Company Information This chapter provides essential company details, including board and committee members, registered address, share registrar, and key professional advisors - This section provides the company's basic information, including the list of board and committee members, registered address, principal place of business, share registrar, legal advisors, auditors, and principal bankers711 Definitions This chapter defines specific terms used throughout the annual report, encompassing company entities, share types, related parties, and key financial and legal terminology - This section defines specific terms used in the annual report, covering company entities, share types, related parties, major subsidiaries (such as Beixiao Water, Fanxing Environmental Protection, etc.), and financial and legal terms, providing a basis for understanding the report content162645 Chairman's Statement The Chairman's statement reviews the company's performance in 2020, highlighting stable growth despite challenges, and outlines future strategic directions Performance Review In 2020, the Group achieved stable operating performance with total revenue growing by 22.0% and full-year profit by 11.6%, leading to a proposed final dividend of RMB 0.06 per share (tax inclusive) Performance Highlights | Indicator | 2020 | 2019 | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Total Revenue | Approx. 2,521.9 million RMB | Approx. 2,067.1 million RMB | +22.0% | | Full-Year Profit | Approx. 224.8 million RMB | Approx. 201.5 million RMB | +11.6% | | Basic Earnings Per Share | 0.24 RMB | 0.22 RMB | +9.1% | | Proposed Final Dividend | 0.06 RMB per share (tax inclusive) | - | - | Business Highlights and Outlook During the reporting period, the company made significant progress in smart water services, business expansion, project construction, and internal control, with daily water supply and wastewater treatment capacities substantially increasing, while future plans focus on seizing regional economic opportunities to drive sustainable high-quality development - The company focused on smart leadership, achieving a breakthrough in smart water construction from self-operation to external output, and established a comprehensive smart water solution provider for small and medium-sized water enterprises56 - Project construction made solid progress, with multiple water plant projects completed and put into trial operation, significantly enhancing the company's core business capabilities - Daily water supply capacity reached 639 thousand tons, a year-on-year increase of 30.1% - Daily wastewater treatment capacity reached 391 thousand tons, a year-on-year increase of 19.6%60 - Future Outlook: The company will seize development opportunities in the "Chengdu-Chongqing Economic Circle" and "Southern Sichuan Economic Integration" to focus on three major goals: core business operations, investment expansion, and industrial chain extension63 Financial Summary This chapter provides a high-level overview of the company's consolidated financial performance, assets, and liabilities over the past five years Consolidated Performance This section presents key consolidated performance data for the company from 2016 to 2020, showing a continuous growth trend in revenue and profit, with 2020 revenue reaching RMB 2.52 billion and full-year profit at RMB 225 million Consolidated Performance (2016-2020) | Indicator (thousand RMB) | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 2,521,905 | 2,067,132 | 1,218,206 | 1,081,744 | 836,191 | | Profit Before Tax | 272,763 | 231,994 | 186,630 | 163,169 | 165,812 | | Full-Year Profit | 224,804 | 201,523 | 167,242 | 142,689 | 140,796 | | Profit Attributable to Owners of the Company | 208,058 | 190,960 | 153,451 | 131,298 | 126,647 | | Basic Earnings Per Share (RMB) | 0.24 | 0.22 | 0.18 | 0.16 | 0.20 | Consolidated Assets and Liabilities This section presents the company's consolidated assets and liabilities from 2016 to the end of 2020, indicating continuous expansion in total assets and liabilities, with total assets reaching RMB 7.22 billion and total equity at RMB 2.33 billion by year-end 2020 Consolidated Assets and Liabilities (2016-2020) | Indicator (thousand RMB) | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 7,224,011 | 5,815,603 | 3,811,837 | 3,264,816 | 2,659,137 | | Total Liabilities | (4,891,079) | (3,688,125) | (1,854,926) | (1,386,900) | (1,287,864) | | Total Equity | 2,332,932 | 2,127,478 | 1,956,911 | 1,877,916 | 1,371,273 | Management Discussion and Analysis This chapter provides a comprehensive review and analysis of the company's operational and financial performance, industry trends, and future strategies Industry Overview and Development Strategy The water industry benefits from strong policy support, particularly from national and provincial initiatives, and for 2021, the Group plans to advance smart water initiatives, expand into urban wastewater treatment, and extend its industrial chain to become a comprehensive water and environmental service provider - National and local policies provide strong support for water enterprises to integrate resources, expand across regions, and extend their business scope7677 - The 2021 development strategy focuses on "reform and innovation, quality and efficiency improvement, smart leadership, and leapfrog development," with a key emphasis on expanding the upstream and downstream industrial chain79 Business Review The company, a comprehensive municipal water service provider in Sichuan Province, operates 12 water treatment plants and 9 urban wastewater treatment plants with a total capacity of approximately 1.03 million tons/day, achieving significant growth in both water sales and urban wastewater treatment volumes - Tap Water Projects: Operates 12 water plants with a total daily supply capacity of approximately 639 thousand tons; total water sales during the reporting period were approximately 144.2 million tons, a year-on-year increase of 8.5%83 - Wastewater Treatment Projects: Operates 9 wastewater treatment plants with a daily treatment capacity of approximately 391 thousand tons; total urban wastewater actually treated was approximately 139.5 million tons, a year-on-year increase of 33.5%84 Financial Review This section provides a detailed analysis of the company's consolidated income statement and financial position, showing 2020 total revenue increased by 22.0% to RMB 2.52 billion, gross profit grew by 21.5% to RMB 456 million with a stable gross margin of 18.1%, and total assets expanded to RMB 7.22 billion, while the net debt-to-equity ratio rose to 78.2% Revenue Analysis Total revenue in 2020 increased by 22.0% to RMB 2.52 billion, primarily driven by a 90.6% growth in wastewater treatment infrastructure construction and upgrade services and a 17.2% growth in installation services, with moderate increases also seen in tap water sales and infrastructure construction revenue Revenue by Segment | Revenue Segment (million RMB) | 2020 | 2019 | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Total Revenue | 2,521.9 | 2,067.1 | +22.0% | | Tap Water Supply | | | | | - Tap Water Sales | 340.0 | 317.5 | +7.1% | | - Installation Services | 341.5 | 291.4 | +17.2% | | - Infrastructure Construction and Upgrade | 827.6 | 810.7 | +2.1% | | Wastewater Treatment | | | | | - Operation Services | 302.1 | 266.9 | +13.2% | | - Interest Income from Receivables | 91.5 | 55.8 | +64.0% | | - Infrastructure Construction and Upgrade | 619.2 | 324.8 | +90.6% | Cost of Sales and Services Total cost of sales and services increased by 22.1% to RMB 2.07 billion, in line with revenue growth, primarily due to higher costs in wastewater treatment infrastructure construction and upgrade services (up 90.8%) and installation services (up 53.8%) - Total cost of sales and services increased by 22.1% from RMB 1.69 billion in 2019 to RMB 2.07 billion in 202098 - Costs for wastewater treatment infrastructure construction and upgrade increased by 90.8% to RMB 619 million, mainly due to the construction of Erdaoxi Phase III and Xuyong Phase II projects107 Gross Profit and Gross Margin Gross profit increased by 21.5% to RMB 456 million, driven by expanded infrastructure construction and upgrade services, with the overall gross margin stable at 18.1%, while tap water sales gross margin decreased due to higher amortization, and wastewater treatment operation services gross margin improved due to increased billed volume and effective cost control - Overall gross profit increased by 21.5% from RMB 375 million to RMB 456 million; gross margin slightly decreased from 18.2% to 18.1%108 - Gross profit from tap water supply infrastructure construction and upgrade significantly increased by 1806.3%, primarily due to high-margin self-built projects113 - Gross margin for wastewater treatment operation services increased from 24.0% to 30.0%, driven by increased billed volume from new projects and effective cost control114 Other Income and Expense Items Finance costs significantly increased by 55.0% to RMB 118 million due to new borrowings and longer bond interest periods, while income tax expense rose by 57.4% to RMB 48.0 million, pushing the effective tax rate from 13.1% to 17.6%, ultimately resulting in an 11.6% increase in profit after tax to RMB 225 million, though the profit margin decreased from 9.7% to 8.9% - Finance costs increased by 55.0% year-on-year to RMB 118 million, primarily due to new borrowings and an increased interest-bearing period for bonds120 - Income tax expense increased by 57.4% year-on-year to RMB 48.0 million, with the effective tax rate rising from 13.1% to 17.6%123 - Profit after tax increased by 11.6% year-on-year to RMB 225 million, but the profit margin decreased from 9.7% to 8.9%124 Balance Sheet and Operating Efficiency Analysis By the end of 2020, total assets increased to RMB 7.22 billion, with significant growth in intangible assets (primarily concession rights) and receivables under service concession arrangements; operating efficiency showed improved inventory turnover (22 days from 26 days), but trade receivables turnover lengthened to 104 days from 78 days due to the pandemic, and the net debt-to-equity ratio rose from 50.7% to 78.2%, indicating higher leverage - Intangible assets increased from RMB 2.71 billion to RMB 3.51 billion, mainly due to the completion of engineering projects and upgrades126 Operating Efficiency Indicators | Operating Efficiency Indicator | 2020 | 2019 | | :--- | :--- | :--- | | Average Inventory Turnover Days | 22 days | 26 days | | Average Trade Receivables Turnover Days | 104 days | 78 days | | Average Trade Payables Turnover Days | 31 days | 32 days | - The net debt-to-equity ratio increased from 50.7% at the end of 2019 to 78.2% at the end of 2020144 Other Matters This section covers employee information, IPO proceeds utilization, significant acquisitions, asset pledges, and other important matters, noting an increase in employees to 1,142, the establishment of three new subsidiaries for business expansion, the planned use of most IPO funds, and the minimal overall impact of the COVID-19 pandemic on the Group's operations - As of the end of the reporting period, the company employed 1,142 staff, an increase from 940 at the end of 2019146 - During the reporting period, the company established three new subsidiaries, Qingbaijiang Water, Dechang Water, and Leibo Water, through joint contributions to expand its wastewater treatment and tap water supply businesses152 - As of the end of the reporting period, approximately HKD 399 million of the net proceeds from the initial public offering of approximately HKD 401 million had been utilized, with HKD 1.76 million remaining unutilized148149 - The Board believes that the COVID-19 pandemic had a generally minimal impact on the Group's consolidated financial statements as of December 31, 2020164 Directors, Supervisors and Senior Management This chapter provides detailed biographical information for the company's directors, supervisors, and senior management, highlighting their extensive professional experience across various relevant fields Biographies of Directors, Supervisors and Senior Management This section details the personal biographies of the company's executive, non-executive, and independent non-executive directors, supervisors, company secretary, senior management, and joint company secretaries, showcasing their extensive professional experience in the water industry, municipal infrastructure, corporate management, finance, accounting, and legal fields - The executive director team comprises Mr. Zhang Qi (Chairman), Mr. Liao Xingyue (General Manager), and Mr. Wang Junhua (Deputy General Manager), all possessing years of experience in the water and municipal industries166170 - The Supervisory Committee is led by Ms. Qu Mei (Chairperson), with members including shareholder representative supervisors, employee representative supervisors, and external supervisors, bringing diverse backgrounds in corporate management, law, and accounting194203 - Senior management includes deputy general managers and the chief financial officer, responsible for the company's daily operations, financial management, and external investments, among other key functions210212215 Directors' Report This chapter presents the Directors' Report, covering the company's business review, financial performance, dividend policy, risk factors, and corporate governance practices Business, Dividends, Risks and Key Relationships This section outlines the company's principal activities, performance, dividend policy, environmental policy, and key risk factors, including market expansion, operational management, cost control, safety, environmental, and policy risks, noting a proposed final dividend of RMB 0.06 per share and significant customer and supplier concentration - The Board recommends a final dividend of RMB 0.06 per share (tax inclusive) for the year ended December 31, 2020, totaling approximately RMB 51.583 million224 - The company faces key risks including market expansion and investment risks, operational management risks, cost control risks, safety and environmental risks, cybersecurity risks, and policy risks238239242 - High customer concentration: Sales to the top five customers accounted for 63.2% of total revenue during the reporting period, with the largest customer accounting for 43.8%257 - High supplier concentration: Purchases from the top five suppliers accounted for 50.8% of total purchases during the reporting period, with the largest supplier accounting for 30.1%258 Share Capital, Securities and Shareholder Equity This section discloses the company's share capital structure, bond issuance, securities trading, and major shareholder holdings, noting a total share capital of 859.71 million shares, the successful issuance of RMB 700 million in corporate bonds in 2019, and significant stakes held by controlling shareholder Xinglu Investment and Beijing Enterprises Water Group - As of the end of the reporting period, the company's total share capital was 859.71 million shares, comprising 644.77 million domestic shares and 214.94 million H shares261 - The company successfully issued corporate bonds with an aggregate principal amount of RMB 700 million in 2019, which are listed on the Shanghai Stock Exchange262 Major Shareholder Holdings | Major Shareholder | Holding Capacity | Share Class | Number of Shares | Percentage of Class Shares | Percentage of Total Shares | | :--- | :--- | :--- | :--- | :--- | :--- | | Xinglu Investment | Beneficial owner and controlled corporation interest | Domestic Shares | 574,363,690 (L) | 89.08% | 66.81% | | Luzhou Laojiao | Beneficial owner | Domestic Shares | 70,406,310 (L) | 10.92% | 8.19% | | Beijing Enterprises Water Group Limited | Beneficial owner | H Shares | 71,150,000 (L) | 33.10% | 8.28% | Governance and Compliance This section details the company's governance practices, including public float, continuing connected transactions, non-compete undertakings, and compliance with corporate governance codes, confirming sufficient public float and adherence to general commercial terms for connected transactions, with the controlling shareholder complying with non-compete commitments, and overall compliance with governance codes except for a rotational retirement provision due to delayed board re-election - The company confirmed that its public float remained no less than 25% during the reporting period, complying with listing rule requirements305 - Continuing connected transactions primarily involve providing tap water supply, installation services, and property management services to connected persons, all conducted on normal commercial terms and in compliance with relevant approval and disclosure requirements312313319 - The controlling shareholder confirmed full compliance with the non-compete undertaking during the reporting period, which was also reviewed and confirmed by the independent non-executive directors323 - Due to delays in the board re-election process, the company was unable to fully comply with Rule A.4.2 of the Corporate Governance Code regarding the rotational retirement of directors every three years; otherwise, the company complied with all other code provisions during the reporting period326327 Supervisory Committee Report This chapter presents the Supervisory Committee's report, detailing its oversight activities and independent opinions on the company's operations, financial status, and internal controls Supervisory Committee Work and Independent Opinions Comprising seven supervisors, the Supervisory Committee diligently performed its oversight duties during the reporting period, attending board and shareholder meetings and reviewing financial reports, and provided independent opinions affirming the company's lawful operations, sound financial condition, fair connected transactions, and effective internal controls, with no actions found detrimental to the company or shareholders' interests - The Supervisory Committee positively evaluated the Board's work, deeming its decision-making processes legal and effective, and noting diligent execution of shareholder meeting resolutions347 - The Supervisory Committee positively evaluated the management team's work, recognizing their diligence and significant achievements in production and operations348 - The Supervisory Committee's independent opinion states that the company's operations are lawful, financial systems are sound, connected transactions adhere to fair principles, and internal control and risk management systems are relatively comprehensive350351354355 Corporate Governance Report This chapter outlines the company's corporate governance framework, detailing the structure and functions of the Board of Directors, its committees, and shareholder rights Board Structure and Operations This section details the company's corporate governance structure, focusing on the Board of Directors' composition, responsibilities, operations, and diversity policy, noting a 9-member board (3 executive, 3 non-executive, 3 independent non-executive) compliant with listing rules, separation of Chairman and General Manager roles, adoption of a board diversity policy, and high attendance at 8 board meetings during the reporting period - The Board of Directors consists of 9 directors, including 3 independent non-executive directors, accounting for one-third of the board, in compliance with listing rule requirements360 - The roles of the Board Chairman (Mr. Zhang Qi) and General Manager (Mr. Liao Xingyue) are separate, ensuring a balance of power366 - The company has adopted a Board Diversity Policy, and its board members demonstrate diversity in age, educational background, professional skills, and management experience371373382 - A total of 8 Board meetings and 2 general meetings were held during the reporting period, with good director attendance390 Committees, Remuneration, Risk Management and Shareholder Rights The company has established Strategy, Nomination and Remuneration, and Audit Committees, each with distinct responsibilities, and this section discloses their composition, duties, meeting details, and senior management remuneration ranges, while also outlining the Board's responsibility for establishing and reviewing risk management and internal control systems, and clarifying shareholder rights regarding extraordinary general meetings, proposals, and inquiries - The company has established a Strategic Committee, a Nomination and Remuneration Committee, and an Audit Committee, with detailed disclosure of each committee's membership, meeting frequency, and attendance395400403 - The Board is responsible for establishing and maintaining effective risk management and internal control systems, which are reviewed by the Audit Committee; the Board deemed the system effective and adequate during the reporting period415419 - Shareholder rights are clearly defined, including the right for shareholders holding 10% or more of the shares to request an extraordinary general meeting, and for shareholders holding 3% or more of the shares to propose ad hoc resolutions410 Auditor's Remuneration | Service Category | Amount (thousand RMB) | | :--- | :--- | | Annual Audit Services | 2,220 | | Interim Financial Review Services | 550 | | Total Fees | 2,770 | Environmental, Social and Governance (ESG) Report This chapter presents the company's Environmental, Social, and Governance (ESG) report, detailing its management approach, performance in key areas, and commitment to sustainable development ESG Management and Anti-Corruption The company has established a Board-supervised ESG governance framework, identifying material ESG issues through stakeholder engagement, and rigorously implements anti-corruption measures through internal policies, integrity agreements, whistleblowing channels, and training, with no corruption cases reported during the period - The Board is responsible for ESG strategy and reporting, and an ESG working group has been established to promote daily work437 - Through surveys and interviews, climate change response, corporate governance, stable and efficient water services, and anti-corruption were identified as highly material issues461462 - The company has formulated various anti-corruption policies, such as the "Implementation Measures for Preventing Occupational Crimes," and strengthens supervision through signing integrity responsibility letters and conducting integrity talks466467 Special Topic: Working Together to Combat the Pandemic In response to the COVID-19 pandemic in early 2020, the company swiftly implemented measures to safeguard employee health, support community anti-epidemic efforts, and ensure water supply security, demonstrating corporate social responsibility through strict prevention protocols, volunteer services, and emergency water provisions for critical facilities - Strict epidemic prevention and control measures were implemented, including personnel screening, temperature monitoring, and material provision, to ensure employee health and safety476 - A youth epidemic prevention and control volunteer service team was established to conduct epidemic prevention publicity, personnel screening, and road control in communities481483 - Full efforts were made to ensure water supply, with emergency teams established to provide vital water access to hospitals and isolation points, and convenient services like "no water cutoff for overdue payments" were introduced486487 Operations Management: Product Quality and Customer Service The company is committed to providing high-quality and safe tap water and efficient wastewater treatment services, adhering to national standards with 100% water quality compliance through a three-tier testing system, employing advanced technologies for wastewater discharge, and continuously enhancing customer service through multi-channel communication and standardized processes - Tap water supply implements a three-tier testing system, with a total daily supply of approximately 639 thousand tons and a 100% water quality compliance rate during the reporting period490491495 - Total wastewater treatment reached 139.5 million tons, with effluent quality meeting the Grade I A standard of the "Discharge Standard of Pollutants for Municipal Wastewater Treatment Plants"504506 - Through the "Full-Area Safe Water Supply" project, an investment of RMB 440 million resolved drinking water difficulties for 340 thousand rural residents in Jiangyang District498 Environmental Protection The company adheres to green development principles, focusing on emissions management, resource conservation, and water environment protection through technological upgrades and refined management to reduce greenhouse gas emissions and energy consumption, ensuring compliant disposal of waste, actively protecting water sources, and mitigating construction impacts on the surrounding environment Environmental Performance Indicators | Indicator | Unit | 2020 | | :--- | :--- | :--- | | Total Greenhouse Gas Emissions | ten thousand tons of CO2 equivalent | 17.44 | | Hazardous Waste Generated | tons | 42.84 | | Non-Hazardous Waste Generated | ten thousand tons | 21.34 | | Total Energy Consumption | ten thousand tons of standard coal | 1.66 | - By strengthening equipment upgrades and promoting "Internet+production management" and other measures, the company effectively reduced production power consumption528530 - The "Water Source Protection Zone Patrol System" was formulated, and activities such as water source protection zone patrols, garbage cleanup, and environmental protection publicity were carried out, with approximately 11.5 tons of garbage cleaned up in 2020540 Employee Care and Development The company values employees as a precious resource, committed to equal employment, protecting rights, fostering development, and ensuring health and safety through a comprehensive compensation and benefits system, dual career paths, internal and external training, and skill competitions, while rigorously implementing safety production responsibilities with 100% annual health check coverage, and promoting employee well-being through democratic initiatives, hardship assistance, and cultural activities - The company strictly adheres to labor laws and regulations, ensuring equal employment and firmly prohibiting child labor and forced labor; the annual employee turnover rate in 2020 was 1.77%555563565 - Systematic training is provided, with each employee receiving an average of 103.83 hours of training in 2020, and "industry-university-research" cooperation agreements signed with multiple universities569577 - The company prioritizes production safety and occupational health, having obtained OHSAS18001 certification, with no production safety accidents occurring during the reporting period and a 100% employee health check coverage rate578579580 Supply Chain Management and Social Welfare The company emphasizes win-win partnerships with suppliers, implementing strict admission, supervision, and evaluation systems that consider environmental and social responsibility, and actively engages in social welfare through community volunteer services and targeted poverty alleviation, donating RMB 375 thousand and supporting poverty-stricken areas through consumption-based assistance - Strict supplier management processes are implemented, including admission review, dynamic supervision, and annual evaluation, with environmental and social responsibility incorporated into considerations607610613 - Actively engaged in social welfare, organizing or participating in 87 public welfare activities totaling 354 hours, and making external donations of RMB 375 thousand618626 - Continued targeted poverty alleviation efforts, donating funds to designated assistance villages for party member education base construction and industrial development, and carrying out consumption-based poverty alleviation activities622625 Independent Auditor's Report and Financial Statements This chapter contains the Independent Auditor's Report and the company's consolidated financial statements, providing a detailed view of its financial position and performance Independent Auditor's Report Deloitte Touche Tohmatsu issued a standard unqualified audit opinion on the company's consolidated financial statements for the year ended December 31, 2020, affirming that the statements fairly present the Group's financial position and results in accordance with International Financial Reporting Standards and Hong Kong Companies Ordinance disclosure requirements, with 'Impairment assessment of intangible assets not yet available for use' identified as a key audit matter - The auditor, Deloitte Touche Tohmatsu, issued a standard unqualified audit opinion628 - A key audit matter identified was "Impairment assessment of intangible assets not yet available for use," due to its significant impact on the consolidated financial statements and the substantial management estimates involved633 Consolidated Financial Statements This section includes the company's 2020 consolidated statement of profit or loss and other comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity, and consolidated statement of cash flows, presenting a detailed view of the company's financial performance and position during the reporting period Consolidated Statement of Profit or Loss Key Items | Consolidated Statement of Profit or Loss Key Items (thousand RMB) | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | 2,521,905 | 2,067,132 | | Gross Profit | 456,120 | 375,464 | | Profit Before Tax | 272,763 | 231,994 | | Full-Year Profit | 224,804 | 201,523 | | Profit for the Year Attributable to Owners of the Company | 208,348 | 190,591 | | Basic Earnings Per Share (RMB) | 0.24 | 0.22 | Consolidated Statement of Financial Position Key Items | Consolidated Statement of Financial Position Key Items (thousand RMB) | December 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Total Assets | 7,224,011 | 5,815,603 | | Non-Current Assets | 5,683,590 | 4,314,959 | | Current Assets | 1,540,421 | 1,500,644 | | Total Liabilities | 4,891,079 | 3,688,125 | | Current Liabilities | 2,003,991 | 1,574,134 | | Non-Current Liabilities | 2,887,088 | 2,113,991 | | Total Equity | 2,332,932 | 2,127,478 | | Equity Attributable to Owners of the Company | 2,176,637 | 2,019,412 | Consolidated Statement of Cash Flows Key Items | Consolidated Statement of Cash Flows Key Items (thousand RMB) | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash from Operating Activities | (42,862) | 241,578 | | Net Cash Used in Investing Activities | (563,334) | (803,840) | | Net Cash from Financing Activities | 546,512 | 1,110,431 | | Net (Decrease) Increase in Cash and Cash Equivalents | (59,684) | 548,169 | | Cash and Cash Equivalents at Year End | 1,036,193 | 1,095,877 | Notes to the Consolidated Financial Statements The notes to the financial statements elaborate on the company's accounting policies, key judgments, and estimates, providing detailed breakdowns and explanations for various financial statement items, with important notes covering revenue disaggregation, segment information, service concession arrangements, financial instrument risk management, related party transactions, and capital commitments - Note 5 provides a detailed breakdown of revenue from contracts with customers, disaggregated by service type (tap water supply, wastewater treatment), timing of revenue recognition (at a point in time/over time), and customer type (government/non-government)830 - Note 6 presents segment information, categorizing business into two major segments: tap water supply and wastewater treatment, and discloses revenue, performance, assets, and liabilities for each segment843845850 - Note 18 elaborates on the accounting treatment for service concession arrangements, which represent the company's core business model, involving the recognition of intangible assets (concession rights) and financial assets (receivables)919920 - Note 40 details the risk management of financial instruments, including interest rate risk, foreign currency risk, credit risk, and liquidity risk, and provides sensitivity analysis and a detailed assessment of expected credit losses111211151120
兴泸水务(02281) - 2020 - 年度财报