Infore Environment Technology Group
Co., Ltd.
2021 Annual Report
April 2022
Part I Important Notice, Table of Contents and DefinitionsThe Board of Directors, the Supervisory Committee as well as the directors,supervisors and senior management of Infore Environment Technology GroupCo., Ltd. (hereinafter referred to as "the Company") hereby guarantee that theinformation presented in this report is free of any misrepresentations,misleading statements or material omissions, and shall be jointly and severallyliable for the truthfulness, accuracy and completeness of its contents.
Ma Gang, the Company's legal Representative, Lu Anfeng, the Company'sChief Financial Officer, and Wu Shanshan, the Head of the Company'sAccounting Department (equivalent to Financial Manager) hereby guaranteethat the financial statements carried in this report are truthful, accurate andcomplete.
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 final dividend plan as follows: based on the totalshare capital (minus shares in the Company's repurchase account) on the date ofrecord for the 2021 final dividend plan, a cash dividend of RMB 1.00 (taxinclusive) per 10 shares will be distributed to the shareholders, with no bonusissue from either profit or capital reserves.
Table of Contents
Part I Important Notice, Table of Contents and Definitions ...... 2
Part II Company Profile and Principal Financial Indicators ...... 6
Part III Management Discussion and Analysis ...... 12
Part IV Corporate Governance ...... 49
Part V Environmental and Social Responsibility ...... 72
Part VI Significant Events ...... 80
Part VII Share Changes and Shareholder Information ...... 96
Part VIII Information on Preference Shares ...... 106
Part IX Information on Bonds ...... 107
Part X Financial Report ...... 110
Documents for Reference
(I) Financial statements with signatures and seals of the legal representativeof the company, principal officer in charge of accounting and principal officer ofthe accounting division.
(II) Original audit report with seal of the accounting firm and signature(s)and seal(s) of CPA(s).
(III) Originals of all company documents and announcements publiclydisclosed on the website appointed by China Securities Regulatory Commission(CSRC) within the reporting period.
The original and notarized photocopies of the abovementioned documentsare available at the company and the stock exchange for investors' reference.
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. |
| Greenlander Environmental | means | Shenzhen Greenlander Environmental Protection Co., Ltd. |
| CSRC | means | China Securities Regulatory Commission |
| SZSE | means | Shenzhen Stock Exchange |
| General Meetings | means | General Meetings of Infore Environment Technology Group Co., Ltd. |
| Board of Directors | 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. |
| PPP | means | Private-Public Partnership: an operational model of public infrastructural projects |
| BOT | means | Build-Operate-Transfer: a way in which private businesses participate in the development of public infrastructure and provide public services to the society |
| EPC | means | Engineering, procurement and construction: a form of contract for large-scale and complex infrastructural projects in which the contractor coordinates all engineering, procurement and construction works and ensures that the entire project is completed and delivered for a guaranteed price by a fixed date and to specified standards. |
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 Road West, Dongguan Street, Shangyu District, Shaoxing City, Zhejiang Province | ||
| Postal code | 312300 | ||
| Historical updates to registered address | NA | ||
| 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 online | 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
| Organization 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 of 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 consultation. 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. 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, Media 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 biggest 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% share of Zoomlion Environmental. Ningbo Infore Asset Management Co., Ltd. became the Company's largest shareholder. As of the end of the reporting period, the Company's controlling shareholder was Ningbo Infore Asset Management Co., Ltd. |
V. Other Relevant Information
The auditor engaged by the company
| Auditor | Pan-China Certified Public Accountants LLP (Special General Partnership) |
| Auditor's office address | 28/F, Block B, China Resources Building, No. 1366 Qianjiang Road, Jianggan District, Hangzhou City, Zhejiang Province |
| Authorized signatories | Bian Shanshan, Pan Jianwu |
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 |
| China Renaissance Securities (China) Co., Ltd. | Room 2501, No. 575 Wusong Road, Hongkou District, Shanghai City | Li Zeming, Zheng Zaoshun | 2021 |
The financial advisor engaged by the company to exercise constant supervision over the company during the reporting period
√ Applicable □ Not Applicable
| Financial advisor | Financial advisor's office address | Representative | Supervisory period |
| China Renaissance Securities (China) Co., Ltd. | Room 2501, No. 575 Wusong Road, Hongkou District, Shanghai City | Li Zeming, Zheng Zaoshun | 2021 |
VI. Major Accounting Data and Financial Indicators
Indicate whether there is any retrospectively restated datum in the table below
□ Yes √ No
| 2021 | 2020 | Boy change (%) | 2019 | |
| Revenue (RMB) | 11,813,537,444.48 | 14,332,025,075.40 | -17.57% | 12,695,858,666.40 |
| Net profit attributable to the listed company's shareholders (RMB) | 728,467,910.42 | 1,386,476,099.73 | -47.46% | 1,361,453,754.17 |
| Net profit attributable to the listed company's shareholders after non-recurring gains and losses (RMB) | 532,726,168.36 | 1,432,219,046.72 | -62.80% | 1,252,134,237.70 |
| Net cash flows from operating activities (RMB) | 809,218,720.13 | 1,688,714,091.75 | -52.08% | 1,484,750,054.02 |
| Basic earnings per share (RMB/share) | 0.23 | 0.44 | -47.73% | 0.43 |
| Diluted earnings per share (RMB/share) | 0.23 | 0.44 | -47.73% | 0.43 |
| Weighted average return on equity (%) | 4.33% | 8.62% | -4.29% | 9.05% |
| December 31, 2021 | December 31, 2020 | Boy change (%) | December 31, 2019 | |
| Total assets (RMB) | 28,332,009,628.13 | 30,110,536,990.88 | -5.91% | 24,854,667,694.94 |
| Net assets attributable to the listed company's shareholders (RMB) | 16,903,241,702.09 | 16,920,214,085.42 | -0.10% | 15,514,697,715.97 |
Indicate whether the lower of the net profit attributable to the listed company's shareholders before and after non-recurring gains andlosses was negative for the last three accounting years and that there was uncertainty about the Company's ability to continue as agoing concern in the latest independent auditor's report.
□ Yes √ No
Indicate whether the lower of the net profit attributable to the listed company's shareholders before and after non-recurring gains andlosses is negative.
□ Yes √ No
VII. Accounting Data Differences Arising from Domestic/Overseas Accounting Standards
1. Net Profit and Net Assets Under China Accounting Standards (CAS) and International FinancialReporting Standards (IFRS)
□ Applicable √ Not Applicable
No such differences for the reporting period.
2. Net Profit and Net Assets under CAS and Overseas Accounting Standards
□ Applicable √ Not Applicable
No such differences for the reporting period.VIII. Quarterly Key Financial Indicators
Unit: RMB
| Q1 | Q2 | Q3 | Q4 | |
| Revenue | 2,737,466,332.64 | 2,710,222,451.64 | 2,214,117,506.71 | 4,151,731,153.49 |
| Net profit attributable to the listed company’s shareholders | 151,775,586.90 | 219,603,321.44 | 189,304,686.57 | 167,784,315.51 |
| Net profit attributable to the listed company’s shareholders after non-recurring gains and losses | 218,315,226.13 | 217,122,682.26 | 166,728,253.71 | -69,439,993.74 |
| Net cash flows from operating activities | -887,704,591.04 | -527,674,751.33 | -189,394,992.84 | 2,413,993,055.34 |
Indicate whether any of the quarterly financial data in the table above or their summations differs materially from what have beendisclosed in the Company's quarterly or interim reports
□ Yes √ No
IX. Non-recurring Gains and Losses Items and Amounts
√ Applicable □ Not Applicable
Unit: RMB
| Item | 2021 | 2020 | 2019 | Note |
| Gain or loss for the disposal of non-current assets (inclusive of provisions to write off impaired assets) | 6,337,251.97 | -42,036,810.26 | -60,892,199.11 | Gain of RMB 8,040,787.90 for the disposal of long-term equity investments; loss of RMB 2,254,626.67 for the disposal of fixed assets; gain of RMB 1,092,784.45 for the disposal of construction in progress; loss of RMB 541,693.71 for the retirement of fixed assets |
| Tax rebates, reductions and exemptions granted ultra vires or without official documents of | 3,768,945.18 | 621,422.30 | -- | -- |
| approval | ||||
| 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) | 55,341,877.03 | 42,047,479.15 | 104,385,272.35 | -- |
| Capital collected from non-financial enterprises that was recognized as gain or loss during the reporting period | 3,173,551.55 | 22,117,071.89 | 19,799,364.06 | Guangdong Liangke Environmental Protection Engineering Co., Ltd., RMB 1,211,591.98; Shantou Zhonglian Ruikang Environmental Health Service Co., Ltd., RMB 726,429.04; minority shareholders of Shangfeng Industrial Company, RMB 645,168.12; Lianjiang Greenlander New Energy Co., Ltd., RMB 474,994.40; Jilin Xinyu Environmental Technology Group Co., Ltd., RMB 92,260.00; Shantou Zhonglian Ruikang Environmental Health Service Co., Ltd, RMB 19,599.99; Suzhou Xingzhou Environmental Water Treatment Technology Co., Ltd., RMB 3,508.02 |
| Gain or loss on assets entrusted to other parties for investment or management | 29,170,261.66 | 23,771,715.03 | 4,556,023.27 | Investment income of RMB 29,170,261.66 on investments in wealth management products |
| Gain or loss arising from changes in fair value of financial assets and financial liabilities held for 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 course of business) | -79,222,823.84 | -90,608,285.06 | 24,337,671.43 | Changes in fair value of financial assets held for trading: RMB -73,146,774.32; gain/loss for disposal of financial assets held for trading: RMB -2,883,937.64; gain/loss for ineffective hedges that have been closed: RMB -3,263,048.33; changes in fair value of ineffective hedges that remain open: RMB 72,100.27; gain/loss arising from futures transaction fees: RMB -1,163.82 |
| Reversal of provisions for impaired receivables which have been individually tested for impairment | -- | -- | 140,000.00 | -- |
| Other non-operating income and expense | 2,598,028.75 | -7,514,468.68 | -467,259.49 | -- |
| Other gains and losses that fall into the definition of non-recurrent gains and losses | 172,459,718.81 | 839,195.26 | 24,676,400.00 | Gain/loss from the disposal of Guangdong Liangke Environmental Protection Engineering Co., Ltd.'s creditors' rights: RMB 8,999,098.81; original shareholders of |
| Greenlander Environmental's compensation for failing to meet committed business performance: RMB 163,460,620.00 | ||||
| Less: Income tax | -8,007,245.43 | -8,391,224.21 | 6,566,767.92 | -- |
| Impact from minority shareholders’ interests (after tax) | 5,892,314.48 | 3,371,490.83 | 648,988.12 | -- |
| Total | 195,741,742.06 | -45,742,946.99 | 109,319,516.47 | -- |
Details on other gains and losses that fall into the definition of non-recurring gain/loss:
√ Applicable □ Not Applicable
Gain/loss from the disposal of Guangdong Liangke Environmental Protection Engineering Co., Ltd.'s creditors' rights: RMB8,999,098.81; original shareholders of Greenlander Environmental's compensation for failing to meet committed businessperformance: RMB 163,460,620.00The explanation for why the Company reclassified an item defined as an non-recurring gain/loss item in the ExplanatoryAnnouncement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Non-recurring Gain/LossItems as a recurrent item
√ Applicable □ Not Applicable
| Item | Amount Involved (RMB) | Reason |
| Value-added tax rebate | 22,195,312.61 | 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 | 3,056,730.58 | 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 Analysis
I. Industry Performance During Reporting Period
1. Overview
The sanitation industry in which the Company operates is classified as a public services industry. The sanitation industry istypically divided into two parts: sanitation equipment and sanitation services.The year 2021 is the inaugural year for the 14th Five-Year Plan. Municipal governments have been facilitating plans fordevelopment over the next five years and intensively launching various policies. Some sanitation projects were rescheduled fordeferred implementation. The recurring pandemic and other factors such as rising costs of raw materials have resulted in relativelysignificant fluctuations in the overall sanitation industry in the short term.However, as a provider of essential public services that are closely intertwined with the daily livelihood of the people, thesanitation industry is resilient against the short-term macroeconomic fluctuations, which pose little impact to the long-termdevelopment of the sanitation industry. The long-term development of the domestic economy, government policies, expectations ofstandards of sanitation and the people's standard of living, on the other hand, will determine the growth of the industry. The intensivedemand and implementation of plans for sanitation by municipal governments in 2021 will pave the way for an early resurgence ofthe sanitation industry. The overall industry is set for continual growth in the long run.
2. Development Trends
(1) As separation of government and enterprise accelerates, marketization is becoming the mainstream in the industry
The marketization of China's sanitation industry refers to municipal governments' gradual withdrawal from the actualmanagement and operation in the sanitation industry and a shift towards an operational model in which governments source servicesand allow service providers to openly bid for such sourcing of services. Under such model, municipal governments make use of thecompetitive market, constant supervision and other means to effectively boost the operational efficiency and quality of sanitationservices provided. The government's continual investment and implementation of policies that promote urban environmentaldevelopment have maximized the domestic sanitation industry's potential for growth.
The marketization of our domestic sanitation industry will further expand the industry's room for growth in the future. Players insanitation industry with competitive advantages such as an established working relationship with the government, capital,management experience, strong brand and cost synergy are well positioned to seize the opportunities granted by the current phase ofmarketization and enjoy the benefits of rapid growth. The domestic sanitation industry is set for growth in the future. Increasingmarket concentration is also to be expected.
(2) Rapid development of IoT technologies and increased adoption of smart sanitation
Smart sanitation primarily relies on intelligent equipment and the Smart Sanitation Cloud Platform to achieve smart operation ofenvironmental sanitation, reduce reliance on human labor and material resources and boost operational efficiency. It continues to bethe future trend of the sanitation industry.
Intelligent equipment: The increased adoption of 5G sanitation robots, autonomous sanitation vehicles, and small smartsanitation robots continues to expand the frontiers of the sanitation equipment industry and offer highly promising market prospects.Thus, the future of urban/rural sanitation services is increasingly steered towards one that is smart, requires less or even no humanlabor. Small intelligent equipment and autonomous vehicles will present the next breakthrough and revolutionize the industry.
Smart Sanitation Cloud Platform: a platform that relies on IoT and mobile Internet technologies and integrates data generatedfrom all aspects involving sanitation equipment and services, such as R&D, manufacturing, logistics, vehicle operation, projectmanagement, after-sales services, etc., in order to achieve a 24/7, all-round integration of four key elements - humans, vehicles,objects and events- within the operating environment alongside backend and frontend platforms, delivering a precise and highlyeffective model of operation, maintenance and remote monitoring. Such platform will boost the overall standards of urbanmanagement and governmental services in the city comprehensively, from management and governance, to provision of services andoperation.
(3) Growing investment in the sanitation industry and continual expansion of market size
As an important part of public services, the sanitation industry obtains its funds mainly from allocation of government financial
expenditure. The infrastructure investment in the sanitation industry typically has a longer payback period and requires a large scaleof resources and capital. Nevertheless, as a necessary public expenditure, the industry is assured with a guaranteed and relativelystable source of funds. In general, there has been an increase in the funds invested in the domestic sanitation industry from 2016 to2020. There has been a gradual increase in the number of sanitation facilities and equipment, the area of roads and streets beingcleaned as well as the volume of domestic waste being collected. These indicators point to the sustained expansion of our domesticsanitation industry, a trend that is expected to persist in the future.
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 environmental sanitation services industry. With "smart sanitation" at thecore of its business, the Company employs a flexible business model for investment and operation and integrates new energyequipment, autonomous vehicles and other smart sanitation equipment with a smart platform that is empowered by IoT, big data andadvanced industry-specific technologies to improve segmented full cycle dynamic control. The Company provides customers withintegrated IoT applications and a smart platform for operations and services across the full life cycle in areas such as cleaning anddisinfection 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 2021, the Company rose swiftly to become a strong competitor in the sanitation services industry, ranking second in terms ofannualized new contract value. In terms of sales of sanitation equipment, the Company was ranked No.1 for the 21st consecutive year.
2. Principal products
In terms of intelligent equipment, leveraging its leading position in sanitation equipment industry, strong R&D andmanufacturing capabilities and a well-established nation-wide sales network, the Company forged a comprehensive suite ofsanitation equipment of over 400 models, providing customers with a wide range of solutions including a variety of sanitation andcleaning equipment, waste collection and transportation equipment, new energy and clean energy sanitation equipment. The
Company's range of products spans from 5G sanitation robots, autonomous sanitation vehicles, small smart sanitation robots, newenergy sanitation 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 that the Company developed independently and a pioneeringplatform in the domestic sanitation industry that encompasses the full industrial chain. The platform is worth of RMB 150 millioninvestment, supported by over 20 smart sanitation-related copyrighted software and patents and integrating 5G, AI, big data, cloudcomputing, edge computing and other advanced technologies to form an immersive framework and develop core technologies suchas integrated IoT applications, data communication, video command and control, safe driving tests, IoT software and hardwarecompatible technologies and big data applications. Through the platform, the Company can monitor all humans, vehicles, objects andevents related to the management of environmental sanitation on a real-time basis and design sanitation management modelsaccordingly, boosting operational quality, reducing operating costs and promoting effective management of environmental sanitationwith statistical data and assessment.Currently, the platform has provided smart services to local customers for over 50,000 products. In the future, the Company willcontinue to deploy digital technologies and innovate new intelligent equipment and smart services. By synergizing with broaderdevelopment of smart city, it will continue to promote the intensive application of its smart cloud platform as well as steer and drive
the digital transformation of the environmental sanitation industry.
In terms of smart services, the Company's "Environmental Sanitation APP" supports 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 able to facilitate the online digitalized management of equipment, sophisticatedmanagement of processes and quantified management of materials and achieving the operationalization of "smart services". Theentire process is smart, informatized and integrated, and its management is digitalized.
3. Performance in Key Markets
(1) Ranked second for annualized new contract value of sanitation services in 2021
According to statistics from Environmental Compass, a total of 75 new contracts for sanitation services were signed during thereporting period. The projects are located across 25 provinces with a total contract value of RMB 8.435 billion and an annualizedcontract value of RMB 1.228 billion, placing the Company as the first runner up in the industry. The Company's operating revenuefor sanitation services in 2021 was RMB 3.025 billion, a YoY increase of 53.66%. As of the end of the reporting period, InforeEnviro is operating 179 sanitation services projects with an annualized contract value of RMB 4.068 billion and a cumulativecontract value of RMB 45.884 billion. The total value of the Company's executory contracts reached RMB 38.273 billion. TheCompany ranks second place in the industry and has performed excellently in terms of the ability to continue as a going concern.
According to statistics from Environmental Compass, amidst the marketization of the domestic sanitation industry, the totalvalue of projects that were successfully bid for reached RMB 216.3 billion in 2021, with an annualized new contract value of RMB
71.6 billion.
(2) Ranked first in terms of sales of sanitation equipment in 2021
According to the China Banking and Insurance Regulatory Commission's statistics on mandatory traffic accident liabilityinsurance for motor vehicles, the Company was ranked first in terms of sales of sanitation equipment in 2021 for the 21st consecutiveyear. In 2021, the Company recorded sales of 16,521 units of sanitation equipment for a total of RMB 6.212 billion. Among theproducts sold, 744 units were electric-only vehicles, which accounted for 18.37% of the market share.According to the abovementioned statistics from the China Banking and Insurance Regulatory Commission, as of December 31,2021, a total of 104,601 sanitation vehicles were sold in China. Among these, 4,050 were electric-only vehicles, amounting to amarket penetration rate of 3.87%.
4. Technological accumulation and innovation
(1) Cumulative R&D capabilities
Infore Enviro's R&D team comprises of experts from national research institutes. The company has innovation written into itsDNA. The Company has applied for 123 patents, including 69 utility patents. As of the end of the reporting period, it obtained 1,051independent patents, of which 555 were utility patents, 415 were utility models and 81 were design patents. The Company rankedfirst for the highest number of technical patents and utility patents in the industry, took the leading role in the establishment ofmultiple national, industrial as well as local standards and established provincial research centers. It was granted the honorary title of"Top 10 Enterprises of Intellectual Property Rights in Hunan Province" and awarded the China Machinery Industry Science andTechnology Award, the Hunan Provincial Science and Technology Progress Award, and the China Award for Science andTechnology in Construction. The Company was the first company in the environmental sanitation industry to be granted a license forautonomous driving road testing by the government. It was also included in the Ministry of Industry and Information Technology'slist of key enterprises for China's new-generation AI industrial innovation, marking the Company as one of China's top AI researchteams and the "national team" when it comes to innovation in the field of smart sanitation robots.
(2) Innovation of cloud platform
Smart Sanitation Cloud Platform is a big data smart cloud platform that was independently developed by the Company andsupported by 14 software copyrights. By integrating advanced underlying technologies such as big data, cloud computing, IoT,mobile Internet and AI into the platform, the Company developed core technologies such as integrated IoT applications, datacommunication, video command and control, safe driving tests, IoT software and hardware compatible technologies and big dataapplications. The seamless integration of sanitation equipment and operations allows the platform to achieve real-time connectivitybetween humans, vehicles, objects and events involved in the provision of environmental sanitation services as well as standardized,digitalized and smart operation and management. In terms of smart governance, the Company established a digital operation andmanagement system for plants, stations and equipment on the cloud platform. Through smart and safe operation that requires lesslabor and energy consumption, the Company strives to develop competitive advantages with smart governance.
The platform is supported by over 20 smart sanitation-related software copyrights and patents and has won accolades such as theMinistry of Industry and Information Technology'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 ? GarbageClassification Collection and Transportation System Based on Image Recognition and CNN Deep Learning Algorithm and 2022Changsha, Hunan's Torch Plan for an Intelligent Vehicle Industry. Currently, the platform has provided smart services to localcustomers for over 50,000 products.
(3) Leader in new energy
The Company was the first to pioneer the development of new energy in the industry and offers the most comprehensiveportfolio of new energy products in the industry. Infore Enviro started the research and development of new energy-poweredsanitation equipment in 2007 and successfully developed the first full-electric sweeper truck in China in July 2008. The Companywas tasked with the cleaning and sanitation of the streets during the 2008 Beijing Olympics. Three decades of sustained R&D insanitation vehicles and over a decade of hard work has led Infore Enviro into developing over 40 types of new energy vehicles for
cleaning, washing, waste collection and urban sanitation. Its nearly 200 vehicle models form the most comprehensive suite of newenergy-powered sanitation vehicles in China.During the reporting period, Infore Enviro launched its fifth-generation of new energy sanitation vehicles. This new series is themost comprehensive array of sanitation vehicles available in the industry. The fifth-generation products have three main features:
they are safer and more reliable; more efficient and environmentally friendly, and more intelligent and energy-saving. Safe andreliable: whole-vehicle competitiveness is improved and meets the strictest regulations of European ECE R45-04; the brakingperformance exceeds the industry standard by 20%, which leads the industry standard of alternative energy sanitation equipment; thedriving assistance system is launched to allow comprehensive monitoring and ensure safety. Efficient environmental protection:
light-weighted environmental protection design and upgraded operation system result in over 10% increase of the operating effect;the combination of active and passive noise reduction design successfully reduced vehicle noise by 5 decibels. Intelligent and energy-saving: the design of module-free battery pack increases the energy density by over 10%; the energy exchange system enables smartcharging and discharging, which effectively improves the battery endurance of all products, and can even be used to charge theemergency rescue equipment in emergency situations.
(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 of productsare integrated with core technologies such as green new energy, 5G+AIOT cluster control, AI, machine vision, 360-degree imagerecognition and are equipped with sensors such as laser radar, ultrasonic radar, high precision differential GPS, 360-degree cameras,allowing for smart robotic operations and smart navigation as well as paving the way for a more diverse operational capacity in awide range of locations and scenarios. The Company's first "5G Cloud+Sanitation Robot" is a smart remote cluster model ofoperation that redefines how sanitation is carried out. By raising the standards of digitalization and efficiency in the industrydrastically and reducing safety risks to sanitation personnel as well as labor costs, the new model of operation presents clear socialbenefits for the community and economy.The Company's 5G smart sanitation robot crew has been deployed in Shenzhen, Changsha and Suzhou. The crew has become anew benchmark for smart urban sanitation and has been repeatedly recognized by government agencies and other associations as amodel 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 the sanitationindustry and improves the standards of sophisticated management of urban public services, creating a better living environment forthe people.Other businesses of the Company primarily include environmental monitoring, solid waste treatment and the manufacturing ofventilator equipment.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 is 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, thelandfilling of domestic waste, the recycling of food waste and the utilization of solid waste in industrial parks. The incineration ofdomestic waste for the generation of energy and the utilization of solid waste in industrial parks form the core components of thebusiness. The industrial parks are equipped with treatment facilities for the disposal of domestic and hazardous waste, the treatmentof sludge, food waste, sewage, construction waste, leachate and fly ash and the ecological restoration of landfills. By applying anintegrated approach to these related services, the Company is able to provide a one-stop solution for the management of solid waste.PPP forms the primary model of operation for this business.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 of sanitation equipment
As a domestic leader in environmental sanitation equipment, the Company has state-of-the-art core technologies and offers themost comprehensive range of environmental sanitation equipment in the industry. In terms of R&D, the Company has successfullymastered the technologies for new energy sanitation equipment, smart sanitation robots, autonomous vehicles and other pioneeringtechnologies that embody the direction in which the industry is headed. It was the first company in the environmental sanitationindustry to be granted a license for autonomous driving road testing by the government. The Company developed the world’s firstsmart sanitation robot crew and successfully deployed the crew in Orange Isle, a 5A level national scenic spot in Changsha City,Hunan Province. The Company's 5G autonomous sanitation robot crew has also been deployed in the college town in Changsha. TheCompany has developed a comprehensive suite of environmental sanitation equipment that spans over 400 models and allows theCompany to meet the diverse sanitation demands across the country. The Company has ranked first in terms of sales in the domesticmarket for 21 consecutive years. As one of the pioneers in environmental sanitation equipment, the Company developed the first wetand dry vacuum sweeper truck, the first fully hydraulic mini road sweeper, the first tunnel road washer, the first electric-only roadsweeper and the first natural gas-powered road washer in China. The Company has extensive and proven experience in theenvironmental sanitation industry and became the most influential brand in the industry.
2. Fast growing sanitation business 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 services andplanning, visual monitoring of the entire process of sanitation, swift response to emergencies and a closed-loop management. Withsmart analysis performed on all data and improvements to management and controls that are based on evidence and rigorous science,the Company strives to achieve "standardized service" and lead in the new era of smart sanitation.
From 2016 to 2020, the Company recorded total contract values of RMB 1.237 billion, RMB 5.561 billion, RMB 8.711 billion,RMB 9.72 billion and RMB 12.574 billion respectively and annual service contract values of RMB 55 million, RMB 305 million,RMB 429 million, RMB 855 million and RMB 1.248 billion respectively for environmental sanitation services, representing annualgrowths by 454.54%, 40.66%, 99.3% and 45.96% respectively from 2017 to 2020. In 2021, the Company signed a total of 75projects for sanitation services across 25 provinces, with an annual value and total value of RMB 1.228 billion and RMB 8.435billion respectively. In 2021, The Company's operating revenue of sanitation services was RMB 3.025 billion, a YoY increase of
53.66%.
3. The best-in-class and most comprehensive after-sales service network
Leveraging its established sales network for sanitation equipment and rich industry experience, the Company built a nationwideservice network with 300 operational centers and nearly 1,000 environmental management and service projects in 31 provinces, citiesand autonomous regions. It has nearly 500 engineers who provide after-sales services and set off within 30 minutes from receiving arequest for troubleshooting. Regardless of the location in the country, all general issues can be resolved within 24 hours.
Environmental sanitation service projects are relatively localized and necessitate customization in order to meet regional needs.As governments at all levels pay increasing attention to environmental sanitation, providers of sanitation services are required topossess more experience in professional operations and provide long-term monitoring services in order to keep existing projectsrunning and continue to win new projects. A highly specialized after-sales network is needed in the industry to improve the quality ofservices and delivery, seize commercial opportunities in each region and win new contracts.
4. Excellent corporate culture
A company's corporate culture is the cornerstone of its creativity and unity as well as an important component in a company'skey competitiveness. The Company has a corporate vision of "Cleaner World, Better Future" and a corporate philosophy of providingservices that are "simple, professional and speedily executed". Its core values represent its beliefs: "Our clients are vital to us", "Ouremployees are our business partners ", "Performance-oriented, we don't settle for mediocrity" and "We are built on technicalinnovation". Facilitated by tech and talent enablements, our strategy places order growth at its core. The Company is committed tobecoming a respected and trusted leader that provides smart sanitation equipment and services with sanitation robotics at the core ofits business. Throughout the years, the Company's corporate culture and spirit are closely integrated with its business objectives anddaily operations, guiding the Company’s various business segments and its subsidiaries to fully implement benchmarking operations,continuously promote refined management and drive quality development of all businesses.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 and hasclearly 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 market opportunitiespromptly. For many years, the Company has promoted stock incentives and employee stock ownership as well as set up teammanagement frameworks for cornerstone partnerships, senior partnerships and general partnerships, gathering a group of passionatetrailblazers who share the Company's values, building a community for key employees in the Company and propelling the Companytowards stable, healthy and long-term growth.
IV. Analysis of Principal Business
1. Overview
The year 2021 is the inaugural year for the 14th Five-Year Plan. Municipal governments have been facilitating plans fordevelopment over the next five years and intensively launching various policies. Some sanitation projects were rescheduled fordeferred implementation. The recurring pandemic and other factors such as rising costs of raw materials have resulted in relativelysignificant fluctuations in the overall sanitation industry in the short term. In the face of external challenges, the Company remainedsteadfast to its key "5115" strategy by boosting its core workforce, investing more in technological innovation and R&D and steadilycultivating internal strength. The Company also pushed for digital transformation and smart upgrades to improve operations. Byexpanding online coverage, driving standardization and informatization, the Company strove to bring the standard of operationalmanagement to the next level and provide a new momentum to push the Company into its next bound.
In 2021, the Company recorded RMB 11,813,537,400 in operating revenue, RMB 728,467,900 in net profit attributable to thelisted company's shareholders and RMB 532,726,200 in net profit attributable to the listed company's shareholders after non-recurring gains and losses, a YoY decrease of 17.57%, 47.46% and 62.80% respectively. As of the end of the reporting period, theCompany's total assets amounted to RMB 28,332,009,600 and the net assets attributable to the listed company's shareholdersamounted to RMB 16,903,241,700, a YoY decrease of 5.91% and 0.10% respectively. After the divestiture of its electromagneticwire business, the Company recorded RMB 11,264,667,000 in operating revenue, a YoY decrease of 4.46%.
The key operational milestones during the reporting period:
1. Rapid development of environmental sanitation services
The Company's operating revenue of sanitation services in 2021 was RMB 3.025 billion, a YoY increase of 53.66%. Accordingto statistics from Environmental Compass, a total of 75 new contracts for sanitation services were signed during the reporting period.These projects are located across 25 provinces with a total contract value of RMB 8.435 billion and an annual contract value of RMB
1.228 billion, placing the Company as the first runner-up in the industry. As of the end of the reporting period, Infore Enviro isrunning 179 projects for sanitation services. These contracts amounted to an annual value of RMB 4.068 billion and a cumulativevalue of RMB 45.884 billion. The total value of the Company's executory contracts reached RMB 38.273 billion. The Companyranks second place in the industry and has performed excellently in terms of sustainable operation.
2. Improvement in quality and efficiency and a focus on "Smart Sanitation"
During the reporting period, the Company kept its focus on its key "5115" strategy and relied on its competitive strengths insanitation equipment to proactively drive the development of the smart sanitation business and consolidate its core businesses. Itscontinued focus on the leading advantage in smart sanitation resulted in an increase of 78.19% in revenue generated from this mainbusiness segment. The Company made gradual adjustments to its non-core businesses through restructuring, divestiture and spinoffs,revitalizing existing resources and underperforming assets and improving asset management and operational quality to pave the wayfor sustained and quality growth for the Company.
3. Sustained leadership in sanitation equipment
According to the China Banking and Insurance Regulatory Commission's statistics on mandatory traffic accident liabilityinsurance for motor vehicles, the Company recorded sales of 16,521 sanitation equipment in 2021. The Company ranked first interms of sales of sanitation equipment in 2021 for the 21st consecutive year. During the reporting period, the Company continued toperfect and innovate its products, injecting RMB 290 million into R&D. The funds invested in the R&D of equipment took up 3.75%of the revenue generated from smart equipment, and created cutting-edge outcomes leading the rest of the industry.
During the reporting period, the Company launched the first compression semi-trailer garbage truck and dual function deep roadcleaner in the domestic market, developed and launched a fuel cell-powered road washer, a solar panel washer, a waste liquidspraying vehicle and high-altitude pruning vehicle, and launched the first 5G hydrogen-powered sanitation robot in the world.
4. Digital transformation and the setup of a highly efficient operating system
Over the years, the Company has remained committed to its digital transformation and in building a digital infrastructure for thefull value chain. The entire process of digital transformation has been transparent. As at 2021, Infore Enviro's digital transformationhas reached a certain phase and achieved results. In the digital factories, the manufacturing cycles for standard and non-standardproducts are cut down by 22% and 28% respectively, the rate of timely deliveries by suppliers increased by 10% and blueprintstransfer efficiency increased by 90%. The Company can now deliver orders for standard products within seven days. In after-salesservice, the rate of timely responses rose to 92% and the rate of prompt delivery of components within 15 days rose to 93%. In sales,the accuracy of delivery orders improved to 85%, the rate for manufactured products-to-warehouse improved to 95% and theefficiency level of completing delivery orders was up by 30%. In R&D, the accuracy of cost estimation increased to 98% while theuse of common materials increased by 25%. In the wake of its digital transformation, the Company has integrated R&D, marketing,planning, procurement, warehousing and manufacturing in an end-to-end process. With all decisions driven by data, the standard ofmanagement is given a boost to the next level and new momentum provided to propel the Company into its next leap.
5. Active and committed agent to corporate social responsibilities
In 2021, Infore Enviro continued to participate in charity and anti-pandemic activities in Shenzhen, Shijiazhuang, Xingtai,Zhuhai, Fangchenggang and Nanjing, proactively battling the pandemic and fulfilling its corporate social responsibility through thedonation of cash and goods. As the prevention and control of the pandemic becomes a norm, the digitalized, mechanized andsophisticated operation mode of Infore Enviro provided highly efficient aid to various regions in combatting the pandemic digitally,it has received much attention from the community as well as repeated media coverage from Shenzhen City Channel, China Scienceand Technology Network, Shenzhen Special Zone Daily, Securities Daily and the like. During the pandemic, Infore Enviro increasedthe frequency of its mechanical operations and carried out washing, sweeping, spraying, dust suppression and disinfection on a 24/7basis. The Company capitalized on its small smart equipment and expanded the scope of its mechanical operations in CBDs, squaresand parks, back alleys and urban villages to curb cross-infections. It assumed the work of daily sanitation monitoring, disinfectionand waste collection in the community promptly and successfully built a "safety net" with no blind spots, no hidden hazards andwhere all waste are cleared on the day. Infore Enviro also concurrently strived to heed the government's call and resume work andproduction. The Company actively coordinated its resources and kickstarted production quickly, delivering a set of fog cannon,cleaning and disinfection vehicle, road washer, garbage truck and other large sanitation equipment to various regions across thecountry. As Infore Enviro endeavored to achieve success in its pandemic response as well as high quality growth, the Companyremained committed to working together with the community to overcome challenges.
2. Revenue and cost
(1) Breakdown of operating revenue
Unit: RMB
| 2021 | 2020 | YoY change (%) | |||
| Amount | Percentage of operating revenue | Amount | Percentage of operating revenue | ||
| Total revenue | 11,813,537,444.48 | 100% | 14,332,025,075.40 | 100% | -17.57% |
| Sector | |||||
| Smart sanitation | 9,237,262,348.48 | 78.19% | 10,323,422,172.13 | 72.03% | -10.52% |
| Others | 2,576,275,096.00 | 21.81% | 4,008,602,903.27 | 27.97% | -35.73% |
| Product | |||||
| Intelligent equipment | 6,211,980,162.80 | 52.58% | 8,354,554,126.13 | 58.29% | -25.65% |
| Smart service | 3,025,282,185.68 | 25.61% | 1,968,868,046.00 | 13.74% | 53.66% |
| Others | 2,576,275,096.00 | 21.81% | 4,008,602,903.27 | 27.97% | -35.73% |
| Region | |||||
| Domestic | 11,770,703,070.74 | 99.64% | 14,276,021,772.44 | 99.61% | -17.55% |
| Overseas | 42,834,373.74 | 0.36% | 56,003,302.96 | 0.39% | -23.51% |
| Wholesale | |||||
| Direct sales | 10,431,862,062.40 | 88.30% | 12,680,076,069.55 | 88.47% | -17.73% |
| Retail | 1,381,675,382.08 | 11.70% | 1,651,949,005.85 | 11.53% | -16.36% |
(2) Sector, product, region or sales model contributing to over 10% of operating revenue/profit
√ Applicable □ Not Applicable
Unit: RMB
| Revenue | Operating cost | Gross profit margin | YoY change in revenue | YoY change in cost | YoY change in gross profit margin | |
| Sector | ||||||
| Smart sanitation | 9,237,262,348.48 | 7,253,801,852.83 | 21.47% | -10.52% | -3.22% | -5.93% |
| Others | 2,576,275,096.00 | 1,956,516,573.54 | 24.06% | -35.73% | -40.19% | 5.67% |
| Product | ||||||
| Intelligent equipment | 6,211,980,162.80 | 4,737,242,308.93 | 23.74% | -25.65% | -20.73% | -3.49% |
| Smart service | 3,025,282,185.68 | 2,516,559,543.90 | 16.82% | 53.66% | 65.70% | -6.04% |
| Others | 2,576,275,096.00 | 1,956,516,573.54 | 24.06% | -35.73% | -40.19% | 5.67% |
| Region | ||||||
| Domestic | 11,770,703,070.74 | 9,174,926,853.06 | 22.05% | -17.55% | -14.37% | -2.89% |
| Overseas | 42,834,373.74 | 35,391,573.31 | 17.38% | -23.51% | -30.86% | 8.78% |
| Wholesale | ||||||
| Direct sales | 10,431,862,062.40 | 8,128,524,796.71 | 22.08% | -17.73% | -14.61% | -2.84% |
| Retail | 1,381,675,382.08 | 1,081,793,629.66 | 21.70% | -16.36% | -13.22% | -2.84% |
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 generated from physical sales higher than service revenue
√ Yes □ No
| Sector | Item | Unit | 2021 | 2020 | YoY change (%) |
| Smart sanitation | Sales | Unit | 18,689 | 24,233 | -22.88% |
| Production | Unit | 19,654 | 24,515 | -19.83% | |
| Inventory | Unit | 3,087 | 2,122 | 45.48% |
The explanation for data with YoY differences that exceed 30%
√ Applicable □ Not Applicable
The difference is primarily a result of an increased storage capacity for the inventory.
(4) Fulfillment of major sales/procurement contracts signed during the reporting period
□ Applicable √ Not Applicable
(5) Breakdown of operating cost
Sector
Unit: RMB
| Sector | Item | 2021 | 2020 | YoY change (%) | ||
| Amount | Percentage of operating cost | Amount | Percentage of operating cost | |||
| Smart sanitation | Raw materials | 4,554,862,117.93 | 62.79% | 6,641,092,791.72 | 88.77% | -31.41% |
| Smart sanitation | Labor expense | 758,997,718.92 | 10.46% | 343,174,808.02 | 4.59% | 121.17% |
| Smart sanitation | Depreciation | 340,775,770.93 | 4.70% | 104,388,340.95 | 1.40% | 226.45% |
| Smart sanitation | Utilities | 412,552,873.06 | 5.69% | 66,597,774.16 | 0.89% | 519.47% |
| Smart sanitation | Other manufacturing overhead | 1,186,613,371.99 | 16.36% | 325,178,262.77 | 4.35% | 264.91% |
| Others | Raw materials | 1,221,921,019.77 | 62.45% | 2,870,104,855.95 | 88.56% | -57.43% |
| Others | Labor expense | 94,761,477.14 | 4.84% | 97,432,062.90 | 3.01% | -2.74% |
| Others | Depreciation | 74,879,413.01 | 3.83% | 127,190,822.18 | 3.93% | -41.13% |
| Others | Utilities | 23,045,821.82 | 1.18% | 47,866,336.76 | 1.48% | -51.85% |
| Others | Other manufacturing overhead | 541,908,841.79 | 27.70% | 97,771,335.08 | 3.02% | 454.26% |
Note
Labor costs, depreciation, utilities and other manufacturing overhead rose significantly on a YoY basis. This is primarily a resultof increased revenue from sanitation services in the current period, leading to a corresponding increase in costs for supportingfacilities, labor and outsourced labor, as well as cost of construction and services for PPP projects.
(6) Changes in the scope of consolidated financial statements for the reporting period
√ Yes □ No
1. Entities newly included in the consolidated financial statements
| Company | Mode of acquisition | Date of acquisition | Capital contribution | Ratio of capital contribution (%) |
| Xiangtan Yinglian Environmental Industry Co., Ltd. | Incorporation | Mar. 2021 | 24,508,110.00 | 66 |
| Jinzhou Yinglian Urban Environmental Sanitation Management Co., Ltd. | Incorporation | Mar. 2021 | 12,000,000.00 | 100 |
| Handan Yinglian Environmental Sanitation Management Co., Ltd. | Incorporation | Apr. 2021 | 2,000,000.00 | 100 |
Ordos Environmental Sanitation Management Co.,Ltd.
| Ordos Environmental Sanitation Management Co., Ltd. | Incorporation | Jul. 2021 | 1,020,000.00 | 100 |
| Luanzhou Yinglian Environmental Service Co., Ltd. | Incorporation | Aug. 2021 | 2,000,000.00 | 100 |
| Guangzhou Huadu Yinglian Environment Co., Ltd. | Incorporation | Sept. 2021 | 100,000.00 | 100 |
| Fenghuang Yinglian Environmental Service Co., Ltd. | Incorporation | Sept. 2021 | 2,000,000.00 | 100 |
| Xinning Yinglian Urban Environmental Service Co., Ltd. | Incorporation | Sept. 2021 | 8,000,000.00 | 100 |
| Wanning Yinglian Environmental Industry Co., Ltd. | Incorporation | Oct. 2021 | 1,000,000.00 | 100 |
Foshan Gaoming Yingde Smart City ManagementCo., Ltd.
| Foshan Gaoming Yingde Smart City Management Co., Ltd. | Incorporation | Oct. 2021 | 5,000,000.00 | 60 |
| Huayuan Environmental Sanitation Management Co., Ltd. | Incorporation | Nov. 2021 | 260,000.00 | 100 |
| Zhongwei Yinglian Urban Environmental Service Co., Ltd. | Incorporation | Dec. 2021 | 1,000,000.00 | 70 |
| Guangzhou Yingsheng Environmental Sanitation | Incorporation | Jan. 2021 | [Note] | 100 |
| Service Co., Ltd. | ||||
| Yiyang Yinglian Environmental Sanitation Management Co., Ltd. | Incorporation | Jan. 2021 | [Note] | 100 |
| Shenzhen Infore Enviro Robot Co., Ltd. | Incorporation | Feb. 2021 | [Note] | 100 |
| Sanya Yinghe Environmental Sanitation Service Co., Ltd. | Incorporation | Feb. 2021 | [Note] | 100 |
| Wuhan Infore Zhonghui Environmental Protection Technology Co., Ltd. | Incorporation | Feb. 2021 | [Note] | 100 |
| Chongyang Yinglian Environmental Protection Co., Ltd. | Incorporation | Feb. 2021 | [Note] | 100 |
| Pu'an Yinghe Environmental Sanitation Management Co., Ltd. | Incorporation | Mar. 2021 | [Note] | 100 |
| Guangzhou Yinglian Environmental Sanitation Service Co., Ltd. | Incorporation | Mar. 2021 | [Note] | 100 |
| Wuhu Infore Zoomlion Environmental Technology Co., Ltd. | Incorporation | Mar. 2021 | [Note] | 100 |
| Suzhou Xiangcheng Yinglian Environmental Industry Co., Ltd. | Incorporation | Mar. 2021 | [Note] | 100 |
| Susong Yinghe Environmental Sanitation Management Co., Ltd. | Incorporation | Apr. 2021 | [Note] | 100 |
| Foshan Shunde Yingsheng Urban Environmental Management Co., Ltd. | Incorporation | Apr. 2021 | [Note] | 100 |
| Taizhou Zhongying Urban Environmental Service Co., Ltd. | Incorporation | May 2021 | [Note] | 100 |
| Liaocheng Yinghe Environmental Sanitation Service Co., Ltd. | Incorporation | May 2021 | [Note] | 100 |
| Shenzhen Tongying Environmental Industry Co., Ltd. | Incorporation | May 2021 | [Note] | 100 |
| Shenzhen Zhongfu Environmental Technology Co., Ltd. | Incorporation | Apr. 2021 | [Note] | 100 |
| Wuhai Yinglian Environmental Engineering Co., Ltd. | Incorporation | May 2021 | [Note] | 100 |
| Jian' ou Yingsheng Environmental Sanitation Management Co., Ltd. | Incorporation | Jun. 2021 | [Note] | 100 |
| Heping Liansheng Environmental Development Co., Ltd. | Incorporation | Jun. 2021 | [Note] | 100 |
| Zhongshan Yinglian Environmental Sanitation Management Co., Ltd. | Incorporation | Jun. 2021 | [Note] | 100 |
Ruili Yinglian Environmental Industry Co., Ltd.
| Ruili Yinglian Environmental Industry Co., Ltd. | Incorporation | Jul. 2021 | [Note] | 100 |
| Zongyang Tongying Environmental Sanitation Management Co., Ltd. | Incorporation | Jul. 2021 | [Note] | 100 |
| Guangdong Infore Smart Technology Co., Ltd. | Incorporation | Jul. 2021 | [Note] | 100 |
Fengxian Zhongying Urban EnvironmentalSanitation Management Co., Ltd.
| Fengxian Zhongying Urban Environmental Sanitation Management Co., Ltd. | Incorporation | Jul. 2021 | [Note] | 100 |
| Shanghai Yingwofeng Environment Technology Development Co., Ltd. | Incorporation | Jul. 2021 | [Note] | 100 |
| Yichang Yinglian Urban Environmental Service Co., Ltd. | Incorporation | Jul. 2021 | [Note] | 100 |
| Huai' an Yinghe Environment Technology Co., Ltd. | Incorporation | Jul. 2021 | [Note] | 100 |
| Zhangjiagang Zhongying Environmental Development Co., Ltd. | Incorporation | Aug. 2021 | [Note] | 100 |
| Guangde Yinghe Environmental Sanitation Development Co., Ltd. | Incorporation | Aug. 2021 | [Note] | 100 |
| Foshan Shunde Yinghong Smart Environmental Sanitation Management Co., Ltd. | Incorporation | Oct. 2021 | [Note] | 100 |
| Zhongshan Yinglian Urban Environmental Management Co., Ltd. | Incorporation | Oct. 2021 | [Note] | 100 |
| Taizhou Zhongying Environmental Management Co., Ltd. | Incorporation | Oct. 2021 | [Note] | 100 |
| Weihui Yinglian Environmental Service Co., Ltd. | Incorporation | Oct. 2021 | [Note] | 100 |
| Baisha Yinghe Environmental Sanitation Service Co., Ltd. | Incorporation | Nov. 2021 | [Note] | 100 |
| Zhoushan Yinghe Environmental Sanitation Service Co., Ltd. | Incorporation | Nov. 2021 | [Note] | 100 |
| Wuhan Tongying Environmental Sanitation Management Co., Ltd. | Incorporation | Nov. 2021 | [Note] | 100 |
| Nanchang Yingsheng Environmental Protection Service Co., Ltd. | Incorporation | Nov. 2021 | [Note] | 100 |
| Wuhu Yinghe Environmental Sanitation Management Co., Ltd. | Incorporation | Nov. 2021 | [Note] | 100 |
| Huaibei Yinghe Urban Environmental Service Co., Ltd. | Incorporation | Nov. 2021 | [Note] | 100 |
| Hanshou Jinglan Environmental Protection Co., Ltd. | Incorporation | Nov. 2021 | [Note] | 100 |
| Chongqing Tongliang Fenglan Environmental Protection Technology Co., Ltd. | Incorporation | Nov. 2021 | [Note] | 100 |
| Shenzhen Yingli Environmental Sanitation Service Co., Ltd. | Incorporation | Dec. 2021 | [Note] | 100 |
| Guangrao Yinghe Urban Service Co., Ltd. | Incorporation | Dec. 2021 | [Note] | 100 |
| Anning Tongying Environmental Sanitation Service Co., Ltd. | Incorporation | Dec. 2021 | [Note] | 100 |
| Foshan Yinghe Investment Co., Ltd | Incorporation | Jun. 2021 | [Note] | 100 |
| Guangdong Yinglian Urban Environmental Management Co., Ltd. | Incorporation | Jun. 2021 | [Note] | 100 |
2. Disposal of subsidiaries
Single disposal of investment in a subsidiary that results in loss of control.
| Name of subsidiary | Consideration of equity disposal | Proportion of equity disposal (%) | Mode of equity disposal | Date of loss of control | Basis determining date of loss of control | Difference between the consideration of disposal and the share of the subsidiary's net assets corresponding to investment disposal in consolidated financial statement |
| Foshan Yingtong Electrical Materials Co., Ltd. | 255,000,000.00 | 51.00 | Sale | Feb. 2021 | Substantive transfer of control | 2,356,921.46 |
| Hunan Ningxiang Renhe Garbage Comprehensive Treating Co., Ltd. | 92,500,000.00 | 100.00 | Sale | Nov. 2021 | Substantive transfer of control | 25,170,570.60 |
| Guangdong Yingling Testing Technology Co., | 1.00 | 51.00 | Sale | Aug. 2021 | Substantive transfer of control | 4,276,507.83 |
(continued)
Ltd.
Name ofsubsidiary
| Name of subsidiary | Proportion of remaining equity interests on date of loss of control (%) | Carrying amounts of remaining equity interests on date of loss of control | Fair value of remaining equity interests on date of loss of control | Gain or loss incurred from remaining equity interests re-measured according to fair value | Methodology and key assumptions for determining fair value of remaining equity interest on date of loss of control | Other comprehensive income related to equity investments of subsidiary, amount of transfer of changes in other owners' equity to gains and losses on investment |
| Foshan Yingtong Electrical Materials Co., Ltd. | 49.00 | 272,872,012.67 | 245,000,000.00 | -27,872,012.67 | Determined according to equity value of the portion disposed | -- |
HunanNingxiangRenhe GarbageComprehensiveTreating Co.,Ltd.
| Hunan Ningxiang Renhe Garbage Comprehensive Treating Co., Ltd. | -- | -- | -- | -- | -- | -- |
| Guangdong Yingling Testing Technology Co., Ltd. | 49.00 | -4,108,800.68 | -- | 4,108,800.68 | Determined according to equity value of the portion disposed | -- |
3. Entities excluded from the consolidation scope
| Company | Mode of equity disposal | Date of equity disposal | Net assets on disposal date | Net profit from the beginning of the period to the disposal date |
| Liling Zhongfeng Environmental Industry Co., Ltd. | De-registration | June 29, 2021 | -- | -983.54 |
(7) Major changes in the business, products or services in the reporting period
□ Applicable √ Not Applicable
(8) Major customers and suppliers
Major customers of the Company
| Total sales to top five customers (RMB) | 931,507,483.46 |
| Total sales to top five customers as percentage of total sales of the reporting period (%) | 7.88% |
| Total sales to related parties among top five customers as percentage of total sales of the reporting period (%) | 0.00% |
Top five customers
| No. | Customer | Sales revenue (RMB) | As percentage of the total sales revenue of the reporting period (%) |
| 1 | Customer A | 431,275,241.23 | 3.65% |
| 2 | Customer B | 135,070,606.80 | 1.14% |
| 3 | Customer C | 131,464,510.32 | 1.11% |
| 4 | Customer D | 130,540,081.73 | 1.11% |
| 5 | Customer E | 103,157,043.38 | 0.87% |
| Total | -- | 931,507,483.46 | 7.88% |
Other information about major customers
□ Applicable √ Not Applicable
Major suppliers of the Company
| Total purchases from top five suppliers (RMB) | 1,948,795,492.30 |
| Total purchases from top five suppliers as percentage of total purchases of the reporting period (%) | 31.15% |
| Total purchases from related parties among top five suppliers as percentage of total purchases of the Reporting Period (%) | 0.00% |
Top five suppliers
| No. | Supplier | Purchase in the reporting period (RMB) | As percentage of the total purchases (%) |
| 1 | Customer A | 1,311,387,884.96 | 20.96% |
| 2 | Customer B | 200,092,183.53 | 3.20% |
| 3 | Customer C | 195,481,317.70 | 3.12% |
| 4 | Customer D | 125,346,682.22 | 2.00% |
| 5 | Customer E | 116,487,423.89 | 1.86% |
| Total | -- | 1,948,795,492.30 | 31.15% |
Other information about major suppliers
□ Applicable √ Not Applicable
3. Expenses
Unit: RMB
| 2021 | 2020 | YoY change (%) | Reason for material change | |
| Selling expenses | 738,833,571.05 | 801,289,013.51 | -7.79% | -- |
| Administrative expenses | 585,353,407.57 | 536,466,686.12 | 9.11% | -- |
| Financial Expenses | 58,604,804.53 | 66,121,331.59 | -11.37% | -- |
| R&D expenses | 262,619,127.29 | 254,677,332.19 | 3.12% | -- |
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 |
| Anodic Stripping Voltammetry Heavy Metal Detection Water Quality On-line Monitoring Series products | To construct an Anodic Stripping Voltammetry technology CP, and to manufacture Trace Amount Heavy Metal On-line Monitoring equipment, so as to build up a technology and equipment reserve for the water quality monitoring project expansion during the | R&D completed | To manufacture a full-range Category I Heavy Metal Trace Amount Water Quality Monitoring products and reach a domestic leading level of technology. | It is conducive to the Company's continuous advancement towards high-tech innovative enterprises and breakthroughs in technical difficulties. |
| 14th Five Year Plan. | ||||
| On-line groundwater quality monitoring series | Build an Ultra-Low Concentration Water Sample Testing Technology CP to solve the problem of on-line monitoring of drinking water sources, groundwater, lakes, and reservoirs with good water quality and very low pollutant concentrations. | R&D completed | To complete the R&D and launch of Groundwater Ammonia-Nitrogen and Total Phosphorus Water Quality Analyzer. | It is conducive to the Company's continuous advancement towards high-tech innovative enterprises and breakthroughs in technical difficulties. |
| On-line carbon emission monitoring series | To construct a full-range carbon emission monitors and system to empower carbon neutrality and emission reduction. | R&D completed | To complete the R&D and launch of Atmospheric Carbon Emission CO2, CH4 Analyzer, and Systematic, Pollution Source Carbon Emission CO2、CO、CH4 Analyzer and System. | It is conducive to the Company's continuous advancement towards high-tech innovative enterprises and breakthroughs in technical difficulties. |
| Nuclear-grade double-layered stack-up axial flow 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 in progress | To industrialize the result and generate market orders | This helps to improve the key competitive advantages of the company |
| Purification fan dedicated for pastoral purposes | 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 |
| Electric garbage truck with detachable back container | To develop garbage transferring trucks used for the classified collection and transfer of domestic waste of places such as tenement residences, towns and villages, commercial area, tourist attractions, schools, etc., so as to fill our small sanitation garbage removal spectrum | R&D completed | To develop a full electrical wet garbage collection & transportation truck with airtight transportation and zero dripping | It is conducive to the Company's continuous advancement towards high-tech innovative enterprises and breakthroughs in technical difficulties. |
| Full electrical direct-drive articulated barrel road sweeper | To develop a full electrical direct-drive barrel road sweeper product mainly used for the sweeping and cleaning of urban auxiliary roads, urban villages and other narrow areas, in response to the trend and demand for new energy in the industry | R&D completed | To develop a full electrical, direct-drive, articulated, quiet, efficient, and durable product | It is conducive to the Company's continuous advancement towards high-tech innovative enterprises and breakthroughs in technical difficulties. |
| Full electrical sidewalk/auxiliary road washer | To meet the market demand for mechanized, new energy washing of narrow paths such as sidewalks | R&D completed | To realize the advantages of light-weight, small, durable, zero-emission, and low noise without compromising the washing capability of the product | It is conducive to the Company's continuous advancement towards high-tech innovative enterprises and breakthroughs in technical difficulties. |
| Multi-functional sweeper/mower | To stockpile mowing equipment technology and expand the field of application | R&D completed | To complete the stockpiling of mowing equipment technology and the development of the | It is conducive to the Company's continuous advancement towards high- |
| device | for multi-functional sweeper | prototype | tech innovative enterprises and breakthroughs in technical difficulties. | |
| 11T light-weight airtight leakage-free compression garbage truck | To solve the airtightness challenge of leakage-free garbage truck's trash containers. | R&D completed | To develop an airtight leakage-free compression garbage truck | It is conducive to the Company's continuous advancement towards high-tech innovative enterprises and breakthroughs in technical difficulties. |
| 18T short boom Dongfeng commercialized wall cleaning truck | To solve the customer's problem of occupying a smaller section of the road during vehicle operation and the complicated operation of adjusting the boom | R&D completed | To meet the customer's problem of occupying a smaller section of the road during vehicle operation and simple operation of adjusting the boom | It is conducive to the Company's continuous advancement towards high-tech innovative enterprises and breakthroughs in technical difficulties. |
| 12T tall tree pruning truck | To expand the array of our products and meet the demand for trimming roadside trees and the pruning and beautifying of tall branches | R&D completed | To develop a specialized truck for the pruning of roadside trees in the cities, highways, and tourist attractions | It is conducive to the Company's continuous advancement towards high-tech innovative enterprises and breakthroughs in technical difficulties. |
Information about R&D personnel
| 2021 | 2020 | Change (%) | |
| Number of R&D personnel | 1,407 | 1,356 | 3.76% |
| R&D personnel as percentage of total employees | 10.53% | 15.54% | -5.01% |
| Education background of R&D personnel | —— | —— | —— |
| Bachelor‘s degree | 1,064 | 1,082 | -1.66% |
| Master's degree | 303 | 223 | 35.87% |
| Doctoral degree | 6 | 2 | 200.00% |
| College degree | 34 | 49 | -30.61% |
| Age composition of R&D personnel | —— | —— | —— |
| < 30 years | 647 | 586 | 10.41% |
| 30~40 years | 596 | 590 | 1.02% |
| > 40 years | 114 | 117 | -2.56% |
Information about R&D investments
| 2021 | 2020 | Change (%) | |
| R&D investments (RMB) | 289,920,069.26 | 264,110,819.71 | 9.77% |
| R&D investments percentage of sales revenue | 2.45% | 1.84% | 0.61% |
| Capitalized R&D investments (RMB) | 27,300,941.97 | 9,433,487.52 | 189.40% |
| Capitalized R&D investments as percentage of total R&D investments | 9.42% | 3.57% | 5.85% |
Reasons and impacts of material change in R&D personnel composition
□ Applicable √ Not Applicable
Reasons for material YoY change in the percentage of total R&D investments in operating revenue
□ Applicable √ Not Applicable
Reasons and rationale for significant change in capitalization rate of R&D investment
□ Applicable √ Not Applicable
5. Cash flow
Unit: RMB
| Item | 2021 | 2020 | YoY change (%) |
| Subtotal of cash inflows from operating activities | 14,872,489,012.69 | 15,584,916,372.80 | -4.57% |
| Subtotal of cash outflows from operating activities | 14,063,270,292.56 | 13,896,202,281.05 | 1.20% |
| Net cash flows from operating activities | 809,218,720.13 | 1,688,714,091.75 | -52.08% |
| Subtotal of cash inflows from investing activities | 5,412,369,009.46 | 5,451,867,664.79 | -0.72% |
| Subtotal of cash outflows from investing activities | 6,534,593,586.86 | 6,335,579,681.05 | 3.14% |
| Net cash flows from investing activities | -1,122,224,577.40 | -883,712,016.26 | 26.99% |
| Subtotal of cash inflows from financing activities | 2,901,823,101.45 | 5,922,067,481.72 | -51.00% |
| Subtotal of cash outflows from financing activities | 3,125,894,632.23 | 4,680,215,496.91 | -33.21% |
| Net cash flows from financing activities | -224,071,530.78 | 1,241,851,984.81 | -118.04% |
| Net increase in cash and cash equivalents | -539,079,213.51 | 2,046,145,151.54 | -126.35% |
Explanation on main impact factor of significant change of the data YoY
√ Applicable □ Not Applicable
(1) Net cash generated from operating activities decreased by 52.08% YoY, mainly due to a) the expansion of business scale in2020 led to an increase in accounts payable at the end of the reporting period, which was paid in the current period; b) increase inpurchase expenses due to early stocking in the current period.
(2) Cash generated from financing activities decreased by 51.00% YoY, mainly due to company's issuance of convertiblecorporate bonds in the previous year.
(3) Cash used in financing activities decreased by 33.21% YoY, mainly attributable to decrease in repayment of bank loanscompared with the prior period.Explanation on main reasons leading to the material difference between net cash flows from operating activities during the ReportingPeriod and net profit for the year
□ Applicable √ Not Applicable
V. Analysis of Non-Core Business
√ Applicable □ Not Applicable
Unit: RMB
| Amount | Percentage of total profit | Reasons for generation | Recurrent or non-recurrent |
| Investment income | 239,933,995.59 | 29.20% | Mainly comprises performance compensation of the original shareholders of Greenlander Environmental of RMB 163,460,620.00, return on investment recognized using the equity method, and returns on wealth management product. | RMB 36,885,135.08 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 | -73,074,674.05 | -8.89% | -- | No |
| Impairment of assets | -230,940,495.92 | -28.10% | Mainly as a result of provision of goodwill impairment loss | No |
| Non-operating income | 10,028,024.42 | 1.22% | -- | No |
| Non-operating expenses | 11,786,454.06 | 1.43% | -- | No |
VI. Assets and Liabilities
1. Material changes of asset items
Unit: RMB
| December 31, 2021 | January 1, 2021 | Change in percentage (%) | Reason for material change | |||
| Amount | As a percentage of total assets | Amount | As a percentage of total assets | |||
| Cash and cash equivalents | 4,583,245,371.02 | 16.18% | 5,904,127,970.85 | 19.59% | -3.41% | -- |
| Accounts receivable | 4,946,704,963.71 | 17.46% | 5,564,834,864.04 | 18.46% | -1.00% | -- |
| Contract assets | 140,367,802.53 | 0.50% | 170,840,655.62 | 0.57% | -0.07% | -- |
| Inventories | 1,124,149,719.01 | 3.97% | 1,305,177,407.85 | 4.33% | -0.36% | -- |
| Investment properties | 1,837,703.68 | 0.01% | 2,009,006.98 | 0.01% | 0.00% | -- |
| Long-term equity investment | 603,580,781.31 | 2.13% | 318,243,332.69 | 1.06% | 1.07% | -- |
| Fixed assets | 1,758,052,005.19 | 6.21% | 1,640,546,747.67 | 5.44% | 0.77% | -- |
| Construction in progress | 224,068,633.86 | 0.79% | 70,735,483.95 | 0.23% | 0.56% | -- |
| Right-of-use assets | 25,505,911.86 | 0.09% | 30,945,067.78 | 0.10% | -0.01% | -- |
| Short-term borrowings | 439,024,733.46 | 1.55% | 1,657,905,376.55 | 5.50% | -3.95% | -- |
| Contract liabilities | 210,432,628.98 | 0.74% | 181,051,683.90 | 0.60% | 0.14% | -- |
| Long-term borrowings | 1,697,742,767.72 | 5.99% | 765,643,457.78 | 2.54% | 3.45% | -- |
| Lease liabilities | 18,523,740.10 | 0.07% | 23,243,848.61 | 0.08% | -0.01% | -- |
| Intangible assets | 5,319,721,844.23 | 18.78% | 4,875,729,418.41 | 16.18% | 2.60% | -- |
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 in the current period | Cumulative changes in fair value included in equity | Accrual of impairment in current period | Purchase amount in the current period | Sales amount in the current period | Other changes | Closing balance |
| Financial assets | ||||||||
| 1. Trading financial assets (exclusive of derivative financial assets) | 127,192,985.11 | -76,032,983.26 | 5,263.80 | 51,165,265.65 | 0.00 | |||
| 2. Derivative financial assets | 824,750.00 | 503,500.27 | -1,328,250.27 | 0.00 | ||||
| 4. Investments in other entity instrument | 26,070,000.00 | 4,280,000.00 | -6,087,028.99 | 15,702,971.01 | ||||
| Subtotal of financial assets | 154,087,735.11 | -75,529,482.99 | 4,280,000.00 | 5,263.80 | 51,165,265.65 | -7,415,279.26 | 15,702,971.01 | |
| Total | 154,087,735.11 | -75,529,482.99 | 0.00 | 4,280,000.00 | 5,263.80 | 51,165,265.65 | -7,415,279.26 | 15,702,971.01 |
| Financial liabilities | 810,300.00 | -431,400.00 | -378,900.00 | 0.00 | ||||
Other changesOther changes were due to the transfer of derivative financial assets and financial liabilities from Foshan Yingtong ElectricMaterial Co., Ltd. (hereinafter referred to as "Foshan Yingtong") following its disposal during the current period.
Indicate whether any material changes occurred to the measurement attributes of the major assets of the Company during thereporting period.
□ Yes √ No
3. Restricted asset rights as of end of reporting period
| Item | Carrying amounts at the end of the period | Reason for restriction |
| Cash and cash equivalents | 464,498,485.30 | Deposits, certificate of deposit, frozen litigation preservation, escrow account |
| Accounts receivable | 226,481,841.35 | Pledged |
| Notes receivable - bank acceptance | 5,050,609.92 | Pledged |
Notes receivable - trade acceptance
| Notes receivable - trade acceptance | 14,668,452.95 | Pledged |
| Receivable financing | 143,994,957.80 | Pledged |
Long-term account receivable and non-current assets duewithin one year
| Long-term account receivable and non-current assets due within one year | 49,479,996.55 | Factoring financing with recourse |
| Fixed assets | 514,793,694.20 | Mortgaged |
| Intangible assets | 215,913,237.17 | Mortgaged |
| 100% equity interests of Funan Greenlander Environmental Protection Co., Ltd. | 63,725,949.84 | Mortgaged [Note] |
| 100% equity interests of Shouxian Greenlander New Energy Co., Ltd. | 83,655,768.30 | |
| 100% equity interests of Xiantao Greenlander Environmental Protection Power Co., Ltd. | 218,180,606.50 | |
| 100% equity interests of Poyang Greenlander Environmental Protection Power Co., Ltd. | 61,177,347.25 | |
| 100% equity interests of Lianjiang Greenlander New Energy Co., Ltd. | 25,074,902.82 | Frozen for litigation preservation |
| Total | 2,086,695,849.95 | -- |
[Note] The pledged amount is the net assets of the Company's share of equity.
VII. Investments
1. Overview
□ Applicable √ Not Applicable
2. Significant equity investments made in the reporting period
□ Applicable √ Not Applicable
3. Significant non-equity investments ongoing in the reporting period
□ Applicable √ Not Applicable
4. Financial investments
(1) Securities investments
√ Applicable □ Not Applicable
Unit: RMB
| Securities category | Stock code | Security abbreviation | Initial investment cost | Accounting measurement model | Carrying amounts at the beginning of the period | Gain/loss on changes in fair value in the current period | Cumulative changes in fair value included in equity | Purchase amount in the current period | Sales amount in the current period | Gain/loss during the reporting period | Carrying amounts at the end of the period | Accounting subject | Source of funds |
| Domestics/overseas-listed stock | 600340 | CFLD | 3,019,500.00 | Fair value measurement | 126,067,500.00 | -73,125,000.00 | 50,095,697.15 | -75,971,802.85 | 0.00 | Trading financial assets | Original capital contribution | ||
| Domestics/overseas-listed | 002161 | Invengo | 1,662,299.72 | Fair value measurement | 1,117,293.21 | -25,890.93 | 1,052,950.04 | -64,343.17 | 0.00 | Trading financial assets | Purchased from secondary market |
| stock | |||||||||||||
| Domestics/overseas-listed stock | 605155 | Xidamen | 2,095.83 | Fair value measurement | 3,017.52 | -433.62 | 2,525.83 | -491.69 | 0.00 | Trading financial assets | Purchased from secondary market | ||
| Domestics/overseas-listed stock | 605179 | Yiming Food | 2,698.53 | Fair value measurement | 5,174.38 | -383.83 | 7,157.40 | 1,983.02 | 0.00 | Trading financial assets | Purchased from secondary market | ||
| Domestics/overseas-listed stock | 605189 | Fuchun Dye and Weave | 2,992.50 | Fair value measurement | 1,747.50 | 2,992.50 | 4,165.25 | 1,172.75 | 0.00 | Trading financial assets | Purchased from secondary market | ||
| Domestics/overseas-listed stock | 605277 | Xinya Electronic | 2,271.30 | Fair value measurement | 2,749.68 | 2,271.30 | 2,769.98 | 498.68 | 0.00 | Trading financial assets | Purchased from secondary market | ||
| Other securities investments held at the end of the reporting period | 0.00 | -- | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | -- | -- | ||
| Total | 4,691,857.88 | -- | 127,192,985.11 | -73,147,211.20 | 0.00 | 5,263.80 | 51,165,265.65 | -76,032,983.26 | 0.00 | -- | -- | ||
| Disclosure date of the board meeting announcement approving the securities investments | April 23, 2018 | ||||||||||||
| Disclosure date of the general meeting announcement approving the securities investments (if any) | May 16, 2018 | ||||||||||||
(2) Derivatives investments
□ Applicable √ Not Applicable
No such cases in the reporting period.
5. Use of funds raised
√ Applicable □ Not Applicable
(1) Overall use of funds raised
√ Applicable □ Not Applicable
Unit: RMB 10,000
| Year | Fund-raising type | Total amount of funds raised | Total amount of raised funds used in the | Accumulative amount of raised funds used | Total amount of raised funds that changed purposes | Accumulative amount of raised funds that | Proportion of accumulative raised funds that | Total amount of unused raised funds | Purpose and tracking of unused raised funds | Raised funds left unused for >2 |
| current period | during the reporting period | changed purposes | changed purposes | years | ||||||
| 2020 | Public offering of convertible corporate bonds | 145,733.62 | 10,106.41 | 27,569.8 | 0 | 0 | 0.00% | 118,728.9 | The Proposal on Using Part of the Idle Raised Funds 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 raised funds 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 of the date when the Proposal was deliberated and approved by the Board of Directors. | 0 |
| Total | -- | 145,733.62 | 10,106.41 | 27,569.8 | 0 | 0 | 0.00% | 118,728.9 | -- | 0 |
| Explanation of the overall use of funds raised | ||||||||||
| 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 China Securities Regulatory Commission, the lead underwriter of the Company, China Renaissance Securities (China) Co., Ltd. (formerly known as "Huajing Securities", hereinafter referred to as Huaxing Securities) issued 14,761,896 convertible corporate bonds (hereinafter referred to as CB) to the public with the offering price of 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 | ||||||||||
(2) Committed projects of raised funds
√ Applicable □ Not Applicable
Unit: RMB 10,000
this public offering. Funds raised in this offering had been remitted to the Company's raised fund supervision account by the leadunderwriter Huaxing Securities on November 10, 2020, and the amount actually received after deducting RMB 15,238,100 ofunderwriting and sponsorship fees (net of tax) was RMB 1,460,951,500. After deducting RMB 3,615,300 (net of tax) of externalfees that were directly related to CB such as online offering expenses, printing fee for the prospectus, fees of the reportingaccountant, counsel fee, credit rating fee, information disclosure expenses, and issuance commission fee, the net amount of raisedfunds from this offering was RMB 1,457,336,200. The availability of the above-mentioned raised funds has been verified by Pan-China Certified Public Accountants LLP in its Capital Verification Report (T.J.Y. [2020] No.490).As of December 31, 2021, the accumulated use of raised funds was RMB 275,698,000, and the total amount of raised fundsnot yet used was RMB 1,187,289,000.
Committedinvestmentprojects andinvestment ofexcessive raisedfunds
| Committed investment projects and investment of excessive raised funds | Whether projects have been changed (including partial change) | Total amount of funds raised | 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 benefits are 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 | 10,106.41 | 11,474.67 | 8.85% | December 31, 2022 | 1,175.26 | Not applicable | 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 | Not applicable | No |
| Subtotal of committed investment projects | -- | 145,733.62 | 145,733.62 | 10,106.41 | 27,569.8 | -- | -- | 1,175.26 | -- | -- |
| Investment of excessive raised funds | ||||||||||
| Not applicable | ||||||||||
| 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 raised funds | -- | 0 | 0 | 0 | 0 | -- | -- | 0 | -- | -- |
| Total | -- | 145,733.62 | 145,733.62 | 10,106.41 | 27,569.8 | -- | -- | 1,175.26 | -- | -- |
| Cases and reasons for failing to realize the planned progress or predicted return (by specific projects) | None | |||||||||
| Explanations of the material changes in the | None | |||||||||
| project feasibility | |
| Amount, purpose, and progress of excessive raised funds | Not applicable |
| Location changes in the implementation of investment projects of the raised funds | Not applicable |
| Adjustments to the implementation method of investment projects of the raised funds | Not applicable |
| Early investment and placement of the investment projects of the raised funds | Not applicable |
| Temporary replenishment of working capital with the idle raised funds | Applicable |
| The Proposal on Using Part of the Idle Raised Funds 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 raised funds 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 of the date when the Proposal was deliberated and approved by the Board of Directors. The Company issued the Announcement on the Early Return of Funds Raised for Temporary Replenishment of Working Capital on October 21, 2021, in which the Company returned all the above-mentioned RMB 1 billion of funds raised for temporary replenishment of working capital to the relevant designated account for funds raised on October 20, 2021 in advance for a period not exceeding 12 months. The Proposal on Using Part of the Idle Raised Funds 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 raised funds 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 of the date when the Proposal was deliberated and approved by the Board of Directors. As of December 31, 2021, the balance of the idle raised funds 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 raised funds from the project implementation | Not applicable |
| Purpose and tracking of the unused raised funds | The Proposal on Using Part of the Idle Raised Funds 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 raised funds 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 of the date when the Proposal was deliberated and approved by the Board of Directors. As of December 31, 2021, the balance of the idle raised funds used by the Company for temporary replenishment of working capital was RMB 1,000,000,000. The other unused raised fund of RMB 187,289,000 were kept in the designated account for funds raised in the form of demand deposits to be used for the construction of the corresponding investment projects. |
| Problems in the use of raised funds | None |
(3) Changed projects of raised funds
□ Applicable √ Not Applicable
No such cases in the reporting period.Ⅷ. Sale of Major Assets and Equity Investments
1. Sale of major assets
□ Applicable √ Not Applicable
No such cases in the reporting period.
2. Sale of major equity investments
√ Applicable □ Not Applicable
and disclosure, orother cases
Counterparty
| Counterparty | Equity investments sold | Selling date | Transaction price (RMB 10,000) | Net profit contributed by the equity investment to the listed company from the beginning of the reporting period to the selling date (RMB 10,000) | Impact on the Company from the sale of the equity investment | Proportion of the net profit contributed to the listed company from the sale of equity investment to total net profit | Pricing principle of sale of equity investment | Whether it is a related party transaction | Related party relationship with the transaction counterparty | Whether the equity investments involved have all been transferred | Whether the implementation is on schedule, and if not, the reasons and measures taken by the Company should be explained | Disclosure date | Disclosure document |
| Guangdong Yinghe Enterprise Management Co., Ltd. | 51% of equity interest in Foshan Yingtong Electrical Materials Co., Ltd. | February 28, 2021 | 25,500 | 735.48 | The sale of the wire enamel business is based on the overall development strategy to continue to focus on the core business of "smart sanitation", optimize resource allocation and asset structure, and strategicall | -3.55% | At fair value market price | No | None | Yes | Yes | March 17,2021 | For details, please refer to the Announcement on the Completion of the Transfer of 51% Equity Interests in Subsidiaries by Public Listing (Announcement No. 2021-014) disclosed on Cninfo (www.cninfo.com.cn/) |
IX. Analysis of Major Subsidiaries and Joint Stock Companies
√ Applicable □ Not Applicable
Main subsidiaries and joint stock companies with an over 10% influence on the Company's net profit
Unit: RMB
y divestnon-corebusinessassets,which hasa positiveimpact onthecompany'soperations.Company
| Company | Type of company | Principal activities | Registered capital (Unit: RMB 10,000) | Total assets | Net assets | Revenue | Operating profit | Net profit |
| Changsha Zoomlion Environmental Industry Co., Ltd. | Subsidiary | Smart sanitation | 235152.98 | 13,832,759,909.86 | 7,211,512,816.31 | 8,861,710,574.04 | 896,221,466.35 | 785,151,698.46 |
| Shenzhen Greenlander Environmental Protection Co., Ltd. | Subsidiary | Others | 15,000 | 1,888,558,410.13 | 50,356,767.90 | 352,289,730.86 | 10,948,736.66 | 10,881,641.78 |
| Guangdong Infore Technology Co., Ltd. | Subsidiary | Others | 11,000 | 926,920,963.55 | 112,482,176.21 | 292,885,322.94 | 4,122,576.57 | 6,253,847.02 |
| Foshan Infore Water Environment Investment Co., Ltd. | Subsidiary | Others | 30,000 | 546,349,317.95 | 361,779,370.88 | 161,634,469.82 | 57,649,272.90 | 50,586,828.12 |
Acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ Not Applicable
| Company name | Acquisition and disposal of subsidiaries during the reporting period | Effects on the overall operations and performance |
| Xiangtan Yinglian Environmental Industry Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Jinzhou Yinglian Urban Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Handan Yinglian Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Ordos Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Luanzhou Yinglian Environmental Service Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Guangzhou Huadu Yinglian Environment Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Fenghuang Yinglian Environmental Service Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Xinning Yinglian Urban Environmental Service Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Wanning Yinglian Environmental Industry Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Foshan Gaoming Yingde Smart City Management Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Huayuan Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Zhongwei Yinglian Urban Environmental Service Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Guangzhou Yingsheng Environmental Sanitation Service Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Yiyang Yinglian Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Shenzhen Infore Enviro Robot Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Sanya Yinghe Environmental Sanitation Service Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Wuhan Infore Zhonghui Environmental Protection Technology Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Chongyang Yinglian Environmental Protection Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Pu'an Yinghe Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Guangzhou Yinglian Environmental Sanitation Service Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Wuhu Infore Zoomlion Environmental Technology Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Suzhou Xiangcheng Yinglian Environmental Industry Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Susong Yinghe Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Foshan Shunde Yingsheng Urban Environmental Management Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Taizhou Zhongying Urban Environmental Service Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Liaocheng Yinghe Environmental Sanitation Service Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Shenzhen Tongying Environmental Industry Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Shenzhen Zhongfu Environmental Technology Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Wuhai Yinglian Environmental Engineering Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Jian' ou Yingsheng Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Heping Liansheng Environmental Development Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Zhongshan Yinglian Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Ruili Yinglian Environmental Industry Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Zongyang Tongying Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Guangdong Infore Smart Technology Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Fengxian Zhongying Urban Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Shanghai Yingwofeng Environment Technology Development Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Yichang Yinglian Urban Environmental Service Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Huai' an Yinghe Environment Technology Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Zhangjiagang Zhongying Environmental Development Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Guangde Yinghe Environmental Sanitation Development Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Foshan Shunde Yinghong Smart Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Zhongshan Yinglian Urban Environmental Management Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Taizhou Zhongying Environmental Management Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Weihui Yinglian Environmental Service Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Baisha Yinghe Environmental Sanitation Service Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Zhoushan Yinghe Environmental Sanitation Service Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Wuhan Tongying Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Nanchang Yingsheng Environmental Protection Service Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Wuhu Yinghe Environmental Sanitation Management Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Huaibei Yinghe Urban Environmental Service Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Hanshou Jinglan Environmental Protection Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Chongqing Tongliang Fenglan Environmental Protection Technology Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Shenzhen Yingli Environmental Sanitation Service Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Guangrao Yinghe Urban Service Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Anning Tongying Environmental Sanitation Service Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Changsha Fenglan Environmental Protection Technology Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Foshan Yinghe Investment Co., Ltd | Incorporation | Positive effects on the Company’s business |
| Guangdong Yinglian Urban Environmental Management Co., Ltd. | Incorporation | Positive effects on the Company’s business |
| Liling Zhongfeng Environmental Industry Co., Ltd. | De-registration | Asset optimization, no major impact on the company's production, operation and performance |
| Foshan Yingtong Electrical Materials Co., Ltd. | Selling | Asset optimization, no major impact on the company's production, operation and performance |
| Hunan Ningxiang Renhe Garbage Comprehensive Treating Co., Ltd. | Selling | Asset optimization, no major impact on the company's production, operation and performance |
| Guangdong Yingling Testing Technology Co., Ltd. | Selling | Asset optimization, no major impact on the company's production, operation and performance |
Fact Sheet of major subsidiariesX. Structured Entities Controlled by the Company
□ Applicable √ Not Applicable
XI. Future Prospects of the Company
(I) Market opportunities
1. The 2021 national policies are favorable for the development of sanitation industry
On January 19, the State Administration of Market Regulation and seven other departments issued the Guidelines on Promotingthe Construction of Rural Living Environment Standard System. The framework, the construction standards, and the implementationand promotion standards of the rural living environment standard system were identified from five aspects, namely: generalprinciples, rural toilets, domestic waste, domestic sewage, and the village image.
On February 21, the No. 1 Central Document - Guidelines on Pushing Forward All-Round Rural Revitalization and SpeedingUp Agriculture and Countryside Modernization was published. The State Council offered directions of action for countrysideconstruction and ecological optimization in the construction of rural living environments, covering many aspects including "toiletrevolution", sewage treatment and waste management.
On May 6, the National Development and Reform Commission and the Ministry of Housing and Urban-Rural Developmentpublished the 14th Five Year Plan Development Plan for Urban-Rural Domestic Waste Classification and Disposal Facilities. Basedon the country's 14th Five Year Plan, this plan is focused on the classification and disposal of domestic waste and set out detailedplanning and goal setting for the next five years from various dimensions and layers. From this plan, we could see the marketdirection and market size during the 14th Five Year Plan period.
On July 2, the National Development and Reform Commission and the Ministry of Housing and Urban-Rural Developmentpublished the Guidelines on the Measuring and Charging of Non-Residential Kitchen Waste Disposal. The guideline requires that"the measuring and charging of kitchen waste disposal shall be promoted"; "non-residential kitchen waste quota management andover-quota progressive price increase mechanism shall be established gradually"; "the clarification of the management and operationmechanism of the collection, transportation, and disposal non-residential kitchen waste shall be accelerated"; and "the registrationand management of non-residential kitchen waste drainage shall be improved".
On July 16, online trading was enabled in the National Carbon Emissions Trading Market. According to the reports, the firstcompliance cycle encompasses the entire year of 2021, covering approximately 4.5 billion tons of CO2, making it the world's largestcarbon market. On the first day, the total volume of transactions reached 4.104 million tons, with a total transaction amount of RMB210 million.
On October 26, the State Council published the Action Plan for Reaching Peak Carbon Emission before 2030. Domestic wastereduction and recycling, as important aspects of carbon emission reduction, are incorporated into the action plan, mainly including:
the construction of a domestic waste collection and disposal system, treatment for plastic pollution throughout the pollution chain, thepromotion of domestic waste incineration treatment, the reduction of the proportion of landfills, the exploration of waste recyclingtechnology that caters to the characteristics of kitchen waste in Chinese households, and the promotion of sewage recycling.
On November 12, the Ministry of Housing and Urban-Rural Development circulated the Construction Standard for DomesticWaste in Stock Treatment Projects for public comments. This is the first national standard regarding waste in stock.
On December 5, the General Office of the Communist Party Central Committee and the General Office of the State Councilpublished the Five-Year (2021-2025) Action Plan for the Remediation and Improvement of Rural Living Environment. The actionplan requires that "the rural toilet revolution shall be firmly implemented", "the promotion of rural domestic sewage treatment shall
be accelerated", "the standard of rural domestic waste treatment shall be improved comprehensively", and "the general improvementof village images shall be promoted".
On December 15, the Ministry of Ecology and Environment and other 18 ministries and commissions jointly issued the Schemefor the Construction of 'Zero-Waste Cities' during the 14th Five Year Plan. This scheme made detailed plans for the "zero-waste cityconstruction" in the next 5 years. The pilot "zero-waste city" would increase from "11+5" pilots to 100. This will further facilitate theformation of green, low-carbon lifestyles, and promote the reduction and recycling of solid domestic waste.
2. The demand for sanitation services will continue to rise
Sanitation services are public service undertakings, and the source of revenue is the government budget with the nature of rigidexpenditure and is less affected by macroeconomic regulation factors. The business is featured by continuity and stability.
(1) The scale of demand for services driven by urbanization
As urbanization continues, the construction of urban roads will directly increase the area for road cleaning, urban housing,compound construction, and urban greening, hence increasing the demand for sanitation equipment and urban cleaning services.Furthermore, sanitation is one of the prerequisites for each province, city, and district to construct urban upgrades such as "nationalcivilized cities", "national hygienic cities", "national model cities of environmental protection", and "national ecological gardencities". According to the National Bureau of Statistics and the Ministry of Housing and Urban-Rural Development, statistics showthat from 2015 to 2020, the area of road cleaning in China's cities and counties increased from 9.678 billion sqm to 12.606 billionsqm, an overall increase of nearly 30.25%. The domestic waste clearing and removal volume in cities and counties increased from258 million tons to 303 million tons, an overall increase of 17.54%. Driven by urbanization, in order to maintain the cleanliness andsanitation of urban roads, residential compounds, and municipal gardens, as well as the normal transfer and treatment of domesticwaste, the release of sanitation service demands is constantly facilitated.
(2) The "Beautiful Countryside" kick-started, and the rural sanitation market is gradually gaining momentum
The Five-Year (2021-2025) Action Plan for the Remediation and Improvement of Rural Living Environment 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". Against the backdrop of constructing "beautifulcountryside" and integrating urban-rural sanitation, comprehensive treatment projects pushed on the overall county level areintroduced one after another. The rural sanitation market will usher in a sprint stage of further expansion. This will provide a hugeroom for improvement for the sanitation services industry and even the sanitation industry as a whole.
(3) Continued promotion of waste classification and the continued release of market demands
In September 2020, President Xi Jinping chaired the Central Comprehensively Deepening Reforms Conference to deliberate andapprove Some Opinions on the Further Promotion of Domestic Waste Classification. The accelerated implementation of wasteclassification policies would lead to an overturn of the traditional domestic waste collection and transportation system. Thetraditional sanitation vehicles will no longer meet the needs of the classified collection and transportation. Domestic waste is dividedinto four categories in all of the four disposal processes, namely "drop-off", "collection", "transportation", and "treatment". As such,the corresponding traditional sanitation technology and equipment ushered in the demand for upgrading and transformation. Coupledwith the investment demand for system smart upgrade, the market demands continue to be released.
(4) The adoption of new energy for carbon neutrality and sanitation equipment would be further accelerated
With relevant policies issued by local governments to make most of the updated sanitation vehicles towards new energypowered ones, the future procurement of new energy sanitation vehicles is expected to release constantly. The process of new energysanitation equipment in the next few years will be further accelerated. In November 2020, the New Energy Vehicles DevelopmentPlan (2021-2035) was published. The plan requires the proportion of new energy sanitation vehicles in the public sector in key areasto reach 80%. Since 2012, the country has made a guiding policy to accelerate the cultivation of the new energy vehicle industry, andhas successively released important documents for its promotion. After a gestation period, the promotion of new energy sanitationvehicles has gradually entered the outbreak period.
(5) The improved increase in mechanization rate will drive the incremental volume of sanitation equipment marketThe improved mechanization rate of the sanitation industry will reduce the cost of sanitation operations and relieve the financialburden of governments and enterprises. With the expansion of China's urban and rural road cleaning area, the mechanization rate ofthe sanitation industry is gradually increasing. Based on the Urban-Rural Construction Statistical Bulletin released by the Ministry ofHousing and Urban-Rural Development, as of the end of 2020, the national urban road sweeping and cleaning area adoptingmechanical sweeping reached 9.756 billion sqm, with a mechanical sweeping rate of 76.10%. In China, the road sweeping andcleaning area in counties covered by mechanical sweeping reached 2.851 billion sqm, with a mechanical sweeping rate of 73.90%. Incomparison, the mechanization rate of sanitation industry in the urban area of developed countries can usually reach 80%. As such,there is still room for development in terms of the mechanization level of sanitation industry in China. In the future, as labor costscontinue to rise, the mechanization of sanitation operations will become the main development direction of the domestic sanitationmarket, and it will cover road cleaning, guardrail cleaning, waste collection & transportation, and other segments.
(6) The trend of aging population will drive the expansion of the sanitation equipment marketChina's frequent urban minimum wage adjustments in recent years had a relatively great impact on the operating costs ofsanitation services enterprises. The traditional human-labored sanitation service model is featured by higher operating costs andlower operational efficiency, hence increasing the operating pressure of enterprises engaged in the sanitation operation business.Furthermore, China's elderly population is expected to reach 267 million by 2021, with an aging population of 18.9%, according tothe National Committee on Aging Population. The aging trend will exacerbate the workforce deficit in the sanitation industry.Meanwhile, with the diversification of job options, the number of young and middle-aged laborers who are willing to engage insanitation work is also decreasing. Therefore, improving the mechanization rate of sanitation industry and expanding the use ofsanitation equipment is not only a realistic need in the face of the labor market shortage, but also the requirement of the developmentof urban sanitation level.
(7) Industrial breakthrough fueled by technological advancement
The rapid development of 5G and AI technology has widened the industrial border and opened up a slew of new opportunities.Small-sized smart devices and smart services will be the new bonanza, introducing new variables and increments for the sector.Smart, less humanized, or even unmanned sanitation will be a general trend.
(II) Business plan of 2021
In 2021, the Company closely revolved around its development strategy and annual operation plan, focusing on its core strategicbusiness, divesting and splitting off non-core principle businesses, and actively promoting smart sanitation, environmentalmonitoring and solid waste treatment. It achieved its business plan relatively well for 2021. The operating target set at the beginningof the year was to achieve an annual revenue of RMB 2.8 billion with a cumulative contract value of RMB 50 billion for theCompany's smart sanitation service solutions. The actual achieved cumulative contract value of the company's smart sanitationservice solutions reached RMB 45.884 billion, and the actual achieved an annual revenue was RMB 3.025 billion.
In 2021, the company completed its annual revenue target of RMB 2.8 billion for smart services, with an achievement rate of108%; It did not complete its operation target of RMB 50 billion in total contract value, with an achievement rate of 91.77%. Thereason for the company's failure to achieve the operating target of total contract value is the decrease of orders with long cycles ofmore than 5 years in the market. The annualized rate of the company's new marketable projects of 5 years and below has reached
81.5%, resulting in a slight decrease of the total contract value of orders obtained by the Company. In 2022, the Company will takeinto account the market development trend, diversify the business forms and actively attract short-and medium-cycle projects.
2022 Operation target: to achieve a cumulative contract value of RMB 60 billion for the Company's smart sanitation servicesolutions; from 2020 to 2024, the planned cumulative contract value would be RMB 100 billion, so as to achieve an annual revenueof RMB 10 billion.
The Company will continue to increase resource input in its strategic core business, smart environmental sanitation service,striving to be one of the top-ranking enterprises in the industry in the next five years.
In 2022, the Company will continue to focus on the core business of Smart Sanitation. It will firmly adhere to the operationstrategy of "technology leadership and product leadership". It will further strengthen and consolidate its advantages in sanitationequipment and its smart and interconnected environmental sanitation service, and maintain the leading position in the industry.(III) Plan for use of funds2022 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 own funds.It will also further strengthen the management of accounts receivable while optimizing the financial structure to provide strongfinancial guarantee for the Company's business development and control financial risks. The source of funds is the optimization andcombination of multiple channels including the issuance of commercial paper, medium-term note, cash flow generated by operatingactivities, bank loans.
(IV) Main risk factors that may adversely affect the achievement of the Company's future development strategies and businessobjectives
1. Policy risks
With the growing emphasis on environmental protection and environmental treatment, the environmental and sanitation industryis poised for unprecedented growth opportunities. The environmental and sanitation industry, on the other hand, is a typical policy-driven industry that strongly relies on national industrial policies. Adjustments to macroeconomic policies, tax policies,environmental industry policies and environmental management policies will affect the Company's performance.
Countermeasures: to raise the scientific decision-making capacity of managers and boost the Company's ability to resist policyrisks, the Company will pay careful attention to changes in national macroeconomic policies and strengthen research and analysis ofindustry policy information.
2. Operation management risks
The Company's business scale is expanding, business types are diversifying, the target market is expanding, and the number ofsubsidiaries is growing. The asset size, personnel scale, and organizational scale of the Company are all rapidly expanding. TheCompany's organizational structure and management system are becoming increasingly complicated. Despite the fact that theCompany has developed a more comprehensive set of internal control management systems and improved them year after year, thedifficulty and risk of control are increasing due to differences in industry nature, geographical distribution, humanistic characteristics,and corporate culture of each branch.
Countermeasures: the Company is concentrating on strengthening the management and risk control systems, further improvingthe operation management system and business process, continuing to refine management, and strengthening the risk control andculture of subsidiaries, all while strengthening the talent team.
3. Heightened market competition risks
The sanitation industry in China is an emerging comprehensive industry that is still in the early stages of marketization and has arelatively low level of concentration. However, the industry is currently in a period of rapid growth. With its rapid growth, theinvolvement of upstream and downstream enterprises, and the continuous participation of new enterprises in different sectors, marketcompetition 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. Investors and related parties should maintain sufficient risk awareness in this regard.
XII. Visits Paid to the Company for Purposes of Research, Communication, Interview duringthe 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 7, 2021 | Shanghai, China | Field study | Institution | GF Fund, Galaxy Fund, HSBC Jintrust, Goldstate, CITIC Capital, China Universal Asset Management, Essence Fund, PICC Asset, BOC Investment, Three Gorges Asset, GF Securities, Soochow Securities, Essence Securities, Changjiang Securities, Shenwan Hongyuan, State Power Investment, Yujin Investment, TF Securities, Hongshang Assets, Penghua Fund, Guosheng Securities, Hua Chuang Securities, CITIC Securities, Haitong Securities, HuaAn Funds, Hua Chuang Securities, Everbright Securities, CN-NL Waste Solution, Shizhi Fund, China Development Bank Securities, Zhonggeng Fund, Aegon-industrial Fund, CPIC, Ping An, Yuan Xi Group, Zhonghai Fund, Northeast Securities, Sinolink Securities, Orient Securities, Huatai Securities, Industrial Securities, Western Leadbank Fund, Great Abundance Year Asset, Riverlink Capital, EI (Shanghai) Investment, Huajin Securities, Central China Securities, Nuode Fund, Nord Engine Capital, Kaiyuan Securities, Wanjia Asset, Jisheng Investment, Purekind Fund, Shanxi Securities, CICC, Founder Securities, Chino Asset, Ping An Endowment Insurance, BNB Wealth Management | Business strategy and operation of the Company | For details, please refer to the Investor Relations Activities disclosed by the Company on May 10, 2021 on the Cninfo (www.cninfo.com.cn). |
| May 18, 2021 | Panorama Roadshow Global | Others | Others | Investors participated in the 2020 Infore Enviro online performance briefing | Integrated operations and industry trend of the Company. | For details, please refer to the Investor Relations Activities disclosed by the Company on May 18, 2021 on Cninfo (www.cninfo.com.cn) |
| June 29, 2021 | Meeting room | By phone | Institution | BlackRock Asset Management North Asia Limited | Strategy and market | For details, please refer to the Investor |
| orientation of the Company. | Relations Activities disclosed by the Company on June 30, 2021 on Cninfo (www.cninfo.com.cn) | |||||
| August 23, 2021 | Foshan, Guangdong | Field study | Institution | Huatai Asset, Changjiang Pension, PICC Asset, Southern Asset, CCB Principal Asset, China Future Capital, Greenwoods Asset, CITICPE, GTS Fund, CMB Wealth Management, New China Fund, GF Securities, First Beijing Investment, Changjiang Securities, Shanghai Junxi Investment, Shenzhen Yujin Fund, Bank of Communications Schroder Fund, Shanrun Investment, CITIC Capital (Shenzhen) Asset Management Co., Ltd, GF Securities, Everbright Securities Asset Management, Essence Securities, Great Abundance Year Asset, Shenzhen Yujin Fund, Leixin Private Investment Fund (Nanjing), Fu Venture Capital, Purekind Fund, Hangzhou Guangtian Investment, Zhuhai Shengping Asset, Xizang Yuancheng Investment, Shanghai Minghe Investment, Purekind Fund, Shandong Camel Asset, Sanya Hongsheng Asset, GF Venture Capital, Zhuhai Shengping Asset, Tebon Fund, Chengdu Songhua Asset, Shanghai UU Wealth Investment, Zhuhai Shengping Asset, Discovering Investment, Fidelity Investment, Fullerton Investment, etc. | Operations and R&D of the Company. | For details, please refer to the Investor Relations Activities disclosed by the Company on August 23, 2021 on Cninfot (www.cninfo.com.cn) |
| October 22, 2021 | Guangdong, China | Field study | Institution | GF Securities, Soochow Securities, Changjiang Securities, Orient Securities, Zhongtai Securities, Industrial Securities, etc. | Understanding the business operation and R&D direction of the Company. | For details, please refer to the Investor Relations Activities disclosed by the Company on October 22, 2021 on Cninfo (www.cninfo.com.cn) |
Part IV Corporate Governance
I. General Information of Corporate Governance
1. The Company continuously perfects its corporate governance structure in strict accordance with the requirements of theCompany Law, the Securities Law and the relevant laws and regulations of the China Securities Regulatory Commission. The Boardof Directors has four special committees, namely, Strategy Committee, Audit Committee, Nomination Committee, and Remuneration& Appraisal Committee, dedicated to providing advice and recommendations to ensure the Board of Directors' deliberation anddecision-making are professional and efficient.
2. The Company convenes Annual General Meeting of Shareholders in strict accordance with the relevant provisions of theArticles of Association and Rules of Procedure of General Meeting of Shareholders of the Company. The Board of Directors, whichis the decision-making body of the Company, conscientiously implements the resolutions of General Meetings of the Shareholders.The Supervisory Committee exercises its supervisory function and powers in strict accordance with the regulations, and it supervisesthe financial affairs of the Company as well duty performance and actions of directors and senior management members, thussafeguarding the legitimate rights and interests of the Company and all shareholders. The Management of the Company strictlyimplements the resolutions of the General Meetings of Shareholders and the Meetings of the Board of Directors and executesdecisions. All functional departments and holding subsidiaries of the Company are responsible for the day-to-day operations.
3. During the reporting period, in order to standardize its insider information management, ensure confidentiality of 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 and regulationssuch as the Securities Law, the Management Measures for Information Disclosure by Listed Companies, the relevant provisions ofthe Articles of Association, Information Disclosure Management Policy and the Policy on Internal Reporting of Significant Mattersof the Company, as well as the requirements of the Regulatory Guidelines for Listed Companies No. 5—the System for Registrationand Management of Insiders Who Have Access to Insider Information of Listed Companies.
4. The Company discloses information strictly in accordance with the provisions of the Company Law, the Securities Law, theStock Listing Rules of the Shenzhen Stock Exchange, 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 information disclosure toincrease the openness and transparency of its operations. The Company has received no disciplinary actions such as criticism andreprimand from the stock exchange for issues relating to information disclosure. During the reporting period, there were nogovernance irregularities such as the provision of undisclosed information to the controlling shareholder and the de facto controller.
5. During the reporting period, when material events occurred in the Company, there was no abnormal fluctuation in the 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 relevant lawsand regulations as well as the requirements of the Shenzhen Stock Exchange.As to the actual status of governance of the Company, indicate whether there is any material non-compliance with laws,administrative regulations and the rules issued by the China Securities Regulatory Commission (CSRC) on the governance of listed
companies.
□ 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 Facto Controllerand on Ensuring Company's Assets, Personnel, Finance, Structure and Businesses and OtherAspects
The Company is completely independent of the controlling shareholder in terms of businesses, personnel, assets, organizationand finance, etc., and has fully independent businesses and operation capacity. Details are as follows:
(1) Business independence: The Company's businesses are independent of the controlling shareholder, and the 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, ChiefFinancial Officer, Board Secretary and other senior management members of the Company do not hold positions other than directorsin the controlling shareholder, the financial officers of the Company do not have a part-time job in affiliated companies. TheCompany has put in place independent policies on labor, personnel and remuneration management and established an independentlabor and personnel management department. Thus, its labor, personnel and remuneration management are completely independent.
(3) Integrity of assets: The Company owns independent and complete assets and has independent production, supply and 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 no superior-subordinate relationshipbetween its controlling shareholder and functional departments thereof and the Company and functional departments thereof. TheCompany's Board of Directors, Supervisory Committee and other internal institutions operate completely independently.
(5) Financial separation: The Company's finance is entirely independent, with an independent financial department. It has alsoestablished an independent accounting system and financial accounting management system responsible for independent accounting,independent opening of bank accounts and independent tax payment.III. Horizontal Competition
□ Applicable √ Not Applicable
IV. Annual and Extraordinary General Meetings Convened During the Reporting Period
1. Shareholders' meeting convened during the reporting period
| Meeting | Type | Investor participation ratio | Date of the meeting | Disclosure date | Meeting resolution |
| The first extraordinary general meeting of shareholders in 2021 | Extraordinary general meeting | 59.51% | February 24, 2021 | February 25, 2021 | The Announcement on the Resolutions of the First Extraordinary General Meeting of Shareholders in 2021 (Announcement No.: 2021-012) published on the Securities Daily, the Securities Times, the China Securities Journal, the Shanghai Securities News and Cninfo |
| (http://www.cninfo.com.cn), which are media designated by the Company for information disclosure | |||||
| The 2020 Annual General Meeting of Shareholders | Annual general meeting of shareholders | 49.89% | May 14, 2021 | May 15, 2021 | The Announcement on the Resolutions of the 2020 Annual General Meeting of Shareholders (Announcement No.: 2021-046) published on the Securities Daily, the Securities Times, the China Securities Journal, the Shanghai Securities News and http://www.cninfo.com.cn, which are media designated by the Company for information disclosure |
| The Second Extraordinary General Meeting of Shareholders in 2021 | Extraordinary general meeting | 49.97% | September 06, 2021 | September 07, 2021 | The Announcement on the Resolutions of the Second Extraordinary General Meeting of Shareholders in 2021 (Announcement No.: 2021-073) published on the Securities Daily, the Securities Times, the China Securities Journal, the Shanghai Securities News and Cninfo (http://www.cninfo.com.cn), which are media designated by the Company for information disclosure |
2. Extraordinary general meeting of shareholders convened at the request of preference shareholders withresumed voting rights
□ Applicable √ Not Applicable
V. Information of directors, supervisors and senior management members
1. Basic information
| Name | Position | Incumbent/Former | Gender | Age | Start of tenure | End of tenure | Shareholding number (share) at beginning of the period | Shareholding number (share) increase in the current period | Shareholding number (share) decrease in the current period | Other increase/decrease (share) | Shareholding number (share) at end of the period | Reasons for share increase/decrease |
| Ma Gang | Chairman of the Board and President | Incumbent | Male | 43 | December 04, 2014 | December 26, 2022 | 1,654,600 | 0 | 0 | 0 | 1,654,600 | NA |
| Su Bin | Director | Incumbent | Male | 44 | September 06, 2021 | December 26, 2022 | 0 | 0 | 0 | 0 | 0 | NA |
| Kuang Guangxiong | Director | Incumbent | Male | 43 | January 30, 2019 | December 26, 2022 | 0 | 0 | 0 | 0 | 0 | NA |
| Shen Ke | Director | Incumbent | Male | 51 | January 30, 2019 | December 26, 2022 | 0 | 0 | 0 | 0 | 0 | NA |
| Shi Shuiping | Independent Director | Incumbent | Male | 47 | November 14, 2016 | December 26, 2022 | 0 | 0 | 0 | 0 | 0 | NA |
| Zhang Yu | Independent Director | Incumbent | Male | 44 | December 26, 2019 | December 26, 2022 | 0 | 0 | 0 | 0 | 0 | NA |
| Li Ruidong | Independent Director | Incumbent | Male | 45 | December 26, 2019 | December 26, 2022 | 0 | 0 | 0 | 0 | 0 | NA |
| Jiao Wanjiang | Chairman of the Supervisory Committee | Incumbent | Male | 41 | November 14, 2016 | December 26, 2022 | 308,692 | 0 | 0 | 0 | 308,692 | NA |
| Liu Kan | Supervisor | Incumbent | Male | 38 | December 26, 2019 | December 26, 2022 | 0 | 0 | 0 | 0 | 0 | NA |
| Lin Meiling | Employee Supervisor | Incumbent | Female | 37 | November 14, 2016 | December 26, 2022 | 0 | 0 | 0 | 0 | 0 | NA |
| Lu Anfeng | Vice President and Chief Financial Officer | Incumbent | Male | 44 | November 08, 2013 | December 26, 2022 | 486,762 | 0 | 0 | 0 | 486,762 | NA |
| Jin Taotao | Vice President and Board Secretary | Incumbent | Male | 39 | December 26, 2019 | December 26, 2022 | 0 | 0 | 0 | 0 | 0 | NA |
| Chen Peiliang | Director | Off-office | Male | 50 | January 30, 2019 | August 02, 2021 | 0 | 0 | 0 | 0 | 0 | NA |
| Total | -- | -- | -- | -- | -- | -- | 2,450,054 | 0 | 0 | 0 | 2,450,054 | -- |
Whether there has been any off-office of any director or supervisor or removal of any senior management members in their tenuresduring the reporting period
√ Yes □ No
During the reporting period, Mr. Chen Peiliang, Director of the Company, resigned from his position as Director and VicePresident and from his position in the special committees of the Board of Directors of the Company due to personal reasons. Inaccordance with the Company Law of the People's Republic of China, the Self-regulatory Guidelines for the Companies Listed onthe Shenzhen Stock Exchange No. 1 - Standardized Operation of the Companies Listed on the Main Board and other laws andregulations and the Articles of Association of the Company, Mr. Chen Peiliang's resignation application shall become effective fromthe date on which it is delivered to the Board. Mr. Chen Peiliang did not directly hold any shares of the Company and has nooutstanding commitments that should be performed but have not been performed. The resignation of Mr. Chen Peiliang will notadversely affect the production and operation of the Company.Changes of company’s directors, supervisors and senior management members
√ Applicable □ Not Applicable
| Name | Position held | Type | Date | Reason |
| Chen Peiliang | Director | Off-office | August 02, 2021 | Personal 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, holds a master's degree, is Chairman of the eighth and ninth Board of Directors of Infore Enviro.Starting from December 2014 till now, he has been serving as President of the Company. He joined Midea Group in June 2001, andsuccessively held the positions of R&D Engineer, branch salesman and Regional Director at Midea Rice Cooker Division, GeneralManager at Midea Small Domestic Appliance Sales Company in China, President of China Marketing Headquarter of Midea DailyHome Electric Appliance Group, Vice President and Domestic Sales General Manager at Midea Small Domestic Appliance Division,Vice President of Midea Small Domestic Appliance Division and General Manager at Midea Water Material Product Company, andDeputy Director at Midea Domestic Market Department.
2. Mr. Su Bin, born in 1978, holds a Master's degree. From October 2020 till now, he has been Vice President of Infore GroupCo., Ltd. From March 2013 to October 2020, he successively held the positions of Executive President and President of FosunGroup's Energy and Environment Group, as well as the Executive President and Vice President of Fosun Capital, etc. He was aPartner of Mingli China Growth Fund from January 2009 to February 2013 and an Executive Director of Hongshang IndustrialHolding Group Co., Ltd. from March 2003 to December 2008.
3. Mr. Kuang Guangxiong, born in 1979, holds a Master's degree, is PRC Certified Public Accountant and InternationalAccountant, in addition to Director of the eighth and ninth Board of Directors of Infore Enviro He has been Vice President of InforeGroup since 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, the 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, has a Master's degree, is Director of the eighth and ninth Board of Directors of Infore Enviro.Since January 2019, he has served as Investment Director at Zoomlion Heavy Industry Science and Technology Co., Ltd. from July2003 to January 2019, he successively held the positions of Deputy Manager and Head of Investment Development Department,Deputy Department Director of Investment & Financing Management Department, and Board Secretary of Zoomlion Heavy IndustryScience and Technology Co., Ltd.
5. Mr. Zhang Yu, born in 1978, has a Doctoral degree. He serves as Associate Professor at China Europe International BusinessSchool from 2015, and held the position of Assistant Professor at University of California, Irvine from 2008 to 2015.
6. Mr. Li Ruidong, born in 1977, has a Bachelor's degree. He has been President and Editor-in-chief at the China EnvironmentMagazine since November 2013. He served as Assistant to General Manager of Environmental Protection Magazine Co., Ltd. fromFebruary 2012 to November 2013, and Director of the Office of Environmental Protection from March 2008 to January 2012.
7. Mr. Shi Shuiping, born in 1975, has a Doctoral degree and is Certified Anti-Fraud Professional and Independent Director ofthe eighth and ninth Board of Directors of Infore Enviro. Since October 2010 till now, he has been the Professor and Supervisor toUndergraduate Students at the School of Management, Jinan University. He is also a Visiting Scholar at Boston University and CityUniversity of Hong Kong, Senior Member of Accounting Society of China, Senior Member of China Audit Society, Director atGuangdong Audit Society, Executive Director at Guangzhou Audit Society, and Expert Member of Guangdong Enterprise Institutefor Internal Controls.
8. Mr. Lu Anfeng, born in 1978, holds a Master's degree, is PRC Certified Public Accountant and Certified Tax Agent. SinceSeptember 2012 till now, he has served as Vice President and Chief Financial Officer of the Company. He held the positions ofSenior Financial Manager at Guangzhou PCI Group Co., Ltd., Audit Manager at Guangzhou Mayland Group, and Certified Public
Accountant at Guangzhou Branch of Shenzhen Dahua Tiancheng Accounting Firm, etc.
9. Mr. JinTaotao, born in 1983, has a Master's degree. He is Vice President and Board Secretary of the Company. He held thepositions of Engineer at the Environmental Planning Institute of the former Ministry of Environmental Protection from September2005 to April 2016, Vice President at Infore Environment Technology Group Co., Ltd. from May 2016 to June 2019, and BoardSecretary at Stariver Environmental Technology Co., Ltd. from July 2019 to November 2019. Mr. Jin Tao joined the qualificationtraining of Shenzhen Stock Exchange for Board Secretaries in November 2019 and obtained the qualification certificate for BoardSecretary.
10. Mr. Jiao Wanjiang, born in 1981, holds a Master's degree. He is currently the General Manager of the Business Departmentof Infore Environment Technology Group Co., Ltd. He successively served as Head of the Operation Management Department andGeneral Manager of the Solid Waste Treatment Department of Infore Environment Technology Group Co., Ltd. He joined Midea inJuly 2005. He successively held the positions of Domestic Sales Branch Manager of Guangdong Midea Small Domestic ApplianceSales Company in China, Senior Product Planning Manager at Headquarter and Head of Brand & Marketing Department ofHeadquarter.
11. Mr. Liu Kan, born in 1984, has a Bachelor's degree. He has worked in the Company since February 2016, and is currentlyDirector of the Operation Management Department of Zoomlion Urban Environmental Service Co., Ltd. He served as GeneralManager at Infore Network Technology Co., Ltd. from 2017 to November 2019, Director of the Operation Management Departmentof Universtar Science & Technology (Shenzhen) Co., Ltd. from 2016 to 2017, and Rice Cooker Product Planning Manager at MideaSmall Domestic Appliance Shenzhen Branch and Midea Small Domestic Appliance Division from 2006 to 2015.
12. Ms. Lin Meiling, born in 1985, has a Bachelor's degree. She is currently Director of Human Resources at InforeEnvironment Technology Group Co., Ltd. From 2010 to now, she is responsible for the administration and human resources affairsof 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 | Whether obtains remuneration or allowance from the shareholder entity |
| 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. | Investment Director | July 1, 2003 | -- | Yes |
| Statements on positions held in shareholder entities | Mr. Ma Gang is a Director of Infore Group Co., Ltd.; Mr. Su Bin is a Director and Co-President of Infore Group Co., Ltd.; Mr. Kuang Guangxiong is a Director and Co-President of Infore Group Co., Ltd.; Mr. Shen Ke is an Investment Director at Zoomlion Heavy Industry Science and Technology Co., Ltd. | ||||
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 | Whether obtains remuneration or allowance from the shareholder entity |
| Shen Ke | Bichamp Cutting Technology (Hunan) Co., Ltd. | Director | July 5, 2014 | --- | No |
| Zhang Yu | China Europe International Business School | Associate Professor | July 1, 2015 | -- | Yes |
| Li Ruidong | China Environment Magazine | President and Editor-in-chief | November 1, 2013 | -- | Yes |
| Shi Shuiping | Jinan University | Professor and Graduate Students’ Supervisor at the School of Management | January 1, 2010 | -- | Yes |
| Statements on positions held in other entities | Mr. Shen Ke is a Director of Bichamp Cutting Technology (Hunan) Co., Ltd. Mr. Zhang Yu is an Associate Professor at China Europe International Business School; Mr. Li Ruidong is the President and Editor-in-chief of the China Environment Magazine; Mr. Shi Shuiping is a Professor and Supervisor to Undergraduate Students at the School of Management of Jinan University. | ||||
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 during the reporting period:
□ Applicable √ Not Applicable
3. Remuneration of directors, supervisors and senior management Members
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and seniormanagement membersThe remuneration of the directors, supervisors and senior management members of the Company for year 2021 are strictly incompliance with the Remuneration Plan for Directors, Supervisors and Senior Management Members in 2021 deliberated andadopted by the Company, the Rules of Procedures for the Board of Directors formulated by the Company, the Rules of Proceduresfor the Supervisory Committee 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 basis ofreasonable remuneration in the market and the Company's performance appraisal results. The remuneration of the directors of theCompany is actually paid on a yearly basis. The remuneration of senior management members is actually paid partly on a monthlybasis, and the part linked to the Company's performance appraisal 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 | Whether this person receives remuneration from the Company's associates |
| Ma Gang | Chairman of the board and president | Male | 43 | Incumbent | 188.22 | No |
| Su Bin | Director | Male | 44 | Incumbent | 0 | Yes |
| Kuang Guangxiong | Director | Male | 43 | Incumbent | 0 | Yes |
| Shen Ke | Director | Male | 51 | Incumbent | 0 | Yes |
| Shi Shuiping | Independent Director | Male | 47 | Incumbent | 10 | No |
| Zhang Yu | Independent Director | Male | 44 | Incumbent | 10 | No |
| Li Ruidong | Independent Director | Male | 45 | Incumbent | 10 | No |
| Jiao Wanjiang | Chairman of the Supervisory Committee | Male | 41 | Incumbent | 80.37 | No |
| Liu Kan | Supervisor | Male | 38 | Incumbent | 63.76 | No |
| Lin Meiling | Employee Supervisor | Female | 37 | Incumbent | 14.02 | No |
| Lu Anfeng | Vice President and Chief Financial Officer | Male | 44 | Incumbent | 99.75 | No |
| Jin Taotao | Vice President and Board Secretary | Male | 39 | Incumbent | 95.78 | No |
| Chen Peiliang | Director | Male | 50 | Off-office | 359.92 | No |
| Total | -- | -- | -- | -- | 931.82 | -- |
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 11th extraordinary meeting of the ninth Board of Directors | January 29, 2021 | January 30, 2021 | The Announcement on the Resolutions of the 11th Extraordinary Meeting of the Ninth Board of Directors (Announcement No.: 2021-004) was published on the Securities Daily, the Securities Times, the China Securities Journal, the Shanghai Securities News and Cninfo (www.cninfo.com.cn), which are media designated by the Company for information disclosure |
| The 12th extraordinary meeting of the ninth Board of Directors | April 08, 2021 | April 09, 2021 | The Announcement on the Resolutions of the 12th Extraordinary Meeting of the Ninth Board of Directors (Announcement No.: 2021-017) was published on the Securities Daily, the Securities Times, the China Securities Journal, the Shanghai Securities News and Cninfo (www.cninfo.com.cn), which are media designated by the Company for information disclosure |
| The 13th meeting of the ninth Board of Directors | April 22, 2021 | April 23, 2021 | The Announcement on the Resolutions of the 13th Meeting of the Ninth Board of Directors (Announcement No.: 2021-023) was published on the Securities Daily, the Securities Times, the China Securities Journal, the Shanghai Securities News and Cninfo (www.cninfo.com.cn), which are media designated by the Company for information disclosure |
| The 14th meeting of the ninth Board of Directors | August 19, 2021 | August 21, 2021 | The Announcement on the Resolutions of the 14th Meeting of the Ninth Board of Directors (Announcement No.: 2021-064) was published on the Securities Daily, the Securities Times, the China Securities Journal, the Shanghai Securities News and Cninfo (www.cninfo.com.cn), which are media designated by the Company for information disclosure |
| The 15th meeting of the ninth Board of Directors | October 22, 2021 | October 23, 2021 | The Announcement on the Resolutions of the 15th Meeting of the Ninth Board of Directors (Announcement No.: 2021-079) was published on the Securities Daily, the Securities Times, the China Securities Journal, the Shanghai Securities News and Cninfo (www.cninfo.com.cn), which are 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 | Total number of board meetings the director shall attend during the reporting period | Number of board meetings the director attended on site | Number of board meetings the director attended by way of telecommunication | Number of board meetings the director attended through proxy | Number of board meetings the director failed to attend | Whether the director failed to attend two consecutive board meetings | Number of general meetings of shareholders attended by the director |
| Ma Gang | 5 | 5 | 0 | 0 | 0 | No | 3 |
| Su Bin | 1 | 1 | 0 | 0 | 0 | No | 0 |
| Kuang Guangxiong | 5 | 5 | 0 | 0 | 0 | No | 3 |
| Shen Ke | 5 | 4 | 1 | 0 | 0 | No | 3 |
| Zhang Yu | 5 | 4 | 1 | 0 | 0 | No | 3 |
| Li Ruidong | 5 | 4 | 1 | 0 | 0 | No | 3 |
| Shi Shuiping | 5 | 4 | 1 | 0 | 0 | No | 3 |
| Chen Peiliang | 3 | 2 | 1 | 0 | 0 | No | 2 |
Explanation of why any director failed to attend two consecutive board meetings
3. Objections raised by directors on relevant matters of the company
Indicate whether any director raised any objections on any relevant matter of the Company
□ Yes √ No
Directors did not raise any objection to the relevant matters of the Company during the reporting period.
4. Other information about the performance of duties by directors
Indicate whether any recommendation from directors were adopted by the Company.
√ Yes □ No
Explanation on adoption/rejection of recommendation of any director of the Company
During the reporting period, the directors of the Company acted in a diligent and responsible manner, and actively attendedboard meetings and shareholders' general meetings in strict compliance with provisions and requirements in the Articles ofAssociation of the Company, the Rules of Procedures 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 significant governance andoperation decisions, reached 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 Specialized 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, Li Ruidong and Chen Peiliang | 4 | January 28, 2021 | 1. Proposal on Related-party Transactions concerning the Provision of Temporary Lending Funds by Infore Holding Group Co., Ltd. to the Company for the Year 2021; 2. Proposal on the Provision of Guarantee by the Company for Joint-Stock Companies; 3. Report on the Self-assessment of Internal Control in 2020; 4. Report on the Planning for Internal Audit in 2021; and 5. Pre-communication on the 2021 Annual Report. | Agreed to pass the relevant proposals of this meeting. | -- | Not applicable |
| April 21, 2021 | 1. 2020 Annual Report and the summary thereof; 2. 2020 Annual Financial Accounts Report; 3. The main text and full text of the 2021 First Quarter Report; 4. Profit Distribution Plan or 2020; 5. Proposal regarding the Fulfillment of Performance Commitments for 2018- 2020 by Changsha Zoomlion Heavy Industry Science & Technology Environmental Industry Co., Ltd.; 6. Internal Control Work Report for the First Quarter of 2021; 7. Special Report on Annual Use of Funds Raised in 2020; 8. Annual Special Report on Matters relating to the Provision of Guarantee; 9. Proposal on Guarantee Quotas Provided to Subsidiaries; 10. Proposal on Providing Buyer's Credit Guarantee for Clients; 11. Annual Special Report on Related-party Transaction Matters; 12. Proposal on Expected Routine Related-party Transactions in 2021; 13. Proposal on Renewal of Engagement of the Accounting Firm; 14. Proposal on the Change of Accounting Policies of the Company and its Subsidiaries; 15. Proposal for the Annual Planning on the Entrusted Wealth Management with Self-owned Funds for 2021; 16. Proposal on Carrying out the Instrument Pool Business. | Agreed to pass the relevant proposals of this meeting. | -- | Not applicable |
| August 18, 2021 | 1. 2021 Semi-annual Report and the summary thereof; 2. 2021 Semi-annual Financial Report; 3. Internal Control Work Report for the Second Quarter of 2021; 4. 2021 Semi-annual Special Report on the Annual Use of Raised Funds; 5. Semi-annual Special Report on Providing Guarantee; 6. Semi-annual Special Report on Related-party Transactions; and 7. Proposal on Financing Factoring and Related-party Transactions Conducted by Wholly-owned Subsidiaries and Joint-stock Subsidiaries. | Agreed to pass the relevant proposals of this meeting. | -- | Not applicable | |||
| October 21, 2021 | 1. Third Quarter Report in 2021; 2. Internal Control Work Report in the Third Quarter of 2021; 3. The Special Report on the Use of Raised Funds in the Third Quarter of 2021; and 4. Proposal on the Use of Part of the Idle Raised Funds to Temporarily Supplement Working Capital. | Agreed to pass the relevant proposals of this meeting. | -- | Not applicable | |||
| Strategy Committee | Ma Gang, Shen Ke and Kuang Guangxiong | 2 | January 28, 2021 | Proposal on Transferring the 51% of the Company’s Controlling Right of the Subsidiary through Public Listing | Agreed to pass the relevant proposals of this meeting. | -- | Not applicable |
| April 07, 2022 | 1. Proposal on the Termination of Company Share Repurchase; 2. Proposal on the Company Share Repurchase Plan. | Agreed to pass the relevant proposals of this meeting. | -- | Not applicable | |||
| Remuneration & Appraisal Committee | Li Ruidong, Kuang Guangxiong and Zhang Yu | 2 | April 21, 2021 | 1. Proposal regarding the Remuneration Packages for Directors, Supervisors and Senior Management Members for 2021; 2. Proposal regarding the Cancellation of Partial Stock Options Expired but Not Exercised under Phase II Stock Option Incentive Plan; 3. Proposal for the Adjustment of the Eligible Participants and the Number of Options to Be Exercised under the Phase II and Phase III Stock Option Incentive Plans and Cancellation of Partial Stock Options; 4. Proposal for Matters relating to Option Exercise in the Third Exercise Schedule | Agreed to pass the relevant proposals of this meeting. | -- | Not applicable |
| under the Phase II Stock Option Incentive Plan of the Company; 5. Proposal for Matters Relating to Option Exercise in the Second Exercise Schedule under Phase III Stock Option Incentive Plan of the Company. | |||||||
| August 18, 2021 | Proposal for Adjustment of the Option Exercise Prices of Phase II and Phase III Stock Option Incentive Plans | Agreed to pass the relevant proposals of this meeting. | -- | Not applicable | |||
| Nomination Committee | Zhang Yu, Ma Gang | 2 | August 18, 2021 | Proposal for the By-election of Mr. Su Bin as a Non-independent Director of the 9th Board of Directors | Agreed to pass the relevant proposals of this meeting. | -- | Not applicable |
| October 21, 2021 | Proposal for the By-election of Members of the Special Committees of the 9th Board of Directors | Agreed to pass the relevant proposals of this meeting. | -- | Not applicable |
VIII. Work of the Supervisory CommitteeIndicate whether the supervisory committee found any risk to the Company during its supervision in the reporting period.
□ Yes √ No
The supervisory committee has no objection to the 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 | 228 |
| Number of in-service employees of the major subsidiaries at the end of the reporting period | 13,135 |
| Total number of in-service employees at the end of the reporting period | 13,363 |
| Total number of paid employees in the reporting period | 13,363 |
| 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 | 8,871 |
| Sales personnel | 1,453 |
| Technical personnel | 1,582 |
| Finance personnel | 222 |
| Administrative personnel | 1,235 |
| Total | 13,363 |
| Educational level | |
| Types of educational level | Number of people |
| Doctoral degree | 9 |
| Master's degree | 483 |
| Bachelor‘s degree | 2,787 |
| College | 2,167 |
| Below college | 7,917 |
| Total | 13,363 |
2. Remuneration policy
The Company adopts a fair remuneration system featured by positive incentives. It follows the performance-oriented principleand promotes competent personnel. The remuneration of employees is paid on time according to the remuneration policy of theCompany. The fixed remuneration of employees is determined by the Company according to the position value and individualperformance, and the floating salary of employees is determined according to the Company and individual performance. TheCompany swings the weight of salary payment towards technical professionals to ensure that the income level of core talent iscompetitive in the market. The employee remuneration policy will be dynamically adjusted according to regional conditions, talentsupply, staff turnover, extent of changes in the industry environment and the corporate payment capacity.
3. Training plan
In adherence to the core value of "our employees are our business partners", the Company is committed to building a team ofhighly skilled personnel. It has established a multi-level talent training system ("Fenglin Program -Yingfeng Training Camp -TanfengTraining Camp") and a multi-category professional and general training system covering employees from fresh graduates to seniorexecutives, so that employees can continuously improve their comprehensive abilities through training. In order to create a goodconcentrated learning atmosphere in the whole company, in 2021, the Company set up a cross-unit and cross-department InforeEnviro Talent Training Center – "Infore Enviro Staff Ability Charging Station", and established a professional internal lecturer teamthrough effective selection, training and motivation to share internal excellent experience and methodology. According to the actualneeds of employees at different levels and functional departments, the Company organized multiple online or offline training sessions,insisted on the concept of parallel progress of talent development and enterprise development, improved the multi-level talenttraining system, cultivated "Infore Enviro Staff" in one continuous line, and contributed to the Company's high-quality development.
4. Labor outsourcing
√ Applicable □ Not Applicable
| Total hours of labor outsourced | 45,405,082.6 |
| Total payment for labor outsourcing (RMB) | 446,329,864.19 |
X. Company's Profit Distribution and Converting Capital Reserve into Share Capital
Formulation, execution or adjustments of profit distribution policy, especially cash dividend policy in the reporting period
√ Applicable □ Not Applicable
According to the Articles of Association, while satisfying the conditions of cash dividend and ensuring the Company's normaloperation and long-term development, the Company shall in principle pay cash dividend on an annual basis. The Board of Directorsmay propose interim cash dividends depending on the Company's profit status, cash flow status, development stage and capital
requirements. The Company shall maintain continuity and stability of the profit distribution policy. When the conditions for cashdividends are met, the cumulative profit distributed in cash in the recent three years shall not be less than 30% of the average annualattributable 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 have voicedtheir opinions on the annual profit distribution plan of the Company.
| Special remarks on the cash dividend policy | |
| Whether it is in compliance with the Company’s Articles of Association or resolutions of the general meetings of shareholders: | Yes |
| Whether dividend standards and ratio are made clear: | Yes |
| Whether the decision-making procedure and mechanism are complete: | Yes |
| Whether Independent Directors faithfully performed their duties and played their role with due diligence: | Yes |
| Whether medium and small shareholders can fully express their opinions and desire and whether their legal rights and interests are fully 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 in the reporting period and the parent company's profits attributable to shareholders was positive, but apreliminary plan for cash dividend distribution was not 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) | 1.00 |
| Total shares as the basis for the preliminary plan for profit distribution (share) | 3,179,499,754.00 |
| Cash dividends (RMB) (tax inclusive) | 317,949,975.40 |
| Cash dividends in other forms (such as share repurchase) (RMB) | 455,303,777.91 |
| Total cash dividends (inclusive of those in other forms) (RMB) | 773,253,753.31 |
| Attributable profit (RMB) | 706,488,302.65 |
| Percentage of total cash dividends (inclusive of those in other forms) in the total distributed profit (%) | 100% |
| Information on this cash dividend | |
| Others | |
| Details about the preliminary plan for profit distribution and converting capital reserve into share capital | |
| The profit distribution plan for 2021 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 2021 profit distribution plan, a cash dividend of RMB 1.00 (tax inclusive) per 10 shares will be distributed to the shareholders, with no bonus issue from either profit or capital reserves. The attributable profit was 502,505,012.72 at the end of 2020, and the balance of retained earnings after the distribution of cash dividend was RMB 130,011,840.20. For 2021, net profit realized was RMB 640,529,402.45, and RMB 64,052,940.00 was set aside as surplus reserves. The attributable profit was RMB 706,488,302.65 at the end of 2021. If, at the time of the implementation of the 2021 profit distribution plan, there is no share repurchase before the implementation of the 2021 equity distribution plan, the total share capital for the 2021 profit distribution plan at the date of equity registration would be the existing share capital of 3,179,499,754 shares. And according to the 2021 profit distribution plan, a cash dividend of RMB1.00 (tax inclusive) per 10 shares would be distributed to the shareholders. The total cash dividend payout would amount to RMB 317,949,975.40, and the balance of retained earnings after distribution would be RMB 388,538,327.25. Where any share repurchase occurs before the implementation of the 2021 equity distribution plan, the repurchased shares will be excluded from the total share capital for actual cash dividend, and the total cash dividend payout will be reduced accordingly. | |
XI. Company's Implementation of Stock Incentive Plan and Employee Stock Ownership Planor Other Employee Incentive Measures
√ Applicable □ Not Applicable
1. Stock incentive
Overview of Phase II Stock Option Incentive Plan:
1. On March 11, 2021, the second exercise schedule of the Company's Phase II Stock Option Incentive Plan ended, a total of18,200 stock options had been partially exercised by 46 incentive subjects, leaving 3,476,800 stock options unexercised. TheCompany would cancel the 3,476,800 stock options that were granted and were not exercised during the second exercise schedule ofthe Phase II Stock Option Incentive Plan, in accordance with the applicable laws and regulations.
2. On April 22, 2021, the 13th meeting of the ninth Board of Directors and the 12th meeting of the ninth Supervisory Committeeheld by the Company deliberated and approved the Proposal Regarding the Cancellation of Partial Stock Options Expired but NotExercised under Phase II Stock Option Incentive Plan; Proposal for the Adjustment of the Eligible Participants and the Number ofOptions to Be Exercised under the Phase II and Phase III Stock Option Incentive Plans and Cancellation of Partial Stock Options;Proposal for Matters relating to Option Exercise in the Third Exercise Schedule under the Phase II Stock Option Incentive Plan of theCompany.
(1) In accordance with the Phase II Stock Option Incentive Plan (Draft), considering the fact that when the second exerciseschedule of the Company's Phase II Stock Option Incentive Plan ended, a total of 18,200 stock options had been partially exercisedby 46 incentive subjects, leaving 3,476,800 stock options unexercised, the Board of Directors of the Company approved thecancellation of the 3,476,800 stock options that were granted but were not exercised during the second exercise schedule of the PhaseII Stock Option Incentive Plan, in accordance with the relevant regulations.
(2) The Company’s six incentive subjects resigned due to personal reasons or became supervisors due to position change, andthey were identified by the Company’s Board of Directors as no longer suitable for incentives. According to the provisions of thePhase II Stock Option Incentive Plan (Draft), their 560,000 stock options in total were canceled for the third exercise schedule. Afterthe adjustments, the incentive subjects of the phase II Stock Option Incentive Plan were adjusted from the original 46 to 40, and thenumber of stock options granted was adjusted from 4.66 million to 4.10 million.
(3) The exercise conditions for the third exercise schedule under the Phase II Share Option Incentive Plan have been met, andthe total number of options available for exercise is 4,100,000, which are exercised by individual exercise at the price of RMB 9.15per share. Prior to the exercise of stock option, if the Company has dividend distribution, capital reserve transferred to share capital,distribution of share bonus, share split, share reduction or increase issue in stocks, etc., the exercise price of stock options will beadjusted accordingly.
3. On August 19, 2021, the 14th meeting of the ninth Board of Directors and the 13th meeting of the ninth SupervisoryCommittee held by the Company deliberated and approved the Proposal for Adjustment of the Option Exercise Prices of Phase II andPhase III Stock Option Incentive Plans. In view of the fact that the Company's 2020 annual equity distribution was completed on July8, 2021, according to relevant provisions on the adjustment of the stock option exercise price of the Phase II Stock Option IncentivePlan (Draft), if the Company has capital reserve transferred to share capital, distribution of share bonus, share split, share reduction,dividend distribution or share allotments, etc. within the validity period of the stock options, the exercise price of stock options willbe adjusted accordingly. After the implementation of this equity distribution, the exercise price of the Phase II Stock OptionIncentive Plan will be adjusted from RMB 9.15 per share to RMB 9.03 per share.
4. As of December 31, 2021, as the market price is lower than the exercise price, the options under the Phase II Share OptionIncentive Plan of the Company remain unexercised in the third exercise schedule.
For more information, please refer to announcements published on April 23, 2021 and August 21, 2021 on the media ofinformation disclosure specified by the Company and Cninfo (http://www.cninfo.com.cn).Overview of Phase III Stock Option Incentive Plan:
1. On April 22, 2021, the 13th meeting of the ninth board of directors and the 12th meeting of the ninth Supervisory Committeeheld by the Company deliberated and approved the Proposal for the Adjustment of the Eligible Participants and the Number ofOptions to Be Exercised under the Phase II and Phase III Stock Option Incentive Plans and Cancellation of Partial Stock Options andthe Proposal for Matters Relating to Option Exercise in the Second Exercise Period under Phase III Stock Option Incentive Plan ofthe Company.
(1) Company’s 13 incentive subjects resigned due to personal reasons, and they were identified by the Company’s board ofdirectors as no longer suitable for incentives. According to the provisions of the Phase III Stock Option Incentive Plan (Draft), their3,101,000 stock options in total were canceled for the second and third exercise schedules. After the adjustments, the incentivesubjects of the Phase III Stock Option Incentive Plan were adjusted from the original 244 to 231, and the number of locked stockoptions granted was adjusted from 44,667,000 to 41,566,000.
(2) The exercise conditions for the second exercise schedule under the Phase III Share Option Incentive Plan have been met, andthe total number of options available for exercise is 17,814,000, which are exercised by individual exercise at the price of RMB 6.34per share. Prior to the exercise of stock option, if the Company has dividend distribution, capital reserve transferred to share capital,distribution of share bonus, share split, share reduction or increase issue in stocks, etc., the exercise price of stock options will beadjusted accordingly.
2. On August 19, 2021, the 14th meeting of the ninth Board of Directors and the 13th meeting of the ninth SupervisoryCommittee held by the Company deliberated and approved the Proposal for Adjustment of the Option Exercise Prices of Phase II andPhase III Stock Option Incentive Plans. In view of the fact that the Company's 2020 annual equity distribution was completed on July8, 2021, according to relevant provisions on the adjustment of the stock option exercise price of the Phase III Stock Option IncentivePlan (Draft), if the Company has capital reserve transferred to share capital, distribution of share bonus, share split, share reduction,dividend distribution or share allotments, etc. within the validity period of the stock options, the exercise price of stock options willbe adjusted accordingly. After the implementation of this equity distribution, the exercise price of the Phase III Stock OptionIncentive Plan will be adjusted from RMB 6.34 per share to RMB 6.22 per share.
3. As of December 31, 2021, the second exercise schedule of the Phase III stock options is still not expired, and the number ofexercised stock options is 16,384,380 shares.
For more information, please refer to announcements published on April 23, 2021 and August 21, 2021 on the media ofinformation disclosure specified by the Company and Cninfo (http://www.cninfo.com.cn).Equity incentives granted to directors and senior management members of the Company:
□ Applicable √ Not Applicable
Appraisal mechanism and incentives for senior management members
The Company has established a sound performance assessment and incentive system. The Board of Directors of the Companyestablished the Nomination Committee and the Remuneration & Appraisal Committee as the administrative institutions for theappointment and remuneration appraisal of the senior management members of the Company, which shall be responsible forformulating remuneration standards and schemes for the senior management members, reviewing their performance of duties andformulating scientific and reasonable remuneration scheme and submitting to the board for review and discussion. The seniormanagement members currently serving in the Company shall be subject to comprehensive performance appraisal based on theirpositions, the current remuneration system of the Company, the Company's actual operating performance, individual performance,performance of duties and achievement of responsibilities and goals, and the result of such appraisal shall serve as the basis todetermine their remunerations. The Company pays the remunerations of senior management members based on schedule. During thereporting period, the senior management members of the Company conscientiously performed their duties in strict accordance with
the Company Law, the Articles of Association and the relevant laws and regulations, actively implemented relevant resolutions of theshareholders' meetings and Board meetings, and completed various tasks of the year in a quite good way.
2. Implementation of the employee stock ownership plan
√ Applicable □ Not Applicable
Information on all effective employee stock ownership plans during the reporting period
| Scope of employees | Number of employees | Total shares held by employees | Changes | Proportion to 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 | 36,211,560 shares | As of December 31, 2021, 35,671,310 company shares were sold cumulatively through centralized price competitions by the Phase I Employee Stock Ownership Plan of the Company, accounting for 1.12% of the total share capital of the Company. After the sale the Phase I Employee Stock Ownership Plan holds 540,250 company shares, accounting for 0.02% of the total share capital of the Company. | 1.14% | Employees’ legitimate remuneration, self-raised funds and other funds obtained through legitimate and compliant means. |
Shareholding of directors, supervisors and senior management members in the employee stock ownership plan during the reportingperiod
| Name | Position | Number of shares held at the beginning of the reporting period | Number of shares held at the end of the reporting period | Proportion to the total share capital of the listed company |
| Ma Gang | Chairman of the Board and President | 8,632,835 | 128,795 | 0.00% |
| Chen Peiliang | Director and Vice President | 793,033 | 11,831 | 0.00% |
| Lu Anfeng | Vice President and Chief Financial Officer | 2,708,624 | 40,410 | 0.00% |
| Jin Taotao | Vice President and Secretary of the Board of Directors | 409,190 | 6,104 | 0.00% |
| Jiao Wanjiang | Chairman of the Supervisory Committee | 1,267,404 | 18,908 | 0.00% |
Changes in the asset management institution during the reporting period
□ Applicable √ Not Applicable
Changes in equity arising from disposal of shares by holders during the reporting period
□ Applicable √ Not Applicable
Exercise of shareholders' rights during the reporting periodNAOther relevant circumstances and explanations of the employee stock ownership plan during the reporting period
√ Applicable □ Not Applicable
1. The Company disclosed the Indicative Announcement on the Expiration of the Lock-up Period of the Phase I Employee StockOwnership Plan on May 12, 2021, and the lock-up period of the Company's Phase I Employee Stock Ownership Plan is 12 months
from the time when the registration of last underlying stock is under the name of Phase I Employee Stock Ownership Plan wasannounced by the Company (i.e., from May 13, 2020 to May 12, 2021). In accordance with the relevant provisions of the Phase IEmployee Stock Ownership Plan (Draft) of the Company, upon expiry of the lock-up period of the employee stock ownership plan,the asset management institution will sell the underlying shares at the right time according to the specific market conditions.
2. As of December 31, 2021, 35,671,310 shares were sold cumulatively through centralized price competitions by the Phase IEmployee Stock Ownership Plan of the Company, accounting for 1.12% of the total share capital of the Company. After the sale, thePhase I Employee Stock Ownership Plan holds 540,250 company shares, accounting for 0.02% of the total share capital of theCompany.Change of the members of the employee stock ownership plan management committee
□ Applicable √ Not Applicable
The financial impact of the employee stock ownership plan on the listed company in the reporting period and relevant accountingtreatment
□ Applicable √ Not Applicable
Termination of the employee stock ownership plan in the reporting period
□ Applicable √ Not Applicable
Other statementsNA
3. Other employee incentive measures
□ Applicable √ Not Applicable
XII. Establishment and Implementation of the Internal Control System in the ReportingPeriod
1. Establishment and implementation of internal control
I. Basic Information of the Establishment of Internal Control
Infore Enviro has established and improved various rules and regulations relating to corporate governance and internal controlin accordance with the requirements of the Company Law, the Securities Law, the Basic Internal Control Norms for Enterprises, theStock Listing Rules of the Shenzhen Stock Exchange and other statutory documents. The operations of the General Meeting ofShareholders, the Board of Directors and the Supervisory Committee in Infore Enviro are in compliance with the provisions of therelevant laws, regulations, the Articles of Association of the Company, the Rules of Procedures for the General Meeting ofShareholders, the Rules of Procedures for the Board of Directors, and the Rules of Procedures for the Supervisory Committee.Corresponding internal management systems with respect to such major issues as financial accounting, fundraising, externalinvestment, external guarantee, related-party transactions and information disclosure have been established in Infore Enviro to ensurethe legality and compliance of daily operations and decision-making procedures with respect to major matters.
II. Implementation of Internal Control
(I) Implementation of the information disclosure management policy
Upon verification, the Company effectively complied with the Information Disclosure Management Policy in 2021, with a goodperformance in information disclosure, and has not been punished by the securities regulatory authorities for violation of rules oninformation disclosure.
(II) Implementation of the financial internal control system
Upon verification, with respect to finance and accounting, the Company has formulated the relevant internal managementsystem in accordance with the requirements of the Accounting Standards for Enterprises, the Company Law and other relevant lawsand regulations, which can ensure the accuracy and reliability of the financial and accounting information and the safety andeffectiveness of the financial and accounting systems.
(III) Implementation of other internal control systems
Upon verification, Infore Enviro complied with the provisions of the Articles of Association of the Company and the relevantrules and regulations, performed necessary decision-making procedures, and implemented the internal control system quite well.
2. Details of material internal control deficiencies identified during the reporting period
□ Yes √ No
XIII. Management and Control of the Company over the Subsidiaries during the ReportPeriod
| Company | Integration plan | Integration progress | Problems in the integration | Resolution measures taken | Resolution progress | Follow-up resolution plan |
| None | None | None | None | None | None | None |
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 29, 2022 | |
| Index of full disclosure of the internal control assessment report | For details, see the 2021 Internal Control Self-Assessment Report disclosed on Cninfo (http://www.cninfo.com.cn) | |
| Ratio of the total assets of the organization included in the assessment to the total assets in the Company's consolidated financial statements | 100.00% | |
| Ratio of the revenue of the organization included in the assessment to the revenue in the Company's consolidated financial statements | 100.00% | |
| Deficiency identification criteria | ||
| Category | Financial reports | Non-financial reports |
| Qualitative criteria | 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 policies with reference to the generally accepted accounting principles; 4. Internal control over the financial reporting procedures at the end of 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 |
| 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 in the current period's financial report identified by a certified public accountant, which was not identified in the course of running of internal control; 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 may have a significant impact on the reliability of financial reports; 7. The management's failure to correct significant deficiency after a reasonable period of the deficiency being reported to the management. | Company; 3. Failure to take timely and active response measures for frequent negative media reports, which involve a wide range of subjects, leading to a significant negative impact on the Company; 4. Failure to remedy internal control assessment findings, especially 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 ordinary deficiencies identified in the prior year without reasonable explanation; 4. Incompetency of some managers or operators. Ordinary deficiencies: 1. Fraud committed by general employees; 2. Failure to remedy ordinary deficiencies identified in the prior year with reasonable explanation; | |
| Quantitative criteria | Material deficiencies: 1. The potentially misstated amount in the profit statement is greater than or equals to 1% of the revenue in the consolidated financial statements of the Company for the most recent fiscal year or 5% of the total pre-tax profit; 2. The potentially misstated amount in the balance sheet is greater than or equals 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 equals to 0.5% of the Company's revenue or 3% of the total pre-tax profit in the consolidated financial statements for the most | Ordinary deficiencies: Less than RMB 5 million; Significant deficiencies: RMB 5 million (including RMB 5 million) to RMB 10 million; Material deficiencies: RMB 10 million and above |
| 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 equals 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. Ordinary 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 total assets in the consolidated financial statements of the Company for the most recent fiscal year. | ||
| 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
| Opinion paragraph in the audit report on internal control | |
| Infore Enviro maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the Basic Internal Control Norms for Enterprises 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 30, 2022 |
| Index to the full audit report on internal control | PCCPA Auditor’s Report [2022] No. 5131 |
| Opinion type of the audit report on internal control | Standard unqualified opinion |
| Indicate whether any material deficiency in the non-financial reports | No |
Indicate whether any non-standard opinion is expressed in the audit report on the Company’s internal control by the accounting firm
□ Yes √ No
Indicate whether the accounting firm’s report on the Company’s internal control is consistent with the internal control self-assessmentreport issued by the Company’s Board of Directors.
√ Yes □ No
XV. 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 truth fromfacts and in strict accordance with the Company Law, the Securities Law, the Standardized Operation of Companies Listed on theMain Board and other relevant laws and regulations as well as its internal rules and regulations, carefully sorted out the issues andfilled in the forms. Through this self-examination, the Company believes that its corporate governance complies with therequirements of the Company Law, the Securities Law, the Standardized Operation of Companies Listed on the Main Board andother laws and regulations, and that its corporate governance structure is relatively sound, the operations are standardized, and thereis no material problems or mistakes. The Company shall continue to strengthen management in the following aspects:
1. To further improve the internal control system of the Company
The Company shall systemically sort out and improve its corporate governance and internal control in accordance with the latestlaws and regulations and combined with the requirements of the regulatory authorities and its self-examination result, further perfectits internal control system and implement the corresponding examination and approval procedure on the revised and improvedrelevant systems.
2. To further facilitate special board committees to play their roles
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 with the business of the Company, facilitate them to play their rolesand provide advice and suggestions on the Company's development planning, operation and management, risk control, selection andengagement of senior management members and back-up personnel, performance appraisal of senior management members, internalcontrol and internal audit, etc., to further improve the scientific decision-making capacity and risk prevention capacity of theCompany.
3. To further improve 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 and ensurethe quality of information disclosure and promote the level of information disclosure. During the reporting period, the Company andrelevant personnel completed the information disclosure work in strict accordance with the requirements of laws and regulations.
4. To further strengthen the training of relevant personnel on laws and regulations
The Company shall, through optimizing internal training programs and intensifying training efforts, enhance the understandingand memory of the relevant personnel on relevant laws and regulations and normative documents, such as the Securities Law, StockListing Rules of the Shenzhen Stock Exchange, the Self-regulatory Guidelines for the Companies Listed on the Shenzhen StockExchange No.1 - Standardized Operation of the Companies Listed on the Main Board, Several Provisions on the Reduction of SharesHeld in a Listed Company by the Shareholders, Directors, Supervisors, and Senior Executives of the Listed Company, and theDetailed Implementing Rules of the Shenzhen Stock Exchange for Shareholding Reduction by Shareholders, Directors, Supervisorsand Senior Executives of Listed Companies, and continuously strengthen relevant study, strictly observe relevant provisions, manage
its operation in a prudent manner and eradicate violations.
Part V Environmental and Social ResponsibilityI. Major Environmental IssuesIndicate whether the listed company and its subsidiaries fell into major pollutant-discharge enterprises and institutions published bynational environmental protection authorities.
√ Yes □ No
| Name of company or subsidiary | Names of main pollutants and characteristic pollutants | Way of discharge | Number of discharge outlets | Layout of discharge outlets | Discharge concentration | 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) | COD | Continuous discharge | 1 | Beijiang River trunk stream waterway | 8.1 mg/L | GB18918-2002, Class 1A | 325.21t | 1606t/a | None |
| 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) | Ammonia nitrogen | Continuous discharge | 1 | Beijiang River trunk stream waterway | 0.70 mg/L | GB18918-2002, Class 1A | 28.10 t | 200.75 t/a | None |
| 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) | Total phosphorus | Continuous discharge | 1 | Beijiang River trunk stream waterway | 0.28 mg/L | GB18918-2002, Class 1A | 11.24 t | 20.075 t/a | None |
| Foshan Shunde Huaqingyuan Water Environmental Protection Co., Ltd. (Phases I and II sewage stations by the | Total nitrogen | Continuous discharge | 1 | Beijiang River trunk stream waterway | 5.8mg/L | GB18918-2002, Class 1A | 232.87 t | 602.25 t/a | None |
| gate), Foshan Shunde Yuanrun Water Environmental Protection Co., Ltd. (Phase III sewage station by the gate) | |||||||||
| Funan Greenlander Environmental Protection Energy Co., Ltd. | Waste gas/smoke | 80m chimney | 1 | North side of the main plant | 2.4mg/Nm? | GB18485-2014 | 1.044t | 14.6t/a | None |
| Funan Greenlander Environmental Protection Energy Co., Ltd. | Waste gas/SO2 | 80m chimney | 1 | North side of the main plant | 36.9mg/Nm? | GB18485-2014 | 23.475t | 100t/a | None |
| Funan Greenlander Environmental Protection Energy Co., Ltd. | Waste gas/NOx | 80m chimney | 1 | North side of the main plant | 159.6mg/Nm? | GB18485-2014 | 95.456t | 96.72t/a | None |
| Funan Greenlander Environmental Protection Energy Co., Ltd. | Waste gas/HCl | 80m chimney | 1 | North side of the main plant | 36.4mg/Nm? | GB18485-2014 | 22.857t | / | None |
| Funan Greenlander Environmental Protection Energy Co., Ltd. | Waste gas/CO | 80m chimney | 1 | North side of the main plant | 19.1mg/Nm? | GB18485-2014 | 10.463t | / | None |
| Funan Greenlander Environmental Protection Energy Co., Ltd. | Waste gas/Pb | 80m chimney | 1 | North side of the main plant | 0.02407mg/Nm? | GB18485-2014 | / | / | None |
| Funan Greenlander Environmental Protection Energy Co., Ltd. | Waste gas/Cd | 80m chimney | 1 | North side of the main plant | 0.000016397mg/Nm? | GB18485-2014 | / | / | None |
| Funan Greenlander Environmental Protection Energy Co., Ltd. | Waste gas/Hg | 80m chimney | 1 | North side of the main plant | 0.0048mg/Nm? | GB18485-2014 | / | / | None |
| Funan Greenlander Environmental Protection Energy Co., Ltd. | Waste gas/dioxin | 80m chimney | 1 | North side of the main plant | 0.049ng-TEQ/m? | GB18485-2014 | / | / | None |
| Shouxian Greenlander New Energy Co., Ltd. | Waste gas/smoke | 80m chimney | 1 | West side of the main plant | 1.79mg/m? | GB18485-2014 | 0.81t | / | None |
| Shouxian Greenlander New Energy Co., Ltd. | Waste gas/SO2 | 80m chimney | 1 | West side of the main plant | 40.97mg/m? | GB18485-2014 | 29.23t | 70t/a | None |
| Shouxian Greenlander New Energy Co., Ltd. | Waste gas/NOx | 80m chimney | 1 | West side of the main plant | 199.09mg/m? | GB18485-2014 | 139.37t | 144t/a | None |
| Shouxian Greenlander New Energy Co., Ltd. | Waste gas/HCl | 80m chimney | 1 | West side of the main plant | 47.41mg/m? | GB18485-2014 | 30.16t | / | None |
| Shouxian Greenlander New Energy Co., Ltd. | Waste gas/CO | 80m chimney | 1 | West side of the main plant | 8.74mg/m? | GB18485-2014 | 1.23t | / | None |
| Shouxian Greenlander New Energy Co., Ltd. | Waste gas/Pb | 80m chimney | 1 | West side of the main plant | 0.024mg/m? | GB18485-2014 | / | / | None |
| Shouxian Greenlander | Waste | 80m | 1 | West side of | 0.0019mg/ | GB18485- | / | / | None |
| New Energy Co., Ltd. | gas/Cd | chimney | the main plant | m? | 2014 | ||||
| Shouxian Greenlander New Energy Co., Ltd. | Waste gas/Hg | 80m chimney | 1 | West side of the main plant | 0.00007mg/ Nm? | GB18485-2014 | / | / | None |
| Shouxian Greenlander New Energy Co., Ltd. | Waste gas/dioxin | 80m chimney | 1 | West side of the main plant | 0.0018ngTEQ/m? | GB18485-2014 | / | / | None |
| Xiantao Greenlander Environmental Protection Power Co., Ltd. (1# furnace) | Waste gas/smoke | 80m chimney | 1 | West side of the main plant | 0.86mg/ Nm? | GB18485-2014 | 0.32t | / | None |
| Xiantao Greenlander Environmental Protection Power Co., Ltd. (1# furnace) | Waste gas/SO2 | 80m chimney | 1 | West side of the main plant | 12.83mg/ Nm? | GB18485-2014 | 9.35t | 58t/a | None |
| Xiantao Greenlander Environmental Protection Power Co., Ltd. (1# furnace) | Waste gas/NOx | 80m chimney | 1 | West side of the main plant | 180.38mg/ Nm? | GB18485-2014 | 119.72t | 148.85t/a | None |
| Xiantao Greenlander Environmental Protection Power Co., Ltd. (1# furnace) | Waste gas/HCl | 80m chimney | 1 | West side of the main plant | 16.01mg/ Nm? | GB18485-2014 | 10.58t | / | None |
| Xiantao Greenlander Environmental Protection Power Co., Ltd. (1# furnace) | Waste gas/CO | 80m chimney | 1 | West side of the main plant | 10.97mg/ Nm? | GB18485-2014 | 7.45t | / | None |
| Xiantao Greenlander Environmental Protection Power Co., Ltd. (1# furnace) | Waste gas/Pb | 80m chimney | 1 | West side of the main plant | 0.006mg/ Nm? | GB18485-2014 | / | / | None |
| Xiantao Greenlander Environmental Protection Power Co., Ltd. (1# furnace) | Waste gas/Cd | 80m chimney | 1 | West side of the main plant | 0.00005mg/ Nm? | GB18485-2014 | / | / | None |
| Xiantao Greenlander Environmental Protection Power Co., Ltd. (1# furnace) | Waste gas/Hg | 80m chimney | 1 | West side of the main plant | 0.0004mg/ Nm? | GB18485-2014 | / | / | None |
| Xiantao Greenlander Environmental Protection Power Co., Ltd. (1# furnace) | Waste gas/dioxin | 80m chimney | 1 | West side of the main plant | 0.021ng-TEQ/m? | GB18485-2014 | / | / | None |
| Xiantao Greenlander Environmental Protection Power Co., Ltd. (2# furnace) | Waste gas/smoke | 80m chimney | 1 | West side of the main plant | 1.12mg/ Nm? | GB18485-2014 | 0.53t | / | None |
| Xiantao Greenlander Environmental Protection Power Co., Ltd. (2# furnace) | Waste gas/SO2 | 80m chimney | 1 | West side of the main plant | 25.24mg/ Nm? | GB18485-2014 | 9.00t | 58t/a | None |
| Xiantao Greenlander | Waste | 80m | 1 | West side of | 179.64mg/ | GB18485- | 93.80t | 148.85t/a | None |
| Environmental Protection Power Co., Ltd. (2# furnace) | gas/NOx | chimney | the main plant | Nm? | 2014 | ||||
| Xiantao Greenlander Environmental Protection Power Co., Ltd. (2# furnace) | Waste gas/HCl | 80m chimney | 1 | West side of the main plant | 14.16mg/ Nm? | GB18485-2014 | 8.19t | / | Nnoe |
| Xiantao Greenlander Environmental Protection Power Co., Ltd. (2# furnace) | Waste gas/CO | 80m chimney | 1 | West side of the main plant | 31.93mg/ Nm? | GB18485-2014 | 5.76t | / | None |
| Xiantao Greenlander Environmental Protection Power Co., Ltd. (2# furnace) | Waste gas/Pb | 80m chimney | 1 | West side of the main plant | 0.007mg/ Nm? | GB18485-2014 | / | / | None |
| Xiantao Greenlander Environmental Protection Power Co., Ltd. (2# furnace) | Waste gas/Cd | 80m chimney | 1 | West side of the main plant | 0.00007mg/ Nm? | GB18485-2014 | / | / | None |
| Xiantao Greenlander Environmental Protection Power Co., Ltd. (2# furnace) | Waste gas/Hg | 80m chimney | 1 | West side of the main plant | 0.0025mg/ Nm? | GB18485-2014 | / | / | None |
| Xiantao Greenlander Environmental Protection Power Co., Ltd. (2# furnace) | Waste gas/dioxin | 80m chimney | 1 | West side of the main plant | 0.010ng-TEQ/m? | GB18485-2014 | / | / | None |
| Poyang Greenlander Renewable Energy Co., Ltd. | Waste gas/smoke | 80m chimney | 1 | North side of the main plant | 0.790mg/ Nm? | GB18485-2014 | 0.2223t | 12t/a | None |
| Poyang Greenlander Renewable Energy Co., Ltd. | Waste gas/SO2 | 80m chimney | 1 | North side of the main plant | 22.689mg/ Nm? | GB18485-2014 | 6.3807t | 80t/a | None |
| Poyang Greenlander Renewable Energy Co., Ltd. | Waste gas/NOx | 80m chimney | 1 | North side of the main plant | 151.684mg/ Nm? | GB18485-2014 | 42.6568t | 250t/a | None |
| Poyang Greenlander Renewable Energy Co., Ltd. | Waste gas/HCl | 80m chimney | 1 | North side of the main plant | 30.054mg/ Nm? | GB18485-2014 | 8.4518t | / | None |
| Poyang Greenlander Renewable Energy Co., Ltd. | Waste gas/CO | 80m chimney | 1 | North side of the main plant | 2.466mg/ Nm? | GB18485-2014 | 0.6935t | / | None |
| Poyang Greenlander Renewable Energy Co., Ltd. | Waste gas/Pb | 80m chimney | 1 | North side of the main plant | 0.019mg/ Nm? | GB18485-2014 | / | / | None |
| Poyang Greenlander Renewable Energy Co., Ltd. | Waste gas/Cd | 80m chimney | 1 | North side of the main plant | 0.000243mg/ Nm? | GB18485-2014 | / | / | None |
| Poyang Greenlander Renewable Energy Co., Ltd. | Waste gas/Hg | 80m chimney | 1 | North side of the main plant | 0.000077mg/ Nm? | GB18485-2014 | / | / | None |
| Poyang Greenlander | Waste | 80m | 1 | North side | 0.0271ng- | GB18485- | / | / | None |
| Renewable Energy Co., Ltd. | gas/dioxin | chimney | of the main plant | TEQ/m? | 2014 | ||||
| Biyang County Fenghe New Energy Power Co., Ltd. | Waste gas/smoke | 80m chimney | 1 | South side of the main plant | 10.64mg/ Nm? | GB18485-2014 | 0.157t | 10.95t/a | None |
| Biyang County Fenghe New Energy Power Co., Ltd. | Waste gas/SO2 | 80m chimney | 1 | South side of the main plant | 38.36mg/ Nm? | GB18485-2014 | 6.937t | 31.68t/a | None |
| Biyang County Fenghe New Energy Power Co., Ltd. | Waste gas/NOx | 80m chimney | 1 | South side of the main plant | 215.88mg/ Nm? | GB18485-2014 | 33.779t | 159.72t/a | None |
| Biyang County Fenghe New Energy Power Co., Ltd. | Waste gas/HCl | 80m chimney | 1 | South side of the main plant | 25.6mg/ Nm? | GB18485-2014 | 5.104t | / | None |
| Biyang County Fenghe New Energy Power Co., Ltd. | Waste gas/CO | 80m chimney | 1 | South side of the main plant | 60.8mg/ Nm? | GB18485-2014 | 0.864t | / | None |
| Biyang County Fenghe New Energy Power Co., Ltd. | Waste gas/Pb | 80m chimney | 1 | South side of the main plant | 0.1221mg/ Nm? | GB18485-2014 | / | / | None |
| Biyang County Fenghe New Energy Power Co., Ltd. | Waste gas/Cd | 80m chimney | 1 | South side of the main plant | 0.000481mg/ Nm? | GB18485-2014 | / | / | None |
| Biyang County Fenghe New Energy Power Co., Ltd. | Waste gas/Hg | 80m chimney | 1 | South side of the main plant | 0.00143mg/ Nm? | GB18485-2014 | / | / | None |
| Biyang County Fenghe New Energy Power Co., Ltd. | Waste gas/dioxin | 80m chimney | 1 | South side of the main plant | 0.01195ngTEQ/Nm? | GB18485-2014 | / | / | None |
| Xiantao Yinghe Environmental Protection Co., Ltd. | 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: 0.06mg/ Nm?; hydrogen sulfide: 1.5mg/ Nm? | GB14554-93 | NA | / | None |
| Xiantao Yinghe Environmental Protection Co., Ltd. | Smoke, SO2 and NOX | Centralized | 1 | Discharge outlets of kitchen biogas combustion were set at the end of the combustion system, and waste gas | Smoke: 20mg/ Nm?; SO2: 50mg/ Nm?; NOX: 200mg/ Nm? | GB13271-2014 | 0 | Smoke: 0.241t; SO2: 0.467t; NOX: 1.809t | None |
| was discharged through the chimney | |||||||||
| Xiantao Yinghe Environmental Protection Co., Ltd. | 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: no limit | GB8978-1996 | COD: 2.88t; ammonia nitrogen: 0.0155t | COD: 4.2627t; ammonia nitrogen: 0.427t | None |
Construction and operation of pollution prevention and control facilities:
The Company, in strict accordance with the environmental protection laws and regulations such as Environmental ProtectionLaw of the People's Republic of China, Law of the People's Republic of China on Prevention and Control of Air Pollution, Law ofthe People's Republic of China on Prevention and Control of Environmental Pollution Caused by Solid Waste, and Law of thePeople's Republic of China on Prevention and Control of Water Pollution, as well as the administrative requirements of simultaneousdesign, construction and application of main works and pollution prevention and control measures, designed and constructedpollution prevention and control facilities and main works simultaneously and carried out acceptance inspections and put them intouse simultaneously. The Company ran its water treatment projects with mature and reliable production process, conducted dailysampling and recorded the operation in full, maintained stable operation throughout the year. The Company also ran its domesticwaste incineration power generation projects with the most mature and stable process in the industry, ensured sufficientenvironmental consumables input in these projects, maintained stable operation throughout the year. As required, all key pollutantdischarge projects of the Company were equipped with online monitoring devices at the outlets, with monitoring data directly sent tothe national environmental platform. All the projects were supervised by national environmental protection authorities, with allemissions in 2021 meeting the requirements.Assessment on the environmental impact of construction projects and other administrative licenses of environmental protectionThe Company has been running all its key pollutant discharge projects according to laws and regulations for many years. Duringthe construction period, environmental impact assessment was carried out for these projects in accordance with relevant laws andregulations such as Environmental Protection Law of the People's Republic of China and Law of the People's Republic of China onEnvironmental Impact Assessment, and environmental impact assessment documents were approved by environmental authorities.Besides, the Company obtained approval from environmental authorities before pilot production, organized environmental protectionacceptance inspection for completed project during pilot production, and simultaneously designed, constructed and put into use thesupporting environmental protection facilities and the main works.Contingency plan for environmental emergenciesThe Company commissioned a professional third-party organization to develop a contingency plan for environmentalemergencies for each of its key pollutant discharge projects, which was approved and filed for record. In 2021, it carried out regulartraining and drills among its employees in different projects according to the requirements and contents of the contingency plan toenable them to timely and accurately deal with environmental pollution emergencies. In 2021, no major environmental risk incidents
occurred in any of the projects.Environmental self-monitoring planThe Company developed the 2021 Environmental Self-Monitoring Plan for each of its key pollutant discharge projects, and filedthem with local ecological and environmental protection authorities. It also commissioned a professional third-party inspectioninstitution to carry out regular environmental monitoring of the pollutants discharged by the projects.Administrative penalties for environmental issues during the reporting period
| Name of company or subsidiary | Reason | Violation | Penalty | Impact on the production and operation of listed company | Rectification measures |
| Shenzhen Yinglian Urban Environmental Service Co., Ltd. | The sealing measures were not well performed and the waste was exposed when the urban waste transport vehicles transported urban domestic waste to the designated place. | The aforesaid administrative penalty given to Shenzhen Yinglian Urban Environmental Service Co., Ltd. is a warning on general violation against law. Such violation did not fall into the situation of "failing to correct within the time limit or causing serious consequences", and did not constitute a major illegal act. | The company was ordered to make rectification and fined RMB 2,000. | There is no significant impact on the production and operation of listed company. | Rectified in time |
| Shenzhen Bao’an Yinglian Urban Service Co., Ltd. | The sewage was discharged into rainwater pipe network in the area where the rain and sewage should be discharged separately. | The aforesaid administrative penalty given to Shenzhen Bao’an Yinglian Urban Service Co., Ltd. is a warning on general violation against law. Such violation did not fall into the situation of "failing to correct within the time limit or causing serious consequences", and did not constitute a material illegal act. | The company was ordered to make rectification and received a warning, without any fine. | There is no significant impact on the production and operation of listed company. | Rectified in 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.Measures taken 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 resource
utilization 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 0.2-0.3TCO2e per ton of waste, with sound emission reduction effect.Other information related to environmental protectionNAII. Corporate Social ResponsibilityFor details, please refer to the 2021 Corporate Social Responsibility Report disclosed at Cninfo (www.cninfo.com.cn).III. Performance in Consolidating Achievements of Poverty Alleviation and Promoting RuralRevitalizationIn 2021, the Company actively took social responsibility, participated in local education support activities, and donated fundsand materials to help promote rural revitalization with targeted poverty alleviation. All subsidiaries of the Company activelyresponded to the call of governments at all levels and actively participated in local education support activities, including a pledge ofRMB 100,000 to Shangyu People's Education Fund, which will be used to improve the conditions of local schools at all levels andcategories, encourage and reward teachers and students, help the poverty-stricken students, etc.; a donation of RMB 12,000 to FunanYouth Volunteers Association to help impoverished college students; a donation of RMB 10,000 for the "Assisting the ImpoverishedStudent in Autumn" activity organized by Biyang County Education Bureau, Henan Province; a pledge of RMB 20,000 to DaliangEducational Charity Fund; a donation of RMB 15,000 to Shenzhen Xinzhiqing Education Development Foundation.In addition, the Company actively explored ways to carry out targeted poverty alleviation. Its subsidiaries participated in ruralrevitalization activities such as "supporting rural revitalization by Biyang Charity Fund", "paired-up assistance in poverty alleviationin Long'an, Mashan and Shanglin counties in Guangxi", donating funds for "Anhua Rural Revitalization Fund and Shimen CitrusFestival", participating in "Assisting in poverty alleviation in Dashuiping Village in Xinhua County and helping to improve thevillage environment" activity organized by the United Front Work Department of CPC Central Committee of Hunan Province, anddonated about RMB 495,000 in funds and materials to meet local development needs, making positive contributions to ruralrevitalization.The Company always adheres to the unity of economic benefits and social benefits, and pursues healthy and sustainabledevelopment. It aims to increase its contribution to the local economy, and finally realize the common progress and development ofenterprises and society while striving to achieve its own development and growth.
Part VI Significant EventsI. Performance of undertakings
1. Undertakings of the Company’s de facto controller, shareholders, related parties, and acquirer, as well as the Company and other commitment makersfulfilled in the reporting period or ongoing at the period-end
√ Applicable □ Not Applicable
| Undertaking | Party | Type | Content | Date | Term of undertakings | Fulfillment of undertakings |
| Undertaking on shareholding structure reform | -- | -- | -- | -- | -- | -- |
| Undertakings made in acquisition report or equity change report | -- | -- | -- | -- | -- | -- |
| 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 control of the listed company in the next 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 of the listed company acquired from this transaction shall not be transferred within 36 months from the closing date of issuance. 2. In case the closing price of the listed company's stock is lower than its issue price for 20 consecutive trading days within 6 months from the completion of this transaction, or the closing price is lower than the issue price at the end of six months from the completion of this transaction, the lock-up period for Ningbo Infore's shareholding in the listed company shall automatically extend for at least 6 months. | January 3, 2019 | 42 months | It is being properly fulfilled without breach of such undertaking. | |
| Counterparties Ningbo Yingtai, | Undertaking on trading restrictions |
The shares of the listed company acquired from this transaction shallnot be transferred within 36 months from the closing date of issuance.
| January 3, 2019 | 36 months | It is being properly fulfilled without breach of such |
| Ningbo Zhongfeng, Ningbo Liantai | undertaking. | ||||
| De facto controller He Jianfeng, Ningbo Infore, Infore Holding | 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. |
| Ningbo Yingtai, Ningbo Zhongfeng, Ningbo Liantai | Undertaking related to the employment term and non-solicitation | Core personnel such as the general manager of the Company (the specific list of main management personnel and other core personnel shall be verified and confirmed by Infore Enviro) shall be incumbent with the target company for at least 36 months from the closing date of the underlying shares. | November 27, 2018 | 36 months | The undertaking has been fulfilled and strictly observed by the undertaking parties. |
| 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 Greenlander Environmental Protection Power Co., Ltd., Funan Greenlander 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 | From 2016 to 2019, the Greenlander Environmental 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). | October 14, 2015 | 48 months | Not fulfilled properly. The newly signed projects by Greenlander Environmental from 2016 to 2019 totaled 1,400 tons, 5,100 tons less than the project undertaking. | |
| Greenlander Investment Holding Co., Ltd. and Zheng Weixian | Project construction undertakings | Jiujiang Company must start the construction and obtain approval prior to December 31, 2020. In case of failure to commence or the construction is recovered by the government, it shall compensate the listed company at a consideration of no less than RMB 5 million. | October 14, 2015 | December 31, 2020 48 months | Not fulfilled properly. | |
| Undertakings made in IPO or refinancing | He Jianfeng | Undertaking on trading restrictions | The shares subscribed for this time shall not be transferred within 36 months from the closing date of this issuance. | January 3, 2018 | 36 months | The undertaking has been fulfilled and strictly observed by the undertaking parties. |
| She Changguang | Undertaking on trading restrictions | The shares subscribed for shall not be transferred within 36 months from the closing date of this issuance. | January 3, 2018 | 36 months | The undertaking has been fulfilled and strictly observed by the undertaking parties. | |
| Undertakings related to equity incentives | -- | -- | -- | -- | -- | -- |
| Undertakings made to minority shareholders of the company | -- | -- | -- | -- | -- | -- |
| 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 | The main cause is that the project construction progress was slower than expected. To safeguard the rights and interests of the Company and protect the interests of shareholders, the Company applied to Foshan Intermediate People's Court for asset preservation against Greenlander Investment Holding Co., Ltd., Zheng Weixian, and Ren Zhe on November 5, 2018. The court has frozen 30% equity interest of Greenlander Investment Holding Co., Ltd. in Shenzhen Greenlander Environmental Protection Co., Ltd. as well as Zheng Weixian's deposits of RMB 9,816.09. On August 21, 2020, the Company received a counterclaim filed by Greenlander Investment Holding Co., Ltd. and Zheng Weixian to the court. On August 24, 2020 and September 24, 2020, the court held two hearings on the case, and on January 13, 2021, the court issued a judgment of first instance. Greenlander Investment Holding Co., Ltd. and Zheng Weixian filed an appeal on January 29, 2021, and the court held a public hearing on the case of second instance | |||||
| be elaborated | on November 2, 2021, and has not yet issued the judgment of second instance. |
2. Where any earnings forecast was made for any of the Company’s assets or projects and the reporting period is still within the forecast period, theCompany shall explain whether the performance of the asset or project reaches the earnings forecast and why
□ Applicable √ Not Applicable
II. Occupation of the Company’s Capital by the Controlling Shareholder or Other Related Parties for Non-Operating Purposes
□ Applicable √ Not Applicable
No such cases in the reporting period.III. Illegal Provision of Guarantees for External Parties
□ Applicable √ Not Applicable
No such cases in the reporting period.IV. Explanations Given by the Board of Directors Regarding the "Non-standard Audit Opinion" for the Latest Period
□ Applicable √ Not Applicable
V. Explanation of the Board of Directors, the Supervisory Committee, and IndependentDirectors (If Any) Regarding the "Non-standard Audit Opinion" for the Reporting Period
□ Applicable √ Not Applicable
VI. Reason for Changes in Accounting Policies, Accounting Estimates or Corrections ofMaterial Accounting Errors as Compared to the Financial Report for the Prior Year
√ Applicable □ Not Applicable
1. The Company has implemented the revised Accounting Standard No. 21 for Business Enterprises—Leasing (hereinafterreferred to as the "New Leasing Standard") since 1 January 2020 (hereinafter referred to as the first implementation date).
(1) For existing contracts prior to the first implementation date, the Company has chosen not to reassess whether they are leasesor contain leases.
(2) For leases in which the Company is the lessee, the Company has adjusted the amount of retained earnings and other relateditems in the financial statements at the beginning of the reporting period based on the cumulative effects of the first implementationdate of the new leasing standard and the previous standard, without adjusting the information for comparable periods. The specificprocess was as follows:
For finance leases prior to the first implementation date, the Company measured the right-of-use assets and lease liabilitiesrespectively at the original carrying amounts of the finance lease assets and finance lease payables on the first implementation date.
For operating leases prior to the first implementation date, the Company measured the lease liabilities on the firstimplementation date based on the present value of the remaining lease payments discounted at the Company's incremental borrowingrate as of the first implementation date, and measured the right-of-use assets based on an amount equal to the lease liabilities, withnecessary adjustments for prepaid rentals.
On the first implementation date, the Company conducted impairment tests on right-of-use assets and accounted for themaccordingly as per Note V.31 to the Financial Statements.
1) The major effects of implementing the new leasing standard on the financial statements as of January 1, 2021:
| Item | Balance sheet | ||
| December 31, 2021 | Effect of the new leasing standard | January 1, 2021 | |
| Right-of-use assets | 30,945,067.78 | 30,945,067.78 | |
| Non-current liabilities due within one year | 150,862,201.57 | 7,701,219.17 | 158,563,420.74 |
Lease liabilities
| Lease liabilities | 23,243,848.61 | 23,243,848.62 |
2) The weighted average of the Company's incremental borrowing rate used for the lease liabilities recorded in the balance sheeton the first implementation date was 4.65%.
3) Simplified treatment of operating leases prior to the first implementation date
① For leases completed within 12 months from the first implementation date, the Company applied the simplified approach anddid not recognize right-of-use assets and lease liabilities;
② The Company used the same discount rate for lease contracts with similar characteristics when measuring the lease liability;
③ The measurement of right-of-use assets did not include initial direct costs;
④ The Company determined the lease term based on the actual exercise of the renewal option or termination option prior to thefirst implementation date and other updates;
The above simplified treatment has no significant impact on the Company's financial statements.
(3) For operating lease contracts for low-value assets that existed prior to the first implementation date, the Company adoptedthe simplified approach of not recognizing right-of-use assets and lease liabilities and accounting for them as per the new leasingstandard from the first implementation date.
(4) Leases for which the Company is the lessor were accounted for as per the new leasing standard from the first implementationdate.
(5) Treatment of existing sale and leaseback transactions prior to the first implementation date
For sale and leaseback transactions existing prior to the first implementation date, the Company did not reassess on the firstimplementation date whether the transfer of assets was in conformity with the provisions of Accounting Standard for BusinessEnterprises No. 14 – Revenue for accounting as a sale.
For sale and leaseback transactions accounted for as sales and finance leases prior to the first implementation date, the Company,as the seller (lessee), accounted for the leasebacks in the same manner as other finance leases existing on the first implementationdate and continued to amortize the related deferred revenue or loss over the lease term.
For sale and leaseback transactions accounted for as sales and operating leases prior to the first implementation date, theCompany, as the seller (lessee), accounted for the leasebacks in the same manner as other operating leases existing on the firstimplementation date, and adjusted the right-of-use assets for the related deferred revenue or loss recorded on the balance sheet priorto the first implementation date.
2. The Company has implemented, since January 26, 2021, Interpretation No. 14 of the Accounting Standards for BusinessEnterprises (hereinafter referred to as Interpretation No. 14) issued in 2021 by the Ministry of Finance.
The Company retroactively adjusted the contracts of relevant PPP projects that commenced before December 31, 2020, and hadnot been completed by the effective date of Interpretation No. 14, and the amount of relevant projects in the financial statements atthe beginning of 2021 based on the cumulative effects, without adjusting the information for comparable periods. The major effectsof the adjustment on the Company's financial statements as of January 1, 2021:
| Item | Balance sheet | ||
| December 31, 2021 | Effects | January 1, 2021 | |
| Construction in progress | 1,782,529,087.95 | -1,711,793,604.00 | 70,735,483.95 |
| Intangible assets | 3,163,935,814.41 | 1,711,793,604.00 | 4,875,729,418.41 |
3) The Company has implemented, since December 31, 2021, the provision of "Presentation of Centralized Fund Management"in the Interpretation No. 15 of the Accounting Standards for Business Enterprises issued by the Ministry of Finance, and such changein accounting policies has no impact 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 Applicable
For details of the changes in the scope of the consolidated financial statements during the reporting period, please refer to NoteVIII "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 (RMB | 310 |
| 10,000) | |
| Consecutive years of the audit service provided by the domestic accounting firm | 20 |
| Names of the certified public accountants from the domestic accounting firm | Bian Shanshan and Pan Jianwu |
| Consecutive years of the audit service provided by the certified public accountants from the domestic accounting firm | 3 years and 1 year respectively |
| Name of the overseas accounting firm (if any) | Not applicable |
Whether the CPA firm was changed for the reporting period
□ Yes √ No
Engagement of any accounting firm for internal control audit, financial advisor, or sponsor
√ Applicable □ Not Applicable
During the year, Pan-China Certified Public Accountants LLP (Special General Partnership) was appointed as the accountingfirm for the Company's internal control audit.
IX. Possibility of Delisting after the Disclosure of this Report
□ Applicable √ Not Applicable
X. Bankruptcy and Reorganization
□ Applicable √ Not Applicable
No such cases in the reporting period.XI. Material Litigation and Arbitration
□ Applicable √ Not Applicable
No such cases in 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 149 million, which are not expected to incur anyprovision of large amount.XII. Punishments and Rectifications
□ Applicable √ Not Applicable
No such cases in the reporting period.XIII. Credit Quality of the Company as well as Its Controlling Shareholder and De FactoController
√ Applicable □ Not Applicable
During the reporting period, the Company as well as its controlling shareholder and de facto controller were of good creditquality, with no such cases as non-fulfillment of effective court judgments or outstanding debts of large amounts due and unpaid.
XIV. Significant Related-Party Transactions
1. Related-party transactions arising from daily operation
√ 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 (RMB 10,000) | Proportion in the amount of similar transactions (%) | Approved transaction L\line (RMB 10,000) | Over the approved line | Method of settlement | Available market price for similar transactions | Disclosure date | Disclosure document |
| Zoomlion | Shareholder holding more than 5% of the Company’s shares | Goods or financial services | Goods or financial services | Market price | -- | 21,318.44 | 80,550 | No | As per contractual provisions | -- | April 23, 2021 | www.cninfo.com.cn | |
| Total | -- | -- | 21,318.44 | -- | 80,550 | -- | -- | -- | -- | -- | |||
| Details of any large-amount sales return | None | ||||||||||||
| Give the actual fulfillment situation in the reporting period (if any) where an estimate by type had been made for the total amounts of daily related-party transactions to occur in the current period | None | ||||||||||||
| Reason for any significant difference between the transaction price and the market reference price (if applicable) | Not applicable | ||||||||||||
2. Related-party transactions regarding purchase or sales of assets or equity interests
□ Applicable √ Not Applicable
No such cases in the reporting period.
3. Related-party transactions regarding joint investments in external parties
□ Applicable √ Not Applicable
No such cases in the reporting period.
4. Current associated rights of credit and liabilities
√ Applicable □ Not Applicable
Indicate whether there were any associated rights of credit and liabilities for non-operating purposes
□ Yes √ No
No such cases in the reporting period.
5. Transactions with finance companies with related party relationships
√ Applicable □ Not Applicable
Deposit business
| Related parties | Related party relationship | Maximum daily deposit limit (RMB 1 0,000) | Range of deposit rate | Opening balance (RMB 10,000) | Current period actual | Ending balance (RMB 10,000) | |
| Total deposited amount (RMB 10,000) | Total withdrawn amount (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 | 443.46 | 7,838.95 | 8,282.41 | 0 |
6. Transactions between the finance company controlled by the Company and related parties
□ Applicable √ Not Applicable
There is no deposit, loan, credit, or other financial business between the finance company controlled by the Company andrelated parties.
7. Other material related-party transactions
□ Applicable √ Not Applicable
No such cases in the reporting period.XV. Significant Contracts and Their Execution
1. Entrustment, contracting, and leasing
(1) Entrustment
□ Applicable √ Not Applicable
No such cases in the reporting period.
(2) Contracting
□ Applicable √ Not Applicable
No such cases in the reporting period.
(3) Leasing
√ Applicable □ Not Applicable
Description 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 23rd floor of Yingfeng Business Building at 8 Yixin Road, Junlan Community, BeijiaoTown, Shunde District, Foshan City, as the business premises with a construction area of 1,578.68 sqm. The rent payable for the year2020 was RMB 1,296,100, and the actual payment was RMB 1,296,100. As of December 31, 2021, the above amounts have beensettled.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 Applicable
No leasing items brought about profits or losses to the Company accounting for more than 10% of the gross profit of theCompany during the reporting period.
2. Major 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 line announcement | Line of guarantee | Actual occurrence date | Actual guarantee amount | Guarantee type | Security (if any) | Counter-guarantees (if any) | Term of guarantee | Completed or not | Guarantee for a related party or not |
| Buyer's credit business | April 23, 2021 | 15,000 | October 29, 2021 | 3,294.09 | Joint and several liability guarantee | NA | -- | 2 years | No | No |
| Buyer's credit business | April 23, 2021 | 20,000 | June 30, 2021 | 5,749.52 | Joint and several liability guarantee | NA | -- | 1 year | No | No |
| Buyer's credit business | April 23, 2021 | 16,528.1 | September 18, 2021 | 16,528.1 | Joint and several liability guarantee | NA | -- | 1 year | No | No |
| Buyer's credit business | April 23, 2021 | 778.23 | May 18, 2021 | 778.23 | Joint and several liability guarantee | NA | -- | 1 year | No | No |
| Buyer's credit business | April 23, 2021 | 4,948 | May 14, 2021 | 4,948 | Joint and several liability guarantee | NA | -- | 1 year | No | No |
| Lianjiang Greenlander New Energy Co., Ltd. | August 21, 2020 | 4,981.5 | -- | 4,649.34 | Joint and several liability guarantee | NA | -- | 15 years | No | Yes |
| Guangdong | January 30, | 14,000 | January 1, | 14,000 | Joint and | NA | -- | 5 years | No | Yes |
| Wellkey Electric Material Co., Ltd. | 2021 | 2021 | several liability guarantee | |||||||
| Guangdong Wellkey Electric Material Co., Ltd. | January 30, 2021 | 2,000 | June 25, 2021 | 2,000 | Joint and several liability guarantee | NA | -- | 1 year | No | Yes |
| Liaoning Donggang Magnetic Wire Co., Ltd. | January 30, 2021 | 25,000 | December 21, 2020 | 14,800 | Joint and several liability guarantee | NA | -- | 3 years | No | Yes |
| Anhui Wellkey Electric Material Co., Ltd. | January 30, 2021 | 4,000 | June 21, 2021 | 3,000 | Joint and several liability guarantee | NA | -- | 1 year | No | Yes |
| Anhui Wellkey Electric Material Co., Ltd. | January 30, 2021 | 3,000 | May 25, 2021 | 3,000 | Joint and several liability guarantee | NA | -- | 1 year | No | Yes |
| Anhui Wellkey Electric Material Co., Ltd. | January 30, 2021 | 2,000 | June 28, 2021 | 2,000 | Joint and several liability guarantee | NA | -- | 1 year | No | Yes |
| Guangdong Wellkey Electric Material Co., Ltd. | January 30, 2021 | 18,000 | -- | -- | -- | -- | -- | -- | -- | -- |
| Anhui Wellkey Electric Material Co., Ltd. | January 30, 2021 | 3,000 | -- | -- | -- | -- | -- | -- | -- | -- |
| Buyer's credit business | April 23, 2021 | 22,745.67 | -- | -- | -- | -- | -- | -- | -- | -- |
| Total approved line for external guarantee during the reporting period (A1) | 155,981.5 | Total actual amount of external guarantee during the reporting period (A2) | 74,747.28 | |||||||
| Total approved line for external guarantee at the end of the reporting period (A3) | 155,981.5 | Total actual balance of external guarantee at the end of the reporting period (A4) | 74,747.28 | |||||||
| Guarantees provided by the Company for its subsidiaries | ||||||||||
| Guaranteed party | Disclosure date of the guarantee | Line of guarantee | Actual occurrence | Actual guarantee | Guarantee type | Security (if any) | Counter-guarant | Term of guarantee | Completed or not | Guarantee for a related |
| line announcement | date | amount | ees (if any) | party or not | ||||||
| Zhejiang Shangfeng Special Blower Industrial Co., Ltd. | April 23, 2021 | 22,000 | November 13, 2020 | 15,501.89 | Joint and several liability guarantee | NA | -- | 2 years | No | Yes |
| Zhejiang Shangfeng Special Blower Industrial Co., Ltd. | April 23, 2021 | 15,350 | December 29, 2020 | 14,687.7 | Joint and several liability guarantee | NA | -- | 2 years | No | Yes |
| Zhejiang Shangfeng Special Blower Industrial Co., Ltd. | April 23, 2021 | 9,100 | October 25, 2019 | 3,883.91 | Joint and several liability guarantee | NA | -- | 2 years | No | Yes |
| Zhejiang Shangfeng Special Blower Industrial Co., Ltd. | April 23, 2021 | 30,000 | December 10, 2021 | 5,127.41 | Joint and several liability guarantee | NA | -- | 1 year | No | Yes |
| Zhejiang Shangfeng Special Blower Industrial Co., Ltd. | April 23, 2021 | 11,000 | August 18, 2020 | 1,579 | Joint and several liability guarantee | NA | -- | 1 year | No | Yes |
| Zhejiang Shangfeng Special Blower Industrial Co., Ltd. | April 23, 2021 | 10,000 | April 23, 2021 | 10,000 | Joint and several liability guarantee | NA | -- | 1 year | No | Yes |
| Zhejiang Shangfeng Special Blower Industrial Co., Ltd. | April 23, 2021 | 7,500 | March 22, 2021 | 0 | Joint and several liability guarantee | NA | -- | 1 year | No | Yes |
| Zhejiang Shangfeng Special Blower Industrial Co., Ltd. | April 23, 2021 | 15,000 | November 16, 2021 | 15,000 | Joint and several liability guarantee | NA | -- | 1 year | No | Yes |
| Guangdong Infore Technology | April 23, 2021 | 5,000 | June 17, 2021 | 65.33 | Joint and several liability | NA | -- | 1 year | No | Yes |
| Co., Ltd. | guarantee | |||||||||
| Guangdong Infore Technology Co., Ltd. | April 23, 2021 | 4,000 | March 1, 2021 | 256.04 | Joint and several liability guarantee | NA | -- | 3 years | No | Yes |
| Guangdong Infore Technology Co., Ltd. | April 23, 2021 | 3,000 | September 3, 2021 | 51.44 | Joint and several liability guarantee | NA | -- | 1 year | No | Yes |
| Guangdong Infore Technology Co., Ltd. | December 26, 2017 | 15,000 | December 26, 2018 | 9,423.05 | Joint and several liability guarantee | NA | -- | 5 years | No | Yes |
| Shenzhen Greenlander Environmental Protection Co., Ltd. | April 20, 2020 | 13,000 | June 15, 2020 | 12,750 | Joint and several liability guarantee | NA | -- | 15 years | No | Yes |
| Shenzhen Greenlander Environmental Protection Co., Ltd. | August 10, 2019 | 25,000 | December 27, 2019 | 15,840 | Joint and several liability guarantee | NA | -- | 10 years | No | Yes |
| Shenzhen Greenlander Environmental Protection Co., Ltd. | February 2, 2016 | 13,000 | August 25, 2016 | 6,175 | Joint and several liability guarantee | NA | -- | 8 years | No | Yes |
| Shenzhen Greenlander Environmental Protection Co., Ltd. | October 27, 2016 | 12,000 | November 15, 2016 | 5,120 | Joint and several liability guarantee | NA | -- | 8 years | No | Yes |
| Shenzhen Greenlander Environmental Protection Co., Ltd. | August 21, 2020 | 28,000 | January 21, 2021 | 28,000 | Joint and several liability guarantee | NA | -- | 10 years | No | Yes |
| Maoming Infore Environment Water Treatment Technology | December 26, 2017 | 15,000 | March 20, 2018 | 11,421.05 | Joint and several liability guarantee | NA | -- | 15 years | No | Yes |
| Co., Ltd. | ||||||||||
| Changsha Zoomlion Changgao Environmental Industry Co., Ltd. | October 24, 2019 | 10,000 | March 25, 2020 | 7,000 | Joint and several liability guarantee | NA | -- | 5 years | No | Yes |
| Changde Zelian Environmental Service Co., Ltd. | April 23, 2021 | 12,000 | May 26, 2021 | 9,600 | Joint and several liability guarantee | NA | -- | 15 years | No | Yes |
| Lu'an Zhongfeng Urban Environmental Service Co., Ltd. | April 23, 2021 | 8,000 | June 08, 2021 | 7,800 | Joint and several liability guarantee | NA | -- | 13 years | No | Yes |
| Tongshan Tongda Water Treatment Technology Co., Ltd. | April 25, 2020 | 6,000 | February 01, 2021 | 1,000 | Joint and several liability guarantee | NA | -- | 18 years | No | Yes |
| Xiantao Yinghe Environmental Protection Co., Ltd. | August 21, 2020 | 30,100 | January 20, 2021 | 9,300 | Joint and several liability guarantee | NA | -- | 15 years | No | Yes |
| Changsha Zhongbiao Environmental Industry Co., Ltd. | April 23, 2021 | 5,000 | September 11, 2021 | 3,408.12 | Joint and several liability guarantee | NA | -- | 1 year | No | Yes |
| Changde Zelian Environmental Service Co., Ltd. | April 23, 2021 | 60 | -- | -- | -- | -- | -- | -- | -- | -- |
| Guangdong Infore Technology Co., Ltd. | April 23, 2021 | 700 | -- | -- | -- | -- | -- | -- | -- | -- |
| Other holding subsidiaries | April 23, 2021 | 5,450 | -- | -- | -- | -- | -- | -- | -- | -- |
| Total approved guarantee line for subsidiaries during the reporting period (B1) | 219,260 | Total actual guarantee amount for subsidiaries during the reporting period (B2) | 192,989.95 | |||||||
| Total approved | 330,260 | Total actual guarantee | 192,989.95 | |||||||
| guarantee line for subsidiaries at the end of the reporting period (B3) | balance for subsidiaries at the end of the reporting period (B4) | ||||||||||
| Guarantees between subsidiaries | |||||||||||
| Guaranteed party | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date | Actual guarantee amount | Guarantee type | Security (if any) | Counter-guarantees (if any) | Term of guarantee | Completed or not | Guarantee for a related party or not | |
| Total approved guarantee line for subsidiaries during the reporting period (C1) | 0 | Total actual guarantee amount for subsidiaries during the reporting period (C2) | 0 | ||||||||
| Total approved guarantee line 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 line during the reporting period (A1+B1+C1) | 375,241.5 | Total actual guarantee amount during the reporting period (A2+B2+C2) | 267,737.23 | ||||||||
| Total approved guarantee line at the end of the reporting period (A3+B3+C3) | 486,241.5 | Total actual guarantee balance at the end of the reporting period (A4+B4+C4) | 267,737.23 | ||||||||
| Proportion of the total actual guarantee amount (A4+B4+C4) in the Company's net assets | 15.84% | ||||||||||
| Of which: | |||||||||||
| Balance of debt guarantees provided directly or indirectly for the guaranteed party with a liability-to-asset ratio over 70% (E) | 173,089.95 | ||||||||||
| Total amount of the three kinds of guarantees above (D+E+F) | 173,089.95 | ||||||||||
Description of composite guarantees
3. Entrusted cash management
(1) Entrusted wealth management
√ Applicable □ Not Applicable
Overview of entrusted wealth management during the reporting period
Unit: RMB 10,000
| Type | Funding source | Entrustment amount | Undue amount | Unrecovered overdue amount | Accrued impairment amount for unrecovered overdue wealth management |
| Bank’s wealth management | Own funds | 217,895 | 0 | 0 | 0 |
| product | |||||
| Total | 217,895 | 0 | 0 | 0 | |
High-risk entrusted wealth management with a significant single amount or low security and low liquidity
□ Applicable √ Not Applicable
Entrusted wealth management with expected irrecoverable principal or other circumstances that may lead to impairment
□ Applicable √ Not Applicable
(2) Entrusted loans
□ Applicable √ Not Applicable
No such cases in the reporting period.
4. Other significant contracts
□ Applicable √ Not Applicable
No such cases in the reporting period.XVI. Other Significant Events
□ Applicable √ Not Applicable
No such cases in the reporting period.XVII. Other Significant Events of Subsidiaries
√ Applicable □ Not Applicable
On January 29, 2021, and February 24, 2021, the Company held the 11th Extraordinary Meeting of the ninth Board of Directorsand the 1st Extraordinary General Meeting of 2021 to deliberate and approve the Proposal on Public Listing Transfer of 51% of theControlling Right of Subsidiary. It was approved that the Company would transfer 51% of the controlling right of Foshan Yingtong tothe transferee, Guangdong Yinghe Corporate Management Co., Ltd. (hereinafter referred to as Guangdong Yinghe). The Companyhad completed the registration of the public listing transfer of 51% equity interest in Foshan Yingtong, after which the Company held49% equity interest in Foshan Yingtong. During the reporting period, the Company had received RMB 131.9 million of thetransaction price paid by Guangdong Yinghe, and the remaining RMB 123.1 million is to be paid as per the transfer agreement. Formore information, please refer to announcements published on November 21, 2020, January 30, 2021, February 25, 2021, and March17, 2021 on the media of information disclosure specified by the Company, Cninfo (www.cninfo.com.cn).
Part VII Share Changes and Shareholder InformationI. Share Changes
1. Share changes
Unit: Share
| Before | Increase/decrease in the current 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 | 1,158,356,644 | 36.62% | 0 | 0 | 0 | -18,757,326 | -18,757,326 | 1,139,599,318 | 35.84% |
| 1. State-owned shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 2. State-owned legal person shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 3. Other domestic shares | 1,158,356,644 | 36.62% | 0 | 0 | 0 | -18,757,326 | -18,757,326 | 1,139,599,318 | 35.84% |
| Including: Domestic legal person shares | 1,137,761,778 | 35.97% | 0 | 0 | 0 | 0 | 0 | 1,137,761,778 | 35.78% |
| Domestic natural person shares | 20,594,866 | 0.65% | 0 | 0 | 0 | -18,757,326 | -18,757,326 | 1,837,540 | 0.06% |
| 4. Foreign-owned shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Including: Foreign legal person share | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Foreign natural person share | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| II. Unrestricted Shares | 2,004,705,502 | 63.38% | 16,409,605 | 0 | 0 | 18,757,326 | 35,166,931 | 2,039,872,433 | 64.16% |
| 1. RMB-denominated ordinary shares | 2,004,705,502 | 63.38% | 16,409,605 | 0 | 0 | 18,757,326 | 35,166,931 | 2,039,872,433 | 64.16% |
| 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 | 3,163,062,146 | 100.00% | 16,409,605 | 0 | 0 | 0 | 16,409,605 | 3,179,471,751 | 100.00% |
Reasons for share changes
√ Applicable □ Not Applicable
1. On January 7, 2021, the Company disclosed the Reminder on Lifting Trading Restrictions on Restricted Shares in the PrivatePlacement. In 2017, the Company issued 73,856,975 restricted shares to 9 subscribers through private placement, with lock-upperiods of 12 months and 36 months, respectively. On January 3, 2018, the shares issue via the private placement were listed on the
Shenzhen Stock Exchange (SZSE). The 18,757,326 shares subscribed by He Jianfeng and Yu Changguang were not negotiablewithin 36 months upon completion of issuance. On January 8, 2021, the 18,757,326 restricted shares issued via the private placementwere lifted from trading restrictions and available for listing and circulation.
2. On March 11, 2021, the 2
nd
exercise schedule of the 2nd stock option incentive plan was closed. The total of stock optionsexercised by 46 incentive subjects was 18,200. The number of non-restricted shares increased by 18,200. Therefore, the Company'stotal share capital increased from 3,163,062,146 shares to 3,163,080,346 shares.
3. In the 2
nd eligible exercise schedule of the 3
rdstock option incentive plan, the total of exercised stock options was 16,384,380(as of 31 December 2021). The number of non-restricted shares increased by 16,384,380. Therefore, the Company's total sharecapital increased from 3,163,080,346 shares to 3,179,464,726 shares.
4. On January 5, 2022, the Company disclosed the Announcement on Results of Conversion of Convertible Bonds and Changesin Share Capital in the 4
thQuarter of 2021. As of December 31, 2021, a total amount of 7,025 A shares were converted from the"Infore Convertible Bonds" issued by the Company. The number of non-restricted shares increased by 7,025. Therefore, theCompany's total share capital increased from 3,179,464,726 shares to 3,179,471,751 shares.Approval of changes in share capital
√ Applicable □ Not Applicable
1. On April 23, 2020, the Company convened the 4th Meeting of the 9th Board of Directors. Upon discussion, the Meetingapproved the "Proposal on Matters Related to the Exercise in the 2nd Exercise Schedule of the 2nd Stock Option Incentive Plan". Atotal of 46 incentive objects of the 2nd Stock Option Incentive Plan were deemed fit to exercise their 3,495,000 stock optionsvoluntarily in the 2nd exercise window before March 11, 2021.
2. On April 22, 2021, the Company convened the 13th Meeting of the ninth Board of Directors. Upon discussion, the meetingapproved the Proposal on Matters Related to the Exercise in the 2nd Exercise Schedule of the 3rd Stock Option Incentive Plan. Atotal of 231 incentive subjects of the 3rd stock option incentive plan were deemed fit to exercise their 17,814,000 stock optionsvoluntarily in the 2nd exercise schedule before November 25, 2022.
3. With the approval granted by the CSRC under Document ZH.J.X.K [2020], the Company publicly issued 14,761,896convertible corporate bonds on November 4, 2020, each with a par value of RMB 100 and the total issued amount is RMB1,476,189,600. Approved by the SZSE, the Company's convertible corporate bonds of RMB 1,476,189,600 have been listed fortrading 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 18,200 exercised stock options in the 2nd stock option incentive plan, 16,384,380 exercised stock optionsin the 3rd stock option incentive plan and 7,025 shares converted from the convertible corporate bonds.Effects of share changes on the basic earnings per share, diluted earnings per share, equity per share attributable to the Company’sordinary shareholders and other financial indicators of the prior year and the prior accounting period, respectively
□ Applicable √ Not Applicable
Other information that the Company deems necessary or required to be disclosed by that 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 | 0 | 1,017,997,382 | Restricted shares in private placement | July 4, 2022 |
| Ningbo Yingtai Investment Partnership (Limited Partnership) | 40,913,514 | 0 | 0 | 40,913,514 | Restricted shares in a private placement | January 4, 2022 |
| Ningbo Zhongfeng Investment Partnership (Limited Partnership) | 40,141,033 | 0 | 0 | 40,141,033 | Restricted shares in a private placement | January 4, 2022 |
| Ningbo Liantai Investment Partnership (Limited Partnership) | 38,709,849 | 0 | 0 | 38,709,849 | Restricted shares in a private placement | January 4, 2022 |
| He Jianfeng | 11,723,329 | 0 | 11,723,329 | 0 | Restricted shares in a private placement | January 8, 2021 |
| She Changguang | 7,033,997 | 0 | 7,033,997 | 0 | Restricted shares in a private placement | January 8, 2021 |
| Others | 1,837,540 | 0 | 0 | 1,837,540 | Locked-up shares of senior management | 25% of the total shareholdings are unlocked annually |
| Total | 1,158,356,644 | 0 | 18,757,326 | 1,139,599,318 | -- | -- |
II. Issuance and Listing of Securities
1. Securities (exclusive of preference shares) issued in the reporting period
□ Applicable √ Not Applicable
2. Changes in total shares, shareholder structure and asset and liability structures
√ Applicable □ Not Applicable
1. On November 8, 2017, the Company received the Approval of Private Placement of Infore Environment Technology GroupCo., Ltd.(Document ZH.J.X.K [2017] No.1938) from the CSRC. On December 22, 2017, it received the Confirmation Letter ofAcceptance of Share Registration Application from the CSDC Shenzhen. In this private placement, the Company non-publicly issued73,856,975 floating shares with trading restrictions (lock-up period of 12 months and 36 months respectively) to 9 subscribers. Theshares issued were listed on the SZSE on January 3, 2018.On January 7, 2021, the Company disclosed the Reminder on Lifting Trading Restrictions on Restricted Shares in the PrivatePlacement. The 18,757,326 shares subscribed by He Jianfeng and Yu Changguang were not negotiable within 36 months uponcompletion of issuance. On January 8, 2021, the 18,757,326 restricted shares issued in the private placement were lifted from tradingrestrictions and available for listing and circulation.
2. On April 23, 2020, the Company convened the 4th Meeting of the ninth Board of Directors. Upon discussion, the meetingapproved the Proposal on Matters Related to the Exercise in the 2nd Exercise Schedule of the 2nd Stock Option Incentive Plan". Atotal of 46 incentive subjects of the 2nd stock option incentive plan were deemed fit to exercise their 3,495,000 stock optionsvoluntarily in the 2nd exercise schedule before March 21, 2021.On March 11, 2021, the 2nd exercise schedule of the 2nd stock option incentive plan was closed. The total of stock optionsexercised by 46 incentive subjects was 18,200. The number of non-restricted shares increased by 18,200. Therefore, the Company'stotal share capital increased from 3,163,062,146 shares to 3,163,080,346 shares.
3. On April 22, 2021, the Company convened the 13th Meeting of the ninth Board of Directors. Upon discussion, the Meetingapproved the Proposal on Matters Related to the Exercise in the 2nd Exercise Schedule of the 3rd Stock Option Incentive Plan. Atotal of 231 incentive subjects of the 3rd stock option incentive plan were deemed fit to exercise their 17,814,000 stock optionsvoluntarily in the 2nd exercise schedule before November 25, 2022.
In the 2nd eligible exercise schedule of the 3rd stock option incentive plan, the total of exercised stock options was 16,384,380(as of December 31, 2021). The number of non-restricted shares increased by 16,384,380. Therefore, the Company's total sharecapital increased from 3,163,080,346 shares to 3,179,464,726 shares.
4. With the approval granted by the CSRC under Document ZH.J.X.K [2020] No.2219, the company publicly issued 14,761,896convertible corporate bonds on November 4, 2020, each with a par value of RMB 100, and the total issued amount is RMB1,476,189,600. Approved by the SZSE, the Company's convertible corporate bonds of RMB 1,476,189,600 have been listed fortrading 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 5, 2022, the Company disclosed the Announcement on Results of Conversion of Convertible Bonds and Changes inShare Capital in the 4th Quarter of 2021. As of December 31, 2021, a total amount of 7,025 A shares were converted from the "InforeConvertible Bonds" issued by the Company. The number of non-restricted shares increased by 7,025. Therefore, the Company's totalshare capital increased from 3,179,464,726 shares to 3,179,471,751 shares.
3. Existing internal employee shares
□ Applicable √ Not Applicable
III. Controlling Shareholders and De Facto Controller
1. Shareholders and their shareholdings
Unit: Share
| Shareholders of common shares at the end of the reporting period | 31,113 | Shareholders at the end of the previous month prior to the disclosure date of this report | 45,043 | 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 proportion | Shareholdings at the end of the | Increase/decrease during the | Restricted shares held | Unrestricted shares held | Shares pledged, tagged or frozen | |||||||
| Status | Quantity | |||||||||||||
| reporting period | reporting period | ||||||||
| Ningbo Infore Asset Management Co., Ltd. | Domestic non-state-owned legal person | 32.02% | 1,017,997,382 | 0 | 1,017,997,382 | 0 | 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 | Pledged | 0 | |
| Infore Group Co., Ltd. | Domestic non-state-owned legal person | 11.31% | 359,609,756 | 0 | 0 | 359,609,756 | Pledged | 200,000,000 | |
| Hongchuang (Shenzhen) Investment Center (Limited Partnership) | Domestic non-state-owned legal person | 9.76% | 310,423,813 | 0 | 0 | 310,423,813 | -- | -- | |
| He Jianfeng | Domestic natural person | 2.00% | 63,514,690 | 0 | 0 | 63,514,690 | Pledged | 32,941,724 | |
| Zara Green Hong Kong Limited | Foreign legal persons | 1.72% | 54,778,335 | 0 | 0 | 54,778,335 | -- | -- | |
| Ningbo Yingtai Investment Partnership (Limited Partnership) | Domestic non-state-owned legal person | 1.29% | 40,913,514 | 0 | 40,913,514 | 0 | -- | -- | |
| Ningbo Zhongfeng Investment Partnership (Limited Partnership) | Domestic non-state-owned legal person | 1.26% | 40,141,033 | 0 | 40,141,033 | 0 | -- | -- | |
| Ningbo Liantai Investment Partnership (Limited Partnership) | Domestic non-state-owned legal person | 1.22% | 38,709,849 | 0 | 38,709,849 | 0 | -- | -- | |
| Chen Liyuan | Domestic natural person | 0.98% | 31,018,000 | 0 | 0 | 31,018,000 | -- | -- | |
| Strategic investor/general legal person becoming a top 10 shareholder in a rights issue (if any) (see note 3) | Not applicable. | ||||||||
| Related or acting-in-concert parties among the shareholders above | Ningbo Infore Asset Management Co., Ltd. and Infore Group Co., Ltd. share the same de facto controller — He Jianfeng, and they act in concert. Apart from that, the Company is not aware of any related or acting-in-concert parties (as defined in the Methods for the Acquisition and Management of Listed Companies) among the above other shareholders. | ||||||||
| Shareholders above entrusting/entrusted with or waiving voting rights | Not applicable. | ||||||||
| Top 10 shareholders with repurchase account (if any) (see note 10) | There are 58,976,234 corporate shares in the Company's account for security repurchase, occupying for about 1.85% of the total shares. | ||||||||
| 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 | ||||||||
| 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 | 310,423,813 | RMB-dominated | 310,423,813 | ||||||
| Center (Limited Partnership) | common shares | ||
| 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 |
| Hong Kong Securities Clearing Company Ltd. | 29,123,470 | RMB-dominated common shares | 29,123,470 |
| Guangdong Hengjian Investment Holding Co., Ltd. | 28,059,147 | RMB-dominated common shares | 28,059,147 |
| Bank of China Limited - China AMC Industrial Hybrid Securities Investment Fund | 24,953,514 | RMB-dominated common shares | 24,953,514 |
| Ningbo Chaoyi Commodity Co., Ltd. | 18,705,329 | RMB-dominated common shares | 18,705,329 |
| Related or acting-in-concert parties among top 10 unrestricted public shareholders, as well as between top 10 unrestricted public shareholders and top 10 shareholders | He Jianfeng is the de facto controller of Infore Group Co., Ltd. Apart from that, the Company is not aware of any related or acting-in-concert parties (as defined in the Methods for the Acquisition and Management of Listed Companies) among the other shareholders. | ||
| Top 10 common shareholders involved in securities margin trading (if any) (see note 4) | N/A | ||
Indicate whether any of the top 10 common shareholders or the top 10 unrestricted common shareholders of the Company conductedany promissory repurchase during the reporting period
□ Yes √ No
No such case 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 absorbing deposits, financing guarantee, wealth management service, and raising/financing funds from the public without the approval of regulatory authorities such as financial regulators.) (Business activities subject to approval in accordance with laws shall not be |
| carried out without approval by 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 Applicable
During the reporting period, there was no change in controlling shareholders of the Company.
3. De facto controller and acting-in-concert parties
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 | Not applicable. | ||
Change in de facto controller during the reporting period
□ Applicable √ Not Applicable
During the reporting period, there was no change in de facto controller of the Company.Ownership and control relationship between the de facto controller and the Company
The de facto controller controls the Company via trust or other asset management arrangement
□ Applicable √ Not Applicable
4. The pledged shares of the company's controlling shareholder or largest shareholder and concerted actorsaccount for 80% of their total shareholdings
□ Applicable √ Not Applicable
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 8,666,612,984 | 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 without approval from relevant authorities.) |
| 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. |
6. Limitations on shareholding reduction by the Company’s controlling shareholder, de facto controller,reorganizer party and other commitment makers
□ Applicable √ Not Applicable
IV. Repurchase of Shares during the Reporting PeriodThe progress of share repurchase
√ Applicable □ Not Applicable
Enterprise management and enterpriseconsulting services. Computerinformation services and softwareservices. Film production and planning(based on validated licenses).Advertising planning and production.Appraisal and consultancy services ofartwork (excluding ivory and ivoryproducts) and collectibles. Planning ofculture and art exhibitions. Sales ofmaternal and baby products andclothing. Supply and marketing ofdomestic business and goods exceptthe above items. Business informationconsulting services. Import and exportof commodities or technologies(excluding the import and export ofcommodities and technologies that areprohibited by the state or involveadministrative review and approval).R&D, manufacturing, sales and leasingof sanitation equipment, robots, newenergy vehicles, and environmentalmonitoring equipment. Cleaning,collection, recycling, transportation,and treatment services of urbandomestic waste. Undertakingenvironmental engineering and waterpollution control projects. R&D,manufacturing and sales of ventilators,and air-cooling, water-cooling and airconditioning equipment. R&D,manufacturing, and sales of newmaterials, equipment, and products.(Production and manufacturingprojects shall be operated by thecompany's subsidiaries) (Businessactivities subject to approval inaccordance with laws shall not becarried out without approval fromrelevant authorities.)Disclosure date
| Disclosure date | Shares to be repurchased | Proportion to the total shares | Value of shares to be repurchased | Repurchase period | Repurchase purpose | Repurchased shares currently | Repurchased shares as a percentage of the underlying |
| shares included in the stock option incentive plan (if any) | |||||||
| April 14, 2020 | 25,000,000 - 50,000,000 shares | 0.79%-1.57% | RMB 200,000,000 - 400,000,000 | April 13, 2020 - April 8, 2021 | Exercise of the Company's stock option incentive plan/employee stock ownership plan | 7,634,138 | 0.00% |
| April 9, 2021 | 22,730,000 - 45,450,000 shares | 0.71% - 1.43% | RMB 200,000,000 - 400,000,000 | April 8, 2021 - April 7, 2022 | Exercise of the Company's stock option incentive plan/employee stock ownership plan | 51,342,096 | 0.00% |
Progress of decreasing repurchased shares by auction
□ Applicable √ Not Applicable
Part VIII Information on Preference Shares
□ Applicable √ Not Applicable
During the reporting period, the Company had no preference shares.
Part IX Information on Bonds
√ Applicable □ Not Applicable
I. Enterprise Bond
□ Applicable √ Not Applicable
During the reporting period, the Company had no enterprise bond.II. Corporate Bond
□ Applicable √ Not Applicable
During the reporting period, the Company had no corporate bond.III. Debt Financing Instruments of Non-financial Enterprises
□ Applicable √ Not Applicable
During the reporting period, the Company had no debt financing instruments of non-financial enterprisesIV. Convertible Corporate Bonds
√ Applicable □ Not Applicable
1. Previous adjustments of the conversion price
With the approval granted by the China Securities Regulatory Commission under Document ZH.J.X.K. [2020] No. 2219, thecompany publicly issued 14,761,896 convertible corporate bonds on November 4, 2020, each with a par value of RMB 100, and thetotal issued amount is RMB 1,476,189,600. The initial conversion price of this tranche of convertible bonds is RMB 8.31 per share.In case of distribution of bonus shares, increase of share capital through conversion, issuance of new shares (excluding the increasedshare capital due to the conversion of convertible corporate bonds issued this time), allotment of shares and distribution of cashdividends, the conversion price will be adjusted accordingly pursuant to relevant laws and regulations.On July 8, 2021, the distribution of the company's equity interests in 2020 was completed. In accordance with the issuance termsof the Prospectus for Public Offering of Convertible Corporate Bonds by Infore Environment Technology Group Co., Ltd. and therelevant regulations of China Securities Regulatory Commission on the issuance of convertible bonds, the conversion price of "InforeConvertible Bonds" was adjusted from the original RMB 8.31 per share to RMB 8.19 per share since July 8, 2021. The adjustedconversion price will take effect on July 8, 2021.
2. Information on cumulative conversion of bonds into shares
√ Applicable □ Not Applicable
| Abbreviated name of | Commencement and end | Total issued number | Total issued amount | Accumulated share | Accumulated share | The proportion of | Amount not yet converted | Proportion of the amount |
| convertible bond | date of share conversion | (sheet) | conversion amount (RMB) | conversion number (share) | the number of shares converted to the total issued shares of the Company before the commencement date of the conversion | into shares RMB) | not converted into shares to the total issued amount | |
| Infore Enviro Convertible Bond | May 10, 2021 | 14,761,896 | 1,476,189,600.00 | 58,300.00 | 7,025 | 0.00% | 1,476,131,300.00 | 100.00% |
3. Information on top 10 convertible bond holders
Unit: Share
| 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 | Industrial and Commercial Bank of China Co., Ltd -- CUAM Convertible Bond Securities Investment Fund | Others | 1,032,235 | 103,223,500.00 | 6.99% |
| 2 | Agricultural Bank of China Co., Ltd -- Bocom Schroeder Regular Payment Double Interest Balanced Hybrid Securities Investment Fund | Others | 557,457 | 55,745,700.00 | 3.78% |
| 3 | Industrial and Commercial Bank of China Co., Ltd -- GF Convertible Bond Initiated Securities Investment Fund | Others | 538,456 | 53,845,600.00 | 3.65% |
| 4 | Renmin stable and double-benefit fixed-income pension product -- Industrial and Commercial Bank of China Co., Ltd. | Others | 470,001 | 47,000,100.00 | 3.18% |
| 5 | Industrial and Commercial Bank of China Co., Ltd -- Aegon-industrial Hengyi Bond Securities Investment Fund | Others | 447,180 | 44,718,000.00 | 3.03% |
| 6 | Northwest Investment Management (Hong Kong) Co., Ltd. -- Northwest Feilong Fund Co., Ltd. | Foreign legal persons | 409,186 | 40,918,600.00 | 2.77% |
| 7 | Fullgoal Fumin Fixed-Income Pension Product -- China Construction Bank Co., Ltd | Others | 323,482 | 32,348,200.00 | 2.19% |
| 8 | Industrial and Commercial Bank of China Co., Ltd -- CUAM double-Benefit bond securities investment fund | Others | 295,852 | 29,585,200.00 | 2.00% |
| 9 | Yinhua Kunli No.2 fixed income pension product -- CITIC Bank Co., Ltd. | Others | 239,028 | 23,902,800.00 | 1.62% |
| 10 | Fullgoal Fuyi aggressive fixed-income pension product -- Industrial and Commercial Bank of China Co., Ltd | Others | 221,390 | 22,139,000.00 | 1.50% |
4. Information on significant changes of the profitability, asset and credit standing of the guarantor
□ Applicable √ Not Applicable
5. Change on the Company's liabilities and credit standing, and cash arrangements for debt repayment infuture years at the end of the reporting periodOn June 21, 2021, China Chengxin International Credit Rating Co., Ltd. issued the Tracking Rating Report on the PublicOffering of Convertible Corporate Bonds by Infore Environment Technology Group Co., Ltd. (2021) (X.P.W.H. [2021] TrackingNo.0853), maintaining the corporate credit rating of the company at AA +, maintaining the credit rating of Infore Convertible Bondsat AA +, with a rating outlook as stable. For details, please refer to the Tracking Rating Report on Public Offering of ConvertibleCorporate Bonds by the Company (2021) disclosed by the Company on June 23, 2021 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 inflow and net profitfrom operating activities; (2) The Company has good credit standing and a reasonable asset structure and can obtain financing frombanks 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 Applicable
VI. Overdue Interest-Bearing Debts Other Than Bonds at the End of the Reporting Period
□ Applicable √ Not Applicable
VII. Violation of Rules and Regulations During the Reporting Period
□ Yes √ No
VIII. Main Accounting Data and Financial Indicators of the Company in Recent Two Yearsas of the End of the Reporting Period
Unit: RMB 10,000
| Item | End of the current reporting period | End of last year | Change at the end of this reporting period compared to the end of prior year |
| Current ratio | 1.7 | 1.51 | 12.58% |
| Liabilities-to-assets ratio | 39.10% | 42.64% | -3.54% |
| Quick ratio | 1.55 | 1.38 | 12.32% |
| Current reporting period | Prior year | YoY increase/decrease during the current reporting period | |
| Net profit after deducting non-recurring profit and loss | 53,272.62 | 143,221.9 | -62.80% |
| EBITDA/total liabilities | 13.75% | 17.45% | -3.70% |
| Interest coverage ratio | 5.84 | 11.8 | -50.51% |
| Cash/interest coverage ratio | 9.46 | 14.44 | -34.49% |
| EBITDA/interest coverage ratio | 9.15 | 14.91 | -38.63% |
| 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 29, 2022 |
| Name of the auditor | Pan-China Certified Public Accountants LLP (Special General Partnership) |
| No. of the auditor’s report | PCCPA Auditor’s Report [2022] No. 5128 |
| Names of certified public accountants | Bian Shanshan, Pan Jianwu |
Main body of the auditor's reportAll shareholders of Infore Environment Technology Group Co., Ltd.:
Ⅰ. Audit OpinionsWe have audited the attached financial statements of Infore Environment Technology Group Co., Ltd. (hereinafter referred toas "the Company"), including the Consolidated and the Parent Company’s Balance Sheet as of December 31, 2021, the Consolidatedand the Parent Company’s Income Statement, the Consolidated and the Parent Company’s Cash Flow Statement, Consolidated andthe Parent Company’s Statement of Changes in Owner's Equity and the Notes to Financial Statements of 2021.
In our opinion, the attached financial statements were prepared in accordance with the provisions of the accounting standardsfor business enterprises in all major aspects, and fairly reflected the Company's consolidated and the parent company's financialposition as of December 31, 2021, as well as the consolidated and the parent company's business results and cash flows in 2021.
Ⅱ. Basis for Forming the Audit Opinions
We conducted audit in accordance with the provisions of the Auditing Standards for the Chinese Certified Public Accountants(CPA). The section "CPA's responsibility for audit of financial statements" in the audit report further provided for our responsibilitiesunder these accounting standards. According to the Code of Ethics for Chinese Certified Public Accountants, we are independent ofthe Company and perform other duties in terms of professional ethics. We believe that the audit evidence we have obtained isappropriate and sufficient to provide a basis for our audit opinion.Ⅲ. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the 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 provide a separate opinion on these matters.
(I) Revenue recognition
1. Description
Please refer to Notes III (XXVI) and V (II) 1 to the financial statements for details of relevant information disclosure.
The operating revenue of the Company mainly comes from the sales of environmental and sanitation machinery andequipment, ventilator equipment and the environmental sanitation operation business. In 2021, the operating revenue of the Companywas RMB 11,813,537,400, down 17.57% from the previous year.
The Company's sales of environmental and sanitation machinery and equipment and ventilator equipment fall into to theperformance of obligation to be fulfilled at a certain point in time, of which the income is recognized when the products are deliveredby the Company to the place agreed in the contract and are confirmed and accepted by the customer, and when the price has beencollected or the right to collect money has been obtained and the relevant economic benefits are very likely to flow in. TheCompany’s sanitation operation business falls to the performance of obligation to be fulfilled within a certain period of time, ofwhich the income is recognized pursuant to the service assessment statement acknowledged by the labor recipient.
As operating revenue is the key financial indicator of the Company, and the authenticity, accuracy and completeness ofrevenue recognition have a significant impact on the financial statements of the Company, we identify revenue recognition as a keyaudit matter.
2. Responsive audit procedures
For revenue recognition, our audit procedures mainly include:
(1) Understanding the key internal controls related to revenue recognition, evaluating the design of such controls to determinewhether they have been implemented, and testing the operational effectiveness of relevant internal controls;
(2) Checking the sales contracts signed between the Company and its customers, understanding the main contract terms orconditions, and evaluating whether the revenue recognition policy conforms to the provisions of the Accounting Standards forBusiness Enterprises;
(3) Implementing analysis procedures for operating revenue and gross profit margin based on months, products, customers orprojects, identifying potential major or abnormal fluctuations, and identifying the reasons for fluctuations;
(4) For the revenue from sales of environmental and sanitation machinery and equipment, ventilator equipment and otherproducts, checking the supporting documents related to revenue recognition by sampling method, including sales contract, salesinvoice, outbound delivery order, shipment order, customer receipt, etc. For the revenue from environmental sanitation operationbusiness, conducting a selective examination on the supporting documents related to revenue recognition, such as sales contract,service assessment statement and supervision progress sheet;
(5) Implementing written confirmation procedures for key customers related to product sales and major customers related toenvironmental sanitation operation business, and recognizing the sales amount and current account balance of the current period andthe performance of contracts;
(6) Carrying out cut-off test on the operating revenue recognized before and after the balance sheet date to evaluate whetherthe operating revenue is recognized in an appropriate period;
(7) Checking whether the information related to operating revenue has been properly presented in the financial statements.
(II) Impairment of accounts receivable and long-term receivables
1. Description
Please refer to Notes III (X) and V (I) 4, 10, 12 to the financial statements for details of relevant information disclosure.
As of December 31, 2021, the carrying amounts balance of accounts receivable of the Company was RMB 5,424,413,700, theprovision for bad debts was RMB 477,708,800, and the book value was RMB 4,946,705,000; The book balance of long-termreceivables (including those due within one year) was RMB 2,024,611,400, the provision for bad debts was RMB 149,338,400, andthe book value was RMB 1,757,164,400. The total carrying amounts of accounts receivable and long-term receivables (hereinaftercollectively referred to as receivables) was RMB 6,703,869,400.
According to the credit risk characteristics of various receivables, the management of the Company (hereinafter referred to asthe Management) measures its loss reserve in line with the amount equivalent to the expected credit loss in the whole duration basedon single receivables item or receivables portfolio. For receivables that measure expected credit losses on a single basis, theManagement estimates the expected cash flow in the light of comprehensive considerations of reasonable and based informationabout past events, current conditions and prediction of future economic conditions, and determines the bad debt provision that shouldbe accrued accordingly; For receivables that measure expected credit losses on a collective basis, the Management divides theportfolio according to the overdue days or aging, makes adjustments according to historical credit loss experience and forward-looking estimates, and prepares a comparison table between the overdue days/aging of receivables and the expected credit loss rate,so as to determine the provision for bad debts that should be accrued.
As the amount of receivables is significant and the impairment test of receivables involves major judgment of the Management,we determine the impairment of receivables as a key audit matter.
2. Responsive audit procedures
For impairment of receivables, our audit procedures mainly include:
(1) Understanding the key internal controls related to impairment of receivables, evaluating the design of these controls todetermine whether they have been implemented, and testing the operational effectiveness of relevant internal controls;
(2) Reviewing the subsequent actual write-off or reversal of receivables for which provision for bad debts has been made inprevious years to evaluate the accuracy of the Management's past forecasts;
(3) Reviewing the relevant considerations and objective evidence of the Management's credit risk assessment of receivables toevaluate whether the Management properly identifies the credit risk characteristics of various receivables;
(4) For receivables that measure expected credit losses on a single basis, obtaining and checking the Management's forecast ofexpected cash flow, evaluating the rationality of key assumptions used in the forecast and the accuracy of data, and checking with theobtained external evidence;
(5) For receivables that measure expected credit losses on a collective basis, evaluating the rationality of the Management'sdividing the portfolio according to credit risk characteristics; evaluating the rationality of the comparison table between overduedays/aging of receivables and expected credit loss rate determined by the Management according to historical credit loss experienceand forward-looking estimation; testing the accuracy and completeness of data used by the Management (including overdue days,aging of receivables, etc.) and the accuracy of the calculation of bad debt provision;
(6) Checking the post-period payment of receivables to evaluate the rationality of the Management's provision for bad debts ofreceivables;
(7) Check whether information relating to impairment of receivables has been properly presented in the financial statements.
(III) Impairment of goodwill
1. Description
Please refer to Notes III (XX) and V (I) 21 to the financial statements for details of relevant information disclosure.
As of December 31, 2021, the original carrying amounts of goodwill of the Company was RMB 6,209,424,300, theimpairment reserve was RMB 233,232,300, and the carrying amounts was RMB 5,976,192,000, accounting for 21.09% of the totalassets.
When there are signs of impairment in the asset group or portfolio related to goodwill and at the end of each year, theManagement conducts impairment test on goodwill. The Management conducts impairment test on goodwill in combination with itsrelated asset groups or portfolio, and the recoverable amount of related asset groups or portfolio is calculated and determined in linewith the present value of estimated future cash flows. The key assumptions used in the impairment test include: the growth rate ofrevenue in the detailed forecast period, the growth rate of stable revenue, profit rate, pre-tax discount rate, etc.
As the amount of goodwill is significant and the goodwill impairment test involves major judgment of the Management, weidentify goodwill impairment as a key audit matter.
2. Responsive audit procedures
For impairment of goodwill, our audit procedures mainly include:
(1) Understanding the key internal controls related to impairment of goodwill, evaluating the design of these controls todetermine whether they have been implemented, and testing the operational effectiveness of relevant internal controls;
(2) Reviewing the Management's forecast of the present value of future cash flows in previous years and the actual operatingresults to evaluate the accuracy of the Management's past calculation;
(3) Understanding and evaluating the competence, professionalism and objectivity of external valuation experts employed bythe management;
(4) Evaluating the competence, professionalism and objectivity of the experts we employ and the appropriateness of their work;
(5) Evaluating the rationality and consistency of the methods used by the Management in the impairment test;
(6) Evaluating the rationality of the key assumptions adopted by the Management in the impairment test, and reviewingwhether the relevant assumptions are consistent with the overall economic environment, industry conditions, operating conditions,historical experience, operating plans, approved budgets, meeting minutes, and other assumptions related to the financial statementsused by the Management;
(7) Reviewing the sensitivity analysis conducted by the management on key assumptions, evaluating the impact of changes inkey assumptions on impairment test results, and identifying possible signs of bias of the Management in the selection of keyassumptions;
(8) Testing the accuracy, completeness and relevance of the data used by the Management in the impairment test, andreviewing the internal consistency of relevant information in the impairment test;
(9) Testing whether the Management's calculation of the present value of the estimated future cash flow is accurate;
(10) Checking whether information relating to impairment of goodwill has been properly presented in the financial statements.
(IV) Confirmation of performance compensation and indemnifying payment
1. Description
Please refer to Notes V (II) 8 and XIV (V) to the financial statements for details of relevant information disclosure.
As Greenlander Investment Holding Co., Ltd. and Zheng Weixian failed to fulfill the commitment on the businessperformance of Shenzhen Greenlander Environmental Protection Co., Ltd. in 2016-2019, the Company confirmed the investmentincome of RMB 163,460,600 for the performance compensation and indemnifying payment arising from such business performancecommitment, which accounted for 22.44% of the net profit attributable to the owner of the parent company in 2021.
In order to implement the collection of the performance compensation and indemnifying payment, the Company filed a lawsuitagainst Greenlander Investment Holding Co., Ltd. and Zheng Weixian. As of December 31, 2021, the Company has obtainedfavorable judgment in the first instance. According to the judgment of the first instance, the public hearing of the second instance, therelevant lawyers' case handling reports and lawyers' analysis reports, the Company believes that the court of second instance wouldmaintain the judgment of the first instance, and the economic benefits related to the performance compensation and indemnifyingpayment are very likely to flow in, so the investment income is recognized in 2021. As the amount of performance compensation andindemnifying payments is significant and involves major judgment of the Management, we determine the recognition of performancecompensation and indemnifying payment as key audit matters.
2. Responsive audit procedures
For the recognition of performance compensation and indemnifying payment, our audit procedures mainly include:
(1) Obtaining relevant documents on equity acquisition and performance completion related to the recognition of performancecompensation and indemnifying payment, including Signing Equity Transfer Agreement, Cooperation Framework Agreement ofShenzhen Greenlander Environmental Protection Co., Ltd. and Authentication Report on Completion of the PerformanceCommitment of Shenzhen Greenlander Environmental Protection Co., Ltd., etc.;
(2) Obtaining litigation-related documents related to the recognition of performance compensation and indemnifying payment,including the first-instance judgment of Foshan Intermediate People's Court of Guangdong Province, Greenlander InvestmentHolding Co., Ltd. and Zheng Weixian's appellate petition to Guangdong Higher People's Court, the supplementary evidencesubmitted by the appellant in the public hearing of the second instance, and the bill of defense of Infore Enviro;
(3) Obtaining the case handling report issued by Guangdong ETR Law Firm and the legal analysis report issued byGuangdong Dafang Law Firm to understand the lawyer's analysis and judgment on the case;
(4) Obtaining relevant instructions issued by the Management on the recognition of performance compensation andindemnifying payment;
(5) Reviewing the Management's assessment of the recoverability of the performance compensation and indemnifyingpayment;
(6) Checking whether the information related to the recognition of performance compensation and indemnifying payment hasbeen properly presented in the financial statements.Ⅳ. Other Information
The Management is responsible for other information. Other information include the information covered in the annual report,excluding the financial statements and audit report.
Our audit opinions to the financial statements do not cover such other information, and will not give authentication
conclusions in any form on such other information.
Our responsibility is to read such other information together with our audit of the financial statements. In this process, weconsider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.If we determine that there is a material misstatement in such other information based on the work we have performed, weshould report such material misstatement. In this regard, we have nothing to report.V. The Management and Corporate Governance Team’s Responsibilities for the Financial StatementsThe Management shall be responsible for the preparation and fair presentation of financial statements in accordance with theAccounting Standards for Business Enterprises, as well as designing, implementing and maintaining the necessary internal control soas to make the financial statements be free from any material misstatement caused by frauds and errors.In the preparation of the financial statements, the Management was responsible for assessing the Company's ability to continueas a going concern, disclosing the matters related to the going concern (if applicable), and applying the going concern assumptionunless it either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.The corporate governance team of the Company (hereinafter referred to as the Corporate Governance Team) is responsible forsupervising the financial reporting process of the Company.VI. CPA’s Responsibility for Auditing Financial Statements
Our objective is to obtain reasonable assurance as to whether the entire financial statements are free from materialmisstatement due to frauds or errors and to present an audit report containing audit opinions. Reasonable assurance is a high level ofassurance, but it does not guarantee that the audit performed in accordance with audit standards can always identify all materialmisstatements. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they couldreasonably be expected to influence the economic decisions of users made on the basis of these financial statements.
During the audit performed in accordance with the audit standards, we used professional judgment and maintainedprofessional suspicion. At the same time, we also performed the following tasks, including:
(I) Identifying and assessing risks of material misstatement of the financial statements due to fraud or errors, designing andimplementing audit procedures to address these risks, and obtaining adequate and appropriate audit evidence as a basis for expressingaudit opinions. Since frauds may involve collusion, falsification, intentional omission, misrepresentation or override of internalcontrols, the risk of failing to identify a material misstatement due to frauds is higher than the risk of failing to identify a materialmisstatement due to errors.
(II) Learning about the internal control related to the audit, in order to design appropriate audit procedures.
(III) Evaluating the appropriateness of the accounting policies selected by the Management and the reasonableness of theaccounting estimates and relevant disclosure made by the Management.
(IV) Drawing conclusions on the appropriateness of going concern assumptions used by the Management. Meanwhile, basedon the audit evidence acquired, conclude on the existence of material uncertainty related to matters or condition that may castsignificant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we arerequired by the auditing standards to draw attention of the users of the statements in the audit report to the relevant disclosures in thefinancial statements; If such disclosures are inadequate, we are required to express unqualified opinions. Our conclusions are basedon the information available as of the date of the audit report. However, future events or circumstances may impair the Company’sability to continue as a going concern.
(V) Evaluating the overall presentation, structure, and content of the financial statements, and evaluating whether the financialstatements fairly reflect the relevant transactions and events.
(VI) Obtaining sufficient and appropriate audit evidence on the financial information of entities or business activities in theCompany to express audit opinions on the financial statements. We are responsible for guiding, supervising and executing audit ofthe Company, and assume full responsibility for the audit opinions.
We communicated with the Corporate Governance Team on the planned audit scope, timing, and major audit findings,
including communication on the internal control deficiencies that we identified during the audit.We also provide those charged with the Corporate Governance Team with a statement that we have complied with relevantethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonablybe thought to bear on our independence, and related safeguards (if applicable).
From the matters communicated with the Corporate Governance Team, we determine those matters that were of mostsignificance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe thesematters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rarecircumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of such communication.
Pan-China CPAS (Special General Partnership) Chinese Certified Public Accountant: Bian Shanshan
(Project Partner)
Hangzhou, China Chinese Certified Public Accountant: Pan Jianwu
April 29, 2022II. Financial StatementsCurrency unit of the statements in notes to the financial statements is RMB
1. Consolidated Balance Sheet
Compiled by: Infore Environment Technology Group Co., Ltd.
Unit: RMB
| Item | December 31, 2021 | December 31, 2020 |
| Current Assets: | ||
| Cash and bank balances | 4,583,245,371.02 | 5,904,127,970.85 |
| Deposit reservation for balance | ||
| Lending to banks and other financial institutions | ||
| Held-for-trading financial assets | 128,017,735.11 | |
| Derivative financial assets | ||
| Notes receivable | 54,402,653.25 | 64,663,544.98 |
| Accounts receivable | 4,946,704,963.71 | 5,564,834,864.04 |
| Financing from accounts receivables | 296,379,694.57 | 520,429,874.86 |
| Prepayments | 128,604,382.66 | 137,769,198.53 |
| Premiums receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance reserve receivable | ||
| Other receivables | 509,164,126.27 | 257,670,998.28 |
| Including: Interest receivable |
| Dividends receivable | ||
| Financial assets purchased under resale agreement | ||
| Inventories | 1,124,149,719.01 | 1,305,177,407.85 |
| Contract assets | 140,367,802.53 | 170,840,655.62 |
| Held-for-sale assets | ||
| Non-current assets due within one year | 739,917,866.53 | 1,157,997,329.53 |
| Other current assets | 492,705,381.17 | 524,859,055.94 |
| Total current assets | 13,015,641,960.72 | 15,736,388,635.59 |
| Non-current assets: | ||
| Loans and advances to customers | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | 1,017,246,537.53 | 1,063,292,418.65 |
| Long-term equity investments | 603,580,781.31 | 318,243,332.69 |
| Other entity instrument investments | 15,702,971.01 | 26,070,000.00 |
| Other non-current financial assets | ||
| Investment properties | 1,837,703.68 | 2,009,006.98 |
| Fixed assets | 1,758,052,005.19 | 1,640,546,747.67 |
| Construction in progress | 224,068,633.86 | 1,782,529,087.95 |
| Bearer biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 25,505,911.86 | |
| Intangible assets | 5,319,721,844.23 | 3,163,935,814.41 |
| Development expenditure | 15,682,278.17 | 4,449,066.69 |
| Goodwill | 5,976,192,021.27 | 6,170,809,035.86 |
| Long-term deferred expenses | 15,733,757.32 | 12,703,802.65 |
| Deferred tax assets | 109,565,926.15 | 95,270,882.31 |
| Other non-current assets | 233,477,295.83 | 94,289,159.43 |
| Total non-current Assets | 15,316,367,667.41 | 14,374,148,355.29 |
| Total assets | 28,332,009,628.13 | 30,110,536,990.88 |
| Current liabilities: | ||
| Short-term borrowings | 439,024,733.46 | 1,657,905,376.55 |
| Borrowings from the Central Bank | ||
| Borrowings from banks and other financial institutions | ||
| Held-for-trading financial liabilities | 810,300.00 | |
| Derivative financial liabilities | ||
| Notes payable | 2,468,799,189.71 | 3,853,175,394.09 |
| Accounts payable | 2,960,061,508.33 | 3,404,825,085.03 |
| Advance receipts | ||
| Contract liabilities | 210,432,628.98 | 181,051,683.90 |
| Financial assets sold under repurchase agreement | ||
| Absorbing deposit and due to placements with banks and other |
| financial institutions | ||
| Receivings from vicariously traded securities | ||
| Receivings from vicariously sold securities | ||
| Employee benefits payable | 310,701,572.37 | 321,861,989.64 |
| Taxes payable | 139,494,861.08 | 372,514,942.66 |
| Other payables | 683,714,082.05 | 443,477,082.48 |
| Including: Interest payable | ||
| Dividends payable | ||
| Fees and commissions payable | ||
| Amounts payable under reinsurance contracts | ||
| Held-for-sale liabilities | ||
| Non-current liabilities due within one year | 378,610,951.81 | 150,862,201.57 |
| Other current liabilities | 62,964,777.60 | 55,106,039.73 |
| Total current liabilities | 7,653,804,305.39 | 10,441,590,095.65 |
| Non-current liabilities: | ||
| Insurance contract reserves | ||
| Long-term borrowings | 1,697,742,767.72 | 765,643,457.78 |
| Bonds payable | 1,254,962,176.00 | 1,199,466,109.60 |
| Including: Preference shares | ||
| Perpetual bonds | ||
| Lease liabilities | 18,523,740.10 | |
| Long-term payables | 315,735,814.91 | 255,735,814.91 |
| Long-term employee benefits payable | ||
| Estimated liabilities | 3,129,793.85 | 1,461,553.82 |
| Deferred income | 101,635,992.65 | 96,734,819.84 |
| Deferred income tax liabilities | 32,562,033.97 | 78,884,957.38 |
| Other non-current liabilities | ||
| Total Non-current Liabilities | 3,424,292,319.20 | 2,397,926,713.33 |
| Total liabilities | 11,078,096,624.59 | 12,839,516,808.98 |
| Owner's equity: | ||
| Share capital | 3,175,734,760.00 | 3,163,062,146.00 |
| Other equity instruments | 266,929,289.24 | 266,939,831.65 |
| Including: Preference shares | ||
| Perpetual bonds | ||
| Capital reserve | 9,772,795,863.75 | 9,707,741,876.49 |
| Less: Treasury shares | 455,303,777.91 | 8,920,597.83 |
| Other comprehensive income | -4,280,000.00 | |
| Special reserve | ||
| Surplus reserve | 296,754,883.56 | 232,701,943.56 |
| General risk reserve | ||
| Retained profits | 3,850,610,683.45 | 3,558,688,885.55 |
| Total owners' equity attributable to equity holders of the Parent Company | 16,903,241,702.09 | 16,920,214,085.42 |
| Minority interests | 350,671,301.45 | 350,806,096.48 |
| Total owners' equity | 17,253,913,003.54 | 17,271,020,181.90 |
| Total liabilities and owners' equity | 28,332,009,628.13 | 30,110,536,990.88 |
Legal Representative: Ma Gang Chief Accountant: Lu Anfeng Person in Charge of Accounting Body: Wu Shanshan
2. The Parent Company’s balance sheet
Unit: RMB
| Item | Dec. 31, 2021 | Dec. 31, 2020 |
| Current Assets: | ||
| Cash and bank balances | 920,283,773.31 | 1,279,695,772.57 |
| Held-for-trading financial assets | 126,075,691.90 | |
| Derivative financial assets | ||
| Notes receivable | 2,964,486.88 | |
| Accounts receivable | ||
| Financing from accounts receivables | 221,756,340.36 | 528,356,236.97 |
| Prepayments | 601,403.69 | |
| Other receivables | 3,884,005,093.84 | 3,095,331,754.24 |
| Including: Interest receivable | ||
| Dividends receivable | 50,000,000.00 | |
| Inventories | ||
| Contract assets | ||
| Held-for-sale assets | ||
| Non-current assets due within one year | 337,148,608.96 | |
| Other current assets | ||
| Total current assets | 5,029,611,098.08 | 5,366,608,064.64 |
| Non-current assets: | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 16,956,047,890.72 | 16,694,341,699.36 |
| Other entity instrument investments | 15,702,971.01 | 26,070,000.00 |
| Other non-current financial assets | ||
| Investment properties | ||
| Fixed assets | ||
| Construction in progress | ||
| Bearer biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 1,779,955.11 | |
| Intangible assets | 2,755,338.15 | 3,395,200.95 |
| Development expenditure | ||
| Goodwill |
| Long-term deferred expenses | 1,155,903.84 | |
| Deferred tax assets | ||
| Other non-current assets | ||
| Total non-current Assets | 16,976,286,154.99 | 16,724,962,804.15 |
| Total assets | 22,005,897,253.07 | 22,091,570,868.79 |
| Current liabilities: | ||
| Short-term borrowings | 150,165,000.00 | 600,733,518.18 |
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 1,137,507.93 | 3,899,667.53 |
| Advance receipts | ||
| Contract liabilities | ||
| Employee benefits payable | 3,357,619.13 | 8,700,968.00 |
| Taxes payable | 10,278,606.48 | 12,475,208.42 |
| Other payables | 892,387,560.66 | 753,207,113.25 |
| Including: Interest payable | ||
| Dividends payable | ||
| Held-for-sale liabilities | ||
| Non-current liabilities due within one year | 1,539,297.15 | |
| Other current liabilities | ||
| Total current liabilities | 1,058,865,591.35 | 1,379,016,475.38 |
| Non-current liabilities: | ||
| Long-term borrowings | 300,000,000.00 | |
| Bonds payable | 1,254,962,176.00 | 1,199,466,109.60 |
| Including: Preference shares | ||
| Perpetual bonds | ||
| Lease liabilities | 579,712.08 | |
| Long-term payables | 3,000,000.00 | 3,000,000.00 |
| Long-term employee benefits payable | ||
| Estimated liabilities | 3,129,793.85 | 218,598.02 |
| Deferred income | 350,000.00 | |
| Deferred income tax liabilities | 30,762,849.39 | |
| Other non-current liabilities | ||
| Total Non-current Liabilities | 1,561,671,681.93 | 1,233,797,557.01 |
| Total liabilities | 2,620,537,273.28 | 2,612,814,032.39 |
| Owner's equity: | ||
| Share capital | 3,175,734,760.00 | 3,163,062,146.00 |
| Other equity instruments | 266,929,289.24 | 266,939,831.65 |
| Including: Preference shares | ||
| Perpetual bonds | ||
| Capital reserve | 15,433,256,911.67 | 15,356,688,889.72 |
| Less: Treasury shares | 455,303,777.91 | 8,920,597.83 |
| Other comprehensive income | -4,280,000.00 |
| Special reserve | ||
| Surplus reserve | 262,534,494.14 | 198,481,554.14 |
| Retained profits | 706,488,302.65 | 502,505,012.72 |
| Total owners' equity | 19,385,359,979.79 | 19,478,756,836.40 |
| Total liabilities and owners' equity | 22,005,897,253.07 | 22,091,570,868.79 |
3. Consolidated income statement
Unit: RMB
| Item | FY2021 | FY2020 |
| I. Total operating income | 11,813,537,444.48 | 14,332,025,075.40 |
| Including: Operating income | 11,813,537,444.48 | 14,332,025,075.40 |
| Interest income | ||
| Premiums earned | ||
| Fee and commission income | ||
| II. Total operating costs | 10,909,873,152.25 | 12,499,304,152.40 |
| Including: Operating costs | 9,210,318,426.37 | 10,766,288,959.00 |
| Interest expenses | ||
| Fee and commission expenses | ||
| Surrenders | ||
| Net claims paid | ||
| Net provision of insurance policy reserve | ||
| Insurance policyholder dividends | ||
| Expenses for reinsurance accepted | ||
| Taxes and surcharges | 54,143,815.44 | 74,460,829.99 |
| Selling expenses | 738,833,571.05 | 801,289,013.51 |
| Administrative expenses | 585,353,407.57 | 536,466,686.12 |
| R&D expenses | 262,619,127.29 | 254,677,332.19 |
| Financial expenses | 58,604,804.53 | 66,121,331.59 |
| Including: Interest expense | 149,868,429.63 | 136,661,706.73 |
| Interest income | 107,324,690.38 | 94,482,738.64 |
| Add: Other income | 83,541,172.51 | 74,276,327.83 |
| Investment income (Loss is indicated by "-") | 239,933,995.59 | 78,328,670.09 |
| Including: Income from investments in associates and joint ventures | 36,885,135.08 | 41,578,662.81 |
| Gains from derecognition of financial assets at amortized cost | ||
| Gains from foreign exchange (losses are indicated by "-") | ||
| Net exposure hedging income (loss is indicated by "-") | ||
| Gains from fair value changes (losses are indicated by "-") | -73,074,674.05 | -95,719,301.47 |
| Credit impairment loss (losses are indicated by "-") | -98,375,820.02 | -119,562,421.08 |
| Asset impairment losses on (losses are indicated by "-") | -230,940,495.92 | -82,478,500.15 |
| Gains on disposal of assets (losses are indicated by "-") | -1,161,842.22 | -1,787,925.37 |
| III. Operating profit (loss is indicated by "-") | 823,586,628.12 | 1,685,777,772.85 |
| Add: Non-operating income | 10,028,024.42 | 9,844,019.69 |
| Less: Non-operating expenses | 11,786,454.06 | 58,229,724.05 |
| IV. Total profit (loss is indicated by "-") | 821,828,198.48 | 1,637,392,068.49 |
| Less: Income tax expenses | 53,503,488.11 | 207,571,413.76 |
| V. Net profit (net loss is indicated by "-") | 768,324,710.37 | 1,429,820,654.73 |
| (I) Classified by business continuity | ||
| 1. Net profit from going concern (net loss indicated by "-") | 761,297,012.86 | 1,396,598,567.79 |
| 2. Net profit from discontinued operations (net loss indicated by "-") | 7,027,697.51 | 33,222,086.94 |
| (II) Classified by ownership | ||
| 1. Net profit attributable to the shareholders of the Parent Company | 728,467,910.42 | 1,386,476,099.73 |
| 2. Profit or loss attributable to minority shareholders | 39,856,799.95 | 43,344,555.00 |
| VI. Other comprehensive income, net of tax | -4,280,000.00 | -479,437.51 |
| Other comprehensive income attributable to the owners of the Parent Company, net of tax | -4,280,000.00 | -479,437.51 |
| (I) Other comprehensive income that will not be reclassified to profit or loss | -4,280,000.00 | |
| 1. Changes arising from re-measurement of defined benefit plan | ||
| 2. Other comprehensive income that cannot be transferred to the profit or loss under the equity method | ||
| 3. Fair value changes of other equity instrument investments | -4,280,000.00 | |
| 4. Fair value changes of credit risk of the Company | ||
| 5. Others | ||
| (II) Other comprehensive income that will be reclassified to profit or loss | -479,437.51 | |
| 1. Other comprehensive income that can be transferred to profit or loss under equity method | ||
| 2. Fair value changes of other debt investments | ||
| 3. Amount of financial assets reclassified to other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Cash flow hedging reserve | -479,437.51 | |
| 6. Translation difference of financial statement denominated in foreign currencies |
| 7. Others | ||
| Other comprehensive incomes attributable to minority shareholders, net of tax | ||
| VII. Total comprehensive income | 764,044,710.37 | 1,429,341,217.22 |
| Total comprehensive income attributable to owners of the Parent Company | 724,187,910.42 | 1,385,996,662.22 |
| Total comprehensive income attributable to minority shareholders | 39,856,799.95 | 43,344,555.00 |
| VIII. Earnings per share: | ||
| (I) Basic earnings per share | 0.23 | 0.44 |
| (II) Diluted earnings per share | 0.23 | 0.44 |
For business combination involving enterprises under common control in the current period, the net profit realized by the acquirebefore the combination was RMB 0.00, and the net profit realized by the acquire for the prior period was RMB 0.00.Legal Representative: Ma Gang Chief Accountant: Lu Anfeng Person in Charge of Accounting Body: Wu Shanshan
4. The parent company's income statement
Unit: RMB
| Item | FY2021 | FY2020 |
| I. Operating income | 487,932.74 | 7,213,284.07 |
| Less: Operating costs | 487,932.74 | 4,157,985.26 |
| Taxes and surcharges | 227,340.60 | 182,314.26 |
| Selling expenses | 562,853.92 | 369,570.87 |
| Administrative expenses | 24,147,760.09 | 39,475,371.54 |
| R&D expenses | ||
| Financial expenses | -17,684,273.22 | -26,807,548.72 |
| Including: Interest expense | 23,111,838.20 | 39,786,911.13 |
| Interest income | 83,393,551.31 | 52,733,916.01 |
| Add: Other income | 184,301.81 | 46,200.00 |
| Investment income (Loss is indicated by "-") | 697,535,882.88 | -51,519,175.85 |
| Including: Income from investments in associates and joint ventures | 24,398,494.78 | 30,182,747.26 |
| Gains from derecognition of financial assets at amortized cost (losses are indicated by "-") | ||
| Net exposure hedging income (loss is indicated by "-") | ||
| Gains from fair value changes (losses are indicated by "-") | -73,120,883.39 | -89,179,102.46 |
| Credit impairment loss (losses are indicated by "-") | -11,011,665.82 | -9,948,732.66 |
| Asset impairment losses on (losses are indicated by "-") | ||
| Gains on disposal of assets (losses are indicated by "-") |
| II. Operating profit (loss is indicated by "-") | 606,333,954.09 | -160,765,220.11 |
| Add: Non-operating income | 1,877,643.88 | 4,001.38 |
| Less: Non-operating expenses | 36,656.80 | 6,251,989.16 |
| III. Total profit (total loss is indicated by "-") | 608,174,941.17 | -167,013,207.89 |
| Less: Income tax expenses | -32,354,461.28 | -16,043,825.23 |
| IV. Net Profit (net loss is indicated by "-") | 640,529,402.45 | -150,969,382.66 |
| (I) Net profit from going concern (net loss is indicated by "-") | 640,529,402.45 | -150,969,382.66 |
| (II) Net profit from discontinued operations (net loss is indicated by "-") | ||
| V. Other comprehensive income, net of tax | -4,280,000.00 | |
| (I) Other comprehensive income that will not be reclassified to profit or loss | -4,280,000.00 | |
| 1. Changes arising from re-measurement of defined benefit plan | ||
| 2. Other comprehensive income that cannot be transferred to the profit or loss under the equity method | ||
| 3. Fair value changes of other equity instrument investments | -4,280,000.00 | |
| 4. Fair value changes of credit risk of the Company | ||
| 5. Others | ||
| (II) Other comprehensive income that will be reclassified to profit or loss | ||
| 1. Other comprehensive income that can be transferred to profit or loss under equity method | ||
| 2. Fair value changes of other debt investments | ||
| 3. Amount of financial assets reclassified to other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Cash flow hedging reserve | ||
| 6. Translation difference of financial statement denominated in foreign currencies | ||
| 7. Others | ||
| VI. Total comprehensive income | 636,249,402.45 | -150,969,382.66 |
| VII. Earnings Per Share: | ||
| (I) Basic earnings per share | ||
| (II) Diluted earnings per share |
5. Consolidated Cash Flow Statement
Unit: RMB
| Item | FY2021 | FY2020 |
| I. Cash flows from operating activities: | ||
| Cash receipts from sale of goods and rendering of services | 11,921,988,281.60 | 14,388,470,951.18 |
| Net Increase in customers deposits and due to placements with from banks and other financial institutions | ||
| Net increase in borrowings from Central Bank | ||
| Net increase in borrowings from banks and other financial institutions | ||
| Cash receipts from premiums under direct insurance contracts | ||
| Net cash receipts from reinsurance business | ||
| Net increase in policyholders' deposits and investment | ||
| Cash receipts from interest, fees and commissions | ||
| Net increase in borrowings from banks and other financial institutions | ||
| Net increase in financial assets sold under repurchase agreements | ||
| Net cash receipts from vicariously traded securities trading agency securities | ||
| Receipts of tax refunds | 26,261,970.67 | 42,951,350.75 |
| Other cash receipts relating to operating activities | 2,924,238,760.42 | 1,153,494,070.87 |
| Subtotal of cash inflows from operating activities | 14,872,489,012.69 | 15,584,916,372.80 |
| Cash payments for goods purchases and services received | 9,223,061,869.14 | 9,435,508,509.89 |
| Net increase in loans and advances to customers | ||
| Net increase in balance with the Central Bank and due placements with from banks and other financial institutions | ||
| Cash payments for claims and policyholders' benefits under direct insurance contracts | ||
| Net increase in lending to banks and other financial institutions | ||
| Cash payments for interest, fees and commissions | ||
| Cash payments for insurance policyholder dividends | ||
| Cash payments to and on behalf of employees | 1,604,759,059.51 | 1,060,641,117.62 |
| Payments of various types of taxes | 628,578,908.13 | 617,586,885.55 |
| Other cash payments relating to operating activities | 2,606,870,455.78 | 2,782,465,767.99 |
| Subtotal of cash outflows from operating activities | 14,063,270,292.56 | 13,896,202,281.05 |
| Net cash flows from operating activities | 809,218,720.13 | 1,688,714,091.75 |
| II. Cash flows from investing activities: | ||
| Cash receipts from disposals and recovery of investments | 56,196,352.10 | 25,375,775.54 |
| Cash receipts from investment income | 42,698,349.08 | 47,958,881.63 |
| Net cash receipts from disposal of fixed assets, intangible assets and other long-term assets | 17,760,470.09 | 4,912,554.51 |
| Net cash receipts from disposal of subsidiaries and other business units | 445,597,313.96 | 213,687,034.09 |
| Other cash receipts relating to investing activities | 4,850,116,524.23 | 5,159,933,419.02 |
| Subtotal of cash inflows from investing activities | 5,412,369,009.46 | 5,451,867,664.79 |
| Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 1,734,581,869.14 | 1,291,812,173.08 |
| Cash payments to acquire investments | 10,130,000.00 | 7,639,195.26 |
| Net increase in pledged loans receivables | ||
| Net cash payments for acquisition of subsidiaries and other business units | ||
| Other cash payments relating to investing activities | 4,789,881,717.72 | 5,036,128,312.71 |
| Subtotal of cash outflows from investing activities | 6,534,593,586.86 | 6,335,579,681.05 |
| Net cash flows from investing activities | -1,122,224,577.40 | -883,712,016.26 |
| III. Cash flows from financing activities: | ||
| Cash receipts from capital contributions | 96,777,104.58 | 64,992,660.00 |
| Including: Cash receipts from capital contributions from minority shareholders' investment ins subsidiaries | 17,943,815.00 | 64,992,660.00 |
| Cash receipts from borrowings | 2,571,966,000.32 | 5,849,194,821.72 |
| Other cash receipts relating to financing activities | 233,079,996.55 | 7,880,000.00 |
| Subtotal of cash inflows from financing activities | 2,901,823,101.45 | 5,922,067,481.72 |
| Cash repayments of borrowings | 2,180,619,133.00 | 4,153,395,539.94 |
| Cash payments for distribution of dividends, profits or settlement of interest expenses | 491,122,899.60 | 488,778,125.98 |
| Including: Payments for distribution of dividends or profits to minority shareholders by subsidiaries | 339,454.75 | |
| Other cash payments relating to | 454,152,599.63 | 38,041,830.99 |
| financing activities | ||
| Subtotal of cash outflows from financing activities | 3,125,894,632.23 | 4,680,215,496.91 |
| Net cash flows from financing activities | -224,071,530.78 | 1,241,851,984.81 |
| IV. Effect of exchange rate changes on cash and cash equivalents | -2,001,825.46 | -708,908.76 |
| V. Net increase in cash and cash equivalents | -539,079,213.51 | 2,046,145,151.54 |
| Add: Opening balance of cash and cash equivalents | 4,657,826,099.23 | 2,611,680,947.69 |
| VI. Closing balance of cash and cash equivalents | 4,118,746,885.72 | 4,657,826,099.23 |
6. The parent company's cash flow statement
Unit: RMB
| Item | FY2021 | FY2020 |
| I. Cash flows from operating activities: | ||
| Cash receipts from sale of goods and rendering of services | 728,741.14 | 8,741,951.34 |
| Receipts of tax refunds | ||
| Other cash receipts relating to operating activities | 1,467,056,243.50 | 532,435,143.45 |
| Subtotal of cash inflows from operating activities | 1,467,784,984.64 | 541,177,094.79 |
| Cash payments for goods purchases and services received | 1,743,599.35 | 8,712,307.61 |
| Cash payments to and on behalf of employees | 16,185,831.90 | 9,702,646.88 |
| Payments of various types of taxes | 383,530.02 | 339,945.08 |
| Other cash payments relating to operating activities | 1,235,268,785.97 | 1,244,340,931.04 |
| Subtotal of cash outflows from operating activities | 1,253,581,747.24 | 1,263,095,830.61 |
| Net cash flows from operating activities | 214,203,237.40 | -721,918,735.82 |
| II. Cash flows from investing activities: | ||
| Cash receipts from disposals and recovery of investments | 549,259,519.99 | 513,687,034.09 |
| Cash receipts from investment income | 509,652,357.10 | 95,158,453.24 |
| Net cash receipts from disposal of fixed assets, intangible assets and other long-term assets | ||
| Net cash receipts from disposal of subsidiaries and other business units | ||
| Other cash receipts relating to investing activities | 2,165,423,619.03 | 4,883,758,860.22 |
| Subtotal of cash inflows from investing activities | 3,224,335,496.12 | 5,492,604,347.55 |
| Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 513,101.79 | 1,135,853.50 |
| Cash payments to acquire | 436,550,000.00 | 427,739,035.26 |
| investments | ||
| Net cash payments for acquisition of subsidiaries and other business units | ||
| Other cash payments relating to investing activities | 3,012,636,177.10 | 4,870,251,731.64 |
| Subtotal of cash outflows from investing activities | 3,449,699,278.89 | 5,299,126,620.40 |
| Net cash flows from investing activities | -225,363,782.77 | 193,477,727.15 |
| III. Cash flows from financing activities: | ||
| Cash receipts from capital contributions | 78,833,289.58 | |
| Cash receipts from borrowings | 650,000,000.00 | 2,497,336,184.17 |
| Other cash receipts relating to financing activities | 580,000,000.00 | 6,100,000.00 |
| Subtotal of cash inflows from financing activities | 1,308,833,289.58 | 2,503,436,184.17 |
| Cash repayments of borrowings | 800,000,000.00 | 777,500,000.00 |
| Cash payments for distribution of dividends, profits or settlement of interest expenses | 393,783,090.74 | 375,434,276.64 |
| Other cash payments relating to financing activities | 447,594,655.11 | 8,920,597.83 |
| Subtotal of cash outflows from financing activities | 1,641,377,745.85 | 1,161,854,874.47 |
| Net cash flows from financing activities | -332,544,456.27 | 1,341,581,309.70 |
| IV. Effect of exchange rate changes on cash and cash equivalents | ||
| V. Net increase in cash and cash equivalents | -343,705,001.64 | 813,140,301.03 |
| Add: Opening balance of cash and cash equivalents | 1,213,988,774.95 | 400,848,473.92 |
| VI. Closing balance of cash and cash equivalents | 870,283,773.31 | 1,213,988,774.95 |
7. Consolidated statement of changes in owners' equity
Amount for the current period
Unit: RMB
| Item | FY2021 | ||||||||||||||
| Equity attributable to owners of the parent company | Minority interests | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Retained profits | Others | Sub-total | |||||
| Preference share | Perpetual bonds | Others | |||||||||||||
| I. Closing balance of the 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 | 16,920,214,085.42 | 350,806,096.48 | 17,271,020,181.90 | ||||||
| Add: Changes in accounting | |||||||||||||||
| policies | |||||||||||||||
| Corrections of prior period errors | |||||||||||||||
| Business combination involving enterprises under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Opening balance of the 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 | 16,920,214,085.42 | 350,806,096.48 | 17,271,020,181.90 | ||||||
| III. Changes for the current period (decrease is indicated by "-") | 12,672,614.00 | -10,542.41 | 65,053,987.26 | 446,383,180.08 | -4,280,000.00 | 64,052,940.00 | 291,921,797.90 | -16,972,383.33 | -134,795.03 | -17,107,178.36 | |||||
| (I) Total comprehensive income | -4,280,000.00 | 728,467,910.42 | 724,187,910.42 | 39,856,799.95 | 764,044,710.37 | ||||||||||
| (II) Owners' contributions and reduction in capital | 12,672,614.00 | -10,542.41 | 65,053,987.26 | 446,383,180.08 | -368,667,121.23 | -39,652,140.23 | -408,319,261.46 | ||||||||
| 1. Ordinary share invested by owners | 12,665,589.00 | 66,167,700.58 | 78,833,289.58 | 17,943,815.00 | 96,777,104.58 | ||||||||||
| 2. Capital contribution from holders of other equity instruments | 7,025.00 | -10,542.41 | 52,079.08 | 48,561.67 | 48,561.67 | ||||||||||
| 3. Share-based payment recognized in owners' equity | 10,348,242.29 | 10,348,242.29 | 388,939.63 | 10,737,181.92 | |||||||||||
| 4. Others | -11,514,034.69 | 446,383,180.08 | -457,897,214.77 | -57,984,894.86 | -515,882,109.63 | ||||||||||
| (III) Profit distribution | 64,052,940.00 | -436,546,112.52 | -372,493,172.52 | -339,454.75 | -372,832,627.27 | ||||||||||
| 1. Withdrawal of surplus reserve | 64,052,940.00 | -64,052,940.00 | |||||||||||||
| 2.Withdrawal of general risk reserve | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -372,493,172.52 | -372,493,172.52 | -339,454.75 | -372,832,627.27 | |||||||||||
| 4. Others |
| (IV) Transfers within owners' equity | |||||||||||||||
| 1. Capitalization of capital reserve (into cash capital or share capital) | |||||||||||||||
| 2. Capitalization of surplus reserve (into cash capital or share capital) | |||||||||||||||
| 3. Loss offset by surplus reserve | |||||||||||||||
| 4. Changes of defined benefit plan transferred to retained earnings | |||||||||||||||
| 5. Other comprehensive incomes transferred to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Withdrawal of special reserve in the period | 7,434,025.58 | 7,434,025.58 | 7,434,025.58 | ||||||||||||
| 2. Amount utilized in the period | -7,434,025.58 | -7,434,025.58 | -7,434,025.58 | ||||||||||||
| (VI) Others | |||||||||||||||
| Ⅳ. Closing balance of the 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 | 3,850,610,683.45 | 16,903,241,702.09 | 350,671,301.45 | 17,253,913,003.54 |
Amount for the prior period
Unit: RMB
| Item | FY2020 | ||||||||||||||
| Equity attributable to owners of the parent company | Minority interests | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Retained profits | Others | Sub-total | |||||
| Preference share | Perpetual bonds | Others | |||||||||||||
| I. Closing balance of the prior year | 3,163,062,146.00 | 9,698,117,762.75 | 99,993,195.75 | 479,437.51 | 232,701,943.56 | 2,520,329,621.90 | 15,514,697,715.97 | 252,600,598.37 | 15,767,298,314.34 | ||||||
| Add: Changes in accounting | |||||||||||||||
| policies | |||||||||||||||
| Corrections of prior period errors | |||||||||||||||
| Business combination involving enterprises under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Opening balance of the current year | 3,163,062,146.00 | 9,698,117,762.75 | 99,993,195.75 | 479,437.51 | 232,701,943.56 | 2,520,329,621.90 | 15,514,697,715.97 | 252,600,598.37 | 15,767,298,314.34 | ||||||
| III. Changes for the current period (decrease is indicated by "-") | 266,939,831.65 | 9,624,113.74 | -91,072,597.92 | -479,437.51 | 1,038,359,263.65 | 1,405,516,369.45 | 98,205,498.11 | 1,503,721,867.56 | |||||||
| (I) Total comprehensive income | -479,437.51 | 1,386,476,099.73 | 1,385,996,662.22 | 43,344,555.00 | 1,429,341,217.22 | ||||||||||
| (II) Owners' contributions and reduction in capital | 266,939,831.65 | 9,624,113.74 | -91,072,597.92 | 367,636,543.31 | 54,860,943.11 | 422,497,486.42 | |||||||||
| 1. Ordinary share invested by owners | 8,920,597.83 | -8,920,597.83 | 61,699,287.49 | 52,778,689.66 | |||||||||||
| 2. Capital contribution from holders of other equity instruments | 266,939,831.65 | 266,939,831.65 | 266,939,831.65 | ||||||||||||
| Share-based payment recognized in owners' equity | 11,260,547.81 | 11,260,547.81 | 765,449.01 | 12,025,996.82 | |||||||||||
| 4. Others | -1,636,434.07 | -99,993,195.75 | 98,356,761.68 | -7,603,793.39 | 90,752,968.29 | ||||||||||
| (III) Profit distribution | -348,116,836.08 | -348,116,836.08 | -348,116,836.08 | ||||||||||||
| 1. Withdrawal of surplus reserve | |||||||||||||||
| 2.Withdrawal of general risk reserve | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -348,116,836.08 | -348,116,836.08 | -348,116,836.08 | ||||||||||||
| 4. Others |
| (IV) Transfers within owners' equity | |||||||||||||||
| 1. Capitalization of capital reserve (into cash capital or share capital) | |||||||||||||||
| 2. Capitalization of surplus reserve (into cash capital or share capital) | |||||||||||||||
| 3. Loss offset by surplus reserve | |||||||||||||||
| 4. Changes of defined benefit plan transferred to retained earnings | |||||||||||||||
| 5. Other comprehensive incomes transferred to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Withdrawal of special reserve in the period | 8,699,413.98 | 8,699,413.98 | 8,699,413.98 | ||||||||||||
| 2. Amount utilized in the period | -8,699,413.98 | -8,699,413.98 | -8,699,413.98 | ||||||||||||
| (VI) Others | |||||||||||||||
| Ⅳ. Closing balance of the 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 | 16,920,214,085.42 | 350,806,096.48 | 17,271,020,181.90 |
8. The parent company's statement of changes in owner’s equity
Amount for the current period
Unit: RMB
| Item | FY2021 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained profits | Others | Total owners' equity | |||
| Preference share | Perpetual bonds | Others | ||||||||||
| I. Closing balance of the | 3,163,062,146. | 266,939,831.6 | 15,356,688,889.7 | 8,920,597.83 | 198,481,554.14 | 502,505,012.7 | 19,478,756,836.40 | |||||
| prior year | 00 | 5 | 2 | 2 | ||||||||
| Add: Changes in accounting policies | ||||||||||||
| Corrections of prior period errors | ||||||||||||
| Others | ||||||||||||
| II. Opening balance of the 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. Changes for the current period (decrease is indicated by "-") | 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 | -4,280,000.00 | 640,529,402.45 | 636,249,402.45 | |||||||||
| (II) Owners' contributions and reduction in capital | 12,672,614.00 | -10,542.41 | 76,568,021.95 | 446,383,180.08 | -357,153,086.54 | |||||||
| 1. Ordinary share invested by owners | 12,665,589.00 | 66,167,700.58 | 446,383,180.08 | -367,549,890.50 | ||||||||
| 2. Capital contribution from holders of other equity instruments | 7,025.00 | -10,542.41 | 52,079.08 | 48,561.67 | ||||||||
| 3. Share-based payment recognized in owners' 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. Withdrawal of surplus reserve | 64,052,940.00 | -64,052,940.00 | ||||||||||
| 2. Distribution to owners (or shareholders) | -372,493,172.52 | -372,493,172.52 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Transfers within owners' equity | ||||||||||||
| 1. Capitalization of capital reserve (into cash capital or share capital) | ||||||||||||
| 2. Capitalization of surplus reserve (into cash capital or |
| share capital) | ||||||||||||
| 3. Loss offset by surplus reserve | ||||||||||||
| 4. Changes of defined benefit plan transferred to retained earnings | ||||||||||||
| 5. Other comprehensive incomes transferred to retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Withdrawal of special reserve in the period | ||||||||||||
| 2. Amount utilized in the period | ||||||||||||
| (VI) Others | ||||||||||||
| Ⅳ. Closing balance of the 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 |
Amount for the prior period
Unit: RMB
| Item | FY2020 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained profits | Others | Total owners' equity | |||
| Preference share | Perpetual bonds | Others | ||||||||||
| I. Closing balance of the prior year | 3,163,062,146.00 | 15,345,428,341.90 | 99,993,195.75 | 198,481,554.14 | 1,001,411,231.44 | 19,608,390,077.73 | ||||||
| Add: Changes in accounting policies | ||||||||||||
| Corrections of prior period errors | ||||||||||||
| Others | ||||||||||||
| II. Opening balance of the current year | 3,163,062,146.00 | 15,345,428,341.90 | 99,993,195.75 | 198,481,554.14 | 1,001,411,231.44 | 19,608,390,077.73 | ||||||
| III. Changes for the current period (decrease is indicated by "-") | 266,939,831.65 | 11,260,547.82 | -91,072,597.92 | -498,906,218.72 | -129,633,241.33 | |||||||
| (I) Total comprehensive income | -150,969,382.66 | -150,969,382.66 | ||||||||||
| (II) Owners' contributions and reduction in capital | 266,939,831.65 | 11,260,547.82 | -91,072,597.92 | 369,272,977.39 | ||||||||
| 1. Ordinary share invested by owners | 8,920,597.83 | -8,920,597.83 | ||||||||||
| 2. Capital contribution from holders of other equity instruments | 266,939,831.65 | 266,939,831.65 | ||||||||||
| 3. Share-based payment recognized in owners' equity | 11,260,547.82 | 11,260,547.82 | ||||||||||
| 4. Others | -99,993,195.75 | 99,993,195.75 | ||||||||||
| (III) Profit distribution | -347,936,836.06 | -347,936,836.06 | ||||||||||
| 1. Withdrawal of surplus reserve | ||||||||||||
| 2. Distribution to owners (or shareholders) | -347,936,836.06 | -347,936,836.06 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Transfers within owners' equity | ||||||||||||
| 1. Capitalization of capital reserve (into cash capital or share capital) | ||||||||||||
| 2. Capitalization of surplus reserve (into cash capital or share capital) | ||||||||||||
| 3. Loss offset by surplus reserve | ||||||||||||
| 4. Changes of defined benefit plan transferred to retained earnings | ||||||||||||
| 5. Other comprehensive incomes transferred to retained earnings | ||||||||||||
| 6. Others |
| (V) Special reserve | ||||||||||||
| 1. Withdrawal of special reserve in the period | ||||||||||||
| 2. Amount utilized in the period | ||||||||||||
| (VI) Others | ||||||||||||
| Ⅳ. Closing balance of the 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. Company Profile
Infore Environment Technology Group Co., Ltd. (the "Company"), formerly known as Zhejiang Shangfeng Industrial Co., Ltd.,was registered with the Zhejiang Industry & Commerce Administrative Bureau on November 18, 1993. Under the approval of theZhejiang Share System Pilot Work Coordination Group with the document of approval numbered Zhe Gu [1993] No.51, theCompany was established by Zhejiang Fan and Air Cooling Equipment Co., Ltd., the main initiator, and Shangyu Fan Factory andShaoxing Fluid Engineering Research Institute, the joint initiators, through private placement. It is headquartered in Shaoxing City,Zhejiang Province. The Company currently holds a business license with a unified social credit code of 913300006096799222. As ofDecember 31, 2021, its registered capital is RMB 3,163,062,146.00, and its share capital is RMB 3,175,734,760.00. The differencebetween the Company’s registered capital and share capital is caused by the unfulfilled industrial and commercial change registrationof the increased share capital. According to China Securities Depository and Clearing Corporation Limited ("CSDC"), as ofDecember 31, 2021, the Company has 1,139,599,318 restricted outstanding shares and 2,039,872,433 unrestricted outstanding shares,totaling 3,179,471,751 shares, including 3,736,991 shares that were exercised by employees and paid to the CSDC’s account but notyet transferred to the Company’s account. The Company’s shares have been listed on Shenzhen Stock Exchange since March 30,2000.The Company is classified as ecological protection and environmental management industry. Its main business activities includeR&D, maintenance and operation services of environmental monitoring instruments and environmental sanitation equipment,environmental treatment technology development, consulting and services, operation services of environmental treatment facilities,environmental engineering, environmental protection engineering, urban engineering, sale of ventilators, air-cooling, and water-cooling and air-conditioning equipment, etc. The main revenue source categories include environmental and sanitation machineryand equipment, sale of ventilators, and environmental sanitation operation services.The financial statements were approved and authorized for issuance by the 18th meeting of the ninth session of the Board ofDirectors dated April 29, 2022.The Company has brought 189188 subsidiaries including Changsha Zoomlion Environmental Industry Co., Ltd., hereinafterreferred to as Zoomlion Environmental, Zhejiang Shangfeng Hi-Tech Zhuanfeng Industrial Co., Ltd., hereinafter referred to asShangfeng Industrial, Guangdong Infore Technology Co., Ltd. (hereinafter referred to as Infore Technology), and ShenzhenGreenlander Environmental Protection Co., Ltd. (hereinafter referred to as Greenlander Environmental) into the consolidation scope.Please refer to sections VI and VII of notes to financial statements for details.
IV. Preparation Basis of the Financial Statements
1. Preparation basis
The financial statements have been prepared on the basis of going concern.
2. Assessment of the ability to continue as a going concern
The Company has no event or condition that may cast significant doubts upon the Company’s ability to continue as a goingconcern within 12 months after the balance sheet date.V. Significant accounting policies and estimatesSpecific accounting policies and accounting estimates reminders:
Important note: The Company has set up accounting policies and estimates on transactions or events such as impairment offinancial instruments, depreciation of fixed assets, amortization of intangible assets, revenue recognition, etc. based on theCompany’s actual production and operation features.
1. Statement of compliance
The financial statements have been prepared in accordance with the requirements of China Accounting Standards for BusinessEnterprises, and present truly and completely the financial position, results of operations, cash flows, and other related information ofthe Company.
2. Accounting period
The accounting year of the Company runs from January 1 to December 31 under the Gregorian calendar.
3. Operating cycle
The Company has a relatively short operating cycle for its business. An asset or a liability is classified as current if it is expectedto be realized or due within 12 months.
4. Recording currency
The Company’s recording currency is Renminbi (RMB).
5. 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 a business combination are measured at the carrying amount of the combined party includedin the consolidated financial statements of the ultimate controlling party at the combination date. The difference between the carryingamount of the equity of the combined party included in the consolidated financial statements of the ultimate controlling party and thatof the combination consideration or total par value of shares issued is adjusted to capital reserve, and if the balance of capital reserveis insufficient to offset, any excess is adjusted to retained earnings.
2. Accounting treatment of business combination not under common control
When the combination cost is in excess of the fair value of identifiable net assets obtained from the acquire on the acquisitiondate, 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, and then the difference is recognized in profit or loss.
6. 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.
7. Classification of joint arrangements and accounting treatments 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 thejoint operation:
(1) its assets, including its share of any assets held jointly;
(2) its liabilities, including its share of any liabilities incurred jointly;
(3) its revenue from the sale of its share of the output arising from the joint operation;
(4) its share of the revenue from the sales of the assets by the joint operation; and
(5) its expenses, including its share of any expenses incurred jointly.
8. Recognition criteria of cash and cash equivalents
Cash as presented in the cash flow statement refers to cash on hand and deposits on demand for payment. Cash equivalents referto short-term, highly liquid investments that can be readily converted to known amounts of cash and that are subject to aninsignificant risk of changes in value.
9. Foreign currency translation
1. Translation of transactions denominated in foreign currency
Transactions denominated in foreign currency are translated into RMB at the spot exchange rate on the transaction date at initialrecognition. On the balance sheet date, monetary items denominated in foreign currency are translated at the spot exchange rate onthe balance sheet date with the difference, except for those arising from the principal and interest of exclusive borrowings eligible forcapitalization, included in profit or loss; non-monetary items carried at historical costs are translated at the spot exchange rate on thetransaction date, with the RMB amounts unchanged; non-monetary items carried at fair value in foreign currency are translated at thespot exchange rate on the date when the fair value is determined, with the difference included in profit or loss or other comprehensiveincome.
2. Translation of financial statements measured in foreign currency
The asset and liability items on the balance sheet are translated into RMB at the spot rate on the balance sheet date; the equityitems, other than the undistributed profit, are translated at the spot rate on the transaction date; the revenue and expense items on theincome statement are translated into RMB at the spot exchange rate on the transaction date. The difference arising from theaforementioned foreign currency translation is included in other comprehensive income.
10. 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 measured atamortized cost; (2) financial assets measured at fair value with changes included in other comprehensive income; (3) financial assetsmeasured at fair value with changes included in profit or loss.Financial liabilities are classified into the following four categories when initially recognized: (1) financial liabilities measuredat fair value with changes included in profit or loss; (2) financial liabilities that arise when a transfer of a financial asset does notqualify for derecognition or when the continuing involvement approach applies; (3) financial guarantee contracts not falling withinthe above categories (1) and (2), and commitments to provide a loan at a below-market interest rate, which do not fall within theabove category (1); (4) financial liabilities measured at amortized cost.
2. Recognition criteria, measurement method and derecognition condition of financial assets and financial liabilities
(1) Recognition criteria and initial measurement method of financial assets and financial liabilities
A financial asset or a financial liability is recognized when the Company becomes a party to a financial instrument contract.Financial assets and financial liabilities are measured at fair value when initially recognized; for financial assets and liabilitiesmeasured at fair value with changes included in profit or loss, the transaction expenses thereof are directly included in profit or loss;for other categories of financial assets and financial liabilities, the transaction expenses thereof are included into the initiallyrecognized amount. However, at initial recognition, for accounts receivable that do not contain a significant financing component orcontracts in which the financing components with an associated period less than one year are not considered, the initial measurementis conducted at their transaction price defined in the Accounting Standard for Business Enterprises 14 – Revenues.
(2) Subsequent measurement of financial assets
1) Financial assets measured at amortized cost
This category of financial assets is measured at amortized cost using the effective interest method. Gains or losses on financialassets that are measured at amortized cost but not part of any hedging relationship shall be included into profit or loss when they arederecognized, reclassified, amortized using the effective interest method or recognized with impairment loss.
2) Debt instrument investments measured at fair value with changes included in other comprehensive income
Equity instrument investments are measured at fair value. Interests, impairment gains or losses, and gains and losses on foreignexchange that are calculated using the effective interest method shall be included into profit or loss, while other gains or losses areincluded 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 measured at fair value with changes included in other comprehensive income
Equity instrument investments are measured at fair value. Dividends obtained (other than those as part of investment costrecovery) shall be included into profit or loss, while other gains or losses are included into other comprehensive income.Accumulated gains or losses that initially recognized as other comprehensive income should be transferred out into retained earningswhen these financial liabilities are derecognized.
4) Financial assets measured at fair value with changes included in profit or loss
These financial assets are measured at fair value, and gains or losses arising therefrom (including interests and dividends) shallbe included into profit or loss, except for those as part of hedging relationships.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities measured at fair value with changes included in profit or loss
This category of financial liabilities includes held-for-trading financial liabilities (including derivatives that are liabilities) andfinancial liabilities designated as measured at fair value with changes included in profit or loss. All of them are measured at fair value.
The amount of changes in the fair value of the financial liabilities that are attributable to changes in the Company’s own credit riskshall be included into other comprehensive income, unless such treatment would create or enlarge accounting mismatches in profit orloss. Other gains or losses on those financial liabilities (including interests, changes in fair value that are attributable to reasons otherthan changes in the Company’s own credit risk) shall be included into profit or loss, except for those as part of hedging relationships.Accumulated gains or losses that initially recognized as other comprehensive income should be transferred out into retained earningswhen these 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 financial liabilities are measured in accordance with the Accounting Standards for Business Enterprises No. 23 - Transfer ofFinancial Assets.
3) Financial guarantee contracts not falling within the above categories 1) and 2), and commitments to provide a loan at abelow-market interest rate, which do not fall within the above category 1)
Both of them are measured at the higher of: ① the amount of loss allowances in accordance with impairment requirements offinancial instruments; ② the amount initially recognized less the amount of accumulated amortization recognized in accordance withthe Accounting Standards for Business Enterprises No. 14 – Revenue.
4) Financial liabilities measured at amortized cost
They are measured at amortized cost using the effective interest method. Gains or losses on financial liabilities that aremeasured at amortized cost but are not part of any hedging relationship shall be included into profit or loss when they arederecognized or amortized using the effective interest method.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when one of the following conditions are met:
① the contractual rights to collect cash flows from the financial assets expired; or
② the financial assets have been transferred, and the transfer qualifies for derecognition as specified in the AccountingStandards for Business Enterprises No. 23 – Transfer of Financial Assets.
2) When the present obligations of a financial liability are relieved fully or partly, the financial liability (or this part of financialliability) shall be derecognized accordingly.
3. Recognition criteria and measurement method of financial assets transfer
Where the Company has transferred substantially all the risks and rewards related to the ownership of the financial asset, itderecognizes the financial asset, and any right and obligation arising or retained from such transfer is recognized independently as anasset or a liability; if it has retained substantially all the risks and rewards related to the ownership of the financial asset, it continuesto recognize the financial asset. Where the Company neither transfers nor retains substantially all the risks and rewards related to theownership of a financial asset, it is dealt with according to the circumstances as follows respectively: (1) if the Company does notretain its control over the financial asset, the financial asset is derecognized, and any right and obligation arising or retained fromsuch transfer is recognized independently as an asset or a liability; (2) if the Company retains its control over the financial asset,according to the extent of its continuing involvement in the transferred financial asset, the related financial asset is recognized andthe relevant liability is recognized accordingly.
If the transfer of an entire financial asset satisfies the conditions for derecognition, the difference between the amounts of thefollowing two items are 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 corresponding to the transferred financial asset(financial assets transferred refer to debt instrument investments at fair value with changes included in other comprehensive income).If a part of a financial asset is transferred and satisfies the conditions for derecognition, the entire carrying amount of the financialasset before such transfer is, between the portion which is derecognized and the portion which is not, apportioned according to their
respective relative fair value, and the difference between the amounts of the following two items are included into profit or loss: (1)the carrying amount of the portion which is derecognized; (2) the sum of consideration of the portion which is derecognized, and theportion of the accumulative amount of the changes in the fair value originally included in other comprehensive income which iscorresponding to the portion which is derecognized (financial assets transferred refer to debt instrument investments at fair value withchanges included in other comprehensive income).
4. Fair value determination method of financial assets and financial liabilities
The Company uses valuation techniques that are appropriate in the current circumstances and for which sufficient supportingdata and other information are available to measure the fair value of relevant financial assets and financial liabilities. The inputs tovaluation techniques used to measure fair value are arranged in the following hierarchy and applied accordingly:
(1) Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities available on the measurementdate.
(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, including: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similarassets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability, for example,interest rates and yield curves observable at commonly quoted intervals; market-corroborated inputs;
(3) Level 3 inputs are unobservable inputs for the asset or liability, including interest rate that is not observable or cannot becorroborated by observable market data, stock volatility, future cash flows to be paid to fulfill the disposal obligation assumed inbusiness combination, and financial forecast developed using the Company’s own data, etc.
5. Impairment of financial instruments
(1) Measurement and accounting treatment
The Company, on the basis of expected credit loss, recognizes loss allowances of financial assets measured at amortized cost,debt instrument investments, contract assets or lease receivables measured at fair value with changes included in othercomprehensive income, loan commitments other than financial liabilities measured at fair value with changes included in profit orloss, financial guarantee contracts not belonging to financial liabilities measured at fair value with changes included in profit or lossor financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuinginvolvement approach applies.
Expected credit losses refer to the weighted average of credit losses of financial instruments with the respective risks of a defaultoccurring as the weights. Credit loss refers to the difference between all contractual cash flows that are due to the Company inaccordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at theoriginal effective interest rate. Among which, purchased or originated credit-impaired financial assets are discounted at the credit-adjusted effective interest rate.
On the balance sheet date, the Company shall only recognize the cumulative changes of the lifetime expected credit losses sincethe initial recognition as a loss allowance for purchased or originated credit-impaired financial assets.
For lease receivables, accounts receivable and contract assets that incurred from the transactions as regulated in the AccountingStandards for Business Enterprises No. 14 – Revenue, the Company utilizes the simplified approach to measure the loss allowance atan amount equal to the lifetime expected credit losses.
At each balance sheet date, the Company assesses whether the credit risks on financial assets other than those measured by theapproach above have increased significantly since the initial recognition. The Company measures the loss allowance at an amountequal to the lifetime expected credit losses if the credit risks have increased significantly since the initial recognition; otherwise, theCompany shall measure the loss allowance for that financial instrument at an amount equal to the 12-month expected credit loss.
Considering the reasonable and based information available, including forward-looking information, the Company compares therisk of default occurring on the financial instrument as at the balance sheet date with that as at the date of initial recognition, so as toassess whether the credit risk on the financial instrument has increased significantly since the initial recognition.
The Company may assume that the credit risk on a financial instrument has not increased significantly since the initialrecognition if the financial instrument is determined to have a relatively low credit risk at the balance sheet date.
The Company estimates the expected credit risk and measure the 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 losses on each balance sheet date, and the 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 with changes included in other comprehensive income, the loss allowance shall be recognized inother comprehensive income, without offsetting the carrying amount of such financial asset.
(2) Financial instruments with the expected credit risk assessed and expected credit losses measured on a collective basis
| Item | Basis for portfolio determination | Method for measuring the expected credit loss |
Other receivables – Portfolio grouped bybalance due from related parties within theconsolidation scope
| Other receivables – Portfolio grouped by balance due from related parties within the consolidation scope | Related party dealings within the consolidation scope | Based on the historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates the expected credit loss through exposure at default and 12-month or lifetime expected credit loss rate |
| Other receivables – Portfolio grouped by performance compensation | Nature of the account | Based on the historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates the expected credit loss through exposure at default and 12-month or lifetime expected credit loss rate |
| Other receivables – Portfolio grouped by account aging | Account aging | Based on the historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates the expected credit loss through exposure at default and 12-month or lifetime expected credit loss rate |
| Long-term receivables – Portfolio grouped by financial lease payment/ Long-term receivables – Portfolio grouped with accounts receivable and commercial factoring payment/ Accounts receivable – Portfolio grouped with commercial factoring payment | Nature of the account | The expected credit loss rates are managed by five-level classification of credit assets of non-bank financial institutions and calculated accordingly: 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 the expected credit losses measured on a collective basis
1) Specific portfolios and method for measuring the expected credit loss
| Item | Basis for portfolio determination | Method for measuring the expected credit loss |
| Bank acceptance receivable | Type of notes | Based on the historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates the expected credit loss through exposure at default and lifetime expected credit loss rate |
| Trade acceptance receivable | ||
| Accounts receivable – Portfolio grouped by balance due from related parties within the consolidation scope | Related party dealings within the consolidation scope | Based on the historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates the expected credit loss through exposure at default and lifetime expected credit loss rate |
| Accounts receivable – Portfolio grouped by account aging | Account aging | Based on the historical credit loss experience, the current situation and the forecast of future economic conditions, the Company prepares the comparison table between overdue days/ages and lifetime expected credit loss rate, and calculates the expected credit loss |
| Accounts receivable – Portfolio grouped by government subsidies receivable for new energy | Nature of the account | Based on the historical credit loss experience, the current situation and the forecast of future economic conditions, the Company prepares the comparison table between overdue days/ages and lifetime expected credit |
| vehicles | loss rate, and calculates the expected credit loss | |
| Contract assets – Portfolio grouped by quality guarantee deposit | Nature of the account | Based on the historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates the expected credit loss through exposure at default and lifetime expected credit loss rate |
| Long-term receivables – Portfolio grouped by account aging | Nature of the account | For long-term receivables within the credit period that have not reached the contractual payment deadline, the provision for bad debts is accrued at 5% of the balance; for the outstanding long-term receivables that have exceeded the contractual payment deadline, the 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 the portfolio grouped by accountaging
① The parent company and electromechanical equipment manufacturing industry
| Account aging | 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 |
② Ventilation equipment manufacturing industry and environmental integrated industry
| Account aging | Expected credit loss rate of accounts receivable (%) |
| Within 1 year | 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 without offsetting. 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 offset 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.
11. Notes receivable
12. Accounts receivable
13. Receivables financing
14. Other receivables
The methods of determination and accounting treatment of the expected credit loss of other receivables
15. Inventory
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, and materials or supplies etc. to be consumed in the production process or in the rendering of services.
2. Accounting method for dispatching inventories
Inventories dispatched from storage are accounted for with the weighted average method.
3. Basis for determining the net realizable value of inventories
On the balance sheet date, inventories are measured at the lower of cost and net realizable value, and the provisions forinventory write-down are made on the excess of its cost over the net realizable value. The net realizable value of inventories held forsale is determined based on the amount of the estimated selling price less the estimated selling expenses and relevant taxes andsurcharges in the ordinary course of business; the net realizable value of materials to be processed is determined based on the amountof the estimated selling price less the estimated costs of completion, selling expenses and relevant taxes and surcharges in theordinary course of business; on the balance sheet date, when only part of the same item of inventories have contract prices, their netrealizable value is determined separately and is compared with their costs to set the provisions for inventory write-down to be madeor reversed.
4. Inventory system
The Company adopts the perpetual inventory system.
5. Amortization method of low-value consumables and packages
(1) Low-value consumables
Packages are amortized with the one-off method.
(2) Packages
Packages are amortized with the one-off method.
16. Contract assets
17. Contract costs
Assets related to contract costs including costs of obtaining a contract and costs to fulfill a contract.The Company recognizes as an asset the incremental costs of obtaining a contract if those costs are expectedto be recovered.If the costs incurred to fulfill a contract are not within the scope of standards related to inventories, fixedassets or intangible assets, etc., the Company shall recognize the costs to fulfill a contract as an asset if all thefollowing criteria are satisfied:
1. The costs relate directly to a contract or to an anticipated contract, including direct labor, direct materials,manufacturing costs (or similar costs), costs that are explicitly chargeable to the customer under the contract, andother costs that are only related to the contract;
2. The costs can increase the resources of the Company that can be used in satisfying performanceobligations in the future;
3. The costs are expected to be recovered.
An asset related to contract costs shall be amortized by the Company on a same basis that is used forrecognizing the revenue of goods or services related to the asset, with amortization being included into profit or
loss.The Company shall make a provision for impairment and recognize an impairment loss to the extent that thecarrying amount of an asset related to contract costs exceeds the remaining amount of consideration that theCompany expects to receive in exchange for the goods or services to which the asset relates less the costsexpected to be incurred. The provision for impairment shall be reversed and included into profit or loss if thecarrying amount of an asset is less than the remaining amount of consideration that the Company expects toreceive in exchange for the goods or services to which the asset relates less the costs expected to be incurredbecause the impairment conditions for a previous period no longer exists. The carrying amount of the asset afterthe reversal shall not exceed the amount that would have been determined on the reversal date if no provision forimpairment had been made previously.
18. Assets 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 all of the following conditions are met: (1) theasset must be available for immediate sale in its present condition subject to terms that are usual and customary for sales of suchassets or disposal groups; (2) its sales must be highly probable, i.e., the Company has made a decision on the sale plan and hasobtained a confirmed offer, 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 such non-current assetor disposal group as held for sale on the acquisition date only if the requirement of "being expected to be completed within one year"is met on that date and it is highly probable that other criteria for held for sale will be met within a short period (usually within threemonths).An asset or a disposal group is still accounted for as held for sale when the Company remains committed to its plan to sell theasset or disposal group in the circumstance that non-related party transactions fail to be completed within one year due to one of thefollowing reasons beyond the control of the Company: (1) a buyer or other party unexpectedly set conditions that will delay the sale,while the Company has taken timely actions to respond to the conditions and expects a favorable resolution of the delaying factorswithin one year since the setting; (2) a non-current asset or disposal group classified as held for sale fails to be sold within one yeardue to rare cases, and the Company has taken action necessary to respond to the circumstances during the initial one-year period andthe criteria for held for sale are met.
2. Measurement of non-current assets or disposal groups held for sale
(1) Initial measurement and subsequent measurement
For the initial measurement and subsequent measurement of a non-current asset or disposal group held for sale on the balancesheet date, where the carrying amount is higher than the fair value less the costs to sell, the carrying amount is written down to thefair value less the costs to sell, the write-down is recognized in profit or loss as the asset impairment loss, and meanwhile, theprovision for impairment of assets held for sale shall be made.
For a non-current asset or disposal group classified as held for sale on the acquisition date, the asset or disposal group ismeasured upon the initial measurement at the lower of its initial measurement amount had it not been so classified and the fair valueless the costs to sell. Apart from the non-current asset or disposal group acquired through business combination, the differencearising from the net amount of initial measurement of a non-current asset or disposal group at the fair value less the costs to sell shallbe included into profit or loss.
The asset impairment loss recognized for a disposal group held for sale shall deduct the carrying amount of goodwill in thedisposal group first, and then deduct 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) Accounting treatment of reversal of assets impairment loss
When there is a subsequent increase in the net amount of the fair value of a non-current asset held for sale less the costs to sellon the balance sheet date, the write-down shall be recovered, and shall be reversed not in excess of the impairment loss that has beenrecognized after the non-current asset was classified as held for sale, the reversal amount shall be included into the profit or loss.Assets impairment loss that has been recognized before the classification is not reversed.
When there is a subsequent increase in the net amount of the fair value of a disposal group held for sale less the costs to sell onthe balance sheet date, the write-down shall be recovered, and shall be reversed not in excess of the non-current assets impairmentloss that has been recognized after the disposal group was classified as held for sale, the reversal amount shall be included into theprofit or loss. The deducted carrying amount of goodwill and non-current assets impairment loss that has been recognized before theclassification are not reversed.
For the subsequent reversal amount of the impairment loss that has been recognized in a disposal group held for sale, thecarrying amount is increased based on the proportion of carrying amount of each non-current asset (excluding goodwill) in thedisposal group.
(3) Accounting treatment of those no longer classified as held for sale and derecognized
A non-current asset or disposal group that does not meet the criteria of being held for sale and no longer classified as held forsale, or a non-current asset being removed from a disposal group held for sale shall be measured at the lower of: 1) its carryingamount before it was classified as held for sale, adjusted for any depreciation, amortization or impairment that would have beenrecognized had it not been classified as held for sale; and 2) its recoverable amount.
When a non-current asset or disposal group classified as held for sale is derecognized, the unrecognized gains or losses shall beincluded into profit or loss.
19. Debt investments
20. Other debt investments
21. Long-term accounts receivable
22. 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 have been unanimously consented by the parties sharing control. Significant influence is the power to participate inthe financial and operating policy decisions of the investee but is not in control or in joint control with others of the stipulation ofthese policies.
2. Determination of investment cost
(1) For business combination under common control, if the consideration of the combining party is made by payment in cash,transfers of non-cash assets, assumption of liabilities or issuance of equity securities, on the date of combination, it regards the shareof the carrying amount of the equity of the combined party included in the consolidated financial statements of the ultimatecontrolling party as the initial investment cost. The difference between the initial investment cost of the long-term equity investments
and the carrying amount of the combination consideration paid or the par value of shares issued offsets the capital reserve; if thebalance of the capital reserve is insufficient to offset, the retained earnings are adjusted.When the long-term equity investments are obtained through business combination under common control achieved in stages,the Company determines whether it is a "package deal"." If it is a "package deal", the stages as a whole are considered as onetransaction in the accounting treatment. If it is not a "package deal", on the date of combination, the initial investment cost isrecognized at the share of the carrying amount of net assets of the combined party included the consolidated financial statements ofthe ultimate controlling party. The capital reserve is adjusted according to the difference between the initial investment cost of thelong-term equity investments and the sum of the carrying amount of the long-term equity investments before combination and theacquired carrying amount of the consideration newly paid for shares on the combination date, and if the capital reserve is insufficientto write down, the retained earnings are adjusted.
(2) For business combination not under common control, the initial investment cost is initially recognized at the acquisition-datefair value of the considerations paid.If the 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 the relevantaccounting treatment:
1) In the case of stand-alone financial statements, the initial investment cost accounted for using the cost method is the sum ofthe carrying amount of previously-held equity investment and the additional investment cost.
2) In the case of consolidated financial statements, the Company determines whether it is a "package deal". If it is a "packagedeal", the stages as a whole are considered as one transaction in the accounting treatment. If it is not a "package deal", the carryingamount of the acquirer’s previously held equity interest in the acquire is remeasured with the fair value on the acquisition-date fairvalue, and the difference between the fair value and the carrying amount is recognized in investment income; when the acquirer’spreviously held equity interest in the acquire involves other comprehensive income under the 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 the defined benefit plan of the acquire.
(3) Long-term equity investments obtained by ways other than business combination: the initial investment cost of thoseobtained by cash payment shall be the actually paid purchase consideration; the initial investment cost of those obtained by issuingequity securities shall be the fair value of the equity securities issued; the initial investment cost of those obtained through debtrestructuring shall be determined according to the Accounting Standards for Business Enterprises No. 12 – Debt Restructuring; andthe initial investment cost of those obtained through exchange of non-cash assets shall be determined according to the AccountingStandards for Business Enterprises No. 7 – Non-cash Assets Exchange.
3. Subsequent measurement and recognition method of profit or loss
Long-term equity investments controlled by the investee are accounted for with the cost method, and those in associatedenterprises and joint ventures are accounted for with the equity method.
4. Disposal of a subsidiary in stages resulting in the 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 loss of significant influence or joint control, the remaining equity is accounted for with theequity method; however, if the disposal results in loss of control, joint control, or significant influence, the remaining equity isaccounted for according to the Accounting Standards for Business Enterprises No. 22 – Financial Instruments: Recognition andMeasurement.
(2) Consolidated financial statements
1) Disposal of a subsidiary in stages not qualified as "package deal" resulting in loss of control
Before loss of control, the difference between the disposal consideration and the proportionate share of net assets in the disposed
subsidiary from acquisition date or combination date to the disposal date is adjusted to capital reserve (capital premium); if thebalance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings.When the control of a former subsidiary is lost, the remaining equity is remeasured at the fair value on the date of loss of control.The aggregated value of disposal consideration and the fair value of the remaining equity, less the share of net assets in the disposedsubsidiary held before the disposal from the acquisition date or combination date to the disposal date is recognized in investmentincome in the period when the control over such subsidiary is lost, and meanwhile goodwill is offset. Other comprehensive incomerelated to equity investments in the former subsidiary is reclassified as investment income upon the loss of control.
2) Disposal of a subsidiary in stages qualified as "package deal" resulting in loss of control
In case of a "package deal", the stages as a whole are considered as one transaction resulting in loss of control in the accountingtreatment. However, before loss of control, the difference between the disposal consideration at each stage and the proportionateshare of net assets in the disposed subsidiary is recognized as other comprehensive income in the consolidated financial statementsand reclassified as profit or loss in the period when the control is lost.
23. Investment properties
Measurement mode of investment properties
Measurement by cost method
Depreciation or amortization method
1. Investment properties include leased-out land use right, land use right held for capital appreciation, and buildings that havebeen leased out.
2. Investment properties are measured initially at cost, subsequently using the cost model, and depreciated or amortized with thesame method as that of fixed assets and intangible assets.
24. Fixed assets
(1) Recognition criteria
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 for more than one accounting year. Fixed assets are recognized if, and only if, it isprobable that future economic benefits associated with the assets will flow in and the cost of the assets can be measured reliably.
(2) Depreciation method
| Category | Depreciation method | Depreciation life | Salvage rate | Annual depreciation rate |
| Houses and buildings | Straight-line method | 3-35 | 3-5 | 1.90-19.40 |
| General equipment | Straight-line method | 3-5 | 3-5 | 9.50-32.33 |
| Special equipment | Straight-line method | 2-15 | 0-5 | 6.33-47.50 |
| Transport facilities | Straight-line method | 3-15 | 3-5 | 9.50-32.33 |
| Other equipment | Straight-line method | 3-10 | 5 | 9.50-31.67 |
(3) Basis for identification of fixed assets held under finance leases and related valuation and depreciationmethods
25. 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 in, and the cost of the item can be measured reliably. Construction in progress is measured at the actual cost incurred to reach itsdesigned usable conditions.
2. Construction in progress is transferred into fixed assets at its actual cost when it reaches the designed usable conditions. Whenthe final accounts of the construction in progress was not finished while reaching the designed usable conditions, it is transferred tofixed assets using the estimated value first, and then adjusted accordingly when the actual cost is settled in the final accounts, but theaccumulated depreciation is not to be adjusted retrospectively.
26. 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 arerecognized 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 all of the following requirements are 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) Where the acquisition and construction or production of a qualified asset is interrupted abnormally, and the interruptionperiod lasts for more than 3 months, the capitalization of the borrowing costs is suspended; the borrowing costs incurred during suchperiod are recognized as expenses, and are included in profit or loss, until the acquisition and construction or production of the assetrestarts.
(3) When the qualified asset under acquisition and construction or production is ready for the intended use or sale, thecapitalization 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 interestamount to be capitalized is determined in light of the actual interest expenses incurred (including amortization of premium ordiscount according to the effective interest method) of the special borrowings in the current period less the interest income on theunused borrowings 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 interest amount on the general borrowing to be capitalized iscalculated and determined by multiplying the weighted average asset disbursement on the part of the accumulative assetdisbursements in excess of the general borrowing by the capitalization rate of the general borrowing used.
27. Biological assets
28. Oil-and-gas assets
29. Right-of-us assets
30. Intangible assets
(1) Valuation method, useful life and impairment test
1. Intangible assets, including land use rights, patent rights and non-patented technologies etc., are initially measured at cost.
2. Intangible assets with finite useful lives are amortized within their useful lives systematically and reasonably according toeconomic benefits related to the intangible assets; if it is unable to reliably determine the expected realization pattern, the intangibleassets are amortized by the straight-line method, with details as follows:
| Item | Amortization period (years) |
| Franchise | Contract years |
| Land use right | 35-50 |
| Proprietary technology | Economic lifecycle |
| Software | 3-10 |
| Others | 5 |
(2) Accounting policies on internal R&D expenses
Expenditures in the research phase of an internal R&D project are recognized as profit or loss d when they are incurred. Anintangible asset arising from the development phase of an internal R&D project is recognized if all of the following criteria are met:
(1) it is technically feasible to complete the intangible asset so that it will be available for use or sale; (2) there is an intention tocomplete the intangible asset and use or sell it; (3) evidence of how the intangible asset will generate probable future economicbenefits, among other things, it is able to demonstrate the existence of a market for the output of the intangible asset or the intangibleasset itself or, if it is to be used internally, the usefulness of the intangible asset; (4) there are adequate technical, financial and otherresources available to complete the development and to use or sell the intangible asset; and (5) the expenditure attributable to theintangible asset during its development can be measured reliably.
Criteria used by the Company for distinguishing the research phase from the development phase of an internal R&D project:
The planned investigation phase for acquiring new technology and knowledge should be defined as the research phase, which ischaracterized by the 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 and greaterpossibility of generating results. The Company divides the research and development phases by forming the prototype drawing andstarting the prototype trial production. Expenditures in the research phase of an internal R&D project are recognized as profit or losswhen they are incurred. When the Company enters the development phase, project expenditures are first calculated by projects under"development expenditure", and if the capitalization conditions are met, they are reported as development expenditures in thefinancial statements. The project will be transferred to intangible assets when it qualifies for sale or mass production.
31. Provisions for long-term asset impairment
For long-term assets such as long-term equity investments, investment property measured by the cost model, fixed assets,construction in progress, right-of-use assets, intangible assets with finite useful lives, etc., if on the balance sheet date there is an
indication of impairment, the recoverable amount is to be estimated. For goodwill recognized in business combination and intangibleassets with indefinite useful lives, no matter whether there is an indication of impairment, the impairment test must be performedannually. The impairment test on goodwill is performed on its 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.
32. Long-term deferred expenses
The long-term deferred and prepaid expenses are the expenses that have been spent but with amortization periods of more thanone year (excluded). They are recorded with the actual amount, and evenly amortized within the beneficiary period or stipulatedperiod. If any items of the long-term deferred and prepaid expenses cannot be beneficial to the following accounting periods, theresidual values of such items which have not been amortized shall be fully transferred to profit or loss.
33. Contract liabilities
34. Employees’ remuneration
(1) Accounting treatment of short-term remuneration
1. Employees' remuneration includes short-term remuneration, post-employment benefits, termination benefits and other long-term employee benefits.
2. Accounting treatment of short-term remuneration
The Company recognizes, in the accounting period in which an employee provides service, short-term remuneration actuallyincurred as liabilities, with a corresponding charge to profit or loss or the cost of a relevant asset.
(2) Accounting treatment of post-employment benefits
Post-employment benefits are divided into defined contribution plans and defined benefit plans.
(1) The Company recognizes in the accounting period in which an employee provides service the contribution amount payableto a defined contribution plan as a liability, with a corresponding charge to profit or loss or the cost of a relevant asset.
(2) The accounting treatment of a defined benefit plan usually involves the following steps:
1) According to the projected unit credit method, the demographic variables, financial variables, etc. shall be estimated throughthe unbiased and mutually consistent actuarial assumption, so as to measure the obligations arising from the defined benefit plan anddetermine the period of relevant obligations. Meanwhile, the obligations under the defined benefit plan are discounted to determinethe present value of the defined benefit plan obligations and the current service cost;
2) When a defined benefit plan has assets, the deficit or surplus by deducting the fair value of the defined benefit plan assetsfrom the present value of the defined benefit plan obligations is recognized as a net liability or asset of the defined benefit plan.When a defined benefit plan has a surplus, the net asset of the defined benefit plan is measured at the lower of the surplus in thedefined benefit plan and the asset ceiling;
3) At the end of the period, the employee remuneration costs generated by the defined benefit plan are recognized as three parts:
net interests of the service costs, net liabilities or net assets of the defined benefit plan, and changes from net liabilities or net assetsof the remeasured defined benefit plan, in which the net interests of the service costs and the net liabilities or net assets of the definedbenefit plan are included in profit or loss or relevant assets cost, and the changes from net liabilities or net assets of the remeasured
defined benefit plan are included in other comprehensive incomes, and are not allowed to be turned back to profit or loss in thesubsequent accounting period, but the amounts recognized in other comprehensive incomes can be transferred within the equityscope.
(3) Accounting treatment of termination benefits
Termination benefits provided to employees are recognized as an employee remuneration liability generated from terminationbenefits, with a corresponding charge to profit or loss on the earlier of the following dates: (1) when the Company cannot unilaterallywithdraw the offer of termination benefits because of the termination of employment or a curtailment proposal; or (2) when theCompany recognizes cost or expenses related to a restructuring that involves the payment of termination benefits.
(4) Accounting treatment of other long-term employee benefits
When other long-term employee benefits provided to the employees can meet the conditions for setting a defined contributionplan, those benefits shall be accounted for according to the requirements relating to defined contribution plan, while other benefitsare accounted for under the requirements relating to defined benefit plan. In order to simplify the relevant accounting treatment, thecost of employee benefits arising therefrom are recognized as service cost, net interest on the net liability or net assets of other long-term employee benefits, and changes as a result of remeasurement of the net liability or net assets of other long-term employeebenefits. The net total of the aforesaid amounts is recognized in profit or loss or included in the cost of a relevant asset.
35. Lease liabilities
36. Estimated liabilities
1. Obligations are recognized by the Company as estimated liabilities when they become present obligations arising fromcontingencies such as providing guarantees externally, litigation matters, products quality guarantee, onerous contract, etc., whichmay cause the outflow of the economic benefits from the Company and the amount of such obligations can be reliably measured.
2. Estimated liabilities are initially measured by the Company according to the best estimated figures required for fulfilling therelevant present obligations, and their carrying amount is reviewed on the balance sheet date.
37. Share-based payments
1. Categories of share-based payments
Share-based payments are divided into share-based payments settle by equity and share-based payments settled by cash.
2. Accounting treatment of settlements, modifications and cancellations of share-based payment plans
(1) Share-based payments settled by equity
The share-based payments settled by equity in exchange for employees' services, if immediately exercisable upon being granted,are recognized as relevant cost or expense at the fair value of equity instruments on the grant date, with a corresponding adjustmentin capital reserve. If the share-based payments settled by equity in exchange for employees' services can be exercisable until theservices are provided in the vesting period or the specified performance criteria are met, then on each balance sheet date within theexercise period, based on the best estimate of the number of exercisable equity instruments, services received in the period arerecognized as relevant cost or expense at the fair value of equity instruments on the grant date, with a corresponding adjustment incapital reserve.
For share-based payments settled by equity in exchange for the services of parties other than employees, if the fair value of the
services received can be measured reliably, the fair value is measured on the day when the services are received; if the fair value ofthe services received cannot be measured reliably, but that of equity instruments can be measured reliably, they are measured at thefair value of the equity instruments granted measured on the day when the services are received, and recognized as relevant cost orexpense, with a corresponding increase in owner's equity.
(2) Share-based payments settled by cash
The share-based payments settled by cash in exchange for employees' services, if immediately exercisable upon being granted,are recognized as relevant cost or expense at the fair value of the liabilities assumed by the Company on the grant date, with acorresponding increase in liabilities. If the share-based payments settled by cash in exchange for employees' services can beexercisable until the services are provided in the exercise period or the specified performance criteria are met, then on each balancesheet date within the exercise period, based on the best estimate of the exercisable circumstances, the services received in the periodare recognized as relevant cost or expense and the corresponding liabilities at the fair value of the liabilities assumed by the Company.
(3) Modifications and cancellations of share-based payment plan
If a modification increases the fair value of equity instruments granted, the Company recognizes the increase of servicesreceived according to the incremental fair value of equity instruments; if a modification increases the number of equity instrumentsgranted, the Company recognizes the fair value of the increased equity instruments as an increase in services received; if theCompany modifies the exercise conditions in a manner that is beneficial to the employee, it may take the modified exerciseconditions into account.
If a modification reduces the fair value of equity instruments granted, the Company does not take into account the reduction inthe fair value, but continues to recognize the amount for services received based on the fair value of equity instruments on the grantdate; if a modification reduces the number of equity instruments granted, the Company treats the reduction as a cancellation of thatportion of equity instruments granted; if the exercise conditions are modified in a manner adverse to employees, the modifiedexercise conditions may not be taken into account.
If the Company cancels or settles granted equity instruments during the exercise period (other than those canceled because theexercise conditions are not satisfied), the cancellation or settlement may be treated as an acceleration of exercise, and the amount thatotherwise would have been recognized over the remainder of the exercise period shall be recognized immediately.
38. Preference shares, perpetual bonds and other financial instruments
Pursuant to the relevant accounting standards on financial instruments, Regulations for Distinguishing Financial Liabilities andEquity Instruments and Relevant Accounting Treatment (Cai Kuai [2014] No. 13), and Regulations on Accounting Treatments ofPerpetual Bonds (Cai Kuai [2019] No. 2), for financial instruments such as issued convertible bonds, the Company classifiesfinancial instruments or their components upon initial recognition as financial assets, financial liabilities or equity instruments,according to the contract terms of the issued financial instruments and the economic essence it reveals instead of its legal form only,in combination with the definitions of financial asset, financial liability and equity instrument.
On the balance sheet date, for any financial instrument classified as an equity instrument, its interest expenditure or dividenddistribution is treated as the Company's profit distribution, and its repurchase and cancellation are treated as the changes in equity; forany financial instrument classified as financial liabilities, its interest expenditure or dividend distribution is treated as borrowingexpense, and its gain or loss on repurchase or redemption is included in profit or loss.
39. Revenue
Accounting policies adopted for revenue recognition and measurement
1. Principles of revenue recognition
On the contract effective date, the Company shall assess the contract, identify each performance obligation in the contract, anddetermine whether a performance obligation is satisfied over time or at a point in time.Performance obligation is satisfied over time if one of the following criteria is met, otherwise, it is satisfied at a point in time: (1)the customer simultaneously receives and consumes the economic benefits provided by the Company’s performance as the Companyperforms; (2) the customer controls as the goods is created during the Company’s performance; (3) goods created during theCompany’s performance have irreplaceable uses and the Company has an enforceable right to receive the payments for performancecompleted to date during the whole contract period.For a performance obligation satisfied over time, the Company shall recognize revenue over time according to the progress ofperformance. If the progress cannot be determined reasonably, and the costs incurred are expected to be compensated, the revenueshall be recognized at the amount of costs incurred until the progress can be determined reasonably. For a performance obligationsatisfied at a point in time, the revenue shall be recognized at the time point that the customer obtains control of relevant goods orservices. To determine whether the customer has obtained control of the goods, the Company shall consider the following indications:
(1) the Company has a present right to payment for the goods, i.e., the customer is presently obliged to pay for the goods; (2) theCompany has transferred the legal title of the goods to the customer, i.e., the customer has the legal title to the goods; (3) theCompany has transferred the physical possession of the goods to the customer, i.e., the customer has physically possessed the goods;
(4) the Company has transferred the significant risks and rewards in the ownership of the goods to the customer, i.e., the customerhas obtained the significant risks and rewards in the ownership of the goods; (5) the customer has accepted the goods; (6) there isother evidence indicating the customer has obtained control over the goods.
2. Principles of revenue measurement
(1) Revenue is measured by the Company according to the transaction price that is allocated to each performance obligation.The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goodsor 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 estimation ofvariable consideration at the expected value or the most likely amount. However, the transaction price that includes the amount ofvariable consideration only to the extent that it is highly 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) If a contract contains a significant financing component, the Company shall determine the transaction price according to theamount payable in cash by the customer for obtaining control over the goods or services. The difference between the transactionprice and the amount of contract consideration is amortized with the effective interest method over the contract period. The effects ofa significant financing component shall not be considered if the Company expects, on the contract effective date, that the periodbetween when the customer obtains control over the goods or services and when the customer pays consideration is one year or less.
(4) For a contract containing two or more performance obligations, the Company shall determine the stand-alone selling priceon the contract effective date of the distinct good underlying each performance obligation and allocate the transaction price to eachperformance obligation on a relative stand-alone selling price basis.
3. Specific methods of revenue recognition
The Company mainly sells products such as environmental and sanitation machinery and equipment, ventilator equipment, andengages in environmental sanitation operation business.
(1) The sale of ventilator equipment is a performance obligation satisfied at a point in time. The revenue from the domestic salesof products that do not require installation is recognized when the Company has delivered them to the place of delivery designated bythe contract and such delivery have been verified for acceptance by customers, the Company has obtained the delivery notes andcollected the payments or has obtained the right to the payments, and related economic benefits are highly probable to flow to theCompany; for products that require installation, the revenue is recognized when the products are delivered and the installation andcommissioning are accepted. The revenue from the overseas sales is recognized when the customs clearance has been handled
pursuant to the contract, the bill of lading has been obtained, the Company has collected the payments or has obtained the right to thepayments, and related economic benefits are highly probable to flow to the Company.
(2) The sale of environmental and sanitation machinery and equipment is a performance obligation satisfied at a point in time,and its revenue is recognized when the goods are delivered and accepted, the Company has collected the payments or has obtainedthe right to the payments, and related economic benefits are highly probable to flow to the Company.
(3) The environmental sanitation operation business is a performance obligation satisfied over time, and its revenue isrecognized according to the service assessment statement confirmed by the service recipient.
(4) The revenue recognition of PPP business with BOT models is detailed in Note III (XXXIII)1 to the financial statements.
Differences in the accounting policies of revenue recognition because the same type of business adopts different operationmodels
40. Government subsidies
1. Government subsidies shall be recognized if, and only if all of the following conditions are met: (1) the Company will complywith the conditions attaching to the subsidies; (2) the subsidies will be received. Monetary government subsidies are measured at theamount received or receivable. Non-monetary government subsidies are measured at fair value, and can be measured at nominalamount in the circumstance that fair value cannot be assessed.
2. Government subsidies related to assets
Government subsidies related to assets are government subsidies with which the Company 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 subsidies, and government subsidies related to assets aregovernment subsidies 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 withinthe useful lives of the relevant assets in a reasonable and systematic manner. Those measured at notional amount are directlyincluded into profit or loss. For assets sold, transferred, retired or damaged within the useful lives, balance of unamortized deferredincome is transferred into profit or loss of the period in which the disposal occurred.
3. Government subsidies related to income
Government grants related to income are government subsidies other than those related to assets. For government subsidies thatcontain both parts related to assets and parts related to income, in which those two parts are blurred, they are thus collectivelyclassified as government subsidies related to income. For government subsidies related to income used for compensating the relatedfuture cost, expenses or losses, they are recognized as deferred income and included in profit or loss or used to offset relevant costduring the period in which the relevant cost, expenses or losses are recognized; for government subsidies 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 subsidies related to the ordinary course of business shall be included into other income or used to offset relevantcost or expense based on business nature, while those not related to the ordinary course of business shall be included into non-operating income or expense.
41. Deferred Income Tax Assets/Deferred Income Tax Liabilities
42. Leases
(1) Accounting treatment of operating lease
1. Company as lessee
The Company recognizes a lease with an entire term of no more than 12 months and without a purchase option as a short-termlease, and a lease with a separate underlying asset that is of low value when it is new as a low-value asset lease, on thecommencement date of the lease term. The original lease will cease being a low-value asset lease if the Company sub-leases orexpects to sub-lease the underlying asset.For all short-term leases and low-value asset leases, the Company includes the lease payments to the cost of the related asset orprofit or loss on a straight-line basis in each period over the lease term.For all leases other than the above-mentioned short-term leases and low-value asset leases that are accounted for in a simplifiedway, the Company recognizes a right-of-use assets and a lease liability, on the commencement date of the lease term.
(1) Right-of-use assets
The right-of-use asset is initially measured at cost, which comprises: 1) the amount equal to the lease liability at its initialrecognition; 2) the lease payments made at or before the commencement of the lease, less lease incentives received (if any) ; 3) anyinitial direct costs incurred by the lessee; 4) an estimate of costs to be incurred by the lessee in dismantling and removing theunderlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms andconditions of the lease.
The Company depreciates the right-of-use assets on a straight-line basis. If the Company is reasonably certain to obtain theownership of the underlying asset upon the expiration of the lease term, the Company depreciates the underlying asset over theremaining useful life. Otherwise, the Company depreciates the underlying asset over the shorter of the lease term and the remaininguseful life of the underlying asset.
(2) Lease liability
The Company recognizes the present value of the lease payments receivable as a lease liability, on the lease commencementdate. When calculating the present value of the lease payments, the Company uses the interest rate implicit in the lease as thediscount rate. However, if the interest rate implicit in the lease cannot be reasonably determined, the Company uses its incrementalborrowing interest rate as the discount rate. The difference between the amount of lease payments and their present value is regardedas an unrecognized financing cost, with the interest expense to be recognized at the discount rate used to recognize the present valueof the lease payments and to be included in the current profit or loss in each period over the lease term. The variable lease paymentsnot included in the measurement of the lease liability are included in the current profit or loss when actually incurred.
After the commencement date of the lease term, in the event of any change in in-substance fixed payments, amounts expected tobe payable under residual value guarantees, the index or rate used to determine the lease payments, or the assessment result or actualexercise of the purchase option, renewal option or termination option, the Company remeasures the lease liability at the present valuecalculated based on the lease payments after the change and adjusts the carrying amount of the right-of-use assets accordingly, and ifthe carrying amount of the right-of-use assets has been adjusted down to zero but the lease liability still needs to be further adjusteddown, the Company includes the remaining amount in the current profit or loss.
2. Company as lessor
The Company classifies a lease that substantially transfers all the risks and rewards incidental to ownership of an underlyingasset as a financial lease, and any other lease as an operating lease, on the lease commencement date.
(1) Operating lease
In each period over the lease term, the Company recognizes the lease receipts as a rental income on a straight-line basis, andcapitalizes the initial direct costs incurred and amortizes them to the current profit or loss according to the same principles andprocedures applicable to the recognition of rental income over the lease term. The variable lease payments received by the Companyin relation to the operating lease but not included in the lease receipts are included in the current profit or loss when actually incurred.
(2) Financial lease
On the commencement date of the lease term, the Company recognizes a finance lease receivable at an amount equal to the netinvestment in the lease (which is the sum of any unguaranteed residual value and the present value of the aggregate of lease paymentsreceivable as at the commencement date of the lease term, discounted at the interest rate implicit in the lease) and derecognizes afinancial lease asset. In each period over the lease term, the Company calculates and recognizes an interest income at the interest rateimplicit in the lease.
The variable lease payments received by the Company but not included in the measurement of the net investment in the leaseare included in the current profit or loss when actually incurred.
3. Sale and leaseback
(1) Company as lessee
The Company assesses and determines whether the asset transfer in a sale and leaseback transaction is a sale in accordance withthe Accounting Standards for Business Enterprises No. 14 – Revenue.
If the asset transfer in the sale and leaseback transaction is a sale, the Company measures the right-of-use asset arising from thesale and leaseback at the carrying amount of the original asset corresponding to the part of right-of-use acquired due to the leaseback,and only recognizes gains or losses in relation to the part of right-of-use transferred to the lessor.
If the asset transfer in the sale-and-leaseback transaction is not a sale, the Company continues recognizing the transferred asset,and at the same time, recognizes a financial liability equal to the transfer proceeds, and accounts for the financial liability inaccordance with the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments.
(2) Company as lessor
The Company assesses and determines whether the asset transfer in a sale and leaseback transaction is a sale in accordance withthe Accounting Standards for Business Enterprises No. 14 – Revenue.
If the asset transfer in the sale and leaseback transaction is a sale, the Company accounts for the purchase of the asset inaccordance with other applicable accounting standards for business enterprises, and accounts for the lease of the asset in accordancewith the Accounting Standards for Business Enterprises No. 21 - Lease.
If the asset transfer in the sale-and-leaseback transaction is not a sale, the Company does not recognize the transferred asset, butrecognizes a financial asset equal to the transfer proceeds, and accounts for the financial asset in accordance with the AccountingStandards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments.
(2) Accounting treatment of financial lease
43. Other significant accounting policies and estimates
(I) Work safety fund
The Company accrues work safety fund in accordance with the Management Measures on the Accrual and Use of Work SafetyFund (Cai Qi [2012] No. 16) issued by the Ministry of Finance and the State Administration of Work Safety of China. The standardwork safety fund is included in cost or current profit or loss, and meanwhile accounted for under "special reserve"." When theaccrued work safety fund is used as an expense, it can offset the special reserve directly. When the work safety fund forms fixedassets, the expenses are accounted for under "construction in progress" and recognized as fixed assets when the work safety projectsreach the designed useful conditions; meanwhile, the cost included in fixed assets is to offset the special reserve, and the accumulated
depreciation shall be recognized with the same amount. Such fixed assets shall not be depreciated in future periods(II) Segment reportingOperating segments are determined based on the structure of the Company’s internal organization, management requirementsand internal reporting system. An operating segment of the Company is a component meeting the following conditionssimultaneously:
1. the segment engages in daily activities from which it may generate revenues and incur expenses;
2. its operating results can be regularly reviewed by the management to make decisions about resource to be allocated to thesegment and to assess its performance;
3. the accounting information regarding its financial position, operating results and cash flows is available through analysis.
(III) Other significant accounting policies and estimates
1. PPP business
The Company adopts the PPP model (by means of BOT and TOT, etc.) for participation in the public infrastructure business.Project companies can obtain the franchise rights of public infrastructure projects from government authorities so as to take part inthe project construction and operation. Upon expiry of the franchise rights, project companies need to transfer relevant infrastructureto government or government-designated departments.
The company provides multiple services (both asset building services of PPP projects and operation and maintenance servicesafter construction) according to the contractual provisions of the PPP project, identifies separate performance obligations in thecontract pursuant to the Accounting Standards for Business Enterprises No.14 – Revenue, and allocates the transaction price to eachperformance obligation in proportion to the standalone selling price. If the stand-alone selling price cannot be directly observable orthe similar market price is not available, the Company will reasonably estimate the stand-alone selling price with the marketadjustment method, cost-plus method or residual method after considering information such as market conditions, company specificfactors and customer-related information. If a construction service provided by the Company is satisfied over time, the revenueshould be recognized based on performance progress over time, except that the performance progress cannot be determinedreasonably. The performance progress is generally measured by the proportion of accumulative actual contract costs incurred againstthe expected total contract costs. If the performance progress cannot be determined reasonably, and the Company expects that thecosts incurred can be compensated, the revenue shall be recognized at the amount of costs incurred until the progress can bedetermined reasonably.
Pursuant to the contractual provisions of the PPP project, during the project operation, the Company has the right to collectpayments from the recipient of public goods and services, but such right shall not be an unconditional collection right if the paymentamount is uncertain. When the PPP project assets reach their expected usable conditions, the amount of consideration of relevant PPPproject assets or recognized amount of construction revenue is recognized as an intangible asset and subject to the accountingtreatment specified in the Accounting Standards for Business Enterprises No. 6 – Intangible Assets.
Pursuant to the contractual provisions of the PPP project, during the project operation, if the conditions for collection can be met,the cash of a definite amount (other financial asset) is recognized as accounts receivable when the Company has the right to collectsuch consideration (which depends only on the passage of time), and subject to the accounting treatment specified in the AccountingStandards for Business Enterprises No. 22 – Financial Instruments: Recognition and Measurement. When the PPP project assetsreach their expected usable conditions, the difference of the amount of consideration of relevant PPP project assets or the recognizedamount of construction revenue in excess of the cash of a definite amount (or other financial asset) is recognized as an intangibleasset.
If the amount of consideration of relevant PPP project assets or recognized amount of construction revenue is recognized as anintangible asset, the contract assets recognized during the construction are presented under "intangible assets" in the balance sheet;other contract assets recognized during the construction, depending on whether they will be realized within one year from thebalance-sheet date, are presented under "contract assets" or "other non-current assets" in the balance sheet.
When the PPP project assets reach their expected usable conditions, the Company recognizes revenue related to operationservices according to the Accounting Standards for Business Enterprises No. 14 – Revenue.
2. Basis of the adoption of hedging accounting and accounting treatment
(1) Hedge includes fair value hedge, cash flow hedge and hedge of net investment in foreign operation.
(2) A hedge may qualify for hedge accounting if all the following conditions are met: 1) the hedging relationship consists onlyof eligible hedging instruments and eligible hedged instruments; 2) at the inception of the hedge, the Company formally designateshedging instruments and hedged item, and prepares the written documentation of the hedging relationship and the Company’s riskmanagement strategy and objective for undertaking the hedge; 3) the hedging relationship meets the hedging effectivenessrequirements.
The Company recognizes that a hedging relationship meets the effectiveness requirements if the all the followings aresimultaneously satisfied: 1) there is an economic relationship between the hedged item and the hedging instruments; 2) the effect ofcredit risk does not dominate the value changes that result from that economic relationship between the hedged item and the hedginginstruments; 3) the hedge ratio of the hedging relationship is the equal to the ratio of the quantity of the hedged item that theCompany actually hedges and the actual number of hedging instruments to hedge them, but does not reflect an imbalance betweenthe weightings of the hedged item and the hedging instrument.
The Company shall assess whether a hedging relationship meets the hedge effectiveness requirements on the hedge inceptiondate and on an ongoing basis. If a hedging relationship ceases to meet the hedge effectiveness requirements due to the hedge ratio butthe risk management objective for that designated hedging relationship remains the same, the Company shall rebalance the hedgingrelationship.
(3) Accounting treatment of hedges
1) Fair value hedges
① Gain or loss on the hedging instrument shall be recognized in profit or loss. If a hedging instrument hedges a non-tradingequity instrument (or a component thereof) at fair value through other comprehensive income, gain or loss on the hedging instrumentmay be recognized in other comprehensive income.
② The gain or loss on a hedged item arising from risk exposure should be recognized in profit or loss, and meanwhile thecarrying amount of the recognized hedged item which is not measured at fair value should be adjusted. If a hedged item is a financialasset (or a component thereof) that is measured at fair value with changes included in other comprehensive income according to theclassification in Article 18 of the Accounting Standards for Business Enterprises No. 22 - Financial Instruments: Recognition andMeasurement, the gain or loss arising from the hedged risk exposure shall be recognized in profit or loss, with its carrying amountbeing unadjusted because it has already been measured at fair value; if the hedged item is a non-trading equity instrument (or acomponent thereof) for which the Company has elected to present changes at fair value with changes included in othercomprehensive income, the gain or loss arising from risk exposure on the hedged item shall be recognized in other comprehensiveincome, with carrying amount being unadjusted because it has already been measured at fair value.
When a hedged item is an unrecognized firm commitment (or a component thereof), the cumulative change in the fair value ofthe hedged item after its designation shall be recognized as an asset or a liability with a corresponding gain or loss being recognizedin profit or loss for each period. When a firm commitment is performed to acquire an asset or assume a liability, the initiallyrecognized amount of the asset or the liability is adjusted to include the cumulative change in the fair value of the hedged item thatwas previously recognized.
For a hedged item that is a financial instrument (or a component thereof) measured at amortized cost, any adjustment made bythe Company on the carrying amount of the hedged item shall be amortized to profit or loss based on a recalculated effective interestrate on the date that amortization begins. If a financial asset (or a component thereof) that is a hedged item and that is measured atfair value with changes included in other comprehensive income according to the classification in Article 18 of the AccountingStandards for Business Enterprises No. 22 - Financial Instruments: Recognition and Measurement, amortization applies in the same
manner but to the amount that represents the cumulative gain or loss previously recognized, which shall be subsequently recognizedin profit or loss, instead of by adjusting the carrying amount of the financial asset (or a component thereof).
2) Cash flow hedges
① The portion of the gain or loss on the hedging instrument that belongs to an effective hedge shall be recognized in othercomprehensive income as cash flow hedge reserve, while the ineffective portion shall be recognized in profit or loss. The cash flowhedge reserve shall be recognized at the lower of the following (in absolute amounts): A. the cumulative gain or loss on the hedginginstrument from the inception of the hedge; and B. the cumulative change in the present value of the expected future cash flows ofthe hedged item from the inception of the hedge.
② If a hedged item is a forecast transaction that subsequently results in the recognition of a non-financial asset or non-financialliability, or a hedged forecast transaction for a non-financial asset or non-financial liability becomes a firm commitment for which thefair value hedge accounting is applied, the Company shall transfer out the amount of cash flow hedge reserve previously recognizedin other comprehensive income, and include it in the initially recognized amount of the asset or the liability.
③ For other cash flow hedges, the amount of cash flow hedge reserve previously recognized in other comprehensive incomeshall be transferred out into profit or loss in the same period the hedged forecast sale affects profit or loss.
3) Hedges of net investment in foreign operation
The portion of gain or loss on the hedging instrument that belongs to an effective hedge is recognized in other comprehensiveincome, and reclassified from other comprehensive income to profit or loss on the disposal of the foreign operation; and theineffective portion is recognized in profit or loss.
3. Accounting treatment related to share repurchase
When the Company repurchases its shares for the purpose of reducing its registered capital or rewarding its employees, if thepurchased shares are to be kept as treasury shares at the actually paid amount, and recorded and registered for reference. If therepurchased shares are to be canceled, the capital reserve is reduced according to the difference between the book value of sharescanceled plus the total book value calculated by the number of shares canceled and the amount paid for the actual repurchase, or theretained earnings are reduced when the capital reserve is not sufficient. If the reward of repurchased shares to the Company'semployees is the share-based payment settled by equity, when the employee exercises the stock purchase right and the companyreceives the payment, the cost of treasury shares granted to employees and capital reserve (other capital reserve) accumulated are tobe written off, and the capital reserve (share premium) is adjusted according to the difference.
44. Significant changes in accounting policies and estimates
(1) Significant changes in accounting policies
√ Applicable □ Not Applicable
| Content of and reason for the changes in accounting policies | Approval procedures | Remarks |
| The revised Accounting Standard for Business Enterprises No. 21 — Leasing has been implemented since January 1, 2021 (hereinafter referred to as "the first implementation date") | Approved by the Company's management | Please refer to the statements for details |
| The Interpretation No. 14 of the Accounting Standards for Business Enterprises issued by the Ministry of Finance has been implemented since January 26, 2021 | Approved by the Company's management | Please refer to the statements for details |
| The Company has, since December 31, 2021, implemented the Interpretation No. 15 of the Accounting Standards for Business Enterprises "Presentation of Centralized Fund Management" issued by the Ministry of Finance | Approved by the Company's management | Please refer to the statements for details |
Accounting policy changes caused by variations in the accounting standards for business enterprises
1. The Company has implemented the revised Accounting Standard No. 21 for Business Enterprises—Leasing (hereinafter
referred to as the "New Leasing Standard") since 1 January 2021 (hereinafter referred to as the first implementation date).
(1) For existing contracts prior to the first implementation date, the Company has chosen not to reassess whether they are leasesor contain leases.
(2) For leases in which the Company is the lessee, the Company has adjusted the amount of retained earnings and other relateditems in the financial statements at the beginning of the reporting period based on the cumulative effects of the first implementationdate of the new leasing standard and the previous standard, without adjusting the information for comparable periods. The specificprocess was as follows:
For finance leases prior to the first implementation date, the Company measured the right-of-use assets and lease liabilitiesrespectively at the original carrying amounts of the finance lease assets and finance lease payables on the first implementation date.
For operating leases prior to the first implementation date, the Company measured the lease liabilities on the firstimplementation date based on the present value of the remaining lease payments discounted at the Company's incremental borrowingrate as of the first implementation date, and measured the right-of-use assets based on an amount equal to the lease liabilities, withnecessary adjustments for prepaid rentals.
On the first implementation date, the Company conducted impairment tests on right-of-use assets and accounted for themaccordingly as per Note 3(2) to the Financial Statements.
1) The major effects of implementing the new leasing standard on the financial statements as of January 1, 2021:
| Item | Balance sheet | ||
| December 31, 2020 | New leasing standard Effects | January 1, 2021 | |
| Right-of-use assets | 30,945,067.78 | 30,945,067.78 | |
| Non-current liabilities due within one year | 150,862,201.57 | 7,701,219.17 | 158,563,420.74 |
Lease liabilities
| Lease liabilities | 23,243,848.61 | 23,243,848.61 |
2) The weighted average of the Company's incremental borrowing rate used for the lease liabilities recorded in the balance sheeton the first implementation date was 4.65%.
3) Simplified treatment of operating leases prior to the first implementation date
① For leases completed within 12 months from the first implementation date, the Company applied the simplified approach anddid not recognize right-of-use assets and lease liabilities;
② The Company used the same discount rate for lease contracts with similar characteristics when measuring the lease liability;
③ The measurement of right-of-use assets did not include initial direct costs;
④ The Company determined the lease term based on the actual exercise of the renewal option or termination option prior to thefirst implementation date and other updates;
The above simplified treatment has no significant impact on the Company's financial statements.
(3) For operating lease contracts for low-value assets that existed prior to the first implementation date, the Company adoptedthe simplified approach of not recognizing right-of-use assets and lease liabilities and accounting for them as per the new leasingstandard from the first implementation date.
(4) Leases for which the Company is the lessor were accounted for as per the new leasing standard from the first implementationdate.
(5) Treatment of existing sale and leaseback transactions prior to the first implementation date
For sale and leaseback transactions existing prior to the first implementation date, the Company did not reassess on the firstimplementation date whether the transfer of assets was in conformity with the provisions of Accounting Standard for BusinessEnterprises No. 14 – Revenue for accounting as a sale.
For sale and leaseback transactions accounted for as sales and finance leases prior to the first implementation date, the Company,
as the seller (lessee), accounted for the leasebacks in the same manner as other finance leases existing on the first implementationdate and continued to amortize the related deferred revenue or loss over the lease term.
For sale and leaseback transactions accounted for as sales and operating leases prior to the first implementation date, theCompany, as the seller (lessee), accounted for the leasebacks in the same manner as other operating leases existing on the firstimplementation date, and adjusted the right-of-use assets for the related deferred revenue or loss recorded in the balance sheet priorto the first implementation date.
2. The Company has implemented, since January 26, 2021, Interpretation No. 14 of the Accounting Standards for BusinessEnterprises (hereinafter referred to as Interpretation No. 14) issued in 2021 by the Ministry of Finance.
The Company retroactively adjusted the contracts of relevant PPP projects that commenced before December 31, 2020, and hadnot been completed by the effective date of Interpretation No. 14, and the amount of relevant projects in the financial statements atthe beginning of 2021 based on the cumulative effects, without adjusting the information for comparable periods. The major effectsof the adjustment on the Company's financial statements as of January 1, 2021:
| Item | Balance sheet | ||
| December 31, 2020 | Effects | January 1, 2021 | |
| Construction in progress | 1,782,529,087.95 | -1,711,793,604.00 | 70,735,483.95 |
| Intangible assets | 3,163,935,814.41 | 1,711,793,604.00 | 4,875,729,418.41 |
3. The Company has implemented the Interpretation No. 15 of the Accounting Standards for Business Enterprises "Presentationof Centralized Fund Management" issued by the Ministry of Finance since December 31, 2021, and such change in accountingpolicies has no impact on the Company's financial statements.
(2) Significant changes in accounting estimates
□ Applicable √ Not Applicable
(3) The first implementation of the new leasing standard to adjust the year-beginning financial statementitems since 2021
√ Applicable □ Not Applicable
Whether to adjust the year-beginning balance sheet items
√ Yes □ No
Consolidated Balance Sheet
Unit: RMB
| Item | December 31, 2020 | January 1, 2021 | Adjustment due to the implementation of the revised revenue standard |
| Current Assets: | |||
| Cash and bank balances | 5,904,127,970.85 | 5,904,127,970.85 | |
| Deposit reservation for balance | |||
| Lending to banks and other financial institutions | |||
| Held-for-trading financial assets | 128,017,735.11 | 128,017,735.11 | |
| Derivative financial assets |
| Notes receivable | 64,663,544.98 | 64,663,544.98 | |
| Accounts receivable | 5,564,834,864.04 | 5,564,834,864.04 | |
| Financing from accounts receivables | 520,429,874.86 | 520,429,874.86 | |
| Prepayments | 137,769,198.53 | 137,769,198.53 | |
| Premiums receivable | |||
| Reinsurance accounts receivable | |||
| Reinsurance reserve receivable | |||
| Other receivables | 257,670,998.28 | 257,670,998.28 | |
| Including: Interest receivable | |||
| Dividends receivable | |||
| Financial assets purchased under resale agreement | |||
| Inventories | 1,305,177,407.85 | 1,305,177,407.85 | |
| Contract assets | 170,840,655.62 | 170,840,655.62 | |
| Held-for-sale assets | |||
| Non-current assets due within one year | 1,157,997,329.53 | 1,157,997,329.53 | |
| Other current assets | 524,859,055.94 | 524,859,055.94 | |
| Total current assets | 15,736,388,635.59 | 15,736,388,635.59 | |
| Non-current assets: | |||
| Loans and advances to customers | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | 1,063,292,418.65 | 1,063,292,418.65 | |
| Long-term equity investments | 318,243,332.69 | 318,243,332.69 | |
| Other entity instrument investments | 26,070,000.00 | 26,070,000.00 | |
| Other non-current financial assets | |||
| Investment properties | 2,009,006.98 | 2,009,006.98 | |
| Fixed assets | 1,640,546,747.67 | 1,640,546,747.67 | |
| Construction in progress | 1,782,529,087.95 | 70,735,483.95 | 1,711,793,604.00 |
| Bearer biological assets | |||
| Oil and gas assets | |||
| Right-of-use assets | 30,945,067.78 | -30,945,067.78 | |
| Intangible assets | 3,163,935,814.41 | 4,875,729,418.41 | -1,711,793,604.00 |
| Development expenditure | 4,449,066.69 | 4,449,066.69 | |
| Goodwill | 6,170,809,035.86 | 6,170,809,035.86 | |
| Long-term deferred expenses | 12,703,802.65 | 12,703,802.65 | |
| Deferred tax assets | 95,270,882.31 | 95,270,882.31 |
| Other non-current assets | 94,289,159.43 | 94,289,159.43 | |
| Total non-current Assets | 14,374,148,355.29 | 14,405,093,423.07 | -30,945,067.78 |
| Total assets | 30,110,536,990.88 | 30,141,482,058.66 | -30,945,067.78 |
| Current liabilities: | |||
| Short-term borrowings | 1,657,905,376.55 | 1,657,905,376.55 | |
| Borrowings from the Central Bank | |||
| Borrowings from banks and other financial institutions | |||
| Held-for-trading financial liabilities | 810,300.00 | 810,300.00 | |
| Derivative financial liabilities | |||
| Notes payable | 3,853,175,394.09 | 3,853,175,394.09 | |
| Accounts payable | 3,404,825,085.03 | 3,404,825,085.03 | |
| Advance receipts | |||
| Contract liabilities | 181,051,683.90 | 181,051,683.90 | |
| Financial assets sold under repurchase agreement | |||
| Absorbing deposit and due to placements with banks and other financial institutions | |||
| Receivings from vicariously traded securities | |||
| Receivings from vicariously sold securities | |||
| Employee benefits payable | 321,861,989.64 | 321,861,989.64 | |
| Taxes payable | 372,514,942.66 | 372,514,942.66 | |
| Other payables | 443,477,082.48 | 443,477,082.48 | |
| Including: Interest payable | |||
| Dividends payable | |||
| Fees and commissions payable | |||
| Amounts payable under reinsurance contracts | |||
| Held-for-sale liabilities | |||
| Non-current liabilities due within one year | 150,862,201.57 | 158,563,420.74 | -7,701,219.17 |
| Other current liabilities | 55,106,039.73 | 55,106,039.73 | |
| Total current liabilities | 10,441,590,095.65 | 10,449,291,314.82 | -7,701,219.17 |
| Non-current liabilities: | |||
| Insurance contract reserves | |||
| Long-term borrowings | 765,643,457.78 | 765,643,457.78 | |
| Bonds payable | 1,199,466,109.60 | 1,199,466,109.60 | |
| Including: Preference shares |
| Perpetual bonds | |||
| Lease liabilities | 23,243,848.61 | -23,243,848.61 | |
| Long-term payables | 255,735,814.91 | 255,735,814.91 | |
| Long-term employee benefits payable | |||
| Estimated liabilities | 1,461,553.82 | 1,461,553.82 | |
| Deferred income | 96,734,819.84 | 96,734,819.84 | |
| Deferred income tax liabilities | 78,884,957.38 | 78,884,957.38 | |
| Other non-current liabilities | |||
| Total Non-current Liabilities | 2,397,926,713.33 | 2,421,170,561.94 | -23,243,848.61 |
| Total liabilities | 12,839,516,808.98 | 12,870,461,876.76 | -30,945,067.78 |
| Owner's equity: | |||
| Share capital | 3,163,062,146.00 | 3,163,062,146.00 | |
| Other equity instruments | 266,939,831.65 | 266,939,831.65 | |
| Including: Preference shares | |||
| Perpetual bonds | |||
| Capital reserve | 9,707,741,876.49 | 9,707,741,876.49 | |
| Less: Treasury shares | 8,920,597.83 | 8,920,597.83 | |
| Other comprehensive income | |||
| Special reserve | |||
| Surplus reserve | 232,701,943.56 | 232,701,943.56 | |
| General risk reserve | |||
| Retained profits | 3,558,688,885.55 | 3,558,688,885.55 | |
| Total owners' equity attributable to equity holders of the Parent Company | 16,920,214,085.42 | 16,920,214,085.42 | |
| Minority interests | 350,806,096.48 | 350,806,096.48 | |
| Total owners' equity | 17,271,020,181.90 | 17,271,020,181.90 | |
| Total liabilities and owners' equity | 30,110,536,990.88 | 30,141,482,058.66 | -30,945,067.78 |
Adjustment descriptionParent company balance sheet
Unit: RMB
| Item | December 31, 2020 | January 1, 2021 | Adjustment due to the implementation of the revised revenue standard |
| Current Assets: | |||
| Cash and bank balances | 1,279,695,772.57 | 1,279,695,772.57 | |
| Held-for-trading financial assets | 126,075,691.90 | 126,075,691.90 | |
| Derivative financial assets | |||
| Notes receivable | |||
| Accounts receivable | |||
| Financing from accounts receivables | 528,356,236.97 | 528,356,236.97 |
| Prepayments | |||
| Other receivables | 3,095,331,754.24 | 3,095,331,754.24 | |
| Including: Interest receivable | |||
| Dividends receivable | 50,000,000.00 | 50,000,000.00 | |
| Inventories | |||
| Contract assets | |||
| Held-for-sale assets | |||
| Non-current assets due within one year | 337,148,608.96 | 337,148,608.96 | |
| Other current assets | |||
| Total current assets | 5,366,608,064.64 | 5,366,608,064.64 | |
| Non-current assets: | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | 16,694,341,699.36 | 16,694,341,699.36 | |
| Other entity instrument investments | 26,070,000.00 | 26,070,000.00 | |
| Other non-current financial assets | |||
| Investment properties | |||
| Fixed assets | |||
| Construction in progress | |||
| Bearer biological assets | |||
| Oil and gas assets | |||
| Right-of-use assets | 2,966,591.85 | -2,966,591.85 | |
| Intangible assets | 3,395,200.95 | 3,395,200.95 | |
| Development expenditure | |||
| Goodwill | |||
| Long-term deferred expenses | 1,155,903.84 | 1,155,903.84 | |
| Deferred tax assets | |||
| Other non-current assets | |||
| Total non-current Assets | 16,724,962,804.15 | 16,727,929,396.00 | -2,966,591.85 |
| Total assets | 22,091,570,868.79 | 22,094,537,460.64 | -2,966,591.85 |
| Current liabilities: | |||
| Short-term borrowings | 600,733,518.18 | 600,733,518.18 | |
| Held-for-trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | |||
| Accounts payable | 3,899,667.53 | 3,899,667.53 | |
| Advance receipts |
| Contract liabilities | |||
| Employee benefits payable | 8,700,968.00 | 8,700,968.00 | |
| Taxes payable | 12,475,208.42 | 12,475,208.42 | |
| Other payables | 753,207,113.25 | 753,207,113.25 | |
| Including: Interest payable | |||
| Dividends payable | |||
| Held-for-sale liabilities | |||
| Non-current liabilities due within one year | 1,194,082.62 | -1,194,082.62 | |
| Other current liabilities | |||
| Total current liabilities | 1,379,016,475.38 | 1,380,210,558.00 | -1,194,082.62 |
| Non-current liabilities: | |||
| Long-term borrowings | |||
| Bonds payable | 1,199,466,109.60 | 1,199,466,109.60 | |
| Including: Preference shares | |||
| Perpetual bonds | |||
| Lease liabilities | 1,772,509.23 | -1,772,509.23 | |
| Long-term payables | 3,000,000.00 | 3,000,000.00 | |
| Long-term employee benefits payable | |||
| Estimated liabilities | 218,598.02 | 218,598.02 | |
| Deferred income | 350,000.00 | 350,000.00 | |
| Deferred income tax liabilities | 30,762,849.39 | 30,762,849.39 | |
| Other non-current liabilities | |||
| Total Non-current Liabilities | 1,233,797,557.01 | 1,235,570,066.24 | -1,772,509.23 |
| Total liabilities | 2,612,814,032.39 | 2,615,780,624.24 | -2,966,591.85 |
| Owner's equity: | |||
| Share capital | 3,163,062,146.00 | 3,163,062,146.00 | |
| Other equity instruments | 266,939,831.65 | 266,939,831.65 | |
| Including: Preference shares | |||
| Perpetual bonds | |||
| Capital reserve | 15,356,688,889.72 | 15,356,688,889.72 | |
| Less: Treasury shares | 8,920,597.83 | 8,920,597.83 | |
| Other comprehensive income | |||
| Special reserve | |||
| Surplus reserve | 198,481,554.14 | 198,481,554.14 | |
| Retained profits | 502,505,012.72 | 502,505,012.72 | |
| Total owners' equity | 19,478,756,836.40 | 19,478,756,836.40 | |
| Total liabilities and owners' equity | 22,091,570,868.79 | 22,094,537,460.64 | -2,966,591.85 |
Adjustment description
(4) Retrospectively restated datum of the previous period since the first adoption of new accountingstandards governing leases in 2021
□ Applicable √ Not Applicable
45. Others
VI. Taxes
1. Main taxes and tax rates
| Taxes | Tax basis | 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, the difference is the amount of the VAT due | 3%, 6%, 9%, 13%. Exported goods are subject to "exemption, credit, refund" policies, with refund rate of 10% or 13%. |
| Urban maintenance and construction tax | Turnover tax actually paid | 7%, 5% |
| Enterprise income tax | Taxable income | 15%, 20%, 25% |
| 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 rent revenue. | 1.2%, 12% |
| Education surcharge | Turnover tax actually paid | 3% |
| Local education surcharge | Turnover tax actually paid | 2%, 1% |
Different enterprise income tax rates applicable to different taxpayers:
| Taxpayers | Income tax rate |
| Infore Technology Company | 15% |
| Zhejiang Shangfeng Special Blower Industrial Co., Ltd. | 15% |
| Liaoning Donggang Magnetic Wire Co., Ltd. | 15% |
| Guangdong Wellkey Electric Material Co., Ltd. | 15% |
| Anhui Wellkey Electric Material Co., Ltd. | 15% |
| Zoomlion Environmental | 15% |
| Foshan Shunde Huaqingyuan Environmental Protection Co., Ltd. | 15% |
| Fengyun IoT Technology Co., Ltd. | 15% |
| Foshan Shunde Huabo Environmental Water Co., Ltd. | 20% |
| Dingnan Zoomlion Environmental Industry Co., Ltd. | 20% |
| Huichang Zoomlion Environmental Industry Co., Ltd. | 20% |
| Huachuan Zhongfeng Urban Environmental Service Co., Ltd. | 20% |
| Heze Yingsheng Environmental Sanitation Service Co., Ltd. | 20% |
| Shenzhen Yinglian Environmental Industry Co., Ltd. | 20% |
| Qixian Tongying Environmental Sanitation Service Co., Ltd. | 20% |
| Shengzhou Yinghe Environmental Sanitation Management Co., | 20% |
| Ltd. | |
| Shengzhou Zoomlion Environmental Engineering Co., Ltd. | 20% |
| Pu'an Yinghe Environmental Sanitation Management Co., Ltd. | 20% |
| Susong Yinghe Environmental Sanitation Management Co., Ltd. | 20% |
| Liaocheng Yinghe Environmental Sanitation Service Co., Ltd. | 20% |
| Changsha Zoomlion Environmental Industry Co., Ltd. Chengdu Branch | 20% |
| Shenzhen Tongying Environmental Industry Co., Ltd. | 20% |
| Shenzhen Zhongfu Environmental Technology Co., Ltd. | 20% |
| Jian' ou Yingsheng Environmental Sanitation Management Co., Ltd. | 20% |
| Yichang Yinglian Urban Environmental Service Co., Ltd. | 20% |
| Wuhan Infore Zhonghui Environmental Protection Technology Co., Ltd. | 20% |
| Wuhan Tongying Environmental Sanitation Management Co., Ltd. | 20% |
| Shenzhen Yingli Environmental Sanitation Service Co., Ltd. | 20% |
| Binchuan Zhongying Environmental Service Co., Ltd. | 20% |
| Heping Hesheng Environmental Sanitation Service Co., Ltd. | 20% |
| Suzhou Xiangcheng Yinglian Environmental Industry Co., Ltd. | 20% |
| Foshan Gaoming Yingde Smart City Management Co., Ltd. | 20% |
| Foshan Liansheng Environmental Sanitation Service Co., Ltd. | 20% |
| Fengxian Zhongying Urban Environmental Sanitation Management Co., Ltd. | 20% |
| Taxpayers other than the above-mentioned | 25% |
2. Tax preferential policies
1. Enterprise income tax
| No. | Company | Tax preferences |
| 1 | Zhejiang Shangfeng Special Blower Industrial Co., Ltd., Infore Technology Company, Guangdong Wellkey Electric Material Co., Ltd., Foshan Shunde Huaqingyuan Environmental Protection Co., Ltd. | According to the preferential income tax policy for high-tech enterprises, its 2019-2021 enterprise income tax rate is reduced to 15%. |
| 2 | Zoomlion Environmental, Fengyun IoT Technology Co., Ltd., Liaoning Donggong Magnet Wire Co., Ltd. | According to the preferential income tax policy for high-tech enterprises, its 2020-2022 enterprise income tax rate is reduced to 15%. |
| 3 | Anhui Wellkey Electric Material Co., Ltd. | According to the preferential income tax policy for high-tech enterprises, its 2021-2023 enterprise income tax rate is reduced to 15%. |
| 4 | Shimen Zoomlion Environmental Industry Co., Ltd., Huaian Chenjie Environmental Engineering Co., Ltd. | Engage in qualified environmental protection, energy-saving and water-saving projects, it enjoys enterprise income tax exemption in 2016-2018, and enjoys a 50% reduction in income for 2019-2021. |
| 5 | Funan Greenlander Environmental Energy Co., Ltd., Hanshou Zoomlion Environmental Industry Co., Ltd.*, Zhongfang County Zoomlion Environmental Industry Co., Ltd., Anhua Zoomlion Environmental Industry Co., Ltd., Cili County Zoomlion Huabao Environmental Industry Co., Ltd., Longhui County Zoomlion Environmental Industry Co., Ltd. | Engage in qualified environmental protection, energy-saving and water-saving projects, it enjoys enterprise income tax exemption in 2017-2019, and enjoys a 50% reduction in income for 2020-2022. |
| 6 | Xiantao Greenlander Environmental Power Generation Co., Ltd., Shouxian Greenlander New Energy Co., Ltd., Zhangjiajie Zoomlion Environmental Industry Co., Ltd., Huayuan Zoomlion Environmental Industry Co., Ltd., Fusui Zhongfeng Environmental Industry Co., Ltd., Shangsi Zoomlion Environmental Industry Co., Ltd., Ningyuan County | Engage in qualified environmental protection, energy-saving and water-saving projects, it enjoys enterprise income tax exemption in 2018-2020, and enjoys a 50% reduction in income for 2021-2023. |
| Zoomlion Environmental Industry Co., Ltd., Lianping Zoomlion Jiabao Environmental Industry Co., Ltd., Hongjiang District Zhongfeng Environmental Industry Co., Ltd., Meishan Pengshan Zhongfeng Environmental Industry Co., Ltd., Liling Yingfeng Zoomlion Environmental Industry Co., Ltd. | ||
| 7 | Changsha Zoomlion Changgao Environmental Industry Co., Ltd., Xiantao Yinghe Environmental Protection Co., Ltd., Kaili Zoomlion Environmental Industry Co., Ltd., Loudi Zoomlion Huabao Environmental Protection Technology Co., Ltd., Changsha Juzhou Zoomlion Environmental Industry Co., Ltd., Duchang County Zhongfeng Environmental Industry Co., Ltd., Anlong Ninghe Environmental Protection Technology Co., Ltd., Fushun Yingfeng Zoomlion Urban Environmental Sanitation Management Co., Ltd., Renshou Infore Zoomlion Urban Environmental Service Co., Ltd., Yichun Yinglian Urban Environmental Service Co., Ltd., Songyuan Zoomlion Xinyu Environmental Service Co., Ltd., Ganzhou Rongjiang New Area Zhongfeng Environmental Technology Co., Ltd., Quyang Yinglian Environmental Service Co., Ltd., Chengdu Yinglian Environmental Management Co., Ltd., Qixian Yinglian Urban Environmental Service Co., Ltd., Fujian Nan’an Yingfeng Urban Environmental Service Co., Ltd., Gucheng Yinglian Urban Environmental Service Co., Ltd., Huaibei Yinglian Urban Environmental Service Co., Ltd., Huaibei Zhongfeng Urban Environmental Service Co., Ltd., Jishan County Yinglian Urban Environmental Service Co., Ltd., Tangshan Caofeidian District Yinglian Environmental Service Co., Ltd., Anyi County Zhongfeng Environmental Industry Co., Ltd., Changsha Zhongfeng Environmental Protection Technology Co., Ltd., Shenzhen Yinglian Urban Environmental Service Co., Ltd. | Engage in qualified environmental protection, energy-saving and water-saving projects, it enjoys enterprise income tax exemption in 2019-2021, and enjoys a 50% reduction in income for 2022-2024. |
| 8 | Tongren Bijiang District Zhongfeng Environmental Industry Co., Ltd., Baise Yinglian Urban Environmental Service Co., Ltd., Chongqing Yinglian City Sanitation Service Co., Ltd., Donglan Yinglian Urban Environmental Service Co., Ltd., XiantaoYinglian Environmental Technology Co., Ltd., Anhua Yingsheng Environmental Sanitation Service Co., Ltd., Shenzhen Bao’an Yinglian City Service Co., Ltd., Shaoyang County Zhongfeng Environmental Industry Co., Ltd., Tangyin County Yinglian Environmental Service Co., Ltd., Xi’an Yinglian Urban Environmental Service Co., Ltd., Yangbi Zhongying Environmental Services Co., Ltd., Rongcheng County Yinglian Urban Environmental Service Co., Ltd., Infore Zoomlion City Environmental Service Co., Ltd., Zhaoyuan County Jincheng Environmental Sanitation Management Service Co., Ltd., Ji’an Zhongfeng Environmental Technology Co., Ltd., Anshan Yinglian Urban Environmental Sanitation Management Co., Ltd., Luannan County Yinglian Environmental Management Co., Ltd., Guangxi Guiping Yinghe Environmental Sanitation Management Co., Ltd., Shennongjia Forest Area Yinghe Environmental Sanitation Management Co., Ltd., Foshan Shunde District Yinghe Urban Environmental Service Co., Ltd., Foshan Shunde District Lianying Environmental Development Co., Ltd., Foshan Yingshun Urban Environmental Service Co., Ltd., Zaozhuang Yinglian Urban Environmental Service Co., Ltd., Zaozhuang Zhongying Urban Environmental Service Co., Ltd., Daqing Saertu District Zoomlion Environmental Development Co., Ltd., Jilin Zhongfeng Oasis Environmental Development Co., Ltd., Lai’an Zhongfeng Environmental Technology Co., Ltd., Lanling Zoomlion Environmental Service Co., Ltd., Yuncheng Zhongying City Environmental Service Co., Ltd., Suqian Lianying City Service Co., Ltd. | Engage in qualified environmental protection, energy-saving and water-saving projects, it enjoys enterprise income tax exemption in 2020-2022, and enjoys a 50% reduction in income for 2023-2025. |
| 9 | Poyang Greenlander Renewable Energy Co., Ltd., Biyang County Fenghe New Energy Power Co., Ltd., Jiayu Xingzhou Water Treatment Technology Co., Ltd. , Xianghe Yinglian Environmental Technology Co., Ltd., Renshou Yinglian Urban and Rural Environmental Sanitation Service Co., Ltd., Liucheng Yinglian Environmental Sanitation Management Co., Ltd., Chongqing Zhongying Environmental Sanitation Service Co., Ltd., Tongbai Tongying Environmental Sanitation Development Co., Ltd., Yiyang Yinglian Environmental Sanitation Management Co., Ltd., Chongyang Yinglian Environmental Protection Co., Ltd., Xiangtan Yinglian Environmental Industry Co., Ltd., Jinzhou | Engage in qualified environmental protection, energy-saving and water-saving projects, it enjoys enterprise income tax exemption in 2021-2023, and enjoys a 50% reduction in income for 2024-2026. |
| Yinglian Urban Environmental Sanitation Management Co., Ltd., Handan Yinglian Environmental Sanitation Management Co., Ltd., Wuhai Yinglian Environmental Engineering Co., Ltd., Zongyang Tongying Environmental Sanitation Management Co., Ltd., Ordos Environmental Sanitation Management Co., Ltd., Luanzhou Yinglian Environmental Service Co., Ltd., Wanning Yinglian Environmental Industry Co., Ltd., Guangde Yinghe Environmental Sanitation Development Co., Ltd., Weihui Yinglian Environmental Service Co., Ltd., Zhoushan Yinghe Environmental Sanitation Service Co., Ltd., Baisha Yinghe Environmental Sanitation Service Co., Ltd.,, Shouxian Liansheng Environmental Sanitation Management Co., Ltd., Foshan Shude Yinghong Smart Environmental Sanitation Management Co., Ltd., Foshan Shunde Yingsheng Urban Environment Management Co., Ltd., Zhongshan Yinglian Urban Environment Management Co., Ltd. | ||
| 10 | Xinning Lianying Urban Environmental Service Co., Ltd. , , Fenghuang Lianying Environmental Service Co., Ltd. , Huayuan Environmental Sanitation Management Co., Ltd., Nanchang Yingsheng Environment Protection Service Co., Ltd., Zhongwei Yinglian Urban Environmental Service Co., Ltd., Huaibei Yinghe Urban Environmental Service Co., Ltd., Guangrao Yinghe Urban Service Co., Ltd., Foshan Gaoming Yingde Smart Urban Administration Co., Ltd., Changde Zelian Environmental Service Co., Ltd., Yongshun Zhongfeng Jingtou Environmental Technology Co., Ltd., Chongqing Tongliang Fenglan Environmental Technology Co., Ltd., Hnashou Jinglan Environment Protection Co., Ltd., Lu'an Zhongfeng Urban Environmental Service Co., Ltd. | Engaged in qualified environmental protection, energy-saving and water-saving projects, it enjoys three-year-exemption and three-year-half-reduction policy for enterprise income tax since the year in which it generates its first income. |
| 11 | Foshan Shunde Huabo Environmental Water Co., Ltd., Dingnan Zoomlion Environmental Industry Co., Ltd., Huichang Zoomlion Environmental Industry Co., Ltd., Huachuan Zhongfeng Urban Environmental Service Co., Ltd., Heze Yingsheng Environmental Sanitation Service Co., Ltd., Shenzhen Yinglian Environmental Industry Co., Ltd., Qixian Tongying Environmental Sanitation Service Co., Ltd., Shengzhou Yinghe Environmental Sanitation Management Co., Ltd., Shengzhou Zoomlion Environmental Engineering Co., Ltd., Puan Yinghe Environmental Sanitation Management Co., Ltd., Susong Yinghe Environmental Sanitation Management Co., Ltd., , Liaocheng Yinghe Environmental Sanitation Service Co., Ltd., Changsha Zoomlion Environmental Industry Co., Ltd. Chengdu Branch, Shenzhen Tongying Environmental Industry Co., Ltd., Shenzhen Zhongfu Environmental Technology Co., Ltd., Jianou Yingsheng Environmental Sanitation Management Co., Ltd., Yichang Lianying Urban Environmental Service Co., Ltd., Wuhan Yingfeng Zhonghui Environmental Technology Co., Ltd., Wuhan Tongying Environmental Sanitation Management Co., Ltd., Shenzhen Yingli Environmental Sanitation Service Co., Ltd., Binchuan Zhongying Environmental Service Co., Ltd. , Heping County Hesheng Environmental Sanitation Service Co., Ltd., Suzhou Xiangcheng Yinglian Environmental Industry Co., Ltd., Foshan Liansheng Environmental Sanitation Service Co., Ltd., Fengxian Zhongying Urban Environmental Sanitation Management Co., Ltd. | According to Announcement of the State Taxation Administration on Implementing the Preferential Income Tax Policies for Micro and Small Enterprises and Individual Industrial and Commercial Households (2021) No.12, from January 1, 2021 to December 31, 2022, for small enterprises with low profits, the income tax is calculated by applying income tax rate of 20% to the adjusted taxable income, i.e. 12.5% of the portion of taxable income not exceeding RMB 1,000,000 plus 50% of the portion of taxable income exceeding RMB 1,000,000 but not exceeding RMB 3,000,000. |
| 12 | Foshan Shunde Huaqingyuan Environmental Protection Co., Ltd., Foshan Shunde Huaying Environmental Water Co., Ltd., Foshan Shunde Yuanrun Water Environmental Protection Co., Ltd., Foshan Shunde Huabo Environmental Protection Co., Ltd. | For revenue from producing the products that are not restricted or prohibited by the state and satisfy the national and industrial standards using the resources specified in the Catalogue of Preferential Income Tax for Enterprises Adopting Comprehensive Utilization of Resources (2008) as the major raw materials, only 90% of such revenue is included in taxable income when calculating the enterprise income tax for 2021. |
| 13 | Ruili Yinglian Environmental Industry Co., Ltd. | According to the Implementation Plan for the Construction of Key Development and Opening-Up Pilot Zone in Ruili, Yunnan (Guo Ban Han [2012] No.103), the start-up business in the pilot zone enjoys the five-year-exemption and five-year-half-reduction policy for the portion of local tax (40%) of the enterprise income tax, specifically, the local tax exemption period is |
2. VAT
(1) According to the Notice of MOF and STA on VAT Preferential Policies for Promoting Employment of Persons withDisabilities (Cai Shui [2016] No. 52), taxpayers who meet the conditions for enjoying preferential tax policies shall be entitled toenjoy VAT refund upon collection within limit according to the number of persons with disabilities employed by taxpayer. For Jan. -Feb. 2021, the subsidiary Liaoning Donggang Magnet Wire Co., Ltd. (hereinafter referred to as "Donggang Magnet Wire Company")enjoys the preferential policy of VAT refund upon collection at the amount of RMB 59,200 per year for each disabled personemployed, and the refunded VAT upon collection totaled RMB 2,048,320.00.
(2) According to the Notice of MOF and STA on VAT Policies for Software Products (Cai Shui [2011] No. 100), general VATtaxpayers who sell self-developed and produced software products are subject to VAT refund upon collection for the amountexceeding 3% of their actual VAT burdens. In 2021, the subsidiaries Zoomlion Environmental and Infore Technology Company areentitled to enjoy the VAT refund upon collection policy for its development and sale of their self-developed software products, andthe VAT refunds received in the current period are RMB 13,995,039.60 and RMB 171,688.08 respectively.
(3) According to the Notice of MoF and STA on Policies for Weighted VAT Deductions for Consumer Services (2019) No.87,the qualified taxpayers may apply to competent tax authority for weighted deduction of input VAT. In 2021, the subsidiariesZoomlion Environmental and Foshan Shunde District Yuanyi Environmental Water Co., Ltd. are engaged in consumer servicerelated business and enjoy the weighted deduction of input VAT of RMB 2,104,520.73 and RMB 81,887.02 respectively.
(4) According to Article 5 of the Notice of MOF and STA on Printing and Distributing the “Catalogue of Preferential VAT forProducts and Services Adopting Comprehensive Utilization of Resources" (Cai Shui [2015] No. 78), since July 1, 2015, sewagetreatment services are entitled to enjoy 70% VAT refund upon collection. In 2021, the subsidiaries Foshan Shunde HuaqingyuanEnvironmental Protection Co., Ltd., Foshan Shunde Huaying Environmental Water Co., Ltd., Foshan Shunde Yuanrun WaterEnvironmental Protection Co., Ltd., and Foshan Shunde Huabo Environmental Protection Co., Ltd. received VAT refund uponcollection of RMB 2,412,123.35, RMB 1,746,316.53, RMB 1,707,473.76 and RMB 114,351.29 respectively.
(5) Pursuant to the Measures for the Implementation of the Pilot Implementation of VAT Reform for the Transportation Industryand Certain Modern Service Industries (Cai Shui [2011] No. 111), revenue from technology transfer, technology development, andrelated technical consulting, and technical service businesses is exempt from VAT. In 2021, the subsidiary Shenzhen DingzhuEnvironmental Technology Co., Ltd. meets the condition and is exempt from VAT.
3. Urban land use tax
(1) According to the Notice of MOF and STA on the Urban Land Use Tax and Other Policies for Entities with Employment ofPersons with Disabilities (Cai Shui [2010] No. 121), the Donggang Magnet Wire Company, as a social welfare company, meets therequirement of temporary exemption of land use tax. After confirmation with Beijingzi Local Taxation Bureau of Donggang LocalTaxation Bureau, it is exempt from land use tax in Jan. - Feb. 2021.
(2) According to Opinions on Deepening the Reform of Optimal Allocation of Resource Elements for ManufacturingEnterprises (Zhe Zheng Ban Fa [2019] No.62) of General Office of the People's Government of Zhejiang Province, the subsidiaryZhejiang Shangfeng Special Blower Industrial Co., Ltd. satisfy the conditions for preferential tax and enjoys 100% exemption of landuse tax in 2021.
3. Others
VII. Notes to items in the consolidated financial statements
1. Cash and bank balances
Unit: RMB
| Item | Closing balance | Opening balance |
| Cash on hand | 89,806.02 | 147,826.76 |
| Bank deposits | 4,190,857,415.70 | 5,334,320,758.07 |
| Other cash and bank balances | 392,298,149.30 | 569,659,386.02 |
| Total | 4,583,245,371.02 | 5,904,127,970.85 |
| Including: Total amount deposited overseas | 4,464,479.35 | 4,585,104.79 |
Other statements
1) Closing balance of bank deposits included certificate of deposits in amount of RMB 67,743,888.90, funds frozen due tolawsuits in amount of RMB 1,109,678.44, and engineering escrow accounts that are not available for separate use in amount of RMB3,632,809.64, which were restricted for use.
2) Closing balance of other cash and bank balances included deposit for notes amounting to RMB 304,539,128.51, deposit forletters of guarantee amounting to RMB 86,544,774.72, deposit for migrant workers' wages amounting to RMB 925,205.09, and ETCdeposit amounting to RMB 3,000.00, which were restricted for use.
2. Held-for-trading financial assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Financial assets at fair value through profit or loss | 128,017,735.11 | |
| Including: | ||
| Equity instrument investments | 127,192,985.11 | |
| Derivative financial assets | 824,750.00 | |
| Including: | ||
| Total | 128,017,735.11 |
3. Derivative financial assets
□ Applicable √ Not Applicable
4. Notes receivable
(1) Notes receivable presented by category
Unit: RMB
| Item | Closing balance | Opening balance |
| Bank acceptance | 6,412,054.79 |
| Commercial acceptance | 47,990,598.46 | 64,663,544.98 |
| Total | 54,402,653.25 | 64,663,544.98 |
Unit: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Carrying amount | Book balance | Bad debt provision | Carrying amount | |||||
| Amount | Ratio | Amount | Provision proportion | Amount | Ratio | Amount | Provision proportion | |||
| Including: | ||||||||||
| Notes receivable for which bad debt provision is assessed collectively | 57,247,027.23 | 100.00% | 2,844,373.98 | 4.97% | 54,402,653.25 | 67,804,653.12 | 100.00% | 3,141,108.14 | 4.63% | 64,663,544.98 |
| Including: | ||||||||||
| Bank acceptance | 6,412,054.79 | 11.20% | 0.00 | 0.00% | 6,412,054.79 | |||||
| Commercial acceptance | 50,834,972.44 | 88.80% | 2,844,373.98 | 5.60% | 47,990,598.46 | 67,804,653.12 | 100.00% | 3,141,108.14 | 4.63% | 64,663,544.98 |
| Total | 57,247,027.23 | 100.00% | 2,844,373.98 | 4.97% | 54,402,653.25 | 67,804,653.12 | 100.00% | 3,141,108.14 | 4.63% | 64,663,544.98 |
Dad debt provision assessed collectively:
Unit: RMB
| Name | Closing balance | ||
| Book balance | Bad debt provision | Provision proportion | |
| Bank acceptance portfolio | 6,412,054.79 | ||
| Commercial acceptance portfolio | 50,834,972.44 | 2,844,373.98 | 5.60% |
| Total | 57,247,027.23 | 2,844,373.98 | -- |
Description of basis for determining the portfolio:
If the bad debt provision for notes receivable is assessed using general model of expected credit loss, please disclose the bad debtprovision by reference to the disclosure of bad debt provision for other receivables:
□ Applicable √ Not Applicable
(2) Provision, recovery or reversal of bad debt for the period
Dad debt provision for the period:
Unit: RMB
| Category | Opening balance | Changes in the period | Closing balance | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Commercial acceptance portfolio | 3,141,108.14 | -296,734.16 | 2,844,373.98 | |||
| Total | 3,141,108.14 | -296,734.16 | 2,844,373.98 | |||
Significant recovery or reversal of bad debt provision for the period:
□ Applicable √ Not Applicable
(3) The Company had no pledged notes receivable at the end of the period
(4) Notes receivable endorsed or discounted by the Company at the end of the period and yet undue at thebalance sheet date
Unit: RMB
| Item | Amount derecognized at the end of the period | Amount not derecognized at the end of the period |
| Bank acceptance | 5,050,609.92 | |
| Commercial acceptance | 2,050,000.00 | 14,668,452.95 |
| Total | 2,050,000.00 | 19,719,062.87 |
The Company discounted part of the commercial acceptance to bank in the manner of buyout and no longer assumes the risk ofsuch commercial acceptance, therefore the Company derecognized aforesaid notes.
(5) Notes receivable transferred to accounts receivable due to the drawer's failure to perform its obligations
Unit: RMB
| Item | Amount transferred to accounts receivable at the end of the period |
| Commercial acceptance | 3,013,368.24 |
| Total | 3,013,368.24 |
(6) There is no write-off of notes receivable in the period
5. Accounts receivable
(1) Accounts receivable disclosed by category
Unit: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Carrying amount | Book balance | Bad debt provision | Carrying amount | |||||
| Amount | Ratio | Amount | Provision proportion | Amount | Ratio | Amount | Provision proportion | |||
| Accounts receivable for which bad debt provision is assessed individually | 5,544,902.60 | 0.10% | 5,544,902.60 | 100.00% | 13,881,143.78 | 0.23% | 13,881,143.78 | 100.00% | ||
| Of which: | ||||||||||
| Accounts receivable for which bad debt provision is assessed collectively | 5,418,868,812.39 | 99.90% | 472,163,848.68 | 8.71% | 4,946,704,963.71 | 5,965,218,384.23 | 99.77% | 400,383,520.19 | 6.71% | 5,564,834,864.04 |
| Of which: | ||||||||||
| Accounts receivable for which bad debt provision is assessed collectively on the basis of account aging | 4,927,634,598.38 | 90.93% | 465,706,843.43 | 9.45% | 4,461,927,754.95 | 5,761,903,779.56 | 96.37% | 397,132,501.12 | 6.89% | 5,364,771,278.44 |
| Accounts receivable for which bad debt provision is assessed based on five-level classification of credit risks | 419,134,910.78 | 7.73% | 6,457,005.25 | 1.54% | 412,677,905.53 | 203,314,604.67 | 3.40% | 3,251,019.07 | 1.60% | 200,063,585.60 |
| Accounts receivable for which bad debt provision is assessed collectively - government subsidy for new energy vehicles | 72,099,303.23 | 1.33% | 0.00% | 72,099,303.23 | ||||||
| Total | 5,424,413,714.99 | 100.00% | 477,708,751.28 | 8.81% | 4,946,704,963.71 | 5,979,099,528.01 | 100.00% | 414,264,663.97 | 6.93% | 5,564,834,864.04 |
Dad debt provision assessed individually:
Unit: RMB
| Name | Closing balance | |||
| Book balance | Bad debt provision | Provision proportion | Reasons for provision | |
| Jiande Xinyue Real Estate Co., Ltd. | 377,496.00 | 377,496.00 | 100.00% | Expected to be irrecoverable |
| Xuzhou Weitian Chemical Co., Ltd. | 400,000.00 | 400,000.00 | 100.00% | Expected to be irrecoverable |
| Ma'anshan Ruiheng Material Trading Co., Ltd. | 2,137,100.00 | 2,137,100.00 | 100.00% | Expected to be irrecoverable |
| Fuqing Dinghuan Cleaning Co., Ltd. | 329,600.00 | 329,600.00 | 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 |
| Nanning Mingwan Environmental Protection Engineering Co., Ltd. | 525,000.00 | 525,000.00 | 100.00% | Expected to be irrecoverable |
| Others | 445,706.60 | 445,706.60 | 100.00% | Expected to be irrecoverable |
| Total | 5,544,902.60 | 5,544,902.60 | -- | -- |
Bad debt provision assessed collectively: Ventilation equipment manufacturing industry and environmental integrated industry underaging analysis method
Unit: RMB
| Name | Closing balance | ||
| Book balance | Bad debt provision | Provision proportion | |
| Within 1 year | 3,640,492,179.71 | 182,024,609.08 | 5.00% |
| 1-2 years | 835,288,035.93 | 83,528,803.59 | 10.00% |
| 2-3 years | 262,860,548.89 | 78,858,164.66 | 30.00% |
| 3-5 years | 135,397,135.35 | 67,698,567.60 | 50.00% |
| Over 5 years | 53,596,698.50 | 53,596,698.50 | 100.00% |
| Total | 4,927,634,598.38 | 465,706,843.43 | -- |
Bad debt provision assessed collectively: Commercial factoring portfolio grouped by five-level classification
Unit: RMB
| Name | Closing balance |
| Book balance | Bad debt provision | Provision proportion | |
| Normal | 430,467,016.73 | 6,457,005.25 | 1.50% |
| Total | 430,467,016.73 | 6,457,005.25 | -- |
Bad debt provision assessed collectively: government subsidy for new energy vehicles
Unit: RMB
| Name | Closing balance | ||
| Book balance | Bad debt provision | Provision proportion | |
| Accounts receivable – Portfolio grouped with government subsidy receivable for new energy vehicles | 72,099,303.23 | 0.00 | |
| Total | 72,099,303.23 | 0.00 | -- |
If the bad debt provision for notes receivable is assessed using general model of expected credit loss, please disclose the bad debtprovision by reference to the disclosure of bad debt provision for other receivables:
□ Applicable √ Not Applicable
Disclosure by account aging
Unit: RMB
| Account aging | Book balance |
| Within 1 year (inclusive) | 4,131,726,393.71 |
| 1-2 years | 836,618,035.93 |
| 2-3 years | 263,420,548.90 |
| Over 3 years | 192,648,736.45 |
| 3-5 years | 138,149,475.35 |
| Over 5 years | 54,499,261.10 |
| Total | 5,424,413,714.99 |
(2) Provision, recovery or reversal of bad debt for the period
Dad debt provision for the period:
Unit: RMB
| Category | Opening balance | Changes in the period | Closing balance | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Dad debt provision assessed individually | 13,881,143.78 | 1,968,398.82 | 10,304,640.00 | 5,544,902.60 | ||
| Dad debt provision assessed collectively | 400,383,520.19 | 78,712,815.20 | 6,665,916.53 | 266,570.18 | 472,163,848.68 | |
| Total | 414,264,663.97 | 80,681,214.02 | 16,970,556.53 | 266,570.18 | 477,708,751.28 | |
Other decrease of RMB 266,570.18 represents the transfer-out due to disposal of Guangdong Yingling Testing TechnologyService Co., Ltd., Hunan Ningxiang Renhe Integrated Waste Treatment Co., Ltd. and Donggang Magnet Wire Company.
(3) Accounts receivable written off in the period
Unit: RMB
| Item | Write-off |
| Trade receivable | 16,970,556.53 |
Significant accounts receivable written off in the period:
Unit: RMB
| Debtors | Nature of accounts receivable | Write-off | Reasons for write-off | Write-off procedures performed | Whether arising from related party transactions |
| Shenzhen Weimin Ecological Technology Co., Ltd. | Goods payment | 10,304,640.00 | Expected to be irrecoverable | Management approval | No |
| Shenzhen Jieya Environmental Protection Industry Co., Ltd. | Goods payment | 1,525,200.00 | Expected to be irrecoverable | Management approval | No |
| Urban Administration and Law Enforcement Bureau of Anqing County | Goods payment | 600,000.00 | Expected to be irrecoverable | Management approval | No |
| Ordos Municipal Kangbashi District Utility Service Center | Goods payment | 500,000.00 | Expected to be irrecoverable | Management approval | No |
| Shenzhen Dongheng Environmental Protection Co., Ltd. | Goods payment | 450,000.00 | Expected to be irrecoverable | Management approval | No |
| Shenghe Urban Environmental Technology Co., Ltd. | Goods payment | 447,486.02 | Expected to be irrecoverable | Management approval | No |
| Tianjin City Appearance and Sanitation Machinery Equipment Service Center | Goods payment | 422,300.00 | Expected to be irrecoverable | Management approval | No |
| Xi'an Municipal Beilin District Urban Administration and Law Enforcement Bureau | Goods payment | 295,500.00 | Expected to be irrecoverable | Management approval | No |
| Tianjin Municipal Beichen District City Appearance and Gardens Management Committee | Goods payment | 266,980.00 | Expected to be irrecoverable | Management approval | No |
| Xiamen Xiang'an Municipal Group Environmental Engineering Co., Ltd | Goods payment | 261,538.48 | Expected to be irrecoverable | Management approval | No |
| Total | -- | 15,073,644.50 | -- | -- | -- |
(4) Details of the top 5 debtors with the largest balances of accounts receivable
Unit: RMB
| Debtors | Closing balance of accounts receivable | Proportion to the total balance of accounts receivable (%) | Closing balance of bad debt provision |
| Customer A | 74,081,870.15 | 1.37% | 3,704,093.51 |
| Customer B | 73,000,000.00 | 1.35% | 1,136,107.50 |
| Customer C | 72,099,303.23 | 1.33% | 0.00 |
| Customer D | 71,096,232.59 | 1.31% | 5,439,787.47 |
| Customer E | 68,183,982.98 | 1.26% | 5,048,890.25 |
| Total | 358,461,388.95 | 6.62% |
(5) Assets and liabilities arising from continuing involvement in the transferred accounts receivableNA
(6) Accounts receivable derecognized due to transfer of financial assets
1) Zhejiang Shangfeng Special Blower Industrial Co., Ltd.
| Item | Amount derecognized | Gains or losses on derecognition | Way of transfer of financial assets |
| Sales of ventilation equipment | 4,711,704.53 | -58,099.17 | Factoring accounts receivable without recourse |
| Sub-total | 4,711,704.53 | -58,099.17 |
2) Zoomlion Environmental
| Item | Amount derecognized | Gains or losses on derecognition | Way of transfer of financial assets |
| Sales of sanitation vehicles | 571,064,080.00 | -21,967,180.07 | Factoring accounts receivable without recourse |
| Sub-total | 571,064,080.00 | -21,967,180.07 |
6. Receivables financing
Unit: RMB
| Item | Closing balance | Opening balance |
| Bank acceptance | 296,379,694.57 | 520,429,874.86 |
| Total | 296,379,694.57 | 520,429,874.86 |
Changes in receivables financing in the current period and fair value changes
□ Applicable √ Not Applicable
If the impairment provision for receivables financing is assessed using general model of expected credit loss, please disclose theimpairment provision by reference to the disclosure of other receivables:
□ Applicable √ Not Applicable
(1) There is no write-off of receivables financing in the current period
(2) Notes receivable pledged by the Company at the end of the period
| Item | Amount pledged at the end of the period |
| Bank acceptance | 143,994,957.80 |
| Sub-total | 143,994,957.80 |
(3) Notes receivable endorsed or discounted by the Company at the end of the period and yet undue at the balance sheet date
| Item | Amount derecognized at the end of the period |
| Bank acceptance | 176,645,163.93 |
Sub-total
| Sub-total | 176,645,163.93 |
As the acceptor of bank acceptance is commercial bank, which has higher credit, there is minor possibility that the bankacceptance will not be paid. Therefore, the Company derecognized the bank acceptance that has been endorsed or discounted.However, if such bank acceptance is accepted and paid by the bank upon maturity, the Company still bears joint liability to the holderof the bank acceptance in accordance with the Bill Law.
7. Prepayments
(1) Presentation of prepayments by aging
Unit: RMB
| Account aging | Closing balance | Opening balance | ||
| Amount | Ratio | Amount | Ratio | |
| Within 1 year | 124,131,454.89 | 96.52% | 134,718,034.94 | 97.79% |
| 1-2 years | 3,969,968.37 | 3.09% | 1,328,399.29 | 0.96% |
| 2-3 years | 67,855.05 | 0.05% | 1,621,900.20 | 1.18% |
| Over 3 years | 435,104.35 | 0.34% | 100,864.10 | 0.07% |
| Total | 128,604,382.66 | -- | 137,769,198.53 | -- |
(2) Details of the top 5 debtors with the largest balances of prepayments
| Debtors | Book balance | Proportion to the total balance of prepayments (%) |
| Customer A | 21,800,000.00 | 16.95 |
| Customer B | 7,722,960.00 | 6.01 |
Customer C
| Customer C | 3,932,330.35 | 3.06 |
| Customer D | 3,217,699.03 | 2.50 |
| Customer E | 3,000,000.00 | 2.33 |
| Sub-total | 39,672,989.38 | 30.85 |
8. Other receivables
Unit: RMB
| Item | Closing balance | Opening balance |
| Other receivables | 509,164,126.27 | 257,670,998.28 |
| Total | 509,164,126.27 | 257,670,998.28 |
(1) Other receivables
1) Other receivables categorized by nature
Unit: RMB
| Nature of the account | Closing balance | Opening balance |
| Security deposits | 129,986,238.82 | 155,500,083.80 |
| Temporary advance payment receivable and petty cash | 108,556,330.04 | 79,760,368.16 |
| Loans receivable | 13,046,550.18 | 48,442,016.60 |
| Equity transfer receivable [note] | 115,100,000.00 | |
| Debt transfer receivable | 9,000,000.00 | |
| Performance compensation | 163,460,620.00 | |
| Others | 2,220,686.46 | 3,846,217.89 |
| Total | 541,370,425.50 | 287,548,686.45 |
[Note] The equity transfer receivable represents the receivable arising from disposal of Foshan Yingtong in the current periodand has been received in full amount on January 26, 2022.Bad debt provision
Unit: RMB
| Bad debt provision | Stage I | Stage II | Stage III | Total |
| 12-month expected credit loss (ECL) | Lifetime ECL (not credit-impaired) | Lifetime ECL (credit-impaired) | ||
| Balance at January 1, 2021 | 9,190,094.83 | 4,437,355.76 | 16,250,237.58 | 29,877,688.17 |
| Balance at January 1, 2021 in the current period | —— | —— | —— | —— |
| --Transfer to stage II | -1,885,311.19 | 1,885,311.19 | 0.00 | 0.00 |
| --Transfer to stage III | 0.00 | -2,323,153.72 | 2,323,153.72 | 0.00 |
| --Reversed to stage II | 0.00 | 0.00 | 0.00 | 0.00 |
| --Reversed to stage I | 0.00 | 0.00 | 0.00 | 0.00 |
| Provision in the current period | 3,641,359.99 | 65,064.37 | 11,887,101.40 | 15,593,525.76 |
| Reversal in the period | 0.00 | 0.00 | 0.00 | 0.00 |
| Write-off in the period | 473,500.75 | 473,500.75 | ||
| Other changes | -12,791,413.95 | -12,791,413.95 | ||
| Balance on December 31, 2021 | 10,946,143.63 | 4,064,577.60 | 17,195,578.00 | 32,206,299.23 |
Changes in book balance with significant changes in loss allowance in the current period
□ Applicable √ Not Applicable
Disclosure by account aging
Unit: RMB
| Account aging | Book balance |
| Within 1 year (inclusive) | 462,044,798.94 |
| 1-2 years | 40,645,776.00 |
| 2-3 years | 23,641,994.01 |
| Over 3 years | 15,037,856.55 |
| 3-5 years | 9,861,753.55 |
| Over 5 years | 5,176,103.00 |
| Total | 541,370,425.50 |
3) Provision, recovery or reversal of bad debt in the current period
Dad debt provision for the period:
Unit: RMB
| Category | Opening balance | Changes in the period | Closing balance | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Dad debt provision assessed collectively | 29,877,688.17 | 15,593,525.76 | 473,500.75 | 12,791,413.95 | 32,206,299.23 | |
| Total | 29,877,688.17 | 15,593,525.76 | 473,500.75 | 12,791,413.95 | 32,206,299.23 | |
[Note] Other decrease of RMB 263,601.84 represents the transfer-out due to disposal of Guangdong Yingling TestingTechnology Service Co., Ltd. and Foshan Yingtong Electrical Materials Co., Ltd.; other decrease of RMB 12,164,432.14 representsthe transfer-out due to the transfer of the Company's creditor's rights against Guangdong Liangke Environmental Engineering Co.,Ltd.; other decrease of RMB 363,379.97 represents the transfer-out due to the sales of the creditor’s rights of ZoomlionEnvironmental against Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd.
4) Other receivables written off in current period
Unit: RMB
| Item | Write-off |
| Dad debt provision assessed collectively | 473,500.75 |
5) Details of the top 5 debtors with the largest balances of other receivables
Unit: RMB
| Debtors | Nature of other receivables | Closing balance | Account aging | Proportion to the total balance of other receivables (%) | Closing balance of bad debt provision |
| Customer A | Performance compensation and temporary advance payment receivable | 163,792,911.19 | Within 1 year, 2-5 years | 30.26% | 106,389.76 |
| Customer B | Equity transfer receivable | 115,100,000.00 | Within 1 year | 21.26% | 2,302,000.00 |
| Customer C | Security deposits | 12,245,069.06 | 0-2 years, over 5 years | 2.26% | 1,562,903.45 |
| Customer D | Debt transfer receivable | 9,000,000.00 | Within 1 year | 1.66% | 0.00 |
| Customer E | Security deposits | 7,000,000.00 | 1-2 years | 1.29% | 700,000.00 |
| Total | -- | 307,137,980.25 | -- | 4,671,293.21 |
6) Other receivables derecognized due to transfer of financial assets
NA
7) Assets and liabilities arising from continuing involvement in the transferred other receivablesNA
9. Inventory
Is the Company required to comply with the disclosure requirements for real estate industryNo
(1) Categories of inventories
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for decline in value of inventories or impairment of cost to fulfill a contract | Carrying amount | Book balance | Provision for decline in value of inventories or impairment of cost to fulfill a contract | Carrying amount | |
| Raw materials | 147,473,632.02 | 10,760,156.11 | 136,713,475.91 | 171,456,835.82 | 11,347,353.70 | 160,109,482.12 |
| Work in process | 181,227,151.81 | 2,023,841.04 | 179,203,310.77 | 243,622,797.51 | 12,052,957.06 | 231,569,840.45 |
| Goods on hand | 809,403,199.63 | 18,453,429.33 | 790,949,770.30 | 920,639,142.87 | 23,583,555.13 | 897,055,587.74 |
| Consigned processing materials | 2,741,520.48 | 0.00 | 2,741,520.48 | 4,463,263.89 | 0.00 | 4,463,263.89 |
| Packaging materials | 0.00 | 0.00 | 0.00 | 600,215.41 | 0.00 | 600,215.41 |
| Low-value consumables | 0.00 | 0.00 | 0.00 | 33,051.67 | 0.00 | 33,051.67 |
| Cost to fulfill a contract | 14,541,641.55 | 0.00 | 14,541,641.55 | 11,345,966.57 | 0.00 | 11,345,966.57 |
| Total | 1,155,387,145.49 | 31,237,426.48 | 1,124,149,719.01 | 1,352,161,273.74 | 46,983,865.89 | 1,305,177,407.85 |
(2) Provision for decline in value of inventories or impairment of cost to fulfill a contract
Unit: RMB
| Item | Opening balance | Increase in the period | Decrease in the period | Closing balance | ||
| Provision | Others | Reversal or write-off | Others | |||
| Raw materials | 11,347,353.70 | 6,939,879.28 | 0.00 | 6,971,978.61 | 555,098.26 | 10,760,156.11 |
| Work in process | 12,052,957.06 | 1,101,074.11 | 0.00 | 11,130,190.13 | 0.00 | 2,023,841.04 |
| Goods on hand | 23,583,555.13 | 13,558,144.28 | 0.00 | 15,964,295.04 | 2,723,975.04 | 18,453,429.33 |
| Total | 46,983,865.89 | 21,599,097.67 | 0.00 | 34,066,463.78 | 3,279,073.30 | 31,237,426.48 |
(1) Other decrease of RMB 3,279,073.30 represents the transfer-out due to disposal of Foshan Yingtong Electrical Materials Co.,Ltd.
(2) Basis for determining the net realizable value, reasons for reversal or write-off of provision for decline in value ofinventories
| Item | Basis for determining the net realizable value | Reasons for write-off of provision for decline in value of inventories |
| Raw materials, work in process | The net realizable value is the estimated selling price of relevant finished goods less the estimated cost of completion, the estimated cost necessary to make the sale and relevant taxes. | The inventories for which the provision for decline in value has been made at the beginning of the period have been consumed or sold |
| Goods on hand | The net realizable value is the estimated selling price of relevant finished goods less the estimated cost necessary to make the sale and relevant taxes. | The inventories for which the provision for decline in value has been made at the beginning of the period have been consumed or sold |
(3) Description of capitalized borrowing cost included in closing balance of inventories
□ Applicable √ Not Applicable
(4) Description of amortization of cost to fulfill a contract in the current period
| Item | Opening balance | Increase in current period | Carried forward | Closing balance |
| Urban Garbage Classification EPC Project of Changgao Project | 2,726,893.11 | 2,726,893.11 | ||
| Nanliu Bobai Project | 2,445,242.48 | 2,445,242.48 | ||
| Foshan Shunde Project | 1,767,838.14 | 1,767,838.14 | ||
| Yunli Software Project | 1,319,009.81 | 1,319,009.81 | ||
| Urban Classification Construction Project of Baoan Project | 1,310,653.98 | 1,310,653.98 | ||
| Urban and Rural Domestic Waste Sanitation Integration Project in Nan’an City | 682,811.36 | 682,811.36 | ||
| Shenzhen Futian Kitchen Waste Delivery Project | 7,541,198.74 | 7,541,198.74 | ||
| Liling MVR Concentrated Liquor Project | 2,382,149.87 | 2,382,149.87 | ||
| Qingyuan Leachate Full Capacity Emergency Operation Project | 1,242,114.60 | 1,242,114.60 |
Hanshou Rural Sewage Delivery ProjectPhase II
| Hanshou Rural Sewage Delivery Project Phase II | 907,876.13 | 907,876.13 | ||
| Xi' an Chanba Transfer Station Leachate Delivery Project | 769,578.05 | 769,578.05 | ||
| Fuzhou Jin'an District Leachate Delivery Project | 449,012.13 | 449,012.13 |
Others
| Others | 1,093,517.69 | 36,208,148.21 | 36,051,953.87 | 1,249,712.03 |
| Sub-total | 11,345,966.57 | 49,500,077.73 | 46,304,402.75 | 14,541,641.55 |
10. Contract assets
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Carrying amount | Book balance | Impairment provision | Carrying amount | |
| Quality guarantee deposit receivable | 154,503,581.34 | 14,135,778.81 | 140,367,802.53 | 179,821,458.38 | 8,980,802.76 | 170,840,655.62 |
| Total | 154,503,581.34 | 14,135,778.81 | 140,367,802.53 | 179,821,458.38 | 8,980,802.76 | 170,840,655.62 |
If the bad debt provision for contract assets is assessed using general model of expected credit loss, please disclose the bad debt
provision by reference to the disclosure of other receivables:
□ Applicable √ Not Applicable
Impairment provision for contract assets for the current period
Unit: RMB
| Item | Provision in the current period | Reversal in the period | Write-off/ elimination in the period | Reason |
| On collective basis | 5,154,976.05 | |||
| Total | 5,154,976.05 | -- |
11. Held-for-sale assets
□ Applicable √ Not Applicable
12. Non-current assets due within one year
Unit: RMB
| Item | Closing balance | Opening balance |
| Quality guarantee deposit receivable | 2,542,221.63 | |
| Sale of goods in installments | 509,828,906.59 | 547,491,985.64 |
| Guaranteed collection amount for BOT projects | 529,174.84 | |
| Payments for finance lease | 164,002,734.90 | 97,160,974.39 |
| Equity transfer payments received in installments | 337,148,608.96 | |
| Financial factoring of accounts receivable | 66,086,225.04 | 167,133,864.07 |
| Long-term loans with payment of interest by installments and principal at the maturity date | 5,990,500.00 | |
| Total | 739,917,866.53 | 1,157,997,329.53 |
13. Other current assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Cost to obtain a contract | 14,900,623.62 | |
| Input tax to be deducted and tax credits | 477,804,757.55 | 524,859,055.94 |
| Total | 492,705,381.17 | 524,859,055.94 |
14. Debt investments
□ Applicable √ Not Applicable
15. Other debt investments
□ Applicable √ Not Applicable
16. Long-term receivables
(1) Long-term receivables
Unit: RMB
| Item | Closing balance | Opening balance | Range of discount rate | ||||
| Book balance | Bad debt provision | Carrying amount | Book balance | Bad debt provision | Carrying amount | ||
| Payments for finance lease | 56,739,301.32 | 877,857.61 | 55,861,443.71 | 41,994,262.31 | 667,631.54 | 41,326,630.77 | 4.75 |
| Sale of goods in installments | 746,421,615.68 | 105,634,590.61 | 640,787,025.07 | 748,549,528.18 | 100,750,766.12 | 647,798,762.06 | 4.75 |
| Guaranteed collection amount for BOT projects | 143,652,118.72 | 8,275,286.70 | 135,376,832.02 | 163,149,034.54 | 10,298,871.59 | 152,850,162.95 | 4.75 |
| Long-term loans with payment of interest by installments and principal at the maturity date | 21,800,446.27 | 520,511.10 | 21,279,935.17 | Not applicable | |||
| Financial factoring of accounts receivable | 188,408,490.13 | 3,187,253.40 | 185,221,236.73 | 203,587,199.71 | 3,550,272.01 | 200,036,927.70 | 4.75 |
| Total | 1,135,221,525.85 | 117,974,988.32 | 1,017,246,537.53 | 1,179,080,471.01 | 115,788,052.36 | 1,063,292,418.65 | -- |
Changes in book balance with significant changes in loss allowance in the current period
□ Applicable √ Not Applicable
(2) Long-term receivables derecognized due to transfer of financial assets
NA
(3) Assets and liabilities arising from continuing involvement in the transferred long-term receivablesNA
17. Long-term equity investments
Unit: RMB
| Investee | Opening balance (carrying amount) | Changes for the current period | Closing balance (carrying amount) | Closing balance of impairment provision | |||||||
| Additional investment | Reduction in investment | Profit and loss on investments under the equity method | Adjustment of other comprehensive income | Other equity changes | Cash dividends or profits to be distributed as announced | Impairment provision | Others | ||||
| I. Joint ventures | |||||||||||
| II. Associates | |||||||||||
| Lianjiang Greenlander New Energy Co., Ltd. | 40,821,473.18 | 3,757,005.24 | 44,578,478.42 | ||||||||
| Tengine Innovation (Beijing) Monitoring Instrument Co., Ltd. | 29,563,175.06 | 902,107.42 | 260,167.12 | 30,205,115.36 | |||||||
| Guangdong Shunkong Environmental Investment Co., Ltd. | 174,007,088.84 | 28,696,900.36 | 7,573,789.83 | 195,130,199.37 | |||||||
| Guangdong Tianshu New Energy Technology Co., Ltd. | 8,000,000.00 | -5,311,299.25 | 2,688,700.75 | ||||||||
| Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. | 15,026,188.96 | 4,524,731.63 | 19,550,920.59 | ||||||||
| Shantou Chaoyang District Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. | 16,575,434.18 | 2,858,291.55 | 19,433,725.73 | ||||||||
| Changsha Cowa Zoomlion Intelligent Technology Co., Ltd. | 6,570,949.29 | -1,141,749.41 | 5,429,199.88 | ||||||||
| Guangdong Liangke Environmental Engineering Co., Ltd. | 35,679,023.18 | -1,569,183.38 | 34,109,839.80 | ||||||||
| Guangxi Zoomlion Guilv Urban Environmental Service Co., Ltd. | 2,100,000.00 | 36,327.10 | 2,136,327.10 | ||||||||
| Shenzheng Yingmei City Stewards Co., Ltd.( | 30,000.00 | 30,000.00 | |||||||||
| Foshan Yingtong Electrical Materials Co., Ltd. [note 1] | 5,288,274.31 | 245,000,000.00 | 250,288,274.31 | ||||||||
| Guangdong |
| Yingling Testing Technology Service Co., Ltd. [note 2] | |||||||||||
| Sub-total | 318,243,332.69 | 10,130,000.00 | 38,041,405.57 | 7,833,956.95 | 245,000,000.00 | 603,580,781.31 | |||||
| Total | 318,243,332.69 | 10,130,000.00 | 38,041,405.57 | 7,833,956.95 | 245,000,000.00 | 603,580,781.31 |
[Note 1] Other increase of RMB 245,000,000.00 represents that the Company disposed 51% equity of Foshan YingtongElectrical Materials Co., Ltd. resulting in that Foshan Yingtong Electrical Materials Co., Ltd. became an associate of the Company,and the fair value of the remaining 49% equity remeasured on the date of losing control is RMB 245,000,000.00.[Note 2] The long-term equity investments in Guangdong Yingling Testing Technology Service Co., Ltd. is RMB 0.00 mainlyrepresents that the Company reduced the carrying amount of the long-term equity investments to RMB 0.00 under equity method,because the company incurred long-run loss.
18. Other equity instrument investments
Unit: RMB
| Item | Closing balance | Opening balance |
| Zhejiang Shangyu Rural Commercial Bank Co., Ltd. | 800,000.00 | 800,000.00 |
| Shenzhen Yingfeng Environmental Protection Industry Fund Management Co., Ltd. | 270,000.00 | 270,000.00 |
| Shenzhen Yingfeng Environmental Protection Industry Merger and Acquisition Fund [note] | 14,632,971.01 | 25,000,000.00 |
| Total | 15,702,971.01 | 26,070,000.00 |
Non-held-for-trading equity instrument investments for the period
Unit: RMB
| Item | Dividend income recognized | Cumulative gains | Cumulative losses | Other comprehensive income transferred to retained earnings | Reason for designation as at fair value through other comprehensive income | Reason for transfer from other comprehensive income to retained earnings |
| Zhejiang Shangyu Rural Commercial Bank Co., Ltd. | 414,960.00 |
[Note] The Shenzhen Yingfeng Environmental Protection Industry Merger and Acquisition Fund entered into liquidationprocedures in the current period. As of December 31, 2021, the liquidation is still in progress. In the current period, the Companyreceived liquidation fund in the form of bank deposits of RMB 6,087,028.99; according to the calculation, the Company is expectedto incur loss of RMB 4,280,000.00 and made provision for fair value changes of RMB -4,280,000.00 in the current period.
19. Other non-current financial assets
□ Applicable √ Not Applicable
20. Investment properties
(1) Investment properties measured at cost
√ Applicable □ Not Applicable
Unit: RMB
| Item | Housing and Buildings | Land use right | Construction in progress | Total |
| I. Cost | ||||
| 1. Opening balance | 2,749,234.43 | 2,749,234.43 | ||
| 2. Increase in the period | ||||
| (1) Purchased | ||||
| (2) Transfer from inventories/ fixed assets/ construction in progress | ||||
| (3) Increase due to business combination | ||||
| 3. Decrease in the period | 220,550.00 | 220,550.00 | ||
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| (3) Disposal of subsidiaries | 220,550.00 | 220,550.00 | ||
| 4. Closing balance | 2,528,684.43 | 2,528,684.43 | ||
| II. Accumulated depreciation and amortization | ||||
| 1. Opening balance | 740,227.45 | 740,227.45 | ||
| 2. Increase in the period | 171,303.30 | 171,303.30 | ||
| (1) Provision or amortization in the period | 171,303.30 | 171,303.30 | ||
| 3. Decrease in the period | 220,550.00 | 220,550.00 | ||
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| (3) Disposal of subsidiaries | 220,550.00 | 220,550.00 | ||
| 4. Closing balance | 690,980.75 | 690,980.75 | ||
| III. Impairment provision | ||||
| 1. Opening balance | ||||
| 2. Increase in the period | ||||
| (1) Charge for the period | ||||
| 3. Decrease in the period |
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| 4. Closing balance | ||||
| IV. Carrying amount | ||||
| 1. Closing carrying amount | 1,837,703.68 | 1,837,703.68 | ||
| 2. Opening carrying amount | 2,009,006.98 | 2,009,006.98 |
(2) Investment properties measured at fair value
□ Applicable √ Not Applicable
(3) Investment property with certificate of titles being unsettled
Unit: RMB
| Item | Carrying amount | Reason(s) for the failure to obtain the certificate of title |
| Shangyu Wanda Real Estate | 1,837,703.68 | In process |
Other statements
21. Fixed assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Fixed assets | 1,758,052,005.19 | 1,640,546,747.67 |
| Total | 1,758,052,005.19 | 1,640,546,747.67 |
(1) Details of fixed assets
Unit: RMB
| Item | Houses and buildings | General equipment | Special equipment | Transport facilities | Other equipment | Total |
| I. Original book value | ||||||
| 1. Opening balance | 1,185,150,084.27 | 121,293,856.34 | 761,110,029.41 | 39,846,605.97 | 42,802,907.42 | 2,150,203,483.41 |
| 2. Increase in the period | 165,686,166.46 | 34,010,803.55 | 220,605,077.69 | 24,561,781.91 | 1,648,036.75 | 446,511,866.36 |
| (1) Purchase | 3,188,473.20 | 32,088,672.13 | 73,983,327.78 | 24,561,781.91 | 1,648,036.75 | 135,470,291.77 |
| (2) Transfer from construction in progress | 162,497,693.26 | 1,922,131.42 | 135,046,081.59 | 0.00 | 0.00 | 299,465,906.27 |
| (3) Increase due to business combination | ||||||
| (4) Transfer | 11,575,668.32 | 11,575,668.32 |
| from inventories | ||||||
| 3. Decrease in the period | 116,622,056.20 | 7,531,506.32 | 200,096,469.31 | 1,342,840.56 | 10,051,411.82 | 335,644,284.21 |
| (1) Disposal or retirement | 2,626,064.70 | 4,979,884.76 | 15,047,460.00 | 111,111.11 | 39,917.00 | 22,804,437.57 |
| (2) Disposal of subsidiaries | 113,995,991.50 | 2,551,621.56 | 185,049,009.31 | 1,231,729.45 | 10,011,494.82 | 312,839,846.64 |
| 4. Closing 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 |
| II. Accumulated depreciation | ||||||
| 1. Opening balance | 179,905,052.43 | 35,355,332.78 | 259,273,098.92 | 9,710,022.45 | 25,413,229.16 | 509,656,735.74 |
| 2. Increase in the period | 46,220,576.04 | 14,368,226.22 | 101,340,722.61 | 5,992,951.40 | 1,493,802.29 | 169,416,278.56 |
| (1) Charge for the period | 46,220,576.04 | 14,368,226.22 | 101,340,722.61 | 5,992,951.40 | 1,493,802.29 | 169,416,278.56 |
| 3. Decrease in the period | 63,235,480.81 | 4,846,798.21 | 97,776,850.30 | 678,059.94 | 9,516,764.67 | 176,053,953.93 |
| (1) Disposal or retirement | 172,451.62 | 3,970,065.23 | 5,487,151.44 | 75,444.45 | 1,222.20 | 9,706,334.94 |
| (2) Disposal of subsidiaries | 63,063,029.19 | 876,732.98 | 92,289,698.86 | 602,615.49 | 9,515,542.47 | 166,347,618.99 |
| 4. Closing 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 |
| III. Impairment provision | ||||||
| 1. Opening balance | ||||||
| 2. Increase in the period | ||||||
| (1) Charge for the period | ||||||
| 3. Decrease in the period | ||||||
| (1) Disposal or retirement | ||||||
| 4. Closing balance | ||||||
| IV. Carrying amount | ||||||
| 1. Closing carrying amount | 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. Opening carrying amount | 1,005,245,031.84 | 85,938,523.56 | 501,836,930.49 | 30,136,583.52 | 17,389,678.26 | 1,640,546,747.67 |
(2) Fixed assets that are temporarily idle
NA
(3) Fixed asset leased out through operating lease
NA
(4) Fixed assets with certificate of title being unsettled
Unit: RMB
| Item | Carrying amount | Reason(s) for failure to obtain the certificate of title |
| Lu'eryuan employee dormitory | 141,005,849.01 | Certificate of title is in processing |
| Lu'eryuan exhibition center | 26,684,469.11 | Certificate of title is in processing |
| Lu'eryuan debugging shed | 18,366,071.29 | Certificate of title is in processing |
| Lu'eryuan workshop | 35,032,263.47 | Certificate of title is in processing |
| Lu'eryuan staff canteen | 22,316,545.29 | Certificate of title is in processing |
| Sub-total | 243,405,198.17 | -- |
22. Construction in progress
Unit: RMB
| Item | Closing balance | Opening balance |
| Construction in progress | 224,068,633.86 | 70,735,483.95 |
| Total | 224,068,633.86 | 70,735,483.95 |
(1) Details of construction in progress
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Carrying amount | Book balance | Impairment provision | Carrying amount | |
| Construction of Lu'eryuan employee dormitory | 47,031,231.64 | 47,031,231.64 | ||||
| West plot construction of Lueryuan North Plant | 335,590.56 | 335,590.56 | ||||
| Construction of integrated smart equipment and sanitation service | 189,748,878.58 | 189,748,878.58 | ||||
| Equipment to be installed | 5,468,920.80 | 5,468,920.80 | 8,524,283.57 | 8,524,283.57 | ||
| Piecemeal projects | 28,850,834.48 | 28,850,834.48 | 14,844,378.18 | 14,844,378.18 | ||
| Total | 224,068,633.86 | 224,068,633.86 | 70,735,483.95 | 70,735,483.95 | ||
[Note] The difference between the opening balance and prior year closing balance (December 31, 2020) is detailed in Note V(XLIV) 2 to the financial statements.
(2) Changes in significant construction in progress in the current period
Unit: RMB
| Item | Budgets | Opening balance | Increase in the period | Transfer to fixed assets | Other decreases | Closing balance | Accumulated input to budget (%) | Percentage of completion (%) | Accumulated capitalization of borrowing cost | Including: Capitalization of interest in the period | Annual capitalization rate (%) | Source of funds |
| Construction of Lu'eryuan employee dormitory | 150,000,000.00 | 47,031,231.64 | 94,958,402.71 | 141,989,634.35 | 100.00% | 100.00 | Others | |||||
| West plot construction of Lueryuan North Plant | 44,484,704.00 | 335,590.56 | 335,590.56 | 100.00% | 100.00 | Others | ||||||
| Construction of integrated smart equipment and sanitation service | 300,000,000.00 | 189,748,878.58 | 189,748,878.58 | 63.25% | 63.25 | Others | ||||||
| Equipment to be installed | 8,524,283.57 | 140,272,728.33 | 130,998,646.50 | 12,329,444.60 | 5,468,920.80 | - | Others | |||||
| Piecemeal projects | 14,844,378.18 | 40,148,491.16 | 26,142,034.86 | 28,850,834.48 | - | Others | ||||||
| Total | 494,484,704.00 | 70,735,483.95 | 465,128,500.78 | 299,465,906.27 | 12,329,444.60 | 224,068,633.86 | -- | -- | -- |
23. Bearer biological assets
(1) Bearer biological assets measured at cost
□ Applicable √ Not Applicable
(2) Bearer biological assets measured at fair value
□ Applicable √ Not Applicable
24. Oil and gas assets
□ Applicable √ Not Applicable
25. Right-of-use assets
Unit: RMB
| Item | Houses and buildings | Other equipment | Total |
| I. Original book value | |||
| 1. Opening balance | 28,155,865.39 | 2,789,202.39 | 30,945,067.78 |
| 2. Increase in the period | 490,555.41 | 0.00 | 490,555.41 |
| (1) Held under lease | 490,555.41 | 0.00 | 490,555.41 |
| 3. Decrease in the period | 0.00 | 0.00 | 0.00 |
| 0.00 | |||
| 4. Closing balance | 28,646,420.80 | 2,789,202.39 | 31,435,623.19 |
| II. Accumulated depreciation | 0.00 | ||
| 1. Opening balance | 0.00 | 0.00 | 0.00 |
| 2. Increase in the period | 4,608,299.09 | 1,321,412.24 | 5,929,711.33 |
| (1) Charge for the period | 4,608,299.09 | 1,321,412.24 | 5,929,711.33 |
| 0.00 | |||
| 3. Decrease in the period | 0.00 | ||
| (1) Disposal | 0.00 | ||
| 0.00 | |||
| 4. Closing balance | 4,608,299.09 | 1,321,412.24 | 5,929,711.33 |
| III. Impairment provision | 0.00 | ||
| 1. Opening balance | 0.00 | ||
| 2. Increase in the period | 0.00 | ||
| (1) Charge for the period | 0.00 | ||
| 0.00 | |||
| 3. Decrease in the period | 0.00 | ||
| (1) Disposal | 0.00 | ||
| 0.00 | |||
| 4. Closing balance | 0.00 | ||
| IV. Carrying amount | 0.00 | ||
| 1. Closing carrying amount | 24,038,121.71 | 1,467,790.15 | 25,505,911.86 |
| 2. Opening carrying amount | 28,155,865.39 | 2,789,202.39 | 30,945,067.78 |
[Note] The difference between the opening balance and prior year closing balance (December 31, 2020) is detailed in Note V
(44) 1 to the financial statements.
26. Intangible assets
(1) Details of intangible assets
Unit: RMB
| Item | Land use right | Patents | Non-patented technology | Franchise | Software | Total |
| I. Cost | ||||||
| 1. Opening balance | 642,513,532.79 | 418,489,925.32 | 4,867,974,432.55 | 29,965,109.94 | 5,958,943,000.60 |
| 2. Increase in the period | 16,067,730.49 | 872,440,307.47 | 16,090,584.84 | 904,598,622.80 | ||
| (1) Purchase | 872,440,307.47 | 5,008,197.47 | 877,448,504.94 | |||
| (2) Internal R&D | ||||||
| (3) Increase due to business combination | ||||||
| (4) Transfer from construction in progress | 11,082,387.37 | 11,082,387.37 | ||||
| (5) Independent R&D | 16,067,730.49 | 16,067,730.49 | ||||
| 3. Decrease in the period | 54,874,305.42 | 90,945,386.56 | 3,572,860.03 | 149,392,552.01 | ||
| (1) Disposal | 1,835,171.80 | 1,835,171.80 | ||||
| (2) Disposal of subsidiaries | 54,874,305.42 | 89,110,214.76 | 3,572,860.03 | 147,557,380.21 | ||
| 4. Closing balance | 587,639,227.37 | 434,557,655.81 | 5,649,469,353.46 | 42,482,834.75 | 6,714,149,071.39 | |
| II. Accumulated amortization | ||||||
| 1. Opening balance | 74,727,360.32 | 189,088,308.97 | 759,944,108.21 | 14,580,701.65 | 1,038,340,479.15 | |
| 2. Increase in the period | 12,464,449.21 | 34,060,104.12 | 314,111,404.97 | 3,562,666.10 | 364,198,624.40 | |
| (1) Provision for the period | 12,464,449.21 | 34,060,104.12 | 314,111,404.97 | 3,562,666.10 | 364,198,624.40 | |
| 3. Decrease in the period | 14,632,772.43 | 35,434,960.36 | 2,917,246.64 | 52,984,979.43 | ||
| (1) Disposal | 731,303.45 | 731,303.45 | ||||
| (2) Disposal of subsidiaries | 14,632,772.43 | 34,703,656.91 | 2,917,246.64 | 52,253,675.98 | ||
| 4. Closing balance | 72,559,037.10 | 223,148,413.09 | 1,038,620,552.82 | 15,226,121.11 | 1,349,554,124.12 | |
| III. Impairment provision | ||||||
| 1. Opening balance | 20,185,580.19 | 24,687,522.85 | 44,873,103.04 | |||
| 2. Increase in the period | ||||||
| (1) Provision for the period | ||||||
| 3. Decrease in the period | ||||||
| (1) Disposal | ||||||
| 4. Closing balance | 20,185,580.19 | 24,687,522.85 | 44,873,103.04 |
| IV. Carrying amount | ||||||
| 1. Closing carrying amount | 515,080,190.27 | 191,223,662.53 | 4,586,161,277.79 | 27,256,713.64 | 5,319,721,844.23 | |
| 2. Opening carrying amount | 567,786,172.47 | 209,216,036.16 | 4,083,342,801.49 | 15,384,408.29 | 4,875,729,418.41 |
At the end of the current period, the intangible assets arising from internal R&D accounts for 0.72% of the total intangible assets.[Note] The difference between the opening balance and prior year closing balance (December 31, 2020) is detailed in Note V(XLIV) 2 to the financial statements.
(2) Land use right with certificate of titles being unsettled
At the end of the period, the Company had no land use right with certificate of titles being unsettled
27. Development expenditure
Unit: RMB