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2021042600164.Pdf CONTENTS Chapter I Corporate Information 2 Chapter II Definitions 4 Chapter III Chairman’s Statement 8 Chapter IV Financial Highlights 12 Chapter V Management Discussion and Analysis 14 Chapter VI Directors, Supervisors and Senior Management 35 Chapter VII Directors’ Report 49 Chapter VIII Supervisory Committee’s Report 72 Chapter IX Corporate Governance Report 77 Chapter X Environmental, Social and Governance Report 93 Chapter XI Independent Auditor’s Report 143 Consolidated Statement of Profit or Loss and Other Comprehensive Income 148 Consolidated Statement of Financial Position 150 Consolidated Statement of Changes In Equity 152 Consolidated Statement of Cash Flows 153 Notes to the Consolidated Financial Statements 155 CHAPTER I CORPORATE INFORMATION BOARD OF DIRECTORS: SECRETARY TO THE BOARD: Executive Directors: Mr. Chen Yongzhong (陳永忠先生) Mr. Zhang Qi (張歧先生) (Chairman of the Board) JOINT COMPANY SECRETARIES: Mr. Liao Xingyue (廖星樾先生) Mr. Wang Junhua (王君華先生) Mr. Chen Yongzhong (陳永忠先生) Ms. Ng Wing Shan (吳詠珊女士) Non-executive Directors: AUTHORISED REPRESENTATIVES: Mr. Chen Bing (陳兵先生) Ms. Xu Yan (徐燕女士) Mr. Zhang Qi (張歧先生) Mr. Xie Xin (謝欣先生) Mr. Chen Yongzhong (陳永忠先生) Independent Non-executive Directors: REGISTERED ADDRESS, HEADQUARTERS AND PRINCIPAL Mr. Gu Ming’an (辜明安先生) PLACE OF BUSINESS IN THE PRC: Mr. Lin Bing (林兵先生) Mr. Cheng Hok Kai, Frederick (鄭學啟先生) 16 Baizi Road Jiangyang District, Luzhou STRATEGY COMMITTEE: Sichuan Province, the PRC Mr. Chen Bing (陳兵先生) (Chairman) PRINCIPAL PLACE OF BUSINESS Mr. Zhang Qi (張歧先生) IN HONG KONG: Mr. Lin Bing (林兵先生) 40th Floor, Dah Sing Financial Centre AUDIT COMMITTEE: No.248 Queen’s Road East Wanchai, Hong Kong Mr. Cheng Hok Kai, Frederick (鄭學啟先生) (Chairman) DOMESTIC SHARE REGISTRAR: Mr. Gu Ming’an (辜明安先生) Mr. Xie Xin (謝欣先生) China Securities Depository and Clearing Corporation Limited NOMINATION AND REMUNERATION No.17, Taipingqiao Avenue COMMITTEE: Xicheng District, Beijing, the PRC Mr. Gu Ming’an (辜明安先生) (Chairman) Mr. Cheng Hok Kai, Frederick (鄭學啟先生) Mr. Zhang Qi (張歧先生) 2 Annual Report 2020 CHAPTER I CORPORATE INFORMATION (Continued) H SHARE REGISTRAR: INTERNATIONAL AUDITOR: Computershare Hong Kong Investor Services Deloitte Touche Tohmatsu Limited Certified Public Accountants Shops 1712–1716, 17th Floor Public Interest Entity Auditor Hopewell Centre, 183 Queen’s Road East registered in accordance with the Wanchai, Hong Kong Financial Reporting Council Ordinance 35th Floor, One Pacific Place LEGAL ADVISER: 88 Queensway Hong Kong As to Hong Kong law: Morgan, Lewis & Bockius STOCK CODE: Suites 1902–09, 19th Floor Edinburgh Tower, The Landmark 2281 15 Queen’s Road Central Hong Kong COMPANY WEBSITE: PRINCIPAL BANKERS: www.lzss.com Industrial and Commercial Bank of China Luzhou City Commercial Bank Bank of Communications Co., Ltd. Luzhou Xinglu Water (Group) Co., Ltd. 3 CHAPTER II DEFINITIONS In this annual report, unless the context otherwise requires, the following expressions shall have the following meanings: “Annual General Meeting” the annual general meeting to be convened by the Company on 11 June 2021, or any adjournment thereof “Articles of Association” the articles of association of the Company, as amended, supplemented or otherwise modified from time to time “associate(s)” has the meaning ascribed to it under the Listing Rules “Beijiao Water” Luzhou Xinglu Water (Group) Beijiao Water Co., Ltd.* (瀘州市興瀘水 務(集團)北郊水業有限公司), a limited liability company established in the PRC on 25 March 2004 and a non-wholly owned subsidiary of the Company, mainly engaged in tap water production business “Beijing Enterprises Water Group” Beijing Enterprises Water Group Limited* (北控水務集團有限公 司), one of our Shareholders, whose shares are listed on the Main Board of the Hong Kong Stock Exchange (stock code: 371) “Board” the board of Directors “Company” or “Group” or “us” or “we” Luzhou Xinglu Water (Group) Co., Ltd.* (瀘州市興瀘水務 (集團) 股 份有限公司), converted by Xinglu Water Company Limited (a limited liability company established on 31 July 2002) on 25 December 2015, which includes its predecessor and subsidiaries as required by the context “connected person(s)” has the meaning ascribed to it under the Listing Rules “Controlling Shareholder(s)” has the meaning ascribed to it under the Listing Rules “Corporate Governance Code” the Corporate Governance Code set out in Appendix 14 to the Listing Rules “Director(s)” the director(s) of the Company “Domestic Share(s)” the ordinary share(s) in issue in the share capital of the Company, with a nominal value of RMB1.00 each, which are subscribed for or credited as paid up in RMB 4 Annual Report 2020 CHAPTER II DEFINITIONS (Continued) “Fanxing Environmental” Luzhou Fanxing Environmental Development Co., Ltd.* (瀘州市繁 星環保發展有限公司), a limited liability company established in the PRC on 18 August 2016 and a non-wholly owned subsidiary of the Company, mainly engaged in wastewater treatment business “H Share(s)” the ordinary share(s) in issue in the share capital of the Company, with a nominal value of RMB1.00 each, which are listed on the Main Board of the Hong Kong Stock Exchange “Hejiang Water” Luzhou Xinglu Water (Group) Hejiang Water Co., Ltd.* (瀘州市 興瀘水務 (集團) 合江水業有限公司), a limited liability company established in the PRC on 26 April 1999 and a non-wholly owned subsidiary of the Company, mainly engaged in tap water production and sale “HK$” the lawful currency of Hong Kong “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China “Hong Kong Stock Exchange” The Stock Exchange of Hong Kong Limited “IFRSs” International Financial Reporting Standards issued by the International Accounting Standards Board “IPO” the initial public offering of the Company’s H Shares on the Main Board of the Hong Kong Stock Exchange on 31 March 2017 “Jiangnan Water” Luzhou Xinglu Water Group Jiangnan Water Co., Ltd.* (瀘州市興瀘 水務集團江南水業有限公司), a limited liability company established in the PRC on 7 March 2003 and a wholly-owned subsidiary of the Company, mainly engaged in tap water production and sale “Leshan Xingjia” Leshan Xinglu Water Xingjia Environmental Protection Technology Co., Ltd.* (樂山市興瀘水務興嘉環保科技有限公司), a limited liability company established in the PRC on 28 December 2018 and a non-wholly owned subsidiary of the Company, mainly engaged in wastewater treatment business “Listing Rules” the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange Luzhou Xinglu Water (Group) Co., Ltd. 5 CHAPTER II DEFINITIONS (Continued) “Luzhou Laojiao” Luzhou Laojiao Group Co., Ltd.* (瀘州老窖集團有限責任公司), one of our Shareholders “Luzhou Infrastructure” Luzhou City Infrastructure Investment Co., Ltd.* (瀘州市基礎建設投 資有限公司), one of our Shareholders “Model Code” the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Listing Rules “Naxi Water” Luzhou Xinglu Water (Group) Naxi Water Co., Ltd.*(瀘州市興瀘水務 (集團)納溪水業有限公司), a limited liability company established in the PRC on 17 March 2003 and a wholly owned subsidiary of the Company, mainly engaged in tap water production and sale. “PRC” or “China” the People’s Republic of China, and for the purpose of this report only, excluding Hong Kong, Macau and Taiwan “Prospectus” the prospectus dated 21 March 2017 in relation to the IPO “Reporting Period” the year ended 31 December 2020 “RMB” or “Yuan” the lawful currency of the PRC “SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “Share(s)” the ordinary share(s) of RMB1.00 each in the share capital of the Company, including H Shares and Domestic Shares “Shareholder(s)” the holder(s) of the Share(s) “Sitong Design” Luzhou Sitong Water Supply and Drainage Engineering Design Co., Ltd.* (瀘州市四通給排水工程設計有限公司), a limited liability company established in the PRC on 6 September 2002 and a non- wholly owned subsidiary of the Company, mainly engaged in the provision of water supply and drainage design service “Sitong Engineering” Luzhou Sitong Tap Water Engineering Co., Ltd.* (瀘州市四通自來水 工程有限公司), a limited liability company established in the PRC on 2 September 2002 and a wholly-owned subsidiary of the Company, mainly engaged in the provision of engineering construction service “subsidiary(ies)” has the meaning ascribed to it under the Listing Rules 6 Annual Report 2020 CHAPTER II DEFINITIONS (Continued) “Supervisor(s)” the supervisor(s) of the Company “Supervisory Committee” the supervisory committee of the Company “Weiyuan Qingxi Water” Xinglu Water (Group) Weiyuan Qingxi Water Co., Ltd. (興瀘水務 (集 團) 威遠清溪水務有限公司), a limited liability company established in the PRC on 30 December 2004 and a non-wholly owned subsidiary of the Company, mainly engaged in the provision of water supply service “Weiyuan Installation Company” Weiyuan City Water Supply and Drainage Installation Engineering Co., Ltd.* (威遠城市供排水安裝工程有限公司), a limited liability company established in the PRC on 5 November 2007 and a non-wholly owned subsidiary, mainly engaged in the provision of engineering construction service “Xinglu Investment” Luzhou City Xinglu Investment Group Co., Ltd.* (瀘州市興瀘投資集 團有限公司), a limited liability company established in the PRC on 28 January 2003 and our Controlling Shareholder “Xinglu Wastewater Treatment” Luzhou Xinglu Wastewater Treatment Co., Ltd.* (瀘州市興瀘污水 處理有限公司), a limited liability company established in the PRC on 11 December 2000 and a non-wholly owned subsidiary of the Company, mainly engaged in wastewater treatment business “Xingxu Water” Luzhou Xinglu Water (Group) Xingxu Water Co., Ltd. (瀘州市興瀘水 務 (集團) 興敘水業有限公司), a limited liability company established in the PRC on 9 October 2018 and a non-wholly owned subsidiary of the Company, mainly engaged in the provision of water supply service “Yongxing Water” Xuyong Yongxing Water Governance Co., Ltd. * (敘永縣永星水環境 治理有限公司), a limited liability company established in the PRC on 31 July 2019 and a non-wholly owned subsidiary of the Company, mainly engaged in wastewater treatment business “Zhihui Water” Zhihui Water Science and Technology Co., Ltd.*(瀘州市興瀘智慧水 務科技有限責任公司), a limited liability company established in the PRC on 2 January 2020 and a non-wholly owned subsidiary of the Company, mainly engaged in equipments sale. “%” percent Luzhou Xinglu Water (Group) Co., Ltd.
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