the right to take back and sell the machinery that is thesubject of the lease, and keep any sales income exceeding the balance of the guarantee payment to the lease company. As ofDecember 31, 2022, the Company’s maximum exposure to these guarantees is 302,693,073.88 yuan.
XIII. Events after the balance sheet date
(I) Significant non-adjusting events
The Company has no significant non-adjusting events after the balance sheet date.
(II) Profit distribution after the balance sheet date
According to the “Profit Distribution Plan of 2022” deliberated and approved by the second meeting of the tenth session of theBoard of Directors on April 24, 2023, the Company intends to distribute cash dividends of 1.1 yuan (tax inclusive) per 10 sharesbased on the existing total share capital of 3,166,940,177 shares (net of shares in the Company’s special account for repurchase), withcash dividends distributed totaling 348,363,419.47 yuan.
XIV. Other significant events
(I) Segment information
1. Identification basis for reportable segments
Reportable segments are identified according to the structure of the Company’s internal organization, management requirementsand internal reporting system, and based on product segments. The Company evaluates the operating performance of intelligentsanitation and other businesses respectively. Assets and liabilities shared by different segments are allocated among segmentsproportionate to their respective sizes.
2. Financial information of reportable segments
Products segment
| Items | Intelligent sanitation | Other businesses | Inter-segment offsetting | Total |
| Operating revenue | 9,910,820,445.84 | 2,409,994,016.00 | 64,821,523.42 | 12,255,992,938.42 |
| Operating cost | 7,708,213,679.79 | 1,826,058,429.24 | 64,761,277.76 | 9,469,510,831.27 |
| Total assets | 16,529,487,408.40 | 31,653,128,611.19 | 18,911,324,159.61 | 29,271,291,859.98 |
| Total liabilities | 8,411,563,383.89 | 10,573,528,529.35 | 7,451,212,742.24 | 11,533,879,171.00 |
(II) Leases
1. The Company as lessee
(1) Please refer to section V (I) 25 of notes to the financial statements for details on right-of-use assets.
(2) Please refer to section III (XXXII) of notes to the financial statements for details on the Company’s accounting policies onshort-term leases and leases for which the underlying asset is of low value. The amounts of short-term leases and low-value assetleases included into profit or loss are as follows:
| Items | Current period cumulative | Preceding period comparative |
| Expense relating to short-term leases | 10,884,849.01 | 14,170,570.16 |
| Expense relating to leases of low-value assets (excluding short-term leases) | ||
| Total | 10,884,849.01 | 14,170,570.16 |
(3) Profit or loss and cash flows related to leases
| Items | Current period cumulative | Preceding period comparative |
| Interest expenses on lease liabilities | 1,337,799.45 | 1,106,627.08 |
| Variable lease payments included in profit or loss but not included in the measurement of lease liabilities | ||
| Income from subleasing right-of-use assets | ||
| Total cash outflows related to leases | 17,112,601.77 | 20,516,544.34 |
| Gains or losses arising from sale and leaseback transactions |
(2) Please refer to section VIII (II) of the notes to the financial statements for details on maturity analysis of lease payments andrelated liquidity risk management.
2. The Company as lessor
(1) Operating lease
1) Lease income
| Items | Current period cumulative | Preceding period comparative |
| Lease income | 1,855,150.51 | 386,469.80 |
| Including: Income relating to variable lease payments not included in the measurement of the lease liability |
2) Assets leased out under operating leases
| Items | Closing balance | December 31, 2021 |
| Investment property | 27,105,435.03 | 1,837,703.68 |
| Subtotal | 27,105,435.03 | 1,837,703.68 |
Please refer to section V (I) 21 of notes to the financial statements for details on fixed assets leased out under operating leases.
3) Undiscounted lease payments to be received arising from non-cancellable leases based on the lease contract signed withlessee
| Remaining years | Closing balance | December 31, 2021 |
| Within 1 year | 157,112.00 | 157,112.00 |
| 1-2 years | 157,112.00 | 157,112.00 |
| 2-3 years | 157,112.00 | 157,112.00 |
| 3-4 years | 157,112.00 | 157,112.00 |
| 4-5 years | 157,112.00 | 157,112.00 |
| Over 5 years | 157,112.00 | 314,224.00 |
| Total | 942,672.00 | 1,099,784.00 |
(2) Finance lease
1) Current period profit or loss related to finance lease
| Items | Current period cumulative | Preceding period comparative |
| Finance income on the net investment in the lease | 5,464,955.41 | 11,787,986.68 |
| Income relating to variable lease payments not included in the measurement of the net investment in the lease |
2) Undiscounted lease payments to be received arising from non-cancellable leases based on the lease contract signed withlessee
| Remaining years | Closing balance | December 31, 2021 |
| Within 1 year | 58,791,768.45 | 170,788,078.94 |
| 1-2 years | 10,723,621.03 | 52,525,528.58 |
| 2-3 years | 22,145,694.83 | 5,998,312.06 |
| 3-4 years | 6,143,705.02 | |
| 4-5 years | 1,497,760.00 | |
| Over 5 years | 374,440.00 | |
| Total | 99,676,989.33 | 229,311,919.58 |
3) Reconciliation of undiscounted lease payments to net investment in the lease
| Items | Closing balance | December 31, 2021 |
| Undiscounted lease payments | 99,676,989.33 | 229,311,919.58 |
| Less: Unrealized finance income relating to lease payments | 5,140,906.34 | 6,008,062.18 |
| Add: Present value of unguaranteed residual value | ||
| Net investment in the lease | 94,536,082.99 | 223,303,857.40 |
(III) PPP contractsDetails on the Company’s top five PPP contracts are listed as follows:
| No. | Projects | Summary of contracts | Significant contractual terms that may affect the amount, timing and risk of future cash flows | Related rights enjoyed and obligations assumed by the Company | Changes in contracts | Classification of contracts |
| 1 | Funan County Domestic Waste Incineration Power Plant Project | The project is a waste incineration power generation project invested by the Company and the Funan County Urban Management and Law Enforcement Bureau in the form of BOT. It is planned to be located in Funan, Anhui, and is mainly used for incineration of domestic waste in Funan. The planned total investment is about 1.24 billion yuan, and the designed daily domestic waste treatment scale is 500 tons in the first phase and 1,000 tons in the final phase. The concession period of the project is 30 years (calculated from the date of commercial operation). The project has started commercial operation in 2020. | Annual guaranteed waste supply: the first phase is no less than 180,000 tons/year, and the second phase has not yet been agreed; the waste treatment price is 52 yuan/ton, which will be adjusted every three years; if the annual waste supply of the Funan County Urban Management and Law Enforcement Bureau is more than 0.36 million tons, the two parties can build another factory, while the Company has the priority to invest and construct under the same conditions; the Company’s remaining electricity is connected to the grid according to relevant procedures, and the on-grid electricity price is determined according to the “Power Purchase and Sale Contract”. | Funan County Urban Management and Law Enforcement Bureau granted the project company the exclusive right to invest and finance, design, construct, operate and maintain domestic waste power generation projects; during the concession period, the project company shall bear the costs, responsibilities and risks by itself, be responsible for the investment and financing, design, construction, operation and maintenance of the project facilities, and hand over the project facilities to the Funan County Urban Management and Law Enforcement Bureau or its designated institution free of charge when the concession period expires. | No | BOT; mixed model |
| 2 | PPP Project of Resource Recovery of Liling Urban and Rural Domestic Waste | The project is a waste treatment project invested by the Company and Liling Urban Management and Law Enforcement Bureau in the form of DBOT and ROT. It is mainly used to incinerate domestic waste in Liling City. The planned total investment is about 717 million yuan, including 3 sub-projects: Liling Urban and Rural Domestic Waste Collection and Transportation System Construction Project (DBOT), Liling Urban and Rural Domestic Waste Pretreatment and Incineration Power | Since the commencement of operation, the annual guaranteed minimum supply is 146,000 tons. If the volume of waste delivered is less than such guaranteed minimum volume, the waste treatment fee will be paid according to the guaranteed minimum volume. The unit price of waste collection and transportation service is 198 yuan/ton (the treatment capacity is within 600 tons/day); the unit price of waste pretreatment and incineration power generation service is 84 yuan/ton (the treatment capacity is within 600 tons/day), and the unit price | During the cooperation period, the project company has the exclusive right to invest, construct, operate, maintain and manage the project in Liling City. The project company provides waste treatment services to the Liling Urban Management and Law Enforcement Bureau, and charges the Liling Urban Management and Law Enforcement Bureau thereon; meanwhile, it sells the surplus electricity generated by waste incineration and waste heat to the power company and collects electricity fees, and sells | No | DBOT & ROT; intangible assets model |
| No. | Projects | Summary of contracts | Significant contractual terms that may affect the amount, timing and risk of future cash flows | Related rights enjoyed and obligations assumed by the Company | Changes in contracts | Classification of contracts |
| Generation Project (DBOT) and Liling Domestic Waste Harmless Treatment Plant (ROT). The designed waste collection and transportation scale is 600 tons/day, the scale of pretreatment and incineration power generation projects is 600 tons/day in the near term and 900 tons/day in the long term. The project cooperation period is 25 years from November 2018. | of landfill service is 56.71 yuan/ton (calculated with the treatment capacity of 300 tons/day) or 37.53 yuan/ton (calculated with the treatment capacity of 600 tons/day); a subsidy fee will be paid according to the agreement for the disposal of waste that exceeds the design capacity. The Company’s remaining electricity is connected to the grid according to relevant procedures, and the on-grid electricity price is determined according to the “Power Purchase and Sale Contract”. | recyclable metals and refuse derived fuels and collects fees. The project company shall bear the costs, responsibilities and risks by itself during the cooperation period, be responsible for the investment and financing, design, construction, operation and maintenance of the project facilities, and shall hand over all the necessary assets for the project to an institution designated by the Liling Municipal People’s Government free of charge when the cooperation period expires or terminates according to the contract. | ||||
| 3 | Xin’an, Fuyong and Fuhai Streets Sanitation Integration PPP Project | The project is a integration project including road cleaning, public area and urban village waste sorting, collection and management (including the facility configuration, maintenance and management), other waste collection, transportation and transfer, operation and maintenance management of waste transfer stations, operation and maintenance management of public toilets, construction and operation and maintenance of sanitation parking lots, greening management, construction and operation and maintenance of smart sanitation platforms, sanitation emergency support, etc. in the administrative area of Xin’an, Fuyong and Fuhai streets in Bao’an District, which is invested by the Company and Shenzhen Bao’an District Urban Management and Law Enforcement Bureau in the form of BOT. The initial investment of the project is 520 million yuan, and the operation | The amount paid for this project is equal to the total monthly operating service fee minus the daily assessment deductions of the project. Monthly operation service fee = monthly comprehensive road cleaning and fee + monthly waste collection, transportation and transfer fee + monthly public toilet management fee + monthly greening maintenance fee + monthly sanitation parking lot service fee + monthly smart sanitation platform operation and management fee. From the start of the operation period, every 3 extension years is a price adjustment period. | During the operation period, the project company shall undertake the responsibilities of investment and financing of the project, purchasing of vehicles and equipment, design and construction, operation, maintenance and handover of the parking lots. After the expiry of the operation period, the project assets, project facilities and project site shall be handed over to the implementing agency (except for the parking lots built by the Company itself, but if the land used for the parking lot is provided by the government, the site involved in these parking lots shall be handed over to the implementing agency), and the project company shall collect fees from the sub-district office during the operation period according to the contract. | No | BOT; intangible assets model |
| No. | Projects | Summary of contracts | Significant contractual terms that may affect the amount, timing and risk of future cash flows | Related rights enjoyed and obligations assumed by the Company | Changes in contracts | Classification of contracts |
| period is 15 years (including construction and equipment configuration period of 1 year) from June 1, 2020 to May 31, 2035. | ||||||
| 4 | Lianjiang Domestic Waste Incineration Power Generation Project | The project is a waste incineration power generation project invested by the Company and the Lianjiang Municipal Bureau of Urban Utilities and Landscaping in the form of BOT. It is planned to be located in Lianjiang, Guangdong, and is mainly used for incineration of domestic waste in Lianjiang. The planned total investment is about 493 million yuan, and the designed daily domestic waste treatment scale is 500 tons in the first phase and 1,100 tons in the final phase. The concession period of the project is 30 years (calculated from the date of commercial operation). The first phase has started commercial operation in 2016. | Since the commencement of operation, the daily guaranteed minimum volume of waste delivered or consigned under the first phase is 500 tons. If the actual volume is less than such guaranteed minimum volume, the waste treatment fee will be paid according to the guaranteed minimum volume. The price of waste treatment: in the first stage: from December 1, 2019 to the operation of the second phase (“72+24 hours” trial operation is conducted and a compliance commissioning report is issued), the waste treatment fee is adjusted from 40 yuan/ton to 65 yuan/ton; in the second stage: after the operation of the second phase (“72+24 hours” trial operation is conducted and a compliance commissioning report is issued), the waste treatment fee is adjusted from 65 yuan/ton to 78 yuan/ton; the Company’s remaining electricity is connected to the grid according to relevant procedures, and the on-grid electricity price is determined according to the “Power Purchase and Sale Contract”. | Lianjiang Municipal Bureau of Urban Utilities and Landscaping granted the project company the exclusive right to invest and finance, design, construct, operate and maintain domestic waste power generation projects; during the concession period, the project company shall bear the costs, responsibilities and risks by itself, be responsible for the investment and financing, design, construction, operation and maintenance of the project facilities, and hand over the project facilities to the Lianjiang Municipal Bureau of Urban Utilities and Landscaping or its designated institution free of charge when the concession period expires. | No | BOT; intangible assets model |
| 5 | Xiantao Circular Economy Industrial Park PPP Project | The project is a circular economy industrial park project invested by the Company and Xiantao Urban Management and Law Enforcement Bureau in the form of BOT. It is located in Xiantao City, Hubei Province. The industrial park project includes 8 sub-projects: the recycling of kitchen waste, the harmless treatment of sludge, the resource recovery of construction waste, the leachate treatment station | The return on the sub-projects including resource utilization of kitchen waste, harmless treatment of sludge, resource recovery of construction waste, leachate treatment station (Phase I), domestic waste transfer system, domestic waste sanitary landfill is government feasibility gap subsidy, which is made up of the unit price of waste treatment multiplied by the higher of basic supply, actual treatment capacity and design treatment | In accordance with relevant laws and regulations, Xiantao Urban Management and Law Enforcement Bureau granted Xiantao Yinghe Environmental Protection Co., Ltd., within the scope of the project service and cooperation period, an exclusive right to: (1) invest in, build, operate and maintain 5 sub-projects including the resource recovery of kitchen waste, sludge harmless treatment, | No | BOT; intangible assets model |
| No. | Projects | Summary of contracts | Significant contractual terms that may affect the amount, timing and risk of future cash flows | Related rights enjoyed and obligations assumed by the Company | Changes in contracts | Classification of contracts |
| (Phase II), the leachate treatment station (Phase I), and the domestic waste transfer system (the cooperation period of the above 6 sub-projects covers 30 years from the commencement date of each sub-project, which includes the construction period of 1 year and the operation period of 29 years), the Xiantao Environmental Protection Science and Technology Museum (the cooperation period covers 11 years from the commencement date, which includes the construction period of 1 year and the operation period of 10 years), the domestic waste sanitary landfill (the cooperation period covers 10 years and 3 months from the commencement date, which includes the construction period of 3 months and the operation period of 10 years). The project investment is about 462 million yuan. The domestic waste transfer system has been put into use successively from 2019 to 2020, and the remaining projects are still under construction. | capacity, with the unit price adjusted every three years; while leachate treatment station (Phase II) and the sanitary landfill (fly ash landfill) part are entirely paid by the users. The Company generates products including but not limited to electricity and building materials through waste treatment and comprehensive utilization. The ownership and revenue of the products belong to the Company. | construction waste recycling, leachate treatment station (Phase II), and Xiantao Environmental Science and Technology Museum (2) invest, reconstruct, operate and maintain 3 sub-projects including the leachate treatment station (Phase I), domestic waste transfer system and domestic waste sanitary landfill. Xiantao Yinghe Environmental Protection Co., Ltd. shall bear the costs, responsibilities and risks by itself during the cooperation period, be responsible for the investment, construction, operation and maintenance of the project facilities, and hand over the project facilities in good condition and free of charge to the Xiantao Urban Management and Law Enforcement Bureau or its designated institution when the cooperation period expires, and guarantee the normal operation of the project facilities. During the cooperation period, Xiantao Yinghe Environmental Protection Co., Ltd. provides kitchen waste recycling, sludge harmless treatment, construction waste recycling, leachate treatment, services of environmental protection science and technology museum, domestic waste transfer, domestic waste emergency landfill, fly ash landfill and other services, and enjoys the right to charge service fees and related income. |
(IV) Other significant transactions and matters which are influential to investors on their decision-making
1. As of December 31, 2022, the Company’s controlling shareholder, actual controller and persons acting in concert held a totalof 1,441,121,828 shares of the Company, accounting for 45.33% of the Company’s total share capital, of which, 710,798,429 shareswere pledged, accounting for 49.32% of its holdings of the Company, and 22.36% of the Company’s total share capital. Details are asfollows:
| Shareholder | Holder of the pledge | Number of shares pledged | Initial transaction date | Repurchase date | Remarks |
| Infore Group | China Construction Bank Corporation Limited, Foshan Branch | 100,000,000 | 11/28/2019 | 12/31/2023 | Financing |
| Ningbo Infore Asset Management Co., Ltd. | China Minsheng Banking Corporation Limited, Foshan Branch | 610,798,429 | 6/25/2021 | 3/29/2024 | Financing for M&A |
| Total | 710,798,429 |
2. Recognition of performance compensation and indemnity
Pursuant to the “Proposal on Signing the Equity Transfer Agreement and Cooperation Framework Agreement” deliberated andapproved by the 13th interim meeting of the seventh session of the Board of Directors of the Company dated October 14, 2015, theCompany signed the “Signing of Equity Transfer Agreement” and the “Cooperation Framework Agreement of Shenzhen GreenOriental Environmental Protection Co., Ltd.” (the “Cooperation Framework Agreement”), which stipulated that the Company willacquire 51.00% of equity of Green Oriental Company held by Shenzhen Feima Investment Co., Ltd. and Shenzhen Qianhai ChimaEnvironmental Protection Investment Co., Ltd. at the consideration totaling 100,548,976.00 yuan, of which, 96,605,878.90 yuan isthe consideration for the 49.00% of equity of Green Oriental Company held by Shenzhen Feima Investment Co., Ltd., and3,943,097.10 yuan is the consideration for the 2.00% of equity of Green Oriental Company held by Shenzhen Qianhai ChimaEnvironmental Protection Investment Co., Ltd.According to the Cooperation Framework Agreement, Green Oriental Investment Holdings Co., Ltd. (the “Hong KongInvestment Company”) and Zheng Weixian made commitments on the business performance of Green Oriental Company in the nextfour years as follows: (1) from January 1, 2016 to December 31, 2019, the total net profit realized by the four project companiesincluding Lianjiang Company, Xiantao Company, Funan Company and Shouxian Company (collectively, the “four projectcompanies”) shall not be less than 120 million yuan. Otherwise, the Hong Kong Investment Company and Zheng Weixian shallcompensate the Company based on the difference between the accumulated committed net profit and the accumulated realized netprofit multiplied by 60%, which should be paid in cash. If the cash compensation is insufficient, they will compensate the Companywith the equity of Green Oriental Company held by Hong Kong Investment Company; (2) within 24 months after the completion ofregistration of capital increase at the administration for market regulation, the Hong Kong Investment Company shall transfer itsLuyi 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 thegovernment within the above period, Hong Kong Investment Company and Zheng Weixian will pay the lump sum indemnity of notless than 5.00 million yuan for each project to the Company; (3) before December 31, 2018, the Poyang Project and the YangxinProject must officially start construction and obtain approval procedures. If the construction cannot be started or the projects arewithdrawn by the government, the Hong Kong Investment Company and Zheng Weixian will pay the indemnity of not less than
10.00 million yuan for each project to the Company; (4) before December 31, 2020, Jiujiang Green Oriental Renewable Energy Co.,Ltd. must start construction and obtain approval procedures. If the construction cannot be started or it is withdrawn by thegovernment, Hong Kong Investment Company and Zheng Weixian will pay the indemnity of not less than 5.00 million yuan for eachproject to the Company; (5) from January 1, 2016 to December 31, 2019, for the new waste incineration power generation BOTagreement (subject to the signed franchise agreement) signed by Green Oriental Company, the total daily processing capacity shall benot 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 morethan 2,000 tons). If the above conditions are not met, Hong Kong Investment Company and Zheng Weixian will compensate GreenOriental Company 5 million yuan for every 500 tons less than the daily processing capacity.
In addition, in 2015, the Company and the Hong Kong Investment Company entered into the equity pledge contract, stipulatingthat the Hong Kong Investment Company would pledge 49% of equity of Green Oriental Company for the debt portfolio worth 340million 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 ofGreen Oriental Company through capital increase of 86.67 million yuan and finally held 70% of equity of Green Oriental Company.On April 23, 2020, Pan-China Certified Public Accountants issued an assurance report numbered PCCPAAR [2020] 3439, whichstated that: the audited net profits of the four project companies for the year ended December 31, 2016, 2017, 2018 and 2019 (thelower 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 notachieved.In order to promote the implementation of performance compensation and indemnity, the Company filed a lawsuit with theIntermediate People’s Court of Foshan City, Guangdong Province, requiring Hong Kong Investment Company and Zheng Weixian topay 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 unfulfilledperformance commitment, i.e., [120 million yuan - (-42.09 million yuan)]*70%; pay the compensation of 50.00 million yuan for theunfinished daily processing volume; at the same time, the court supported the Company to enjoy the priority of compensation within200 million yuan for the 30% of equity of Green Oriental Company held by the Hong Kong Investment Company.On January 29, 2021, Hong Kong Investment Company and Zheng Weixian appealed to the Higher People’s Court ofGuangdong 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, rulingthat Hong Kong Investment Company and Zheng Weixian shall pay the Company 113.46 million yuan for the unfulfilledperformance commitment and supported the Company to enjoy the priority of compensation within 200 million yuan for the 30% ofequity of Green Oriental Company held by the Hong Kong Investment Company.
As Hong Kong Investment Company and Zheng Weixian have not carried out the effective judgment, the Company has appliedto the Intermediate People’s Court of Foshan City, Guangdong Province for compulsory enforcement, and received the notice ofacceptance of the enforcement case numbered (2022) Yue 06 Zhi 1500 on August 4, 2022.
3. On April 29, 2022, according to the “Proposal on Spin-off of the Subsidiary Zhejiang Shangfeng Special Blower IndustrialCo., Ltd. for Listing on the ChiNext”, “Infore Environment Technology Group Co., Ltd.’s Proposal on the Spin-Off of Its SubsidiaryZhejiang Shangfeng Special Blower Industrial Co., Ltd. for Listing on the ChiNext (Revised Draft)” deliberated and approved by the18th meeting of the ninth session of the Board of Directors of the Company, the Company intended to spin off its subsidiaryShangfeng Industrial Company for listing on the ChiNext.
On May 24, 2022, relevant proposals on spin-off of the subsidiary Shangfeng Industrial Company for listing on the ChiNext ofthe Shenzhen Stock Exchange were deliberated and approved by the Company’s shareholders’ meeting of 2021.
On June 30, 2022, the Shenzhen Stock Exchange accepted the application documents for the initial public offering of shares andlisting on the ChiNext submitted by Shangfeng Industrial Company.
On July 25, 2022, the Shenzhen Stock Exchange issued the “Letter on Review and Inquiry of the Application Documents ofZhejiang Shangfeng Special Blower Industrial Co., Ltd. for IPO and Listing on the ChiNext” (Review Letter [2022] No. 010721). OnDecember 7, 2022, Shangfeng Industrial Company completed the reply to the Shenzhen Stock Exchange’s letter on review andinquiry.
On December 15, 2022, the Shenzhen Stock Exchange issued the “Letter on the Second Round of Review and Inquiry of theApplication Documents of Zhejiang Shangfeng Special Blower Industrial Co., Ltd. for IPO and Listing on the ChiNext” (ReviewLetter [2022] No. 011129). On March 17, 2023, Shangfeng Industrial Company completed the reply to the Shenzhen StockExchange’s letter on the second round of review and inquiry.
At present, the spin-off and listing of shares of Shangfeng Industrial Company is conducted in a steady and orderly manner.
XV. Notes to items of parent company financial statements
(I) Notes to items of parent company balance sheet
1. Other receivables
(1) Details
1) Details on categories
| Categories | Closing balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion (%) | ||
| Receivables with provision made on an individual basis | |||||
| Receivables with provision made on a collective basis | 4,494,472,176.36 | 100.00 | 1,664,734.56 | 0.04 | 4,492,807,441.80 |
| Total | 4,494,472,176.36 | 100.00 | 1,664,734.56 | 0.04 | 4,492,807,441.80 |
(Continued)
| Categories | Opening balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion (%) | ||
| Receivables with provision made on an individual basis | |||||
| Receivables with provision made on a collective basis | 3,886,958,823.73 | 100.00 | 2,953,729.89 | 0.08 | 3,884,005,093.84 |
| Total | 3,886,958,823.73 | 100.00 | 2,953,729.89 | 0.08 | 3,884,005,093.84 |
2) Other receivables with provision made on a collective basis
| Portfolios | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion (%) | |
| Portfolio grouped with performance compensation | 113,460,620.00 | ||
| Portfolio grouped with balances due from related parties within the consolidation scope | 4,347,572,017.16 | ||
| Portfolio grouped with ages | 33,439,539.20 | 1,664,734.56 | 4.98 |
| Including: 1-180 days | 27,553,285.28 | ||
| 180 days-1 year | |||
| 1-2 years | 829,381.49 | 82,938.15 | 10.00 |
| 2-3 years | 4,763,199.03 | 1,428,959.71 | 30.00 |
| 3-4 years | 205,228.40 | 102,614.20 | 50.00 |
| 4-5 years | 68,445.00 | 34,222.50 | 50.00 |
| Over 5 years | 20,000.00 | 16,000.00 | 80.00 |
| Total | 4,494,472,176.36 | 1,664,734.56 | 0.04 |
(2) Changes in provision for bad debts
| Items | Stage 1 | Stage 2 | Stage 3 | Total |
| 12?month expected credit losses | Lifetime expected credit losses (credit not impaired) | Lifetime expected credit losses (credit impaired) | ||
| Opening balance | 2,352,013.49 | 489,925.38 | 111,791.02 | 2,953,729.89 |
| Items | Stage 1 | Stage 2 | Stage 3 | Total |
| 12?month expected credit losses | Lifetime expected credit losses (credit not impaired) | Lifetime expected credit losses (credit impaired) | ||
| Opening balance in the current period | ||||
| --Transferred to stage 2 | -16,587.63 | 16,587.63 | ||
| --Transferred to stage 3 | -476,319.90 | 476,319.90 | ||
| --Reversed to stage 2 | ||||
| --Reversed to stage 1 | ||||
| Provision made in the current period | -2,335,425.86 | 52,745.04 | 993,685.49 | -1,288,995.33 |
| Provision recovered in the current period | ||||
| Provision reversed in the current period | ||||
| Provision written off in the current period | ||||
| Other changes | ||||
| Closing balance | 82,938.15 | 1,581,796.41 | 1,664,734.56 |
(3) Other receivables categorized by nature
| Nature of receivables | Closing book balance | Opening book balance |
| Security deposits | 293,673.40 | 293,673.40 |
| Temporary advance payment receivable | 4,380,717,882.96 | 3,723,204,530.33 |
| Performance compensation | 113,460,620.00 | 163,460,620.00 |
| Total | 4,494,472,176.36 | 3,886,958,823.73 |
(4) Details of the top 5 debtors with largest balances
| Debtors | Nature of receivables | Book balance | Ages | Proportion to the total balance of other receivables (%) | Provision for bad debts |
| Ningbo Infore Finance Lease Co., Ltd. | Temporary advance payment receivable | 873,908,037.63 | 1-180 days | 19.44 | |
| Guangdong Infore Environmental Investment Co., Ltd. | Temporary advance payment receivable | 676,294,343.85 | 1-180 days | 15.05 | |
| Infore Technology Company | Temporary advance payment receivable | 596,479,588.99 | 1-180 days | 13.27 | |
| Xiantao Company | Temporary advance payment receivable | 265,946,649.13 | 1-180 days | 5.92 | |
| Foshan Infore Environmental Water Treatment Co., Ltd. | Temporary advance payment receivable | 174,709,169.42 | 1-180 days | 3.89 | |
| Subtotal | 2,587,337,789.02 | 57.57 |
2. Long-term equity investments
(1) Details
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Investments in subsidiaries | 16,730,929,074.70 | 16,730,929,074.70 | 16,727,278,440.02 | 16,727,278,440.02 | ||
| Investments in | 345,687,796.45 | 345,687,796.45 | 228,769,450.70 | 228,769,450.70 | ||
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| associates and joint ventures | ||||||
| Total | 17,076,616,871.15 | 17,076,616,871.15 | 16,956,047,890.72 | 16,956,047,890.72 | ||
(2) Investments in subsidiaries
| Investees | Opening balance | Increase | Decrease | Closing balance | Provision for impairment made in the current period | Closing balance of provision for impairment |
| Infore Water Environment Investment Co., Ltd. | 113,055,998.06 | 113,055,998.06 | ||||
| Foshan Infore Environmental Water Treatment Co., Ltd. | 250,020,000.00 | 44,088.09 | 250,064,088.09 | |||
| Infore Technology Company | 132,925,243.41 | 1,427,658.22 | 134,352,901.63 | |||
| Infore Zoomlion City Environmental Service Co., Ltd. | 15,300,000.00 | 15,300,000.00 | ||||
| Guangdong Infore Environmental Investment Co., Ltd. | 100,000,000.00 | 100,000,000.00 | ||||
| Changsha Zhongbiao Environmental Industry Co., Ltd. | 5,270,000.00 | 5,270,000.00 | ||||
| Ningbo Infore Finance Lease Co., Ltd. | 356,322,974.66 | 356,322,974.66 | ||||
| Huaqingyuan Company | 899,210.16 | 88,581.41 | 987,791.57 | |||
| Changsha Zoomlion Environmental Industry Co., Ltd. | 15,258,688,696.79 | 1,488,734.89 | 15,260,177,431.68 | |||
| Shangfeng Industrial Company | 200,111,023.93 | 87,777.12 | 200,198,801.05 | |||
| Green Oriental Company | 190,930,453.01 | 262,464.49 | 191,192,917.50 | |||
| Xiantao Yinghe Environmental Protection Co., Ltd. | 103,754,840.00 | 103,754,840.00 | ||||
| Lianjiang Company | 51,330.46 | 51,330.46 | ||||
| Guangdong Infore Intelligent Cleaning Technology Co., Ltd. | 200,000.00 | 200,000.00 | ||||
| Subtotal | 16,727,278,440.02 | 3,650,634.68 | 16,730,929,074.70 |
(3) Investments in associates and joint ventures
| Investees | Opening balance | Increase/Decrease | |||
| Investments increased | Investments decreased | Investment income recognized under equity method | Adjustment in other comprehensive income | ||
| Associates | |||||
| Shenzhen Yingmei City Housekeeper Co., Ltd. | 30,000.00 | -1,834.71 | |||
| Guangdong Tianshu New Energy Technology Co., Ltd. | 2,799,486.97 | -2,799,486.97 | |||
| Tengine Innovation (Beijing) Monitoring | 30,205,115.36 | -573,592.29 | |||
| Investees | Opening balance | Increase/Decrease | |||
| Investments increased | Investments decreased | Investment income recognized under equity method | Adjustment in other comprehensive income | ||
| Instrument Co., Ltd. | |||||
| Guangdong Shunkong Environmental Investment Co., Ltd. | 195,734,848.37 | 28,071,555.61 | |||
| China Urban Institute (Beijing) Environmental Technology Co., Ltd. | 96,346,250.00 | 1,040,896.19 | |||
| Total | 228,769,450.70 | 96,346,250.00 | 25,737,537.83 | ||
(Continued)
| Investees | Increase/Decrease | Closing balance | Closing balance of provision for impairment | |||
| Changes in other equity | Cash dividend/ Profit declared for distribution | Provision for impairment | Others | |||
| Associates | ||||||
| Shenzhen Yingmei City Housekeeper Co., Ltd. | 28,165.29 | |||||
| Guangdong Tianshu New Energy Technology Co., Ltd. | ||||||
| Tengine Innovation (Beijing) Monitoring Instrument Co., Ltd. | 29,631,523.07 | |||||
| Guangdong Shunkong Environmental Investment Co., Ltd. | 5,165,442.08 | 218,640,961.90 | ||||
| China Urban Institute (Beijing) Environmental Technology Co., Ltd. | 97,387,146.19 | |||||
| Total | 5,165,442.08 | 345,687,796.45 | ||||
(II) Notes to items of the parent company income statement
1. Operating revenue/Operating cost
| Items | Current period cumulative | Preceding period comparative | ||
| Revenue | Cost | Revenue | Cost | |
| Revenue from main operations | 818,861.05 | 818,861.05 | 487,932.74 | 487,932.74 |
| Total | 818,861.05 | 818,861.05 | 487,932.74 | 487,932.74 |
2. Investment income
| Items | Current period cumulative | Preceding period comparative |
| Investment income from long-term equity investments under equity method | 25,737,537.83 | 24,398,494.78 |
| Investment income from long-term equity investments under cost method | 216,137,869.15 | 427,103,189.89 |
| Investment income from disposal of long-term equity investments | 73,073,695.75 | |
| Investment income from financial products | 193,472.38 | 2,931,309.05 |
| Performance compensation | -50,000,000.00 | 163,460,620.00 |
| Others | 414,960.00 | 6,568,573.41 |
| Items | Current period cumulative | Preceding period comparative |
| Total | 192,483,839.36 | 697,535,882.88 |
XVI. Other supplementary information(I) Non-recurring profit or loss
1. Schedule of non-recurring profit or loss
(1) Details
| Items | Amount | Remarks |
| Gains on disposal of non-current assets, including write-off of provision for impairment | -2,289,681.16 | |
| Tax refund, credit or exemption approved beyond the power of authorities, without formal documents, or with occasionality | 1,004,379.44 | |
| Government grants included in profit or loss (excluding those closely related to operating activities of the Company, satisfying government policies and regulations, and continuously enjoyed with certain quantity/quota based on certain standards) | 80,268,041.82 | |
| Fund possession charge from non-financial entities and included in profit or loss | 1,280,730.46 | |
| Gains on acquisition of subsidiaries, joint ventures and associates due to the surplus of acquisition-date fair value of net identifiable assets in acquiree over the acquisition cost | ||
| Gains on non-cash assets exchange | ||
| Gains on assets consigned to the third party for investment or management | 19,091,108.25 | Investment income from financial products amounted to 19,091,108.25 yuan. |
| Assets impairment loss incurred due to force majeure such as natural disasters | ||
| Gains on debt restructuring | -5,380,200.00 | |
| Entity restructuring expenses, such as staffing and integrating expenses | ||
| Gains on transactions with unfair value | ||
| Net profit on subsidiaries acquired through business combination under common control from the beginning of the period to the combination date | ||
| Contingent gains on non-operating activities | ||
| Gains or losses on changes in fair value of held-for-trading financial assets and held-for-trading financial liabilities, and investment income from disposal of held-for-trading financial assets, held-for-trading financial liabilities and available-for-sale financial assets, excluding those arising from hedging business related to operating activities | ||
| The reversed provision for impairment of receivables based on impairment testing on an individual basis | ||
| Gains on designated loans | ||
| Gains on changes in fair value of investment properties with subsequent measurement at the fair value mode | ||
| Gains on reconciliation of current period profit or loss following legal and regulative requirements on taxation, accounting, etc. | ||
| Management charges for consigned operations | ||
| Net other non-operating revenue or expenditures | 2,164,235.04 |
| Items | Amount | Remarks |
| Other profit or loss satisfying the definition of non-recurring profit or loss | 19,785,940.63 | It includes gains from refund of handling fees for withholding individual income tax of 429,102.26 yuan; gains from extra deduction of input VAT of 17,460,524.12 yuan; gains from fair value remeasurement at the time of obtaining control of Lianjiang Company of 51,896,314.25 yuan; and reversal of losses arising from performance compensation of the original shareholders of Green Oriental Company of 50,000,000.00 yuan. |
| Subtotal | 115,924,554.48 | |
| Less: Enterprise income tax affected | 22,153,064.81 | |
| Non-controlling interest affected (after tax) | -269,278.28 | |
| Net non-recurring profit or loss attributable to shareholders of the parent company | 94,040,767.95 |
2. The Company recognized “Other profit or loss satisfying the definition of non-recurring profit or loss” based on the“Interpretation Pronouncement on Information Disclosure Criteria for Public Companies No. 1 – Non-Recurring Profit or Loss”issued by China Securities Regulatory Commission, and remarks on exceptions are as follows:
| Items | Amount | Reasons |
| VAT refund | 18,822,951.14 | Government grants that closely related to operating activities of the Company, satisfying government policies and regulations, and continuously enjoyed with certain quantity/quota based on certain standards. |
| Subsidy for sludge treatment | 2,584,059.14 |
(II) ROE and EPS
1. Details
| Profit of the reporting period | Weighted average ROE (%) | EPS (yuan/share) | |
| Basic EPS | Diluted EPS | ||
| Net profit attributable to shareholders of ordinary shares | 2.41 | 0.13 | 0.13 |
| Net profit attributable to shareholders of ordinary shares after deducting non-recurring profit or loss | 1.87 | 0.10 | 0.10 |
2. Calculation process of weighted average ROE
| Items | Symbols | Current period cumulative |
| Net profit attributable to shareholders of ordinary shares | A | 418,794,179.13 |
| Non-recurring profit or loss | B | 94,040,767.95 |
| Net profit attributable to shareholders of ordinary shares after deducting non-recurring profit or loss | C=A-B | 324,753,411.18 |
| Opening balance of net assets attributable to shareholders of ordinary shares | D | 16,927,565,990.33 |
| Net assets attributable to shareholders of ordinary shares increased due to offering of new shares or conversion of debts into shares | E1 | 3,761,991.00 |
| Number of months counting from the next month when the net assets were increased to the end of the reporting period | F1 | 11 |
| Net assets attributable to shareholders of ordinary shares increased due to offering of new shares or conversion of debts into shares | E2 | 8,808.00 |
| Number of months counting from the next month when the net assets were increased to the end of the reporting period | F2 | 6 |
| Net assets attributable to shareholders of ordinary shares decreased due to share repurchase or cash dividends appropriation | G | 312,052,376.40 |
| Number of months counting from the next month when the net assets were decreased to the end of the reporting period | H | 5 |
| Items | Symbols | Current period cumulative | |
| Others | Net assets attributable to shareholders of ordinary shares increased due to amortization of share-based payments in the current period | I1 | 3,868,552.56 |
| Number of months counting from the next month when the net assets were increased to the end of the reporting period | J1 | 6 | |
| Net assets increased due to the debt-to-equity swap | I2 | 53,744.09 | |
| Number of months counting from the next month when the net assets were increased or decreased to the end of the reporting period | J2 | 6 | |
| Net assets increased due to purchases of the Company’s repurchased shares under employee stock ownership plan | I3 | 228,995,320.75 | |
| Number of months counting from the next month when the net assets were increased or decreased to the end of the reporting period | J3 | 4 | |
| Net assets increased due to the vesting of the phase III stock options | I4 | 19,637,568.02 | |
| Number of months counting from the next month when the net assets were increased or decreased to the end of the reporting period | J4 | 11 | |
| Net assets increased due to acquisition of non-controlling interest | I5 | -1,681,759.39 | |
| Number of months counting from the next month when the net assets were increased or decreased to the end of the reporting period | J5 | 8 | |
| Other equity instrument investments - Shenzhen Infore Environmental Protection Industry M&A Fund | I6 | -350,000.00 | |
| Number of months counting from the next month when the net assets were increased or decreased to the end of the reporting period | J6 | 6 | |
| Number of months in the reporting period | K | 12 | |
| Weighted average net assets | L=D+A/2+E×F/K-G×H/K±I×J/K | 17,365,435,652.15 | |
| Weighted average ROE | M=A/L | 2.41% | |
| Weighted average ROE after deducting non-recurring profit or loss | N=C/L | 1.87% | |
3. Calculation process of basic EPS and diluted EPS
(1) Calculation process of basic EPS
| Items | Symbols | Current period cumulative |
| Net profit attributable to shareholders of ordinary shares | A | 418,794,179.13 |
| Non-recurring profit or loss | B | 94,040,767.95 |
| Net profit attributable to shareholders of ordinary shares after deducting non-recurring profit or loss | C=A-B | 324,753,411.18 |
| Opening balance of total shares | D | 3,175,734,760.00 |
| Number of shares increased due to conversion of reserve to share capital or share dividend appropriation | E | |
| Number of shares increased due to offering of new shares or conversion of debts into shares | F | 8,808.00 |
| Number of months counting from the next month when the shares were increased to the end of the reporting period | G | 6 |
| Number of shares increased due to the vesting of stock options | H | 3,761,991.00 |
| Number of months counting from the next month when the shares were increased to the end of the reporting period | I | 11 |
| Number of months in the reporting period | K | 12 |
| Items | Symbols | Current period cumulative |
| Weighted average of outstanding ordinary shares | L=D+E+F×G/K+H×I/K | 3,179,187,656 |
| Basic EPS | M=A/L | 0.13 |
| Basic EPS after deducting non-recurring profit or loss | N=C/L | 0.10 |
(2) Calculation process of diluted EPS
The calculation process of diluted EPS is the same as that of basic EPS.
Infore Environment Technology Group Co., Ltd.
April 24, 2023