Fu Shou Yuan International : 2022 Interim Report

CONTENTS

Corporate Information	2
Chairman's Statement	3
Management Discussion and Analysis	6
Other Information	25
Report on Review of Condensed Consolidated
Financial Statements	30
Condensed Consolidated Statement of Profit or
Loss and Other Comprehensive Income	31
Condensed Consolidated Statement of
Financial Position	32
Condensed Consolidated Statement of
Changes in Equity	34
Condensed Consolidated Statement of
Cash Flows	35
Notes to the Condensed Consolidated
Financial Statements	37
Definitions and Glossary	61

2 FuShou

CORPORATE INFORMATION

2022 Report Interim Limited Group International Yuan

BOARD OF DIRECTORS

Executive Directors

Mr. Bai Xiaojiang (Chairman)

Mr. Tan Leon Li-an(Vice-Chairman)

Mr. Wang Jisheng (Chief Executive)

Non-executive Directors

Mr. Lu Hesheng

Mr. Huang James Chih-Cheng

Ms. Zhou Lijie

Independent Non-executive Directors

Mr. Chen Qunlin

Mr. Luo Zhuping

Mr. Ho Man

Ms. Liang Yanjun

Mr. Chen Xin

AUDIT COMMITTEE

Mr. Ho Man (Chairman)

Mr. Huang James Chih-Cheng

Mr. Luo Zhuping

Mr. Chen Xin

NOMINATION COMMITTEE

Mr. Bai Xiaojiang (Chairman)

Mr. Wang Jisheng

Mr. Chen Qunlin

Mr. Luo Zhuping

Mr. Ho Man

REMUNERATION COMMITTEE

Mr. Luo Zhuping (Chairman)

Mr. Tan Leon Li-an

Mr. Chen Qunlin

COMPLIANCE COMMITTEE

Ms. Liang Yanjun (Chairman)

Mr. Luo Zhuping

Mr. Ho Man

Mr. Chen Qunlin

COMPANY SECRETARY

Ms. Hu Yi

AUTHORIZED REPRESENTATIVES

Mr. Bai Xiaojiang

Ms. Hu Yi

REGISTERED OFFICE

Ocorian Trust (Cayman) Limited

Windward 3, Regatta Office Park

P.O. Box 1350

Grand Cayman KY1-1108

Cayman Islands

HEADQUARTERS

Room 1306

No. 88 Cao Xi Road North

Shanghai

China 200030

PRINCIPAL PLACE OF BUSINESS IN HONG KONG

Unit 709, 7/F K. Wah Centre 191 Java Road North Point Hong Kong

PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE

Ocorian Trust (Cayman) Limited

Windward 3, Regatta Office Park

P.O. Box 1350

Grand Cayman KY1-1108

Cayman Islands

HONG KONG BRANCH SHARE REGISTRAR AND TRANSFER OFFICE

Computershare Hong Kong Investor Services Limited

Shops 1712-1716, 17th Floor

Hopewell Centre

183 Queen's Road East

Wanchai

Hong Kong

PRINCIPAL BANKERS

Shanghai Pudong Development Bank

Construction Bank of China

Shanghai Rural Commercial Bank

Bank of Communications

Bank of Shanghai

Citibank, N.A.

AUDITOR

Deloitte Touche Tohmatsu

Registered Public Interest Entity Auditors

35/F, One Pacific Place

88 Queensway Hong Kong

STOCK CODE

1448

WEBSITE

www.fsygroup.com

CHAIRMAN'S STATEMENT

CHAIRMAN'S STATEMENT

On behalf of the Board of Directors of Fu Shou Yuan International Group Limited, I hereby present the results of the Group for the six months ended June 30, 2022 to all shareholders for review.

In the first half of 2022, the Omicron variant came in fiercely. In order to cut off the transmission chain as early as possible, many places across the country pressed the slow-forward button and pause button to balance public health security and Economic social movement in a "dynamic zero-COVID policy". Under the severe and complex situation of epidemic prevention, the Group maintained stable development in the first half of 2022 and recorded total revenue of RMB906.4 million. Net profit amounted to RMB327.0 million, of which profit and total comprehensive income attributable to owners was RMB261.1 million.

As disclosed in the announcement published in May 2022, based on the good prospect of the Group's future development, after considering multiple factors including the actual operating conditions, profit level, operational liquidity, strategy as well as sustainable development, in order to establish a continuous and stable high return mechanism for investors and to share the operational achievement with all the shareholders, the Board announced that the updated dividend policy of the Company has been approved and adopted to increase the dividend rate to not less than 35% of profit attributable to the shareholders of the Company for the year, and it is expected to be raised to 60% or above on a year-to-year basis of profit attributable to the shareholders of the Company for the year in the future, thus making the Company an enterprise with high development as well as high dividend ratio. The Board declared an interim dividend of HK5.64 cents per Share for the six months ended 30 June 2022 to the Shareholders in appreciation of their support.

During the Period, Fu Shou Yuan continued to respond the national construction of "digital economy", expanded the Internet thinking, embed digital technology in traditional businesses, and promote the process of industrial digitalization. Nowadays, "Internet + death care service" has gradually become a new trend in death care industry. The R&D and application of digital cemetery is the deepening integration mode of traditional transformation. Innovative measures such as online commemoration, remote funerals and valet execution have gotten rid of physical constraints caused by the Epidemic isolation, while preserved the solemnity of the rituals and the reverence brought by going to the site to worship to the greatest extent. In the first half of 2022, Fu Shou Yuan International Group officially launched the "Digital Cemeteries • Huixin Valley" project which, based on the upgraded platforms of "Online Tombsweeping", "Online Blessing" and "Online Memorial", is a brand-new digital integrated service facility that is beautiful in the landscape, sophisticated in technology and rooted in culture. With the concept of intensification and ecology, the project effectively solved the contradiction between the scarcity of resources and the need for passing away in peace through the digital carrier of spiritual services. The first batch of products of the project include "Digital Cemetery 1.0", digital ritual burial, digital ritual memorial, and "Online Memorial 3.2". From now on, this is not only the destination of physical life, but also the home of spiritual life. As a digital cemetery with the advantages of both, Huixin Valley presents a humanistic park of digital with the perfect integration of virtual and reality. In the future, Fu Shou Yuan will also launch a series of phygital products, which will bring infinite possibilities to restore the beauty of life through science and technology.

Committed to building an industry-leading ESG business model, Fu Shou Yuan adheres to the sustainable development strategies of environment protection, technology-driven, public welfare, historical heritage and life education, strives to assume corporate, social, industrial, historical and public responsibilities and builds a caring and heart-warming life service system. The Group has always led the new trend of the eco-friendly and civilized industry which integrated green concepts into products and services as well as built ecological parks to contribute to realizing green-oriented transition. At the same time, the Group carried out assistance and poverty alleviation

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International Yuan Limited Group

Report Interim 2022

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International Yuan Limited Group

Report Interim 2022

CHAIRMAN'S STATEMENT

construction in many places through the public welfare foundation, cultivated modern death care management talents and professional technical talents through Fu Shou Yuan Life Service Academy, and communicated with the global industry workers deeply and continuously to realize cultural transmission and integration. In June 2022, the 2022 "Sages and Shanghai's Urban Memory" forum, jointly hosted by the Shanghai Society of History of Communist Party of China, the Shanghai Communist Party History Figures Research Center, and the Humanities Memorial Museum of Shanghai Fu Shou Yuan, was broadcast on multiple platforms with the theme of "Youth in Centennial Elegance". Over the years, the forum has formed a resonance with history and the times around the two focuses of "people and city", "things and feelings", contributing to the inheritance of history.

Fu Shou Yuan has been committed to public welfare undertakings in death care industry while continuously providing high-quality services to improve people's livelihood, and it regards death care services as an important cornerstone of ensuring people's well-being, building a harmonious society and promoting enhanced adjustment to bereavement and loss at the end-of-life. For more than 20 years, it has focused on social public welfare and charities, covering many fields, such as targeted poverty alleviation, caring for vulnerable groups, community charity, education and teaching assistantship, spiritual rescue, life education, environmental protection, etc. In 2018, Fu Shou Yuan initiated the establishment of Shanghai Fu Shou Yuan Public Welfare Development Foundation as an interface for enterprises to operate and manage public welfare projects, pushing the road of practice and innovation of social responsibility and life service to a new stage of more standardized and scientific sustainable development.

In the first half of the year, both Shanghai and Hong Kong were plagued by the Pandemic. Shanghai Fu Shou Yuan Public Welfare Development Foundation launched the campaign of "Assisting Hong Kong in Fighting the Epidemic Together", strengthened the exchange of Pandemic prevention work between the two places, and donated 60,000 N95 masks that worth HK$1.8 million to Precious Blood Hospital (Caritas) in Hong Kong. The Foundation hopes that through this campaign, it will fully demonstrate our social responsibility as a listed company in Hong Kong, as well as our concerns, care and support for Hong Kong compatriots in fighting the epidemic. The Foundation took active action to raise supplies such as medical surgical masks and donated them to 17 medical institutions in Xuhui District, Shanghai; at the same time, it fully participated in the procurement of Pandemic prevention materials to help the city's nursing homes fight the Pandemic, and widely participated in community voluntary services. The Foundation took the initiative to make donations with the government of Mengyue Township, Longchuan County, Yunnan Province, to contribute to the collective economic development of Wamu Village; join hands with China Siyuan Foundation For Poverty Alleviation and Tencent Charitable Foundation, Micro Public Good, ByteDance Welfare and other institutions to light up the blue light of the Oriental Pearl and speak for autistic children. All measures uphold and reflect the consistent corporate social responsibility and public welfare awareness of Fu Shou Yuan.

During the Period, the industry and society highly recognized the operation, governance and corporate responsibility of Fu Shou Yuan. In January, Fu Shou Yuan was honored as the "Most Socially Responsible Listed Company" at the 6th Golden Hong Kong Stock Awards Ceremony due to its excellent performance in results growth, industry ranking and corporate governance in the past year. In addition, Fu Shou Yuan won the "2021 Award of Socially Responsible Listed Company" for its outstanding performance in fulfilling corporate social responsibility. Fu Shou Yuan also participated in the "2021 Corporate Social Responsibility Carnival" organized for the first time, and working together with responsible brands in various industries to jointly build a business force for the good. In February, two design projects selected by the Temshine Cemetery Design Group Ltd., a subsidiary of the Group, won the Silver Award and the Nomination Award of the 2022 Berlin Design Award respectively, which are the groundbreaking awards in the industry. On the May Day, the "Flower of Life" customer service group of Shanghai Fu Shou Yuan was appraised as "Pioneer of National Workers" by the All-China Federation of Trade Unions, becoming a benchmark for funeral services.