Revenue and Profitability - The total revenue for the year ended December 31, 2023, was RMB 4,076,596,000, a decrease of 11.1% from RMB 4,588,955,000 in 2022[3] - Revenue from service contracts recognized during the reporting period amounted to RMB 30,027,000, down from RMB 102,395,000 in 2022[4] - The group's revenue from waste treatment and energy conversion business for the year was approximately RMB 4,076,596,000, a decrease of about 11.17% compared to RMB 4,588,955,000 in the same period of 2022[93] - Revenue from construction services under service concession arrangements was RMB 535,159, down 60.8% from RMB 1,367,213 in the previous year[166] - Revenue from operation services under service concession arrangements increased to RMB 1,925,332, up 21.4% from RMB 1,586,308 in 2022[166] - The net profit attributable to the company's owners was approximately RMB 285,380,000, a decline of about 82.48% compared to RMB 1,628,662,000 in 2022, mainly due to high gains from the sale of the New Zealand business in 2022[94] - The total comprehensive income for the year was RMB 243.26 million, a significant decrease from RMB 3.66 billion in the previous year[138] Costs and Expenses - The cost of services provided under service arrangements decreased to RMB 1,785,197,000 in 2023 from RMB 2,492,830,000 in 2022, representing a reduction of 28.4%[9] - Research and development costs were RMB 42,740,000 in 2023, down from RMB 79,137,000 in 2022, indicating a decrease of 46.0%[9] - The total interest expense for the year was RMB 440,919,000, a decrease of 19.0% from RMB 544,670,000 in 2022[10] - The company’s employee benefits expenses, excluding directors' remuneration, decreased to RMB 169,932,000 in 2023 from RMB 203,831,000 in 2022, a reduction of 16.6%[9] - The company’s financial expenses decreased to RMB 440.92 million in 2023 from RMB 544.67 million in 2022[134] Assets and Liabilities - The total contract assets decreased to RMB 1,379,905,000 in 2023 from RMB 2,231,458,000 in 2022, a decline of 38.2%[20] - As of December 31, 2023, total assets amounted to approximately RMB 20.29 billion, with net asset value attributable to owners of approximately RMB 6.70 billion[124] - The debt-to-asset ratio increased to 66.99% from 66.81% at the end of 2022, while the current ratio improved from 1.33 to 1.79[124] - Total current liabilities decreased to RMB 3,528,069,000 from RMB 4,629,878,000, showing a reduction of approximately 23.8%[147] - The net value of current assets increased to RMB 2,802,306,000 from RMB 1,535,574,000, representing an increase of about 82.5%[147] - Non-current liabilities rose to RMB 10,063,232,000 from RMB 8,824,034,000, marking an increase of approximately 14.0%[147] Cash Flow and Financing - As of December 31, 2023, the group's cash and bank balances were approximately RMB 702.29 million, a decrease of about RMB 847.74 million from RMB 1.55 billion at the end of 2022[84] - The group's outstanding borrowings increased to approximately RMB 10.47 billion, up about RMB 1.36 billion from RMB 9.11 billion at the end of 2022[84] - The group has a total bank credit of RMB 10.74 billion, with headquarters credit at RMB 1 billion and project company credit at RMB 9.74 billion[70] - Bank interest income decreased to RMB 11,485,000 in 2023 from RMB 24,927,000 in 2022, a decline of approximately 54%[184] - Other interest income fell significantly to RMB 6,898,000 in 2023 from RMB 106,479,000 in 2022, representing a decrease of about 93%[184] Impairment and Losses - The company recognized impairment losses of RMB 68,427,000 for the year, compared to RMB 38,111,000 in 2022, reflecting an increase of 79.5%[18] - The impairment of financial assets related to franchise rights increased to RMB 9,541,196,000 in 2023 from RMB 8,659,064,000 in 2022, reflecting an increase of about 10%[195] - The recoverable amount of cash-generating units involved in impairment totaled RMB 471,644,000 as of December 31, 2023[192] Strategic Initiatives and Future Outlook - The company anticipates a challenging economic environment in China, with fixed asset investment declining month-on-month and infrastructure investment slowing down[44] - The company expects long-term resilience in the Chinese economy despite current pressures on external and internal demand[44] - The company aims to enhance operational efficiency and pursue innovative breakthroughs in 2024, focusing on revenue growth and cost reduction strategies[92] - The company plans to deepen its efforts in key strategic areas and expand into new business fields such as saline-alkali land and tailings ponds[92] Operational Performance - The company processed 9.972721 million tons of municipal waste and 49,819 tons of hazardous waste during the year, generating a total of 2.227 billion kWh of electricity[45] - The company achieved a 2.51% increase in electricity generation per ton of waste processed compared to 2022, with 6 major technical upgrades implemented[66] - The company completed 14 settlement projects and 3 completion acceptance projects in 2023, focusing on improving accounts receivable recovery[46] Corporate Governance and Compliance - The company has established a procurement management mechanism to ensure quality and efficiency while reducing costs[66] - The group has established a safety production committee to oversee and lead environmental management efforts[88] - The group is committed to sustainable development and has established guidelines for supplier selection to manage environmental and social risks[81]

Financial Performance - The company achieved operating revenue of RMB 1.909 billion, a year-on-year decrease of 22.02%[10] - Net profit attributable to the parent company was RMB 150 million, down 44.41% year-on-year[10] - The net profit attributable to shareholders for the period was approximately RMB 150,386,000, a decrease of about 44.41% compared to RMB 270,512,000 in the same period last year[41] - Total revenue for the six months ended June 30, 2023, was RMB 1,639,245,000, a decrease of 25.3% compared to RMB 2,194,925,000 for the same period in 2022[107] - Revenue from construction services under service concession arrangements was RMB 297,268,000, down 71.5% from RMB 1,042,240,000 in the previous year[107] - Revenue from operation services under service concession arrangements increased to RMB 892,187,000, up 20.4% from RMB 741,040,000 in the previous year[107] - The company reported a total comprehensive income of RMB 297,675,000 for the period, compared to RMB 130,799,000 in the previous year[107] - The company reported a profit of RMB 135,498 thousand for the six months ended June 30, 2023, a decrease of 60.5% compared to RMB 343,390 thousand in the same period of 2022[72] Assets and Liabilities - In the first half of 2023, the company's total assets reached RMB 20.174 billion, a year-on-year increase of 0.18%[10] - As of June 30, 2023, the group's outstanding borrowings amounted to approximately RMB 10.49 billion, an increase of about RMB 1.38 billion from RMB 9.11 billion at the end of 2022[23] - The total liabilities decreased significantly from RMB 4,629,878,000 to RMB 2,741,570,000, indicating improved financial health[91] - The company's total borrowings as of June 30, 2023, were RMB 10,486,945,000, compared to RMB 9,107,493,000 as of December 31, 2022[169] - The company's cash and bank balances as of June 30, 2023, were approximately RMB 1,067,216,000, a decrease of about RMB 482,816,000 from RMB 1,550,032,000 at the end of 2022[58] - The company's current assets increased to RMB 6,204,213,000 from RMB 6,165,452,000, reflecting a growth in inventory and financial assets[91] Operational Highlights - The company processed 4.8869 million tons of municipal solid waste and 24,300 tons of hazardous waste during the period[12] - The group signed 16 waste disposal agreements in the first half of the year, achieving over 60,000 tons of waste entering the facility outside of the franchise rights[37] - The group aims to enhance operational efficiency by focusing on increasing waste intake at incineration projects, with a goal to boost daily waste volume by 950 tons through new contracts[37] - The group has established a value system with industry chain participants to create a long-term and stable industrial alliance[18] - The group has completed trial operations for the Zhumadian and Nanle incineration projects, and is advancing construction for the Pu'er and Nongan projects[35] Research and Development - The company obtained 4 authorized invention patents and 12 utility model patents during the first half of the year, along with 1 registered software copyright[38] - The company is exploring new business avenues, including a resource recovery technology based on hydro-pulping and hydrothermal conversion for kitchen waste[40] - The company is conducting research on three main directions: existing business derivatives, technical bottlenecks, and expansion into new fields[40] Strategic Initiatives - The company aims to enhance its business capabilities and market presence through innovation and strategic partnerships[12] - The company is focused on sustainable development and aims to create new business opportunities through technological innovation[12] - The group is actively integrating into national strategies and seizing market opportunities, focusing on green development and ecological protection[31] Financial Management - The company's sales and administrative expenses decreased by approximately 15.8% to about RMB 202,671,000, mainly due to personnel adjustments and reduced professional fees[43] - The financing costs decreased by approximately 8.7% to about RMB 223,134,000 compared to RMB 244,356,000 in the same period last year[57] - The company incurred a loss of RMB 87,800,000 in impairment of other intangible assets during the reporting period[109] Shareholder Information - The basic earnings per share for the period was calculated based on a weighted average of 14,294,733,167 shares, with a declared final dividend of 1 HK cent amounting to RMB 131,590,000[158][160] - The group declared a special dividend of HKD 0.01 per share, approved at the annual general meeting on June 28, 2023, and paid on July 28, 2023[136]

Financial Performance - Operating revenue for the first half of 2023 was RMB 1.909 billion, a decline of 22.02% compared to the previous year[11]. - Net profit for the period was RMB 135 million, down 60.54% year-on-year, while net profit attributable to the parent company was RMB 150 million, a decrease of 44.41%[11]. - The revenue from the waste treatment and waste-to-energy business for the review period was approximately RMB 1,908,540,000, a decrease of about 22.02% compared to RMB 2,447,367,000 in the same period last year[26]. - The gross profit for the same period was RMB 651,966,000, down from RMB 697,665,000, reflecting a gross margin decrease[83]. - The net profit attributable to the owners of the parent company was RMB 150,386,000, compared to RMB 270,512,000 in the previous year, indicating a decline of approximately 44%[84]. - The total comprehensive income for the period was RMB 123,428,000, compared to RMB 142,519,000 in the previous year[53]. - Other income and gains decreased significantly from RMB 166,603,000 in 2022 to RMB 37,274,000 in 2023, a decline of approximately 77.7%[104]. - The company reported a financial loss of RMB 38,785,000 from impairment losses on financial and contract assets, compared to RMB 8,021,000 in the previous year[83]. Assets and Liabilities - As of June 30, 2023, total assets reached RMB 20.174 billion, reflecting a year-on-year growth of 0.18%[11]. - The debt-to-asset ratio was 67.49%, a slight increase from 66.81% at the end of 2022, while the current ratio improved to approximately 2.26 from 1.33[32]. - Total liabilities as of June 30, 2023, amount to RMB 10,486,945 thousand, an increase from RMB 9,107,493 thousand in 2022[140]. - Current liabilities decreased significantly to RMB 2,741,570,000 from RMB 4,629,878,000, reflecting improved liquidity management[58]. - Non-current liabilities total RMB 9,942,482 thousand, up from RMB 7,874,452 thousand in 2022[140]. - Trade receivables amounted to RMB 2,102,777,000 as of June 30, 2023, an increase from RMB 1,801,960,000 as of December 31, 2022[136]. - Trade payables totaled RMB 1,651,711,000 as of June 30, 2023, down from RMB 1,786,155,000 as of December 31, 2022[137]. Operational Highlights - The company processed 4.8869 million tons of municipal solid waste and 24,300 tons of hazardous waste during the first half of 2023[13]. - The company has 55 operational and trial projects, including 24 waste-to-energy projects and 6 organic waste treatment projects[13]. - The company signed five projects in the incineration supporting and derivative business, with a total contract amount of RMB 554 million, which will increase the waste processing capacity by 950 tons per day[18]. - The company achieved a total of 16 waste disposal agreements, resulting in over 60,000 tons of waste processed outside of the franchise rights[17]. - The company launched two solid waste technology products at the China Environmental Expo, focusing on leachate discharge solutions and anaerobic treatment of kitchen waste[20]. Strategic Initiatives - The company aims to align with national strategies focusing on green development and ecological protection, enhancing its market position in the environmental sector[10]. - The company is actively pursuing market expansion with a focus on urban-level business organization to support its "urban deep cultivation" strategy[18]. - The company aims to enhance operational efficiency by prioritizing waste intake at incineration projects, reflecting a strategic focus on operational management[17]. - The company plans to implement a new resource recovery technology for kitchen waste, indicating a commitment to innovation in waste management[22]. - The company is committed to improving quality and efficiency across core business areas, market expansion, and technological innovation in the second half of 2023[24]. Financial Management - Selling and administrative expenses decreased by approximately 15.8% to about RMB 202,671,000, mainly due to personnel restructuring and reduced professional fees[29]. - Financing costs decreased by approximately 8.7% to about RMB 223,134,000 from RMB 244,356,000 in the same period last year, primarily due to the repayment of loans and a decline in domestic bank loan interest rates[30]. - The total finance costs for the six months ended June 30, 2023, were RMB 223,134,000, down from RMB 244,356,000 in 2022, representing a reduction of about 8.7%[106]. - The company incurred a tax expense of RMB (3,644,000) for the six months ended June 30, 2023, compared to a tax expense of RMB 44,279,000 in 2022, reflecting a significant tax credit[107]. Research and Development - The company obtained four authorized invention patents and twelve utility model patents in the first half of the year, enhancing its intellectual property portfolio[20]. - Research and development costs for the period were RMB 20,879,000, down from RMB 29,888,000 in the previous year, indicating a reduction of about 30.2%[104]. Employee and Governance - The group employed approximately 3,631 employees as of June 30, 2023, primarily located in mainland China and Hong Kong[73]. - The board has resolved not to declare an interim dividend for the six months ended June 30, 2023, consistent with the previous year[75].

Financial Performance - The company's revenue for the year ended December 31, 2022, was RMB 128,533,000, a decrease of 76% compared to RMB 533,693,000 in 2021[2] - The total comprehensive income attributable to equity holders of the parent for the year was RMB 111,913,000, down from RMB 618,133,000 in the previous year[2] - The group recognized revenue of RMB 102,395,000 during the reporting period, compared to RMB 132,390,000 in 2021, indicating a decline of approximately 22.7%[15] - The company's revenue for 2022 was RMB 1,835,780,000, a decrease of 26.7% compared to RMB 2,506,661,000 in 2021[40] - The company's net profit attributable to the company's owners for the year was approximately RMB 1,628,662,000, an increase of about 218.88% compared to RMB 510,746,000 in 2021, primarily due to gains from the sale of the entire business in New Zealand[163] - The net profit from continuing operations attributable to the company's owners was approximately RMB 128,533,000, a decrease of about 75.92% from approximately RMB 533,693,000 in 2021, mainly due to reduced construction revenue and asset impairment[164] Discontinued Operations - The company completed the sale of its New Zealand waste management and energy conversion business on September 30, 2022, classifying it as discontinued operations[24] - The company reported a profit from discontinued operations before tax of RMB 287,181,000 for 2022, compared to a loss of RMB (40,301,000) in 2021[40] - The net cash inflow from the sale of discontinued operations was RMB 4,469,792,000[42] - Basic and diluted earnings per share from discontinued operations for 2022 were RMB 10.49, compared to a loss of RMB (0.16) in 2021[43] Assets and Liabilities - The total assets of the company reached RMB 20.138 billion, with operating revenue of RMB 4.589 billion and net profit attributable to the parent company of RMB 1.629 billion[101] - The total bank loans and overdrafts amounted to RMB 9,107,493,000, a decrease from RMB 11,730,624,000 in the previous year, representing a reduction of approximately 22.4%[64] - The company's total liabilities decreased significantly, reflecting a strategic focus on reducing debt levels[64] - The company's asset-liability ratio decreased to 66.81% from 70.52% in 2021, primarily due to the sale of its New Zealand business[152] - The current ratio improved from approximately 0.87 to 1.33, mainly due to the repayment of bank loans due during the year[152] Cash Flow and Financial Management - The company reported a net cash flow from discontinued operations for the nine months ended September 30, 2022, and for the year ended December 31, 2022[27] - The company’s cash flow management strategies have been adjusted to enhance liquidity and operational efficiency in response to market conditions[74] - Cash and bank balances as of December 31, 2022, were approximately RMB 1,550,032,000, a decrease of about RMB 170,459,000 from the previous year[152] Operational Highlights - The group operated 45 subsidiaries in China during the year, an increase from 39 in 2021, with 20 subsidiaries exempt from income tax[22] - The company has established multiple service operating rights arrangements with the Chinese grantors for waste treatment and energy conversion plants, ensuring specific service capability levels[52] - The total waste processed amounted to 6.6942 million tons, with hazardous waste processing at 53,100 tons and electricity provided at 1.945 billion kWh[142] - The average daily new waste input across 17 incineration projects exceeded 2,000 tons per day, with a year-on-year increase of 10.36% in electricity generated from waste[1] Strategic Focus and Future Outlook - The company actively integrates into national strategies and focuses on environmental protection, aiming for structural profit transformation and enhanced operational profit capabilities[129] - The company is committed to achieving carbon peak and carbon neutrality goals, aligning with national policies on green low-carbon development[128] - The company aims for carbon neutrality by 2050 and plans to reduce carbon emissions by 2030[141] - The company is focusing on deepening its business in China and collaborating with various industry sectors to promote ecological and economic prosperity[131] Corporate Governance - The company maintained a high level of corporate governance standards, adhering to all provisions of the corporate governance code as per the listing rules[188] - The company has committed to maintaining high standards of corporate governance as a key to its success[188] Employee and Training Initiatives - The group employed approximately 3,674 employees, primarily located in mainland China and Hong Kong, with a performance-linked compensation policy[157] - The company has implemented a talent strategy and conducted over 15 professional training sessions, offering more than 240 courses to enhance employee skills[114]

Financial Performance - The net profit attributable to the parent company was RMB 271 million, representing a year-on-year increase of 5.09%[6]. - The net profit attributable to shareholders for the period was approximately RMB 270.51 million, an increase of about 5.09% compared to RMB 257.41 million in the same period last year[19]. - Revenue from waste treatment and waste-to-energy operations was approximately RMB 2.45 billion, a decrease of about 10.52% from RMB 2.74 billion in the previous year due to the completion of several domestic projects[20]. - The profit from continuing operations before tax was RMB 236,791,000, a decrease of 49.6% compared to RMB 468,466,000 in the prior year[43]. - The net profit from continuing operations for the period was RMB 192,512,000, down from RMB 311,589,000 in the previous year[43]. - The total profit attributable to equity holders for the six months ended June 30, 2022, was RMB 270,512 thousand, an increase from RMB 257,409 thousand in the same period of 2021[94]. Assets and Liabilities - Total assets of Capital Environment Holdings reached RMB 30.628 billion, an increase of 17.02% year-on-year[6]. - Net assets amounted to RMB 7.829 billion, reflecting a growth of 1.46% compared to the previous year[6]. - The company's total liabilities amounted to RMB 12,463,061,000, up from RMB 7,122,928,000 in the previous year, reflecting increased borrowing[49]. - The total interest-bearing bank and other borrowings reached RMB 12,828,341,000 as of June 30, 2022, up from RMB 11,730,624,000 as of December 31, 2021, representing a growth of approximately 9.4%[108]. - The company's total liabilities increased by 1.5% compared to the previous period, reflecting ongoing operational and financial commitments[134]. Cash Flow and Financing - Cash and bank balances amounted to approximately RMB 1.93 billion, an increase of about RMB 207.53 million from RMB 1.72 billion at the end of 2021, mainly due to tax refunds and new borrowings received during the period[27]. - The operating cash flow for the six months ended June 30, 2022, was RMB 27,901 thousand, a significant improvement from a cash outflow of RMB 354,062 thousand in the same period of 2021[56]. - The financing activities generated a net cash inflow of RMB 716,490 thousand, a substantial increase from RMB 171,291 thousand in the prior year[58]. - The company incurred interest expenses of RMB 302,873 thousand, slightly down from RMB 305,167 thousand in the previous year[58]. Project Development and Operations - The company has a total of 64 projects in reserve, with a total investment of approximately RMB 18.250 billion, of which RMB 15.603 billion has been invested by June 30, 2022[7]. - The operational projects reached 51, processing 3.9798 million tons of municipal waste and 25,500 tons of hazardous waste during the period[9]. - The company signed new contracts for waste management projects, adding 1,480 tons per day of waste processing capacity[10]. - The construction progress of key projects such as the Jishou incineration project and Nanchang Phase II incineration project reached 100% completion[10]. Market Strategy and Expansion - The company is actively expanding its market presence through the establishment of four city companies to enhance operational synergy[10]. - Future strategies include strengthening investment team capabilities and resource integration to capitalize on market opportunities[10]. - The group plans to sell its entire business segment in New Zealand, viewing it as an opportunity to convert overseas investments into cash and refocus its strategic center in China[16]. Shareholder and Governance - Major shareholders include Capital Environment Holdings Limited, holding 6,449,026,736 shares (45.11%), and Beijing Capital Eco-Environment Protection Group Co., Ltd., holding 9,565,793,808 shares (66.92%) as of June 30, 2022[144]. - The company’s board approved the mid-term financial statements on August 22, 2022, indicating a commitment to transparency and governance[141]. - The audit committee, comprising three independent non-executive directors, has reviewed the accounting principles and internal controls, confirming no significant issues in the interim financial data[150]. Foreign Exchange and Discontinued Operations - The company experienced a significant foreign exchange loss of RMB 428,129,000 related to overseas operations, compared to a loss of RMB 27,180,000 in the prior year[46]. - The group has classified its New Zealand operations as discontinued, focusing solely on waste treatment and energy conversion in China[72]. - The net cash flow from discontinued operations for the six months ended June 30, 2022, was RMB 2,569 thousand, compared to a net cash outflow of RMB 65,416 thousand for the same period in 2021[90].

Financial Performance - The company's main business revenue reached RMB 7.903 billion, an increase of 3.35% compared to 2020[15] - The net profit attributable to shareholders was RMB 511 million, marking an increase of approximately 9.83% compared to 2020[15] - The net profit for the year was RMB 573 million, representing a year-on-year increase of 15.57%[29] - The company's revenue for the year ended December 31, 2021, was RMB 7,902,604 thousand, an increase of 3.34% from RMB 7,646,659 thousand in 2020[198] - Gross profit for the same period was RMB 2,397,337 thousand, up from RMB 1,934,337 thousand, reflecting a growth of 24.0%[198] - The net profit for the year was RMB 573,139 thousand, representing an increase of 15.6% compared to RMB 495,922 thousand in 2020[198] - Basic and diluted earnings per share for the parent company's ordinary shareholders were RMB 3.57, compared to RMB 3.25 in the previous year, indicating a growth of 9.85%[198] - Administrative expenses increased to RMB 804,441 thousand from RMB 679,324 thousand, marking a rise of 18.4%[198] - The company reported a decrease in other income and gains, which fell to RMB 90,325 thousand from RMB 160,393 thousand, a decline of 43.6%[198] - Financing costs for the year were RMB 580,502 thousand, slightly up from RMB 554,713 thousand, indicating an increase of 4.6%[198] - The company's share of profits from joint ventures was RMB 54,553 thousand, an increase from RMB 39,758 thousand, reflecting a growth of 37.2%[198] - The income tax expense for the year was RMB 287,718 thousand, compared to RMB 281,365 thousand in 2020, showing a slight increase of 2.4%[198] Assets and Liabilities - Total assets exceeded RMB 26.173 billion, growing approximately 8.79% year-on-year[15] - Net assets surpassed RMB 7.717 billion, reflecting a growth of about 7.34% from the previous year[15] - The total waste processed amounted to 5.9225 million tons, while hazardous waste processed was 12,000 tons[43] - The group’s total assets as of December 31, 2021, were approximately RMB 26,173,239,000, with a net asset value attributable to owners of approximately RMB 6,210,896,000[52] - The debt-to-asset ratio increased slightly to 70.52% from 70.12% in 2020[52] - Cash and bank balances as of December 31, 2021, were approximately RMB 1,720,491,000, a decrease of about RMB 1,096,753,000 from RMB 2,817,244,000 at the end of 2020[53] - The group’s outstanding borrowings as of December 31, 2021, were approximately RMB 11,730,624,000, an increase of about RMB 3,013,478,000 from RMB 8,717,146,000 at the end of 2020[54] Environmental Initiatives - The company has implemented 69 environmental projects across over 20 provinces and cities in China, serving a population of over 60 million[15] - Total investment in these projects exceeded RMB 18.790 billion[15] - The company is committed to sustainable development and has been recognized as one of the top ten influential companies in China's solid waste industry[19] - The company is aligning with national strategies to promote green development and has set goals for carbon peak and carbon neutrality by 2030 and 2060, respectively[27] - The group emphasizes environmental management and has established policies to minimize adverse environmental impacts during operations[40] - The group has established a technology innovation management system and is advancing key research projects, including the development of low-emission technologies and waste treatment solutions[36] Strategic Focus - The company is focusing on a new strategic plan called "Ecology + 2025," integrating various business sectors for enhanced synergy[15] - The company aims to enhance its core competitiveness through technology-driven innovation[15] - The company is committed to expanding its market presence and optimizing its business structure[15] - The company is actively pursuing a "four precision" strategy to improve management in cost, capital, and safety[15] - The company aims to enhance operational efficiency and project conversion rates by expanding its project information database[29] - The group plans to focus on high-quality projects and systematic development in the regions where it operates[49] Corporate Governance - The company has maintained compliance with the corporate governance code as per the Hong Kong Stock Exchange's listing rules throughout the year ending December 31, 2021[75] - The board consists of three executive directors, one non-executive director, and three independent non-executive directors, ensuring a balanced governance structure[78] - The company emphasizes diversity in its board composition, considering factors such as gender, age, and professional experience to support strategic goals[77] - The company is committed to high standards of corporate governance, which it views as critical to its success[75] - The board is responsible for setting strategic direction and overseeing management performance, ensuring alignment with business objectives[77] - The company has a structured approach to internal controls and risk management, which is essential for sustainable development[77] - The management team has been involved in various environmental projects, indicating a focus on sustainability and market expansion[71] Risk Management - The company emphasizes the importance of risk management and internal control systems to identify and manage significant risks[106] - The board is responsible for establishing and maintaining effective risk management and internal control systems[106] - The company aims to ensure compliance with relevant laws and regulations through its internal control systems[105][106] - The company has a structured risk governance framework to enhance internal control effectiveness[106] - The company has established a comprehensive internal control system to enhance governance standards, aligning with regulatory requirements[112] Audit and Compliance - The consolidated financial statements for the year ended December 31, 2021, have been audited by Ernst & Young, confirming compliance with Hong Kong Financial Reporting Standards[176] - The audit opinion states that the financial statements present a true and fair view of the group's financial position as of December 31, 2021, and its financial performance for the year then ended[177] - Key audit matters include the accounting treatment of service concession arrangements related to waste management and energy business, which involve significant management judgments and estimates[181] - The auditor's procedures included reviewing contract terms of service concession arrangements and assessing the accounting model adopted by the group[181] - The auditor evaluated the future guaranteed receipts and current market rates for engineering gross profit margins, comparing them with observable market data and industry peers[181] Shareholder Relations - The company is committed to improving investor relations through regular communication with institutional investors, analysts, and shareholders[125] - The board confirmed that financial statements for the year ended December 31, 2021, were prepared in accordance with applicable laws and listing rules, ensuring accurate reflection of the group's financial position[127] - The company did not recommend the declaration of a final dividend for the year ended December 31, 2021, consistent with the previous year[134] - The company has no distributable reserves as of December 31, 2021[137] - The board aims to provide continuous returns to shareholders while retaining sufficient reserves for future development[135]

Capital Environment Holdings Limited 首創環境控股有限公司 (Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立之有限公司) Banks of - 股票优酷 - eases Stock Code 股票代號 : 03989 目 錄 2 公司資料 3 管理層討論與分析 9 中期簡明合併財務報表審閱報告 10 中期財務報告 中期簡明合併損益表 中期簡明合併全面收益表 中期簡明合併財務狀況報表 中期簡明合併股本權益變動表 中期簡明合併現金流量表 中期簡明合併財務資料附註 41 權益披露及其他資料 公司資料 | --- | --- | |-------------------------|--------------------------------| | | | | 董事會 | 總辦事處及主要營業地點 | | 執行董事 | 香港 | | 曹國憲先生 （主席） | 中環夏愨道 12 號 | | 李伏京先生 （行政總裁） | 美國銀行中心 | | 肖煜坤先生 | 16 樓 | | 非執行董事 | ...

Capital Environment Holdings Limited (Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立之有限公司) Stock Code 股票代號 : 03989 Annual Report =報/ 目 錄 3 公司資料 5 主席的話 9 管理層討論與分析 15 董事會及高級管理層 19 企業管治報告 32 董事會報告 39 獨立核數師報告 45 年度財務報告 合併損益表 合併全面收益表 合併財務狀況報表 合併股本權益變動表 合併現金流量表 財務報表附註 154 財務摘要 公司 賓斯 ps IN 3 200 公司資料 | --- | --- | |-------------------------------------------|------------------------------| | 董事會 | 總辦事處及主要營業地點 | | 執行董事 | 香港 | | 曹國憲先生 （主席） | 中環夏愨道 12 號 | | 李伏京先生 （行政總裁） | 美國銀行中心 | | 郝春梅女士 | 16 ...

@ Capital Environment Holdings Limited 首創環境控股有限公司 (Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立之有限公司) Stock Code 股票代號：03989 Interim Report 中期報告 ▲ 目 錄 2 公司資料 3 管理層討論及分析 8 中期簡明合併財務報表審閱報告 9 中期財務報告 中期簡明合併損益表 中期簡明合併全面收益表 中期簡明合併財務狀況報表 中期簡明合併股本權益變動表 中期簡明合併現金流量表 中期簡明合併財務資料附註 39 權益披露及其他資料 公司資料 | --- | --- | |-------------------------------------------|----------------------------------------------| | | | | 董事會 | 總辦事處及主要營業地點 | | 執行董事 | 香港 | | 曹國憲先生 （主席） | 中環夏愨道 12 號 | | 李伏京先生 （行政總裁） | 美國銀行中心 ...

[Company Information](index=4&type=section&id=Company%20Information) This chapter outlines Shougang Environment Holdings Limited's registration, main offices, board members, committee structure, auditor, legal counsel, and principal bankers [Company Basic Information](index=4&type=section&id=Company%20Basic%20Information) This section provides fundamental company details including registration in the Cayman Islands, main offices in Hong Kong, board composition, and key professional service providers - Company registered in the Cayman Islands with stock code **03989**, and its head office and principal place of business are located in Central, Hong Kong[1](index=1&type=chunk)[7](index=7&type=chunk) - The Board of Directors comprises executive directors (including Chairman Mr. Cao Guoxian and CEO Mr. Li Fujing) and independent non-executive directors, with established audit, nomination, and remuneration committees[7](index=7&type=chunk) - Ernst & Young serves as the company's auditor, and principal bankers include Bank of China (Hong Kong) Limited and The Hongkong and Shanghai Banking Corporation Limited[7](index=7&type=chunk) [Chairman's Statement](index=6&type=section&id=Chairman's%20Statement) The Chairman's statement reviews the company's performance and strategic direction [2019 Operating Environment and Company Performance](index=6&type=section&id=2019%20Operating%20Environment%20and%20Company%20Performance) The Chairman reviews 2019's global economic challenges and China's environmental industry opportunities, highlighting the company's expansion and significant growth in revenue and total assets - Despite global economic volatility in 2019, China's green environmental industry emerged as a new economic growth driver, supported by continuous favorable government policies[12](index=12&type=chunk)[14](index=14&type=chunk) - The Group continued its expansion in the environmental sector, successfully securing **15** waste treatment projects with a total investment of approximately **RMB 4.73 billion**, adding a new designed annual municipal solid waste treatment capacity of **3.42 million tons**[15](index=15&type=chunk) 2019 Key Financial Indicators YoY Growth | Indicator | 2019 Amount (RMB) | YoY Growth Rate | | :------------------- | :---------------- | :-------------- | | Main Business Revenue | 5.938 billion | 27.75% | | Total Assets | 18.636 billion | 25.19% | | Net Assets | 5.241 billion | 9.10% | - As of the end of 2019, the Group's projects covered over **20** provinces and municipalities in China, and expanded to the New Zealand market, with **78** environmental projects implemented domestically, totaling over **RMB 20.6 billion** in investment[15](index=15&type=chunk) [Future Outlook and Social Responsibility](index=8&type=section&id=Future%20Outlook%20and%20Social%20Responsibility) The company will continue its "Eco+" strategy, promote solid waste business integration, develop asset-light models, and ensure stable operations amidst the COVID-19 pandemic - The Group will be guided by the "Eco+" development strategy to achieve vertical and horizontal integration across different solid waste business segments, accelerate momentum transformation, and fully develop an asset-light business model[18](index=18&type=chunk) - Following the outbreak of the novel coronavirus pandemic at the end of 2019, the company coordinated production and pandemic prevention efforts, ensuring all personnel worked together for stable and orderly production and operations[18](index=18&type=chunk) - The company will continue to implement pandemic prevention requirements, comprehensively manage operations, strive for high-quality development, and consider improving national environmental protection as its responsibility[18](index=18&type=chunk)[19](index=19&type=chunk) [Management Discussion and Analysis](index=10&type=section&id=Management%20Discussion%20and%20Analysis) Management discusses the company's operational and financial performance, strategic achievements, and future outlook [Business Review and Outlook](index=10&type=section&id=Business%20Review%20and%20Outlook) Management reviews 2019's business expansion, market achievements, technological innovation, and financial performance, outlining future development strategies - In 2019, China's green economy and environmental industry became new drivers of economic development, and the company actively aligned with national strategies, focusing on value creation[24](index=24&type=chunk)[26](index=26&type=chunk) 2019 Operating Performance Overview | Indicator | 2019 Amount (RMB) | YoY Growth Rate | | :----------------------------- | :---------------- | :-------------- | | Total Assets | 18.636 billion | 25.19% | | Operating Revenue | 5.938 billion | 27.75% | | Profit for the Year | 426 million | 37.1% | | Net Profit Attributable to Parent | 303 million | 65.68% | - The Group has **78** domestic projects in reserve, with a total investment of approximately **RMB 20.6 billion**, and a total designed capacity of approximately **17.22 million tons** per year for waste treatment and approximately **3.2 million units** per year for dismantling electrical and electronic equipment[27](index=27&type=chunk) - Successfully secured **15** waste treatment projects with a total investment of approximately **RMB 4.7 billion**, adding a new designed annual municipal solid waste treatment capacity of **3.42 million tons**, covering the complete industry chain including municipal solid waste sweeping, collection, transportation, landfill, incineration for power generation, anaerobic treatment, and hazardous waste disposal[28](index=28&type=chunk)[29](index=29&type=chunk) - In terms of technological innovation, Beijing Capital Environment Technology Co., Ltd., a wholly-owned subsidiary, was awarded the title of "China Strategic Emerging Environmental Industry Leading Enterprise" for two consecutive years and applied for over **30** patents[29](index=29&type=chunk) - Regarding engineering construction, in 2019, **20** projects were under construction and **7** projects were in preparation for implementation, with **3** projects completed and put into operation, and **16** projects steadily under construction[30](index=30&type=chunk) - In terms of operational management, **35** projects were in operation or trial operation, achieving an annual municipal solid waste treatment volume of **3.968 million tons**, hazardous waste treatment volume of **0.008 million tons**, dismantling volume of **3.14 million units**, and providing **316 million kWh** of grid-connected electricity[30](index=30&type=chunk) - In market financing, the Group obtained a domestic **AA+** corporate credit rating, approved the issuance of Panda bonds and super short-term financing, and secured **RMB 2.4 billion** in working capital credit and approximately **RMB 1.8 billion** in fixed asset loan credit[32](index=32&type=chunk) - In the overseas market, the Group holds a **51%** stake in BCG NZ Investment Holding Limited, which is New Zealand's largest waste management service provider with a market share of nearly **40%**[32](index=32&type=chunk) - Looking ahead, the Group aims to add no less than **7,000 tons/day** of solid waste treatment capacity and will continue to study global funding and capital market trends, utilizing diverse financing methods[34](index=34&type=chunk) [Financial Review](index=14&type=section&id=Financial%20Review) This section reviews the Group's 2019 financial performance, including revenue growth, profit increase, rising finance costs, asset-liability status, and cash flow changes 2019 Financial Performance Overview | Indicator | 2019 Amount (RMB) | 2018 Amount (RMB) | YoY Growth Rate | | :-------------------------------------- | :---------------- | :---------------- | :-------------- | | Revenue from Waste Treatment and Waste-to-Energy Businesses | 5.938 billion | 4.648 billion | 27.75% | | Profit Attributable to Owners | 303 million | 183 million | 65.68% | | Finance Costs | 436 million | 310 million | 40.50% | - The increase in profit was primarily due to enhanced operational project management, improved operational efficiency, a significant increase in operating revenue, and accelerated construction projects driving growth in construction service revenue[37](index=37&type=chunk) - Total assets were approximately **RMB 18.636 billion**, with an asset-liability ratio of **71.88%**, an increase of **3.88%** from 2018, mainly due to increased funding requirements for new projects[38](index=38&type=chunk) - Cash and bank balances were approximately **RMB 1.601 billion**, a decrease of approximately **RMB 0.811 billion** from 2018, mainly due to increased capital expenditures as various projects commenced construction[40](index=40&type=chunk) - Outstanding borrowings were approximately **RMB 7.331 billion**, an increase of approximately **RMB 1.496 billion** from 2018, with fixed-rate borrowings accounting for approximately **58%** and floating-rate borrowings for approximately **42%**[41](index=41&type=chunk) - As of December 31, 2019, the Group employed approximately **4,547** employees, primarily located in mainland China, Hong Kong, and New Zealand[46](index=46&type=chunk) [Board of Directors and Senior Management](index=16&type=section&id=Board%20of%20Directors%20and%20Senior%20Management) This section introduces the company's board of directors and senior management, outlining their backgrounds, qualifications, and key responsibilities [Biographies of Directors](index=16&type=section&id=Biographies%20of%20Directors) This section introduces the backgrounds, qualifications, and key responsibilities of the company's executive and independent non-executive directors, highlighting their extensive experience - Mr. Cao Guoxian was re-designated as Executive Director and Chairman of the Board on November 25, 2019, possessing extensive experience in domestic and international investment and financing businesses[48](index=48&type=chunk) - Mr. Li Fujing was appointed Executive Director and Chief Executive Officer in November 2019, with rich experience in corporate management, operations, investment, financing, and risk management[48](index=48&type=chunk) - Independent Non-executive Directors Mr. Pu Bingrong, Mr. Zheng Qitai, and Dr. Chen Qihua possess extensive experience in urban planning, accounting, finance, and corporate governance[51](index=51&type=chunk)[52](index=52&type=chunk) [Biographies of Senior Management](index=17&type=section&id=Biographies%20of%20Senior%20Management) This section introduces the backgrounds and key responsibilities of the company's senior management, covering various departments from corporate management to legal affairs - Mr. Gu Jinshan is responsible for corporate management; Ms. Liu Jing is responsible for the International Business Department and Hazardous Waste Industry Department; Mr. Liu Yan Jun is responsible for the company's strategy, capital markets, and board management[53](index=53&type=chunk)[55](index=55&type=chunk) - Mr. Xu Jinjun has nearly two decades of experience in the environmental sector, responsible for the operation and management of technology, engineering, and the Southern Investment Center[56](index=56&type=chunk) - Mr. Yan Shengli is responsible for and oversees the Operations Center and Legal Affairs; Mr. Hu Zaichun is responsible for the investment, construction, and operation management of the anaerobic treatment industry[57](index=57&type=chunk)[58](index=58&type=chunk) - Ms. Wang Bingni serves as the Company Secretary, with over two decades of experience in company secretarial matters, internal control, and financial management for Hong Kong listed companies[60](index=60&type=chunk) [Corporate Governance Report](index=20&type=section&id=Corporate%20Governance%20Report) This report details the company's corporate governance framework, board operations, committee functions, and commitment to high standards [Corporate Governance Framework and Board Operations](index=20&type=section&id=Corporate%20Governance%20Framework%20and%20Board%20Operations) The company maintains high corporate governance standards, with the Board responsible for strategy, management oversight, and ensuring director diversity, detailing meeting attendance and training - The company complied with all code provisions of the Corporate Governance Code in Appendix 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited throughout 2019[62](index=62&type=chunk) - The Board's primary responsibilities include formulating the Group's strategic direction, setting objectives and business development plans, monitoring the performance of senior management, and being responsible for corporate governance[64](index=64&type=chunk) - The Board comprises four executive directors and three independent non-executive directors, ensuring diversity by considering factors such as gender, age, cultural and educational background, professional experience, skills, and knowledge[65](index=65&type=chunk) 2019 Board Meeting and General Meeting Attendance | Director Name | Board Meetings Attended/Held | General Meetings Attended/Held | | :----------------- | :--------------------------- | :----------------------------- | | Mr. Cao Guoxian | 8/10 | 1/1 | | Mr. Li Fujing | 1/1 | 0/0 | | Mr. Cheng Jialin | 8/10 | 1/1 | | Ms. Hao Chunmei | 9/10 | 1/1 | | Mr. Pu Bingrong | 10/10 | 1/1 | | Mr. Zheng Qitai | 10/10 | 1/1 | | Dr. Chen Qihua | 10/10 | 1/1 | - All directors participated in continuous professional development activities through training and/or reading relevant materials to update their knowledge and skills[71](index=71&type=chunk) [Board Committees and Auditor's Remuneration](index=23&type=section&id=Board%20Committees%20and%20Auditor's%20Remuneration) This section outlines the responsibilities, composition, and meeting details of the Nomination, Remuneration, and Audit Committees, along with auditor's remuneration for services - The Nomination Committee is responsible for reviewing the Board's structure, identifying suitable director candidates, assessing the independence of independent non-executive directors, and making recommendations on director succession planning[76](index=76&type=chunk)[80](index=80&type=chunk) - The Remuneration Committee is responsible for making recommendations on the remuneration policy and structure for directors and senior management, approving the terms of executive directors' service contracts, and determining specific remuneration packages[84](index=84&type=chunk) - The Audit Committee, composed of three independent non-executive directors, is responsible for considering the appointment of auditors, reviewing financial information, and overseeing risk management and internal control systems[88](index=88&type=chunk)[90](index=90&type=chunk) 2019 Auditor's Remuneration | Service Type | Amount (RMB Thousand) | | :-------------- | :-------------------- | | Audit Services | 4,356 | | Non-audit Services | 2,337 | | **Total** | **6,693** | [Risk Management and Internal Control](index=27&type=section&id=Risk%20Management%20and%20Internal%20Control) The Board is responsible for the effectiveness of risk management and internal control systems, defining roles for the Board, management, and internal audit, and detailing risk identification and management procedures - The Board is responsible for determining the nature and extent of risks acceptable to the company, ensuring the establishment and maintenance of appropriate and effective risk management and internal control systems[93](index=93&type=chunk)[94](index=94&type=chunk) - Management is responsible for detailed risk identification and management, developing daily operational process management guidelines, and executing internal control workflows and self-assessments[96](index=96&type=chunk) - The Internal Audit Department and Corporate Management Department are responsible for leading internal control construction, risk assessment, compiling a risk database, formulating risk-oriented internal audit work plans, and reporting results to the Audit Committee[96](index=96&type=chunk) - The company has established policies for handling and disseminating inside information and regularly reminds directors and employees to comply with relevant policies[103](index=103&type=chunk) - In 2019, the company established a Legal Construction Leading Group and its subordinate Legal Construction Committee to ensure a **100%** legal review rate for contracts, systems, and major decisions[104](index=104&type=chunk) [Shareholder Rights and Investor Relations](index=30&type=section&id=Shareholder%20Rights%20and%20Investor%20Relations) This section details procedures for shareholders to convene extraordinary general meetings, propose resolutions, nominate directors, and inquire with the Board, emphasizing active investor communication - Shareholders holding not less than one-tenth of the paid-up share capital can request an extraordinary general meeting and may convene it themselves if the Board fails to do so within **21** days[108](index=108&type=chunk) - Shareholders can contact the Company Secretary via the phone number, email address on the company website, or at the principal place of business in Hong Kong to make inquiries to the Board[111](index=111&type=chunk) - The company maintains close communication channels with media, analysts, and fund managers through one-on-one meetings, roadshows, and conferences to ensure investors are informed of the company's latest developments[112](index=112&type=chunk) - Directors confirm responsibility for preparing the financial statements for each financial year, ensuring they truly and fairly reflect the Group's financial position, performance, and cash flows, and comply with relevant laws and Listing Rules disclosure requirements[116](index=116&type=chunk) [Directors' Report](index=33&type=section&id=Directors'%20Report) This report provides an overview of the company's business, financial performance, board composition, shareholder interests, and related party transactions [Business Overview and Financial Performance](index=33&type=section&id=Business%20Overview%20and%20Financial%20Performance) This section outlines the company's core business in waste treatment and waste-to-energy projects, confirms 2019 results, discusses dividend policy, and details financial summaries and capital changes - The company is an investment holding company, primarily engaged in providing waste treatment technologies and services, focusing on waste-to-energy projects[121](index=121&type=chunk) - The Board does not recommend declaring a final dividend for the year ended December 31, 2019[123](index=123&type=chunk) - The dividend policy considers various factors, including the Group's financial performance, working capital needs, capital expenditures, liquidity position, debt-to-equity ratio, and economic and political conditions[123](index=123&type=chunk) - The company had no distributable reserves as of December 31, 2019[125](index=125&type=chunk) - In 2018, notes with a total principal amount of **US$300 million** bearing **5.625%** interest were issued, due in 2021, with proceeds used for financing or refinancing eligible green assets and projects[131](index=131&type=chunk) [Board and Shareholder Interests](index=34&type=section&id=Board%20and%20Shareholder%20Interests) This section lists directors, confirms independent non-executive directors' independence, discloses directors' and major shareholders' interests in shares, and states the absence of share option schemes - The list of directors during the year and up to the report date includes Executive Directors Mr. Cao Guoxian (Chairman), Mr. Li Fujing (CEO), and Independent Non-executive Directors Mr. Pu Bingrong, Mr. Zheng Qitai, and Dr. Chen Qihua[134](index=134&type=chunk) - The company has received annual confirmations of independence from each independent non-executive director and considers them all to be independent[134](index=134&type=chunk) - As of December 31, 2019, no director, chief executive, or their associates had any registrable interests or short positions in the company's shares, underlying shares, or debentures[142](index=142&type=chunk) 2019 Major Shareholder Holdings | Shareholder Name | Capacity | Number of Shares/Underlying Shares | Approximate Percentage of Shareholding | | :------------------------------- | :------------------- | :--------------------------------- | :------------------------------------- | | Capital (Hong Kong) Limited | Beneficial Owner | 6,449,026,736 (L) | 45.11% | | Beijing Capital Co., Ltd. | Controlled Corporation Interest | 6,449,026,736 (L) | 45.11% | | Capital Huaxing International Investment Co., Ltd. | Beneficial Owner | 3,116,767,072 (L) | 21.80% | | Beijing Capital Group Co., Ltd. | Controlled Corporation Interest | 9,565,793,808 (L) | 66.92% | - Currently, the company has no effective share option scheme[143](index=143&type=chunk) [Connected Transactions and Other Disclosures](index=37&type=section&id=Connected%20Transactions%20and%20Other%20Disclosures) This section discloses connected transactions, including joint venture formation and corporate financing guarantees, confirms compliance with Listing Rules, and reports on public float, key customers/suppliers, and ESG reporting - The company's wholly-owned subsidiary, Capital Investment, formed a joint venture, Hebei Xiong'an Capital Environmental Governance Co., Ltd., with Beijing Capital Co., Ltd., with Capital Investment holding a **49%** equity stake[148](index=148&type=chunk) - Beijing Capital Group provided corporate financing guarantee services to Capital Investment, with the Group owing approximately **RMB 6 million** in guarantee fees for the year ended December 31, 2019[149](index=149&type=chunk) - Sales to the Group's top five customers accounted for **25.98%** of total sales for the year, with the largest customer accounting for **5.62%**; purchases from the top five suppliers accounted for **10.6%** of total purchases, with the largest supplier accounting for **2.98%**[155](index=155&type=chunk) - Neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities during the current year[157](index=157&type=chunk) - The Environmental, Social and Governance Report will be uploaded to the company's website and the HKEX website by the end of May 2020[160](index=160&type=chunk) [Independent Auditor's Report](index=40&type=section&id=Independent%20Auditor's%20Report) This report presents the independent auditor's opinion on the consolidated financial statements, key audit matters, and responsibilities of directors and auditors [Audit Opinion and Basis](index=40&type=section&id=Audit%20Opinion%20and%20Basis) Independent auditor Ernst & Young issued an unmodified opinion on the consolidated financial statements, affirming they fairly present the Group's financial position, performance, and cash flows in accordance with HKFRSs - The auditor believes that the consolidated financial statements fairly present, in all material respects, the Group's consolidated financial position as of December 31, 2019, and its consolidated financial performance and cash flows for the year then ended, in accordance with Hong Kong Financial Reporting Standards issued by the HKICPA[163](index=163&type=chunk) - The audit was conducted in accordance with Hong Kong Standards on Auditing issued by the HKICPA, and the auditor is independent of the Group and has fulfilled its ethical responsibilities[164](index=164&type=chunk) [Key Audit Matters](index=40&type=section&id=Key%20Audit%20Matters) The auditor identified three key audit matters: accounting for service concession arrangements, impairment of franchise financial assets, and impairment of goodwill and indefinite-lived intangible assets, all involving significant management judgment - The accounting treatment for service concession arrangements involves significant management judgment and estimates, including determining the applicable accounting model, estimating future guaranteed receipts, current market rates for construction gross margin, discount rates, and the percentage of completion for construction services[167](index=167&type=chunk) - The impairment of franchise financial assets is a key audit matter due to its materiality and the level of judgment involved, as management recognizes expected credit loss provisions based on historical credit loss experience and adjusted forward-looking factors[170](index=170&type=chunk) - The impairment test for goodwill and indefinite-lived intangible assets is performed annually and involves a high degree of judgment, based on assumptions such as future revenue growth rates, operating profit margins, perpetual growth rates, and discount rates[172](index=172&type=chunk) [Responsibilities of Directors and Auditor](index=43&type=section&id=Responsibilities%20of%20Directors%20and%20Auditor) This section defines the responsibilities of the company's directors for preparing and presenting consolidated financial statements and the auditor's responsibilities for auditing them, including obtaining reasonable assurance and assessing risks - The company's directors are responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Hong Kong Financial Reporting Standards and the disclosure requirements of the Hong Kong Companies Ordinance, and for ensuring effective internal controls[177](index=177&type=chunk) - The auditor's objective is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an audit opinion[179](index=179&type=chunk) - The auditor needs to identify and assess the risks of material misstatement, understand internal controls, evaluate accounting policies and estimates, and conclude on the going concern ability[179](index=179&type=chunk)[181](index=181&type=chunk) [Annual Financial Report](index=45&type=section&id=Annual%20Financial%20Report) This section contains the Group's consolidated financial statements for the year ended December 31, 2019, along with detailed notes [Consolidated Financial Statements](index=45&type=section&id=Consolidated%20Financial%20Statements) This section provides the consolidated statement of profit or loss, comprehensive income, financial position, changes in equity, and cash flows for the year ended December 31, 2019 2019 Consolidated Statement of Profit or Loss Key Data | Indicator | 2019 (RMB Thousand) | 2018 (RMB Thousand) | | :----------------------------- | :------------------ | :------------------ | | Revenue | 5,938,095 | 4,648,196 | | Gross Profit | 1,567,462 | 1,201,935 | | Profit for the Year | 425,895 | 310,645 | | Attributable to Owners of Parent | 302,749 | 182,733 | | Attributable to Non-controlling Interests | 123,146 | 127,912 | | Basic Earnings Per Share | RMB 2.12 cents | RMB 1.28 cents | 2019 Consolidated Statement of Financial Position Key Data | Indicator | December 31, 2019 (RMB Thousand) | December 31, 2018 (RMB Thousand) | | :----------------------------- | :------------------------------- | :------------------------------- | | Total Non-current Assets | 14,116,827 | 10,545,812 | | Total Current Assets | 4,519,053 | 4,340,221 | | Total Current Liabilities | 2,978,243 | 2,723,517 | | Total Non-current Liabilities | 10,416,383 | 7,358,598 | | Net Assets | 5,241,254 | 4,803,918 | | Total Equity | 5,241,254 | 4,803,918 | 2019 Consolidated Statement of Cash Flows Key Data | Indicator | 2019 (RMB Thousand) | 2018 (RMB Thousand) | | :-------------------------------------- | :------------------ | :------------------ | | Net Cash Used in Operating Activities | (706,940) | (101,395) | | Net Cash Used in Investing Activities | (1,042,559) | (1,274,959) | | Net Cash From Financing Activities | 941,558 | 2,891,377 | | Net Increase/(Decrease) in Cash and Cash Equivalents | (807,941) | 1,515,023 | | Cash and Cash Equivalents at Year End | 1,540,029 | 2,403,522 | [Notes to the Consolidated Financial Statements](index=53&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed notes to the consolidated financial statements, covering company information, accounting policies, significant judgments, segment information, revenue analysis, and financial risk management - The company's ultimate holding company is Beijing Capital Group Co., Ltd., a state-owned enterprise registered in the People's Republic of China[204](index=204&type=chunk) - The Group first adopted Hong Kong Financial Reporting Standard 16 (Leases) in this year's financial statements, adjusting the opening balance of retained earnings as of January 1, 2019, and recognizing **RMB 284,248,000** in right-of-use assets and **RMB 284,248,000** in lease liabilities[228](index=228&type=chunk)[235](index=235&type=chunk) - Management made significant judgments and estimates in applying accounting policies for service concession arrangements, tax provisions, goodwill and intangible asset impairment, expected credit loss provisions, construction project completion percentage, estimated useful lives and residual values of fixed assets and other intangible assets, and site restoration provisions[351](index=351&type=chunk)[356](index=356&type=chunk)[357](index=357&type=chunk)[358](index=358&type=chunk)[360](index=360&type=chunk)[362](index=362&type=chunk)[363](index=363&type=chunk) 2019 Operating Segment Revenue | Segment | Revenue from External Customers (RMB Thousand) | | :---------------------------------------- | :--------------------------------------------- | | Waste Treatment and Waste-to-Energy in China | 3,567,224 | | Waste Treatment and Waste-to-Energy in New Zealand | 2,370,871 | | **Total** | **5,938,095** | 2019 Revenue from Contracts with Customers Breakdown | Revenue Source | 2019 (RMB Thousand) | | :-------------------------------------------- | :------------------ | | Construction Services under Service Concession Arrangements | 2,318,307 | | Operation Services under Service Concession Arrangements | 451,804 | | Dismantling of Electrical Appliances | 442,189 | | Waste Collection Services | 1,521,144 | | Waste Landfill Services | 493,746 | | Recycling | 107,953 | | Technical Services | 243,580 | | Others | 173,985 | | Actual Interest Income from Franchise Financial Assets | 185,387 | | **Total Revenue** | **5,938,095** | - Profit before tax for the year ended December 31, 2019, was net of depreciation of **RMB 247,029,000** and depreciation of right-of-use assets of **RMB 49,278,000**[382](index=382&type=chunk) - Total directors' remuneration in 2019 amounted to **RMB 3,790,000**, comprising **RMB 831,000** in fees and **RMB 2,959,000** in salaries, allowances, and benefits in kind[385](index=385&type=chunk) - The total remuneration for the five highest-paid individuals in 2019 was **RMB 15,959,000**, including **RMB 9,885,000** in salaries, allowances, and benefits in kind, and **RMB 5,609,000** in performance bonuses[391](index=391&type=chunk) - Total tax expense in 2019 was **RMB 208,131,000**; some Chinese subsidiaries enjoyed tax benefits, being exempt from income tax or enjoying preferential tax rates[392](index=392&type=chunk)[396](index=396&type=chunk) - Basic earnings per share was **RMB 2.12 cents**, calculated based on profit for the year attributable to ordinary equity holders of the parent of **RMB 302,749,000** and a weighted average of **14,294,733,167** ordinary shares outstanding[402](index=402&type=chunk)[404](index=404&type=chunk) - The net book value of property, plant and equipment as of December 31, 2019, was **RMB 2,272,692,000**, and the net book value of prepaid lease payments for land was **RMB 103,089,000**[407](index=407&type=chunk)[409](index=409&type=chunk) - Following the adoption of HKFRS 16, the net book value of right-of-use assets was **RMB 1,240,099,000**, and the net book value of lease liabilities was **RMB 1,238,966,000**[411](index=411&type=chunk)[413](index=413&type=chunk) - The net book value of goodwill as of December 31, 2019, was **RMB 2,086,384,000**, primarily allocated to BCG NZ Group, Zhejiang Zhuoshang Environmental Energy Co., Ltd., and Mianyang Lubo Lubricating Oil Co., Ltd[416](index=416&type=chunk)[422](index=422&type=chunk) - The net book value of other intangible assets was **RMB 2,702,006,000**, including customer contracts, service concession arrangements, licenses and permits, trade names and trademarks, and software[429](index=429&type=chunk)[430](index=430&type=chunk) - Investments in joint ventures had a net book value of **RMB 451,469,000**, primarily including Transwaste Canterbury Limited[439](index=439&type=chunk) - Investments in associates had a net book value of **RMB 104,521,000**, primarily including Shenzhen Guangye Environmental Renewable Energy Co., Ltd[450](index=450&type=chunk) - Franchise financial assets had a net book value of **RMB 2,230,486,000**, primarily from construction and operation services for waste treatment and waste-to-energy plants in China[460](index=460&type=chunk) - Contract assets had a net book value of **RMB 3,420,812,000**, primarily from construction services, with **RMB 3,117,140,000** expected to be completed within one year[467](index=467&type=chunk)[468](index=468&type=chunk) - Trade receivables had a net book value of **RMB 1,301,954,000**, including **RMB 579,945,000** in dismantling subsidies receivable from the Chinese government[478](index=478&type=chunk)[481](index=481&type=chunk) - Cash and bank balances were **RMB 1,600,770,000**, and pledged deposits were **RMB 60,741,000**[486](index=486&type=chunk) - Total interest-bearing bank and other borrowings amounted to **RMB 7,330,823,000**, with **RMB 4,252,929,000** in fixed-rate borrowings and **RMB 3,077,894,000** in floating-rate borrowings[506](index=506&type=chunk)[513](index=513&type=chunk) - Notes payable had a net book value of **RMB 2,080,404,000**, bearing interest at an annual rate of **5.625%**, and are redeemable on September 10, 2021[514](index=514&type=chunk)[516](index=516&type=chunk) - Total contingent liabilities were **RMB 356,556,000**, primarily guarantees to the government for ongoing landfill operations and the fulfillment of waste collection contracts[535](index=535&type=chunk) - Total capital commitments were **RMB 3,999,061,000**, mainly for construction projects under service concession arrangements and the acquisition of property, plant, and equipment[539](index=539&type=chunk) - Related party transactions included guarantee fees, rental expenses, interest expenses, and keepwell fees with Beijing Capital Group entities, as well as construction and operation service revenue with other government-related entities[543](index=543&type=chunk)[549](index=549&type=chunk) - The Group primarily faces interest rate risk, foreign currency risk (New Zealand Dollar, US Dollar, and Hong Kong Dollar against RMB), and liquidity risk, which are managed by combining fixed and variable rate debt and monitoring funding shortfalls[586](index=586&type=chunk)[587](index=587&type=chunk)[596](index=596&type=chunk) [Financial Summary](index=153&type=section&id=Financial%20Summary) This section provides a summary of the Group's financial performance over the past five fiscal years [Five-Year Financial Performance Overview](index=153&type=section&id=Five-Year%20Financial%20Performance%20Overview) This section presents a summary of the Group's results, assets, and liabilities for the past five fiscal years (2015-2019), showing trends in revenue, profit, total assets, and total liabilities 2015-2019 Key Financial Indicators | Indicator | 2015 (RMB Thousand) | 2016 (RMB Thousand) | 2017 (RMB Thousand) | 2018 (RMB Thousand) | 2019 (RMB Thousand) | | :--------------------------------- | :------------------ | :------------------ | :------------------ | :------------------ | :------------------ | | Revenue (Continuing and Discontinued Operations) | 2,639,432 | 2,707,882 | 3,495,166 | 4,648,196 | 5,938,095 | | Profit Attributable to Owners of the Company | 157,825 | 43,848 | 148,342 | 182,733 | 302,749 | | Total Assets | 9,143,298 | 9,573,382 | 10,682,437 | 14,886,033 | 18,635,880 | | Total Liabilities | (4,778,793) | (5,281,397) | (6,217,362) | (10,082,115) | (13,394,626) | | Equity Attributable to Owners of the Company | 3,200,504 | 3,101,877 | 3,213,509 | 3,362,362 | 3,622,593 | - The 2015 and 2016 financial summaries have been restated to include BCG NZ Investment Holding Limited and its subsidiaries, and to reflect changes in accounting policy for indefinite-lived intangible assets[610](index=610&type=chunk)[611](index=611&type=chunk)