2020 2020 ANNUAL REPORT 年 報 ANNUAL REPORT 2020 年 報 CONTENTS Annual Report 2020 – Beijing Enterprises Environment Group Limited CONTENTS CORPORATE INFORMATION 2 CORPORATE STRUCTURE 3 FINANCIAL HIGHLIGHTS 4 CHAIRMAN’S STATEMENT 5 MANAGEMENT DISCUSSION AND ANALYSIS 6 BIOGRAPHICAL INFORMATION OF DIRECTORS AND SENIOR MANAGEMENT 15 CORPORATE GOVERNANCE REPORT 17 REPORT OF THE DIRECTORS 26 INDEPENDENT AUDITOR’S REPORT 36 AUDITED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF PROFIT OR LOSS 41 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 42 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 43 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 45 CONSOLIDATED STATEMENT OF CASH FLOWS 46 NOTES TO FINANCIAL STATEMENTS 48 FIVE YEAR FINANCIAL SUMMARY 134 1 CORPORATE INFORMATION Beijing Enterprises Environment Group Limited – Annual Report 2020 CORPORATE INFORMATION BOARD OF DIRECTORS REGISTERED OFFICE Executive directors: 66th Floor, Central Plaza Mr. Ke Jian (Chairman and Chief Executive Officer) 18 Harbour Road Ms. Sha Ning (Vice President) Wanchai Mr. Ng Kong Fat, Brian Hong Kong Independent non-executive directors: WEBSITE Dr. Jin Lizuo http://www.beegl.com.hk Dr. Huan Guocang Dr. Wang Jianping STOCK CODE Prof. Nie Yongfeng Mr. Cheung Ming 154 AUDIT COMMITTEE SHARE REGISTRARS Dr. Huan Guocang (Chairman) Tricor Tengis Limited Dr. Jin Lizuo Level 54, Hopewell Centre Dr. Wang Jianping 183 Queen’s Road East Hong Kong REMUNERATION COMMITTEE AUDITOR Dr. Jin Lizuo (Chairman) Dr. Huan Guocang Ernst & Young Dr. Wang Jianping Certified Public Accountants Mr. Ke Jian Registered Public Interest Entity Auditor NOMINATION COMMITTEE PRINCIPAL BANKERS Mr. Ke Jian (Chairman) In Hong Kong: Dr. Jin Lizuo Bank of China (Hong Kong) Dr. Huan Guocang Dr. Wang Jianping In Mainland China: Agricultural Bank of China COMPANY SECRETARY Bank of Beijing Bank of China Mr. Wong Kwok Wai, Robin China Construction Bank China Minsheng Bank AUTHORISED REPRESENTATIVES Huaxia Bank Mr. Ng Kong Fat, Brian Industrial Bank Mr. Wong Kwok Wai, Robin 2 CORPORATE STRUCTURE 31 March 2021 Annual Report 2020 – Beijing Enterprises Environment Group Limited CORPORATE STRUCTURE 31 March 2021 BEIJING ENTERPRISES HOLDINGS LIMITED # 100% Idata Finance Trading Limited 1.16% 49.23% BEIJING ENTERPRISES ENVIRONMENT GROUP LIMITED # Beijing Haidian District Cyclic Economy 99% Beijing Gaoantun Waste-To-Energy 84.9% Industrial Park Renewable Energy Project, BEIJING Power Generation Project, BEIJING 100% Taian Household Waste Incineration Zhangjiagang Household Waste-To- 100% Power Generation Project, SHANDONG Energy Plant Project, JIANGSU 100% Changde Household Waste Incineration Ha’erbin Shuangqi Waste-To-Energy 80% Power Generation Project, HUNAN BOT Project, HEILONGJIANG Jining Yanzhou Household Waste 75% Jiangsu Shuyang Waste-To-Energy 100% Incineration Power Generation Project, Plant Project, JIANGSU SHANDONG Wenchang Household Waste-To-Energy 100% Plant BOT Project, HAINAN 51% Beijing Beikong Ecology & 65% Construction Group Co., Ltd., BEIJING Hunan Hengyang Hazardous Waste Treatment Project, HUNAN # Listed on the Main Board of The Stock Exchange of Hong Kong Limited 3 FINANCIAL HIGHLIGHTS Beijing Enterprises Environment Group Limited – Annual Report 2020 FINANCIAL HIGHLIGHTS Revenue Prot For The Year Attributable To From Continuing Operations Members Of The Company (in HK$ million) (in HK$ million) 2,000 300 1,791 265 250 222 1,500 1,384 1,270 200 190 1,089 1,000 150 130 129 100 500 402 50 0 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Equity Attributable To Total Assets Members Of The Company (in HK$ million) (in HK$ million) 10,000 3,500 9,753 3,194 3,200 9,500 9,283 2,900 2,818 9,036 9,000 8,940 2,655 2,600 2,553 8,500 8,422 2,300 2,137 8,000 2,000 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 4 CHAIRMAN’S STATEMENT Annual Report 2020 – Beijing Enterprises Environment Group Limited CHAIRMAN’S STATEMENT During the past year, the sudden COVID-19 epidemic outbreak, the waste sorting measures advocated at the national level and the official policy introduction on renewable energy tariff subsidy had brought unprecedented negative impacts on waste incineration power generation enterprises. The Group faced tremendous pressures on its operation under the extremely acute macro situation and policy challenge. To effectively respond to the various adverse factors, the Group conducted practical moves based on its actual production conditions, maintained and updated production equipment, improved and optimised production processes and perfected its technologies. It adopted various measures to effectively improve its production efficiency and minimise operating costs and charges to ensure stable production operation. In 2020, the revenue of the Group increased by 29% to HK$1.79 billion. Profit attributable to shareholders of the Company for the year decreased by 42% to HK$129 million due to the impairment of assets. The solid waste treatment industry is entering a new stage of development and enterprises in the industry are putting more focus on high-quality development. Under the market environment with increasingly intensifying competition, the Company bravely encounters challenges, firmly seizes opportunities, steadily expands markets and proactively explores the development of new sectors in the solid waste segment. Firstly, it continues to deepen and develop its waste incineration projects. By focusing on industrial policies and renewable energy subsidy policies, the Group goes for regions with better economic conditions and more friendly resources integration environment and expand its market size through addition, cooperation, acquisition and other measures. It also actively adopts integrated environmental sanitation, industrial parks with circular economy and other methods to incorporate sludge, kitchen waste, biomass and other new solid waste projects into its existing project portfolios. Secondly, it strives to explore and develop emerging businesses. The Group improves its business diversification quality to achieve all-round business growth and focuses its study in trying to propel its projects on resources utilization and recycling of industrial solid/hazardous wastes. It pays close attention to waste sorting, organic waste treatment, soil restoration, landfill closure and other relevant projects, explores operable business models and fosters new profit drivers to improve enterprise profitability. The Company will implement the concept of green development, firmly adhere to the strategic positioning of “becoming a domestic leading provider offering comprehensive services on environmental improvement” under the general background of national ecological civilization construction and promote high-quality, healthy, orderly and sustainable development of the Group that integrate with the “14th Five-year” national strategic development plans. Ke Jian Chairman Hong Kong 31 March 2021 5 MANAGEMENT DISCUSSION AND ANALYSIS Beijing Enterprises Environment Group Limited – Annual Report 2020 MANAGEMENT DISCUSSION AND ANALYSIS BUSINESS REVIEW Solid Waste Treatment Segment During the year under business review, the Group operated eight household waste incineration power generation projects with waste treatment capacity of 10,225 tonnes/day, and one hazardous and medical waste treatment project with waste treatment capacity of 35,000 tonnes/year. The Group has three household waste incineration power generation projects under construction, including two expansion projects and one new project with waste treatment capacity of 4,350 tonnes/day. Waste Business treatment Project Name Region Model capacity (tonnes/day) Household waste incineration power generation projects: Haidian Project Beijing BOT 2,100 （北京市海澱區循環經濟產業園再生能源發電廠項目） Gaoantun Project Beijing BOT 1,600 （北京高安屯垃圾焚燒項目） Ha’erbin Project Heilongjiang BOT 1,600 （哈爾濱雙琦垃圾焚燒發電項目） Changde Project Hunan BOT 1,400 （常德市生活垃圾焚燒發電項目） Taian Project Shandong BOO 1,200 （泰安生活垃圾焚燒發電項目） Shuyang Project Jiangsu BOT 1,200 （江蘇省沭陽縣垃圾焚燒發電項目） Zhangjiagang Project Jiangsu BOO 900 （張家港市生活垃圾焚燒發電廠項目） Wenchang Project Hainan BOT 225 （文昌市生活垃圾焚燒發電廠項目） Changde Project (Phase III) Hunan BOT 600 # （常德市生活垃圾焚燒發電項目（三期）） Zhangjiagang Jingmai Project Jiangsu BOT 2,250 # （張家港市靜脈科技產業園生活垃圾焚燒發電項目） Yanzhou Project # Shandong BOT 1,500 （濟寧市兗州區生活垃圾焚燒發電項目） Hazardous and medical waste treatment project: Hengxing Project Hunan BOT （湖南省衡陽危險廢物處置中心項目） # Projects under construction During the year under business review, owing to the continuous impact of the COVID-19 epidemic, together with the vigorous promotion of household waste sorting practice in various cities, the volume of household waste decreased. While strictly implementing measures to prevent and control the epidemic and ensure the stable operation of machinery units, the Group took various measures to broaden revenue from other businesses, which, to a certain extent, had reduced the adverse impact on revenue due to the shortage of household waste intake. In response to the problems of waste incineration in winter and the continuously making operating loss in prior years at the Ha’erbin Project, the Group was able to turn around from loss into profit during the year through technological improvements and improved operational and production management. During the year under business review, the Group had invested approximately HK$445 million in construction, expansion and technical renovation works for its projects, contributing additional revenue to the Group. 6 Annual Report 2020 – Beijing Enterprises Environment Group Limited MANAGEMENT