Infore Environment Technology Group Co., Ltd.

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Infore Environment Technology Group Co., Ltd. Annual Report 2020

Make a Cleaner World, Build a Better Future

April 2021

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Part I Important Notes, Table of Contents and Definitions

The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors, supervisors and senior management of Infore Environment Technology Group Co., Ltd. (hereinafter referred to as the “Company”) hereby guarantee that the contents of this Report are true, accurate and complete and free of any misrepresentations, misleading statements and material omissions, and collectively and individually accept legal responsibility for such contents.

Ma Gang, the Company’s legal representative, Lu Anfeng, the Company’s Chief Financial Officer, and Wu Shanshan, the Head of the Company’s Accounting Department (equivalent to Financial Manager) hereby guarantee that the financial statements carried in this Report are truthful, accurate and complete.

All the directors of the Company attended in person the board meeting for the approval of this Report.

Any forward-looking statements such as plans for the future in this Report shall not be considered as promises to investors. And investors are reminded to exercise caution when making investment decisions.

The Board has approved a final dividend plan as follows: based on the total share capital (minus the shares in the Company’s repurchase account) at the date of record for the 2020 final dividend plan, a cash dividend of RMB1.2 (tax inclusive) per 10 shares is planned to be distributed to the shareholders, with no bonus issue from either profit or capital reserves.

This Report has been prepared in Chinese and translated into English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese version shall prevail.

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Part I Important Notes, Table of Contents and Definitions ........................................................... 2 Part II Corporate Information and Key Financial Information ................................................... 5 Part III Business Summary ............................................................................................................. 13 Part IV Management Discussion and Analysis .............................................................................. 21 Part V Significant Events ................................................................................................................ 52 Part VI Share Changes and Shareholder Information ................................................................. 86 Part VII Preference Shares ............................................................................................................. 97 Part VIII Convertible Corporate Bonds ........................................................................................ 98 Part IX Directors, Supervisors, Senior Management and Staff ................................................ 100 Part X Corporate Governance ...................................................................................................... 107 Part XI Corporate Bonds .............................................................................................................. 114 Part XII Financial Statements ...................................................................................................... 122 Part XIII Documents Available for Reference ............................................................................. 264

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Definitions

Term	Definition
Infore Environment, or the “Company”	Infore Environment Technology Group Co., Ltd.
Zoomlion Environmental	Changsha Zoomlion Environmental Industry Co., Ltd.
Greenlander	Shenzhen Greenlander Environmental Protection Co., Ltd.
Infore Technology	Guangdong Infore Technology Co., Ltd.
CSRC	China Securities Regulatory Commission
SZSE, or the “Stock Exchange”	Shenzhen Stock Exchange
General Meeting	General Meeting of Infore Environment Technology Group Co., Ltd.
Board of Directors	Board of Directors of Infore Environment Technology Group Co., Ltd.
Supervisory Committee	Supervisory Committee of Infore Environment Technology Group Co., Ltd.
Company Law	Company Law of the People’s Republic of China
Securities Law	Securities Law of the People’s Republic of China
Articles of Association	Articles of Association of Infore Environment Technology Group Co., Ltd.
PPP	Public-private partnership, a funding model for a public infrastructure project
	Build-operate-transfer, a form wherein a private enterprise participates in
BOT
	infrastructure construction and provides public services to the society

	Engineering procurement construction, in which the contractor is responsible for
EPC	the whole procedure or several stages of a construction project such as design,
	procurement, construction, and trial operation based on contractual agreements.
Reporting Period	The period from 1 January 2020 to 31 December 2020
	Expressed in the Chinese currency of Renminbi, expressed in tens of thousands
RMB, RMB’0,000
	of Renminbi

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Part II Corporate Information and Key Financial Information

I Corporate Information

Stock name	Infore Environment	Stock code	000967
Stock exchange	Shenzhen Stock Exchange
Company name in Chinese	盈峰环境科技集团股份有限公司
Abbr.	盈峰环境科技集团
Company name in English (if
	Infore Environment Technology Group Co., Ltd.
any)

Legal representative	Ma Gang
	1818 Renmin West Road, Dongguan Street, Shangyu District, Shaoxing City, Zhejiang Province,
Registered address
	China

Zip code	312300
	23/F, Infore Center, 7-8 Yixin Road, Xincheng District, Beijiao Town, Shunde District, Foshan City,
Office address
	Guangdong Province, China

Zip code	528300
Company website	www.inforeenviro.com
Email address	[email protected]

II Contact Information

	Board Secretary	Securities Representative
Name	JinTaotao	Wang Fei
	23/F, Infore Center, 7-8 Yixin Road,	23/F, Infore Center, 7-8 Yixin Road,
	Xincheng District, Beijiao Town, Shunde	Xincheng District, Beijiao Town, Shunde
Office address
	District, Foshan City, Guangdong	District, Foshan City, Guangdong

	Province, China	Province, China
Tel.	0757-26335291	0757-26335291
Fax	0757-26330783	0757-26330783
Email address	[email protected]	[email protected]

III Media for Information Disclosure and Place where this Report is Lodged

Newspapers designated by the Company for China Securities Journal, Shanghai Securities News, Securities Times, and information disclosure Securities Daily

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Website designated by the CSRC for publication of
	http://www.cninfo.com.cn
this Report

	The Securities Department, 23/F, Infore Center, 7-8 Yixin Road, Xincheng
Place where this Report is lodged	District, Beijiao Town, Shunde District, Foshan City, Guangdong Province,
	China

IV Change to Company Registered Information

Organization code	913300006096799222
	Since it went public in 2000, the Company has changed its business scope five times.
	Business scope on 18 November 1993: Research, development, and production of
	ventilators, and air-cooled, water-cooled, and air conditioning equipment, refrigeration
	and quick-freezing equipment, mold, and power-generating machines. Operation of
	export businesses (refer to the approval document of the Ministry of Foreign Trade and
	Economic Cooperation for details); on 2 July 2002, "metal and plastic steel composites
	pipe and profile" was included in the Company's business scope; on November 14,
	2003, "undertaking environmental engineering" was included in the business scope; On
	29 February 2016, due to the strategic transformation, the Company's business scope
	was changed to: R&D, maintenance, and operation services of environmental
	monitoring instruments, development, consulting, and services of environmental
	management technologies, operation services of environmental management facilities,
	design and construction of environmental engineering, environmental protection
	engineering, municipal engineering, and water conservancy and other water-related
	projects, development and services of technologies for water pollution control, water
	treatment, and ecological restoration, R&D, sales, and relevant technology consultation
Change to the principal activities of the	services of communication products, network products, mechatronic products,
Company since its listing (if any)	automatic control products, buildings, and intelligent community products, as well as
	software products, design, development, investment, operation management, and
	technical consulting services of relevant supporting facilities for the disposal and
	recycle of municipal waste and solid waste, sales of ventilators and air-cooled,
	water-cooled, and air conditioning equipment, operation of import and export
	businesses, industrial investment, investment management, asset management, and
	investment consultation; On 18 May 2016, "operation of import and export businesses,
	industrial investment, investment management, and asset management" were excluded
	from the Company's business scope; on 28 June 2019, the Company's business scope
	was changed to: R&D, manufacturing, sales, technology consultation, maintenance,
	and operation services of sanitation equipment, special type of working robots, new
	energy vehicles, environmental monitoring equipment, special equipment for
	environmental protection, and automobile charging equipment and parts, equipment
	leasing, design, operation management, technological development and services of
	relevant supporting facilities for the disposal and recycle of municipal waste and solid
	waste, design, construction, operation management, technological development and
	services of environmental engineering, municipal engineering, landscape engineering,

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

electric power engineering, water conservancy and other water-related projects, water pollution control projects, air pollution control projects, and soil remediation projects, commercial cleaning, collection, transportation, and treatment services (based on the license) of urban solid waste, development, consultation, and services of environmental protection, IoT, and Internet technologies, R&D and sales of software, sales of ventilators and air-cooled, water-cooled, and air conditioning equipment, engagement in import and export businesses, and investment consultation. 1. In 2000, the Company went public, and its largest shareholder was Zhejiang Fan & Air-cooled Equipment Company. 2. On 23 February 2006, Zhejiang Shangfeng Industry Group Co., Ltd., the former controlling shareholder of the Company, and Media Group Co., Ltd., a shareholder, transferred their stocks of 9,575,027 shares and 24,897,984 shares to Guangdong Infore Group Co., Ltd. respectively. Therefore, Guangdong Infore Group Co., Ltd. became the largest shareholder of the Company. 3. On 5 August 2008, the Company's controlling shareholder, Guangdong Infore Group Co., Ltd. changed its name to "Guangdong Infore Holding Investment Group Co., Every change of controlling shareholder Ltd.". since incorporation (if any) 4. On 30 September 2010, Guangdong Infore Holding Investment Group Co., Ltd. changed its name to "Infore Holding Investment Group Co., Ltd.", which was the controlling shareholder of the Company. 5. On 4 January 2019, based on the private placement of new shares for purchasing assets, the Company issued 1,017,997,382 shares to Ningbo Infore Asset Management Co., Ltd. to acquire the 51% equity of Zoomlion Environmental held by it. The Company's largest shareholder has been changed to Ningbo Infore Asset Management Co., Ltd. As at the end of the Reporting Period, the Company's controlling shareholder was Ningbo Infore Asset Management Co., Ltd.

V Other Information

The independent auditor hired by the Company:

Name of the independent auditor	Pan-China Certified Public Accountants LLP
	28/F, Block B, China Resources Building, 1366 Qianjiang Road, Jianggan District, Hangzhou
Office address
	City, Zhejiang Province, China

Accountants writing signatures	Bian Shanshan and Cao Cuijuan

The independent sponsor hired by the Company to exercise constant supervision over the Company in the Reporting Period:

√ Applicable □ Not applicable

Name of sponsor	Office address	Representative	Period of supervision
	Room 2501, 575 Wusong Road,
Huaxing Securities Co., Ltd.		Li Zeming and Zheng Zaoshun	2020-2021
	Hongkou District, Shanghai

The independent financial advisor hired by the Company to exercise constant supervision over the Company in the Reporting Period:

√ Applicable □ Not applicable

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Name of financial advisor	Office address	Representative	Period of supervision
	GF Securities Tower, 26
GF Securities Co., Ltd.	Machang Road, Tianhe District,	Yuan Fengzhou and Yin Yue	2018-2020
	Guangzhou

VI Key Financial Information

Indicate whether there is any retrospectively restated datum in the table below.

□ Yes √ No

			2020-over-2019
	2020	2019		2018
			change (%)

Operating revenue (RMB)	14,332,025,075.40	12,695,858,666.40	12.89%	13,044,761,115.49
Net profit attributable to the listed	1,386,476,099.73	1,361,453,754.17
			1.84%	928,577,765.32
company’s shareholders (RMB)

Net profit attributable to the listed
company’s shareholders before
	1,432,219,046.72	1,252,134,237.70	14.38%	319,411,269.58
exceptional gains and losses

(RMB)
Net cash generated from/used in	1,688,714,091.75	1,484,750,054.02
			13.74%	-1,150,744,895.07
operating activities (RMB)

Basic earnings per share	0.44	0.43
			2.33%	0.41
(RMB/share)

Diluted earnings per share	0.44	0.43
			2.33%	0.41
(RMB/share)

Weighted average return on equity
	8.62%	9.05%	-0.43%	7.62%
(%)

			Change of 31
			December 2020 over
	31 December 2020	31 December 2019		31 December 2018
			31 December 2019

			(%)
Total assets (RMB)	30,110,536,990.88	24,854,667,694.94	21.15%	24,461,293,934.13
Equity attributable to the listed	16,920,214,085.42	15,514,697,715.97
			9.06%	14,471,811,680.32
company’s shareholders (RMB)

Indicate whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional gains and losses was negative for the last three accounting years, and the latest independent auditor’s report indicated that there was uncertainty about the Company’s ability to continue as a going concern.

□ Yes √ No

Indicate whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional gains and losses was negative.

□ Yes √ No

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

VII Accounting Data Differences under China’s Accounting Standards for Business Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign Accounting Standards

1. Net Profit and Equity under CAS and IFRS

□ Applicable √ Not applicable

No difference for the Reporting Period.

2. Net Profit and Equity under CAS and Foreign Accounting Standards

□ Applicable √ Not applicable

No difference for the Reporting Period.

VIII Key Financial Information by Quarter

Unit: RMB

	Q1	Q2	Q3	Q4
Operating revenue	2,199,341,508.70	3,420,092,351.48	3,835,286,466.43	4,877,304,748.79
Net profit attributable to the listed
	147,734,732.90	378,964,794.02	371,118,285.78	488,658,287.03
company’s shareholders

Net profit attributable to the listed
company’s shareholders before	189,096,408.24	358,028,986.55	363,826,725.52	521,266,926.41
exceptional gains and losses
Net cash generated from/used in
	-144,580,287.91	-140,597,577.65	397,179,806.32	1,576,712,150.99
operating activities

Indicate whether any of the quarterly financial data in the table above or their summations differs materially from what have been disclosed in the Company’s quarterly or interim reports.

□ Yes √ No

IX Exceptional Gains and Losses

√ Applicable □ Not applicable

Unit: RMB

Item	2020	2019	2018	Note
	-42,036,810.26			Gains of RMB488,224.46 on the disposal of long-term equity investments, gains of RMB-1,787,925.37 on the disposal of fixed
Gain or loss on disposal of non-current
assets (inclusive of impairment allowance		-60,892,199.11	7,668,560.36
write-offs)

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

				assets, gains of RMB-11,767,441.22 on the retirement of fixed assets, and gains of RMB-28,969,668.13 on the retirement of intangible assets
Tax rebates, reductions and exemptions	621,422.30			--
given with ultra vires approval or in lack of			1,728,888.91
official approval documents
Government grants through profit or loss	42,047,479.15			--
(exclusive of government grants given in the
Company’s ordinary course of business at		104,385,272.35	20,368,085.62
fixed quotas or amounts as per the
government’s uniform standards)
	22,117,071.89			RMB4,578,541.63 of Lianjiang Greenlander New Energy Co., Ltd., RMB2,012,499.98 of Guangdong Liangke Environmental Protection Engineering Co., Ltd., RMB1,328,771.30 of Shantou ZhonglianRuikang Environmental Health Service Co., Ltd., RMB264,600.00 of Jilin Xinyu Environmental Protection Engineering Co., Ltd., RMB162,543.33 of Guangdong Tianshu New Energy Technology Co., Ltd., and RMB20,252.48 of Shantou Chaoyang ZhonglianRuikang Environmental Health Service Co., Ltd. The
Capital occupation charges on non-financial
enterprises that are recognized in profit or		19,799,364.06	4,582,264.18
loss

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

				value-added tax amount excluding those incurred from the above-mentioned borrowing and lending stood at RMB178,515.17 and the amortization of installment receipt of the transfer funds of Universtar Science & Technology (Shenzhen) Co., Lt. has generated a finance income of RMB13,928,378.34.
	23,771,715.03			Returns of RMB23,771,715.03 on investments in wealth management products
Gain or loss on assets entrusted to other
		4,556,023.27	6,859,065.89
entities for investment or management


Restructuring costs in staff arrangement,	--			--
		--	-26,087,060.31
integration, etc.

Current profit or loss on subsidiaries	--			--
obtained in business combinations involving
		--	864,922,410.13
entities under common control from the

period-beginning to combination dates, net
	-90,608,285.06			Changes of RMB-89,949,855.53 in the fair value of held-for-trading financial assets, gains of RMB5,117,398.33 on the ineffective portion of closed hedges, gains of RMB-5,769,445.94 on the fair value changes of the ineffective portion of open hedges, and futures transaction costs of RMB-6,381.92
Gain or loss on fair-value changes on
held-for-trading and derivative financial
assets and liabilities & income from disposal
of held-for-trading and derivative financial
		24,337,671.43	160,990,725.00
assets and liabilities and other debt

investments (exclusive of the effective
portion of hedges that arise in the
Company’s ordinary course of business)

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Reversed portions of impairment allowances				--
for receivables and contract assets which are		140,000.00	390,000.00
tested individually for impairment
Non-operating income and expense other	-7,514,468.68			--
		-467,259.49	19,341,734.66
than the above

	839,195.26			Performance commitment compensation from Tengine Innovation (Beijing) Instruments Inc.
Other gains and losses that meet the
		24,676,400.00	22,611,600.00
definition of exceptional gain/loss


Less: Income tax effects	-8,391,224.21	6,566,767.92	45,211,244.61	--
Non-controlling interests effects (net of tax)	3,371,490.83	648,988.12	428,998,534.09	--
Total	-45,742,946.99	109,319,516.47	609,166,495.74	--

Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items:

√ Applicable □ Not applicable

Item	Amount involved (RMB)	Reason
		Government grants continuously given in the Company’s ordinary
Value-added tax rebates	28,804,978.15	course of business at fixed quotas or amounts as per the government’s
		policies or regulations
		Government grants continuously given in the Company’s ordinary
Subsidy for sludge disposal	2,816,166.83	course of business at fixed quotas or amounts as per the government’s
		policies or regulations

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Part III Business Summary

I Principal Activities of the Company in the Reporting Period

1. Main business fields

Infore Environment is a leading environmental sanitation investor and operator in China. With "smart environmental sanitation" as its core business strategy, the Company employs a flexible and competitive business model, based on its smart environmental sanitation equipment such as new energy equipment and self-driving equipment, and its proprietary cloud-based smart sanitation platform empowered by IoT, big data and other advanced technologies. The Company provides its customers with full lifecycle IoT integrated application solutions and smart platform operation services, from cleaning and disinfection in urban and rural areas, domestic waste sorting, collection, transportation and disposal of solid waste, sanitation personnel management, collection and transportation of food waste, to muck transportation supervision, leachate treatment and smart city construction.

In 2020, the Company has gained a significant momentum in the environmental sanitation service industry, moving up to No.1 by market share in terms of the five-year annualized contract value and the total new contract value. Also, in 2020, it ranked first in sales of sanitation equipment for the 20th consecutive year in China.

2. Main business and products

In terms of intelligent equipment, by virtue of its scientific research strengths, leading capabilities of producing and manufacturing environmental equipment and a well-established nation-wide sales network, the Company has established a comprehensive product portfolio of environmental sanitation equipment to provide its customers with a wide range of equipment solutions including a variety of environmental sanitation and cleaning equipment, waste collection and transportation equipment, new energy and clean energy environmental sanitation equipment with more than 400 product models. With leading capabilities of researching and developing smart equipment, the Company has a range of products covering 5G environmental sanitation robots, autonomous environmental sanitation vehicles, intelligent small environmental sanitation robots, new energy environmental sanitation equipment, waste collection and transportation equipment, separate station equipment and environmental sanitation and cleaning equipment.

Smart Cloud Platform, independently developed by the Company with an investment of more than RMB100 million, is a leading big data platform serving across the whole industrial chain in the domestic environmental sanitation industry. With advanced underlying technologies such as 5G, AI, big data, cloud computing and edge computing, and immersive thinking R&D strategy integrated into the platform, the Company has developed core technologies including IoT integrated application, data communication, video command and control, safe driving tests, IoT hardware and software compatible technology and big data application. Therefore, the Company is able to offer technological solutions such as market-oriented operation solution, industrial application solution and connected integrated solution to management of environmental sanitation service. With 14 software copyrights related to smart environmental sanitation, the platform has been included in the Top Ten Innovative Cases in China's Smart Environmental Sanitation in 2018, Pilot and Demonstration Industrial Internet Platform of MIIT in Key Industries in 2019 and Plan for Building of Provincial Industrial Internet Platform of Hunan Province in 2020. At present, by dint of the platform, the Company has built and operated over 110 smart environmental sanitation projects in many cities and provinces in China.

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

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With respect to smart service, through intelligent hardware and the IoT technology, the Company is able to continuously gather and analyze data generated from all aspects such as R&D of environmental sanitation equipment, production and manufacturing, operation and management, and after-sales service, across the whole industrial chain of "smart sorting, smart environmental sanitation, smart environment, new energy and autonomous driving", allowing the Company to implement a highly efficient management model for operation and maintenance service and remote monitoring, which features seamless connection between front and back offices on all fronts in terms of personnel, vehicles, items and events involved in environmental sanitation operation service. In this way, the Company has managed to improve city management capabilities and public service capabilities of the government from management to service and from governance to operation.

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3. The Company's main position in the industry

(1) With respect to environmental sanitation service, the Company ranked first in terms of the annual contract value and the total new contract value in 2020

According to the statistics of Environmental Compass, the Company witnessed a rapid growth in its market share in the competitive landscape of the environmental sanitation service industry, ranking top 1 in 2020 in terms of the new contract value and the new annual contract value in China. In 2020, the Company recorded revenue of RMB1,969 million from environmental sanitation service, and signed a total of 59 new contracts of environmental sanitation service projects in 19 provinces in China, adding RMB1,248 million new annual contract value to the total contract value of RMB12,574 million. As at the end of the Reporting Period, Infore Environment operated 118 environmental sanitation service projects in total, with an annualized contract value of RMB2,831 million and an accumulative contract value of RMB37 billion. Its projects in hand were mainly PPP projects and

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

medium- and long-term market-oriented projects, indicating prominent capabilities of sustainable operation. During the period of 2016-2020, the Company’s environmental sanitation service business recorded total contract value of RMB1,237 million, RMB5,561 million, RMB8,711 million, RMB9,720 million and RMB12,574 million respectively, and annual service value of RMB55 million, RMB305 million, RMB429 million, RMB855 million and RMB1,248 million respectively, representing a year-on-year growth rate of annual income from environmental sanitation service of 454.54%, 40.66%, 99.30% and 45.96% respectively from 2017 to 2020. With increasing competitiveness in the industry, the Company has developed a unique smart environmental sanitation system.

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(2) The Company ranked first in sales of environmental sanitation equipment in 2020

According to the statistics of compulsory traffic accident liability insurance for motor vehicles from the China Banking and Insurance Regulatory Commission ("the CBIRC"), in 2020, the Company ranked first in sales of environmental sanitation equipment for the 20th consecutive year. In 2020, the Company recorded sales of environmental sanitation equipment of RMB8,355 million, a year-on-year increase of 18.78%, and it sold a total of 19,199 pieces of equipment, a year-on-year increase of 11.39%. Among them, it sold 10,643 pieces of medium- and high-end products, a year-on-year increase of 0.59%, representing the largest market share of 29.79%; it also sold 1,367 new energy products, a year-on-year increase of 42.69%, representing the largest market share of 27.85%.

According to the statistics of compulsory traffic accident liability insurance for motor vehicles from the CBIRC, as at 31 December 2020, a total of 113,867 environmental sanitation vehicles were sold in China, a year-on-year increase of 4,089 or 3.72%, wherein 35,721 medium- and high-end operating vehicles were sold, a year-on-year increase of 499 or 1.42%.

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4. Technology accumulation and innovation

(1) Accumulation of R&D strengths

The Company’s R&D team of environmental sanitation equipment came from a background of national scientific research institutes, and “innovation genes” have been embedded in each member of the team. The Company declared 73 patents, including 47 patents of invention. As at the end of the Reporting Period, it had as many as 810 independent patents, including 355 patents of

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

invention, 390 utility models and 65 patents for design. The Company ranked first in terms of the number of technical patents and patents of invention in the industry, took the lead in formulating multiple national, industrial and local standards, and had established provincial research centers. It was granted the honorary title of "Top Ten Enterprises of Intellectual Property Rights in Hunan Province", the China Machinery Industry Science and Technology Award, the Science and Technology Progress Award by Hunan Province and the China Award for Science and Technology in Construction. Besides, the Company was granted the first drive test license for autonomous driving in environmental sanitation by the government. It was also included on the list of the key enterprises for China's new-generation AI industry innovation issued by the Ministry of Industry and Information Technology ("the MIIT"), indicating that the Company was among top AI research teams in China and became a "national team" of innovation in the smart robot industry in terms of environmental sanitation.

(2) Could platform innovation

Smart Cloud Platform, independently developed by the Company, is a leading big data platform serving across the whole industrial chain in the domestic environmental sanitation industry. With advanced underlying technologies such as big data, cloud computing, IoT, mobile Internet and AI integrated into the platform, the Company has developed core technologies including IoT integrated application, data communication, video command and control, safe driving tests, IoT hardware and software compatible technology and big data application. With the integration of environmental sanitation equipment and service operation, the platform is able to achieve real-time connection of personnel, vehicles, items and events involved in environmental sanitation service, as well as standardized, digitalized and intelligentized operation and management. In smart governance, the Company established a digital operation and management system for plants, stations and equipment based on the cloud platform, achieving intelligent and safe operation requiring less manual labor and energy consumption, and striving to develop competitive advantages in smart environmental governance. In terms of application of intelligent control platforms, through application integration of four systems, the Company achieved full lifecycle real-time monitoring of equipment products. Besides, based on AI, 5G, edge computing and big data, it continuously boosted product innovation and industrial upgrading. In industrial Internet big data, the Company adopted real-time online IoT big data technology for its intelligent product application to learn about equipment status before its customers did. By doing so, it established a new model for active after-sales service, reduced the fault rate of equipment, and improved customer satisfaction. At present, the platform has provided intelligent services for more than 50,000 products of customers across the country. In the future, the Company will continue to apply digital technologies and create innovative intelligent equipment and smart service. Moreover, through in-depth integration into smart city development, it will continuously boost application of smart corporate cloud platforms to become a leader and enabler in digital transformation of the environmental sanitation industry by dint of intelligence.

(3) Leader in new energy

The Company began to research, develop and manufacture new energy environmental sanitation equipment in 2007, and successfully introduced the first battery-electric sweeping machine in China in July 2008, which was used for cleaning during Beijing Olympic Games in 2008. Based on the experience in professional R&D of environmental sanitation vehicles for more than three decades, and committed effort in R&D of new energy sanitation vehicles for more than ten years, Infore Environment has managed to offer the most comprehensive and diversified product portfolio in the new energy sanitation vehicles industry in China, with 144 vehicle models and more than 40 types, covering cleaning, rinsing, waste collection and transportation and municipal vehicles. Key features of the Company's new energy products include, 1) Safety: its new energy products are equipped with six layers of protection to ensure safety; 2)Leadership in technology: its new energy products have "six-in-one" controllers and industry-leading new technologies; 3)Reliability: the Company has formed an alliance with domestically renowned commercial vehicle companies to build the most reliable new energy environmental sanitation vehicles;4)Efficiency: thanks to the optimal match of high-torque permanent magnet synchronous motors + AMT gearboxes + universal drive axles + electric drives, energy consumption dropped by 15% year on year; 5)Pertaining to high standards: the Company has strictly controlled quality of its new energy products in the whole process via

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

its quality control system including over 500 vehicle inspections and 24 road tests; 6)Timely service: the Company's engineers can set out within 30 minutes once receiving customer requests and complete general fault handling within 24 hours across the country.

(4) Forerunner in intelligent robots

By virtue of Zoomlion Environmental's industry-leading position and R&D capabilities in terms of environmental protection equipment over the years, the Company launched a product mix of intelligent small environmental sanitation robots, which have integrated advanced technologies such as 5G, artificial intelligence, machine vision technology, full-scene image recognition and green new energy power. In this way, it made breakthroughs in the traditional operation model in which manual labor was the main method supported by equipment in areas such as streets and alleys. It also increased the mechanical rate of environmental sanitation at a faster pace, and improved ecological, social and economic benefits. For each type of robots, there are two versions available, namely, the standard version and the robot version. Therefore, machines can be seamlessly switched between autonomous driving and manual driving, 5G communication models can be installed, and the Car Caretaker - Palm Environmental Sanitation APP of Infore Zoomlion can be used to achieve remote supervision and smart operation for intelligent management of operation equipment, refined management of the operation process and quantitative management of operation materials. The Company is focused on the development of industrial robots, service robots, specialized robots, automatic systems and related industrial chains, and has got a head start and a competitive advantage in smart environmental sanitation and smart city management industries. The Company’s self developed smart sanitation robot crews have been successfully deployed in projects in Orange Isle Scenic Spot in Changsha City, Hunan Province and Futian District, Shenzhen City.

Other businesses of the Company mainly include environmental monitoring and solid waste disposal, electric materials and ventilation machinery manufacturing.

The Company’s environmental monitoring business covers smoke, air quality, haze, water quality, water conservation, soil and dust, and provides one-stop comprehensive environmental services for environmental protection, water conservation and water service and smart cities. Product sales are the main source of revenue, with operation and maintenance services contributing the rest.

The Company's solid waste disposal business mainly engages in the businesses of domestic waste-to-energy, domestic waste landfilling, food waste recycling and industrial parks of solid waste recycling. With waste-to-energy projects as the core, the industrial parks of solid waste recycling are equipped with treatment facilities of domestic waste disposal, hazardous waste disposal, sludge treatment, food waste treatment, sewage treatment, construction wastewater treatment, ecological restoration of landfills, leachate treatment and fly ash disposal. By coordinating these businesses, the Company is able to provide a one-stop solution for solid waste treatment and recycling through Build-Operate-Transfer (BOT) business model.

In terms of electric materials, the Company mainly engages in electromagnetic wire processing, whose products include wires at multiple temperature levels such as copper wires, aluminum wires, round wires, flat wires, enameled wires, paper-wrapped wires and silk-covered wires. These products are widely used in electric motors and appliances such as automobile motors, refrigeration compressors, explosion-proof motors, electronic coils, electric tools, ultra-high voltage transmission and distribution equipment, rail transportation and wind power generation equipment. The Company has adopted a direct selling model by limiting its production of electromagnetic wires to its market ability.

With respect to ventilation machinery manufacturing, the Company's products mainly include fans, mufflers, dampers, refrigeration equipment, magnetic levitation fans, nuclear grade valve blowers and blowers, and its business scope includes nuclear power, subways, tunnels, rail transportation, industrial and civil construction. It has adopted a direct selling model supported by agency sales for its fans.

For further analysis on the industry, please refer to “Discussion and Analysis on the Future Development of the Company” in “Part IV Management Discussion and Analysis”.

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

II Significant Changes in Major Assets

1. Significant Changes in Major Assets



Major assets	Main reason for significant changes

	Profits or losses were recognized, using the equity method, on the equity interests held in
	Guangdong Shunkong Environmental Investment Co., Ltd. (Shunkong Environmental),
Equity assets
	Tengine Innovation (Beijing) Instruments Inc. (Tengine Innovation), etc. in the current

	period
	Transfer of newly purchased equipment and the related construction and installation
Fixed assets	projects, as well as the completed Shunde Environmental Protection Industrial Park, into
	fixed assets
Intangible assets	Transfer to intangible assets associated with completed BOT
	Increase in the investment in the sanitation service PPP project of Zoomlion
Construction in progress
	Environmental

2. Major Assets Overseas

□ Applicable √ Not applicable

III Core Competitiveness Analysis

Leading advantages in environmental sanitation equipment

As a leader in China's environmental sanitation equipment, the Company has state-of-the-art core technologies and a comprehensive product line of environmental protection equipment in the industry. In terms of R&D, the Company has mastered industry-leading technologies in new energy environmental sanitation equipment, intelligent robots of environmental sanitation and autonomous environmental sanitation vehicles, and has been granted the first drive test license in environmental sanitation by the government. The world’s first smart sanitation robot crew was developed by the Company and has been successfully deployed in Orange Isle Scenic Spot, a national 5A scenic area in Changsha City, Hunan Province, and the 5G autonomous robot crew for environmental sanitation has come into service in the university town in the same city. In terms of products, the Company has established a comprehensive product line of environmental protection equipment including approximately 400 models, thus allowing the Company to meet various demands in main application scenarios across the country. Regarding market position, the Company has ranked the first in sales in the domestic market for 20 consecutive years. According to the data of China Automotive Technology and Research Center, the Company had a market share of 29.79% in terms of medium- and high-end products, and a market share of 27.85% in terms of new energy products, far ahead of other market competitors. Pertaining to brand, as one of the forerunners in environmental sanitation equipment, the Company has made achievements by developing the first wet and dry vacuum sweeper truck, the first full-hydraulic mini road sweeper, the first tunnel cleaning vehicle, the first pure electric road sweeper and the first natural gas-powered cleaning vehicle in China. Therefore, the Company has accumulated abundant experiences in the environmental sanitation industry and made a strong brand impact as the No. 1 brand in the industry.

Edges in intelligent management and rapid growth of environmental sanitation service

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

With respect to smart service of environmental sanitation, the Company has invested in and operated flexible business models. Based on advanced underlying technologies such as 5G, IoT, AI, big data, cloud computing and edge computing, the Company has developed brand-new smart, refined, mechanized and economical environmental sanitation business models, facilitating the whole industrial chain of "smart sorting, smart environmental sanitation, smart environment, new energy and autonomous driving", and providing accurate and efficient full-time operation and maintenance service and remote monitoring and management model which features seamless connection between front and back offices on all fronts in terms of personnel, vehicles, items and events involved in environmental sanitation operation service. Given the above efforts and achievements, the Company has been included in the Top Ten Innovative Cases in China's Smart Environmental Sanitation in 2018, Pilot and Demonstration Industrial Internet Platform of MIIT in Key Industries in 2019 and Plan for Building of Provincial Industrial Internet Platform of Hunan Province in 2020. The Company is equipped with strong leading technological advantages in intelligent operation of environmental sanitation service. According to the statistics of Environmental Compass, during the period of 2016-2020, the Company has recorded a total contract value in environmental sanitation service of RMB1,237 million, RMB5,561 million, RMB8,711 million, RMB9,720 million and RMB12,574 million respectively, and an annual service value of RMB55 million, RMB305 million, RMB429 million, RMB855 million and RMB1,248 million respectively, representing a growth rate of the annual income from environmental sanitation service of 454.54%, 40.66%, 99.30% and 45.96% respectively from 2017 to 2020. In 2020, the Company ranked first in terms of new annual environmental sanitation service contracts in China, up three places year on year. In terms of environmental sanitation service, with increasing competitiveness in the industry, the Company has developed a unique smart environmental sanitation system.

3. Advantages in the sound marketing network

With its mature sales and service network for environmental sanitation equipment as well as excellent industry experience, the Company has established a business marketing network all over the country, including 300 operation centers and nearly 1,000 environmental governance operation service projects in 31 provinces, cities and autonomous regions. Environmental sanitation service projects vary from city to city, and thus require localization and customization. As governments at all levels have paid more attention to environmental sanitation, sanitation service providers require higher professional operation experience and long-term follow-up services in order to maintain current cooperation while obtaining new projects. Therefore, the development of a highly specialized marketing network is needed for sanitation services to explore commercial opportunities in each region, improve service and delivery quality, and eventually obtain business contracts.

==> picture [333 x 244] intentionally omitted <==

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

4. Edges in capital and funds

With a sound financial status, good reputation and abundant financing channels, the Company can provide strong funding support for its business development and improve its sustainable operation capabilities, through equity financing and debt financing such as bank loans, corporate bonds (or green bonds), medium-term notes and short-term commercial papers. Meanwhile, the Company has accumulated abundant experience in industrial acquisition, integration and capital operation, as well as strong resources to support itself by multiple means. In addition, the capital strengths and good reputation of the controlling shareholder can offer a solid support to the Company's development.

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Part IV Management Discussion and Analysis

I Overview

In 2020, in the face of the severe external situation caused by the coronavirus pandemic, Infore Environment stuck to its development strategies and the annual business plan, seized the industry momentum, focused on its core "5115" strategy, and proactively promoted the development of its smart environmental sanitation business relying on its competitive strengths in environmental sanitation equipment. Thus, the Company has remained an industry leader, by forming its unique smart environmental sanitation system with "intelligent equipment, smart service and Smart Cloud Platform" as its strategic focuses. During the Reporting Period, the Company witnessed a rapid growth in environmental sanitation service and continued leadership in environmental sanitation equipment.

In 2020, the Board of Directors of the Company fully grasped the national economic situation and the development trend of the environmental protection industry, and implemented a business-focused strategy to focus the Company's main business on smart environmental sanitation, in which the Company has core competitive advantages, and the proportion of the Company's main business of smart environmental sanitation rose to 72.03%. The Company has gradually adjusted the non-core businesses by business structure optimization, asset divestiture and spin-off and listing, thus revitalizing the existing resources and inefficient assets, improving the asset management capacity and operational quality, and underpinning the Company's high-quality sustainable development.

For 2020, the Company recorded operating revenue of RMB14,332.0251 million, up 12.89% year on year; and a net profit attributable to the shareholders of the Company of RMB1,386.4761 million, up 1.84% year on year.

For 2020, Zoomlion Environmental recorded operating revenue of RMB10,135.6730 million, up 24.01% year on year; a net profit of RMB1,436.5164 million, up 8.71% year on year; and a net profit attributable to the shareholders of the Company before exceptional gains and losses of RMB1,409.4124 million. Its audited net profit attributable to the shareholders of the Company before exceptional gains and losses totaled RMB3,778 million for the period from 2018 to 2020, higher than the promised amount by RMB56 million, which means that the interests of the Listed Company and minority investors are well protected.

Continuously rapid growth of environmental sanitation service

Since the beginning of 2020, the coronavirus pandemic has impacted the environmental sanitation service industry. From January to March, the market stagnated. Amid the pandemic, there were both crisis and opportunities. As one of the heroes in harm's way, practitioners of environmental sanitation have led the public to reflect and hold that it is imperative that we strengthen modern equipment and high-tech application to change the weak position of the traditional environmental sanitation service industry. At the early stage, Infore Environment gained presence in smart environmental sanitation in a targeted manner, and seized opportunities for "intelligent equipment, smart service and Smart Cloud Platform", resulting in preliminary benefits during the Reporting Period.

According to the statistics of Environmental Compass, in 2020, the Company ranked No.1in the new contract value and the new annual contract value in China. In 2020, the Company recorded operating revenue of RMB1,969 million from environmental sanitation service, and signed a total of 59 new contracts of environmental sanitation service projects in 19 provinces in China, adding RMB1,248 million new annual contract values to the total contract value of RMB12,574 million. As at the end of the Reporting Period, Infore Environment operated 118 environmental sanitation service projects in total, and had contracts worth RMB2,831 million in hand and an accumulative contract value of RMB37 billion. Its projects in hand were mainly PPP projects and medium- and long-term market-oriented projects, indicating prominent capabilities of sustainable operation. During the period of 2016-2020, the Company saw an increase in the total contract value in terms of environmental sanitation service of RMB1,237

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

million, RMB5,561 million, RMB8,711 million, RMB9,720 million and RMB12,574 million, and recorded annual service value of RMB55 million, RMB305 million, RMB429 million, RMB855 million and RMB1,248 million respectively. During the period of 2017-2020, the Company witnessed a growth rate of the annual income from environmental sanitation service of 454.54%, 40.66%, 99.30% and 45.96% respectively. With rapid improvement of competitiveness in the industry, the Company has developed a unique smart environmental sanitation system. During the Reporting Period, by virtue of Bao'an Project, the Company not only set a record in the industry in terms of volume, but also ranked first place in multiple achievements such as application of new energy environmental sanitation equipment, application of information-based management technologies and AI. It changed city management standards, and fostered internationally-benchmarked public service capabilities of Shenzhen.

2. Continuously leading environmental sanitation equipment

Due to the impact of COVID-19, there was a downturn in bidding of environmental sanitation equipment. After the pandemic eased, the industry started to recover in May. Amid the pandemic, the Company strengthened Internet applications, launched "cloud models" including online product release, publicity and promotion, and displayed new products by visiting customers across the country. Through promotion with the "cloud + offline" models, it boosted growth of market demand, and brought new technologies and products to its customers so that they could learn about new products without traveling afar. Moreover, the Company injected vitality into the market, motivated enterprises, activated capacity, and thus made great achievements and earned a good recognition among customers.

According to the statistics of compulsory traffic accident liability insurance for motor vehicles of the CBIRC, in 2020, the Company ranked first in sales of environmental sanitation equipment for the 20th consecutive year. In 2020, the Company recorded sales of environmental sanitation equipment of RMB8,355 million, a year-on-year increase of 18.78%, and it sold a total of 19,199 pieces of equipment, a year-on-year increase of 11.39%. Among them, it sold 10,643 pieces of medium- and high-end products, a year-on-year increase of 0.59%, with the largest market share of 29.79%; it also sold 1,367 new energy products, a year-on-year increase of 42.69%, with the largest market share of 27.85%.

3. Continuously leading the new energy environmental sanitation equipment

In 2020, the Company sold 1,367 new energy environmental sanitation vehicles, a year-on-year increase of 42.69%, accounting for a market share of 27.85% and ranking first. It also sold 860 all-electric environmental sanitation vehicles, representing an increase of 32.10% in the sales volume, accounting for a market share of 23.06% and ranking first. During the Reporting Period, the Company developed and launched the first hydrogen fuel-powered multifunctional dust suppression vehicle.

Improvement of quality and efficiency and continuous optimization of net cash generated from operating activities

During the Reporting Period, with the key task of "achieving high-quality development", centering on production and operation links, the Company explored multiple methods for improving its asset operation capabilities to reduce existing assets and control incremental assets. It conducted financing leasing, abandoned high-risk orders, strengthened the mechanism for classification, grading and responsibility regarding contract risks, enhanced reflow of corporate sales income, and accelerated operation turnover efficiency to improve net cash generated from operating activities. As at the end of the Reporting Period in 2020, the Company recorded net cash generated from operating activities of RMB1.669 billion, representing a year-on-year increase of 13.74% from RMB1.485 billion in the previous year. Increase in net cash generated from operating activities of the Company led to improvement of operation quality ultimately. The Company improved quality and efficiency and supported its high-quality sustainable development.

5. Issuance of convertible bonds and consolidation of industrial development basis

During the Reporting Period, the Company issued convertible corporate bonds of RMB1,476 million to raise funds for building a comprehensive allocation center for smart environmental sanitation. Upon completion, through integration of high-quality

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

traditional environmental sanitation equipment, new energy and new technology environmental sanitation equipment, Smart Cloud Platform with leading technologies and professional training for practitioners of environmental sanitation, the project will provide the Company's environmental sanitation service with more high-quality cloud platform with informatization, IoT and big data as the core. It will help continuously improve the data capabilities of the Company's environmental sanitation service, optimize the management capabilities of environmental sanitation service, and establish a professional brand of operation and management of environmental sanitation service. This project emphasizes Infore Environment's resource integration capabilities in environmental sanitation to build a more professional and modern brand for environmental sanitation service.

Positive fulfillment of the social responsibility and shouldering the corporate responsibility

After the outbreak of COVID-19, Infore Environment attached great importance to it and set up an emergency working group at the first time to respond to various emergencies.

On 23 January, the central government imposed a lockdown in Wuhan. On 24 January, Infore Environment launched an emergency action to support Wuhan, and actively contacted with relevant departments of Wuhan. Knowing that there were many people entering and leaving hospitals in Wuhan, which hampered the disinfection and might endanger relevant staff, Infore Environment decided to donate 15 cleaning and disinfection vehicles and 15 tons of disinfectant to the Wuhan Urban Management Committee on the same day. On 25 January, Infore Environment urgently deployed equipment and materials and arranged for professional technical engineers and management personnel back to the workshop to ensure the completion of the vehicle modification. On 27 January, through the concerted efforts of all staff, all 15 cleaning and disinfection vehicles were prepared and sent to Wuhan, accompanied by 15 tons of disinfectant.

During the fight against the pandemic, Infore Environment actively donated money and materials, with a total value of nearly RMB10 million. It was honored by the All-China Federation of Industry and Commerce as an “Outstanding Representative of Private Enterprises in the Fight against the COVID-19 Pandemic”. In addition to supporting Wuhan, the Company also provided emergency support to Zhengzhou Qiboshan Hospital for 2 sets of water quality monitoring stations for pollution sources, and donated medical wastewater monitoring equipment to Huanggang Infectious Disease Hospital, actively undertaking corporate social responsibility. At the same time, in accordance with the government's requirements, Infore Environment made every effort to resume work and production, actively coordinating all resources to organize production, and timely delivery of a number of fog cannon trucks, cleaning and disinfection vehicles, cleaning trucks, rubbish trucks and other large sanitation equipment across the country. While the society had reached a crucial juncture between fighting against the pandemic in prevention and control, and achieving high-quality development, Infore Environment has always been working with all sectors of the society to overcome difficulties.

II Core Business Analysis

1. Overview

See “I Overview” above.

2. Revenue and Cost Analysis

(1) Breakdown of Operating Revenue

Unit: RMB

2020	2020	2019	2019
				Change (%)
Operating revenue	As a % of total	Operating revenue	As a % of total

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

		operating revenue		operating revenue
		(%)		(%)
Total	14,332,025,075.40	100%	12,695,858,666.40	100%	12.89%
By operating division
Smart environmental
	10,323,422,172.13	72.03%	8,034,877,719.43	63.29%	28.48%
sanitation

Others	4,008,602,903.27	27.97%	4,660,980,946.97	36.71%	-14.00%
By product category
Traditional
environmental	7,452,381,951.97	52.00%	6,146,996,844.09	48.42%	21.24%
sanitation equipment
New-energy
environmental	902,172,174.16	6.29%	886,400,216.94	6.98%	1.78%
sanitation equipment
Environmental
	1,968,868,046.00	13.74%	1,001,480,658.40	7.89%	96.60%
sanitation services

Others	4,008,602,903.27	27.97%	4,660,980,946.97	36.71%	-14.00%
By operating segment
Domestic	14,276,021,772.44	99.61%	12,640,299,972.80	99.56%	12.94%
Overseas	56,003,302.96	0.39%	55,558,693.60	0.44%	0.80%

(2) Operating Division, Product Category or Operating Segment Contributing over 10% of Operating Revenue or Operating Profit

√ Applicable □ Not applicable

Unit: RMB

				YoY change in		YoY change in
			Gross profit		YoY change in
	Operating revenue	Cost of sales		operating revenue		gross profit
			margin		cost of sales (%)
				(%)		margin (%)

By operating division
Smart
environmental	10,323,422,172.13	7,494,987,200.17	27.40%	28.48%	35.97%	-4.00%
sanitation
Others	4,008,602,903.27	3,271,301,758.83	18.39%	-14.00%	-15.63%	1.58%
By product category
Traditional
environmental	7,452,381,951.97	5,422,933,163.68	27.23%	21.24%	27.98%	-3.84%
sanitation

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

equipment
New-energy
environmental
	902,172,174.16	553,314,420.62	38.67%	1.78%	3.92%	-1.26%
sanitation

equipment
Environmental
sanitation	1,968,868,046.00	1,518,739,615.87	22.86%	96.60%	104.59%	-3.02%
services
Others	4,008,602,903.27	3,271,301,758.83	18.39%	-14.00%	-15.63%	1.58%
By operating segment
Domestic	14,276,021,772.44	10,715,099,244.25	24.94%	12.94%	14.73%	-1.17%
Overseas	56,003,302.96	51,189,714.75	8.60%	0.80%	2.84%	-1.81%

Core business data restated according to the changed methods of measurement that occurred in the Reporting Period:

□ Applicable √ Not applicable

(3) Whether Revenue from Physical Sales Is Higher than Service Revenue

√ Yes □ No

Operating division	Item	Unit	2020	2019	Change (%)
	Sales volume	Unit	24,233	20,217	19.86%
Environmental
	Output	Unit	24,515	20,015	22.48%
sanitation equipment
	Inventory	Unit	2,122	1,840	15.33%

	Sales volume	Ton	54,767	60,932	-10.12%
Electric materials	Output	Ton	54,602	60,774	-10.16%
	Inventory	Ton	1,870	2,035	-8.11%
	Sales volume	Unit	150,694	123,694	21.83%
Ventilation
	Output	Unit	149,019	125,068	19.15%
machinery
	Inventory	Unit	3,417	5,092	-32.89%

Any over 30% YoY movements in the data above and why:

√ Applicable □ Not applicable

The inventory of ventilation machinery as at the end of the current year decreased 32.89% compared to the end of last year, primarily driven by a decrease in the number of products with a low unit value.

(4) Execution Progress of Major Signed Sales Contracts in the Reporting Period

□ Applicable √ Not applicable

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

(5) Breakdown of Cost of Sales

By operating division

Unit: RMB

		2020	2020	2019	2019
Operating
	Item		As a % of total		As a % of total	Change (%)
division		Cost of sales		Cost of sales
			cost of sales (%)		cost of sales (%)

Smart
environmental	Raw materials	6,641,092,791.72	88.77%	5,307,778,765.76	96.28%	25.12%
sanitation
Smart
environmental	Labor costs	343,174,808.02	4.59%	79,211,526.55	1.44%	333.24%
sanitation
Smart
environmental	Depreciation	104,388,340.95	1.40%	20,132,469.93	0.37%	418.51%
sanitation
	Energy resources
Smart
	including water,
environmental		66,597,774.16	0.89%	9,119,691.94	0.17%	630.26%
	electricity, and
sanitation
	steam

Smart	Other
environmental	manufacturing	325,178,262.77	4.35%	95,795,127.03	1.74%	239.45%
sanitation	costs
Others	Raw materials	2,870,104,855.95	88.56%	3,549,155,655.58	92.03%	-19.13%
Others	Labor costs	97,432,062.90	3.01%	94,467,394.48	2.45%	3.14%
Others	Depreciation	127,190,822.18	3.93%	57,679,325.43	1.50%	120.51%
	Energy resources
	including water,
Others		47,866,336.76	1.48%	79,859,131.84	2.07%	-40.06%
	electricity, and

	steam
	Other
Others	manufacturing	97,771,335.08	3.02%	75,211,551.74	1.95%	30.00%
	costs

Note:

Labor costs, depreciation, consumption of energy resources including water, electricity, and steam, as well as other manufacturing costs rose significantly year on year, primarily because revenue from sanitation service increased in the current period, resulting in a corresponding increase in supporting facilities, labor costs, and labor outsourcing costs.

(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period

√ Yes □ No

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

1. Entities Newly Included in the Consolidated Financial Statements

	How the interest
		Time of interest	The Company’s capital	The Company’s
Name of entity	in the entity was
		obtaining	contribution	interest (%)
	obtained

Changde Zelian Environmental Service Co., Ltd.	Incorporation	2020.03	46,695,300.00	90.00
Xiantao Yinglian Environmental Protection Technology Co., Ltd.	Incorporation	2020.04	1,000,000.00	100.00
Shenzhen Yinglian Environmental Industry Co., Ltd.	Incorporation	2020.10	2,000,000.00	100.00
Shenzhen Bao’an Yinglian Urban Service Co., Ltd.	Incorporation	2020.05	109,142,740.00	70.00
Binchuan Zhongying Environmental Service Co., Ltd.	Incorporation	2020.06	927,333.00	92.73
Tangyin Yinglian Environmental Service Co., Ltd.	Incorporation	2020.07	5,760,000.00	100.00
Yangbi Zhongying Environmental Service Co., Ltd.	Incorporation	2020.07	704,682.00	70.47
Shaoyang Zhongfeng Environmental Industry Co., Ltd.	Incorporation	2020.06	10,000,000.00	100.00
Foshan Shunde Yinghe Urban Environmental Service Co., Ltd.	Incorporation	2020.07	1,000,000.00	100.00
Rongcheng Yinglian Urban Environmental Service Co., Ltd.	Incorporation	2020.07	21,000,000.00	100.00
Xi’an Yinglian Urban Environmental Service Co., Ltd.	Incorporation	2020.07	2,000,000.00	100.00
Yongshun Zhongfeng Jingtou Environmental Technology Co., Ltd.	Incorporation	2020.07	10,246,725.00	75.00
Xianghe Yinglian Environmental Protection Technology Co., Ltd.	Incorporation	2020.05	10,000,000.00	100.00
Lanling Zoomlion Environmental Service Co., Ltd.	Incorporation	2020.12	2,000,000.00	100.00
Yuncheng Zhongying Urban Environmental Service Co., Ltd.	Incorporation	2020.12	1,000,000.00	100.00
Foshan Yingshun Urban Environmental Service Co., Ltd.	Incorporation	2020.11	7,000,000.00	70.00
Anshan Yinglian Urban Environmental Sanitation Management Co., Ltd.	Incorporation	2020.10	10,000,000.00	100.00
Foshan Yingtong Electric Material Co., Ltd.	Incorporation	2020.10	350,000,000.00	100.00
Donglan Yinglian Urban Environmental Service Co., Ltd.	Incorporation	2020.01	[Note]	100.00
Baise Yinglian Urban Environmental	Incorporation	2020.01	[Note]	100.00

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Service Co., Ltd.
Infore Zoomlion (Tianjin) Environmental Technology Co., Ltd.	Incorporation	2020.12	[Note]	100.00
Tongbai Tongying Environmental Sanitation Development Co., Ltd.	Incorporation	2020.11	[Note]	100.00
Guangdong Xingzhou Water Treatment Technology Co., Ltd.	Incorporation	2020.09	[Note]	100.00
Anhua Yingsheng Environmental Sanitation Service Co., Ltd.	Incorporation	2020.04	[Note]	100.00
Foshan Shunde Zhongying Urban Environmental Management Co., Ltd.	Incorporation	2020.12	[Note]	100.00
Qixian Tongying Environmental Sanitation Service Co., Ltd.	Incorporation	2020.11	[Note]	100.00
Lai’an Zhongfeng Environmental Technology Co., Ltd.	Incorporation	2020.07	[Note]	100.00
Zhaoyuan Jincheng Environmental Sanitation Management Service Co., Ltd.	Incorporation	2020.07	[Note]	100.00
Ji’an Zhongfeng Environmental Technology Co., Ltd.	Incorporation	2020.09	[Note]	100.00
Heze Yingsheng Environmental Sanitation Service Co., Ltd.	Incorporation	2020.10	[Note]	100.00
Luannan Yinglian Environmental Management Co., Ltd.	Incorporation	2020.11	[Note]	100.00
Guangxi Guiping Yinghe Environmental Sanitation Management Co., Ltd.	Incorporation	2020.11	[Note]	100.00
Shennongjia Forestry District Yinghe Environmental Sanitation Management Co., Ltd.	Incorporation	2020.11	[Note]	100.00
Chongqing Zhongying Environmental Sanitation Service Co., Ltd.	Incorporation	2020.12	[Note]	100.00
Renshou Yinglian Urban and Rural Sanitation Service Co., Ltd.	Incorporation	2020.12	[Note]	100.00
Liucheng Yinglian Environmental Sanitation Management Co., Ltd.	Incorporation	2020.12	[Note]	100.00
Shengzhou Yinghe Environmental Sanitation Management Co., Ltd.	Incorporation	2020.10	[Note]	100.00
Shengzhou Zoomlion Environmental Engineering Co., Ltd.	Incorporation	2020.11	[Note]	100.00
Foshan Liansheng Environmental Sanitation Service Co., Ltd.	Incorporation	2020.09	[Note]	100.00
Heping Hesheng Environmental Sanitation Service Co., Ltd.	Incorporation	2020.08	[Note]	100.00

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Foshan Shunde Lianying Environmental Development Co., Ltd.	Incorporation	2020.10	[Note]	100.00
Suqian Lianying Urban Service Co., Ltd.	Incorporation	2020.11	[Note]	100.00
Shouxian Liansheng Environmental Sanitation Management Co., Ltd.	Incorporation	2020.12	[Note]	100.00
Zaozhuang Zhongying Urban Environmental Service Co., Ltd.	Incorporation	2020.02	[Note]	100.00

[Note]: As of 31 December 2020, the Company has not yet paid in the capital contributions to these entities.

Entities Newly Excluded from the Consolidated Financial Statements

				Net profit from the
	How the interest in the		Net assets at the date of	beginning of the curren
Name of entity		Time of interest disposal
	entity was disposed of		disposal	period to the disposal

				date
Leiyang Zhongfeng Environmental Industry Co., Ltd.	De-registration	December 2020	0	2,071,976.28
Shenzhen Infore Environment Network Technology Co., Ltd.	De-registration	August 2020	0	118,157.09

(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period

□ Applicable √ Not applicable

(8) Major Customers and Suppliers

Major customers:

Major customers:
Total sales to top five customers (RMB)	1,207,911,520.82
Total sales to top five customers as a % of total sales of
	8.43%
the Reporting Period (%)

Total sales to related parties among top five customers as
	7.01%
a % of total sales of the Reporting Period (%)

Top five customers:

		Sales revenue contributed for
No.	Customer		As a % of total sales revenue (%)
		the Reporting Period (RMB)

1	Customer A	318,593,711.38	2.23%
2	Customer B	254,151,014.66	1.77%
3	Customer C	242,552,390.47	1.69%
4	Customer D	201,878,188.07	1.41%
5	Customer E	190,736,216.24	1.33%

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Total -- 1,207,911,520.82 8.43%

Other information about major customers:

□ Applicable √ Not applicable

Major suppliers:

Major suppliers:
Total purchases from top five suppliers (RMB)	2,819,265,985.89
Total purchases from top five suppliers as a % of total
	31.13%
purchases of the Reporting Period (%)

Total purchases from related parties among top five
suppliers as a % of total purchases of the Reporting	0.00%
Period (%)

Top five suppliers:

		Purchase in the Reporting
No.	Supplier		As a % of total purchases (%)
		Period (RMB)

1	Supplier A	1,526,789,831.86	16.86%
2	Supplier B	427,478,302.52	4.72%
3	Supplier C	295,563,961.16	3.26%
4	Supplier D	287,050,379.99	3.17%
5	Supplier E	282,383,510.37	3.12%
Total	--	2,819,265,985.90	31.13%

Other information about major suppliers:

□ Applicable √ Not applicable

3. Expenses

Unit: RMB

	2020	2019	Change (%)	Reason for any significant change
Selling expense	801,289,013.51	917,261,553.74	-12.64%	--
	536,466,686.12	391,834,512.74		Increase in employee remunerations,
				intermediary consulting expenditures
Administrative expense			36.91%	and other administrative expenses as a
				result of growth in the Company’s
				business
	66,121,331.59	53,955,504.01		Increase in interest expense, as well as
Finance costs			22.55%	a decrease in cash discount income and
				financing income in the current period
R&D expense	254,677,332.19	245,637,610.35	3.68%	Increase in R&D investments

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

4. R&D Investments

√ Applicable □ Not applicable

The Company continued to promote technological innovation, process reform and product development. The total R&D investments amounted to RMB264 million in the Reporting Period, accounting for 1.56% of the audited net assets as at the end of the Reporting Period, and 1.84% of the operating revenue.

Particulars about R&D investments:

	2020	2019	Change (%)
Number of R&D personnel	1,356	1,286	5.44%
R&D personnel as a % of total
	15.54%	17.99%	-2.45%
employees

R&D investments (RMB)	264,110,819.71	245,637,610.35	7.52%
R&D investments as a % of
	1.84%	1.93%	-0.09%
operating revenue

Capitalized R&D investments
	9,433,487.52	27,560,044.93	-65.77%
(RMB)

Capitalized R&D investments
as a % of total R&D	3.57%	11.22%	-7.65%
investments

Reasons for any significant YoY change in the percentage of R&D investments in operating revenue:

□ Applicable √ Not applicable

Reason for any sharp variation in the percentage of capitalized R&D investments and rationale:

□ Applicable √ Not applicable

5. Cash Flows

Unit: RMB

Item	2020	2019	Change (%)
Subtotal of cash generated from	15,584,916,372.80	13,800,108,466.88
			12.93%
operating activities

Subtotal of cash used in	13,896,202,281.05	12,315,358,412.86
			12.84%
operating activities

Net cash generated from/used in	1,688,714,091.75	1,484,750,054.02	13.74%
operating activities
Subtotal of cash generated from	5,451,867,664.79	5,111,910,988.96
			6.65%
investing activities

Subtotal of cash used in	6,335,579,681.05	6,075,274,324.63
			4.28%
investing activities

Net cash generated from/used in	-883,712,016.26	-963,363,335.67
			8.27%
investing activities

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Subtotal of cash generated from	5,922,067,481.72	3,188,986,842.48
			85.70%
financing activities

Subtotal of cash used in	4,680,215,496.91	2,814,654,695.61
			66.28%
financing activities

Net cash generated from/used in	1,241,851,984.81	374,332,146.87
			231.75%
financing activities

Net increase in cash and cash	2,046,145,151.54	891,714,315.91
			129.46%
equivalents

Explanation of why any of the data above varies significantly on a year-on-year basis:

√ Applicable □ Not applicable

1) Cash generated from financing activities increased 85.70% year on year, primarily driven by the issuance of convertible corporate bonds in the Reporting Period.

2) Cash used in financing activities increased 66.28% year on year, primarily driven by a greater amount of bank borrowings repaid upon maturity.

Explanation of why the net cash generated from/used in operating activities varies significantly from the net profit of the Reporting Period:

□ Applicable √ Not applicable

III Analysis of Non-Core Businesses

√ Applicable □ Not applicable

Unit: RMB


	Amount	As a % of gross	Primary source/reason	Recurrent or not
		profit

				RMB41,578,662.81 is the
			Return on investment	returns on long-term equity
Return on			recognized using the equity	investments calculated using
	78,328,670.09	4.78%
investment			method, and returns on	the equity method, which is

			wealth management products	recurrent. And the other
				portion is not recurrent.
Gain/loss on
changes in fair	-95,719,301.47	-5.85%	--	Not
value
Asset impairment
	-82,478,500.15	-5.04%	--	Not
loss

Non-operating
	9,844,019.69	0.60%	--	Not
income

Non-operating
	58,229,724.05	3.56%	--	Not
expense

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

IV Analysis of Assets and Liabilities

1. Significant Changes in Asset Composition

Indicate whether the Company has adopted the new accounting standards governing revenue and leases since 2020 and restated the beginning amounts of relevant financial statement line items in the year. Applicable.

Unit: RMB

	31 December 2020	31 December 2020	1 January 2020	1 January 2020	Change in
		As a % of		As a % of	percentag	Reason for any significant change
	Amount		Amount
		total assets		total assets	e (%)

Monetary assets	5,904,127,970.85	19.61%	3,160,767,624.40	12.72%	6.89%	--
Accounts	5,564,834,864.04
		18.48%	4,912,568,006.30	19.77%	-1.29%	--
receivable

Inventories	1,305,177,407.85	4.33%	1,145,000,730.01	4.61%	-0.28%	--
Investment	2,009,006.98
		0.01%	568,026.39	0.00%	0.01%	--
property

Long-term equity	318,243,332.69
		1.06%	303,292,231.01	1.22%	-0.16%	--
investments

Fixed assets	1,640,546,747.67	5.45%	994,681,585.66	4.00%	1.45%	--
Construction in	1,782,529,087.95
		5.92%	1,550,462,442.48	6.24%	-0.32%	--
progress

Short-term	1,657,905,376.55
		5.51%	1,606,673,817.48	6.46%	-0.95%	--
borrowings

Long-term	765,643,457.78
		2.54%	643,843,170.78	2.59%	-0.05%	--
borrowings

Bonds payable	1,199,466,109.60	3.98%			3.98%	--

2. Assets and Liabilities at Fair Value

√ Applicable □ Not applicable

Unit: RMB

			Impairme
		Gain/loss on	nt
		fair-value	allowanc	Sold in the	Other	Closing
Item	Opening amount
		changes in the	e for the	urrent period	changes	amount

		current period	current
			period
Financial

assets

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

1.
Held-for-tradi
ng financial
assets								127,192,985
	217,138,046.28	-89,949,855.53			4,794.36
(exclusive of								.11

derivative
financial
assets)
2. Derivative
financial	51,100.00	-3,205,100.27			4,793,300.00	0.00	814,549.73	824,750.00
assets
3. Other debt
								0.00
investments

4.
Investments
								26,070,000.
in other	26,070,000.00
								00
equity

instruments
Subtotal of
								154,087,735
financial	243,259,146.28	-93,154,955.80	0.00	0.00	4,798,094.36	0.00	814,549.73
								.11
assets

Total of the								154,087,735
	243,259,146.28	-93,154,955.80	0.00	0.00	4,798,094.36	0.00	814,549.73
above								.11

Financial
	866,300.00	-2,564,345.67			0.00	2,622,150.00	1,804.33	810,300.00
liabilities

Particulars about other changes:

Other changes in derivative financial assets and financial liabilities were changes in the fair value of a hedged item—copper in stock. Indicate whether any significant change occurred to the measurement attributes of the major assets in the Reporting Period. □ Yes √ No

3. Assets to which the Company’s Rights Were Restricted as at the Period-End

Unit: RMB

		Unit: RMB
Item	Closing carrying amount	Reason for restriction
Monetary assets	1,246,301,871.62	Security deposits, frozen and preserved amount in legal procedures, and amount in escrow account
Accounts receivable	103,965,922.09	In pledge
Receivables financing	306,145,249.74	In pledge
Long-term receivables and current portion of	49,160,385.66	Factoring with the right of recourse

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

non-current liabilities
Fixed assets	551,470,379.29	As collateral
Investment property	51,185.99	As collateral
Intangible assets	236,472,755.88	As collateral
100% equity interests of Funan Greenlander Environmental Protection Co., Ltd.	58,236,923.40	In pledge
100% equity interests of Shouxian Greenlander New Energy Co., Ltd.	80,691,695.44	In pledge
100% equity interests of Xiantao Greenlander Environmental Protection Power Co., Ltd.	204,935,012.39	In pledge
25% equity interests in Lianjiang Greenlander New Energy Co., Ltd.	23,149,733.54	Frozen and preserved in legal procedures
Total	2,860,581,115.04	--

V Investments Made

1. Total Investment Amount

□ Applicable √ Not applicable

2. Significant Equity Investments Acquired in the Reporting Period

□ Applicable √ Not applicable

3. Significant Non-Equity Investments of which the Acquisition Was Uncompleted in the Reporting Period

□ Applicable √ Not applicable

4. Financial Investments

(1) Securities Investments

√ Applicable □ Not applicable

Unit: RMB

						Gain/los	Cumulat
						s on	ive
						fair-valu	fair-valu	Purchas	Sold in	Gain/los
			Initial	Measure	Opening						Closing
Security	Security	Security				e	e	ed in the	the	s in the		Accountin	Funding
			investm	ment	carrying						carrying
type	code	name				changes	changes	current	current	current		g title	source
			ent cost	method	amount						amount
						in the	recogniz	period	period	period

						current	ed in
						period	equity

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Domesti
												Held-for-tr
cally/													Original
			3,019,5	Fair	215,250	-89,182,				-89,182,	126,067	ading
overseas	600340	CFLD											contribut
			00.00	value	,000.00	500.00				500.00	,500.00	financial
listed													ion
												assets
stock

Domesti													Purchase
												Held-for-tr
cally/													d from
			1,662,2	Fair	1,888,0	-770,75				-770,75	1,117,29	ading
overseas	002161	Invengo											the
			99.72	value	46.28	3.07				3.07	3.21	financial
listed													secondar
												assets
stock													y market

Domesti													Purchase
												Held-for-tr
cally/													d from
		Xidame	2,095.8	Fair				2,095.8			3,017.5	ading
overseas	605155				0.00	921.69	0.00			921.69			the
		n	3	value				3			2	financial
listed													secondar
												assets
stock													y market

Domesti													Purchase
												Held-for-tr
cally/													d from
		Yiming	2,698.5	Fair		2,475.8		2,698.5		2,475.8	5,174.3	ading
overseas	605179				0.00		0.00						the
		Food	3	value		5		3		5	8	financial
listed													secondar
												assets
stock													y market

			4,686,5		217,138	-89,949,		4,794.3		-89,949,	127,192
Total				--			0.00		0.00			--	--
			94.08		,046.28	855.53		6		855.53	,985.11

Disclosure date of the
board announcement
			23 April 2018
approving the securities

investments
Disclosure date of the
general meeting
announcement approving			16 May 2018
the securities investments
(if any)

(2) Investments in Derivative Financial Instruments

□ Applicable √ Not applicable

No such cases in the Reporting Period.

5. Use of Raised Funds

√ Applicable □ Not applicable

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

(1) Overall Use of Raised Funds

√ Applicable □ Not applicable

Unit: RMB’0,000

										Raised
					Total
			Total							funds
					raised
			raised				Proportion			that
				Total raised	funds	Total		Total
			funds				of total		Use and	have
				funds that	with	accumulativ		raised
Year for	Method of	Total	that have				accumulativ		ownership	been
				have been	altered	e raised		funds that
fund-raisin	fund-raisin	raised	been				e raised		change of	left
				used	purposes	funds with		have not
g	g	funds	used in				funds with		unused raised	unuse
				accumulativel	during	altered		been used
			the				altered		funds	d for
				y	the	purposes		yet
			current				purposes			over
					Reportin
			period							two
					g Period
										years

									The Proposal
									on Using
									Some Idle
									Raised Funds
									to Replenish
									Working
									Capital was
									deliberated
									and approved
									at the 9th
									Extraordinar
									y Meeting of
									the 9th Board
									of Directors
	Public	145,733.6	17,463.3					128,270.2
2020				17,463.39	0	0	0.00%		and the 10th	0
	offering	2	9					3
									Extraordinar

									y Meeting of
									the 9th Board
									of Directors
									held by the
									Company on
									4 December
									2020,
									allowing the
									Company to
									use restricted
									raised funds
									of no more
									than RMB1

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

									billion for
									temporary
									replenishmen
									t of working
									capital,
									which shall
									be used for
									the
									production
									and operation
									related to the
									Company's
									main
									businesses
									with a term
									of no more
									than 12
									months as of
									the date
									when the
									Proposal was
									deliberated
									and approved
									by the Board
									of Directors.
		145,733.6	17,463.3					128,270.2
Total	--			17,463.39	0	0	0.00%		--	0
		2	9					3

Explanation of the overall use of raised funds
Upon approval by the Document ZH.J.X.K. [2020] No. 2219 of the China Securities Regulatory Commission (CSRC) and with
the consent of the Shenzhen Stock Exchange (SZSE), the lead underwriter of the Company, Huaxing Securities Co., Ltd. (formerly
known as “Huajing Securities”, hereinafter referred to as Huaxing Securities) issued 14,761,896 convertible corporate bonds
(hereinafter referred to as CB) to the public with the offering price of RMB100, each having a par value of RMB100, totaling
RMB1,476,189,600.00. Specifically, priority allotment of 9,405,386 CB was issued to original shareholders of the Company,
accounting for 63.71% of the total amount of this public offering; 5,304,730 CB was issued to public investors through online
channels, accounting for 35.94% of the total amount of this public offering; 51,780 CB was to be underwritten by the lead
underwriter, accounting for 0.35% of the total amount of this public offering. Funds raised in this offering had been remitted to the
Company's raised fund supervision account by the lead underwriter Huaxing Securities on 10 November 2020, and the amount
actually received after deducting RMB15,238,100 of underwriting and sponsorship fees (tax-exclusive) was RMB1,460,951,500.
After deducting RMB3,615,300 (tax-exclusive) of external fees that were directly related to CB such as online offering expenses,
printing fee for the prospectus, fees of the reporting accountant, counsel fee, credit rating fee, information disclosure expenses, and
issuance commission fee, the net raised funds of the Company from this offering were RMB1,457,336,200. The availability of the
above-mentioned raised funds has been verified by Pan-China Certified Public Accountants LLP in its Capital Verification Report
(T.J.Y. [2020] No.490).

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

(2) Committed Projects of Raised Funds

√ Applicable □ Not applicable

Unit: RMB’0,000

	Whether					Investment	Date			Whether
Committed				The	Accumulative			Benefits	Whether
	projects	Total				progress	when the			there are
investment			Adjusted	investment	investment			recorded	the
	have been	committed				as at the	projects			material
projects and			total	amount	amount as at			during	estimated
	altered	investment				end of the	are ready			changes
investment of			investment	during the	the end of the			the	benefits
	(including	with raised				Reporting	for their			in the
excessive			amount (1)	Reporting	Reporting			Reporting	are
	partial	funds				Period	intended			project
raised funds				Period	Period (2)			Period	reached
	alternation)					(3)-(2)/(1)	use			feasibility

Committed investment projects
The project of
the
comprehensive							31
intelligent	No	129,638.49	129,638.49	1,368.26	1,368.26	1.06%	December		N/A	No
sanitation							2022
allocation
center
Replenishment							31
of working	No	16,095.13	16,095.13	16,095.13	16,095.13	100.00%	December		N/A	No
capital							2020
Subtotal of
committed
	--	145,733.62	145,733.62	17,463.39	17,463.39	--	--		--	--
investment

projects
Investment of excessive raised funds
N/A
Repayment of
bank loans (if	--	0	0	0	0	0.00%	--	--	--	--
any)
Replenishment
of working	--	0	0	0	0	0.00%	--	--	--	--
capital (if any)
Subtotal of
investment of
	--	0	0	0	0	--	--	0	--	--
excessive

raised funds
Total	--	145,733.62	145,733.62	17,463.39	17,463.39	--	--	0	--	--
Cases and
	None
reasons for

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

failing to reach
the planned
progress or
predicted
return (by
specific
projects)
Explanations of
the material
changes in the	None
project
feasibility
Amount, use,
and use
progress of	N/A
excessive
raised funds
Implementation
of location
changes in the
	N/A
investment

projects with
the raised funds
Implementation
of method
adjustments to
	N/A
the investment

projects with
the raised funds
Early
investment and
placement
concerning the	N/A
investment
projects with
the raised funds
Temporary	Applicable
replenishment	The Proposal on Using Some Idle Raised Funds to Replenish Working Capital was deliberated and approved at the 9th Extraordinary Meeting of the 9th Board of Directors and the 10th Extraordinary Meeting of the 9th Board of Directors held by the Company on 4 December 2020, allowing the Company to use restricted raised funds of no more than RMB1 billion for temporary replenishment of working capital, which shall be used for the production and operation related to the Company's main businesses with a term of no more than 12 months as of the date when the
of working
capital with the
idle raised
funds

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

==> picture [60 x 34] intentionally omitted <==

Proposal was deliberated and approved by the Board of Directors. As at 31 December 2020, the balance of the idle raised funds used by the Company for temporary replenishment of working capital was RMB1,000,000,000.

	Proposal was deliberated and approved by the Board of Directors. As at 31 December 2020, the balance of the idle raised funds used by the Company for temporary replenishment of working capital was RMB1,000,000,000.
Surplus raised	N/A
funds for
project
implementation
and reasons for
the surplus
	The Proposal on Using Some Idle Raised Funds to Replenish Working Capital was deliberated and approved at the 9th Extraordinary Meeting of the 9th Board of Directors and the 10th Extraordinary Meeting of the 9th Board of Directors held by the Company on 4 December 2020, allowing the Company to use raised funds of no more than RMB1 billion for temporary replenishment of working capital, which shall be used for the production and operation related to the Company's main businesses with a term of no more than 12 months as of the date when being deliberated and approved by the Board of Directors. As at 31 December 2020, the balance of the idle raised funds used by the Company for temporary replenishment of working capital was RMB1,000,000,000. Other unused raised funds of RMB284,509,100 were still retained on the special account of raised funds in the form of demand deposits at banks for the purpose of continuous construction of corresponding fund-raising projects.
Use and
ownership
change of
unused raised
funds

Problems in the	None
use of raised
funds and
disclosure, or
other cases

(3) Altered Projects of Raised Funds

□ Applicable √ Not applicable

No such cases in the Reporting Period.

VI Sale of Major Assets and Equity Investments

1. Sale of Major Assets

□ Applicable √ Not applicable

No such cases in the Reporting Period.

2. Sale of Major Equity Investments

□ Applicable √ Not applicable

VII Principal Subsidiaries and Joint Stock Companies

√ Applicable □ Not applicable

Principal subsidiaries and joint stock companies with an over 10% effect on the consolidated net profit:

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Unit: RMB

	Relationship
		Principal	Registered			Operating	Operating
Name				Total assets	Net assets			Net profit
	with the	activities	capital			revenue	profit
	Company

Changsha
Zoomlion
		Intelligent	RMB2,351.5	14,748,699,7	6,813,202,91	10,135,672,9	1,701,177,612.	1,436,516,377
Environment	Subsidiary
		sanitation	298 million	93.30	9.41	62.73	90	.48
al Industry

Co., Ltd.
Shenzhen
		Environment
Greenlander
		monitoring and	RMB150	1,741,873,02	38,592,327.4	181,203,208.
Environment	Subsidiary						2,913,858.34	1,458,573.11
		treatment of	million	8.13	2	46
al Protection
		solid waste
Co., Ltd.

Guangdong		Environment
Infore		monitoring and	RMB110	789,035,728.	101,177,283.	211,026,157.
	Subsidiary						16,676,579.49	22,011,639.68
Technology		treatment of	million	95	36	11

Co., Ltd.		solid waste
Foshan
Infore		Environment monitoring and treatment of solid waste
Environment				595,470,908.	163,408,762.	156,482,090.
	Subsidiary		RMB100,000				62,080,036.62	55,592,595.40
Water				92	29	72

Treatment
Co., Ltd.
Foshan
		Manufacturing
Yingtong
		of electric	RMB350	1,275,456,50	552,633,962.	2,541,740,19
Electric	Subsidiary						48,813,200.25	33,222,086.94
		materials and	million	8.41	43	0.79
Material Co.,
		others
Ltd.

Subsidiaries acquired or disposed of in the Reporting Period:

√ Applicable □ Not applicable

Name	Way of acquisition or disposal	Effects on the overall operations and performance
Donglan Yinglian Urban Environmental	Incorporation
		Positive effects on the Company’s business
Service Co., Ltd.

Baise Yinglian Urban Environmental Service	Incorporation
		Positive effects on the Company’s business
Co., Ltd.

Zaozhuang Zhongying Urban Environmental	Incorporation
		Positive effects on the Company’s business
Service Co., Ltd.

Changde Zelian Environmental Service Co.,	Incorporation
		Positive effects on the Company’s business
Ltd.

XiantaoYinglian Environmental Protection	Incorporation	Positive effects on the Company’s business

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Technology Co., Ltd.
Xianghe Yinglian Environmental Protection
	Incorporation	Positive effects on the Company’s business
Technology Co., Ltd.

Binchuan Zhongying Environmental Service
	Incorporation	Positive effects on the Company’s business
Co., Ltd.

Shenzhen Bao’an Yinglian Urban Service
	Incorporation	Positive effects on the Company’s business
Co., Ltd.

Foshan Shunde Yinghe Urban Environmental
	Incorporation	Positive effects on the Company’s business
Service Co., Ltd.

Foshan Liansheng Environmental Sanitation
	Incorporation	Positive effects on the Company’s business
Service Co., Ltd.

Shaoyang Zhongfeng Environmental Industry
	Incorporation	Positive effects on the Company’s business
Co., Ltd.

Tangyin Yinglian Environmental Service Co.,
	Incorporation	Positive effects on the Company’s business
Ltd.

Xi’an Yinglian Urban Environmental Service
	Incorporation	Positive effects on the Company’s business
Co., Ltd.

Yangbi Zhongying Environmental Service
	Incorporation	Positive effects on the Company’s business
Co., Ltd.

Rongcheng Yinglian Urban Environmental
	Incorporation	Positive effects on the Company’s business
Service Co., Ltd.

Lai’an Zhongfeng Environmental Technology
	Incorporation	Positive effects on the Company’s business
Co., Ltd.

Zhaoyuan Jincheng Environmental Sanitation
	Incorporation	Positive effects on the Company’s business
Management Service Co., Ltd.

Ji’an Zhongfeng Environmental Technology
	Incorporation	Positive effects on the Company’s business
Co., Ltd.

Heping Hesheng Environmental Sanitation
	Incorporation	Positive effects on the Company’s business
Service Co., Ltd.

Yongshun Zhongfeng Jingtou
	Incorporation	Positive effects on the Company’s business
Environmental Technology Co., Ltd.

Foshan Shunde Lianying Environmental
	Incorporation	Positive effects on the Company’s business
Development Co., Ltd.

Shouxian Liansheng Environmental
	Incorporation	Positive effects on the Company’s business
Sanitation Management Co., Ltd.

Foshan Shunde Zhongying Urban
	Incorporation	Positive effects on the Company’s business
Environmental Management Co., Ltd.

Suqian Lianying Urban Service Co., Ltd.	Incorporation	Positive effects on the Company’s business

Anshan Yinglian Urban Environmental
	Incorporation	Positive effects on the Company’s business
Sanitation Management Co., Ltd.

Liucheng Yinglian Environmental Sanitation
	Incorporation	Positive effects on the Company’s business
Management Co., Ltd.

Chongqing Zhongying Environmental	Incorporation	Positive effects on the Company’s business

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Sanitation Service Co., Ltd.
Renshou Yinglian Urban and Rural Sanitation
	Incorporation	Positive effects on the Company’s business
Service Co., Ltd.

Infore Zoomlion (Tianjin) Environmental
	Incorporation	Positive effects on the Company’s business
Technology Co., Ltd.

Yuncheng Zhongying Urban Environmental
	Incorporation	Positive effects on the Company’s business
Service Co., Ltd.

Lanling Zoomlion Environmental Service
	Incorporation	Positive effects on the Company’s business
Co., Ltd.

Tongbai Tongying Environmental Sanitation
	Incorporation	Positive effects on the Company’s business
Development Co., Ltd.

Shennongjia Forestry District Yinghe
Environmental Sanitation Management Co.,	Incorporation	Positive effects on the Company’s business
Ltd.
Shengzhou Zoomlion Environmental
	Incorporation	Positive effects on the Company’s business
Engineering Co., Ltd.

Shengzhou Yinghe Environmental Sanitation
	Incorporation	Positive effects on the Company’s business
Management Co., Ltd.

Guangxi Guiping Yinghe Environmental
	Incorporation	Positive effects on the Company’s business
Sanitation Management Co., Ltd.

Heze Yingsheng Environmental Sanitation
	Incorporation	Positive effects on the Company’s business
Service Co., Ltd.

Shenzhen Yinglian Environmental Industry
	Incorporation	Positive effects on the Company’s business
Co., Ltd.

Foshan Yingshun Urban Environmental
	Incorporation	Positive effects on the Company’s business
Service Co., Ltd.

Guangdong Xingzhou Water Treatment
	Incorporation	Positive effects on the Company’s business
Technology Co., Ltd.

Foshan Yingtong Electric Material Co., Ltd.	Incorporation	Positive effects on the Company’s business

Qixian Tongying Environmental Sanitation
	Incorporation	Positive effects on the Company’s business
Service Co., Ltd.

Anhua Yingsheng Environmental Sanitation
	Incorporation	Positive effects on the Company’s business
Service Co., Ltd.

Shenzhen Infore Environment Network		Asset optimization, with no significant impact on
	De-registration
Technology Co., Ltd.		the Company’s operations and performance

Leiyang Zhongfeng Environmental Industry		Asset optimization, with no significant impact on
	De-registration
Co., Ltd.		the Company’s operations and performance

Other information on principal subsidiaries and joint stock companies:

VIII Structured Bodies Controlled by the Company

□ Applicable √ Not applicable

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

IX Prospects

(I) Industry Development and Trend

National policies will promote the development of the sanitation industry

According to the New Energy Vehicle Industry Development Plan (2021-2035), from 2021, new energy vehicles (NEVs) should account for no less than 80% of the vehicles newly added and replaced in public transport areas such as national ecological civilization pilot zone and key regions for prevention and control of atmospheric pollution.

The State Council has issued the Guidelines on Carrying out the Patriotic Public Health Campaign in a Deep-going Way to perfect public health facilities, improve the living environments for urban and rural residents, and promote the comprehensive management of environmental hygiene in urban and rural areas; enhance social health management, make coordinated efforts to promote the building of a healthy China, and vigorously boost the construction of health cities and towns.

The Fifth Plenary Session of the 19th CPC Central Committee raised clear requirements for "drawing up an action plan for carbon emissions to peak by 2030", putting forward specific objectives, indicators, main ways, and policy suggestions for the plan to make it practical and feasible and can be continued and carried forward in the future. Many local governments clearly stated that they would take solid steps toward the goals of achieving peak carbon emissions and carbon neutrality, develop action plans for carbon emissions to peak by 2030, optimize the industrial and energy structures, promote the clean and efficient use of coal, and make a major push to the development of new energy resources.

According to the Several Opinions on Further Promoting the Classification of Domestic Waste, China aims to take another five years or so to establish a fundamentally complete system of laws and regulations for domestic waste classification; cities at the prefecture level and above shall establish a system for domestic waste sorting, separate collection, classified transportation, and sorting treatment according to local conditions. Residents shall generally cultivate household waste sorting habits; the recycling rate of domestic garbage in cities across the country should exceed 35%.

The Guiding Opinions on Building a Modern Environmental Governance System require that key environmental protection technologies and products shall be enhanced, the demonstration and application of first (set of) technical equipment for environmental protection shall be advanced, and the quality of technical equipment for the environmental protection industry shall be expeditiously improved.

2. The demands for sanitation services will keep increasing

As a part of public services, sanitation services' income comes from the government's fiscal expenditure as inflexible items and is less affected by macroeconomic regulation. Therefore, sanitation services are featured by sustainability and stability.

(1) Urbanization has led to increasing service demands

With the constant development of urbanization, the construction of urban roads will directly increase road cleaning space, urban housing, community construction, and urban green space, and thus give rise to higher demands for sanitation equipment and cleaning services in cities and towns. In addition, public sanitation is a necessary guarantee condition for cities in different provinces to engage in a series of urban upgrading and construction as "national civilized cities", "national health cities", "national environmental protection exemplary cities", "national ecological garden cities", etc. According to the statistical data released by Ministry of Housing and Urban-Rural Development, from 2010 to 2018, China's road cleaning space in cities and counties increased from 6,257 million square meters to 11,249 million square meters, with the overall road cleaning space increasing by nearly 80%. Meanwhile, the domestic waste generated in cities and counties increased from 221 million tons to 295 million tons, with the overall domestic waste increasing by 33%. In the context of urbanization, to ensure the roads, residential districts, and municipal gardens in cities and towns

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

are clean, and maintain the normal transportation and treatment of domestic waste, cities and towns are continuously raising demands for sanitation services.

(2) The rural sanitation market is gradually developing with the onset of building "beautiful villages"

For a long time, not enough attention has been paid to the waste produced in China's rural areas. In most rural areas, the construction of waste disposal facilities is rare, with an extremely unsound treatment mechanism for rural waste. The 13th Five-Year Plan for National Integrated Rural Environment Management specified that by 2020, additional 130,000 incorporated villages would have completed the integrated environmental management, adding the number of such villages up to over one third of the total incorporated villages across the country, and more than 4.5 million pieces/sets garbage collection, transportation, and treatment facilities would have been established. The 13th Five-Year Plan for Ecological & Environmental Protection released by the State Council in November 2016 also clarified that China would speed up the construction of waste treatment facilities in counties and realize the full coverage of waste treatment facilities in cities and towns by the end of 2020.

In the era of building "beautiful villages" and boosting urban and rural sanitation integration, projects like promotion by all counties and comprehensive management have emerged continuously and the rural sanitation market will enter a new stage for further rapid market expansion. In the further, with great potential, the rural sanitation market will be able to provide a broad market and large room for improvement for the sanitation service industry and even the whole sanitation market.

(3) With the continuous advancement of waste sorting, the market demands will be increasing constantly

In September 2020, President Xi Jinping chaired the meeting of the Central Commission for Comprehensively Deepening Reform, at which the Several Opinions on Further Promoting the Classification of Domestic Waste were deliberated and passed. With the accelerated promotion of waste sorting policies, since the traditional collection and transportation facilities cannot satisfy the demands for classified collection and transportation and the four treatment procedures including delivery, collection, transportation, and treatment of domestic waste will be divided into four steps, the traditional collection and transportation system for domestic waste will be completely changed. Accordingly, as demands to upgrade traditional practices and sanitation technologies and equipment keeps rising, plus the investment demand for intelligent system improvement, the market demands will be constantly increasing.

(4) Under the influence of the goal of carbon neutrality, the process of sanitation equipment using new energy resources will be further accelerated

According to the relevant policies that have been successively issued by local governments, in principle, the updated sanitation vehicles should be mainly based on new energy resources. In the future, it is expected that the procurement of new energy sanitation vehicles will be on the rise, which will further accelerate the process of sanitation equipment using new energy resources for years to come. In November 2020, the New Energy Vehicle Industry Development Plan (2021-2035) was issued, requiring that new energy vehicles (NEVs) should account for no less than 80% of the vehicles newly added and replaced in key regions and public areas. Since 2012, China has worked out the guiding policy on accelerating fostering the new energy vehicle industry and issued several important documents successively for implementation. In addition, after going through a gestation period, the promotion of new energy sanitation vehicles has now entered a period of explosive growth.

(5) The enhanced mechanization rate will drive the growth in the incremental volume of sanitation equipment in the market

The improvement in the mechanization rate in the sanitation industry can reduce the cost of the sanitation work and reduce the financial burdens on the government and enterprises. With the increasing expansion of road cleaning space in China's urban and rural areas, the mechanization rate in the sanitation industry will gradually rise. According to the statistical communique on urban and rural construction prepared by Ministry of Housing and Urban-Rural Development, at the end of 2018, the mechanical cleaning space of the road in cities across the country reached 5,986 million square meters, with a mechanical cleaning rate of 68.85%; the

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

mechanical cleaning space of the road in counties across the country reached 1,628 million square meters, with a mechanical cleaning rate of 63.70%. However, compared with cities in advanced countries whose mechanical sanitation rates usually reach 80%, there is still a large space for the improvement of mechanization rate in the sanitation industry in China. In the future, in the context of the increasingly higher labor cost, the mechanical sanitation work will become the main development direction for China's sanitation market and cover miscellaneous segments such as road sweeping, guardrail cleaning, and waste collection and transportation.

(6) The aging trend in China will expand the sanitation equipment market

The frequent adjustments made by China in terms of minimum wages in different countries have largely influenced the operating costs of sanitation service enterprises. The defects including high operating costs and low working efficiency in the traditional manual sanitation service model have increased the business pressure on sanitation operation enterprises. In addition, according to the prediction made by the China National Committee on Aging, China's elderly population will reach 248 million by 2020, indicating that the percentage of the elderly population has reached 17.17%. The trend will aggravate the shortage of labor force in the field of sanitation services. Meanwhile, with the diversification of employment selections, the number of young and middle-aged workers that are willing to engage in sanitation work continues to decline day by day. Therefore, improving the mechanical sanitation rate and expanding the use scope of sanitation equipment not only are the real needs in the context of the shortage of labor force in the market but also are the requirements for the development of the urban sanitation level.

(7) Technological progress has caused breakthroughs in the industry

The rapid development of 5G and AI technologies has broadened the industry boundary and brought about infinite possibilities for industry reform. Intelligent, manpower saving, and even unmanned operation will be the general trend while small intelligent equipment and smart services will be the new spotlights, bringing about new factors and growth points for the industry.

(II) Competitive landscape in the industry

At this stage, due to the marketization of the environmental sanitation service, a large number of enterprises have engaged in this industry. According to the Annual Report on Sanitation Bidding Market released by the Yi Biao Tong Sanitation Data Center, there were currently about 10,000 relatively active sanitation enterprises nationwide. In the future, under the trends of mid- and high-end mechanization, intelligent sanitation operation, sanitation services integration and wide-area sanitation market, the sanitation market will put forward higher requirements for enterprises in the sanitation industry in terms of technical strength, marketing strength, R&D strength and financial strength. Therefore, with the continuous enhancement of sanitation industry access, survival barriers, Chinese sanitation market concentration will also continue to improve in the future. Enterprises with weak financial strength, small scale, low technology and inefficient management will be gradually replaced, while enterprises with large scale, strong financial strength, leading technology, diversified business model and standardized operation will become the mainstream of the industry.

Industry-leading intelligent management

The Company chose flexible business model for investment and operation in its "smart environmental sanitation" service, relying on the leading technology, brand, marketing network, and management advantages of sanitation equipment, etc., to develop a smart environmental sanitation system with its own characteristics, including a unified system of smart equipment, smart platform, and smart environmental sanitation. Taking into account the continuous technological changes and application innovations of sanitation IoT, cloud platform development, the core of intelligent operation of sanitation services was to continuously upgrade its products and operation platform in accordance with the changes in frontier technology. The Company has accumulated rich industry experience in sanitation services, and has accumulated a strong foundation of research and development strength in the intelligent management. The Company's self-developed products, such as smart environmental sanitation cloud platform, smart sorting

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

platform, smart environment platform and new energy autonomous driving platform, met the main needs of the market to upgrade from "cleaners" to "urban housekeepers", and provided integrated IoT application solutions of full lifecycle and platform operation services for customers in the fields of new energy autonomous driving, domestic waste sorting, waste collection and transfer, road cleaning, sanitation personnel management, kitchen waste collection and transportation, sludge transportation supervision, leachate treatment and smart city construction.

Industry-leading sanitation equipment

The sanitation equipment required for environmental sanitation services is a technological and capital-intensive industry. As new technologies and application updates of the industry are accelerating, the Company must keep up with industry development for technological improvement and innovation and enhance knowledge reserves and updates to adapt to the changing competitive environment so that the company can meet market demands. After years of continuous technological innovation, Infore Environment has established product series with diversified categories and specifications in the field of environmental sanitation equipment, which involve a wide range of disciplines, strong comprehensiveness across different sectors, integrating hydromechanics, mechanical engineering, aerodynamics, environmental engineering, material science and other professional knowledge. The Company is a high-tech enterprise with industry-leading R&D capacity, and has taken the lead in formulating a number of national, industry and local standards. Therefore, with its strong R&D capacity, technical advantages and industry-leading position, the Company's comprehensive sanitation resources allocation center can continuously provide high-quality environmental sanitation equipment for sanitation service projects.

In addition, the Company enjoys the largest share of environmental sanitation equipment business in China, covering a total of more than 400 product models including intelligent sanitation robot, autonomous sanitation vehicle, sanitizer, cleaning sweeper, high-pressure sewer flushing vehicle, compression refuse collector, waste transfer truck, kitchen refuse truck, refuse station equipment, waste sorting equipment, municipal garden equipment, snow and ice removal equipment, leachate and wastewater treatment equipment. These equipment can fully meet the personalized requirements and product mix demands of downstream customer segments with high quality.

Well-established marketing network

Sanitation service projects are highly regional and customized; as governments at all levels have attached more importance to environmental health, sanitation service projects require higher professional operation experience and long-term follow-up services to maintain current cooperation while obtaining new projects. Therefore, the development of a highly specialized marketing network is needed for sanitation services to explore commercial opportunities in each region, improve service and delivery quality, and obtain business opportunities. Benefiting from its first-mover advantage in the field of environmental sanitation equipment, the Company has established a business marketing network covering all provinces, cities, and autonomous regions (except for Hong Kong, Macao and Taiwan) in China. It has actively expanded its investment and operation of sanitation service projects over the past few years with its mature sales and service network for environmental sanitation equipment as well as excellent industry experience.

In summary, as market concentration continues to increase, the Company will rely on its absolute advantage in environmental sanitation equipment, and fully leverage its strong R&D capacity and technical foundation, wide-range marketing network, well-known industry brand image, mature sanitation integration model and other core competitive advantages to adapt to and even lead the development of the sanitation industry. Driven by the aforementioned core competitive advantages, the Company's market share will continue to increase, and it will become a leading enterprise in the sanitation industry.

(III) Work and business plan for 2021

In 2020, centering on the development strategy and annual business plan, the Company focused on core strategic business, stripped and split off non-core businesses, actively promoted smart environmental sanitation, environmental monitoring and solid

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

waste treatment, and soundly completed the business plan for 2020. The business target set at the beginning of the year was for the Company to achieve RMB35 billion in the planned cumulative contract amount of its smart environmental sanitation services and RMB1.5 billion in its annual operating revenue; the actual planned cumulative contract amount of the Company's smart environmental sanitation services reached RMB37 billion while its annual operating revenue recorded RMB1,969 million, completing the business target.

The business target for 2021: The Company will reach RMB50 billion in the planned cumulative contract amount of its smart environmental sanitation services and RMB2.8 billion in its annual operating revenue; the planned cumulative contract amount of the Company's smart environmental sanitation services from 2020 to 2024 will reach RMB100 billion while its annual operating revenue reaches RMB10 billion.

Since smart environmental sanitation service is the Company's strategic core business, the Company will continue to increase resource input and strive to become one of the best enterprises in the industry.

In 2021, the Company will continue to focus on its core business - smart environmental sanitation, adhere to the business strategy of leading technology and leading product, steadily reinforce its leading advantages in environmental sanitation equipment as well as environmental sanitation services featuring intellectualization, the Internet of Things and network, and maintain its industry-leading position.

(IV) Plan for the use of funds

Since 2021 is a key phase for its rapid development, the Company has a large demand for funds and will establish a fund supply/demand plan competent for its development. The Company will make full use of its own funds, optimize its financial structure while enhancing the management of accounts receivable, provide strong capital guarantee for its business development, and control financial risks. The sources of funds mainly include the optimization and combination of funds raised through various channels such as the issuance of commercial paper and medium-term note, cash flow from operating activities, and bank loans.

(V) Main risk factors that may cast adverse impacts on the realization of the Company's future development strategies and business objectives

1. Policy risk

As the state attaches more importance to environmental protection and environmental governance, unprecedented development opportunities will also appear in the environmental protection industry, but such industry is also highly dependent on national industrial policies since it is typically policy-driven. The adjustment of macroeconomic policies, tax policies, environmental protection industry policies and environmental management policies will affect the Company's business performance.

Countermeasures: The Company will pay close attention to the changes in national macroeconomic policies, step up its study and analysis of industry policies, increase the scientific decision-making level of management personnel, and improve its ability to fend off policy risks.

2. Operation and control risk

As the Company continuously expands its business scale, enriches its business types, broadens its markets and develops more subsidiaries, its asset scale, personnel scale and organization scale are also undergoing rapid expansion, causing its organizational structure and management system to become more complex. Although the Company has formed a complete set of management policies for internal control and improved it annually, , the difficulties and risks in the management and control are still increasing due to the differences in industry attributes, geographic distribution, cultural characteristics and corporate culture of its branch institutions.

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Countermeasures: While strengthening the building of its talent team, the Company will place emphasis on developing its management and risk control systems, further improve its operation and management systems as well as business procedures, continue to enhance refined management, and strengthen the risk control and cultural development of subordinate enterprises.

Risk of intensified market competition

The environmental sanitation industry is an emerging comprehensive industry at its early marketization stage in China with low organizational level and concentration. However, it is currently going through rapid growth. More upstream and downstream enterprises as well as new enterprises in other fields are entering the industry, and market competition will continue to intensify, which brings the risk that the Company's market share may decline in the future.

Countermeasures: The Company will continue to adhere to the technology-driven development strategy and ensure its technology-leading position in the industry to consolidate its industry-leading position.

The contents herein involving plans and result forecasts shall not constitute the Company's commitment to any investors and relevant persons. All investors and relevant persons shall remain adequately aware of risks.

X Communications with the Investment Community such as Researches, Inquiries and Interviews

1. During the Reporting Period

√ Applicable □ Not applicable

		Way of	Type of the
				Main discussions and materials	Index to the relevant
Date	Place	communicatio	communication
				provided by the Company	information
		n	party

	Company
				Learned about the Company’s
15 January 2020	Conference	By phone	Individual		-
				operations
	Room

	Company			Learned about the current
18 March 2020	Conference	By phone	Individual	market condition for the	-
	Room			Company
					The log sheet of investor
					relations activities
				Learned about the Company’s	disclosed by the Company
7 May 2020	Shenzhen	By visit	Institution
				primary operations	on

					www.cninfo.com.cn dated 9
					May 2020
					The log sheet of investor
	Company				relations activities
				Learned about the Company’s
27 May 2020	Conference	By phone	Institution		disclosed by the Company
				operations
	Room				onwww.cninfo.com.cn
					dated 28 May 2020
					The log sheet of investor
2 July 2020	Foshan City in	By visit	Institution	Learned about the Company’s
	Gd				relations activities
	uangong

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

	Province, and			operations	disclosed by the Company
	Changsha City				onwww.cninfo.com.cn
	in Hunan				dated 2 July 2020
	Province
					The log sheet of investor
	Foshan City in				relations activities
25 August 2020	Guangdong	By visit	Institution	Operating results briefing	disclosed by the Company
	Province				onwww.cninfo.com.cn
					dated 26 August 2020
					The log sheet of investor
	Changsha City				relations activities
				Learned about the Company’s
28 October 2020	in Hunan	By visit	Institution		disclosed by the Company
				operations
	Province				onwww.cninfo.com.cn
					dated 28 October 2020
	Company
				Learned about the Company’s
18 November 2020	Conference	By phone	Individual		-
				operations
	Room

	Company
				Learned about the Company’s
29 December 2020	Conference	By phone	Individual		-
				operations
	Room

Times of communications			9
Number of institutions communicated with			5
Number of individuals communicated with			4
Number of other communication parties			0
Tip-offs or leakages of substantial confidential
			None
information

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Part V Significant Events

I Profit Distributions to Ordinary Shareholders (in the Form of Cash and/or Stock)

The profit distribution policy for ordinary shareholders, especially the formulation, implementation and amendments to the cash dividend policy, in the Reporting Period:

√ Applicable □ Not applicable

According to the Articles of Association, while satisfying the conditions of cash dividend and ensuring the Company's normal operation and long-term development, the Company shall in principle pay cash dividend once a year. The Board of Directors may propose interim cash dividends depending on the Company's profit status, cash flow status, development stage and capital requirements. The Company shall maintain continuity and stability of the profit distribution policy. When the conditions for cash dividends are met, the cumulative profit distributed in cash in the recent three years shall not be less than 30% of the average annual distributable profit recorded in the recent three years.

During the Reporting Period, the Company distributed profit in strict accordance with the provisions of the Articles of Association and fully protected the legitimate rights and interests of small and medium investors. Independent directors have voiced their opinions on the annual profit distribution plan of the Company.

Special statement about	the cash dividend policy
In compliance with the Company’s Articles of Association and
	Yes
resolution of general meeting

Specific and clear dividend standard and ratio	Yes
Complete decision-making procedure and mechanism	Yes
Independent directors faithfully performed their duties and
	Yes
played their due role

Non-controlling shareholders are able to fully express their
opinion and desire and their legal rights and interests are fully	Yes
protected
In case of adjusting or changing the cash dividend policy, the
conditions and procedures involved are in compliance with	Yes
applicable regulations and transparent

The profit distributions to ordinary shareholders, either in the form of cash or stock, in the past three years (including the Reporting Period) are summarized as follows:

2020: According to the 2020 Final Dividend Plan approved at the 13[th] Meeting of the 9[th] Board of Directors on 22 April 2021, based on the total share capital (minus the shares in the Company’s repurchase account) at the date of record for the 2020 Final Dividend Plan, a cash dividend of RMB1.20 (tax inclusive) per 10 shares is planned to be distributed to the shareholders.
2019: According to the 2019 Final Dividend Plan approved at the 4[th] Meeting of the 9[th] Board of Directors on 23 April 2020, based on the total share capital (minus the shares in the Company’s repurchase account) at the date of record for the 2019 Final Dividend Plan, a cash dividend of RMB1.10 (tax inclusive) per 10 shares is planned to be distributed to the shareholders.
2018: According to the 2018 Final Dividend Plan approved at the 27[th] Meeting of the 8[th] Board of Directors on 17 April 2019, a cash dividend of RMB1.00 (tax inclusive) per 10 shares is planned to be distributed to the shareholders. The total cash dividend

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

payout amounted to RMB316,306,214.60, and the retained earnings of RMB606,780,499.66 were carried forward for future distribution.

Cash dividends for ordinary shareholders in the past three years (including the Reporting Period):

Unit: RMB

		Net profit
		attributable to
						Total cash
		ordinary		Cash dividends
	Cash dividends					dividends
		shareholders of the	A as % of B	in other forms	C as % of B		A+C as % of B
Year	(tax inclusive)					(including
		listed company in	(%)	(like share	(%)		(%)
	(A)					those in other
		consolidated		repurchase) (C)
						forms) (A+C)
		statements for the

		year (B)
2020	379,569,641.52	1,386,476,099.73	27.38%	8,920,597.83	0.64%	388,490,239.35	28.02%
2019	347,936,836.06	1,361,453,754.17	25.56%	99,993,196.00	7.34%	447,930,032.06	32.90%
2018	316,306,214.60	928,577,765.32	34.06%	0.00	0.00%	316,306,214.60	34.06%

Indicate whether the Company fails to put forward a cash dividend proposal for the ordinary shareholders despite the facts that the Company has made profits in the Reporting Period and the profits of the Company distributable to the ordinary shareholders are positive.

□ Applicable √ Not applicable

II Final Dividend Plan for the Reporting Period

√ Applicable □ Not applicable

√ Applicable □ Not applicable
Bonus issue from profit (share/10 shares)	0
Cash dividend/10 shares (RMB) (tax inclusive)	1.2
Share base (share)	3,163,080,346.00
Cash dividends (RMB) (tax inclusive)	379,569,641.52
Cash dividends in other forms (such as share
	8,920,597.83
repurchase) (RMB)

Total cash dividends (including those in other
	388,490,239.35
forms) (RMB)

Distributable profit (RMB)	502,505,012.72
Total cash dividends (including those in other
	28.02%
forms)as a % of total distributable profit

Cash dividend policy
Other
Cash and/or stock dividend plan in detail

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

The 2020 Final Dividend Plan: based on the total share capital (minus the shares in the Company’s repurchase account) at the date of record for the 2020 Final Dividend Plan, a cash dividend of RMB1.20 (tax inclusive) per 10 shares is planned to be distributed to the shareholders, with no bonus issue from either profit or capital reserves. The distributable profit stood at RMB1,001,411,231.44 as at the end of 2019. With a net profit of RMB-150,969,382.66 and RMB0 set aside as surplus reserves for 2020, the distributable profit stood at RMB502,505,012.72 as at the end of 2020. Where there is no share repurchase before the implementation of the 2020 final dividend plan, the total share capital for the 2020 final dividend plan at the date of record would be the existing share capital of 3,163,080,346 shares. And according to the 2020 final dividend plan, a cash dividend of RMB1.20 (tax inclusive) per 10 shares would be distributed to the shareholders. The total cash dividend payout would amount to RMB379,569,641.52, and the retained earnings would be RMB122,935,371.20. Where any share repurchase occurs before the implementation of the 2020 final dividend plan, the repurchased shares will be excluded from the total share capital for the 2020 final dividend plan, and the total cash dividend payout will be reduced accordingly.

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

III Performance of Undertakings

1. Undertakings of relevant parties such as the actual controller, shareholders, related parties, buyers of the Company and the Company that had been completed during the Reporting Period and that had not been fully completely as of the end of the Reporting Period

√ Applicable □Not applicable

				Date of	Term of	Fulfillment of
Cause of undertakings	Parties of undertakings	Types of undertakings	Contents of undertakings
				undertakings	undertakings	undertakings

Undertakings related to reform of
	--	--	--	--	--	--
shareholder structure

Undertakings made in acquisition
	--	--	--	--	--	--
report of change of equity report

						The undertaking has
	Yuemin Investment Yinglian,
						been performed and
	Hongchuang Investment, Ningbo	Undertaking related to	Zoomlion Environmental made an undertaking that
					31 December	the person making
	Liantai, Ningbo Infore; Ningbo	performance and compensation	the cumulative net profit in in 2018, 2019 and 2020	15 August 2018
					2020	the undertaking has
	Yingtai, Ningbo Zhongfeng,	arrangement	shall not be less than RMB3,722 million.
						strictly observed the
	Shanghai Junhe, Zoomlion
						above undertaking.

						It is in normal
		Undertaking on not to relinquish	I undertake not to relinquish the actual control right			progress of
Undertakings made in asset	Actual controller He Jianfeng	the control right of the listed	of the listed company within 60 months from the	3 January 2019	60 months	fulfillment, without
reorganization		company	date of completion of this transaction.			breach of
						undertaking.
			If the proportion of the shares of the listed company			The undertaking has
			held by me and the enterprises under my control			been performed and
		Undertaking on restrictions on	increases, the shares of the listed company held by			the person making
	Actual controller He Jianfeng			3 January 2019	12 months
		sale of shares	me before this transaction will not be transferred			the undertaking has

			externally within 12 months after the completion of			strictly observed the
			this transaction.			above undertaking.
	Ningbo Infore Asset Management	Undertaking on restrictions on	1. The shares of the listed company acquired from	3 January 2019	42 months	It is in normal

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Co., Ltd.	sale of shares	this transaction shall not be transferred within 36			progress of
		months from the closing date of issuance. 2. Within			fulfillment, without
		6 months from the completion of this transaction, in			breach of
		case the closing price of the listed company's stock			undertaking.
		is lower than its issue price for 20 consecutive
		trading days, or the closing price by the end of the
		sixth month from the completion of this transaction
		is lower than the issue price, the lock-up period of
		Ningbo Infore holding shares in the listed company
		shall automatically extend for at least 6 months.
					It is in normal
		The shares of the listed company acquired from this			progress of
Counterparties Ningbo Yingtai,	Undertaking on restrictions on
		transaction shall not be transferred within 36	3 January 2019	36 months	fulfillment, without
Ningbo Zhongfeng, Ningbo Liantai	sale of shares
		months from the closing date of issuance.			breach of

					undertaking.
					The undertaking has
		The shares of the listed company acquired from this			been performed and
Hongchuang Investment, Lvlian	Undertaking on restrictions on	transaction shall be locked up upon completion of			the person making
			3 January 2019	12 months
Junhe, Zoomlion	sale of shares	issuance and shall not be transferred within 12			the undertaking has

		months from the date of completion of issuance.			strictly observed the
					above undertaking.
		1. The shares of the listed company acquired from
		this transaction shall be locked up upon completion			The undertaking has
		of issuance and shall not be transferred within 12			been performed and
	Undertaking on restrictions on	months from the date of completion of issuance. 2.			the person making
Yuemin Investment Yinglian			3 January 2019	12 months
	sale of shares	The property shares held by Yuemin Investment			the undertaking has

		Yinglian shall not be transferred, sold or withdrawn			strictly observed the
		within 12 months from the closing date of issuance			above undertaking.
		of shares of the listed company in this transaction.
Actual controller He Jianfeng,	Undertaking on avoiding	Undertaking on avoiding horizontal competition,	15 August 2018	Permanent	It is in normal

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Ningbo Infore, Infore Holding	horizontal competition, regulating	regulating and reducing related-party transactions			progress of
	and reducing related-party	and independence of listed companies			fulfillment, without
	transactions and independence of				breach of
	listed companies				undertaking.
					It is in normal
Ningbo Infore, Hongchuang	Undertaking on avoiding
					progress of
Investment, Zoomlion, Ningbo	horizontal competition, regulating	Undertaking on avoiding horizontal competition,
			15 August 2018	Permanent	fulfillment, without
Yingtai, Ningbo Zhongfeng, Ningbo	and reducing related-party	regulating and reducing related-party transactions
					breach of
Liantai	transactions
					undertaking.

		Core personnel such as the general manager of the
					It is in normal
		Company (the specific list of main management
					progress of
Ningbo Yingtai, Ningbo Zhongfeng,	Undertaking related to the term of	personnel and other core personnel shall be verified	27 November
				36 months	fulfillment, without
Ningbo Liantai	employment and non-competition	and confirmed by Infore Environment) shall still	2018
					breach of
		work in the target company for at least 36 months
					undertaking.
		from the closing date of the underlying shares.

					It has not been
					normally fulfilled.
					From 2016 to 2019,
		The accumulative total net profit recorded by
					the audited net
		Lianjiang Greenlander New Energy Co. Ltd.,
					profit (whichever
		Xiantao Greenlander Environmental Protection
					lower before and
		Power Co., Ltd., Funan Greenlander Environmental
					after exceptional
Greenlander Investment Holding	Undertaking related to	Protection Energy Co., Ltd. and Shouxian
			14 October 2015	48 months	gains and losses are
Co. Ltd. and Zheng Weixian	performance	Greenlander New Energy Co., Ltd. from 2016 to
					deducted shall
		2019 shall not be less than RMB120 million
					prevail) was
		(whichever lower before and after exceptional gains
					RMB2,156,500,
		and losses are deducted shall be basis of calculation
					-RMB24,424,500,
		of the net profit).
					-RMB19,192,800

					and -RMB625,700,
					respectively; the

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

						accumulative net
						profit was
						-RMB42,086,600,
						-RMB162,086,600
						less than the
						performance
						undertaken. The
						undertaking on net
						profit from 2016 to
						2019 was
						completed.
						It has not been
						normally fulfilled.
			From 2016 to 2019, the newly signed waste			The newly signed
			incineration power generation BOT agreements			projects by
			(subject to the signing of franchise agreement)			Greenlander
	Greenlander Investment Holding		signed by Greenlander Environmental Protection			Environmental
		Undertaking related to projects		14 October 2015	48 months
	Co. Ltd. and Zheng Weixian		shall specify a total daily disposal capacity of not			Protection from

			less than 6,500 tons (a single project shall have a			2016 to 2019 totaled
			daily disposal capacity of not less than 500 tons, of			1,400 tons, 5,100
			which at least one shall be more than 2,000 tons).			tons less than the
						projects it undertook
						to complete.
			Jiujiang Company must start construction and
			obtain approval before 31 December 2020. If it fails		48 months
	Greenlander Investment Holding	Undertaking on project	to start construction or the construction is recovered		from 31	It has not been
				14 October 2015
	Co. Ltd. and Zheng Weixian	construction	by the government, it shall compensate the listed		December	normally fulfilled.

			company at a consideration of no less than RMB5		2020
			million.
Undertakings made in IPO or	Infore Holding Group Co., Ltd.	Undertakings related to the	The company did not reduce the shares held in the	14 March 2017	Six months	The undertaking has

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

	private placement of shares in	issuer from 23 January 2016 to the date of issuance		after the	been performed and
	2016	of this Letter of Undertaking; the company will not		completion of	the person making
		reduce the shares held in the issuer or make any		this private	the undertaking has
		plan to reduce the shares held in the issuer within		placement	strictly observed the
		six months from the date of issuance of the Letter of			above undertaking.
		Undertaking to the completion of the private
		placement. And the company has no plans to
		relinquish the control right of the issuer by directly
		or indirectly reducing the shares held in the issuer.
		The company and the enterprises or related parties
		controlled by the company will not violate the
		provisions of Article 17 in the Measures for
		Administration of Securities Issuing and		Until the	The undertaking has
		Underwriting (Revised in 2015) and other relevant		completion of	been performed and
	Undertakings related to the
		laws and regulations, nor have they or will they		this private	the person making
Infore Holding Group Co., Ltd.	private placement of shares in		14 March 2017
		provide financial support or compensation, directly		placement of	the undertaking has
	2016
		or indirectly, to Mr. He Jianfeng and Mr. She		shares by the	strictly observed the

		Changguang as subscription objects in the future;		Company	above undertaking.
		nor have they or will they provide financial support
		or compensation, directly or indirectly, to other
		issuing objects in this private placement.
		The company's assets and credit standing are in		Until the	The undertaking has
		good condition, and the company does not have any		completion of	been performed and
	Undertakings related to the
		breach of contract, due outstanding debts or major		this private	the person making
Infore Holding Group Co., Ltd.	private placement of shares in		14 March 2017
		pending litigation, arbitration and other		placement of	the undertaking has
	2016
		circumstances affecting the company's holding of		shares by the	strictly observed the

		controlling interest in the issuer.		Company	above undertaking.
		The shares subscribed for this time shall not be			It is in normal
	Undertaking on restrictions on
He Jianfeng		transferred within 36 months from the closing date	3 January 2018	36 months	progress of
	sale of shares
		of this issuance.			fulfillment, without

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

						breach of
						undertaking.
						It is in normal
			The subscribed shares shall not be transferred			progress of
		Undertaking on restrictions on
	She Changguang		within 36 months from the closing date of this	3 January 2018	36 months	fulfillment, without
		sale of shares
			issuance.			breach of

						undertaking.
						The undertaking has
			From 16 March 2020 to 31 December 2020, the			been performed and
	Zoomlion Heavy Industry Science
		Undertaking not to reduce	Company will not reduce the Company's		31 December	the person making
	& Technology Development Co.,			16 March 2020
		holding-shares	holding-shares, including the portion during the		2020	the undertaking has
	Ltd.
			undertaking period			strictly observed the

						above undertaking.
Undertakings related to equity
	--	--	--	--	--	--
incentives

Undertakings made to minority
	--	--	--	--	--	--
shareholders of the Company

Whether the undertakings were
	No
timely performed

When not performing the	The main cause is that the progress of project construction was slower than expected. To safeguard the rights and interests of the Company and protect the interests of shareholders,
undertakings timely, the Company	the Company applied to Foshan Intermediate People's Court for the asset preservation of Greenlander Investment Holding Co., Ltd., Zheng Weixian and Ren Zhe on 5 November
shall specify specific reasons for	2018. The court froze the 30% stake of Greenlander Investment Holding Co., Ltd. in Shenzhen Greenlander Environmental Protection Co., Ltd. as well as Zheng Weixian's deposits
not performing the undertakings	of RMB9,816.09. On 21 August 2020, the Company received a counterclaim filed by Greenlander Investment Holding Co., Ltd. and Zheng Weixian with the court. On 24 August
timely and work plan in the next	2020 and 24 September 2020, the court held two hearings on the case, and on 13 January 2021, the court issued a judgment of first instance. Now Greenlander Investment Holding
stage	Co., Ltd. and Zheng Weixian have filed an appeal, but the Company has not received the notice of the second trial.

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

2. When there were profit forecast of assets or projects of the Company and the reporting period is covered by the period of profit forecast, the Company shall specify whether the assets or projects reached the original forecast and reasons for it

√ Applicable □Not applicable

			Forecast	Actual	Reasons for
						Date of	Index of
Name of profit			performance in	performance in	not achieving
	Forecast	Forecast				original	original
forecast of assets			the current	the current	the expected
	starting time	ending time				forecast	forecast
or projects			period	period	benefit (if
						disclosure	disclosure
			(RMB’0,000)	(RMB’0,000)	applicable)

					The expected
Zoomlion		31 December				10 August	www.cninfo.co
	1 January 2018		372,200	377,836.49	benefit is
Environmental		2020				2018	m.cn
					achieved

Undertakings made by the shareholders and counterparties of the Company during the reporting of the operating performance of the year:

√ Applicable □Not applicable

According to the Agreement on Profit Forecast Compensation and the Profit Forecast Compensation Supplemental Agreement I signed by the Company and the original eight shareholders of Zoomlion Environmental, the original eight shareholders of Zoomlion Environmental undertake that the cumulative net profit before exceptional gains and losses of Zoomlion Environmental from 2018 to 2020 shall not be less than RMB3,722 million.

Completion of undertaking related to performance and its impact on goodwill impairment test:

There is not impact.

IV Occupation of the Company’s Capital by the Controlling Shareholder or Its Related Parties for Non-Operating Purposes

□ Applicable √ Not applicable

No such cases in the Reporting Period.

V Explanations Given by the Board of Directors, the Supervisory Committee and the Independent Directors (if any) Regarding the Independent Auditor's “Modified Opinion” on the Financial Statements of the Reporting Period

□ Applicable √ Not applicable

VI YoY Changes to Accounting Policies, Estimates and Methods

√ Applicable □ Not applicable
The Company has adopted, since 1 January 2020, the revised version of the Accounting Standard No. 14 for Business Enterprises—Revenue (hereinafter, the “New Revenue Standard”) issued by the Ministry of Finance. Pursuant to the transitional requirements, the Company did not restate the comparable information, but retrospectively restated the opening retained earnings and other relevant financial statement line items of the Reporting Period according to the cumulative effects on the first adoption date of

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

the New Revenue Standard.

The major effects of the adoption of the New Revenue Standard on the financial statements on 1 January 2020:

Item	Balance sheet	Balance sheet	Balance sheet
	31 December 2019	Effect of the New Revenue Standard	1 January 2020
Accounts receivable	5,163,050,940.07	-250,482,933.77	4,912,568,006.30
Contract assets		197,287,015.51	197,287,015.51
Current portion of non-current assets	760,845,984.28	2,872,896.31	763,718,880.59
Long-term receivables	1,152,179,083.21	-1,299,273.03	1,150,879,810.18
Other non-current assets	44,360,378.52	51,622,294.98	95,982,673.50
Advances from customers	170,610,799.52	-170,610,799.52
Contract liabilities		150,983,008.42	150,983,008.42
Other current liabiltiies		29,507,607.98	29,507,607.98
Deferred income	50,399,106.23	-9,879,816.88	40,519,289.35

The Company has adopted, since 1 January 2020, the Explanation No. 13 of the Accounting Standards for Business Enterprises issued in 2019 by the Ministry of Finance. The prospective application method is adopted for the said change to the accounting policies.

VII Retrospective Restatements due to Correction of Material Accounting Errors in the Reporting Period

□ Applicable √ Not applicable

No such cases in the Reporting Period.

VIII YoY Changes to the Scope of the Consolidated Financial Statements

√ Applicable □ Not applicable

Entities Newly Included in the Consolidated Financial Statements

Name of entity	How the interest in the entity was obtained	Time of interest obtaining	Contribution	The Company’s interest
Donglan Yinglian Urban Environmental Service Co., Ltd.	Incorporation	January 2020	【Note】	100.00%
Baise Yinglian Urban Environmental Service Co., Ltd.	Incorporation	January 2020	【Note】	100.00%
Zaozhuang Zhongying Urban Environmental Service Co., Ltd.	Incorporation	Febuary 2020	【Note】	100.00%
Changde Zelian Environmental Service Co., Ltd.	Incorporation	March 2020	46,695,300.00	90.00%
XiantaoYinglian Environmental Protection Technology Co., Ltd.	Incorporation	April 2020	1,000,000.00	100.00%
Xianghe Yinglian Environmental Protection	Incorporation	May 2020	10,000,000.00	100.00%

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Technology Co., Ltd.
Binchuan Zhongying Environmental Service Co., Ltd.	Incorporation	June 2020	927,333.00	92.73%
Shenzhen Bao’an Yinglian Urban Service Co., Ltd.	Incorporation	May 2020	109,142,740.00	70.00%
Foshan Shunde Yinghe Urban Environmental Service Co., Ltd.	Incorporation	July 2020	1,000,000.00	100.00%
Foshan Liansheng Environmental Sanitation Service Co., Ltd.	Incorporation	September 2020	【Note】	100.00%
Shaoyang Zhongfeng Environmental Industry Co., Ltd.	Incorporation	June 2020	10,000,000.00	100.00%
Tangyin Yinglian Environmental Service Co., Ltd.	Incorporation	July 2020	5,760,000.00	100.00%
Xi’an Yinglian Urban Environmental Service Co., Ltd.	Incorporation	July 2020	2,000,000.00	100.00%
Yangbi Zhongying Environmental Service Co., Ltd.	Incorporation	July 2020	704,682.00	70.47%
Rongcheng Yinglian Urban Environmental Service Co., Ltd.	Incorporation	July 2020	21,000,000.00	100.00%
Lai’an Zhongfeng Environmental Technology Co., Ltd.	Incorporation	July 2020	【Note】	100.00%
Zhaoyuan Jincheng Environmental Sanitation Management Service Co., Ltd.	Incorporation	July 2020	【Note】	100.00%
Ji’an Zhongfeng Environmental Technology Co., Ltd.	Incorporation	September 2020	【Note】	100.00%
Heping Hesheng Environmental Sanitation Service Co., Ltd.	Incorporation	August 2020	【Note】	100.00%
Yongshun Zhongfeng Jingtou Environmental Technology Co., Ltd.	Incorporation	July 2020	10,246,725.00	75.00%
Foshan Shunde Lianying Environmental Development Co., Ltd.	Incorporation	October 2020	【Note】	100.00%
Shouxian Liansheng Environmental Sanitation Management Co., Ltd.	Incorporation	December 2020	【Note】	100.00%
Foshan Shunde Zhongying Urban Environmental Management Co., Ltd.	Incorporation	December 2020	【Note】	100.00%
Suqian Lianying Urban Service Co., Ltd.	Incorporation	November 2020	【Note】	100.00%
Anshan Yinglian Urban Environmental Sanitation Management Co., Ltd.	Incorporation	October 2020	10,000,000.00	100.00%
Liucheng Yinglian Environmental Sanitation Management Co., Ltd.	Incorporation	December 2020	【Note】	100.00%
Chongqing Zhongying Environmental Sanitation Service Co., Ltd.	Incorporation	December 2020	【Note】	100.00%
Renshou Yinglian Urban and Rural Sanitation Service Co., Ltd.	Incorporation	December 2020	【Note】	100.00%
Infore Zoomlion (Tianjin) Environmental Technology Co., Ltd.	Incorporation	December 2020	【Note】	100.00%

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Yuncheng Zhongying Urban Environmental Service Co., Ltd.	Incorporation	December 2020	1,000,000.00	100.00%
Lanling Zoomlion Environmental Service Co., Ltd.	Incorporation	December 2020	2,000,000.00	100.00%
Tongbai Tongying Environmental Sanitation Development Co., Ltd.	Incorporation	November 2020	【Note】	100.00%
Shennongjia Forestry District Yinghe Environmental Sanitation Management Co., Ltd.	Incorporation	November 2020	【Note】	100.00%
Shengzhou Yinghe Environmental Sanitation Management Co., Ltd.	Incorporation	October 2020	【Note】	100.00%
Shengzhou Zoomlion Environmental Engineering Co., Ltd.	Incorporation	November 2020	【Note】	100.00%
Guangxi Guiping Yinghe Environmental Sanitation Management Co., Ltd.	Incorporation	November 2020	【Note】	100.00%
Heze Yingsheng Environmental Sanitation Service Co., Ltd.	Incorporation	October 2020	【Note】	100.00%
Shenzhen Yinglian Environmental Industry Co., Ltd.	Incorporation	October 2020	2,000,000.00	100.00%
Foshan Yingshun Urban Environmental Service Co., Ltd.	Incorporation	November 2020	7,000,000.00	70.00%
Guangdong Xingzhou Water Treatment Technology Co., Ltd.	Incorporation	September 2020	【Note】	100.00%
Foshan Yingtong Electric Material Co., Ltd.	Incorporation	October 2020	350,000,000.00	100.00%
Anhua Yingsheng Environmental Sanitation Service Co., Ltd.	Incorporation	April 2020	【Note】	100.00%

[Note]: As of 31 December 2020, the Company has not yet paid in the capital contributions to these entities.

Entities Newly Excluded from the Consolidated Financial Statements

				Net profit from the
	How the interest in the		Net assets at the date of	beginning of the curren
Name of entity		Time of interest disposal
	entity was disposed of		disposal	period to the disposal

				date
Leiyang Zhongfeng Environmental Industry Co., Ltd.	De-registration	December 2020	0	2,071,976.2
Shenzhen Infore Environment Network Technology Co., Ltd.	De-registration	August 2020	0	118,157.0

IX Engagement and Disengagement of Independent Auditor

Current independent auditor:

Current independent auditor:
Name of the domestic independent auditor	Pan-China Certified Public Accountants LLP
The Company’s payment to the domestic independent auditor
	260
(RMB’0,000)

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

How many consecutive years the domestic independent auditor 19 has provided audit service for the Company Names of the certified public accountants from the domestic Bian Shanshan and Cao Cuijuan independent auditor writing signatures on the auditor’s report How many consecutive years the certified public accountants 2 years and 1 year respectively have provided audit service for the Company

Indicate whether the independent auditor was changed for the Reporting Period.

□ Yes √ No

Independent auditor, financial advisor or sponsor hired for the audit of internal control:

√ Applicable □ Not applicable

During the Reporting Period, Pan-China Certified Public Accountants LLP was appointed as the independent auditor for the financial audit and the internal control audit, and GF Securities Co., Ltd. and Huaxing Securities Co., Ltd. were appointed as the independent financial advisor and the sponsor, respectively.

X Possibility of Delisting after the Disclosure of this Report

□ Applicable √ Not applicable

XI Insolvency and Reorganization

□ Applicable √ Not applicable

No such cases in the Reporting Period.

XII Significant Legal Matters

□ Applicable √ Not applicable

No such cases in the Reporting Period.

Other lawsuits that were not qualified as a significant lawsuit that requires disclosure primarily included purchase and sales contract disputes, with the total amount involved being approximately RMB299 million, which are not expected to incur any provision of a large amount.

XIII Punishments and Rectifications

□ Applicable √ Not applicable

No such cases in the Reporting Period.

XIV Credit Quality of the Company as well as Its Controlling Shareholder and Actual Controller

√ Applicable □ Not applicable

During the Reporting Period, the Company as well as its controlling shareholder and actual controller were of a good credit quality, with no such cases as refusing to execute any effective court decision, failing to repay any mature debt that was of a large amount, etc.

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

XV The Company's Implementation of Stock Incentive Plan and Employee Stock Ownership Plan or Other Employee Incentive Measures

√ Applicable □Not applicable

Overview of the First Stock Incentive Plan:

On 25 April 2020, the Company disclosed the Announcement on Cancellation of Part of the Expired and Unexercised Stock Options in the Stock Incentive Plan, canceling 3,021,177 stock options that had been granted but not yet exercised for the third exercise schedule of the first stock incentive plan. On 23 April 2020, the Company convened the 4th Meeting of the 9th Board of Directors. Upon discussion, the Meeting passed the Proposal on Canceling Part of the Expired and Unexercised Stock Options in the Stock Incentive Plan. According to the Company's Stock Option Incentive Plan (Draft), as the stock options of 40 incentive objects had not been exercised at the end of the third exercise schedule of the Company's first stock option incentive plan, the Board of Directors agreed to cancel the above-mentioned 3,021,177 stock options that had been granted but not yet been exercised for the third exercise schedule during which the stock options were granted, in accordance with the applicable provisions. After the cancellation, the first stock option incentive plan will be fully implemented.

For more information, please refer to the announcement published on 25 April 2020 on the media of information disclosure specified by the Company and the cninfo website (http://www.cninfo.com.cn).

Overview of the Second Stock Incentive Plan:

On 23 April 2020, the Company convened the 4th Meeting of the 9th Board of Directors and the 3rd Meeting of the 9th Supervisory Committee. Upon discussion, the Meetings passed the Proposal on Canceling Part of the Expired and Unexercised Stock Options in the Stock Incentive Plan, Proposal on the Adjustment of Incentive Objects and Quantity of Stock Options to Be Exercised in the Second and Third Stock Option Incentive Plans and Proposal on Matters Related to the Exercise in the Second Exercise Schedule of the Second Stock Option Incentive Plan.

(1) According to the Company's Second Stock Option Incentive Plan (Draft), as the stock options of 81 incentive objects have not been exercised at the end of the first exercise schedule of the Company's second stock option incentive plan, the Board of Directors agreed to cancel the said 5,475,000 stock options that had been granted but not yet exercised for the first exercise schedule during which the second-phase stock options were granted, in accordance with the applicable provisions. As a result of the cancellation, number of options under the Company's Second Stock Option Incentive Plan will be reduced to 12,775,000.

(2) For reasons such as the resignation of 35 incentive objects and the fact that they are no longer working in the Company or the holding subsidiary of the Company, they are deemed by the Company's Board of Directors to be no longer fit for the incentive objects. According to the Second Stock Option Incentive Plan (Draft), their 4.62 million stock options for the second and third exercise schedules were cancelled. After the above adjustments, the number of stock options granted in the second stock option incentive plan was adjusted from 81 to 46, and the number of unlocked stock options granted was adjusted from 12,775,000 to 8,155,000.

On 20 August 2020, the Company convened the 6th Meeting of the 9th Board of Directors and the 5th Meeting of the 9th Supervisory Committee. Upon discussion, the Meetings passed the Proposal on Adjustment to the Exercise Prices of the Second and Third Stock Option Incentive Plans. The Company's 2019 annual equity distribution was completed on 10 July 2020. In accordance with requirements in the Company's Second Stock Option Incentive Plan (Draft) on the adjustment to exercise price of stock option, exercise price of the stock option will be adjusted accordingly in the event that the Company changes its capital reserves into additional share capital, distributes stock dividends or stock split, share reduction, dividend payment or allotment of shares occurs during the validity period of the stock option. After the completion of the equity allocation, the exercise price of the second stock option incentive plan will be adjusted from RMB9.26 per share to RMB9.15 per share.
As at 11 March 2021, when the second exercise schedule of the Company's second stock option incentive plan ended, a total of 18,200 stock options had been partially exercised by 46 incentive subjects, leaving 3,476,800 stock options unexercised. The Company will cancel the 3,476,800 stock options that have been granted and have not yet exercised during the second exercise schedule of the

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

second stock option incentive plan, in accordance with the applicable laws and regulations.

For more information, please refer to announcements published on 25 April 2020, 21 August 2020 and 23 April 2021 on the media of information disclosure specified by the Company and the cninfo website (http://www.cninfo.com.cn).

Overview of the Third Stock Incentive Plan:

On 23 April 2020, the Company convened the 4th Meeting of the 9th Board of Directors and the 3rd Meeting of the 9th Supervisory Committee. Upon discussion, the Meetings passed the Proposal on the Adjustment of Incentive Objects and Quantity of Stock Options to Be Exercised in the Second and Third Stock Option Incentive Plans. Five employees resigned out of personal reasons and were no longer deemed fit to be the incentive objects by the Board of Directors. In accordance with the Second Stock Option Incentive Plan (Draft), a total of 1.28 million stock options for the first, second and third exercise schedules were cancelled. After the above adjustments, the number of incentive objects of the third stock option incentive plan was adjusted from 249 to 244, and the number of unlocked stock options granted was adjusted from 65.09 million to 63.81 million.

Upon discussion, the Meetings also passed the Proposal on Failure to Meet the Exercise Conditions for the First Exercise Schedule of the Third Stock Option Incentive Plan and Cancellation of Part of the Stock Options. As the performance of the Company did not meet the exercise conditions for the first exercise schedule of the third stock option incentive plan, the 19,143,000 stock options that had been granted but not yet exercised for the first exercise schedule could not be exercised. According to the Company's Third Stock Option Incentive Plan (Draft), since the performance of the Company did not meet the exercise conditions for the first exercise schedule of the third stock option incentive plan, the Board of Directors agreed to cancel the said 19,143,000 stock options that had been granted but not yet exercised for the first exercise schedule of the third stock option incentive plan. After the cancellation, number of options under the Company's Third Stock Option Incentive Plan will be reduced to 44,667,000.

On 20 August 2020, the Company convened the 6th Meeting of the 9th Board of Directors and the 5th Meeting of the 9th Supervisory Committee. Upon discussion, the Meetings passed the Proposal on Adjustment to the Exercise Prices of the Second and Third Stock Option Incentive Plans. The Company's 2019 annual equity distribution was completed on 10 July 2020. In accordance with requirements in the Company's Third Stock Option Incentive Plan (Draft) on the adjustment to exercise price of stock option, exercise price of the stock option will be adjusted accordingly in the event that the Company changes its capital reserves into additional capital stock, distributes stock dividends or stock split, share reduction, dividend payment or allotment of shares occurs during the validity period of the stock option. After the completion of the equity allocation, the exercise price of the third stock option incentive plan will be adjusted from RMB6.45 per share to RMB6.34 per share.

Upon discussion, the Meetings also passed the Proposal on Revising the Performance Assessment Indicators of the Third Stock Option Incentive Plan, agreeing to revise the exercise conditions for the second and third exercise schedules of the third stock option incentive plan on the performance assessment of the Company.

As at 31 December 2020, the exercise time of the second exercise schedule of the third stock option incentive plan had not yet come, and the stock options had not yet been exercised for the second exercise schedule of the Company's third stock option incentive plan.

For more information, please refer to the announcements published on 25 April 2020 and 21 August 2020 on the media of information disclosure specified by the Company and the cninfo website (http://www.cninfo.com.cn).

Overview of the First Employee Stock Ownership Plan (ESOP):

The Company held the 31st Temporary Meeting of the 8th Board of Directors on 29 January 2021 and the 3rd Extraordinary General Meeting of 2019 on 12 November 2019. Upon discussion, the Meetings passed the Proposal on the First Employee Stock Ownership Plan (Draft) and Its Summary, Proposal on Formulating the Management Measures for the Employee Stock Ownership Plan and Proposal on Requesting the General Meeting to Authorize the Board of Directors to Handle Matters Concerning the Company's Employee Stock Ownership Plan.
The Company, according to the Information Disclosure Guidelines for Listed Companies of the Shenzhen Stock Exchange No. 4 -- Employee Stock Ownership Plan issued by the Shenzhen Stock Exchange on 3 November 2019, the Company supplemented and updated the First Employee Stock Ownership Plan (Draft) and its summary. For more information, please refer to the announcement

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

published on 9 November 2019 on the media of information disclosure specified by the Company and the cninfo website (http://www.cninfo.com.cn).

As at 31 December 2020, the Company's first ESOP had completed the share purchase stage. The Company's special securities account related to the first ESOP held a total of 36,211,560 shares of the Company, accounting for 1.14% of the Company's current total share capital. The average transaction price was RMB6.31 per share, and the total transaction amount was RMB228,329,645.02. Specifically, a total of 20,885,352 shares of the Company were purchased via the secondary market, accounting for 0.66% of the Company's current total share capital. The average transaction price was RMB6.22 per share, and the transaction amount was RMB129,935,389.66. A total of 15,326,208 shares were transferred through the transferee company's repurchase special securities account, accounting for 0.48% of the Company's existing total share capital. The transaction price was RMB6.42 per share, and the transaction amount was RMB98,394,255.36. For more information, please refer to the announcement published on 13 May 2020 on the media of information disclosure specified by the Company and the cninfo website (http://www.cninfo.com.cn).

XVI Significant Related-Party Transactions

1. Continuing Related-Party Transactions

√ Applicable □ Not applicable

							As a %				Obtaina
							of total				ble
								Approv					Index
	Relation						value of		Over		market
						Total		ed		Method			to
	ship	Type of	Specific	Pricing	Transact		all		the		price for
Related						value		transacti		of		Disclos	disclose
	with the	transacti	transacti	principl	ion		transacti		approve		transacti
party						(RMB’0		on line		settleme		ure date	d
	Compan	on	on	e	price		ons of		d line or		ons of
						,000)		(RMB’0		nt			informa
	y						the		not		the
								,000)					tion
							same				same

							nature				nature
	A
	compan
	y
Midea	controll
										As per
Group	ed by a
		Goods	Goods							contract			www.c
Co., Ltd.	relative			Market		96,458.						25 April
		or labor	or labor		--		37.95%	150,000	Not	ual	--		ninfo.c
and its	of the			price		94						2020
		services	services							provisio			om.cn
subsidiari	Compan
										ns
es	y’s

	actual
	controll
	er
Zoomlion	A									As per
Heavy	greater-t	Goods	Goods							contract			www.c

Industry	han-5%	or labor	or labor	Market	--	87,096.		195,300	Not	ual	--	25 April	ninfo.c
				i		73						2020
Science	sharehol	services	services	prce						provisio			om.cn

and	der of									ns

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Technolo	the
gy Co.,	Compan
Ltd. and	y
its
subsidiari
es
				183,555
Total		--	--		--	345,300	--	--	--	--	--
				.67

Large-amount sales return in detail		N/A
Give the actual situation in the
Reporting Period (if any) where an
estimate had been made for the total
		N/A
value of continuing related-party

transactions by type to occur in the
Reporting Period
Reason for any significant difference
between the transaction price and the		N/A
market reference price (if applicable)

2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Investments

□ Applicable √ Not applicable

No such cases in the Reporting Period.

3. Related-Party Transactions Regarding Joint Investments in Third Parties

□ Applicable √ Not applicable

No such cases in the Reporting Period.

4. Amounts Due to and from Related Parties

√ Applicable □ Not applicable

Indicate whether there were any amounts due to or from related parties for non-operating purposes.

□ Yes √ No

No such cases in the Reporting Period.

5. Other Significant Related-Party Transactions

□ Applicable √ Not applicable

No such cases in the Reporting Period.

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

XVII Significant Contracts and Execution thereof

1. Entrustment, Contracting and Leases

(1) Entrustment

□ Applicable √ Not applicable

No such cases in the Reporting Period.

(2) Contracting

□ Applicable √ Not applicable

No such cases in the Reporting Period.

(3) Leases

√ Applicable □ Not applicable

Description of leases

In accordance with the Property Lease Contract signed between the Company and the related party Foshan Shunde Yinghai Investment Co., Ltd., the Company leased the 23rd floor of Yingfeng Business Building at 8 Yixin Road, Junlan Community, Beijiao Town, Shunde District, Foshan City, of the construction area of 1,578.68m[2] , to the latter as the office space. The annual rent payable in 2020 was RMB1,258,900, and the actual payment was RMB1,258,900, which was paid in full as of 31 December 2020.

Items that brought about profits or losses to the Company accounting for more than 10% of the gross profit of the Company during the Reporting Period:

□ Applicable √ Not applicable

No such cases in the Reporting Period.

2. Significant Guarantees

√ Applicable □ Not applicable

(1) Particulars about Guarantees

Unit: RMB'0,000

Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries)	Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries)	Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries)	Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries)	Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries)	Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries)	Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries)	Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries)	Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries)
	Disclosure
								Guarante
	date of the
				Actual			Having	e for a
	guarantee	Line of	Actual		Type of	Term of
Obligor				guarantee			expired	related
	line	guarantee	occurrence date		guarantee	guarantee
				amount			or not	party or
	announcem
								not
	ent

	25 April
Accredited buyer		20,000		4,615.54	Joint-liability	Joint-liability	Not	Not
	2020

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Total approved line for such	Total approved line for such			Total actual amount of such	Total actual amount of such
guarantees in Reporting Period		20,000		guarantees in Reporting				4,615.54
(A1)				Period (A2)
Total approved line for such				Total actual balance of such
guarantees at end of Reporting		20,000		guarantees at end of				4,615.54
Period (A3)				Reporting Period (A4)
		Guarantees provided by the Company for its subsidiaries
	Disclosure
								Guarante
	date of the
				Actual			Having	e for a
	guarantee	Line of	Actual		Type of	Term of
Obligor				guarantee			expired or	related
	line	guarantee	occurrence date		guarantee	guarantee
				amount			not	party or
	announcem
								not
	ent

Liaoning Donggong	25 April
		25,000	28 December	16,000	Joint-liability	3 years	No	Yes
Magnet Wire Co., Ltd.	2020

Zhejiang Shangfeng
			13 November
Special BL Ower				12,407.33	Joint-liability	2 years	No	Yes
			2020
Industrial Co., Ltd.

Zhejiang Shangfeng
	25 April		1 December
Special BL Ower		70,000		29,996.18	Joint-liability	1 year	No	Yes
	2020		2020
Industrial Co., Ltd.

Zhejiang Shangfeng
			29 December
Special BL Ower				11,343.45	Joint-liability	2 years	No	Yes
			2020
Industrial Co., Ltd.

Zhejiang Shangfeng
Special BL Ower			25 October 2019	4,198.82	Joint-liability	2 years	No	Yes
Industrial Co., Ltd.
Zhejiang Shangfeng
	21 August
Special BL Ower		20,000	17 August 2020	2,000	Joint-liability	1 year	No	Yes
	2020
Industrial Co., Ltd.

Zhejiang Shangfeng
Special BL Ower			17 August 2020	4,500	Joint-liability	2 years	No	Yes
Industrial Co., Ltd.
Maoming Infore
	26
Environment Water
	December	15,000	30 March 2018	11,102.83	Joint-liability	15 years	No	Yes
Treatment Technology
	2017
Co., Ltd.

Shenzhen Greenlander
	2 February
Environmental		13,000	25 August 2016	7,865	Joint-liability	8 years	No	Yes
	2016
Protection Co., Ltd.

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Shenzhen Greenlander
	27 October		15 November
Environmental		12,000		6,840	Joint-liability	8 years	No	Yes
	2016		2016
Protection Co., Ltd.

Shenzhen Greenlander
	10 August		17 December
Environmental		25,000		17,280	Joint-liability	10 years	No	Yes
	2019		2019
Protection Co., Ltd.

Shenzhen Greenlander
	25 April
Environmental		20,500	15 June 2020	13,000	Joint-liability	15 years	No	Yes
	2020
Protection Co., Ltd.

Shenzhen Greenlander
	21 August
Environmental		29,200	25 October 2020	8,000	Joint-liability	15 years	No	Yes
	2020
Protection Co., Ltd.

GuangDong Wellkey	12
Electric Material Co.,	December	2,000	31 March 2020	2,000	Joint-liability	1 year	No	Yes
Ltd.	2018
GuangDong Wellkey
	25 April
Electric Material Co.,		14,000	17 June 2020	3,000	Joint-liability	1 year	No	Yes
	2020
Ltd.

GuangDong Wellkey
	21 August
Electric Material Co.,		18,000
	2020
Ltd.

Anhui Wellkey
Electric Material Co.,			17 June 2020	3,000	Joint-liability	1 year	No	Yes
Ltd.
Anhui Wellkey
Electric Material Co.,			17 June 2020	3,000	Joint-liability	1 year	No	Yes
Ltd.	25 April
		12,000
Anhui Wellkey	2020

Electric Material Co.,			25 March 2020	2,000	Joint-liability	1 year	No	Yes
Ltd.
Anhui Wellkey
Electric Material Co.,			17 June 2020	1,000	Joint-liability	1 year	No	No
Ltd.
	26
Guangdong Infore			26 December
	December	15,000		13,923.02	Joint-liability	5 years	No	Yes
Technology Co., Ltd.			2018
	2017

Guangdong Infore
			1 March 2020	2,000	Joint-liability	1 year	No	Yes
Technology Co., Ltd.	25 April
		15,000
Guangdong Infore	2020
			17 June 2020	197.41	Joint-liability	1 year	No	Yes
Technology Co., Ltd.

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Guangdong Infore
			20 May 2020	723.96	Joint-liability	1 year	No	Yes
Technology Co., Ltd.

Changsha Zoomlion
Changgao	24 October
		10,000	25 March 2020	9,000	Joint-liability	5 years	No	Yes
Environmental	2019

Industry Co., Ltd.
Loudi Zoomlion
Huabao
	25 April
Environmental		2,000	--	--	--	N/A	--	Yes
	2020
Protection Technology

Co., Ltd.
Renshou Infore
Zoomlion Urban	25 April
		4,800	--	--	--	N/A	--	Yes
Environmental	2020

Service Co., Ltd.
Jishan Yinglian Urban
	25 April
Environmental		1,000	--	--	--	N/A	--	Yes
	2020
Service Co., Ltd.

Shenzhen Yinglian
	25 April
Urban Environmental		8,800	--	--	--	N/A	--	Yes
	2020
Service Co., Ltd.

Balinyouqi Xingzhou
	25 April
Environmental Water		5,000	--	--	--	N/A	--	Yes
	2020
Co., Ltd.

Guangdong Infore
	25 April
Environmental		28,000	--	--	--	N/A	--	Yes
	2020
Investment Co., Ltd.

Changde Zelian
	25 April
Environmental		11,900	--	--	--	N/A	--	Yes
	2020
Service Co., Ltd.

Shenzhen Bao’an
	21 August
Yinglian Urban		38,000	--	--	--	N/A	--	Yes
	2020
Service Co., Ltd.

Other majority-owned	25 April
		8,000	--	--	--	N/A	--	Yes
subsidiaries	2020

Total approved line for such				Total actual amount of such
guarantees in the Reporting Period		333,200		guarantees in the Reporting		184,378
(B1)				Period (B2)
Total approved line for such				Total actual balance of such
		423,200				184,378
guarantees at the end of the				guarantees at the end of the

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Reporting Period (B3)	Reporting Period (B3)			Reporting Period (B4)	Reporting Period (B4)
Guarantees provided between subsidiaries
	Disclosure				Type of guarantee
								Guarante
	date of the
				Actual			Having	e for a
	guarantee	Line of	Actual			Term of
Obligor				guarantee			expired	related
	line	guarantee	occurrence date			guarantee
				amount			or not	party or
	announcem
								not
	ent

Total guarantee amount (total of the three kinds of guarantees above)
				Total actual guarantee
Total guarantee line approved in
		353,200		amount in the Reporting		188,993.54
the Reporting Period (A1+B1+C1)
				Period (A2+B2+C2)

				Total actual guarantee
Total approved guarantee line at
				balance at the end of the
the end of the Reporting Period		443,200				188,993.54
				Reporting Period
(A3+B3+C3)
				(A4+B4+C4)

Total actual guarantee amount (A4+B4+C4) as % of the
				11.17%
Company’s net assets

Of which:

(2) Irregularities in Provision of Guarantees

□ Applicable √ Not applicable

No such cases in the Reporting Period.

3. Cash Entrusted to Other Entities for Management

(1) Cash Entrusted for Wealth Management

√ Applicable □ Not applicable

Overview of wealth management entrustments in the Reporting Period:

Unit: RMB’0,000

				Unrecovered overdue
Type	Funding source	Amount	Undue amount
				amount

Bank’s wealth
	Self-funded	145,150	0	0
management product

Total		145,150	0	0

High-risk wealth management transactions with a significant single amount or with low security, low liquidity and no principal protection:

□ Applicable √ Not applicable

Wealth management transactions where the principal is expectedly irrecoverable or impairment may be incurred:

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

□ Applicable √ Not applicable

(2) Entrusted Loans

□ Applicable √ Not applicable

No such cases in the Reporting Period.

4. Significant Contracts Arising in the Ordinary Course of Business

□ Applicable √ Not applicable

5. Other Significant Contracts

□ Applicable √ Not applicable

No such cases in the Reporting Period.

XVIII Social Responsibilities

1. Performance of Social Responsibilities

The Company has been attaching great importance to its social responsibilities, actively performing its duty as a corporate citizen, assuming social responsibilities, committed to creating value for customers, creating opportunities for employees, creating returns for shareholders and creating wealth for the society, and contributing to the harmonious economic and social development, natural environment and balanced use of resources. It has also been assuming corresponding responsibilities for employees, customers, suppliers and other stakeholders, and promoting the comprehensive and coordinated development of itself and all stakeholders in the society.

During the Reporting Period, the Company continued to thoroughly implement the scientific concept of development and actively fulfill its social responsibilities, and was committed to developing itself and keeping creating values for and protecting the rights and interests of shareholders. It also fully respected the legitimate rights and interests of employees, customers, suppliers and other stakeholders, carried out active cooperation with all parties, enhanced communication and exchanges, and achieved mutual benefits for shareholders, employees, upstream and downstream partners and all social parties. The Company's fulfillment of social responsibilities in 2020 is as follows:

Protection of the rights and interests of investors and creditors

The Company adhered to honest and law-abiding management, implemented standardized internal management, and paid shareholders with stable business performance. It kept improving the quality of information disclosure, treated all investors fairly and protected shareholders' right to know through timely, true, accurate and full information disclosure, and kept improving corporate governance and standardized operations to protect shareholders' rights and interests, ensure all legitimate rights and interests of shareholders as stipulated by laws, regulations and rules, and safeguard the interests of creditors.

The Company established and improved the internal system for a sound corporate environment of self-development, self-restriction, self-regulation and self-control. It also provided hotlines and fax and email addresses for investors to maintain close communication and interaction with investors in multiple channels such as the investor interaction platform of Shenzhen Stock Exchange. Through general meetings, investor exchanges and phone calls, the Company maintained adequate communication and information exchange with investors.

Protection of the rights and interests of employees

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

The Company has always insisted on the people-oriented management philosophy, and regarded employees as its most valuable resources and wealth. It adhered to harmonious labor relations and strictly abode by the Labor Law. Sound labor and employment management policies, systematic and scientific salary systems, performance appraisal systems, reward, punishment and incentive systems were established in the Company and its subsidiaries to ensure that the employees enjoy labor rights and fulfill labor obligations according to law based on such management policies. The Company gave top priority to safeguarding the legitimate rights and interests of employees, and strictly implemented the social security system.

In addition to further improving the existing talent cultivation system, the Company offered diversified training and a larger learning platform for employees of different levels and positions to improve employees' self-value while enhancing the Company's comprehensive competitiveness.

Upholding the value that "employees are our business partners.", the Company intends to realize and safeguard the interests of all employees with its work, built the company-employee community of shared interests, protected the rights and interests of employees, promoted value realization and all-around development of employees, improved the corporate cohesion, and realized synchronous growth between the Company and employees.

Protection of the rights and interests of suppliers, customers and consumers

"Customers are the ones on whom our livelihood depends." The Company adhered to the business philosophy of "market first, customer first", saw customers as its most valuable assets, took customer satisfaction as the yardstick for its performance, valued the win-win relationship with customers, and abode by integrity and was committed to providing customers with premium services.

The Company has always been attaching great importance to the protection of the legitimate rights and interests of suppliers, partners and consumers. While maintaining sound production and operation, the Company shared information with customers and suppliers in various ways to enhance technical exchange and progress, create an environment of honest, harmonious and fair cooperation and promote common development.

Environmental protection and sustainable development

The Company has been emphasizing environmental protection and sustainable development.

During the reporting period, the Company provided services in the fields of smart service, environmental monitoring and solid waste treatment following the state's policy requirements for environmental protection and environmental governance, and contributed to environmental protection with practical actions by producing great environmental and social benefits in addition to economic benefits. In project construction and operation, the Company strictly abode by local laws and regulations on environmental protection and constantly took pollution control and environmental protection measures, which were recognized by owners and local governments. In daily operation and management, the Company adhered to energy conservation, emission reduction and consumption reduction in specific works, and advocated all employees to save electricity, paper and water as much as possible. Besides, it promoted digital network tools such as the collaborative office system and the financial management information system to share resources and realize remote and paperless office while improving work efficiency.

Public relations and social welfare activities

Since its establishment, the Company has been strictly abiding by laws and regulations when pursuing profits and development, and actively practicing and assuming social responsibilities.

After the outbreak of COVID-19 at the beginning of 2020, the Company immediately organized the emergency working group to aid Wuhan, Hubei, and allocated equipment and supplies, actively cooperated with local governments in disinfection and waste clearing. It donated 15 disinfection vehicles and 15 tons of disinfectants to Wuhan City Management Committee during the Spring Festival. To fulfill its social responsibilities and contribute to epidemic prevention and control, the Company continued to donate medical masks, disinfection liquid, medical wastewater monitoring equipment and waste masks collection buckets to many places in China. In the face of the menacing epidemic, the Company responded quickly, shouldered social responsibilities to the best of its ability, and overcame difficulties and fought the epidemic with all sectors of society, aiming for a win in the battle against COVID-19 with the people of the whole country.

The development of a company and its active commitment to social responsibilities are complementary and inseparable. The

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

society and economy were in complicated and grave difficulties in 2020, and the Company was facing great challenges in development. By fully cooperating with all related parties and through joint efforts of its employees, the Company achieved good results in all businesses. We hereby would like to express our gratitude to all our departments, customers, suppliers and investors and people from all walks of life for their strong support to us.

In 2021, the Company will continue to stay true to its original mission and forge ahead, and continue to speed up technical innovation, improve customer service and customer satisfaction, and create more value for shareholders. It will attach importance to customer and investor relationship management, adhere to people-orientation, effectively protect the rights and interests of employees, and provide employees with more room for career development. Furthermore, while maintaining the sustainable development of its major business, the Company will, as always, promote and improve the assumption of social responsibilities, actively undertake social responsibilities and humbly accept the supervision from all sectors of society, and strengthen communication and exchanges with all stakeholders, devote itself to self-development, and insist on paying back the society with its own strength.

2. Measures Taken for Targeted Poverty Alleviation

The Company did not carry out any work for targeted poverty alleviation in the Reporting Period, and has no such plans for now.

3. Relevant Information on Environmental Protection

Indicate whether the listed company and its subsidiaries fell into major pollutant-discharge enterprises and institutions published by national environmental protection authorities.

√ Yes □ No

	Names of main					Pollutant		Total
			Number of	Distribution			Total
Name of company	pollutants and	Way of			Discharge	discharge		approved	Excessive
			discharge	of discharge			discharge
or subsidiary	characteristic	discharge			concentration	standards		discharge	discharge
			outlets	outlets			volume
	pollutants					abode by		volume

Foshan Shunde
District
Huaqingyuan Water
Environmental
Protection Co., Ltd.
(phases I and II				Beijiang
sewage station by		Continuous		River trunk		GB18918-
	COD		1		9.6mg/L		389.11t	1606t/a	Naught
the gate), Foshan		discharge		stream		2002

Shunde Yuanrun				waterway
Water
Environmental
Protection Co., Ltd.
(phase III sewage
station by the gate)
Foshan Shunde				Beijiang
		Continuous				GB18918-
District	Ammonia-nitrogen		1	River trunk	0.27mg/L		10.94t	200.75t/a	Naught
		discharge				2002
Huaqingyuan Water				stream

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Environmental				waterway
Protection Co., Ltd.
(phases I and II
sewage station by
the gate), Foshan
Shunde Yuanrun
Water
Environmental
Protection Co., Ltd.
(phase III sewage
station by the gate)
Foshan Shunde
District
Huaqingyuan Water
Environmental
Protection Co., Ltd.
(phases I and II				Beijiang
sewage station by		Continuous		River trunk		GB18918-
	Total phosphorus		1		0.32mg/L		12.96t	20.075t/a	Naught
the gate), Foshan		discharge		stream		2002

Shunde Yuanrun				waterway
Water
Environmental
Protection Co., Ltd.
(phase III sewage
station by the gate)
Foshan Shunde
District
Huaqingyuan Water
Environmental
Protection Co., Ltd.
(phases I and II				Beijiang
sewage station by		Continuous		River trunk		GB18918-
	Total nitrogen		1		5.86mg/L		237.50t	602.25t/a	Naught
the gate), Foshan		discharge		stream		2002

Shunde Yuanrun				waterway
Water
Environmental
Protection Co., Ltd.
(phase III sewage
station by the gate)
Funan Greenlander
				North side
Environmental		80m				GB18485-
	Exhaust/smoke		1	of the main	1.6mg/Nm³		1.105t	14.6t/a	Naught
Protection Energy		chimney				2014
				building
Co., Ltd.

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Funan Greenlander
				North side
Environmental		80m				GB18485-
	Exhaust/SO2		1	of the main	31mg/Nm³		20.213t	100t/a	Naught
Protection Energy		chimney				2014
				building
Co., Ltd.

Funan Greenlander
				North side
Environmental		80m				GB18485-
	Exhaust/NOx		1	of the main	148mg/Nm³		96.351t	96.72t/a	Naught
Protection Energy		chimney				2014
				building
Co., Ltd.

Funan Greenlander
				North side
Environmental		80m				GB18485-
	Exhaust/HCl		1	of the main	33mg/Nm³		21.405t	--	Naught
Protection Energy		chimney				2014
				building
Co., Ltd.

Funan Greenlander
				North side
Environmental		80m				GB18485-
	Exhaust/CO		1	of the main	3mg/Nm³		2.045t	--	Naught
Protection Energy		chimney				2014
				building
Co., Ltd.

Funan Greenlander
				North side
Environmental		80m				GB18485-
	Exhaust/Pb		1	of the main	0.002mg/Nm³		1.3017kg	--	Naught
Protection Energy		chimney				2014
				building
Co., Ltd.

Funan Greenlander
				North side
Environmental		80m			0.00005mg/N	GB18485-
	Exhaust/Cd		1	of the main			0.032kg	--	Naught
Protection Energy		chimney			m³	2014
				building
Co., Ltd.

Funan Greenlander
				North side
Environmental		80m			0.0038mg/Nm	GB18485-
	Exhaust/Hg		1	of the main			2.47kg	--	Naught
Protection Energy		chimney			³	2014
				building
Co., Ltd.

Funan Greenlander
				North side
Environmental		80m			0.025ng-TEQ/	GB18485-	0.016g-TE
	Exhaust/dioxin		1	of the main				--	Naught
Protection Energy		chimney			m³	2014	Q/a
				building
Co., Ltd.

Shouxian				West side of
		80m				GB18485-
Greenlander New	Exhaust/smoke		1	the main	2.5mg/Nm³		0.89t	0.89t/a	Naught
		chimney				2014
Energy Co., Ltd.				building

Shouxian				West side of
		80m				GB18485-
Greenlander New	Exhaust/SO2		1	the main	48mg/Nm³		29.143t	70t/a	Naught
		chimney				2014
Energy Co., Ltd.				building

Shouxian				West side of
		80m				GB18485-
Greenlander New	Exhaust/NOx		1	the main	206mg/Nm³		141.945t	144t/a	Naught
		chimney				2014
Energy Co., Ltd.				building

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Shouxian				West side of
		80m				GB18485-
Greenlander New	Exhaust/HCl		1	the main	42mg/Nm³		22.464t	--	Naught
		chimney				2014
Energy Co., Ltd.				building

Shouxian				West side of
		80m				GB18485-
Greenlander New	Exhaust/CO		1	the main	1mg/Nm³		4.98t	--	Naught
		chimney				2014
Energy Co., Ltd.				building

Shouxian				West side of
		80m				GB18485-
Greenlander New	Exhaust/Pb		1	the main	0.118mg/m³		5.392kg	--	Naught
		chimney				2014
Energy Co., Ltd.				building

Shouxian				West side of
		80m			0.000182mg/	GB18485-
Greenlander New	Exhaust/Cd		1	the main			0.0425kg	--	Naught
		chimney			m³	2014
Energy Co., Ltd.				building

Shouxian				West side of
		80m				GB18485-
Greenlander New	Exhaust/Hg		1	the main	ND		2.06kg	--	Naught
		chimney				2014
Energy Co., Ltd.				building

Shouxian				West side of
		80m			0.018ngTEQ/	GB18485-	0.013g-TE
Greenlander New	Exhaust/dioxin		1	the main				--	Naught
		chimney			m³	2014	Q/a
Energy Co., Ltd.				building

Xiantao
Greenlander
				West side of
Environmental		80m				GB18485-
	Exhaust/smoke		1	the main	0.86mg/Nm³		0.32t	--	Naught
Protection Power		chimney				2014
				building
Co., Ltd. (1#

furnace)
Xiantao
Greenlander
				West side of
Environmental		80m				GB18485-
	Exhaust/SO2		1	the main	12.83mg/Nm³		7.17t	58t/a	Naught
Protection Power		chimney				2014
				building
Co., Ltd. (1#

furnace)
Xiantao
Greenlander
				West side of
Environmental		80m			180.38mg/Nm	GB18485-
	Exhaust/NOx		1	the main			105.09t	148.85t/a	Naught
Protection Power		chimney			³	2014
				building
Co., Ltd. (1#

furnace)
Xiantao
Greenlander				West side of
						GB18485-
Environmental	Exhaust/HCl	80m	1	the main	16.01mg/Nm³		9.83t	--	Naught
		chimne				2014
Protection Power		y		building

Co., Ltd. (1#

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

furnace)
Xiantao
Greenlander
				West side of
Environmental		80m				GB18485-
	Exhaust/CO		1	the main	10.97mg/Nm³		4.05t	--	Naught
Protection Power		chimney				2014
				building
Co., Ltd. (1#

furnace)
Xiantao
Greenlander
				West side of
Environmental		80m				GB18485-
	Exhaust/Pb		1	the main	0.006mg/Nm³		5.04kg	--	Naught
Protection Power		chimney				2014
				building
Co., Ltd. (1#

furnace)
Xiantao
Greenlander
				West side of
Environmental		80m			0.00005mg/N	GB18485-
	Exhaust/Cd		1	the main			0.042kg	--	Naught
Protection Power		chimney			m³	2014
				building
Co., Ltd. (1#

furnace)
Xiantao
Greenlander
				West side of
Environmental		80m			0.0004mg/Nm	GB18485-
	Exhaust/Hg		1	the main			0.035kg	--	Naught
Protection Power		chimney			³	2014
				building
Co., Ltd. (1#

furnace)
Xiantao
Greenlander
				West side of
Environmental		80m			0.021ng-TEQ/	GB18485-	0.022g-TE
	Exhaust/dioxin		1	the main				--	Naught
Protection Power		chimney			m³	2014	Q/a
				building
Co., Ltd. (1#

furnace)
Xiantao
Greenlander
				West side of
Environmental		80m				GB18485-
	Exhaust/smoke		1	the main	1.12mg/Nm³		0.36t	--	Naught
Protection Power		chimney				2014
				building
Co., Ltd. (2#

furnace)
Xiantao
Greenlander				West side of
		80m				GB18485-
Environmental	Exhaust/SO2		1	the main	25.24mg/Nm³		10.95t	58t/a	Naught
		chimney				2014
Protection Power				building

Co., Ltd. (2#

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

furnace)
Xiantao
Greenlander
				West side of
Environmental		80m			179.64mg/Nm	GB18485-
	Exhaust/NOx		1	the main			76.48t	148.85t/a	Naught
Protection Power		chimney			³	2014
				building
Co., Ltd. (2#

furnace)
Xiantao
Greenlander
				West side of
Environmental		80m				GB18485-
	Exhaust/HCl		1	the main	14.16mg/Nm³		6.10t	--	Naught
Protection Power		chimney				2014
				building
Co., Ltd. (2#

furnace)
Xiantao
Greenlander
				West side of
Environmental		80m				GB18485-
	Exhaust/CO		1	the main	31.93mg/Nm³		5.01t	--	Naught
Protection Power		chimney				2014
				building
Co., Ltd. (2#

furnace)
Xiantao
Greenlander
				West side of
Environmental		80m				GB18485-
	Exhaust/Pb		1	the main	0.007mg/Nm³		5.56kg	--	Naught
Protection Power		chimney				2014
				building
Co., Ltd. (2#

furnace)
Xiantao
Greenlander
				West side of
Environmental		80m			0.00007mg/N	GB18485-
	Exhaust/Cd		1	the main			0.0548kg	--	Naught
Protection Power		chimney			m³	2014
				building
Co., Ltd. (2#

furnace)
Xiantao
Greenlander
				West side of
Environmental		80m			0.0025mg/Nm	GB18485-
	Exhaust/Hg		1	the main			2.02kg	--	Naught
Protection Power		chimney			³	2014
				building
Co., Ltd. (2#

furnace)
Xiantao
Greenlander				West side of
		80m			0.010ng-TEQ/	GB18485-	0.012g-TE
Environmental	Exhaust/dioxin		1	the main				--	Naught
		chimney			m³	2014	Q/a
Protection Power				building

Co., Ltd. (2#

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

furnace)
				Discharge
				outlets of
				kitchen
				wastes and
				sludges were
					Ammonia:
				set at the
Xiantao Yinghe					0.06mg/Nm³;
	Ammonia, hydrogen			end of the		GB14554-
Environmental		Centralized	2		hydrogen		None	--	Naught
	sulfide			deodorizatio		93
Protection Co., Ltd.					sulfide:
				n system,
					1.5mg/Nm³
				and exhausts

				were
				discharged
				through the
				chimney
				Discharge
				outlets of
				kitchen
				biogas
				combustion
					Smoke:			Smoke:
				were set at
					20mg/Nm³;			0.241t;
Xiantao Yinghe				the end of
					SO2:	GB13271-		SO2:
Environmental	Smoke, SO2, NOX	Centralized	1	the			None		Naught
					50mg/Nm³;	2014		0.467t;
Protection Co., Ltd.				combustion
					NOX:			NOX:
				system, and
					200mg/Nm³			1.809t
				exhausts

				were
				discharged
				through the
				chimney
				Sewage
				discharge
				outlets were
				set at the
				end of the				COD:
					COD:
Xiantao Yinghe				sewage				4.2627t;
	COD,				500mg/L;	GB8978-1
Environmental		Centralized	1	treatment			None	ammonia-	Naught
	ammonia-nitrogen				ammonia-nitro	996
Protection Co., Ltd.				facility, and				nitrogen:
					gen: no limit
				sewage was				0.427t

				discharged
				to Chengxi
				Sewage
				Plant after

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

centralized treatment

==> picture [206 x 34] intentionally omitted <==

Construction and operation of pollution prevention and control facilities:

The Company, in strict accordance with the Environmental Protection Law of the People's Republic of China, Law of the People's Republic of China on Prevention and Control of Air Pollution, Law of the People's Republic of China on Prevention and Control of Environmental Pollution Caused by Solid Waste, and Law of the People's Republic of China on Prevention and Control of Water Pollution and the administrative requirement of simultaneous design, construction and application of main works and water conservation measures, designed and constructed pollution prevention and control facilities and main works simultaneously and carried out acceptance inspections and put them into use simultaneously. The Company ran its water treatment projects with mature and reliable production process, and recorded in full daily sampling and operation, with stable operation throughout the year. The Company also ran its domestic waste incineration power generation projects with the most mature and stable process in the industry, and input sufficient environmental consumables in them, with stable operation throughout the year. As required, all key pollutant discharge projects of the Company were equipped with online monitoring devices at the outlets, with monitoring data directly sent to the national environmental platform. All the projects were supervised by environmental protection authorities of the state, with all emissions in 2020 meeting the requirements.

Assessment on the environmental impact of construction projects and other administrative licenses of environmental protection:

The Company has been running all its key pollutant discharge projects according to laws and regulations for many years. During the construction period, EIA was carried out for these projects in accordance with the Environmental Protection Law of the People's Republic of China and Law of the People's Republic of China on Environmental Impact Assessment, and EIA documents were approved by environmental authorities. Besides, the Company obtained approval from environmental authorities before pilot production, had its environmental protection measures for completed project construction accepted during pilot production, and designed, constructed and put into use simultaneously the supporting environmental protection facilities and the main works.

Contingency plan for environmental emergencies:

The Company commissioned a professional third-party organization to develop a contingency plan for environmental emergencies for each of its key pollutant discharge projects, which was approved and filed for record. In 2020, it carried out regular training and drills among its employees in different projects according to the requirements and contents of the contingency plans to enable them to timely and accurately deal with environmental pollution emergencies. In 2020, no major environmental risk incidents occurred in any of the projects.

Environmental self-monitoring plan:

The Company developed the 2020 Environmental Self-monitoring Plan for each of its key pollutant discharge projects, and filed them with local ecological and environmental protection authorities. It also commissioned a professional third-party inspection institution to carry out regular environmental monitoring of the pollutants discharged by the projects.

Other environmental information to be disclosed:

The Company disclosed the environmental information of each of its key pollutant discharge projects on the government's environmental information disclosure platform on a regular basis according to the requirements of local environmental authorities. Other information related to environmental protection:

N/A.

XIX Other Significant Events

□ Applicable √ Not applicable

No such cases in the Reporting Period.

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

XX Significant Events of Subsidiaries

√ Applicable □Not applicable

On 10 January 2020, the Company held the 2nd Extraordinary Meeting of the 9th Board of Directors and deliberated and approved the Proposal on Accepting the Transfer of Partial Equity of the Holding Subsidiary and Waiving the Preemptive Right and Related-party Transactions. It was approved to accept the transfer of 5.20% of the equity of Zhejiang Shangfeng Special BL Ower Industrial. Co. Ltd. (the "Shangfeng") and waive the preemptive right to purchase 17.90% of the equity of Shangfeng. The overall valuation of Shangfeng was RMB350 million. After this transaction, the Company held 60.20% of the equity of Shangfeng, and Shangfeng was still a holding subsidiary of the Company, causing no change to the scope of the consolidated statement, no significant impact on the Company's financial status and operating results, and no damage to the interests of the Company and the general shareholders, especially the small and medium shareholders. For details, please refer to relevant announcements published on 11 January 2020 by the Company on the media of disclosure specified by CSRC and SZSE and the cninfo website (www.cninfo.com.cn).
On 20 November 2020, the Company held the 9th Extraordinary Meeting of the 9th Board of Directors and the 8th Extraordinary Meeting of the 9th Supervisory Committee, and deliberated and approved the Proposal of the Company's Plan for Public Listed Transfer of Controlling Interest of Subsidiary. It was approved to plan to transfer 51% to 100% of the controlling interest of the wholly-owned subsidiary Foshan Yingtong Electric Material Co., Ltd. (the "Foshan Yingtong"), with the reserve price of the first listing no lower than RMB492,507,300, the value of the net assets of 100% of the equity (the final transfer price was calculated by multiplying RMB492,507,300 by the ratio of the equity to be transferred and bid on the premise that the ratio of the equity to be transferred and bid is no less than 51%). The Company was also approved to lower the listing price if it gets no intended transferee in the first listing, provided that each lowering shall not exceed 20% of the last listing price.

On 29 January 2021, the Company held the 11th Extraordinary Meeting of the 9th Board of Directors and the 10th Extraordinary Meeting of the 9th Supervisory Committee, and deliberated and approved the Proposal on Public Listed Transfer of 51% of the Controlling Right of Subsidiary. It was approved to transfer 51% of the controlling interest of the wholly-owned subsidiary Foshan Yingtong to Guangdong Yinghe Corporate Management Co., Ltd. (Guangdong Yinghe) at RMB255 million by means of public listing and bidding.

On 17 March the Company disclosed the Announcement on Completion of Public Listed Transfer of 51% of Equity of Subsidiary on the media of information disclosure specified by CSRC and SZSE and the cninfo website (www.cninfo.com.cn), upon which the Company had gone through the procedures for transfer and registration of the 51% equity of Foshan Yingtong of this public listed transfer. After the transfer, the Company held 49% of the equity of Foshan Yingtong. As of the date of the announcement, the Company had received RMB131 million of the transaction price paid by Guangdong Yinghe, and the remaining RMB124 million is to be paid according to the transfer agreement. After the transaction, Foshan Yingtong will become a joint-stock subsidiary of the Company, and will be excluded from the consolidated statement of the Company.

For details, please refer to relevant announcements published by the Company on the media of disclosure specified by CSRC and SZSE and the cninfo website (www.cninfo.com.cn) on 21 November 2020, 30 January 2021, and 17 March 2021.

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Part VI Share Changes and Shareholder Information

I. Share Changes

1. Share Changes

Unit: share

	Before	Before	Increase/decrease in the current period (+/-)	Increase/decrease in the current period (+/-)	Increase/decrease in the current period (+/-)	Increase/decrease in the current period (+/-)	Increase/decrease in the current period (+/-)	After	After
					Shares as
				Shares as
					dividend
		Percentag	New	dividend	converted				Percentag
	Shares			converted		Other	Subtotal	Shares
		e (%)	issues		from				e (%)
				from
					capital
				profit
					reserves

	2,017,305,					-858,948,	-858,948,	1,158,356
1. Restricted shares		63.78%	0	0	0				36.62%
	260					616	616	,644

1.1 Shares held by the state	0	0.00%	0	0	0	0	0	0	0.00%
1.2 Shares held by
	0	0.00%	0	0	0	0	0	0	0.00%
state-owned corporations

1.3 Shares held by other	2,017,305,					-858,948,	-858,948,	1,158,356
		63.78%	0	0	0				36.62%
domestic investors	260					616	616	,644

Including: Shares held	1,996,073,					-858,311,	-858,311,	1,137,761
		63.11%	0	0	0				35.97%
by domestic corporations	294					516	516	,778

Shares held	21,231,96							20,594,86
		0.67%	0	0	0	-637,100	-637,100		0.65%
by domestic individuals	6							6

1.4 Shares held by
	0	0.00%	0	0	0	0	0	0	0.00%
overseas investors

Including: Shares held
	0	0.00%	0	0	0	0	0	0	0.00%
by overseas corporations

Shares held
	0	0.00%	0	0	0	0	0	0	0.00%
by overseas individuals

	1,145,756,					858,948,6	858,948,6	2,004,705
2. Unrestricted shares		36.22%	0	0	0				63.38%
	886					16	16	,502

2.1 RMB-denominated	1,145,756,					858,948,6	858,948,6	2,004,705
		36.22%	0	0	0				63.38%
ordinary shares	886					16	16	,502

2.2 Domestically listed
	0	0.00%	0	0	0	0	0	0	0.00%
foreign shares

2.3 Overseas listed foreign	0	0.00%	0	0	0	0	0	0	0.00%

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

shares
2.4 Others	0	0.00%	0	0	0	0	0	0	0.00%
	3,163,062,							3,163,062
3. Total shares		100.00%	0	0	0	0	0		100.00%
	146							,146

Reasons for share changes:

√ Applicable □ Not applicable

The Company disclosed the Reminder on the Unlocking of Restricted Shares in Major Asset Restructuring on www.cninfo.com.cn dated 11 January 2020. The shares issued in the private placement for asset purchase became publicly tradable on the Shenzhen Stock Exchange on 4 January 2019. The shares were placed with eight entities including Ningbo Infore Asset Management Co., Ltd., Zoomlion Heavy Industry Science And Technology Co., Ltd., Hongchuang (Shenzhen) Investment Center (L.P.), Guangzhou Yuemin Investment Yinglian Investment Partnership (L.P.) and Shanghai Lvlian Junhe Industry Buyout Equity Investment Fund Partnership (L.P.). On 14 January 2020, a total of 858,311,516 shares (27.14% of the Company’s total shares) placed with four of the aforesaid shareholders, namely, Zoomlion Heavy Industry Science And Technology Co., Ltd., Hongchuang (Shenzhen) Investment Center (L.P.), Guangzhou Yuemin Investment Yinglian Investment Partnership (L.P.) and Shanghai Lvlian Junhe Industry Buyout Equity Investment Fund Partnership (L.P.), became publicly tradable upon the expiration of a 12-month lockup.
As prescribed, 100% of the 637,100shares held by former Vice President and Board Secretary Mr. Liu Kaiming were unlocked upon the expiration of a 6-month lockup starting from his resignation.

Approval of share changes:

□ Applicable √ Not applicable

Transfer of share ownership:

□ Applicable √ Not applicable

Progress on any share repurchases:

√ Applicable □ Not applicable

The Proposal on the Share Repurchase Plan was approved at the 3rd Extraordinary Meeting of the 9th Board of Directors on 13 April 2020, and the Share Repurchase Report was disclosed on 17 April 2020. The Company decided to carry out a share repurchase through centralized bidding in a self-funded manner, and the repurchased shares would be used for equity incentive and employee stock ownership plans or reducing the registered capital according to law. The total amount used for the repurchase would be no lower than RMB200 million (inclusive) and no more than RMB400 million (inclusive), the repurchase price would not exceed RMB8.00/share (inclusive), and the repurchase period would be no more than 12 months starting from the approval of the share repurchase plan by the Board of Directors.

The 2019 Final Dividend Plan was approved at the 2019 Annual General Meeting on 15 May 2020. Based on the total share capital of 3,163,062,146shares (minus the 0 share in the Company’s repurchase account) at the date of record for the 2019 final dividend plan, a cash dividend of RMB1.10 (tax inclusive) per 10 shares was distributed to the shareholders, with no bonus issue from either profit or capital reserves. The said plan was implemented on 10 July 2020. According to the Share Repurchase Report, a distribution of cash dividends occurred within the repurchase period. According to the applicable regulations of the CSRC and the Shenzhen Stock Exchange, the upper limit of the share repurchase was accordingly adjusted to RMB7.89/share (inclusive) upon the completion of the profit distribution.

The Proposal on the Termination of Share Repurchase was approved at the 12th Extraordinary Meeting of the 9th Board of Directors on 8 April 2021. It was agreed that the Company had fewer opportunities to repurchase shares because the share price was always higher than the upper limit of the repurchase price, multiple sensitive periods were involved during the repurchase period, etc. Considering that the share price was still continuously higher than the upper limit of the repurchase price, the Company decided to

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

terminate the share repurchase upon deliberation.

As of the date of this Report, a total of 7,634,138 shares (approximately 0.24% of the Company’s existing total share capital) have been repurchased by way of centralized bidding. The highest transaction price was RMB7.89/share, the lowest transaction price was RMB7.77/share, and the total transaction amount was RMB59,855,050.85 (exclusive of transaction costs).

For further information, please refer to the relevant announcements disclosed by the Company on the media designated by the

CSRC and the Shenzhen Stock Exchange for information disclosure and http://www.cninfo.com.cn dated 14 April 2020, 17 April 2020, 25 September 2020, 9 October 2020, 3 November 2020, 3 December 2020, 5 January 2021, 2 February 2021, 2 March 2021, 3 April 2021 and 9 April 2021.

Progress on reducing the repurchased shares by way of centralized bidding:

□ Applicable √ Not applicable

Effects of share changes on the basic earnings per share, diluted earnings per share, equity per share attributable to the Company’s ordinary shareholders and other financial indicators of the prior year and the prior accounting period, respectively:

□ Applicable √ Not applicable

Other information that the Company considers necessary or is required by the securities regulator to be disclosed:

□ Applicable √ Not applicable

2. Changes in Restricted Shares

√ Applicable □ Not applicable

Unit: share

		Increase in
	Opening	restricted shares	Unlocked in the	Closing restricted	Reason for	Date of
Shareholder
	restricted shares	in the current	current period	shares	restriction	unlocking

		period
Ningbo Infore					Restricted shares
Asset Management	1,017,997,382	0	0	1,017,997,382	in a private	4 July 2022
Co., Ltd.					placement
Zoomlion Heavy
					Restricted shares
Industry Science
	399,214,659	0	399,214,659	0	in a private	14 January 2020
And Technology
					placement
Co., Ltd.

Hongchuang
					Restricted shares
(Shenzhen)
	310,423,813	0	310,423,813	0	in a private	14 January 2020
Investment Center
					placement
(L.P.)

Guangzhou
Yuemin
					Restricted shares
Investment
	79,842,931	0	79,842,931	0	in a private	14 January 2020
Yinglian
					placement
Investment

Partnership (L.P.)
Shanghai Junhe	68,830,113	0	68,830,113	0	Restricted shares	14 January 2020

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Licheng					in a private
Investment					placement
Management
Center (L.P.)－
Shanghai Lvlian
Junhe Industry
Buyout Equity
Investment Fund
Partnership (L.P.)
Ningbo Yingtai
Investment					Restricted shares
Partnership	40,913,514	0	0	40,913,514	in a private	4 January 2022
(Limited					placement
Partnership)
Ningbo Zhongfeng
Investment					Restricted shares
Partnership	40,141,033	0	0	40,141,033	in a private	4 January 2022
(Limited					placement
Partnership)
Ningbo Liantai
Investment					Restricted shares
Partnership	38,709,849	0	0	38,709,849	in a private	4 January 2022
(Limited					placement
Partnership)
					Restricted shares
He Jianfeng	11,723,329	0	0	11,723,329	in a private	8 January 2021
					placement
					Restricted shares
She Changguang	7,033,997	0	0	7,033,997	in a private	8 January 2021
					placement
						25% of the total
					Locked-up shares
						shareholdings are
Others	2,474,640	0	637,100	1,837,540	of senior
						unlocked
					management
						annually

Total	2,017,305,260	0	858,948,616	1,158,356,644	--	--

II Issuance and Listing of Securities

1. Securities (Exclusive of Preference Shares) Issued in the Reporting Period

√ Applicable □ Not applicable

Name of Issue date Issue price Issued Listing date Number Termination Index to Disclosure

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

stock and its		(or interest	number		approved for	date of	disclosed	date
derivative		rate)			public trading	transaction	information
securities
Type: stock
Type: convertible corporate bonds, convertible corporate bonds with warrants, corporate bonds
							Announceme
							nt No.
							2020-102 on
							the Listing of
							Convertible
Infore
	4 November			2 December			Corporate	1 December
Convertible		RMB100	14,761,896		14,761,896	--
	2020			2020			Bonds	2020
Bonds
							Offered to the

							Public
							disclosed
							onwww.cninf
							o.com.cn
Type: other derivative securities

Particulars about the securities (exclusive of preference shares) issued in the Reporting Period:

On 10 September 2020, the Company received the Reply on the Approval of the Public Offering of Convertible Corporate Bonds by Infore Environment Technology Group Co., Ltd. (CSRC Permit [2020] No. 2219) issued by the CSRC. As such, the Company was approved to carry out a public offering of convertible corporate bonds in the total par value of RMB1,476,189,600, with a term of six years. On 4 November 2020, the Company carried out the public offering of 14,761,896 convertible corporate bonds at the par value of RMB100 each, with the total par value being RMB1,476,189,600. For further information, please refer to the Announcement No. 2020-083 on the Receipt of the CSRC Approval Reply to the Application for a Public Offering of Convertible Corporate Bonds and the Announcement No. 2020-102 on the Listing of Convertible Corporate Bonds Offered to the Public disclosed on www.cninfo.com.cn dated 18 September 2020 and 1 December 2020, respectively.

2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures

□ Applicable √ Not applicable

3. Existing Staff-Held Shares

□ Applicable √ Not applicable

III Shareholders and Actual Controller

1. Shareholders and Their Shareholdings at the Period-End

Unit: share

Number of 28,040 Number of 36,015 Number of 0 Number of 0

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

ordinary		ordinary	ordinary	ordinary		preference	preference		preference	preference
shareholders at		shareholders at				shareholders with			shareholders with
the period-end		the month-end				resumed voting			resumed voting
		prior to the				rights at the			rights at the
		disclosure of this				period-end (if any)			month-end prior
		Report				(see note 8)			to the disclosure
									of this Report (if
									any) (see note 8)
			5% or greater shareholders or top 10 shareholders
			Sharehol		Increase/dec					Shares in pledge or frozen
				Total shares
Name of	Nature of		ding		rease in the		Restricted	Unrestricted
				held at the
shareholder	shareholder		percenta		Reporting		shares held	shares held		Status	Shares
				period-end
			ge		Period

Ningbo Infore Asset Management Co., Ltd.	Domestic non-state-owne d corporation		32.18%	1,017,997,382	0		1,017,997,382	0
										In pledge	610,798,429

Zoomlion Heavy Industry Science And Technology Co., Ltd.	Domestic non-state-owne d corporation		12.62%	399,214,659	0		0	399,214,659
										--	--

Infore Holding Group Co., Ltd.	Domestic non-state-owne d corporation		11.37%	359,609,756	0		0	359,609,756
										In pledge	258,617,365

Hongchuang (Shenzhen) Investment Center (L.P.)	Domestic non-state-owne d corporation		9.81%	310,423,813	0		0	310,423,813
										--	--

He Jianfeng	Domestic individual		2.01%	63,514,690	0		11,723,329	51,791,361
										In pledge	62,952,175

Zara Green Hong Kong Limited	Overseas corporation		1.73%	54,778,335	-54,778,335		0	54,778,335
										In pledge	54,778,335

Ningbo Yingtai Investment Partnership (Limited Partnership)	Domestic non-state-owne d corporation		1.29%	40,913,514	0		40,913,514	0
										--	--

Ningbo Zhongfeng Investment Partnership (Limited Partnership)	Domestic non-state-owne d corporation		1.27%	40,141,033	0		40,141,033	0
										--	--

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Ningbo Liantai Investment Partnership (Limited Partnership)	Domestic non-state-owne d corporation	1.22%	38,709,849	38,709,849	0	38,709,849	38,709,849	0
									--		--

Infore Environment Technology Group Co., Ltd.－The First Employee Stock Ownership Plan	Other	1.14%	36,211,560		26,891,753	0		36,211,560
									--		--

Strategic investor or general
corporation becoming a top-10
		N/A
shareholder in a rights issue (if any)

(see note 3)
		Ningbo Infore Asset Management Co., Ltd. and Infore Holding Group Co., Ltd. share the same
		actual controller—Mr. He Jianfeng, and they act in concert. Apart from that, the Company is not
Related or acting-in-concert parties
		aware of any related or acting-in-concert parties (as defined in the Methods for the
among the shareholders above
		Administration of Information Disclosure Regarding Changes in Shareholdings in Listed

		Companies) among the other shareholders above.
Shareholders above
entrusting/entrusted with or waiving		N/A
voting rights
		Top 10 unrestricted shareholders
				Unrestricted shares			Shares by type
Name of shareholder
				held at the period-end			Class			Shares

Zoomlion Heavy Industry Science And Technology Co., Ltd.				399,214,659
							RMB-denominated ordinary stock			399,214,659

Infore Holding Group Co., Ltd.				359,609,756			RMB-denominated ordinary stock			359,609,756
Hongchuang (Shenzhen) Investment Center (L.P.)				310,423,813			RMB-denominated ordinary stock			310,423,813
Zara Green Hong Kong Limited				54,778,335			RMB-denominated ordinary stock			54,778,335
He Jianfeng				51,791,361			RMB-denominated ordinary stock			51,791,361
Infore Environment Technology Group Co., Ltd.－ The First Employee Stock Ownership Plan				36,211,560
							RMB-denominated ordinary stock			36,211,560

Shanghai Junhe Licheng Investment Management Center (L.P.)－Shanghai Lvlian Junhe Industry Buyout Equity Investment Fund Partnership (L.P.)				34,415,113
							RMB-denominated ordinary stock			34,415,113

New China Life Insurance Company Ltd.－Dividend －Individual Dividend-018L-FH002S.Z.				33,807,208
							RMB-denominated ordinary stock			33,807,208

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Chen Liyuan	31,018,000	RMB-denominated ordinary stock	31,018,000
Guangdong Hengjian Capital Management Co., Ltd.	26,783,347	RMB-denominated ordinary stock	26,783,347
	Mr. He Jianfeng is the actual controller of Infore Holding Group Co., Ltd.
Related or acting-in-concert parties among top 10
	Apart from that, the Company is not aware of any related or acting-in-concert
unrestricted public shareholders, as well as between
	parties (as defined in the Methods for the Administration of Information
top 10 unrestricted public shareholders and top 10
	Disclosure Regarding Changes in Shareholdings in Listed Companies) among
shareholders
	the other public shareholders above.

Top 10 ordinary shareholders involved in securities
	None
margin trading (if any) (see note 4)

Indicate whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company conducted any promissory repo during the Reporting Period.

□ Yes √ No

No such cases in the Reporting Period.

2. Controlling Shareholder

Nature of the controlling shareholder: controlled by an individual

Type of the controlling shareholder: corporation

	Legal
Name of the controlling		Date of
	representative/person-		Organization code	Principal activities
shareholder		incorporation
	in-charge

				Asset management, industrial
				investment, and investment
				management. (The Company shall not
				engage in financial businesses such as
				absorbing deposits, financing
				guarantee, wealth management agency
Ningbo Infore Asset				business, and raising (financing) funds
	Wei Ting	2 May 2017	91330206MA290L5J3L
Management Co., Ltd.				from the public without the approval of

				regulators like financial regulators)
				(business activities subject to approval
				in accordance with laws shall not be
				carried out until approval from
				competent authorities has been
				obtained.).
Interests held in other
domestically and
overseas listed	Not applicable
companies in the
Reporting Period

Change of the controlling shareholder in the Reporting Period:

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

□ Applicable √ Not applicable

No such cases in the Reporting Period.

3. Actual Controller and Acting-in-Concert Parties

Nature of the actual controller: domestic individual

Type of the actual controller: individual

	Relationship with the
Name of the actual controller		Nationality	Residency in other countries or regions or not
	actual controller

	Actual controller
He Jianfeng		Chinese	Yes
	himself

Main occupations and positions	Chairman of the Board and President of Infore Holding Group Co., Ltd.
Controlling interests in other
domestically and overseas listed	Not applicable
companies in the past 10 years

Change of the actual controller in the Reporting Period:

□ Applicable √ Not applicable

No such cases in the Reporting Period.

Ownership and control relationship between the actual controller and the Company:

==> picture [296 x 163] intentionally omitted <==

Indicate whether the actual controller controls the Company via trust or other ways of asset management.

□ Applicable √ Not applicable

4. Other 10% or Greater Corporate Shareholders

√ Applicable □ Not applicable

	Legal
Name of corporate		Date of
	representative/person-		Registered capital	Principal activities
shareholder		incorporation
	in-charge

Zoomlion Heavy Industry	Zhan Chunxin	31 August 1999	7,808,536,633	Development, production, and sales of

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Science And Technology				engineering machines, agricultural
Co., Ltd.				machines, sanitation machines, crane
				trucks and exclusive chassis, fire engines
				and exclusive chassis, high-altitude
				operation machines, other machinery
				equipment, metal and non-metal
				materials, and new high-tech products of
				optical-electro-mechanical integration
				and provision of leasing and after-sale
				technical services; sales of building and
				decorative materials, vehicles for
				engineering and metal materials,
				chemical materials, and chemical
				products (excluding hazardous chemicals
				and monitoring products); operation of
				commodity and technology import and
				export businesses; investment in real
				estate with self-owned assets (The
				Company shall not engage in national
				financial regulation and financial credit
				businesses such as absorbing deposits,
				fund-raising and collection, entrusted
				loans, and issuing notes and loans). Sales
				of second-hand vehicles; disassembly
				and recovery of disused machinery
				equipment. (Business activities subject to
				approval in accordance with laws shall
				not be carried out until approval from
				competent authorities has been
				obtained.)
				Investment in various industries,
				investment management, investment
				consultation, and asset management;
				enterprise management and enterprise
				consulting services; computer
				information services and software
Infore Holding Group Co.,				services; film product and planning
	He Jianfeng	19 April 2002	4,000,000,000
Ltd.				(based on validated licenses); advertising

				planning and production; appraisal and
				consultancy services of artwork
				(excluding ivory and ivory products) and
				collectibles; planning of culture and art
				exhibitions; sales of maternal and baby
				products and clothing; supply and

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

==> picture [225 x 440] intentionally omitted <==

----- Start of picture text -----

marketing of domestic business and
goods except the above items; business
information consulting services; import
and export of commodities or
technologies (excluding the import and
export of commodities and technologies
that are prohibited by the state or involve
administrative review and approval) ;
R&D, manufacturing, sales and
equipment leasing of sanitation
equipment, robots, new energy vehicles,
and environmental monitoring
equipment; cleaning, collection,
recycling, transportation, and treatment
services of urban domestic waste;
undertaking environmental engineering
and water pollution control projects;
R&D, manufacturing and sales of
ventilators, and air-cooled, water-cooled,
and air conditioning equipment; R&D,
manufacturing, and sales of new
materials, equipment, and products.
(Production and manufacturing projects
shall be operated by the Company's
subsidiaries) (Business activities subject
to approval in accordance with laws shall
not be carried out until approval from
competent authorities has been obtained)
----- End of picture text -----

==> picture [255 x 440] intentionally omitted <==

5. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller, Reorganizer and Other Commitment Makers

□ Applicable √ Not applicable

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Part VII Preference Shares

□ Applicable √ Not applicable

No preference shares in the Reporting Period.

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Part VIII Convertible Corporate Bonds

√ Applicable □ Not applicable

I Previous Price Adjustments for Conversion of Bonds into Shares

With the approval granted by the China Securities Regulatory Commission under Document ZH.J.X.K. [2020] No. 2219, the Company on 4 November 2020 publicly issued 14,761,896 convertible corporate bonds, each with a par value of RMB100, and the total issue amount was RMB1,476,189,600. The initial conversion price of this tranche of convertible bonds is RMB8.31 per share. If the Company distributes bonus shares, increases share capital, issues new shares (excluding the increase in share capital as a result of the conversion of this tranche of convertible bonds), issues shares or distributes cash dividends, the conversion price will be adjusted accordingly in accordance with applicable laws and regulations.

II Cumulative Conversion of Bonds into Shares

□ Applicable √ Not applicable

III Information on Top Ten Convertible Bond Holders

Unit: Share

				Amount of
			Number of
		Nature of		convertible bonds	Share of convertible
			convertible bonds
No.	Name of convertible bond folder	convertible bond		held as at the end of	bonds held as at the end
			held as at the end of
		holder		the Reporting Period	of the Reporting Period
			the Reporting Period
				(RMB)

	Industrial and Commercial Bank of
1	China Limited -- Aegon-Industrial	Other	480,485	48,048,500.00	3.25%
	Hengyi Bond Investment Fund
	Industrial and Commercial Bank of
	China Limited -- CUAM
2		Other	466,992	46,699,200.00	3.16%
	Convertible Bond Securities

	Investment Fund
		State-owned
3	Sealand Securities Co., Ltd.		326,366	32,636,600.00	2.21%
		corporation

	Agricultural Bank of China Limited
	-- China Southern Xiyuan
4		Other	269,602	26,960,200.00	1.83%
	Convertible Bond Securities

	Investment Fund
	CNPC Enterprise Annuity Program
5		Other	256,417	25,641,700.00	1.74%
	-- Industrial and Commercial Bank

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

	of China Limited
		State-owned
6	China Galaxy Securities Co., Ltd.		229,994	22,999,400.00	1.56%
		corporation

		State-owned
7	Huatai Securities Co., Ltd.		229,991	22,999,100.00	1.56%
		corporation

	National Social Security Fund 205
8		Other	207,000	20,700,000.00	1.40%
	Portfolio

	National Social Security Fund 201
9		Other	200,770	20,077,000.00	1.36%
	Portfolio

		Domestic
	ICBC Credit Suisse Investment
10		non-state-owned	199,991	19,999,100.00	1.35%
	Management Co., Ltd.
		corporation

IV Significant Changes in Profitability, Assets and Credit Standing of Guarantors

□ Applicable √ Not applicable

V The Company's Liabilities as at the End of the Reporting Period, Credit Standing Changes and Cash Arrangements for Debt Repayment For the Coming Year

1. Principal financial indicators of the Company

Item	2020	2019	Changes
Liability/asset ratio	42.64%	35.88%	6.77%
Interest cover (times)	12.49	12.40	0.09
Loan repayment ratio	100%	100%	0.00%
Interest payment ratio	100%	100%	0.00%

2. Credit rating of convertible bonds

During the Reporting Period, China Chengxin Credit Rating Group assigned rating to convertible corporate bonds issued by the Company and issued the Credit Rating Report on 2020 Public Offering of Convertible Corporate Bonds of Infore Environment Technology Group Co., Ltd. (X.P.W.H. [2020] No. 1498D). According to the rating report, the Company's corporate credit rating was AA+ and bond credit rating was AA+, with a stable outlook. For details, see the Credit Rating Report on 2020 Public Offering of Convertible Corporate Bonds disclosed by the Company on 2 November 2020 on the cninfo website (www.cninfo.com.cn).

3. Financial arrangements for debt repayment in the coming year

The primary sources of funds for the Company to pay the principal and interest of convertible bonds in the future are as follows: (1) The Company seeks endogenous growth by strengthening financial management and increasing the net cash inflow from operating activities and net profit; (2) The Company has good credit standing and a reasonable asset structure and can obtain financing from banks and other channels to reasonably arrange for redemption funds.

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Part IX Directors, Supervisors, Senior Management and Staff

I Changes in the Shareholdings of Directors, Supervisors and Senior Management

								Increase	Decrease
							Opening			Other	Closing
								in the	in the
	Office	Incumbent/					sharehold			increase/d	sharehold
Name			Gender	Age	Start of	End of		current	current
	title	Former			tenure	tenure	ing			ecrease	ing
								period	period
							(share)			(share)	(share)
								(share)	(share)

	Chairman
	of the				4	26
Ma Gang	Board	Incumbent	Male	42	December	December	1,654,600	0	0	0	1,654,600
	and				2014	2022
	President
Kuang					30	26
Guangxio	Director	Incumbent	Male	42	January	December	0	0	0	0	0
ng					2019	2022
					30	26
Shen Ke	Director	Incumbent	Male	50	January	December	0	0	0	0	0
					2019	2022
	Director				30	26
Chen
	and Vice	Incumbent	Male	49	January	December	0	0	0	0	0
Peiliang
	President				2019	2022

	Independ				14	26
Shi
	ent	Incumbent	Male	46	Novembe	December	0	0	0	0	0
Shuiping
	Director				r 2016	2022

	Independ				26	26
Zhang Yu	ent	Incumbent	Male	43	December	December	0	0	0	0	0
	Director				2019	2022
	Independ				26	26
Li
	ent	Incumbent	Male	44	December	December	0	0	0	0	0
Ruidong
	Director				2019	2022

	Chairman
	of the
					14	26
Jiao	Superviso
		Incumbent	Male	40	Novembe	December	308,692	0	0	0	308,692
Wanjiang	ry
					r 2016	2022
	Committe

	e
Liu Kan	Superviso	Incumbent	Male	37	26	26	0	0	0	0	0

100

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

	r				December	December
					2019	2022
	Employee				14	26
Lin
	superviso	Incumbent	Female	36	Novembe	December	0	0	0	0	0
Meiling
	r				r 2016	2022

	Vice
	President				8	26
Lu
	and Chief	Incumbent	Male	43	Novembe	December	486,762	0	0	0	486,762
Anfeng
	Financial				r 2013	2022

	Officer
	Vice
	President				26	26
JinTaotao	and	Incumbent	Male	38	December	December	0	0	0	0	0
	Board				2019	2022
	Secretary
Total	--	--	--	--	--	--	2,450,054	0	0	0	2,450,054

II Changes of Directors, Supervisors and Senior Management

□ Applicable √ Not applicable

III Biographical Information

Professional backgrounds, major work experience and current posts in the Company of the incumbent directors, supervisors and senior management:

Mr. Ma Gang, born in 1979, with a master's degree, is Chairman of the eighth and ninth Board of Directors of Infore Environment. Starting from December 2014, he serves as President of the Company. He joined Midea Group in June 2001, and successively held the positions of R&D Engineer, branch salesman and Regional Director at Midea Rice Cooker Division, Domestic Sales General Manager at Midea Small Domestic Appliance Division, President of China Marketing Headquarters of Midea Daily Home Electric Appliance Group, Vice President and Domestic Sales General Manager at Midea Small Domestic Appliance Division, Vice President of Midea Small Domestic Appliance Division and General Manager at Midea Water Material Entity, and Deputy Director at Midea Domestic Market Department.
Mr. Kuang Guangxiong, born in 1979, with a master's degree, is PRC Certified Public Accountant and international accountant, in addition to Director of the eighth and ninth Board of Directors of Infore Environment. He has been Vice President of Infore Group since October 2018. From July 2002 to October 2018, he successively held the positions of Financial Manager at Midea Daily Home Electric Appliance Group, Financial Manager at Midea subsidiary in the US, the Financial Director at Midea Kitchen Appliances Division, Financial Director at Midea Commercial Air Conditioner Division, and Financial Director at Midea-KUKA Joint Venture in China.
Mr. Shen Ke, born in 1971, with a master's degree, is Director of the eighth and ninth Board of Directors of Infore Environment. Since January 2019, he has served as Chief Investment Officer at Zoomlion Heavy Industry Science And Technology Co., Ltd. From July 2003 to January 2019, he successively held the positions of Deputy Manager and Head of Investment Development Department, Deputy General Manager of Investment & Financing Management Department, and Board Secretary of Zoomlion Heavy Industry Science And Technology Co., Ltd.

101

Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Mr. Chen Peiliang, born in 1972, with a bachelor's degree, is Director of the eighth and ninth Board of Directors of Infore Environment. He has been General Manager of Changsha Zoomlion Environmental Industry Co., Ltd. since September 2013. He served as General Manager of Hunan Zoomlion International Trade Co., Ltd. from July 2002 to May 2010, Executive Deputy General Manager of the Concrete Machinery Division of Zoomlion Heavy Industry Science And Technology Co., Ltd. from May 2010 to September 2013, and Assistant to President and Vice President of Zoomlion Heavy Industry Science And Technology Co., Ltd. from September 2006 to July 2016.
Mr. Zhang Yu, born in 1978, has a doctorate. He serves as Associate Professor at China Europe International Business School from 2015, and held the position of Assistant Professor at University of California, Irvine from 2008 to 2015.
Mr. Li Ruidong, born in 1977, is a bachelor's degree holder. He has been President and Editor-in-chief at the China Environment magazine since November 2013. He served as Assistant to General Manager of Environmental Protection Magazine Co., Ltd. from February 2012 to November 2013, and Director of the Office of Environmental Protection from March 2008 to January 2012.
Mr. Shi Shuiping, born in 1975, has a doctorate and is Certified Anti-Fraud Professional and Independent Director of the eighth and ninth Board of Directors of Infore Environment. Since October 2010, he has Professor and Graduate Students’ Supervisor at School of Management, Jinan University. It is also Visiting Scholar at Boston University and City University of Hong Kong, Senior Member of Accounting Society of China, Senior Member of China Audit Society, Director at Guangdong Audit Society, Executive Director at Guangzhou Audit Society, and Expert Member of Guangdong Enterprise Institute for Internal Controls.
Mr. Lu Anfeng, born in 1978, with a master's degree, is PRC Certified Public Accountant and Certified Tax Agent. Since September 2012, he has served as Vice President and Chief Financial Officer of the Company. He held the positions of Senior Financial Manager at PCI Technology Group Co., Ltd., Audit Manager at Mayland Group, and Certified Public Accountant at Guangzhou Branch of Shenzhen Dahua Tiancheng Accounting Firm.
Mr. JinTaotao, born in 1983, is a master's degree holder. He is Vice President and Board Secretary of the Company. He held the positions of Engineer at the Environmental Planning Institute of the former Ministry of Environmental Protection from September 2005 to April 2016, Vice President at Infore Environment Technology Group Co., Ltd from May 2016 to June 2019, and Board Secretary at Stariver Environmental Technology Co., Ltd from July 2019 to November 2019. Mr. Jin Tao joined the qualification training of Shenzhen Stock Exchange for board secretaries in November 2019 and obtained the qualification certificate for Board Secretary.
Mr. Jiao Wanjiang, born in 1981, holds a master's degree. He is currently General Manager of the Business Department of Infore Environment Technology Group Co., Ltd. He successively served as Head of the Operation Management Department and General Manager of the Solid Waste Treatment Department of Infore Environment. He joined Midea in July 2005. He successively held the positions of Domestic Sales Branch Manager, Senior Product Planning Manager at Headquarters and Head of Brand & Marketing Department of Guangdong Midea Consumer Electric Manufacturing Co., Ltd.
Mr. Liu Kan, born in 1984, is a bachelor's degree holder. He has worked in the Company since February 2016, and is currently Director of the Operation Management Department of Zoomlion Environmental. He served as General Manager at Infore Network Technology Co., Ltd. from 2017 to November 2019, Director of the Operation Management Department of Universtar Science & Technology (Shenzhen) Co., Ltd. from 2016 to 2017, and Rice Cooker Product Planning Manager at Midea Small Domestic Appliance Shenzhen Branch and Midea Small Domestic Appliance Division from 2006 to 2015.
Ms. Lin Meiling, born in 1985, has a bachelor's degree. She is currently Director of Human Resources at Infore Environment Technology Group Co., Ltd. From 2010 to now, she is responsible for the administration and human resources affairs of the Company. Offices held concurrently in shareholding entities:

√ Applicable □ Not applicable

					Remuneration or
Name	Shareholding entity	Office held in	Start of tenure	End of tenure	allowance from the
		the entit
		y			entity or not
Ma Gang	Infore Holding Group Co., Ltd.	Director	16 March 2018	--	Not
Kuang	Infore Holding Group Co., Ltd.	Director and	1 October 2018	--	Yes

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Guangxiong		Vice President

		Chief
	Zoomlion Heavy Industry Science And Technology Co., Ltd.
Shen Ke		Investment	1 July 2003	--	Yes
		Officer

	Mr. Ma Gang concurrently served as a Director of Infore Holding Group Co., Ltd.
	Mr. Kuang Guangxiong concurrently served as a Director and Vice President of Infore Holding Group Co., Ltd.
Note
	Mr. Shen Ke concurrently served as the Chief Investment Officer of Zoomlion Heavy Industry Science And

	Technology Co., Ltd.

Offices held concurrently in other entities:

√ Applicable □ Not applicable

					Remuneration or
Name	Other entity	Office held in	Start of tenure	End of tenure	allowance from
		the entit
		y			the entity or not
	Bichamp Cutting Technology (Hunan) Co.,
Shen Ke		Director	5 July 2014	--	Not
	Ltd.

		Associate
Zhang Yu	China Europe International Business School		1 July 2015	--	Yes
		professor

		President and
			1 November
Li Ruidong	The China Environment magazine	Editor-in-Chi		--	Yes
			2013
		ef

		Associate
		Professor and
		Master
Shi Shuiping	Jinan University		1 January 2010	--	Yes
		Supervisor of

		the Faculty of
		Management
	Mr. Shen Ke concurrently served as a Director of Bichamp Cutting Technology (Hunan) Co., Ltd.
	Mr. Zhang Yu concurrently served as an Associate Professor of China Europe International Business School.
Note	Mr. Li Ruidong concurrently served as the President and Editor-in-Chief of The China Environment magazine.
	Mr. Shi Shuiping concurrently served as an Associate Professor and Master Supervisor of the Faculty of
	Management of Jinan University.

Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors and senior management as well as those who left in the Reporting Period:

□ Applicable √ Not applicable

IV Remuneration of Directors, Supervisors and Senior Management

Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and senior management:

The remunerations of the directors, supervisors and senior management of the Company strictly comply with the Rules of Procedure of the Board of Directors, the Rules of Procedure of the Supervisory Committee and the Articles of Association of the

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Company, as well as the relevant provisions of the Company Law. The remunerations of the Company's directors, supervisors and senior management shall be determined on the basis of reasonable remuneration in the market and according to the Company's performance appraisal results. The actual remuneration of the directors of the Company is paid on an annual basis. The actual remuneration of senior management is partly on a monthly basis, and the part linked to the Company's performance is paid at the end of the year.

Remuneration of directors, supervisors and senior management for the Reporting Period

Unit: RMB'0,000

					Total before-tax
						Remuneration
				Incumbent/Forme	remuneration
Name	Office title	Gender	Age			from any related
				r	from the
						party or not
					Company

	Chairman of the
Ma Gang	Board and	Male	42	Incumbent	228.51	Not
	President
Kuang
	Director	Male	42	Incumbent	0	Yes
Guangxiong

Shen Ke	Director	Male	50	Incumbent	0	Yes
	Director and Vice
Chen Peiliang		Male	49	Incumbent	624.91	Not
	President

	Independent
Shi Shuiping		Male	46	Incumbent	10	Not
	Director

	Independent
Zhang Yu		Male	43	Incumbent	10	Not
	Director

	Independent
Li Ruidong		Male	44	Incumbent	10	Not
	Director

	Chairman of the
Jiao Wanjiang	Supervisory	Male	40	Incumbent	59.93	Not
	Committee
Liu Kan	Supervisor	Male	37	Incumbent	67.96	Not
	Employee
Lin Meiling		Female	36	Incumbent	12.8	Not
	Supervisor

	Vice President
Lu Anfeng	and Chief	Male	43	Incumbent	77.8	Not
	Financial Officer
	Vice President
JinTaotao	and Board	Male	38	Incumbent	74.87	Not
	Secretary
Total	--	--	--	--	1,176.78	--

Equity incentives granted to directors and senior management in the Reporting Period:

□ Applicable √ Not applicable

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V Employees

1. Number, Functions and Educational Backgrounds of Employees

Number of in-service employees of the Company	86
Number of in-service employees of principal subsidiaries	8,639
Total number of in-service employees	8,725
Total number of paid employees in the Reporting Period	8,725
Number of retirees to whom the Company or its major
	0
subsidiaries need to pay retirement pensions

Functions
Function	Employees
Production	4,681
Sales	656
Technical	1,356
Financial	206
Administrative	1,826
Total	8,725
Educational	backgrounds
Educational background	Employees
Doctoral degree	6
Master’s degree	373
Bachelor’s degree	2,369
Junior college	2,113
Below junior college	3,864
Total	8,725

2. Remuneration Policy

The Company adopts a fair remuneration system including positive incentives. It follows the performance-oriented principle and promotes competent personnel. The remuneration of employees is paid on time according to the remuneration policy of the Company. The fixed remuneration of employees is determined by the Company according to the position value and individual performance, and the floating salary of employees is determined according to the Company's and individual performance. The Company swings the weight of salary payment towards technical professionals to ensure that the income level of core talent is competitive in the market. The employee remuneration policy will be dynamically adjusted according to regional conditions, talent supply, staff turnover, degree of changes in the industry environment and the corporate payment capacity.

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3. Training Plans

In adherence to the people-oriented principle, the Company is committed to building a team of highly skilled personnel. It has established a multi-level talent training system ("Fenglin Program-Yingfeng Training Camp-Tanfeng training Camp-Panfeng Training Camp) and a multi-purpose professional training system covering all employees from fresh graduates to senior executives. In addition, according to the actual situation, the Company has built an online learning platform called "Infore Environment Cool College" and constantly rolled out more and better courses, providing convenience and institutional guarantee for employees to study and enhance their competence anytime and anywhere. The Company exercises special management over training expenses and offers offline training programs according to the actual job needs of employees at different levels, including programs for management team members, newbies, professionals, and ordinary employees. It adheres to the learning concept of integrating knowledge with practice, with special attention to the selection and training of internal lecturers and development of training programs.

4. Labor Outsourcing

√ Applicable □ Not applicable

√ Applicable □ Not applicable
Total hours of labor outsourced	16,972,100
Total payment for labor outsourcing (RMB)	199,879,123.30

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Part X Corporate Governance

I General Information of Corporate Governance

The Company continuously perfects its corporate governance structure in strict accordance with the requirements of the Company Law, the Securities Law and the relevant laws and regulations of the China Securities Regulatory Commission. The Board of Directors has four special committees, namely, Strategy Committee, Audit Committee, Nomination Committee, and Remuneration &Appraisal Committee, dedicated to providing advice and recommendations to make Board of Directors' deliberation and decision-making professional and efficient.
The Company convenes Annual General Meeting in strict accordance with the relevant provisions of the Rules for Shareholders' General Meeting of Listed Companies, Articles of Association, and Rules of Procedure of General Meeting of the Company. The Board of Directors, which is the decision-making body of the Company, conscientiously implements the resolutions of General Meetings. The Supervisory Committee exercises its supervisory function and powers in strict accordance with the regulations, and it supervises the financial affairs of the Company as well duty performance and actions of directors and senior managers, thus safeguarding the legitimate rights and interests of the Company and all shareholders. The Management of the Company strictly implements the resolutions of the General Meetings and the Board of Directors and executes decisions. All functional departments and holding subsidiaries of the Company are responsible for the day-to-day operations.
During the Reporting Period, in order to standardize its insider information management, ensure confidentiality of insider information and effective registration and management of insider information, effectively prevent securities violations such as insider trading, maintain the fairness of information disclosure, and protect the legitimate rights and interests of investors, the Company promptly, truthfully and fully recorded the stages of consultation, demonstration, discussion, establishment, and reporting, transmission, preparation, examination, resolution, and disclosure of inside information before disclosure as well as the content, time, place, basis, method and other related information and files containing insider information that all insider personnel know, and file with the relevant regulatory authorities to strictly prevent the occurrence of insider trading, pursuant to the laws and regulations such as the Securities Law, the Management Measures for Information Disclosure by Listed Companies, CSRC Provisions on the Establishment of Registration Management System for Insider Information by Listed Companies, as well as the relevant provisions of the Articles of Association, Information Disclosure Management Policy and the Policy on Internal Reporting of Significant Matters of the Company.
The Company discloses information strictly in accordance with the provisions of the Company Law, the Securities Law, the Stock Listing Rules of the Shenzhen Stock Exchange and other relevant laws, regulations and normative documents, as well as the Information Disclosure Management Policy, to ensure that it makes true, accurate, complete, timely and fair information disclosure to increase the openness and transparency of its operations. The Company has received no disciplinary actions such as criticism and reprimand from the Shenzhen Stock Exchange for issues relating to information disclosure. During the Reporting Period, there were no governance irregularities such as provision of undisclosed information to the controlling shareholder and the actual controller.
During the Reporting Period, material events occurred in the Company, but there was no change in the stock price arising from leakage of inside information. As part of its next steps, the Company will constantly improve corporate governance structure, further standardize corporate operations, and raise the level of corporate governance pursuant to relevant laws and regulations as well as the requirements of the Shenzhen Stock Exchange.

Indicate whether there is any material incompliance with the regulatory documents issued by the CSRC governing the governance of listed companies.

□ Yes √ No

No such cases in the Reporting Period.

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II Independence of the Company from the Controlling Shareholder on Businesses, Personnel, Assets, Structure, and Finance

The Company is completely independent of the controlling shareholder in terms of businesses, structure, personnel, finance, and assets and has fully independent businesses and operation. Details are as follows:

(1) Business independence: The Company's businesses are independent of the controlling shareholder, and the controlling shareholder and its affiliates are not engaged in any businesses in competition with the Company.

(2) Personnel separation: The personnel of the Company are independent of the controlling shareholder, and the President, Chief Financial Officer, Board Secretary and other senior management of the Company do not hold positions other than directors in the controlling shareholder and its affiliates, the financial officers of the Company does not have a part-time job in related companies. The Company has put in place independent policies on labor, personnel and remuneration management and established an independent labor and personnel management department. Thus, its labor, personnel and remuneration management is completely independent.

(3) Integrity of assets: The Company owns independent and complete assets and has independent production, supply and marketing systems, and there is no horizontal competition between the Company and its controlling shareholder in the manufacturing and operation of the same products.

(4) Organizational independence: The Company is organizationally complete, and there is no superior-subordinate relationship between its controlling shareholder and functional departments thereof and the Company and functional departments thereof. The Company's Board of Directors, Supervisory Committee and other internal institutions operate completely independently.

(5) Financial separation: The Company's finance is entirely independent, with an independent financial department. It has also established an independent accounting system and financial accounting management system responsible for independent accounting, independent opening of bank accounts, and independent tax payment.

III Horizontal Competition

□ Applicable √ Not applicable

IV Annual and Extraordinary General Meetings Convened during the Reporting Period

1. General Meeting Convened during the Reporting Period

		Investor			Index to disclosed
Meeting	Type		Date of the meeting	Disclosure date
		participation ratio			information

					Announcement No.
					2020-047 disclosed
The 2019 Annual	Annual General
		62.19%	15 May 2020	16 May 2020	on
General Meeting	Meeting
					http://www.cninfo.co

					m.cn
					Announcement No.
The First
					2020-082 disclosed
Extraordinary	Extraordinary
		51.22%	10 September 2020	11 September 2020	on
General Meeting of	General Meeting
					http://www.cninfo.co
2020
					m.cn

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2. Extraordinary General Meetings Convened at the Request of Preference Shareholders with Resumed Voting Rights

□ Applicable √ Not applicable

V Performance of Duty by Independent Directors in the Reporting Period

1. Attendance of Independent Directors at Board Meetings and General Meetings

	Attendance of independent directors at board meetings and general meetings	Attendance of independent directors at board meetings and general meetings	Attendance of independent directors at board meetings and general meetings	Attendance of independent directors at board meetings and general meetings	Attendance of independent directors at board meetings and general meetings	Attendance of independent directors at board meetings and general meetings	Attendance of independent directors at board meetings and general meetings
	Total number					The
			Board
	of board			Board	Board	independent
		Board	meetings
	meetings the			meetings	meetings the	director failed	General
Independent		meetings	attended by
	independent			attended	independent	to attend two	meetings
director		attended on	way of
	director was			through a	director failed	consecutive	attended
		site	telecommunica
	eligible to			proxy	to attend	board meetings
			tion
	attend					or not

Shi Shuiping	9	7	2	0	0	Not	2
Zhang Yu	9	8	1	0	0	Not	2
Li Ruidong	9	7	2	0	0	Not	2

Explanation of why any independent director failed to attend two consecutive board meetings:

2. Objections Raised by Independent Directors on Matters of the Company

Indicate whether any independent directors raised any objections on any matter of the Company.

□ Yes √ No

No such cases in the Reporting Period.

3. Other Information about the Performance of Duty by Independent Directors

Indicate whether any suggestions from independent directors were adopted by the Company.

√ Yes □ No

Explanation on adoption/rejection of recommendations of independent director of the Company

During the Reporting Period, the independent director of the Company strictly complied with the requirements of the Stock Listing Rules of the Shenzhen Stock Exchange, Articles of Association and Work Policy for Independent Director of the Company, diligently and earnestly performed his duties, performed his duties independently, objectively and impartially, and conducted on-site investigation to understanding matters at on-site meetings of the Board of Directors and Annual Meeting. He kept in regular contact with the directors, the Board Secretary, Chief Financial Officer and other relevant staff to understand the day-to-day production and operations of the Company, seriously reviewed the proposals of the Board of Directors, and reviewed matters concerning related-party transactions beforehand, and issued independent opinions on material matters of the Company as per regulations. Furthermore, he paid attention to the reports published on newspapers, the Internet and media agencies in relation to the Company to keep abreast of the operations of the Company. The independent director put forward relevant recommendations on the investment

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decisions of the Company. For example, he suggested that the Company should make more investments in intelligent and automatic technologies while keeping all risks under control.

VI Performance of Duty by Specialized Committees under the Board in the Reporting Period

(I) Duty performance of the Audit Committee of the Board of Directors: During the Reporting Period, the Audit Committee gave full play to the role of audits and actively promoted the standardization of corporate governance. During the Reporting Period, the Audit Committee primarily completed the following tasks:

(1) During the audit on the 2019 Annual Report of the Company, the Audit Committee carefully reviewed the Company's financial statements and internal controls, actively communicated with the accounting firm responsible for annual audit of the Company, discussed and determined the audit arrangements, and repeatedly urged the accounting firm to organize the audit activities in strict accordance with the audit plan to ensure the smooth completion of the audit on the 2019 Annual Report.

(2) The Audit Committee reviewed, approved and submitted the accounting firm re-engagement proposal to the Board of Directors, recommended that Pan-China Certified Public Accounts LLP should be re-engaged to be responsible for the Company's 2020 annual audit, including the audits on 2020 Annual Report and internal controls.

(3) In the related-party transaction supervision and internal control assessment for the Reporting Period, the Audit Committee conducted a meticulous review of the related-party transactions that occurred in the Company in 2020. It guided and supervised the standard implementation and assessment of the Company's internal control and advanced the development of the Company's internal controls.

(II) Duty performance of the Remuneration & Appraisal Committee of the Board of Directors: The Remuneration & Appraisal Committee, in accordance with relevant laws and regulations, earnestly performed its duties, formulated and reviewed the remuneration policies and schemes for the Company's directors, supervisors and senior management, and guided the Board of Directors to improve the Company's remuneration policy. It concluded that the remunerations of the Company's directors, supervisors and senior management were in line with the relevant remuneration policies of the Company as well as the Company's business performance and individual performance. The Remuneration & Appraisal Committee reviewed the Company's stock option incentive plan, the eligibility of its beneficiaries for exercising the rights, related adjustment items, etc.

(III) Duty performance the Nomination Committee of the Board of Directors: During the Reporting Period, the Nomination Committee of the Board of Directors carried out its work pursuant to the relevant regulations of the CSRC and the Shenzhen Stock Exchange, as well as the principle of diligence and due diligence. According to the business activities of the Company during the Reporting Period, it carefully supervised the post qualifications and duty performance of each director, supervisor and senior manager. During the Reporting Period, the directors, supervisors and senior management of the Company were not found to have violated the Company Law, the Articles of Association of the Company, etc.

(IV) Duty performance of the Strategy Committee of the Board of Directors: The Strategy Committee of the Board of Directors participated in the meetings of the Management on acceptance of partial shares of the holding subsidiary, wavier of the preemption rights and related-party transactions, repurchase scheme for the Company's shares, discussion and issuance of convertible bonds of the Company, and spin-off listing of subsidiary, in accordance with the relevant legal provisions such as the Code of Corporate Governance of Listed Companies, the Articles of Association of the Company and other relevant laws and regulations. Also, it listened to the reports of the Management on the relevant plans, jointly analyzed the feasibility of various issues, and offered professional opinions and recommendations.

VII Performance of Duty by the Supervisory Committee

Indicate whether the Supervisory Committee found any risk to the Company during its supervision in the Reporting Period.

□ Yes √ No

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No such cases in the Reporting Period.

VIII Appraisal of and Incentive for Senior Management

The Company adopts a remuneration policy comprised of basic annual salary and annual performance-based bonus for senior management. It determines and specific assessment, reward and punishment measures according to the overall development strategy and business objectives of the Company at the beginning of the year, and distribute corresponding performance rewards at the end of the year according to the completion of business objectives.

IX Internal Control

1. Details of material internal control deficiencies identified during the Reporting Period

□ Yes √ No

2. Internal control self-assessment report

Date of full disclosure of the internal
	23 April 2021
control assessment report

Index of full disclosure of the internal	For details, see the 2020 Internal Control self-Assessment Report disclosed on
control assessment report	http://www.cninfo.com.cn
Ratio of the total assets of the
organizations included in the assessment to	100.00%
the Company's consolidated total assets
Ratio of the revenue of the organizations
included in the assessment to the	100.00%
Company's consolidated revenue
	Deficiency identification criteria
Category	Financial report	Non-financial report
	(1) Significant deficiencies: 1) Anti-fraud	(1) Material deficiencies: 1) Violations of
	procedures and controls; 2) Internal control	State laws and regulations, e.g.,
	over unconventional or unsystematic	environmental pollution, serious damage
	transactions; 3) Internal control over the	to local ecological environment, failure
	selection and application of accounting	to report or disclose information as
	policies against GAAP; 4) Internal control	regulations; 2) Loss of more than 30% of
	over the final financial reporting procedures.	middle and senior managers and senior
Qualitative criteria
	(2) Material deficiencies: 1) Fraud	technical personnel without timely

	committed by directors, supervisors and	replenishment, affecting the normal
	senior managers; 2) Correction of corporate	operations of the Company; 3) Failure to
	financial report published or reported; 3)	take timely and active response measures
	Material misstatement in the current	for frequent negative media reports,
	financial report identified by certified public	which involve a wide range of subjects,
	accountant, which is not identified in the	leading to a significant negative impact

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	course of running of internal control; 4)	on the Company; 4) Failure to remedy
	Ineffective supervision over internal control	internal control assessment findings,
	by the Audit Committee and internal audit	especially material or significant
	agency; 5) Lack of post qualification or	deficiencies; absence of policy control or
	incompetence of principal financial officer;	systematic failure of critical businesses;
	6) Ineffective compliance supervision, and	5) Unreasonable decision-making
	violations of regulations, which may have a	procedures, e.g., decision-making
	significant impact on the reliability of	mistakes, resulting in unsuccessful
	financial reporting; 7) The Management's	M&A; 6) Losses seen by the Company in
	failure to correct significant deficiency after	consecutive years for reasons apart from
	a reasonable period of the deficiency being	policy reasons, posing challenges to
	reported to the Management.	sustainable operations; 7) Lack of
		internal controls in subsidiaries, leading
		to poor management. (2) Significant
		deficiencies: 1) Fraud committed by
		middle managers; 2) Negative reports
		published by influential media agency in
		that year; 3) Failure to remedy general
		deficiencies identified in the prior year
		without reasonable explanation; 4)
		Incompetency of some managers or
		operators. Circumstances, including but
		not limited to the following, may be
		recognized as internal control "general
		deficiencies": Fraud committed by
		general employees; failure to remedy
		general deficiencies identified in the
		prior year with reasonable explanation.
	(1) Material deficiencies: 1) The potentially
	misstated amount in the profit statement is
	greater than 1% of the consolidated revenue
	of the Company's in the most recent financial
	year or 5% of the total pre-tax profit; 2) The
	potentially misstated amount in the balance
		General deficiency: Less than RMB5
	sheet is greater than 1% of the consolidated
		million; Significant deficiency: RMB5
	total assets of the Company in the most
Quantitative criteria		million (including RMB5
	recent financial year.
		million)-RMB10 million; Material
	(2) Significant deficiencies: 1) The
		deficiency: RMB10 million and above.
	potentially misstated amount is greater than

	0.5% of the Company's consolidated revenue
	or 3% of the total pre-tax profit in the
	income statement but less than 1% of the
	Company's consolidated revenue or 5% of
	the total pre-tax profit in the most recent

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financial year; 2) The potentially misstated amount is greater than 0.5% but less than 1% of the consolidated total assets of the Company in the most recent financial year. (3) General deficiencies: 1) The potentially misstated amount in the income statement is less than 0.5% of the consolidated revenue of the Company' in the most recent financial year or 3% of the total pre-tax profit; 2) The potentially misstated amount in the balance sheet is less than 0.5% of the consolidated total assets of the Company' in the most recent financial year. Number of material deficiencies in financial 0 reports Number of material deficiencies in 0 non-financial reports Number of significant deficiencies in 0 financial reports Number of significant deficiencies in 0 non-financial reports

X Independent Auditor’s Report on Internal Control

√ Applicable □ Not applicable

Opinion paragraph in the independent auditor’s report on internal control	Opinion paragraph in the independent auditor’s report on internal control
Infore Environment Technology Group Co., Ltd. maintained, in all material respects, effective internal control over financial reporting as of 31 December 2020, based on the Basic Rules on Enterprise Internal Control and other applicable rules.
Independent auditor’s report on
	Disclosed
internal control disclosed or not

Disclosure date	23 April 2021
Index to the disclosed report	PCCPA Auditor’s Report [2021] No. 3832
Type of the auditor’s opinion	Unmodified unqualified opinion
Material weaknesses in internal
control not related to financial	None
reporting

Indicate whether any modified opinion is expressed in the independent auditor’s report on the Company’s internal control.

□ Yes √ No

Indicate whether the independent auditor’s report on the Company’s internal control is consistent with the internal control self-evaluation report issued by the Company’s Board of Directors.

√ Yes □ No

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Part XI Corporate Bonds

Does the Company have any corporate bonds publicly offered on the stock exchange, which were outstanding before the date of this Report’s approval or were due but could not be redeemed in full?

No.

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Part XII Financial Statements

I Independent Auditor’s Report

Type of the independent auditor’s opinion	Unmodified unqualified opinion
Date of signing the independent auditor’s report	22 April 2021
Name of the independent auditor	Pan-China Certified Public Accountants LLP
Number of the independent auditor’s report	PCCPAAR [2021] No. 4208
Name of the certified public accountants	Bian Shanshan and Cao Cuijuan

Auditor’s Report

To the Shareholders of Infore Environment Technology Group Co., Ltd.:

I. Audit Opinion

We have audited the accompanying financial statements of Infore Environment Technology Group Co., Ltd. (the “Company”), which comprise the consolidated and parent company balance sheets as at December 31, 2020, the consolidated and parent company income statements, the consolidated and parent company cash flow statements, and the consolidated and parent company statements of changes in equity for the year then ended, as well as notes to financial statements.

In our opinion, the attached financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2020, and of its financial performance and its cash flows for the year then ended in accordance with China Accounting Standards for Business Enterprises.

II. Basis for Audit Opinion

We conducted our audit in accordance with China Standards on Auditing. Our responsibilities under those standards are further described in the Certified Public Accountant’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the China Code of Ethics for Certified Public Accountants, and we have fulfilled other ethical responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

III. Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not express a separate opinion on these matters.

(I) Revenue recognition

1. Key audit matters

Please refer to section III (XXVI) and section V (II) 1 of notes to the financial statements for details.

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The Company is mainly engaged in manufacturing of sanitation vehicles and equipment, electromagnetic wire, ventilation equipment, environmental monitoring instruments, and construction and operation of environmental protection engineering as well as other industries, and adopts different recognition methods for revenue from each industry and product service. In 2020, the operating revenue amounted to 14,332,025,075.40 yuan, increasing by 12.89% compared with that in previous year amounting to 12,695,858,666.40 yuan.

Sales of sanitation vehicles and equipment, electromagnetic wire and ventilation equipment are performance obligations satisfied at a point in time. Revenue is recognized when the Company has delivered goods to the designated address as agreed by contract and such delivered goods have been verified for acceptance by customers, and the Company has collected the payments or has obtained the right to the payments, and related economic benefits are highly probable to flow to the Company. The environment and sanitation comprehensive management projects are performance obligations satisfied over time. Revenue is recognized at the percentage of completion of the performance obligation based on the completion status confirmed by the project supervisor.

As operating revenue is one of the key performance indicators of the Company, the authenticity, accuracy and completeness of revenue recognition have a significant impact on the Company’s profit, we have identified revenue recognition as a key audit matter.

2. Responsive audit procedures

Our main audit procedures for revenue recognition are as follows:

(1) We obtained understandings of key internal controls related to revenue recognition, assessed the design of these controls, determined whether they had been executed, and tested the effectiveness of the operation;

(2) We checked sale contracts and construction contracts with clients, obtained understandings of main contractual terms or conditions, and assessed whether the revenue recognition method conformed to China Accounting Standards for Business Enterprises;

(3) We performed analysis procedure on operating revenue and gross margin by month, product, client, project, etc., so as to identify whether there are significant or abnormal fluctuations and find out the reason of fluctuations;

(4) For revenue recognition, we checked supporting documents related to revenue recognition by sampling method, including sales contracts, orders, sales invoices, delivery lists, delivery orders, shipping documents, client acceptance receipts, progress confirmation sheets, construction acceptance and supervision reports, etc.;

(5) We selected significant engineering contracts, checked the documents including cost budget, purchase contracts, subcontract agreements and others on which the expected total cost was based, and evaluated the reasonableness of the expected total cost estimated by the Management;

(6) We performed confirmation procedure or on-site visit procedure on significant clients and projects to confirm the sales amounts in the current period, the balances of transactions and the performance of the contracts;

(7) We performed cut-off tests on the operating revenue recognized around the balance sheet date, and assessed whether the operating revenue was recognized in the appropriate period; and

(8) We checked whether information related to operating revenue had been presented appropriately in the financial statements.

(II) Impairment of accounts receivable and long-term receivables (including those due within one year)

1. Key audit matters

Please refer to section III (X) and section V (I) 4, 10 and 12 of notes to the financial statements for details.

As of December 31, 2020, the book balance of accounts receivable amounted to 5,979,099,528.01 yuan, with provision for bad debts of 414,264,663.97 yuan, and the carrying amount amounted to 5,564,834,864.04 yuan; the book balance of long-term receivables

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(including those due within one year) amounted to 2,557.32 million yuan, with provision for bad debts of 152.83 million yuan, and the carrying amount amounted to 2,221.29 million yuan.

Based on credit risk features of accounts receivable, the Company’s management (the “Management”) measures the provision for bad

debts at the amount of lifetime expected credit losses, either on an individual basis or on a collective basis. For accounts receivable with expected credit losses measured on an individual basis, the Management estimates the expected cash flows, so as to identify the provision for bad debts to be accrued, based on a comprehensive consideration of information with reasonableness and evidence, which is related to the past events, the current situation and the forecast of future economic conditions. For accounts receivable with expected credit losses measured on a collective basis, the Management classifies portfolios on the basis of ages, adjusts them based on historical credit risk loss experience and forward-looking estimations, prepares the comparison table of ages of accounts receivable, so as to calculate the provision for bad debts to be accrued.

As the amount of accounts receivable is significant and the impairment involves significant judgment of the Management, we have identified impairment of accounts receivable as a key audit matter.

2. Responsive audit procedures

Our main audit procedures for impairment of accounts receivable and long-term receivables (including those due within one year) are as follows:

(1) We obtained understandings of key internal controls related to accounts receivable and long-term receivables (including those due within one year), assessed the design of these controls, determined whether they had been executed, and tested the effectiveness of their operation;

(2) We reviewed accounts receivable and long-term receivables (including those due within one year) with provision for bad debts made in previous periods for their subsequent write-off or reversal, and assessed the accuracy of historical estimations made by the Management;

(3) We reviewed the consideration of the Management on credit risk assessment of accounts receivable and long-term receivables (including those due within one year) and objective evidences, and assessed whether the credit risk features of accounts receivable had been appropriately identified by the Management;

(4) For accounts receivable and long-term receivables (including those due within one year) with expected credit losses measured on a collective basis, we assessed the reasonableness of portfolio classification on the basis of credit risk features; we assessed the reasonableness of the comparison table of ages and expected credit loss rate of accounts receivable and long-term receivables (including those due within one year) prepared by the Management based on the historical credit loss experience of portfolios with similar credit risk features and forward-looking estimations; we tested the accuracy and completeness of data used by the Management (including ages) and whether the calculation of provision for bad debts was accurate;

(5) We checked the subsequent collection of accounts receivable and long-term receivables (including those due within one year) and assessed the reasonableness of provision for bad debts made by the Management; and

(6) We checked whether information related to impairment of accounts receivable and long-term receivables (including those due within one year) had been presented appropriately in the financial statements.

(III) Impairment of goodwill

Key audit matters

Please refer to section III (XX) and section V (I) 20 of the notes to the financial statements for details.

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As of December 31, 2020, the book balance of goodwill amounted to 6,224,243,094.37 yuan, with provision for bad debts of 53,434,058.51 yuan, and the carrying amount amounted to 6,170,809,035.86 yuan, accounting for 20.49% of total assets. Both the carrying amount and the proportion are relatively large.

The Management will perform impairment test on goodwill arising from business combination together with related asset groups or asset group portfolios at the end of each period, and the recoverable amount of related asset groups or asset group portfolios is determined based on the present value of estimated future cash flows. Key assumptions adopted in the impairment test include: revenue growth rate in detailed forecast period, growth rate for stable income, profit margin, pre-tax discount rate, etc.

As the amount of goodwill is significant and impairment test involves significant judgment of the Management, we have identified impairment of goodwill as a key audit matter.

2. Responsive audit procedures

Our main audit procedures for impairment of goodwill are as follows:

(1) We obtained understandings of key internal controls related to impairment of goodwill, assessed the design of these controls, determined whether they had been executed, and tested the effectiveness of their operation;

(2) We reviewed the present value of future cash flows estimated by the Management in previous years and the actual operating results, and assessed the accuracy of the Management’s historical estimations;

(3) We obtained understandings of and assessed the competency, professional quality and objectivity of external appraisers engaged by the Management;

(4) We assessed the reasonableness and consistency of impairment test method adopted by the Management;

(5) We assessed the reasonableness of key assumptions used in impairment test and reviewed whether relevant assumptions were consistent with overall economy environment, industry condition, management situation, historical experience, operation plan, approved budget, meeting summary and other assumptions related to the financial statements used by the Management;

(6) We reviewed the sensitivity analysis on key assumptions performed by the Management, assessed the effect of changes in key assumptions on impairment test result, and identified signs of possible management bias in choosing key assumptions;

(7) We tested the accuracy, completeness and relativity of data used in the impairment test and reviewed the internal consistency of related information in the impairment test;

(8) We tested whether the calculation of present value of estimated future cash flows was accurate; and

(9) We checked whether information related to impairment of goodwill had been presented appropriately in the financial statements.

(IV) Related party transactions and identification

1. Key audit matters

Please refer to section X of the notes to the financial statements for details.

Due to the complex relationship between the Company’s ultimate controller 何剑锋 (He Jianfeng) and its controlling shareholder 盈峰控股集团有限公司 (Infore Holding Group Co., Ltd.[] ), a large number of affiliated entities of the Company’s major shareholder 中联重科股份有限公司 (Zoomlion Heavy Industry Co., Ltd.[*] ), and various types of related party transactions, which may exist a risk that related party relationships and transactions are not fully disclosed in the notes to the financial statements, we have identified the completeness of disclosure on related party relationships and transactions as a key audit matter.

Responsive audit procedures
The English names are for identification purpose only.

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Our main audit procedures for related party transactions and identification are as follows:

(1) We assessed and tested the internal controls related to the identification and disclosure of related party relationships and transactions. Internal controls included regularly reviewing the list of related parties by the Management, performing related party reconciliations on a regular basis and following up on discrepancies, and collecting annual statistics on related party transactions and making a public announcement;

(2) We obtained the list of related party relationships compiled by the Management, and checked it with the related party relationships listed in the sub-ledger and information obtained from other publicly available sources;

(3) We checked significant sales, purchases and other contracts to identify whether there are undisclosed related party relationships and transactions;

(4) We obtained the current account schedule provided by the Management, checked the reconciliation results of amounts and balances of related party transactions to confirm the completeness of the transactions, and checked the original vouchers of corresponding transactions to confirm the authenticity of the transactions;

(5) We performed confirmation procedures to verify the amounts and balances of related party transactions by sampling method; and

(6) We checked whether related party information and transactions had been disclosed in the financial statements.

IV. Other Information

The Management is responsible for the other information. The other information comprises the information included in the Company’s annual report, but does not include the financial statements and our auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact. We have nothing to report in this regard.

V. Responsibilities of the Management and Those Charged with Governance for the Financial Statements

The Management is responsible for preparing and presenting fairly the financial statements in accordance with China Accounting Standards for Business Enterprises, as well as designing, implementing and maintaining internal control relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

VI. Certified Public Accountant’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high

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level of assurance, but is not a guarantee that an audit conducted in accordance with China Standards on Auditing will always detect a material misstatement when it exists. Misstatement can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

We exercise professional judgment and maintain professional skepticism throughout the audit performed in accordance with China Standards on Auditing. We also:

(I) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

(II) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.

(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management.

(IV) Conclude on the appropriateness of the Management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

(V) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain sole responsibility for our audit opinion.

We communicate with those charged with governance regarding the planned audit scope, time schedule and significant audit findings, including any deficiencies in internal control of concern that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

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Pan-China Certified Public Accountants LLP Chinese Certified Public Accountant: Bian Shanshan (Engagement Partner) Hangzhou · China Chinese Certified Public Accountant: Cao Cuijuan Date of Report: April 22, 2021

The auditor’s report and the accompanying financial statements are English translations of the Chinese auditor’s report and statutory financial statements prepared under accounting principles and practices generally accepted in the People’s Republic of China. These financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles and practices generally accepted in other countries and jurisdictions. In case the English version does not conform to the Chinese version, the Chinese version prevails.

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Infore Environment Technology Group Co., Ltd. Consolidated balance sheet as at December 31, 2020 (Expressed in Renminbi Yuan)

Infore Environment Technology Group Co., Ltd. Consolidated balance sheet as at December 31, 2020 (Expressed in Renminbi Yuan)
Assets	Note No.	Closing balance	December 31, 2019
Current assets: Cash and bank balances Settlement funds Loans to other banks Held-for-trading financial assets Derivative financial assets Notes receivable Accounts receivable Receivables financing Advances paid Premiums receivable Reinsurance accounts receivable Reinsurance reserve receivable Other receivables Financial assets under reverse repo Inventories Contract assets Assets classified as held for sale Non-current assets due within one year Other current assets Total current assets Non-current assets: Loans and advances paid Debt investments Other debt investments Long-term receivables Long-term equity investments Other equity instrument investments Other non-current financial assets Investment property Fixed assets Construction in progress Productive biological assets Oil & gas assets Right-of-use assets Intangible assets Development expenditures Goodwill Long-term prepayments Deferred tax assets Other non-current assets Total non-current assets	1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23	5,904,127,970.85 128,017,735.11 64,663,544.98 5,564,834,864.04 520,429,874.86 137,769,198.53 257,670,998.28 1,305,177,407.85 170,840,655.62 1,157,997,329.53 524,859,055.94 15,736,388,635.59 1,063,292,418.65 318,243,332.69 26,070,000.00 2,009,006.98 1,640,546,747.67 1,782,529,087.95 3,163,935,814.41 4,449,066.69 6,170,809,035.86 12,703,802.65 95,270,882.31 94,289,159.43 14,374,148,355.29	3,160,767,624.40 217,189,146.28 40,493,712.20 5,163,050,940.07 683,999,481.60 71,052,084.75 224,865,915.72 1,145,000,730.01 760,845,984.28 331,614,554.91 11,798,880,174.22 1,152,179,083.21 303,292,231.01 26,070,000.00 568,026.39 994,681,585.66 1,550,462,442.48 2,686,210,546.90 7,861,260.14 6,196,214,398.16 16,109,938.88 77,777,629.37 44,360,378.52 13,055,787,520.72
Total assets		30,110,536,990.88	24,854,667,694.94

Company’s legal representative： Company’s Chief Financial Officer: Head of the Company’s Accounting Ma Gang Lu Anfeng Department: Wu Shanshan

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Infore Environment Technology Group Co., Ltd. Consolidated balance sheet as at December 31, 2020 (continued) (Expressed in Renminbi Yuan)

(Expressed in Renminbi Yuan)
Liabilities & Equity	Note No.	Closing balance	December 31, 2019
Current liabilities: Short-term borrowings Central bank loans Loans from other banks Held-for-trading financial liabilities Derivative financial liabilities Notes payable Accounts payable Advances received Contract liabilities Financial liabilities under repo Absorbing deposit and interbank deposit Deposit for agency security transaction Deposit for agency security underwriting Employee benefits payable Taxes and rates payable Other payables Handling fee and commission payable Reinsurance accounts payable Liabilities classified as held for sale Non-current liabilities due within one year Other current liabilities Total current liabilities Non-current liabilities: Insurance policy reserve Long-term borrowings Bonds payable Including: Preferred shares Perpetual bonds Lease liabilities Long-term payables Long-term employee benefits payable Provisions Deferred income Deferred tax liabilities Other non-current liabilities Total non-current liabilities Total liabilities Equity: Share capital Other equity instruments Including: Preferred shares Perpetual bonds Capital reserve Less: Treasury shares Other comprehensive income Special reserve Surplus reserve General risk reserve Undistributed profit Total equity attributable to the parent company Non-controlling interest Total equity	24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 22 40 41 42 43 44 45 46 47	1,657,905,376.55 810,300.00 3,853,175,394.09 3,404,825,085.03 181,051,683.90 321,861,989.64 372,514,942.66 443,477,082.48 150,862,201.57 55,106,039.73 10,441,590,095.65 765,643,457.78 1,199,466,109.60 255,735,814.91 1,461,553.82 96,734,819.84 78,884,957.38 2,397,926,713.33 12,839,516,808.98 3,163,062,146.00 266,939,831.65 9,707,741,876.49 8,920,597.83 232,701,943.56 3,558,688,885.55 16,920,214,085.42 350,806,096.48 17,271,020,181.90	1,606,673,817.48 866,300.00 2,941,694,181.14 2,486,177,851.99 170,610,799.52 225,112,437.87 192,120,056.48 374,873,715.69 86,554,242.52 8,084,683,402.69 643,843,170.78 188,400,523.49 50,399,106.23 120,043,177.41 1,002,685,977.91 9,087,369,380.60 3,163,062,146.00 9,698,117,762.75 99,993,195.75 479,437.51 232,701,943.56 2,520,329,621.90 15,514,697,715.97 252,600,598.37 15,767,298,314.34

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Total liabilities & equity	Total liabilities & equity			30,110,536,990.88	24,854,667,694.94
Company’s legal representative： Ma Gang
	Company’s Chief Financial Lu Anfeng	Officer:

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Infore Environment Technology Group Co., Ltd. Parent company balance sheet as at December 31, 2020 (Expressed in Renminbi Yuan)

Infore Environment Technology Group Co., Ltd. Parent company balance sheet as at December 31, 2020 (Expressed in Renminbi Yuan)
Assets	Note No.	Closing balance	December 31, 2019
Current assets:	1 2	1,279,695,772.57 126,075,691.90 528,356,236.97 3,095,331,754.24 337,148,608.96 5,366,608,064.64 16,694,341,699.36 26,070,000.00 3,395,200.95 1,155,903.84 16,724,962,804.15	414,150,578.04 215,250,000.00 151,020,990.77 2,542,917,115.03 181,784,542.01 3,505,123,225.85 355,122,722.70 16,637,081,190.34 26,070,000.00 4,974,866.68 2,583,187.08 17,025,831,966.80
Cash and bank balances
Held-for-tradingfinancial assets
Derivative financial assets
Notes receivable
Accounts receivable
Receivables financing
Advancespaid
Other receivables
Inventories
Contract assets
Assets classified as held for sale
Non-current assets due within oneyear
Other current assets
Total current assets
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equityinvestments
Other equityinstrument investments
Other non-current financial assets
Investmentproperty
Fixed assets
Construction inprogress
Productive biological assets
Oil &gas assets
Right-of-use assets
Intangible assets
Development expenditures
Goodwill
Long-termprepayments
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets		22,091,570,868.79	20,530,955,192.65

Company’s legal representative： Company’s Chief Financial Officer: Head of the Company’s Accounting Ma Gang Lu Anfeng Department: Wu Shanshan

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Infore Environment Technology Group Co., Ltd. Parent company balance sheet as at December 31, 2020 (continued) (Expressed in Renminbi Yuan)

(Expressed in Renminbi Yuan)
Liabilities & Equity	Note No.	Closing balance	December 31, 2019
Current liabilities:		600,733,518.18 3,899,667.53 8,700,968.00 12,475,208.42 753,207,113.25 1,379,016,475.38 1,199,466,109.60 3,000,000.00 218,598.02 350,000.00 30,762,849.39 1,233,797,557.01 2,612,814,032.39 3,163,062,146.00 266,939,831.65 15,356,688,889.72 8,920,597.83 198,481,554.14 502,505,012.72 19,478,756,836.40	337,975,971.15 7,029,961.20 2,204,822.27 11,019,711.54 514,074,773.76 872,305,239.92 3,000,000.00 296,000.00 46,963,875.00 50,259,875.00 922,565,114.92 3,163,062,146.00 15,345,428,341.90 99,993,195.75 198,481,554.14 1,001,411,231.44 19,608,390,077.73
Short-term borrowings
Held-for-tradingfinancial liabilities
Derivative financial liabilities
Notespayable
Accountspayable
Advances received
Contract liabilities
Employee benefitspayable
Taxes and ratespayable
Otherpayables
Liabilities classified as held for sale
Non-current liabilities due within oneyear
Other current liabilities
Total current liabilities
Non-current liabilities:
Long-term borrowings
Bondspayable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-termpayables
Long-term employee benefitspayable
Provisions
Deferred income
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
Equity:
Share capital
Other equityinstruments
Including: Preferred shares
Perpetual bonds
Capital reserve
Less: Treasuryshares
Other comprehensive income
Special reserve
Surplus reserve
Undistributedprofit
Total equity
Total liabilities & equity		22,091,570,868.79	20,530,955,192.65

Company’s legal representative： Company’s Chief Financial Officer: Head of the Company’s Accounting Ma Gang Lu Anfeng Department: Wu Shanshan

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Consolidated income statement for the year ended December 31, 2020 (Expressed in Renminbi Yuan)

(Expressed in Renminbi Yuan)
Items	Note No.	Current period cumulative	Preceding period comparative
I. Total operating revenue Including: Operatingrevenue	1 1	14,332,025,075.40 14,332,025,075.40 12,499,304,152.40 10,766,288,959.00 74,460,829.99 801,289,013.51 536,466,686.12 254,677,332.19 66,121,331.59 127,630,040.16 49,689,471.88 74,276,327.83 78,328,670.09 41,578,662.81 -95,719,301.47 -119,562,421.08 -82,478,500.15 -1,787,925.37 1,685,777,772.85 9,844,019.69 58,229,724.05 1,637,392,068.49 207,571,413.76 1,429,820,654.73 1,429,820,654.73 1,386,476,099.73 43,344,555.00 -479,437.51 -479,437.51 -479,437.51	12,695,858,666.40 12,695,858,666.40 11,069,345,626.71 9,389,456,412.74 71,200,033.13 917,261,553.74 391,834,512.74 245,637,610.35 53,955,504.01 99,893,189.87 26,182,679.84 135,919,040.42 158,539,294.34 33,697,177.55 22,408,443.66 -111,054,884.67 -40,642,899.39 -2,966,334.79 1,788,715,699.26 12,335,161.18 163,245,079.19 1,637,805,781.25 246,239,615.82 1,391,566,165.43 1,391,566,165.43 1,361,453,754.17 30,112,411.26 1,558,587.50 1,377,025.00 1,377,025.00
Interest income
Premium earned
Revenue from handlingcharges and commission
II. Total operating cost Including: Operatingcost
	1
Interest expenses
Handlingcharges and commission expenditures
Surrender value
Netpayment of insurance claims
Netprovision of insurancepolicyreserve
Premium bonus expenditures
Reinsurance expenses
Taxes and surcharges	2 3 4 5 6 7 8
Sellingexpenses
Administrative expenses
R&D expenses
Financial expenses
Including: Interest expenses
Interest income
Add: Other income
Investment income(or less: losses)
Including: Investment income from associates andjoint ventures
Gains from derecognition of financial assets at amortized cost
Gains on foreign exchange(or less: losses)
Gains on net exposure to hedgingrisk(or less: losses)
Gains on changes in fair value(or less: losses)	9
Credit impairment loss	10 11
Assets impairment loss
Gains on asset disposal(or less: losses)	12
III. Operating profit(or less: losses)
Add: Non-operatingrevenue	13 14 15
Less: Non-operatingexpenditures
IV. Profit before tax(or less: total loss)
Less: Income tax expenses
V. Net profit (or less: net loss) (I) Categorized by the continuity of operations 1. Net profit from continuing operations (or less: net loss) 2. Net profit from discontinued operations (or less: net loss) (II)Categorized bytheportion of equityownership




1. Netprofit attributable to owners ofparent company (or less: net loss)
2. Netprofit attributable to non-controllingshareholders(or less: net loss)
VI. Other comprehensive income after tax Items attributable to the owners of the parent company (I) Not to be reclassified subsequently to profit or loss 1. Changes in remeasurement on the net defined benefit plan 2. Items under equity method that will not be reclassified to profit or loss 3. Changes in fair value of other equity instrument investments 4. Changes in fair value of own credit risk 5. Others (II) To be reclassified subsequently to profit or loss 1. Items under equity method that may be reclassified to profit or loss	16

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2. Changes in fair value of other debt investments 3. Profit or loss from reclassification of financial assets into other comprehensive income 4. Provision for credit impairment of other debt investments 5. Cash flow hedging reserve 6. Translation reserve 7. Others Items attributable to non-controlling shareholders VII. Total comprehensive income Items attributable to the owners of the parent company Items attributable to non-controlling shareholders VIII. Earnings per share (EPS): (I) Basic EPS (yuan per share) (II)Diluted EPS(yuanper share)		-479,437.51 1,429,341,217.22 1,385,996,662.22 43,344,555.00 0.44 0.44	1,377,025.00 181,562.50 1,393,124,752.93 1,362,830,779.17 30,293,973.76 0.43 0.43

Company’s legal representative： Company’s Chief Financial Officer: Head of the Company’s Accounting Ma Gang Lu Anfeng Department: Wu Shanshan

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Infore Environment Technology Group Co., Ltd.

Parent company income statement for the year ended December 31, 2020 (Expressed in Renminbi Yuan)

(Expressed in Renminbi Yuan)
Items	Note No.	Current period cumulative	Preceding period comparative
I. Operating revenue Less: Operating cost Taxes and surcharges Selling expenses Administrative expenses R&D expenses Financial expenses Including: Interest expenses Interest income Add: Other income Investment income (or less: losses) Including: Investment income from associates and joint ventures Gains from derecognition of financial assets at amortized cost Gains on net exposure to hedging risk (or less: losses) Gains on changes in fair value (or less: losses) Credit impairment loss Assets impairment loss Gains on asset disposal (or less: losses) II. Operating profit (or less: losses) Add: Non-operating revenue Less: Non-operating expenditures III. Profit before tax (or less: total loss) Less: Income tax expenses IV. Net profit (or less: net loss) (I) Net profit from continuing operations (or less: net loss) (II) Net profit from discontinued operations (or less: net loss) V. Other comprehensive income after tax (I) Not to be reclassified subsequently to profit or loss 1. Changes in remeasurement on the net defined benefit plan 2. Items under equity method that will not be reclassified to profit or loss 3. Changes in fair value of other equity instrument investments 4. Changes in fair value of own credit risk 5. Others (II) To be reclassified subsequently to profit or loss 1. Items under equity method that may be reclassified to profit or loss 2. Changes in fair value of other debt investments 3. Profit or loss from reclassification of financial assets into other comprehensive income 4. Provision for credit impairment of other debt investments 5. Cash flow hedging reserve 6. Translation reserve 7. Others VI. Total comprehensive income VII. Earnings per share (EPS): (I) Basic EPS (yuan per share) (II)Diluted EPS(yuanper share)	1 1	7,213,284.07 4,157,985.26 182,314.26 369,570.87 39,475,371.54 -26,807,548.72 39,786,911.13 52,733,916.01 46,200.00 -51,519,175.85 30,182,747.26 -89,179,102.46 -9,948,732.66 -160,765,220.11 4,001.38 6,251,989.16 -167,013,207.89 -16,043,825.23 -150,969,382.66 -150,969,382.66 -150,969,382.66	33,915,501.26 28,584,116.83 5,874,151.83 2,529,102.21 30,060,667.94 -62,072,926.77 13,591,427.20 53,003,430.82 5,031,000.00 231,319,838.67 24,371,021.87 24,375,000.00 -3,417,654.17 286,248,573.72 419.21 100,000.00 286,148,992.93 286,148,992.93 286,148,992.93 286,148,992.93



	2

Company’s legal representative： Company’s Chief Financial Officer: Head of the Company’s Accounting Ma Gang Lu Anfeng Department: Wu Shanshan

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Infore Environment Technology Group Co., Ltd.

Consolidated cash flow statement for the year ended December 31, 2020 (Expressed in Renminbi Yuan)

(Expressed in Renminbi Yuan)
Items	Note No.	Current period cumulative	Preceding period comparative
I. Cash flows from operatingactivities:	1 2 3 4	14,388,470,951.18 42,951,350.75 1,153,494,070.87 15,584,916,372.80 9,435,508,509.89 1,060,641,117.62 617,586,885.55 2,782,465,767.99 13,896,202,281.05 1,688,714,091.75 25,375,775.54 47,958,881.63 4,912,554.51 213,687,034.09 5,159,933,419.02 5,451,867,664.79 1,291,812,173.08 7,639,195.26 5,036,128,312.71 6,335,579,681.05 -883,712,016.26 64,992,660.00 64,992,660.00 5,849,194,821.72	12,887,175,130.38 31,686,156.47 881,247,180.03 13,800,108,466.88 8,905,268,694.35 838,624,632.82 839,766,913.35 1,731,698,172.34 12,315,358,412.86 1,484,750,054.02 1,495,138.38 23,794,593.10 8,674,586.32 8,017,154.08 5,069,929,517.08 5,111,910,988.96 1,256,740,258.91 30,863,232.45 4,787,670,833.27 6,075,274,324.63 -963,363,335.67 174,941,340.00 174,941,340.00 2,753,857,571.44
Cash receipts from sale ofgoods or renderingof services
Net increase of client deposit and interbank deposit
Net increase of central bank loans
Net increase of loans from other financial institutions
Cash receipts from original insurance contract premium
Net cash receipts from reinsurance
Net increase ofpolicy-holder deposit and investment

Cash receipts from interest, handling charges and commission

Net increase of loans from others
Net increase of repurchase
Net cash receipts from agencysecuritytransaction
Receipts of tax refund
Other cash receipts related to operating activities
Subtotal of cash inflows from operatingactivities
Cashpayments forgoodspurchased and services received
Net increase of loans and advances to clients
Net increase of central bank deposit and interbank deposit

Cash payments for insurance indemnities of original insurance contracts

Net increase of loans to others

Cash payments for interest, handling charges and commission

Cash payments for policy bonus
Cashpaid to and on behalf of employees
Cashpayments for taxes and rates
Other cashpayments related to operatingactivities
Subtotal of cash outflows from operatingactivities
Net cash flows from operatingactivities
II. Cash flows from investingactivities:
Cash receipts from withdrawal of investments
Cash receipts from investment income
Net cash receipts from the disposal of fixed assets, intangible assets and other
long-term assets
Net cash receipts from the disposal of subsidiaries & other business units
Other cash receipts related to investingactivities
Subtotal of cash inflows from investingactivities
Cash payments for the acquisition of fixed assets, intangible assets and other
long-term assets
Cashpayments for investments
Net increase of pledged borrowings
~~Net cash payments for the acquisition of subsidiaries & other business units~~
Other cashpayments related to investingactivities
Subtotal of cash outflows from investingactivities
Net cash flows from investingactivities
III. Cash flows from financingactivities:
Cash receipts from absorbinginvestments
Including: Cash received by subsidiaries from non-controlling shareholders as
investments
Cash receipts from borrowings

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Items	Note No.	Current period cumulative	Preceding period comparative
Other cash receipts related to financingactivities	5 6	7,880,000.00 5,922,067,481.72 4,153,395,539.94 488,778,125.98 38,041,830.99 4,680,215,496.91 1,241,851,984.81 -708,908.76 2,046,145,151.54 2,611,680,947.69 4,657,826,099.23	260,187,931.04 3,188,986,842.48 2,227,333,573.58 422,951,642.23 164,369,479.80 2,814,654,695.61 374,332,146.87 -4,004,549.31 891,714,315.91 1,719,966,631.78 2,611,680,947.69
Subtotal of cash inflows from financingactivities
Cashpayments for the repayment of borrowings
Cashpayments for distribution of dividends orprofits and for interest expenses
Including: Cash paid by subsidiaries to non-controlling shareholders as
dividend orprofit
Other cashpayments related to financingactivities
Subtotal of cash outflows from financingactivities
Net cash flows from financingactivities
IV. Effect of foreign exchange rate changes on cash & cash equivalents V. Net increase in cash and cash equivalents
Add: Openingbalance of cash and cash equivalents
VI. Closingbalance of cash and cash equivalents

Company’s legal representative： Company’s Chief Financial Officer: Head of the Company’s Accounting Ma Gang Lu Anfeng Department: Wu Shanshan

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Infore Environment Technology Group Co., Ltd. Parent company cash flow statement for the year ended December 31, 2020 (Expressed in Renminbi Yuan)

(Expressed in Renminbi Yuan)
Items	Current period cumulative	Preceding period comparative
I. Cash flows from operatingactivities:
Cash receipts from sale ofgoods and renderingof services	8,741,951.34 532,435,143.45 541,177,094.79 8,712,307.61 9,702,646.88 339,945.08 1,244,340,931.04 1,263,095,830.61 -721,918,735.82 513,687,034.09 95,158,453.24 4,883,758,860.22 5,492,604,347.55 1,135,853.50 427,739,035.26 4,870,251,731.64 5,299,126,620.40 193,477,727.15 2,497,336,184.17 6,100,000.00 2,503,436,184.17 777,500,000.00 375,434,276.64 8,920,597.83 1,161,854,874.47 1,341,581,309.70 813,140,301.03 400,848,473.92 1,213,988,774.95	17,998,824.68 652,476,441.77 670,475,266.45 33,189,961.15 7,109,509.51 29,230,723.56 1,091,355,390.42 1,160,885,584.63 -490,410,318.18 1,164,337,014.74 219,484,322.89 5,599,051,756.93 6,982,873,094.56 3,099,961.65 164,640,000.00 5,916,147,547.23 6,083,887,508.88 898,985,585.68 348,000,000.00 152,370,003.00 500,370,003.00 299,600,000.00 329,014,228.83 159,993,195.75 788,607,424.58 -288,237,421.58 120,337,845.92 280,510,628.00 400,848,473.92
Receipts of tax refund
Other cash receipts related to operatingactivities
Subtotal of cash inflows from operatingactivities
Cash payments for goods purchased and services received Cash paid to and on behalf of employees Cash payments for taxes and rates Other cashpayments related to operatingactivities
Subtotal of cash outflows from operatingactivities
Net cash flows from operatingactivities
II. Cash flows from investingactivities:
Cash receipts from withdrawal of investments Cash receipts from investment income Net cash receipts from the disposal of fixed assets, intangible assets and other long-term assets Net cash receipts from the disposal of subsidiaries & other business units Other cash receipts related to investingactivities
Subtotal of cash inflows from investingactivities
Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets Cash payments for investments Net cash payments for the acquisition of subsidiaries & other business units Other cashpayments related to investingactivities
Subtotal of cash outflows from investingactivities
Net cash flows from investingactivities
III. Cash flows from financing activities: Cash receipts from absorbing investments Cash receipts from borrowings Other cash receipts related to financingactivities
Subtotal of cash inflows from financingactivities
Cash payments for the repayment of borrowings Cash payments for distribution of dividends or profits and for interest expenses Other cashpayments related to financingactivities
Subtotal of cash outflows from financingactivities
Net cash flows from financingactivities
IV. Effect of foreign exchange rate changes on cash and cash equivalents
V. Net increase in cash and cash equivalents
Add: Openingbalance of cash and cash equivalents
VI. Closingbalance of cash and cash equivalents

Company’s legal representative： Company’s Chief Financial Officer: Head of the Company’s Accounting Ma Gang Lu Anfeng Department: Wu Shanshan

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Infore Environment Technology Group Co., Ltd.

Consolidated statement of changes in equity for the year ended December 31, 2020 (Expressed in Renminbi Yuan)

(Expressed	in Renminbi Yuan)	in Renminbi Yuan)	in Renminbi Yuan)	in Renminbi Yuan)	in Renminbi Yuan)	in Renminbi Yuan)	in Renminbi Yuan)	in Renminbi Yuan)	in Renminbi Yuan)	in Renminbi Yuan)

				Equityattributable toparent company
Share capital	Other equityinstruments			Capital reserve	Less: Treasury shares	Other comprehensi ve income	Special reserve	Surplus reserve	General risk reserve	Undistributed profit
	Preferred shares	Perpetua l bonds	Others
3,163,062,146. 00				9,698,117,762. 75	99,993,195.7 5	479,437.51		232,701,943. 56		2,520,329,621. 90




3,163,062,146. 00				9,698,117,762. 75	99,993,195.7 5	479,437.51		232,701,943. 56		2,520,329,621. 90
			266,939,831.6 5	9,624,113.74	-91,072,597. 92	-479,437.51				1,038,359,263. 65
						-479,437.51				1,386,476,099. 73
			266,939,831.6 5	9,624,113.74	-91,072,597. 92
					8,920,597.83
			266,939,831.6 5
				11,260,547.81
				-1,636,434.07	-99,993,195. 75
										-348,116,836.0 8


										-348,116,836.0 8









							8,699,413.98
							-8,699,413.9 8

3,163,062,146. 00			266,939,831.6 5	9,707,741,876. 49	8,920,597.83			232,701,943. 56		3,558,688,885. 55

Company’s Chief Financial Officer: Lu Anfeng

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Infore Environment Technology Group Co., Ltd.

Consolidated statement of changes in equity for the year ended December 31, 2020 (continued) (Expressed in Renminbi Yuan)

(Expressed	in Renminbi Yuan)	in Renminbi Yuan)	in Renminbi Yuan)	in Renminbi Yuan)	in Renminbi Yuan)	in Renminbi Yuan)	in Renminbi Yuan)	in Renminbi Yuan)	in Renminbi Yuan)	in Renminbi Yuan)

				Equityattributable toparent company
Share capital	Other equityinstruments			Capital reserve	Less: Treasury shares	Other comprehensive income	Special reserve	Surplus reserve	General risk reserve	Undistributed profit
	Preferred shares	Perpetua l bonds	Others
3,163,062,146. 00				9,601,763,095. 92		139,994,037.51		189,997,881.7 7		1,376,994,519. 12
						-140,891,625.00		14,089,162.50		126,802,462.50



3,163,062,146. 00				9,601,763,095. 92		-897,587.49		204,087,044.2 7		1,503,796,981. 62
				96,354,666.83	99,993,195.7 5	1,377,025.00		28,614,899.29		1,016,532,640. 28
						1,377,025.00				1,361,453,754. 17
				96,354,666.83	99,993,195.7 5
					99,993,195.7 5

				1,196,651.67
				95,158,015.16
								28,614,899.29		-344,921,113.8 9
								28,614,899.29		-28,614,899.29

										-316,306,214.6 0









							8,203,248.10
							-8,203,248.10

3,163,062,146. 00				9,698,117,762. 75	99,993,195.7 5	479,437.51		232,701,943.5 6		2,520,329,621. 90

Company’s Chief Financial Officer: Lu Anfeng

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Infore Environment Technology Group Co., Ltd.

Parent company statement of changes in equity for the year ended December 31, 2020 (Expressed in Renminbi Yuan)

Share capital	Other equityinstruments	Other equityinstruments	Other equityinstruments	Capital reserve	Less: Treasury shares	Surplus reserve	Undistributed profit
	Preferred shares	Perpetu al bonds	Others
3,163,062,146. 00				15,345,428,341. 90	99,993,195.7 5	198,481,554.1 4	1,001,411,231. 44



3,163,062,146. 00				15,345,428,341. 90	99,993,195.7 5	198,481,554.1 4	1,001,411,231. 44
			266,939,831.6 5	11,260,547.82	-91,072,597. 92		-498,906,218.7 2
							-150,969,382.6 6
			266,939,831.6 5	11,260,547.82	-91,072,597. 92
					8,920,597.83
			266,939,831.6 5
				11,260,547.82
					-99,993,195. 75
							-347,936,836.0 6

							-347,936,836.0 6












3,163,062,146. 00			266,939,831.6 5	15,356,688,889. 72	8,920,597.83	198,481,554.1 4	502,505,012.7 2

Company’s Chief Financial Officer: Lu Anfeng

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Infore Environment Technology Group Co., Ltd.

Parent company statement of changes in equity for the year ended December 31, 2020 (continued) (Expressed in Renminbi Yuan)

				Preceding period comparative	Preceding period comparative	Preceding period comparative
Share capital	Other equityinstruments			Capital reserve	Less: Treasury shares	Other comprehensive income	Special reserve	Surplus reserve	Undistributed profit
	Preferred shares	Perpetua l bonds	Others
3,163,062,146. 00				15,344,231,690. 23		140,891,625.0 0		155,377,168.9 5	923,086,714.2 6
						-140,891,625.0 0		14,089,162.50	126,802,462.5 0


3,163,062,146. 00				15,344,231,690. 23				169,466,331.4 5	1,049,889,176. 76
				1,196,651.67	99,993,195.7 5			29,015,222.69	-48,477,945.32
									286,148,992.9 3
				1,196,651.67	99,993,195.7 5
					99,993,195.7 5

				1,196,651.67

								28,614,899.29	-344,921,113.8 9
								28,614,899.29	-28,614,899.29
									-316,306,214.6 0











								400,323.40	10,294,175.64
3,163,062,146. 00				15,345,428,341. 90	99,993,195.7 5			198,481,554.1 4	1,001,411,231. 44

Company’s Chief Financial Officer: Lu Anfeng

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Infore Environment Technology Group Co., Ltd.

Notes to Financial Statements

For the year ended December 31, 2020

Monetary unit: RMB Yuan

I. Company profile

Infore Environment Technology Group Co., Ltd. (the “Company”), formerly known as 浙江上风实业股份有限公司 (Zhejiang Shangfeng Industrial Co., Ltd.[1] ), was registered at Zhejiang Administration for Industry and Commerce on November 18, 1993. Under the approval of Zhejiang Share System Pilot Work Coordination Group with document of approval numbered Zhe Gu [1993] 51, the Company was established by 浙江风机风冷设备公司 (Zhejiang Fan Air Cooling Equipment Co., Ltd.[] ), the main initiator, and 上虞风机厂 (Shangyu Fan Factory[] ) and 绍兴市流体工程研究所 (Shaoxing Fluid Engineering Research Institute[*] ), the joint initiators, through targeted fundraising. It is headquartered in Shaoxing City, Zhejiang Province. The Company currently holds a business license with unified social credit code of 913300006096799222. As of December 31, 2020, its registered capital is 3,163,062,146.00 yuan, a total of 3,163,062,146 shares (each with par value of 1 yuan), of which, 1,158,356,644shares are restricted outstanding shares, and 2,004,705,502 shares are unrestricted outstanding shares. The Company’s shares were listed at Shenzhen Stock Exchange on March 30, 2000.

The Company belongs to the ecological protection and environmental management industry. The main business activities include R&D, maintenance and operation services of environmental monitoring instruments and environmental sanitation equipment, environmental treatment technology development, consulting and services, operation services of environmental treatment facilities, environmental engineering, environmental protection engineering, urban engineering, sale of ventilators, air-cooling, and water-cooling and air-conditioning equipment, etc. The main product categories include sanitation vehicles and equipment, electrotechnical equipment industrial products, ventilation equipment industrial products and environmental integrated industrial services.

The financial statements were approved and authorized for issue by the 13[th] meeting of the ninth session of the Board of Directors dated April 22, 2021.

The Company has brought 136 subsidiaries and sub-subsidiaries including 长沙中联重科环境产业有限公司 (Changsha Zoomlion Environmental Industry Co., Ltd.[] , hereinafter referred to as Zoomlion Environmental Company), 浙江上风高科专风实业股份有限公司 (Zhejiang Shangfeng Hi-Tech Zhuanfeng Industrial Co., Ltd.[] , hereinafter referred to as Shangfeng Industrial Company), 广东威奇电工材料有限公司 (Guangdong Weiqi Electrical Materials Co., Ltd.[] , hereinafter referred to as Guangdong Weiqi Company),广东盈峰科技有限公司 (Guangdong Infore Technology Co., Ltd.[] , hereinafter referred to as Infore Technology Company) and 深

1 The English names are for identification purpose only.

*The English names are for identification purpose only.

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圳市绿色东方环保有限公司 (Shenzhen Green Oriental Environmental Protection Co., Ltd.[*] , hereinafter referred to as Green Oriental Company)into the consolidation scope. Please refer to section VI and VII of notes to financial statements for details.

II. Preparation basis of the financial statements

(I) Preparation basis

The financial statements have been prepared on the basis of going concern.

(II) Assessment of the ability to continue as a going concern

The Company has no events or conditions that may cast significant doubts upon the Company’s ability to continue as a going concern within the 12 months after the balance sheet date.

III. Significant accounting policies and estimates

Important note:

The Company has set up accounting policies and estimates on transactions or events such as impairment of financial instruments, depreciation of fixed assets, amortization of intangible assets, and revenue recognition, etc. based on the Company’s actual production and operation features.

(I) Statement of compliance

The financial statements have been prepared in accordance with the requirements of China Accounting Standards for Business Enterprises (CASBEs), and present truly and completely the financial position, results of operations and cash flows of the Company.

(II) Accounting period

The accounting year of the Company runs from January 1 to December 31 under the Gregorian calendar.

(III) Operating cycle

The Company has a relatively short operating cycle for its business, an asset or a liability is classified as current if it is expected to be realized or due within 12 months.

(IV) Functional currency

The Company’s functional currency is Renminbi (RMB) Yuan.

(V) Accounting treatments of business combination under and not under common control

1. Accounting treatment of business combination under common control

Assets and liabilities arising from business combination are measured at carrying amount of the combined party included in the consolidated financial statements of the ultimate controlling party at the combination date. Difference between carrying amount of the equity of the combined party included in the consolidated financial statements of the ultimate controlling party and that of the combination consideration or total par value of shares issued is adjusted to capital reserve, if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings.

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2. Accounting treatment of business combination not under common control

When combination cost is in excess of the fair value of identifiable net assets obtained from the acquiree at the acquisition date, the excess is recognized as goodwill; otherwise, the fair value of identifiable assets, liabilities and contingent liabilities, and the measurement of the combination cost are reviewed, then the difference is recognized in profit or loss.

(VI) Compilation method of consolidated financial statements

The parent company brings all its controlled subsidiaries into the consolidation scope. The consolidated financial statements are compiled by the parent company according to “CASBE 33 – Consolidated Financial Statements”, based on relevant information and the financial statements of the parent company and its subsidiaries.

(VII) Classification of joint arrangements and accounting treatment of joint operations
Joint arrangements include joint operations and joint ventures.
When the Company is a joint operator of a joint operation, it recognizes the following items in relation to its interest in a joint operation:
(1) its assets, including its share of any assets held jointly;
(2) its liabilities, including its share of any liabilities incurred jointly;
(3) its revenue from the sale of its share of the output arising from the joint operation;
(4) its share of the revenue from the sales of the assets by the joint operation; and
(5) its expenses, including its share of any expenses incurred jointly.

(VIII) Recognition criteria of cash and cash equivalents

Cash as presented in cash flow statement refers to cash on hand and deposit on demand for payment. Cash equivalents refer to short-term, highly liquid investments that can be readily converted to cash and that are subject to an insignificant risk of changes in value.

(IX) Foreign currency translation

1. Translation of transactions denominated in foreign currency

Transactions denominated in foreign currency are translated into RMB yuan at the spot exchange rate at the transaction date at initial recognition. At the balance sheet date, monetary items denominated in foreign currency are translated at the spot exchange rate at the balance sheet date with difference, except for those arising from the principal and interest of exclusive borrowings eligible for capitalization, included in profit or loss; non-cash items carried at historical costs are translated at the spot exchange rate at the transaction date, with the RMB amounts unchanged; non-cash items carried at fair value in foreign currency are translated at the spot exchange rate at the date when the fair value was determined, with difference included in profit or loss or other comprehensive income.

2. Translation of financial statements measured in foreign currency

The assets and liabilities in the balance sheet are translated into RMB at the spot rate at the balance sheet date; the

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equity items, other than undistributed profit, are translated at the spot rate at the transaction date; the revenues and expenses in the income statement are translated into RMB at the spot exchange rate at the transaction date. The difference arising from the aforementioned foreign currency translation is included in other comprehensive income.

(X) Financial instruments

1. Classification of financial assets and financial liabilities

Financial assets are classified into the following three categories when initially recognized: (1) financial assets at amortized cost; (2) financial assets at fair value through other comprehensive income; (3) financial assets at fair value through profit or loss.

Financial liabilities are classified into the following four categories when initially recognized: (1) financial liabilities at fair value through profit or loss; (2) financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies; (3) financial guarantee contracts not fall within the above categories (1) and (2), and commitments to provide a loan at a below-market interest rate, which do not fall within the above category (1); (4) financial liabilities at amortized cost.

Recognition criteria, measurement method and derecognition condition of financial assets and financial liabilities

(1) Recognition criteria and measurement method of financial assets and financial liabilities

When the Company becomes a party to a financial instrument, it is recognized as a financial asset or financial liability. The financial assets and financial liabilities initially recognized by the Company are measured at fair value; for the financial assets and liabilities at fair value through profit or loss, the transaction expenses thereof are directly included in profit or loss; for other categories of financial assets and financial liabilities, the transaction expenses thereof are included into the initially recognized amount. However, at initial recognition, for accounts receivable that do not contain a significant financing component or contracts in which the financing components with associated period less than one year are not considered, the Company measures at their transaction price in accordance with “CASBE 14 – Revenues”.

(2) Subsequent measurement of financial assets

1) Financial assets measured at amortized cost

The Company measures its financial assets at the amortized costs using effective interest method. Gains or losses on financial assets that are measured at amortized cost and are not part of hedging relationships shall be included into profit or loss when the financial assets are derecognized, reclassified, amortized using effective interest method or recognized with impairment loss.

2) Debt instrument investments at fair value through other comprehensive income

The Company measures its debt instrument investments at fair value. Interests, impairment gains or losses, and gains and losses on foreign exchange that calculated using effective interest method shall be included into profit or loss, while other gains or losses are included into other comprehensive income. Accumulated gains or losses that initially recognized as other comprehensive income should be transferred out into profit or loss when the

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financial assets are derecognized.

3) Equity instrument investments at fair value through other comprehensive income

The Company measures its equity instrument investments at fair value. Dividends obtained (other than those as part of investment cost recovery) shall be included into profit or loss, while other gains or losses are included into other comprehensive income. Accumulated gains or losses that initially recognized as other comprehensive income should be transferred out into retained earnings when the financial assets are derecognized.

4) Financial assets at fair value through profit or loss

The Company measures its financial assets at fair value. Gains or losses arising from changes in fair value (including interests and dividends) shall be included into profit or loss, except for financial assets that are part of hedging relationships.

(3) Subsequent measurement of financial liabilities

1) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities (including derivatives that are liabilities) and financial liabilities designated as at fair value through profit or loss. The Company measures such kind of liabilities at fair value. The amount of changes in the fair value of the financial liabilities that are attributable to changes in the Company’s own credit risk shall be included into other comprehensive income, unless such treatment would create or enlarge accounting mismatches in profit or loss. Other gains or losses on those financial liabilities (including interests, changes in fair value that are attributable to

reasons other than changes in the Company’s own credit risk) shall be included into profit or loss, except for financial liabilities that are part of hedging relationships. Accumulated gains or losses that originally recognized as other comprehensive income should be transferred out into retained earnings when the financial liabilities are derecognized.

2) Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies

The Company measures its financial liabilities in accordance with “CASBE 23 – Transfer of Financial Assets”.

3)Financial guarantee contracts not fall within the above categories 1) and 2), and commitments to provide a loan at a below-market interest rate, which do not fall within the above category 1)

The Company measures its financial liabilities at the higher of: a. the amount of loss allowances in accordance with impairment requirements of financial instruments; b. the amount initially recognized less the amount of accumulated amortization recognized in accordance with “CASBE 14 – Revenues”.

4) Financial liabilities at amortized cost

The Company measures its financial liabilities at amortized cost using effective interest method. Gains or losses on financial liabilities that are measured at amortized cost and are not part of hedging relationships shall be included into profit or loss when the financial liabilities are derecognized and amortized using effective interest method.

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(4) Derecognition of financial assets and financial liabilities

1) Financial assets are derecognized when:

a. the contractual rights to the cash flows from the financial assets expire; or

b. the financial assets have been transferred and the transfer qualifies for derecognition in accordance with “CASBE 23 – Transfer of Financial Assets”.

2) Only when the underlying present obligations of a financial liability are relieved totally or partly may the financial liability be derecognized accordingly.

3. Recognition criteria and measurement method of financial assets transfer

Where the Company has transferred substantially all of the risks and rewards related to the ownership of the financial asset, it derecognizes the financial asset, and any right or liability arising from such transfer is recognized independently as an asset or a liability. If it retained substantially all of the risks and rewards related to the ownership of the financial asset, it continues recognizing the financial asset. Where the Company does not transfer or retain substantially all of the risks and rewards related to the ownership of a financial asset, it is dealt with according to the circumstances as follows respectively: (1) if the Company does not retain its control over the financial asset, it derecognizes the financial asset, and any right or liability arising from such transfer is recognized independently as an asset or a liability; (2) if the Company retains its control over the financial asset, according to the extent of its continuing involvement in the transferred financial asset, it recognizes the related financial asset and recognizes the relevant liability accordingly.

If the transfer of an entire financial asset satisfies the conditions for derecognition, the difference between the amounts of the following two items are included in profit or loss: (1) the carrying amount of the transferred financial asset as of the date of derecognition; (2) the sum of consideration received from the transfer of the financial asset, and the accumulative amount of the changes of the fair value originally included in other comprehensive income proportionate to the transferred financial asset (financial assets transferred refer to debt instrument investments at fair value through other comprehensive income). If the transfer of financial asset partially satisfies the conditions to derecognition, the entire carrying amount of the transferred financial asset is, between the portion which is derecognized and the portion which is not, apportioned according to their respective relative fair value, and the difference between the amounts of the following two items are included into profit or loss: (1) the carrying amount of the portion which is derecognized; (2) the sum of consideration of the portion which is derecognized, and the portion of the accumulative amount of the changes in the fair value originally included in other comprehensive income which is corresponding to the portion which is derecognized (financial assets transferred refer to debt instrument investments at fair value through other comprehensive income).

4. Fair value determination method of financial assets and liabilities

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value. The inputs to valuation techniques used to measure fair value are arranged in the following hierarchy and used accordingly:

(1) Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the

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Company can access at the measurement date.

(2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability, for example, interest rates and yield curves observable at commonly quoted intervals; market-corroborated inputs;

(3) Level 3 inputs are unobservable inputs for the asset or liability. Level 3 inputs include interest rate that is not observable and cannot be corroborated by observable market data at commonly quoted intervals, historical volatility, future cash flows to be paid to fulfill the disposal obligation assumed in business combination, and financial forecast developed using the Company’s own data, etc.

5. Impairment of financial instruments

(1) Measurement and accounting treatment

The Company, on the basis of expected credit loss, recognizes loss allowances of financial assets at amortized cost, debt instrument investments, contract assets or leases receivable at fair value through other comprehensive income, loan commitments other than financial liabilities at fair value through profit or loss, financial guarantee contracts not belong to financial liabilities at fair value through profit or loss or financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies.

Expected credit losses refer to the weighted average of credit losses with the respective risks of a default occurring as the weights. Credit loss refers to the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate. Among which, purchased or originated credit-impaired financial assets are discounted at the credit-adjusted effective interest rate.

At the balance sheet date, the Company shall only recognize the cumulative changes in the lifetime expected credit losses since initial recognition as a loss allowance for purchased or originated credit-impaired financial assets.

For accounts receivable and contract assets that do not contain a significant financing component or financing components in contracts with associated period less than one year that are not considered by the Company, which result from transactions as regulated in “CASBE 14 – Revenues”, the Company chooses simplified approach to measure the loss allowance at an amount equal to lifetime expected credit losses.

For lease receivables, accounts receivable and contract assets that result from transactions as regulated in “CASBE 14 – Revenues” and contain a significant financing component, the Company chooses simplified approach to measure the loss allowance at an amount equal to lifetime expected credit losses.

For financial assets other than the above, on each balance sheet date, the Company shall assess whether the credit risk on the financial instrument has increased significantly since initial recognition. The Company shall measure the loss allowance for the financial instrument at an amount equal to the lifetime expected credit losses if the

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credit risk on that financial instrument has increased significantly since initial recognition; otherwise, the Company shall measure the loss allowance for that financial instrument at an amount equal to 12-month expected credit loss.

Considering reasonable and supportable forward-looking information, the Company compares the risk of a default occurring on the financial instrument as at the balance sheet date with the risk of a default occurring on the financial instrument as at the date of initial recognition, so as to assess whether the credit risk on the financial instrument has increased significantly since initial recognition.

The Company may assume that the credit risk on a financial instrument has not increased significantly since initial recognition if the financial instrument is determined to have relatively low credit risk at the balance sheet date.

The Company shall estimate expected credit risk and measure expected credit losses on an individual or a collective basis. When the Company adopts the collective basis, financial instruments are grouped with similar credit risk features.

The Company shall remeasure expected credit loss on each balance sheet date, and increased or reversed amounts of loss allowance arising therefrom shall be included into profit or loss as impairment losses or gains. For a financial asset measured at amortized cost, the loss allowance reduces the carrying amount of such financial asset presented in the balance sheet; for a debt investment measured at fair value through other comprehensive income, the loss allowance shall be recognized in other comprehensive income and shall not reduce the carrying amount of such financial asset.

(2) Financial instruments with expected credit risk assessed and expected credit losses measured on a collective basis

basis
Items	Basis for determination of portfolio	Method for measuring expected credit loss
Other receivables – Portfolio grouped with balance due from related parties within the consolidation scope	Balance due from related parties within the consolidation scope	Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates expected credit loss through exposure at default and 12-month or lifetime expected credit loss rate.
Other receivables – Portfolio grouped with ages	Ages	Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates expected credit loss through exposure at default and 12-month or lifetime expected credit loss rate.
Long-term receivables – Portfolio grouped with equity transfer payment received in installments	Nature of the balance	Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates expected credit loss through exposure at default and 12-month or lifetime expected credit loss rate.
Long-term receivables – Portfolio grouped with finance lease payment/ Accounts receivable – Commercial factoring payment	Nature of the balance	Managed by five-level classification of credit assets of non-bank financial institutions and expected credit loss rates are calculated accordingly: 1.5% for pass category, 3% for special-mention category, 30% for substandard category, 60% for doubtful category,and 100% for loss category

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(3) Accounts receivable and contract assets with expected credit losses measured on a collective basis

1) Specific portfolios and method for measuring expected credit loss

Items	Basis for determination of portfolio	Method for measuring expected credit loss
Bank acceptance receivable	Type of notes	Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates expected credit loss through exposure at default and lifetime expected credit loss rate.
Trade acceptance receivable
Accounts receivable – Portfolio grouped with balance due from related parties within the consolidation scope	Balance due from related parties within the consolidation scope	Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates expected credit loss through exposure at default and lifetime expected credit loss rate.
Accounts receivable – Portfolio grouped with ages	Nature of the balance	Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company prepares the comparable table between overdue days/ages and lifetime expected credit loss rate, and calculates expected credit loss of theportfolio.
Contract assets – Portfolio grouped with ages	Nature of the balance	Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company prepares the comparable table between overdue days/ages and lifetime expected credit loss rate, and calculates expected credit loss of theportfolio.
Long-term receivables – Portfolio grouped with ages	Nature of the balance	For long-term receivables within the credit period that has not reached the contractual payment deadline, provision for bad debts is accrued at 5% of the balance. For long-term receivables that have exceeded the contractual payment deadline and have not yet been paid, provision for bad debts is accrued based on the age of the balance.

2) Accounts receivable – comparison table of ages and lifetime expected credit loss rate of portfolio grouped with ages
① Parent company and electrotechnical equipment manufacturing industry

①Parent company and electrotechnical equipm	ent manufacturing industry
Ages	Expected credit loss rate of accounts receivable(%)	Expected credit loss rate of other receivables(%)
1-180 days (inclusive, the same hereinafter)	0	0
180 days-1 year	2	2
1-2 years	10	10
2-3 years	30	30
3-5 years	50	50
Over 5 years	80	80

② Ventilation equipment manufacturing industry and environmental integrated industry

②Ventilation equipment manufacturing indust	ry and environmental integrated ind	ustry
Ages	Expected credit loss rate of accounts receivable(%)	Expected credit loss rate of other receivables(%)
Within 1 year (inclusive, the same hereinafter)	5	5
1-2 years	10	10

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2-3 years	30	30
3-5 years	50	50
Over 5 years	100	100

6. Offsetting financial assets and financial liabilities

Financial assets and financial liabilities are presented separately in the balance sheet and are not offset. However, the Company offsets a financial asset and a financial liability and presents the net amount in the balance sheet when, and only when, the Company: (a) currently has a legally enforceable right to set off the recognized amounts; and (b) intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

For a transfer of a financial asset that does not qualify for derecognition, the Company does not offset the transferred asset and the associated liability.

(XI) Inventories

1. Classification of inventories

Inventories include finished goods or goods held for sale in the ordinary course of business, work in process in the process of production, and materials or supplies etc. to be consumed in the production process or in the rendering of services.

2. Accounting method for dispatching inventories:

Inventories dispatched from storage are accounted for with weighted average method.

3. Basis for determining net realizable value

At the balance sheet date, inventories are measured at the lower of cost and net realizable value; provisions for inventory write-down are made on the excess of its cost over the net realizable value. The net realizable value of inventories held for sale is determined based on the amount of the estimated selling price less the estimated selling expenses and relevant taxes and surcharges in the ordinary course of business; the net realizable value of materials to be processed is determined based on the amount of the estimated selling price less the estimated costs of completion, selling expenses and relevant taxes and surcharges in the ordinary course of business; at the balance sheet date, when only part of the same item of inventories have agreed price, their net realizable value is determined separately and is compared with their costs to set the provision for inventory write-down to be made or reversed.

4. Inventory system

Perpetual inventory method is adopted.

5. Amortization method of low-value consumables and packages

(1) Low-value consumables

Low-value consumables are amortized with one-off method.

(2) Packages

Packages are amortized with one-off method.

(XII) Contract costs

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Assets related to contract costs including costs of obtaining a contract and costs to fulfil a contract.

The Company recognizes as an asset the incremental costs of obtaining a contract if those costs are expected to be recovered. The costs of obtaining a contract shall be included into profit or loss when incurred if the amortization period of the asset is one year or less.

If the costs incurred in fulfilling a contract are not within the scope of standards related to inventories, fixed assets or intangible assets, etc., the Company shall recognize the costs to fulfil a contract as an asset if all the following criteria are satisfied:

The costs relate directly to a contract or to an anticipated contract, including direct labor, direct materials, manufacturing overhead cost (or similar cost), cost that are explicitly chargeable to the customer under the contract, and other costs that are only related to the contract;
The costs enhance resources of the Company that will be used in satisfying performance obligations in the future; and

3. The costs are expected to be recovered.

An asset related to contract costs shall be amortized on a systematic basis that is consistent with related goods or services, with amortization included into profit or loss.

The Company shall make provision for impairment and recognize an impairment loss to the extent that the carrying amount of an asset related to contract costs exceeds the remaining amount of consideration that the Company expects to receive in exchange for the goods or services to which the asset relates less the costs expected to be incurred. The Company shall recognize a reversal of an impairment loss previously recognized in profit or loss when the impairment conditions no longer exist or have improved. The carrying amount of the asset after the reversal shall not exceed the amount that would have been determined on the reversal date if no provision for impairment had been made previously.

(XIII) Non-current assets or disposal groups classified as held for sale

Classification of non-current assets or disposal groups as held for sale

Non-current assets or disposal groups are accounted for as held for sale when the following conditions are all met: a. the asset must be available for immediate sale in its present condition subject to terms that are usual and customary for sales of such assets or disposal groups; b. its sales must be highly probable, i.e., the Company has made a decision on the sale plan and has obtained a firm purchase commitment, and the sale is expected to be completed within one year.

When the Company acquires a non-current asset or disposal group with a view to resale, it shall classify the non-current asset or disposal group as held for sale at the acquisition date only if the requirement of “expected to be completed within one year” is met at that date and it is highly probable that other criteria for held for sale will be met within a short period (usually within three months).

An asset or a disposal group is still accounted for as held for sale when the Company remains committed to its

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plan to sell the asset or disposal group in the circumstance that non-related party transactions fail to be completed within one year due to one of the following reasons: a. a buyer or others unexpectedly set conditions that will extend the sale period, while the Company has taken timely actions to respond to the conditions and expects a favorable resolution of the delaying factors within one year since the setting; (2) a non-current asset or disposal group classified as held for sale fails to be sold within one year due to rare cases, and the Company has taken action necessary to respond to the circumstances during the initial one-year period and the criteria for held for sale are met.

2. Measurement of non-current assets or disposal groups as held for sale

(1) Initial measurement and subsequent measurement

For initial measurement and subsequent measurement as at the balance sheet date of a non-current asset or disposal group as held for sale, where the carrying amount is higher than the fair value less costs to sell, the carrying amount is written down to the fair value less costs to sell, and the write-down is recognized in profit or loss as assets impairment loss, meanwhile, provision for impairment of assets as held for sale shall be made.

For a non-current asset or disposal group classified as held for sale at the acquisition date, the asset or disposal group is measured on initial recognition at the lower of its initial measurement amount had it not been so classified and fair value less costs to sell. Apart from the non-current asset or disposal group acquired through business combination, the difference arising from the initial recognition of a non-current asset or disposal group at the fair value less costs to sell shall be included into profit or loss.

The assets impairment loss recognized for a disposal group as held for sale shall reduce the carrying amount of goodwill in the disposal group first, and then reduce its carrying amount based on the proportion of each non-current asset’s carrying amount in the disposal group.

No provision for depreciation or amortization shall be made on non-current assets as held for sale or non-current assets in disposal groups as held for sale, while interest and other expenses attributable to the liabilities of a disposal group as held for sale shall continue to be recognized.

(2) Reversal of assets impairment loss

When there is a subsequent increase in fair value less costs to sell of a non-current asset as held for sale at the balance sheet date, the write-down shall be recovered, and shall be reversed not in excess of the impairment loss that has been recognized after the non-current asset was classified as held for sale. The reversal shall be included into profit or loss. Assets impairment loss that has been recognized before the classification is not reversed.

When there is a subsequent increase in fair value less costs to sell of a disposal group as held for sale at the balance sheet date, the write-down shall be recovered, and shall be reversed not in excess of the non-current assets impairment loss that has been recognized after the disposal group was classified as held for sale. The reversal shall be included into profit or loss. The reduced carrying amount of goodwill and non-current assets impairment loss that has been recognized before the classification is not reversed.

For the subsequent reversal of the impairment loss that has been recognized in a disposal group as held for sale,

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the carrying amount is increased based on the proportion of carrying amount of each non-current asset (excluding goodwill) in the disposal group.

(3) Non-current asset or disposal group that is no longer classified as held for sale and derecognized

A non-current asset or disposal group that does not met criteria for held for sale and no longer classified as held for sale, or a non-current asset that removed from a disposal group as held for sale shall be measured at the lower of: a. its carrying amount before it was classified as held for sale, adjusted for any depreciation, amortization or impairment that would have been recognized had it not been classified as held for sale; and b. its recoverable amount.

When a non-current asset or disposal group classified as held for sale is derecognized, unrecognized gains or losses shall be included into profit or loss.

(XIV) Long-term equity investments

1. Judgment of joint control and significant influence

Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control of these policies.

2. Determination of investment cost

(1) For business combination under common control, if the consideration of the combining party is that it makes payment in cash, transfers non-cash assets, assumes its liabilities or issues equity securities, on the date of combination, it regards the share of the carrying amount of the equity of the combined party included in the consolidated financial statements of the ultimate controlling party as the initial cost of the investment. The difference between the initial cost of the long-term equity investments and the carrying amount of the combination consideration paid or the par value of shares issued offsets capital reserve; if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings.

When long-term equity investments are obtained through business combination under common control achieved in stages, the Company determines whether it is a “bundled transaction”. If it is a “bundled transaction”, stages as a whole are considered as one transaction in accounting treatment. If it is not a “bundled transaction”, on the date of combination, investment cost is initially recognized at the share of the carrying amount of net assets of the combined party included the consolidated financial statements of the ultimate controlling party. The difference between the initial investment cost of long-term equity investments at the acquisition date and the carrying amount of the previously held long-term equity investments plus the carrying amount of the consideration paid for the newly acquired equity is adjusted to capital reserve; if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings.

(2) For business combination not under common control, investment cost is initially recognized at the acquisition-date fair value of considerations paid.

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When long-term equity investments are obtained through business combination not under common control achieved in stages, the Company determined whether they are stand-alone financial statements or consolidated financial statements in accounting treatment:

1) In the case of stand-alone financial statements, investment cost is initially recognized at the carrying amount of the previously held long-term equity investments plus the carrying amount of the consideration paid for the newly acquired equity.

2) In the case of consolidated financial statements, the Company determines whether it is a “bundled transaction”. If it is a “bundled transaction”, stages as a whole are considered as one transaction in accounting treatment. If it is not a “bundled transaction”, the carrying amount of the acquirer’s previously held equity interest in the acquiree is remeasured at the acquisition-date fair value, and the difference between the fair value and the carrying amount is recognized in investment income; when the acquirer’s previously held equity interest in the acquiree involves other comprehensive income under equity method, the related other comprehensive income is reclassified as income for the acquisition period, excluding other comprehensive income arising from changes in net liabilities or assets from remeasurement of defined benefit plan of the acquiree.

(3) Long-term equity investments obtained through ways other than business combination: the initial cost of a long-term equity investment obtained by making payment in cash is the purchase cost which is actually paid; that obtained on the basis of issuing equity securities is the fair value of the equity securities issued; that obtained through debt restructuring is determined according to “CASBE 12 – Debt Restructuring”; and that obtained through non-cash assets exchange is determined according to “CASBE 7 – Non-cash Assets Exchange”.

3. Subsequent measurement and recognition method of profit or loss

For long-term equity investments with control relationship, it is accounted for with cost method; for long-term equity investments with joint control or significant influence relationship, it is accounted for with equity method.

Disposal of a subsidiary in stages resulting in the Company’s loss of control

(1) Stand-alone financial statements

The difference between the carrying amount of the disposed equity and the consideration obtained thereof is recognized in profit or loss. If the disposal does not result in the Company’s loss of significant influence or joint control, the remained equity is accounted for with equity method; however, if the disposal results in the Company’s loss of control, joint control, or significant influence, the remained equity is accounted for according to “CASBE 22 – Financial Instruments: Recognition and Measurement”.

(2) Consolidated financial statements

1) Disposal of a subsidiary in stages not qualified as “bundled transaction” resulting in the Company’s loss of control

Before the Company’s loss of control, the difference between the disposal consideration and the proportionate share of net assets in the disposed subsidiary from acquisition date or combination date to the disposal date is adjusted to capital reserve (capital premium), if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings.

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When the Company loses control, the remained equity is remeasured at the loss-of-control-date fair value. The aggregated value of disposal consideration and the fair value of the remained equity, less the share of net assets in the disposed subsidiary held before the disposal from the acquisition date or combination date to the disposal date is recognized in investment income in the period when the Company loses control over such subsidiary, and meanwhile goodwill is offset correspondingly. Other comprehensive income related to equity investments in former subsidiary is reclassified as investment income upon the Company’s loss of control.

2) Disposal of a subsidiary in stages qualified as “bundled transaction” resulting in the Company’s loss of control In case of “bundled transaction”, stages as a whole are considered as one transaction resulting in loss of control in accounting treatment. However, before the Company loses control, the difference between the disposal consideration at each stage and the proportionate share of net assets in the disposed subsidiary is recognized as other comprehensive income at the consolidated financial statements and reclassified as profit or loss in the period when the Company loses control over such subsidiary.

(XV) Investment property

Investment property includes land use right of leased-out property and of property held for capital appreciation and buildings that have been leased out.
The initial measurement of investment property is based on its cost, and subsequent measurement is made using the cost model, the depreciation or amortization method is the same as that of fixed assets and intangible assets.

(XVI) Fixed assets

1. Recognition principles of fixed assets

Fixed assets are tangible assets held for use in the production of goods or rendering of services, for rental to others, or for administrative purposes, and expected to be used during more than one accounting year. Fixed assets are recognized if, and only if, it is probable that future economic benefits associated with the assets will flow to the Company and the cost of the assets can be measured reliably.

2. Depreciation method of different categories of fixed assets

2. Depreciation method	of different categories	of fixed assets
Categories	Depreciation method	Useful life (years)	Residual value proportion (%)	Annual depreciation rate (%)
Buildings and structures	Straight-line method	3-35	3-5	1.90-19.40
General equipment	Straight-line method	3-5	3-5	9.50-32.33
Special equipment	Straight-line method	2-15	0-5	6.33-47.50
Transport facilities	Straight-line method	3-15	3-5	9.50-32.33
Other equipment	Straight-line method	3-10	5	9.50-31.67

(XVII) Construction in progress

Construction in progress is recognized if, and only if, it is probable that future economic benefits associated

with the item will flow to the Company, and the cost of the item can be measured reliably. Construction in progress is measured at the actual cost incurred to reach its designed usable conditions.

Construction in progress is transferred into fixed assets at its actual cost when it reaches the designed usable conditions. When the auditing of the construction in progress was not finished while reaching the designed usable

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conditions, it is transferred to fixed assets using estimated value first, and then adjusted accordingly when the actual cost is settled, but the accumulated depreciation is not to be adjusted retrospectively.

(XVIII) Borrowing costs

1. Recognition principle of borrowing costs capitalization

Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and construction or production of assets eligible for capitalization, it is capitalized and included in the costs of relevant assets; other borrowing costs are recognized as expenses on the basis of the actual amount incurred, and are included in profit or loss.

2. Borrowing costs capitalization period

(1) The borrowing costs are not capitalized unless the following requirements are all met: 1) the asset disbursements have already incurred; 2) the borrowing costs have already incurred; and 3) the acquisition and construction or production activities which are necessary to prepare the asset for its intended use or sale have already started.

(2) Suspension of capitalization: where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs is suspended; the borrowing costs incurred during such period are recognized as expenses, and are included in profit or loss, till the acquisition and construction or production of the asset restarts.

(3) Ceasing of capitalization: when the qualified asset under acquisition and construction or production is ready for the intended use or sale, the capitalization of the borrowing costs is ceased.

3. Capitalization rate and capitalized amount of borrowing costs

For borrowings exclusively for the acquisition and construction or production of assets eligible for capitalization, the to-be-capitalized amount of interests is determined in light of the actual interest expenses incurred (including amortization of premium or discount based on effective interest method) of the special borrowings in the current period less the interest income on the unused borrowings as a deposit in the bank or as a temporary investment; where a general borrowing is used for the acquisition and construction or production of assets eligible for capitalization, the Company calculates and determines the to-be-capitalized amount of interests on the general borrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements less the general borrowing by the capitalization rate of the general borrowing used.

(XIX) Intangible assets

Intangible assets include land use right, patent right and non-patented technology etc. The initial measurement of intangible assets is based on its cost.
For intangible assets with finite useful lives, their amortization amounts are amortized within their useful lives systematically and reasonably, if it is unable to determine the expected realization pattern reliably, intangible assets are amortized by the straight-line method with details as follows:

Items Amortization period (years)

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Items	Amortization period (years)
Franchise	Contractual term
Land use right	35-50
Proprietary technology	Economic life cycle
Software	3-10
Other	5

Expenditures on the research phase of an internal project are recognized as profit or loss when they are incurred. An intangible asset arising from the development phase of an internal project is recognized if the Company can demonstrate all of the followings: (1) the technical feasibility of completing the intangible asset so that it will be available for use or sale; (2) its intention to complete the intangible asset and use or sell it; (3) how the intangible asset will generate probable future economic benefits, among other things, the Company can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset; (4) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and (5) its ability to measure reliably the expenditure attributable to the intangible asset during its development.

Criteria for distinguishing the research phase from the development phase of an internal project to create an intangible asset:

The planned investigation phase for acquiring new technology and knowledge should be defined as the research phase, which has the characteristics of planning and exploratory nature; before commercial production or use, when the research results or other knowledge are applied to a certain plan or design with the intention to produce new or substantially improved materials, devices, products, etc., such stage should be determined as the development phase, which has the characteristics of pertinence and greater possibility of forming results. The Company divides the research and development phases by forming the prototype drawing and starting the prototype trial production. Expenditures in the research phase of internal research and development projects are included in profit or loss when they incur. When the Company enters the development phase, project expenditures are first calculated by projects under “development expenditure”, and if the capitalization conditions are met, they are reported as development expenditures in the financial statements. The project will be transferred to intangible assets when the project has the conditions for sale or mass production.

(XX) Impairment of part of long-term assets

For long-term assets such as long-term equity investments, investment property at cost model, fixed assets, construction in progress, intangible assets with finite useful lives, etc., if at the balance sheet date there is indication of impairment, the recoverable amount is to be estimated. For goodwill recognized in business combination and intangible assets with indefinite useful lives, no matter whether there is indication of impairment, impairment test is performed annually. Impairment test on goodwill is performed on related asset group or asset group portfolio.

When the recoverable amount of such long-term assets is lower than their carrying amount, the difference is recognized as provision for assets impairment through profit or loss.

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(XXI) Long-term prepayments

Long-term prepayments are expenses that have been recognized but with amortization period over one year (excluding one year). They are recorded with actual cost, and evenly amortized within the beneficiary period or stipulated period. If items of long-term prepayments fail to be beneficial to the following accounting periods, residual values of such items are included in profit or loss.

(XXII) Employee benefits

Employee benefits include short-term employee benefits, post-employment benefits, termination benefits and other long-term employee benefits.

2. Short-term employee benefits

The Company recognizes, in the accounting period in which an employee provides service, short-term employee benefits actually incurred as liabilities, with a corresponding charge to profit or loss or the cost of a relevant asset.

3. Post-employment benefits

The Company classifies post-employment benefit plans as either defined contribution plans or defined benefit plans.

(1) The Company recognizes in the accounting period in which an employee provides service the contribution payable to a defined contribution plan as a liability, with a corresponding charge to profit or loss or the cost of a relevant asset.

(2) Accounting treatment by the Company for defined benefit plan usually involves the following steps:

1) In accordance with the projected unit credit method, using unbiased and mutually compatible actuarial assumptions to estimate related demographic variables and financial variables, measure the obligations under the defined benefit plan, and determine the periods to which the obligations are attributed. Meanwhile, the Company discounts obligations under the defined benefit plan to determine the present value of the defined benefit plan obligations and the current service cost;

2) When a defined benefit plan has assets, the Company recognizes the deficit or surplus by deducting the fair value of defined benefit plan assets from the present value of the defined benefit plan obligation as a net defined benefit plan liability or net defined benefit plan asset. When a defined benefit plan has a surplus, the Company measures the net defined benefit plan asset at the lower of the surplus in the defined benefit plan and the asset ceiling;

3) At the end of the period, the Company recognizes the following components of employee benefits cost arising from defined benefit plan: a. service cost; b. net interest on the net defined benefit plan liability (asset); and c. changes as a result of remeasurement of the net defined benefit liability (asset). Item a and item b are recognized in profit or loss or the cost of a relevant asset. Item c is recognized in other comprehensive income and is not to be reclassified subsequently to profit or loss. However, the Company may transfer those amounts recognized in other comprehensive income within equity.

Termination benefits

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Termination benefits provided to employees are recognized as an employee benefit liability for termination benefits, with a corresponding charge to profit or loss at the earlier of the following dates: a. when the Company cannot unilaterally withdraw the offer of termination benefits because of an employment termination plan or a curtailment proposal; or b. when the Company recognizes cost or expenses related to a restructuring that involves the payment of termination benefits.

5. Other long-term employee benefits

When other long-term employee benefits provided to the employees satisfied the conditions for classifying as a defined contribution plan, those benefits are accounted for in accordance with the requirements relating to defined contribution plan, while other benefits are accounted for in accordance with the requirements relating to defined benefit plan. The Company recognizes the cost of employee benefits arising from other long-term employee benefits as the followings: a. service cost; b. net interest on the net liability or net assets of other long-term employee benefits; and c. changes as a result of remeasurement of the net liability or net assets of other long-term employee benefits. As a practical expedient, the net total of the aforesaid amounts is recognized in profit or loss or included in the cost of a relevant asset.

(XXIII) Provisions

Provisions are recognized when fulfilling the present obligations arising from contingencies such as providing guarantee for other parties, litigation, products quality guarantee, onerous contract, etc., may cause the outflow of the economic benefit and such obligations can be reliably measured.
The initial measurement of provisions is based on the best estimated expenditures required in fulfilling the present obligations, and its carrying amount is reviewed at the balance sheet date.

(XXIV) Share-based payment

1. Types of share-based payment

Share-based payment consists of equity-settled share-based payment and cash-settled share-based payment.

2. Accounting treatment for settlements, modifications and cancellations of share-based payment plans

(1) Equity-settled share-based payment

For equity-settled share-based payment transaction with employees, if the equity instruments granted vest immediately, the fair value of those equity instruments is measured at grant date and recognized as transaction cost or expense, with a corresponding adjustment in capital reserve; if the equity instruments granted do not vest until the counterparty completes a specified period of service, at the balance sheet date within the vesting period, the fair value of those equity instruments measured at grant date based on the best estimate of the number of equity instruments expected to vest is recognized as transaction cost or expense, with a corresponding adjustment in capital reserve.

For equity-settled share-based payment transaction with parties other than employees, if the fair value of the services received can be measured reliably, the fair value is measured at the date the Company receives the service; if the fair value of the services received cannot be measured reliably, but that of equity instruments can be measured reliably, the fair value of the equity instruments granted measured at the date the Company receives the

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service is referred to, and recognized as transaction cost or expense, with a corresponding increase in equity.

(2) Cash-settled share-based payment

For cash-settled share-based payment transactions with employees, if share appreciation rights vest immediately, the fair value of the liability incurred as the acquisition of services is measured at grant date and recognized as transaction cost or expense, with a corresponding increase in liabilities; if share appreciation rights do not vest until the employees have completed a specified period of service, the liability is measured, at each balance sheet date until settled, at the fair value of the share appreciation rights measured at grant date based on the best estimate of the number of share appreciation right expected to vest.

(3) Modifications and cancellations of share-based payment plan

If the modification increases the fair value of the equity instruments granted, the Company includes the incremental fair value granted in the measurement of the amount recognized for services received as consideration for the equity instruments granted; similarly, if the modification increases the number of equity instruments granted, the Company includes the fair value of the additional equity instruments granted, in the measurement of the amount recognized for services received as consideration for the equity instruments granted; if the Company modifies the vesting conditions in a manner that is beneficial to the employee, the Company takes the modified vesting conditions into account.

If the modification reduces the fair value of the equity instruments granted, the Company does not take into account that decrease in fair value and continue to measure the amount recognized for services received as consideration for the equity instruments based on the grant date fair value of the equity instruments granted; if the modification reduces the number of equity instruments granted to an employee, that reduction is accounted for as a cancellation of that portion of the grant; if the Company modifies the vesting conditions in a manner that is not beneficial to the employee, the Company does not take the modified vesting conditions into account.

If the Company cancels or settles a grant of equity instruments during the vesting period (other than that cancelled when the vesting conditions are not satisfied), the Company accounts for the cancellation or settlement as an acceleration of vesting, and therefore recognizes immediately the amount that otherwise would have been recognized for services received over the remainder of the vesting period.

(XXV) Other financial instruments such as preferred shares and perpetual bonds

Pursuant to CASBEs on financial instruments, “Regulations on Distinguishing Financial Liabilities and Equity Instruments and Related Accounting Treatments” numbered Cai Kuai [2014] 13, and “Regulations on Accounting Treatments of Perpetual Bonds” numbered Cai Kuai [2019] 2 by Ministry of Finance (MOF), for financial instruments such as convertible bonds etc., the Company classifies a financial instrument or its components at initial recognition as a financial asset or liability or equity instrument, based on contract terms and economic essence it reveals instead of its legal form, combining with the definitions of financial asset, liability and equity instrument.

At the balance sheet date, for a financial instrument classified as an equity instrument, its interest expenditure or dividend distribution is treated as profit distribution, and share repurchase and cancelation are treated as changes

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in equity; for a financial instrument classified as a financial liability, its interest expenditure or dividend distribution is treated as borrowing expense, and gain or loss on repurchase or redemption is included in profit or loss.

(XXVI) Revenue

1. Revenue recognition principles

At contract inception, the Company shall assess the contracts and shall identify each performance obligation in the contracts, and determine whether the performance obligation should be satisfied over time or at a point in time.

The Company satisfies a performance obligation over time if one of the following criteria are met, otherwise, the performance obligation is satisfied at a point in time: (1) the customer simultaneously receives and consumes the economic benefits provided by the Company’s performance as the Company performs; (2) the customer can control goods as they are created by the Company’s performance; (3) goods created during the Company’s performance have irreplaceable uses and the Company has an enforceable right to receive the payments for performance completed to date during the whole contract period.

For each performance obligation satisfied over time, the Company shall recognize revenue over time by measuring the progress towards complete satisfaction of that performance obligation. In the circumstance that the progress cannot be measured reasonably, but the costs incurred in satisfying the performance obligation are expected to be recovered, the Company shall recognize revenue only to the extent of the costs incurred until it can reasonably measure the progress. For each performance obligation satisfied at a point in time, the Company shall recognize revenue at the time point that the client obtains control of relevant goods or services. To determine whether the customer has obtained control of goods, the Company shall consider the following indications: (1) the Company has a present right to payment for the goods, i.e., the customer is presently obliged to pay for the goods; (2) the Company has transferred the legal title of the goods to the customer, i.e., the customer has legal title to the goods; (3) the Company has transferred physical possession of the goods to the client, i.e., the customer has physically possessed the goods; (4) the Company has transferred significant risks and rewards of ownership of the goods to the client, i.e., the customer has obtained significant risks and rewards of ownership of the goods; (5) the customer has accepted the goods; (6) other evidence indicating the customer has obtained control over the goods.

2. Revenue measurement principle

(1) Revenue is measured at the amount of the transaction price that is allocated to each performance obligation. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer, excluding amounts collected on behalf of third parties and those expected to be refunded to the customer.

(2) If the consideration promised in a contract includes a variable amount, the Company shall confirm the best estimate of variable consideration at expected value or the most likely amount. However, the transaction price that includes the amount of variable consideration only to the extent that it is high probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

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(3) In the circumstance that the contract contains a significant financing component, the Company shall determine the transaction price based on the price that a customer would have paid for if the customer had paid cash for obtaining control over those goods or services. The difference between the transaction price and the amount of promised consideration is amortized under effective interest method over contractual period. The effects of a significant financing component shall not be considered if the Company expects, at the contract inception, that the period between when the customer obtains control over goods or services and when the customer pays consideration will be one year or less.

(4) For contracts containing two or more performance obligations, the Company shall determine the stand-alone selling price at contract inception of the distinct good underlying each performance obligation and allocate the transaction price to each performance obligation on a relative stand-alone selling price basis.

3. Revenue recognition method

The Company mainly sells electromagnetic wires, ventilation equipment, environment and sanitation machinery, etc., and engages in environmental integrated sanitation management and operation business and provides supporting financial services.

(1) Sale of electromagnetic wires and ventilation equipment is a performance obligation satisfied at a point in time. Revenue from domestic sales is recognized when the Company has delivered goods to the designated address as agreed by contract and such delivered goods have been verified for acceptance by customers, and the Company has collected the payments or has obtained the right to the payments, and related economic benefits are highly probable to flow to the Company. Revenue from overseas sales is recognized when the Company has declared goods to the customs based on contractual agreements and has obtained a bill of lading, and the Company has collected the payments or has obtained the right to the payments, and related economic benefits are highly probable to flow to the Company.

(2) For environment and sanitation machinery, environment and sanitation comprehensive management and operation business, according to their different business models, revenue recognition methods are divided into three types:

1) Sales of environment and sanitation machinery products are a performance obligation satisfied at a point in time, and revenue is recognized when customers receive and consume the products, and the Company has collected the payments or has obtained the right to the payments, and related economic benefits are highly probable to flow to the Company.

2) Environment and sanitation comprehensive management business is a performance obligation satisfied over time. Revenue is recognized at the percentage of completion of the performance obligation based on the completion status confirmed by the project supervisor.

3) For revenue policies on PPP business with BOT models, please refer to section III (XXXIII) of notes to financial statements – Other significant accounting policies and estimates – PPP business for details.
(3) For finance lease income, on the commencement date, the sum of the minimum lease payment and the initial

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direct cost is included in finance lease receivable, and the difference between the sum of the minimum lease payment and the initial direct cost and its present value is recognized as unrealized finance income, which is amortized during the lease term with the effective interest method, and included in finance income of the period when it is amortized.

(XXVII) Government grants

Government grants shall be recognized if, and only if, the following conditions are all met: (1) the Company will comply with the conditions attaching to the grants; (2) the grants will be received. Monetary government grants are measured at the amount received or receivable. Non-monetary government grants are measured at fair value, and can be measured at nominal amount in the circumstance that fair value cannot be assessed.

2. Government grants related to assets

Government grants related to assets are government grants with which the Company constructs or otherwise acquires long-term assets under requirements of government. In the circumstances that there is no specific government requirement, the Company shall determine based on the primary condition to acquire the grants, and government grants related to assets are government grants whose primary condition is to construct or otherwise acquire long-term assets. They offset carrying amount of relevant assets, or they are recognized as deferred income. If recognized as deferred income, they are included in profit or loss on a systematic basis over the useful lives of the relevant assets. Those measured at notional amount are directly included into profit or loss. For assets sold, transferred, disposed or damaged within the useful lives, balance of unamortized deferred income is transferred into profit or loss of the period in which the disposal occurred.

3. Government grants related to income

Government grants related to income are government grants other than those related to assets. For government grants that contain both parts related to assets and parts related to income, in which those two parts are blurred, they are thus collectively classified as government grants related to income. For government grants related to income used for compensating the related future cost, expenses or losses, they are recognized as deferred income and included in profit or loss or used to offset relevant cost during the period in which the relevant cost, expenses or losses are recognized; for government grants related to income used for compensating the related cost, expenses or losses incurred to the Company, they are directly included in profit or loss or used to offset relevant cost.

Government grants related to the ordinary course of business shall be included into other income or used to offset relevant cost based on business nature, while those not related to the ordinary course of business shall be included into non-operating revenue or expenditures.

(XXVIII) Contract assets, contract liabilities

The Company presents contract assets or contract liabilities in the balance sheet based on the relationship between its performance obligations and customers’ payments. Contract assets and contract liabilities under the same contract shall offset each other and be presented on a net basis.

The Company presents an unconditional right to consideration (i.e., only the passage of time is required before the

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consideration is due) as a receivable, and presents a right to consideration in exchange for goods that it has transferred to a customer (which is conditional on something other than the passage of time) as a contract asset.

The Company presents an obligation to transfer goods to a customer for which the Company has received consideration (or the amount is due) from the customer as a contract liability.

(XXIX) Deferred tax assets/Deferred tax liabilities

Deferred tax assets or deferred tax liabilities are calculated and recognized based on the difference between the carrying amount and tax base of assets and liabilities (and the difference of the carrying amount and tax base of items not recognized as assets and liabilities but with their tax base being able to be determined according to tax laws) and in accordance with the tax rate applicable to the period during which the assets are expected to be recovered or the liabilities are expected to be settled.
A deferred tax asset is recognized to the extent of the amount of the taxable income, which it is most likely to obtain and which can be deducted from the deductible temporary difference. At the balance sheet date, if there is any exact evidence that it is probable that future taxable income will be available against which deductible temporary differences can be utilized, the deferred tax assets unrecognized in prior periods are recognized.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed. The carrying amount of a deferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow the benefit of the deferred tax asset to be utilized. Such reduction is subsequently reversed to the extent that it becomes probable that sufficient taxable income will be available.
The income tax and deferred tax for the period are treated as income tax expenses or income through profit or loss, excluding those arising from the following circumstances: (a) business combination; and (b) the transactions or items directly recognized in equity.

(XXX) Leases

1. Operating leases

When the Company is the lessee, lease payments are recognized as cost or profit or loss with straight-line method over the lease term. Initial expenses are recognized directly into profit or loss. Contingent rents are charged as profit or loss in the periods in which they are incurred.

When the Company is the lessor, lease income is recognized as profit or loss with straight-line method over the lease term. Initial expenses, other than those with material amount and eligible for capitalization which are recognized as profit or loss by installments, are recognized directly as profit or loss. Contingent rents are charged as profit or loss in the periods in which they are incurred.

2. Finance leases

When the Company is the lessee, at the commencement of the lease term, lessees recognize finance leases as assets and liabilities in their balance sheets at amounts equal to the lower of fair value of the leased property and the present value of the minimum lease payments, each determined at the inception of the lease, and recognize the minimum lease payments as the entering value of long-term payable, and treat the difference of the two as

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unrecognized finance expense. Any initial direct costs of the lessee are added to the amount recognized as an asset. The effective interest method is used to recognize finance expense of the period during the lease term.

When the Company is the lessor, at the commencement of the lease, lessor recognizes the aggregate of minimum lease receipts and initial direct costs, each determined at the inception of the lease, as the entering value of finance lease receivables, and recognize the unguaranteed residual value at the same time. The difference between the aggregate of the minimum lease receipts, the initial direct costs and the unguaranteed residual value, and the sum of their present values is recognized as unrealized finance income. The effective interest method is used to recognize finance income of the period during the lease term.

(XXXI) Work safety fund

The Company accrues work safety fund in accordance with the Circular on Management Measures on the Accrual and Use of Work Safety Fund numbered Cai Qi [2012] 16 by MOF and State Administration of Work Safety. Standard work safety fund is included in the cost or current profit or loss, meanwhile accounted for under “special reserve”. When work safety fund is used as an expense, it is to offset special reserve directly. When work safety fund is qualified to be included in the cost of fixed assets, it is accounted for under “construction in progress” and transferred to fixed assets when related safety projects reach the designed useful conditions; meanwhile, the cost included in fixed assets is to offset “special reserve”, and accumulated depreciation shall be recognized at the same amount. Such fixed assets shall not be depreciated in future periods.

(XXXII) Segment reporting

Operating segments are determined based on the structure of the Company’s internal organization, management requirements and internal reporting system. An operating segment is a component of the Company:

(1) that engages in business activities from which it may earn revenues and incur expenses;

(2) whose financial performance is regularly reviewed by the Management to make decisions about resource to be allocated to the segment and to assess its performance; and

(3) for which accounting information regarding financial position, financial performance and cash flows is available through analysis.

(XXXIII) Other significant accounting policies and estimates

1. PPP business

PPP is the abbreviation of Public-Private Partnerships. The so-called PPP model generally refers to a project operation model under which, the private sector obtains the authorization of the public sector to finance, construct and operate the project for a period of time after the completion of the construction, and to realize the best value of funds by giving full play to the respective advantages of the public sector and the private sector. The PPP model can be divided into build-operate-transfer (BOT), management contract (MC), commissioned operation (OM), build-own-operate (BOO), transfer-operate-transfer (TOT), rebuild-operate-transfer (ROT), etc.

(1) Project construction period

The project company aggregates the actual expenditures incurred in the project and the capitalized interest

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incurred as investment costs under “construction in progress”. Within a certain period after the completion of the infrastructure as stipulated in the contract, the project company can unconditionally receive the definite amount of payment from the contract grantor (that is, the guaranteed minimum recovery part) and the indefinite guaranteed minimum recovery part, which are transferred to “long-term receivables” and “intangible assets” respectively after the project is completed.

(2) Project operation period

During the concession operation period, the project company amortizes the “intangible assets” with straight-line method, so that the income realized by the concession right is matched with the amortized cost, so as to objectively reflect the status quo of the intangible assets. The Company’s specific accounting calculations are as follows: during the operation period, costs incurred in operation and maintenance of the project are included in “operating cost”, services provided in the current period are included in “operating revenue”, while the amortized amount of “intangible assets” in the same period is included in “operating cost”.

(3) Project termination and transfer

When the project is terminated, the project company needs to transfer project assets to the government. Project termination and transfer include free transfer upon maturity, charged transfer upon maturity, free transfer ahead of maturity, and charged transfer ahead of maturity. Under most circumstances, it is free transfer upon maturity. No special accounting treatment is required for the termination and transfer. Any expense incurred during the transfer process is directly expensed.

Basis of the adoption of hedge accounting and its accounting treatment
(1) Hedge includes fair value hedge, cash flow hedge and hedge of a net investment in a foreign operation.

(2) A hedging relationship qualifies for hedge accounting if all of the following conditions are met: 1) the hedging relationship consists only of eligible hedging instruments and eligible hedged instruments; 2) at the inception of the hedge there is formal designation of hedging instruments and hedged item, and documentation of the hedging relationship and the Company’s risk management objective and strategy for undertaking the hedge; 3) the hedging relationship meets the hedging effectiveness requirements.

The Company recognizes that the hedging relationship meets effectiveness requirements if the all of the followings are simultaneously satisfied: a. there is an economic relationship between the hedged item and the hedging instruments; b. the effect of credit risk does not dominate the value changes that result from that economic relationship between the hedged item and the hedging instruments; and c. the hedge ratio of the hedging relationship is the same as the ratio of the quantity of the hedged item that the Company actually hedges and the number of hedging instruments that the Company actually uses to hedge that quantity of hedged item, but does not reflect an imbalance between the weightings of the hedged item and the hedging instrument.

The Company shall assess whether a hedging relationship meets the hedge effectiveness requirements at inception and on an ongoing basis. If a hedging relationship ceases to meet the hedge effectiveness requirement relating to the hedge ratio but the risk management objective for that designated hedging relationship remains the same, the hedging relationship shall be rebalanced.

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(3) Hedge accounting

1) Fair value hedge

a. Gain or loss on the hedging instrument shall be recognized in profit or loss (or other comprehensive income, if the hedging instrument hedges a non-trading equity instrument (or a component thereof) at fair value through other comprehensive income).

b. The gain or loss on hedged item arising from risk exposure should be recognized in profit or loss, and meanwhile, the carrying amount of the hedged item which is not measured at fair value should be adjusted. If the hedged item is a financial asset (or a component thereof) that is measured at fair value through other comprehensive income in accordance with article XVIII in “CASBE 22 - Financial Instruments: Recognition and Measurement”, the gain or loss arising from the risk exposure on the hedged item shall be recognized in profit or loss, with carrying amount unadjusted for it has already been measured at fair value; if the hedged item is a non-trading equity instrument (or a component thereof) for which the Company has elected to present changes at fair value through other comprehensive income, the gain or loss arising from the risk exposure on the hedged item shall be recognized in profit or loss, with carrying amount unadjusted for it has already been measured at fair value.

When a hedged item is an unrecognized firm commitment (or a component thereof), the cumulative change in fair value of the hedged item subsequent to its designation is recognized as an asset or a liability with a corresponding gain or loss recognized in profit or loss. When a firm commitment is performed to acquire an asset or assume a liability, the initial carrying amount of the asset or the liability is adjusted to include the cumulative change in fair value of the hedged item that was previously recognized.

For a hedged item that is a financial instrument (or a component thereof) measured at amortized cost, any adjustment on the carrying amount of the hedged item shall be amortized to profit or loss based on a recalculated effective interest rate at the date that amortization begins. In the case of a financial asset (or a component thereof) that is a hedged item and that is measured at fair value through other comprehensive income in accordance with article XVIII in “CASBE 22 - Financial Instruments: Recognition and Measurement”, amortization applies in the same manner but to the amount that represents the cumulative gain or loss previously recognized, which shall be subsequently recognized in profit or loss, instead of by adjusting the carrying amount.

2) Cash flow hedges

a. The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge shall be recognized in other comprehensive income as cash flow hedge reserve, while the ineffective portion shall be recognized in profit or loss. The cash flow hedge reserve shall be recognized at the lower of the following (in absolute amounts): (i) the cumulative gain or loss on the hedging instrument from inception of the hedge; and (ii) the cumulative change in present value of the expected future cash flows of the hedged item from inception of the hedge.

b. If a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability, or a hedged forecast transaction for a non-financial asset or non-financial liability becomes a firm

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commitment for which fair value hedge accounting is applied, the Company shall transfer out the amount of cash flow hedge reserve previously recognized in other comprehensive income, and include it in the initial cost of the asset or the liability.

c. For other cash flow hedges, the amount of cash flow hedge reserve previously recognized in other comprehensive income shall be transferred out into profit or loss in the same period the hedged forecast sale affects profit or loss.

3) Hedges of a net investment in a foreign operation

The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognized in other comprehensive income, and reclassified from other comprehensive income to profit or loss on the disposal of the foreign operation; and the ineffective portion is recognized in profit or loss.

3. Accounting treatment related to share repurchase

When the Company repurchases its shares for the purpose of reducing its registered capital or rewarding its employees, if the purchased shares are to be kept as treasury shares, the treasury shares are recorded at the cash distributed to existing shareholders for repurchase; if the purchased shares are to be retired, the difference between

the total book value of shares retired and the cash distributed to existing shareholders for repurchase is to reduce

capital reserve, or retained earnings when the capital reserve is not enough to reduce. If the Company repurchases

vested equity instruments in equity-settled share-based payment transactions with employees, cost of treasury shares granted to employees and capital reserve (other capital reserve) accumulated within the vesting period are to be written off on the payment made to employees, with a corresponding adjustment in capital reserve (share premium).

(XXXIV) Significant changes in accounting policies and estimates

1. Changes in accounting policies arising from changes in CASBEs

The Company has adopted the “CASBE 14 – Revenue” revised by the MOF since January 1, 2020. In accordance with the relevant regulations for the convergence of the original and revised standards, the comparable period information is not adjusted, and the cumulative impact of the implementation of the revised standards on the first implementation date is retrospectively adjusted to the amount of retained earnings at the beginning of the reporting period and other related items in the financial statements.

Financial statement items on January 1, 2020 significantly affected by the implementation of the revised revenue standard and their amounts

standard and their amounts
Items		Balance sheet
	December 31, 2019	Adjustment due to the implementation of the revised revenue standard	January 1, 2020
Accounts receivable	5,163,050,940.07	-250,482,933.77	4,912,568,006.30
Contract assets		197,287,015.51	197,287,015.51
Non-current assets due within oneyear	760,845,984.28	2,872,896.31	763,718,880.59
Long-term receivables	1,152,179,083.21	-1,299,273.03	1,150,879,810.18
Other non-current assets	44,360,378.52	51,622,294.98	95,982,673.50

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Items		Balance sheet
	December 31, 2019	Adjustment due to the implementation of the revised revenue standard	January 1, 2020
Advances received	170,610,799.52	-170,610,799.52
Contract liabilities		150,983,008.42	150,983,008.42
Other current liabilities		29,507,607.98	29,507,607.98
Deferred income	50,399,106.23	-9,879,816.88	40,519,289.35

The Company has adopted the “Interpretation of China Accounting Standards for Business Enterprises No. 13” issued by the MOF in 2019 since January 1, 2020, and the prospective application method is applicable to changes in accounting policies.

IV. Taxes

(I) Main taxes and tax rates

(I) Main taxes and tax rates
Taxes	Tax bases	Tax rates
Value-added tax (VAT)	The output tax calculated based on the revenue from sales of goods or rendering of services in accordance with the tax law, net of the input tax that is allowed to be deducted in the current period	3%, 6%, 9%, 13%. Exported goods are subject to “exemption, credit, refund” policies, with refund rate of 10% or 13%.
Housing property tax	For housing property levied on the basis of price, housing property tax is levied at the rate of 1.2% of the balance after deducting 30% of the cost; for housing property levied on the basis of rent, housing property tax is levied at the rate of 12% of rent revenue.	1.2%, 12%
Urban maintenance and construction tax	Turnover tax actually paid	7%, 5%
Education surcharge	Turnover tax actually paid	3%
Local education surcharge	Turnover tax actually paid	2%, 1%
Enterprise income tax	Taxable income	15%, 20%, 25%

Different enterprise income tax rates applicable to different taxpayers:

Taxpayers	Income tax rate
Infore Technology Company	15%
Guangdong Weiqi Company	15%
安徽威奇电工材料有限公司(Anhui Weiqi Electrical Materials Co., Ltd.*)	15%
Zoomlion Environmental Company	15%
佛山市顺德区华清源环保有限公司(Foshan Shunde Huaqingyuan Environmental Protection Co.,Ltd.*)	15%
Shangfeng Industrial Company	15%
佛山市顺德区华博环保水务有限公司(Foshan Shunde Huabo Environmental Water Co.,Ltd.*)	20%
定南中联环境产业有限责任公司(Dingnan Zoomlion Environmental IndustryCo.,Ltd.*)	20%
会昌中联环境产业有限责任公司(Huichang Zoomlion Environmental IndustryCo.,Ltd.*)	20%
峰云物联科技有限公司(Fengyun IoT Technology Co., Ltd.*)	20%

*The English names are for identification purpose only.

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Taxpayers	Income tax rate
耒阳市中锋环境产业有限公司(Leiyang Zhongfeng Environmental IndustryCo.,Ltd.*)	20%
桦川县中峰城市环境服务有限公司(Huachuan Zhongfeng Urban Environmental Service Co.,Ltd.*)	20%
深圳盈联环境产业有限公司(Shenzhen Yinglian Environmental IndustryCo.,Ltd.*)	20%
Taxpayers other than the above-mentioned	25%

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(II) Tax preferential policies

1. Enterprise income tax

No.	Entities	Preferential policies
1	Anhui Weiqi Electrical Materials Co., Ltd.	According to the preferential income tax policy for high-tech enterprises, its 2018-2020 enterprise income tax rate is reduced to 15%.
2	Shangfeng Industrial Company, Guangdong Weiqi Company, Infore Technology Company, Foshan Shunde Huaqingyuan Environmental Protection Co.,Ltd.	According to the preferential income tax policy for high-tech enterprises, its 2019-2021 enterprise income tax rate is reduced to 15%.
3	Zoomlion Environmental Company	According to the preferential income tax policy for high-tech enterprises, its 2020-2022 enterprise income tax rate is reduced to 15%.
4	石门中联环境产业有限责任公司(Shimen Zoomlion Environmental Industry Co., Ltd.), 淮安晨洁环境工程有限公司(Huaian Chenjie Environmental Engineering Co., Ltd.)	Engage in qualified environmental protection, energy-saving and water-saving projects, it enjoys enterprise income tax exemption in 2016-2018, and enjoys a 50% reduction in income for 2019-2021.
5	阜南绿色东方环保能源有限公司(Funan Green Oriental Environmental Energy Co., Ltd.), 汉寿中联环境产业有限责任公司(Hanshou Zoomlion Environmental Industry Co., Ltd.), 中方县中联环境产业有限责任公司(Zhongfang County Zoomlion Environmental Industry Co., Ltd.), 安化县中联环境产业有限公司(Anhua Zoomlion Environmental Industry Co., Ltd.), 慈利县中联华宝环境产业有限责任公司(Cili County Zoomlion Huabao Environmental Industry Co., Ltd.), 隆回县中联环境产业有限公司(Longhui County Zoomlion Environmental IndustryCo.,Ltd.)	Engage in qualified environmental protection, energy-saving and water-saving projects, it enjoys enterprise income tax exemption in 2017-2019, and enjoys a 50% reduction in income for 2020-2022.
6	仙桃绿色东方环保发电有限公司(Xiantao Green Oriental Environmental Power Generation Co., Ltd.), 寿县绿色东方新能源有限责任公司(Shouxian Green Oriental New Energy Co., Ltd.), 张家界中联环境产业有限责任公司(Zhangjiajie Zoomlion Environmental Industry Co., Ltd.), 花垣中联环境产业有限公司(Huayuan Zoomlion Environmental Industry Co., Ltd.), 扶绥中峰环境产业有限责任公司(Fusui Zhongfeng Environmental Industry Co., Ltd.), 上思中联环境产业有限公司(Shangsi Zoomlion Environmental Industry Co., Ltd.), 宁远县中联环境产业有限责任公司(Ningyuan County Zoomlion Environmental Industry Co., Ltd.), 连平中联家宝环境产业有限责任公司(Lianping Zoomlion Jiabao Environmental Industry Co., Ltd.), 洪江区中峰环境产业有限责任公司(Hongjiang District Zhongfeng Environmental Industry Co., Ltd.), 眉山市彭山区中峰环境产业有限责任公司(Meishan Pengshan ZhongfengEnvironmental IndustryCo.,Ltd.)	Engage in qualified environmental protection, energy-saving and water-saving projects, it enjoys enterprise income tax exemption in 2018-2020, and enjoys a 50% reduction in income for 2021-2023.
7	长沙中联长高环境产业有限责任公司(Changsha Zoomlion Changgao Environmental Industry Co., Ltd.), 仙桃盈和环保有限公司(Xiantao Yinghe Environmental Protection Co., Ltd.), 凯里市中联重科环境产业有限公司(Kaili Zoomlion Environmental Industry Co., Ltd.*), 娄底中联华宝环保科技有限公司 (Loudi Zoomlion Huabao	Engage in qualified environmental protection, energy-saving and water-saving projects, it enjoys enterprise income tax exemption in 2019-2021, and enjoys a 50% reduction in income for 2022-2024.

*The English names are for identification purpose only.

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No.	Entities	Preferential policies
	Environmental Protection Technology Co., Ltd.), 长沙市橘洲中联环境产业有限责任公司(Changsha Juzhou Zoomlion Environmental Industry Co., Ltd.), 都昌县中峰环境产业有限公司(Duchang County Zhongfeng Environmental Industry Co., Ltd.), 安龙宁和环保科技有限公司(Anlong Ninghe Environmental Protection Technology Co., Ltd.), 抚顺市盈峰中联城市环境卫生管理有限公司(Fushun Yingfeng Zoomlion Urban Environmental Sanitation Management Co., Ltd.), 仁寿盈峰中联城市环境服务有限公司(Renshou Infore Zoomlion Urban Environmental Service Co., Ltd.), 宜春盈联城市环境服务有限公司(Yichun Yinglian Urban Environmental Service Co., Ltd.), 松原市中联欣雨环境服务有限公司(Songyuan Zoomlion Xinyu Environmental Service Co., Ltd.), 赣州蓉江新区中峰环境科技有限公司(Ganzhou Rongjiang New Area Zhongfeng Environmental Technology Co., Ltd.), 曲阳县盈联环境服务有限公司(Quyang Yinglian Environmental Service Co., Ltd.), 成都盈联环境管理有限公司(Chengdu Yinglian Environmental Management Co., Ltd.), 祁县盈联城市环境服务有限公司(Qixian Yinglian Urban Environmental Service Co., Ltd.), 福建省南安市盈峰城市环境服务有限公司(Fujian Nan’an Yingfeng Urban Environmental Service Co., Ltd.), 故城盈联城市环境服务有限责任公司(Gucheng Yinglian Urban Environmental Service Co., Ltd.), 淮北市盈联城市环境服务有限公司(Huaibei Yinglian Urban Environmental Service Co., Ltd.), 淮北市中峰城市环境服务有限公司(Huaibei Zhongfeng Urban Environmental Service Co., Ltd.), 稷山县盈联城市环境服务有限公司(Jishan County Yinglian Urban Environmental Service Co., Ltd.), 唐山曹妃甸区盈联环境服务有限公司(Tangshan Caofeidian District Yinglian Environmental Service Co., Ltd.), 安义县中峰环境产业有限公司(Anyi County Zhongfeng Environmental Industry Co., Ltd.), 长沙中峰环保科技有限责任公司(Changsha Zhongfeng Environmental Protection Technology Co., Ltd.), 醴陵市盈峰中联环境产业有限公司(Liling Yingfeng Zoomlion Environmental Industry Co., Ltd.), 深圳市盈联城市环境服务有限公司(Shenzhen Yinglian Urban Environmental Service Co.,Ltd.)
8	铜仁市碧江区中峰环境产业有限公司(Tongren Bijiang District Zhongfeng Environmental Industry Co., Ltd.), 百色市盈联城市环境服务有限公司(Baise Yinglian Urban Environmental Service Co., Ltd.), 重庆盈联城市环卫服务有限公司(Chongqing Yinglian City Sanitation Service Co., Ltd.), 东兰盈联城市环境服务有限公司(Donglan Yinglian Urban Environmental Service Co., Ltd.), 仙桃盈联环保技术有限公司(XiantaoYinglian Environmental Technology Co., Ltd.), 安化盈胜环境卫生服务有限公司(Anhua Yingsheng Environmental Sanitation Service Co., Ltd.), 深圳宝安盈联城市服务有限公司(Shenzhen Bao’an Yinglian City Service Co., Ltd.), 宾川中盈环境服务有限公司(Binchuan Zhongying Environmental Service Co.,Ltd.),	Engage in qualified environmental protection, energy-saving and water-saving projects, it enjoys enterprise income tax exemption in 2020-2022, and enjoys a 50% reduction in income for 2023-2025.

*The English names are for identification purpose only.

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No.	Entities	Preferential policies
	邵阳县中峰环境产业有限公司(Shaoyang County Zhongfeng Environmental Industry Co., Ltd.), 汤阴县盈联环境服务有限公司(Tangyin County Yinglian Environmental Service Co., Ltd.), 西安盈联城市环境服务有限公司(Xi’an Yinglian Urban Environmental Service Co., Ltd.), 漾濞中盈环境服务有限公司(Yangbi Zhongying Environmental Services Co., Ltd.), 容城县盈联城市环境服务有限公司(Rongcheng County Yinglian Urban Environmental Service Co., Ltd.), 盈峰中联城市环境服务有限公司(Infore Zoomlion City Environmental Service Co., Ltd.), 肇源县锦城环境卫生管理服务有限公司(Zhaoyuan County Jincheng Environmental Sanitation Management Service Co., Ltd.), 吉安中峰环境科技有限公司(Ji’an Zhongfeng Environmental Technology Co., Ltd.), 鞍山市盈联城市环境卫生管理有限公司(Anshan Yinglian Urban Environmental Sanitation Management Co., Ltd.), 菏泽盈胜环境卫生服务有限公司(Heze Yingsheng Environmental Sanitation Service Co., Ltd.), 滦南县盈联环境管理有限公司(Luannan County Yinglian Environmental Management Co., Ltd.), 广西桂平市盈合环境卫生管理有限公司(Guangxi Guiping Yinghe Environmental Sanitation Management Co., Ltd.), 神农架林区盈合环境卫生管理有限公司(Shennongjia Forest Area Yinghe Environmental Sanitation Management Co., Ltd.), 佛山市顺德区盈合城市环境服务有限公司(Foshan Shunde District Yinghe Urban Environmental Service Co., Ltd.), 和平县合胜环境卫生服务有限公司(Heping County Hesheng Environmental Sanitation Service Co., Ltd.), 佛山市顺德区联盈环境发展有限公司(Foshan Shunde District Lianying Environmental Development Co., Ltd.), 佛山市盈顺城市环境服务有限公司(Foshan Yingshun Urban Environmental Service Co., Ltd.), 宿迁市联盈城市服务有限公司(Suqian Lianying City Service Co., Ltd.), 枣庄市盈联城市环境服务有限公司(Zaozhuang Yinglian Urban Environmental Service Co., Ltd.), 枣庄市中盈城市环境服务有限公司(Zaozhuang Zhongying Urban Environmental Service Co., Ltd.), 大庆市萨尔图区中联重科环境发展有限公司(Daqing Saertu District Zoomlion Environmental Development Co., Ltd.), 吉林中峰绿洲环境发展有限公司(Jilin Zhongfeng Oasis Environmental Development Co., Ltd.), 来安县中峰环境科技有限公司(Lai’an Zhongfeng Environmental Technology Co., Ltd.), 香河盈联环保科技有限公司(Xianghe Yinglian Environmental Technology Co., Ltd.), 祁县同盈环境卫生服务有限公司(Qixian Tongying Environmental Sanitation Service Co., Ltd.), 兰陵中联环境服务有限公司(Lanling Zoomlion Environmental Service Co., Ltd.), 运城市中盈城市环境服务有限公司(Yuncheng Zhongying City Environmental Service Co.,Ltd.*)

*The English names are for identification purpose only.

*The English names are for identification purpose only.

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No.	Entities	Preferential policies
9	Foshan Shunde Huabo Environmental Water Co., Ltd., Dingnan Zoomlion Environmental Industry Co., Ltd., Huichang Zoomlion Environmental Industry Co., Ltd., Fengyun IoT Technology Co., Ltd., Leiyang Zhongfeng Environmental Industry Co., Ltd., Huachuan Zhongfeng Urban Environmental Service Co., Ltd., Shenzhen Yinglian Environmental Industry Co., Ltd.	Pursuant to the Circular on the Implementation of the Inclusive Tax Relief Policy for Small and Micro Enterprises by State Taxation Administration (STA), from January 1, 2019 to December 31, 2021, the enterprise income tax for the portion of the taxable income within 1 million yuan is levied at 20% based on 25% of that portion of income; the enterprise income tax for the portion of the taxable income exceeding 1 million yuan but within 3 million yuan is levied at 20% based on 50% of thatportion of income.
10	Foshan Shunde Huaqingyuan Environmental Protection Co., Ltd., 佛山市顺德区华盈环保水务有限公司(Foshan Shunde District Huaying Environmental Water Co., Ltd.), 佛山市顺德区源润水务环保有限公司(Foshan Shunde District Yuanrun Water Environmental Protection Co., Ltd.), 佛山市顺德区华博环保有限公司(Foshan Shunde District Huabo Environmental Protection Co., Ltd.*)	Revenue from the production of non-restricted and non-prohibited products that meet the relevant national and industry standards using resources specified in the “Resources Comprehensive Utilization of Enterprise Income Tax Preferential Catalogue (2008 Edition)” as the main raw material will be reduced to 90% as taxable income for enterprise income tax.
11	大荔县中联环境产业有限公司(Dali County Zoomlion Environmental Industry Co., Ltd.), 柳城县盈联环境卫生管理有限公司(Liucheng County Yinglian Environmental Sanitation Management Co., Ltd.)	Engaged in qualified environmental protection, energy-saving and water-saving projects, it enjoys three-year-exemption and three-year-half-reduction policy for enterprise income tax since the year in which it generates its first income.

2. VAT

(1) According to the “Notice of MOF and STA on VAT Preferential Policies for Promoting Employment of Persons with Disabilities” (Cai Shui [2016] No. 52), taxpayers who meet the conditions for enjoying preferential tax policies shall be entitled to enjoy VAT refund upon collection within limit according to the number of persons with disabilities employed by taxpayer. In 2020, the subsidiary 辽宁东港电磁线有限公司 (Liaoning Donggang Magnet Wire Co., Ltd.[*] , hereinafter referred to as Donggang Magnet Wire Company) enjoys the preferential policy of VAT refund upon collection at the amount of 57,600 yuan per year for each person with disabilities, and the refunded VAT upon collection totaled 8,297,977.38 yuan.

(2) According to the “Notice of MOF and STA on VAT Policies for Software Products” (Cai Shui [2011] No. 100), general VAT taxpayers who sell software products developed and produced by themselves are subject to VAT refund upon collection for the amount exceeding 3% of their actual VAT burdens. In 2020, the subsidiaries Zoomlion Environmental Company and Infore Technology Company are entitled to enjoy the VAT refund upon collection policy for its development and sale of their self-developed software products, and the VAT refunds received in the current period are 16,098,711.21 yuan and 85,336.07 yuan respectively.

(3) According to the “Announcement of MOF, STA, and the General Administration of Customs (GAC) on Policies Deepening the VAT Reform” (Announcement No. 39, 2019 of MOF, STA and GAC), eligible taxpayers can apply to their competent tax authorities for refund of the incremental retained tax credit. In 2020, the sub-subsidiaries Kaili Zoomlion Environmental Industry Co., Ltd. and Changsha Zoomlion Changgao Environmental Industry Co., Ltd. received tax refund of 1,480,436.23 yuan and 10,453,410.02 yuan respectively.

(4) According to Article 5 of the “Notice of MOF and STA on Printing and Distributing the ‘VAT Preferential

*The English names are for identification purpose only.

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Catalogue of Products and Services for Comprehensive Utilization of Resources’” (Cai Shui [2015] No. 78), since July 1, 2015, sewage treatment services are entitled to enjoy 70% VAT refund upon collection. In 2020, the sub-subsidiaries Foshan Shunde Huaqingyuan Environmental Protection Co., Ltd., Foshan Shunde District Huaying Environmental Water Co., Ltd., Foshan Shunde District Yuanrun Water Environmental Protection Co., Ltd., and Foshan Shunde District Huabo Environmental Protection Co., Ltd. received VAT refund upon collection of 1,930,690.82 yuan, 1,025,296.26 yuan, 1,215,817.61 yuan and 151,148.80 yuan respectively.

(5) Pursuant to the “Measures for the Implementation of the Pilot Implementation of VAT Reform for the Transportation Industry and Certain Modern Service Industries” (Cai Shui [2011] No. 111), revenue from technology transfer, technology development, and related technical consulting, and technical service businesses is exempt from VAT. In 2020, the sub-subsidiary 深圳市鼎铸环保技术有限公司 (Shenzhen Dingzhu Environmental Technology Co., Ltd.[*] ) meets the condition and is exempt from VAT.

3. Urban land use tax

(1) According to the “Notice of MOF and STA on the Urban Land Use Tax and Other Policies for Entities with Employment of Persons with Disabilities” (Cai Shui [2010] No. 121), the subsidiary Donggang Magnet Wire Company, as a social welfare company, meets the temporary exemption of land use tax. After confirmation with Beijingzi Local Taxation Bureau of Donggang Local Taxation Bureau, it is exempt from land use tax in 2020.

(2) According to the “Notice on the Policy Opinions on Deepening the Reform of ‘Heroes in Each Acre’ and Implementing the Differential Allocation of Resource Elements” issued by the Office of the People’s Government of Shangyu District, Shaoxing City (Yu Zheng Ban Fa [2020] No. 73), the Company’s subsidiary Shangfeng Industrial Company meets the conditions of tax incentives and enjoys 100% exemption for land use tax in 2020.

(3) According to Article 1 of the “Announcement of STA, Xiantao Taxation Office on Implementing the Relevant Matters Concerning the Reduction and Exemption of Housing Property Tax and Urban Land Use Tax During the New Coronavirus Pneumonia Epidemic”, taxpayers who have suspended production or business due to the impact of the epidemic may apply for a reduction or exemption of housing property tax and urban land use tax for self-use real estate and land in the first quarter of 2020. The sub-subsidiary Xiantao Green Oriental Environmental Power Generation Co., Ltd. meets the above regulations and the urban land use tax for the first quarter is reduced by 74,665.92 yuan in 2020.

(4) According to the “Announcement on Preferential Policies for Housing Property Tax and Urban Land Use Tax in Response to the Impact of the New Coronavirus Pneumonia Epidemic” (Su Cai Shui [2020] No. 8), taxpayers in hospitality, entertainment, transportation, tourism, etc. are temporarily exempted from housing property tax and urban land use tax in the first half of 2020. The Company’s sub-subsidiary Huaian Chenjie Environmental Engineering Co., Ltd. meets the conditions and the urban land use tax is reduced by 58,572.00 yuan in the first half of 2020.

4. Housing property tax

(1) According to Article 1 of the “Announcement of STA, Xiantao Taxation Office on Implementing the Relevant

*The English name is for identification purpose only.

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Matters Concerning the Reduction and Exemption of Housing Property Tax and Urban Land Use Tax During the New Coronavirus Pneumonia Epidemic”, taxpayers who have suspended production or business due to the impact of the epidemic may apply for a reduction or exemption of housing property tax and urban land use tax for self-used real estate and land in the first quarter of 2020. The sub-subsidiary Xiantao Green Oriental Environmental Power Generation Co., Ltd. meets the above regulations and the housing property tax for the first quarter is reduced by 202,425.81 yuan in 2020.

V. Notes to items of consolidated financial statements

Note: “Opening balance” in this report refers to balances as at January 1, 2020 after the adjustment on balances as at December 31, 2019 under the revised revenue standard.

(I) Notes to items of the consolidated balance sheet

1. Cash and bank balances

(1) Details

(1) Details
Items	Closing balance	Opening balance
Cash on hand	147,826.76	62,621.19
Cash in bank	5,334,320,758.07	2,606,269,825.38
Other cash and bank balances	569,659,386.02	554,435,177.83
Total	5,904,127,970.85	3,160,767,624.40
Including: Deposited overseas	4,585,104.79	36,521,872.96

(2) Other remarks

1) Closing balance of cash in bank included certificate of deposits in amount of 709,048,611.10 yuan, funds frozen due to lawsuits in amount of 2,837,968.00 yuan, and engineering escrow accounts that are not available for separate use in amount of 22,891.63 yuan, which was with use restriction.

2) Closing balance of other cash and bank balances included deposit for notes in amount of 458,086,264.82 yuan, deposit for letters

of guarantee in amount of 75,383,801.54 yuan, and deposit for migrant workers’ wages in amount of 922,334.53 yuan, which was with use restriction.

2. Held-for-trading financial assets

(1) Details

(1) Details
Items	Closing balance	Opening balance
Financial assets classified as at fair value through profit or loss	128,017,735.11	217,189,146.28
Including: Debt instrument investments
Equity instrument investments	127,192,985.11	217,138,046.28
Derivative financial assets	824,750.00	51,100.00
Total	128,017,735.11	217,189,146.28

3. Notes receivable

(1) Details

1) Details on categories

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Categories			Closing balance	Closing balance
	Book balance		Provision for bad debts		Carrying amount
	Amount	% to total	Amount	Provision proportion (%)
Receivables with provision for bad debts made on an individual basis
Receivables with provision for bad debts made on a collective basis	67,804,653.12	100.00	3,141,108.14	4.63	64,663,544.98
Including: Trade acceptance	67,804,653.12	100.00	3,141,108.14	4.63	64,663,544.98
Total	67,804,653.12	100.00	3,141,108.14	4.63	64,663,544.98
(Continued)

(Continued)
Categories			Opening balance
	Book balance		Provision for bad debts		Carrying amount
	Amount	% to total	Amount	Provision proportion (%)
Receivables with provision for bad debts made on an individual basis
Receivables with provision for bad debts made on a collective basis	40,493,712.20	100.00			40,493,712.20
Including: Trade acceptance	40,493,712.20	100.00			40,493,712.20
Total	40,493,712.20	100.00			40,493,712.20

2) Notes receivable with provision for bad debts made on a collective basis

Items		Closing balance
	Book balance	Provision for bad debts	Provision proportion (%)
Bank acceptance portfolio
Trade acceptance portfolio	67,804,653.12	3,141,108.14	4.63
Subtotal	67,804,653.12	3,141,108.14	4.63

(2) Changes in provision for bad debts

1) Details

1) Details
Items	Opening balance	Increase				Decrease		Closing balance
		Accrual	Recovery	Others	Reversal	Write-off	Others
Bank acceptance
Trade acceptance		3,141,108.14						3,141,108.14
Subtotal		3,141,108.14						3,141,108.14

2) No provision is collected or reversed in the current period

(3) No balance is written off in the current period

(4) No balance is pledged at the balance sheet date

(5) Endorsed or discounted but undue notes at the balance sheet date

Items	Closing balance derecognized	Closing balance not yet derecognized
Trade acceptance		8,193,775.64
Subtotal		8,193,775.64

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(6) Notes receivable transferred to accounts receivable due to non-performance of issuer

Items	Amount transferred
Trade acceptance	720,000.00
Subtotal	720,000.00

4. Accounts receivable

(1) Details

1) Details on categories

Categories			Closing balance	Closing balance
	Book balance		Provision for bad debts		Carrying amount
	Amount	% to total	Amount	Provision proportion(%)
Receivables with provision made on an individual basis	13,881,143.78	0.23	13,881,143.78	100.00
Receivables with provision made on a collective basis	5,965,218,384.23	99.77	400,383,520.19	6.71	5,564,834,864.04
Total	5,979,099,528.01	100.00	414,264,663.97	6.93	5,564,834,864.04
(Continued)
Categories			Opening balance [Note]
	Book balance		Provision for bad debts		Carrying amount
	Amount	% to total	Amount	Provision proportion(%)
Receivables with provision made on an individual basis
Receivables with provision made on a collective basis	5,255,708,371.27	100.00	343,140,364.97	6.53	4,912,568,006.30
Total	5,255,708,371.27	100.00	343,140,364.97	6.53	4,912,568,006.30

Note: Please refer to section III (XXXIV) 1 of notes to financial statements for details on the difference between the opening balance of current period and the closing balance of preceding period (i.e. December 31, 2019).

2) Accounts receivable with provision made on an individual basis

2) Accounts receivable with	provision made on an	individual basis
Debtors	Book balance	Provision for bad debts	Provision proportion (%)	Reasons
深圳市为民生态技术有限公司(Shenzhen Weimin Ecological Technology Co., Ltd.)	10,304,640.00	10,304,640.00	100.00	Expected to be irrecoverable
马鞍山市瑞恒物资贸易有限公司(Ma’anshan Ruiheng Material TradingCo.,Ltd.*)	2,137,100.00	2,137,100.00	100.00	Expected to be irrecoverable
徐州伟天化工有限公司 (Xuzhou Weitian Chemical Co.,Ltd.*)	400,000.00	400,000.00	100.00	Expected to be irrecoverable
建德新越置业有限公司 (Jiande Xinyue Real Estate Co.,Ltd.*)	377,496.00	377,496.00	100.00	Expected to be irrecoverable
Other entities	661,907.78	661,907.78	100.00	Expected to be irrecoverable

 The English names are for identification purpose only.

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Debtors	Book balance	Provision for bad debts	Provision proportion (%)	Reasons
Subtotal	13,881,143.78	13,881,143.78	100.00

3) Accounts receivable with provision made on a collective basis
① Parent company and electrotechnical equipment manufacturing industry under age analysis method

①Parent company and electrot	echnical equipment manufa	cturing industry under age a	nalysis method
Ages		Closing balance
	Book balance	Provision for bad debts	Provision proportion (%)
1-180 days	612,769,602.54
180 days - 1 year	188,806.71	3,776.13	2.00
Subtotal	612,958,409.25	3,776.13

② Ventilation equipment manufacturing industry and environmental integrated industry under age analysis method

method
Ages		Closing balance
	Book balance	Provision for bad debts	Provision proportion (%)
Within 1 year	4,237,483,272.06	211,874,163.61	5.00
1-2 years	631,257,697.72	63,125,769.77	10.00
2-3 years	170,701,666.83	51,210,500.05	30.00
3-5 years	77,168,884.29	38,584,442.15	50.00
Over 5 years	32,333,849.41	32,333,849.41	100.00
Subtotal	5,148,945,370.31	397,128,724.99	7.71

③ Commercial factoring portfolio grouped by five-level classification

③Commercial factoring portfo	lio grouped by five-level cla	ssification
Five-level classification		Closing balance
	Book balance	Provision for bad debts	Provision proportion (%)
Pass	189,894,604.67	2,848,419.07	1.50
Special-mention	13,420,000.00	402,600.00	3.00
Subtotal	203,314,604.67	3,251,019.07	1.60

(2) Changes in provision for bad debts

Items	Opening balance	Increase	Increase			Decrease		Closing balance
		Accrual	Recovery	Others	Reversal	Write-off	Others
Receivables with provision made on an individual basis		13,881,143.78						13,881,143.78
Receivables with provision made on a collective basis	343,140,364.97	59,264,181.99				2,021,026.77		400,383,520.19
Subtotal	343,140,364.97	73,145,325.77				2,021,026.77		414,264,663.97

(3) Accounts receivable written off in current period

1) Accounts receivable actually written off in current period totaled 2,021,026.77 yuan.

2) Significant accounts receivable written off in current period

Debtors	Nature of receivables	Amount written off	Reasons for write-off	Write-off procedures performed	Whether arising from related party transactions

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Debtors	Nature of receivables	Amount written off	Reasons for write-off	Write-off procedures performed	Whether arising from related party transactions
Jingyi Freight Service Center, Jiancaoping District, Taiyuan City	Goods payment	600,000.00	Expected to be irrecoverable	Under the approval by the Management	No
安徽万豪物业管理有限公司 (Anhui Wanhao Property Management Co.,Ltd.)	Goods payment	520,000.00	Expected to be irrecoverable	Under the approval by the Management	No
Public Affairs Management Office of Tongliao Economic and Technological Development Zone	Goods payment	150,834.00	Expected to be irrecoverable	Under the approval by the Management	No
Jingmen Administration of City Appearance and Environmental Sanitation	Goods payment	150,000.00	Expected to be irrecoverable	Under the approval by the Management	No
Housing and Urban-Rural Development and Urban Management Bureau of Jiang’an County	Goods payment	109,856.58	Expected to be irrecoverable	Under the approval by the Management	No
Subtotal		1,530,690.58

(4) Details of the top 5 debtors with largest balances

Debtors	Book balance	Proportion to the total balance of accounts receivable(%)	Provision for bad debts
No. 1	138,694,988.13	2.32	7,089,710.51
No. 2	117,833,115.80	1.97	5,891,655.79
No. 3	101,061,055.56	1.69	1,515,915.83
No. 4	85,846,357.20	1.44	4,292,317.86
No. 5	50,436,411.79	0.84	2,521,820.59
Subtotal	493,871,928.48	8.26	21,311,420.58

5. Receivables financing

(1) Details

Details on categories

Items			Closing balance	Closing balance
	Initial cost	Interest adjustment	Interest accrued	Changes in fair value	Carrying amount	Provision for impairment
Notes receivable	520,429,874.86 [Note]				520,429,874.86
Total	520,429,874.86				520,429,874.86
(Continued) Items Notes receivable Total						Provision for impairment
	Initial cost		Opening balance
		Interest adjustment	Interest accrued	Changes in fair value	Carrying amount	Provision for impairment
	683,999,481.60				683,999,481.60
	683,999,481.60				683,999,481.60

Note: The acceptor of receivables financing with closing balance of 109,968,904.97 yuan was a finance company with low credit risk and financial qualification.

(2) Pledged notes at the balance sheet date
The English name is for identification purpose only.

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Items	Closing balance of pledged notes
Bank acceptance	306,145,249.74
Subtotal	306,145,249.74
(3) Endorsed or discounted but undue notes at the balance sheet date
Items	Closing balance derecognized
Bank acceptance	686,352,514.35
Subtotal	686,352,514.35

Due to the fact that the acceptor of bank acceptance is commercial bank, which is of high credit level, there is very little possibility of failure in recoverability when it is due. Based on this fact, the Company derecognized the endorsed or discounted bank acceptance. However, if any bank acceptance is not recoverable when it is due, the Company still holds joint liability on such acceptance, according to the China Commercial Instrument Law.

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6. Advances paid

(1) Age analysis

is
	Closing balance				Opening balance
Book balance	% to total	Provision for impairment	Carrying amount	Book balance	% to total	Provision for impairment	Carrying amount
134,718,034.9 4	97.79		134,718,034.94	64,279,616.58	90.47		64,279,616.58
1,328,399.29	0.96		1,328,399.29	4,843,587.16	6.82		4,843,587.16
1,621,900.20	1.18		1,621,900.20	1,928,881.01	2.71		1,928,881.01
100,864.10	0.07		100,864.10
137,769,198.5 3	100.00		137,769,198.53	71,052,084.75	100.00		71,052,084.75

(2) Details of the top 5 debtors with largest balances

Debtors	Book balance	Proportion to the total balance of advances paid(%)
No. 1	19,650,774.39	14.27
No. 2	11,135,988.03	8.08
No. 3	5,881,147.77	4.27
No. 4	3,954,000.00	2.87
No. 5	3,681,661.72	2.67
Subtotal	44,303,571.91	32.16

7. Other receivables

(1) Details

1) Details on categories

Categories			Closing balance	Closing balance
	Book balance		Provision for bad debts		Carrying amount
	Amount	% to total	Amount	Provision proportion(%)
Receivables with provision made on an individual basis
Receivables with provision made on a collective basis	287,548,686.45	100.00	29,877,688.17	10.39	257,670,998.28
Total	287,548,686.45	100.00	29,877,688.17	10.39	257,670,998.28
(Continued)
Categories			Opening balance
	Book balance		Provision for bad debts		Carrying amount
	Amount	% to total	Amount	Provision proportion(%)
Receivables with provision made on an individual basis
Receivables with provision made on a collective basis	246,792,240.61	100.00	21,926,324.89	8.88	224,865,915.72
Total	246,792,240.61	100.00	21,926,324.89	8.88	224,865,915.72

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(2) Other receivables with provision made on a collective basis

1) Parent company and electrotechnical equipment manufacturing industry under age analysis method

Ages		Closing balance
	Book balance	Provision for bad debts	Provision proportion (%)
1-180 days	17,962,594.27
180 days - 1 year	5,197,653.69	103,953.07	2.00
1-2 years	14,686,598.17	1,468,659.82	10.00
2-3 years	17,833,863.75	5,350,159.13	30.00
3-5 years	87,216.46	43,608.23	50.00
Over 5 years	404,856.00	323,884.80	80.00
Subtotal	56,172,782.34	7,290,265.05	12.98

2) Ventilation equipment manufacturing industry and environmental integrated industry under age analysis method

method
Ages		Closing balance
	Book balance	Provision for bad debts	Provision proportion (%)
Within 1 year	181,722,834.68	9,086,141.76	5.00
1-2 years	29,686,959.35	2,968,695.94	10.00
2-3 years	10,166,980.58	3,050,094.17	30.00
3-5 years	4,633,276.50	2,316,638.25	50.00
Over 5 years	5,165,853.00	5,165,853.00	100.00
Subtotal	231,375,904.11	22,587,423.12	9.76

(3) Changes in provision for bad debts

Items	Phase I	Phase II	Phase III	Subtotal
	12‑ month expected credit losses	Lifetime expected credit losses (credit not impaired)	Lifetime expected credit losses (credit impaired)
Opening balance	13,184,692.17	4,735,356.98	4,006,275.74	21,926,324.89
Opening balance in the current period
--Transferred to phase II	-4,437,355.76	4,437,355.76
--Transferred to phase III		-4,735,356.98	4,735,356.98
--Reversed to phase II
--Reversed to phase I
Provision made in the current period	442,758.42		14,008,604.86	14,451,363.28
Provision recovered in current period
Provision reversed in current period
Provision written off in current period			6,500,000.00	6,500,000.00
Other changes
Closing balance	9,190,094.83	4,437,355.76	16,250,237.58	29,877,688.17

(4) Other receivables written off in current period

Other receivables actually written off in current period totaled 6,500,000.00 yuan.

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(5) Other receivables categorized by nature

(5) Other receivables categorized by nature
Nature of receivables	Closing balance	Opening balance
Security deposits	155,500,083.80	114,939,229.61
Temporary advance payment receivable and petty cash	79,760,368.16	64,158,614.66
Call loans	48,442,016.60	50,530,932.83
Equity transfer payments		9,500,000.00
Others	3,846,217.89	7,663,463.51
Total	287,548,686.45	246,792,240.61

(6) Details of the top 5 debtors with largest balances

Debtors	Nature of receivables	Book balance	Ages	Proportion to the total balance of other receivables(%)	Provision for bad debts
No. 1	Call loans	30,165,333.33	[Note 1]	10.49	6,395,734.82
No. 2	Security deposits	14,261,550.00	Within 1 year	4.96	713,077.50
No. 3	Call loans and securitydeposits	13,048,263.59	[Note 2]	4.54	1,633,347.22
No. 4	Security deposits	7,751,515.52	[Note 3]	2.70	28,294.78
No. 5	Security deposits	7,000,000.00	Within 1 year	2.43	350,000.00
Subtotal		72,226,662.44		25.12	9,120,454.32

Note 1: Of which, 165,333.33 yuan was with age of 1 to 180 days, 1,927,522.33 yuan was with age of 180 days to 1 year, 10,322,794.66 yuan was with age of 1 to 2 years, and 17,749,683.01 yuan was with age of 2 to 3 years.

Note 2: Of which, 11,429,582.76 yuan was with age within 1 year, 618,680.83 yuan was with age of 1 to 2 years, and 1,000,000.00 yuan was with age over 5 years.

Note 3: Of which, 6,336,776.52 yuan was with age of 1 to 180 days, 1,414,739.00 yuan was with age of 180 days to 1 year.

8. Inventories

(1) Details

(1) Details
Items		Closing balance		Opening balance
	Book balance	Provision for write-down	Carrying amount	Book balance	Provision for write-down	Carrying amount
Raw materials	171,456,835.82	11,347,353.70	160,109,482.12	164,384,151.44	13,206,657.73	151,177,493.71
Work in process	243,622,797.51	12,052,957.06	231,569,840.45	217,354,425.22	1,954,250.96	215,400,174.26
Goods on hand	920,639,142.87	23,583,555.13	897,055,587.74	787,587,870.43	18,308,463.42	769,279,407.01
Products on consignment for sales	4,463,263.89		4,463,263.89	3,394,638.35		3,394,638.35
Packages	600,215.41		600,215.41	785,235.30		785,235.30
Low-value consumables	33,051.67		33,051.67	97,647.20		97,647.20
Cost to fulfill a contract	11,345,966.57		11,345,966.57	4,866,134.18		4,866,134.18
Total	1,352,161,273.74	46,983,865.89	1,305,177,407.85	1,178,470,102.12	33,469,372.11	1,145,000,730.01

(2) Provision for inventory write-down

1) Details

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Items	Opening balance	Increase	Increase	Decrease	Decrease	Closing balance
		Accrual	Others	Reversal or write-off	Others
Raw materials	13,206,657.73	2,964,417.49		4,823,721.52		11,347,353.70
Work in process	1,954,250.96	11,004,254.24		905,548.14		12,052,957.06
Goods on hand	18,308,463.42	22,302,262.62		17,027,170.91		23,583,555.13
Subtotal	33,469,372.11	36,270,934.35		22,756,440.57		46,983,865.89

2) Determination basis of net realizable value and reasons for the reversal or write-off of provision for inventory write-down

write-down
Items	Determination basis of net realizable value	Reasons for write-off of provision for inventory write-down
Raw materials, work in process	Estimated selling price of relevant finished goods less cost to be incurred upon completion, estimated sellingexpenses,and relevant taxes and surcharges	Inventories with provision for inventory write-down made in preceding period were used/sold in currentperiod
Goods on hand	Estimated selling price of relevant finished goods less estimated selling expenses, and relevant taxes and surcharges	Inventories with provision for inventory write-down made in preceding period were sold in currentperiod

(3) Cost to fulfill a contract

Items	Opening balance	Increase	Amortization	Closing balance
Urban garbage classification EPC project of Changgao Project	1,240,097.04	1,486,796.07		2,726,893.11
Nanliu Bobai Project		2,445,242.48		2,445,242.48
Foshan Shunde Project		1,767,838.14		1,767,838.14
Yunli Software Project		1,319,009.81		1,319,009.81
Urban classification construction project of Baoan Project		1,310,653.98		1,310,653.98
Urban and rural domestic waste sanitation integration project in Nan’an City	691,168.25	2,849,387.20	2,857,744.09	682,811.36
Huayuan Township Sewage Project	824,363.96	7,650,581.60	8,474,945.56
Jiangxi Poyang Leachate Project	14,601.77	2,647,000.45	2,661,602.22
Others	2,095,903.16	3,132,764.49	4,135,149.96	1,093,517.69
Subtotal	4,866,134.18	24,609,274.22	18,129,441.83	11,345,966.57

9. Contract assets

(1) Details

(1) Details
Items		Closing balance		Opening balance [Note]
	Book balance	Provision for impairment	Carrying amount	Book balance	Provision for impairment	Carrying amount
Quality guarantee deposit receivable	179,821,458.38	8,980,802.76	170,840,655.62	209,005,983.19	11,718,967.68	197,287,015.51
Total	179,821,458.38	8,980,802.76	170,840,655.62	209,005,983.19	11,718,967.68	197,287,015.51

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(2) Details on provision for impairment of contract assets

1) Details

1) Details
Items	Opening balance	Increase			Decrease		Closing balance
		Accrual	Others	Reversal	Write-off	Others
On an individual basis
On a collective basis	11,718,967.68	-2,738,164.92					8,980,802.76
Subtotal	11,718,967.68	-2,738,164.92					8,980,802.76

2) Contract assets with provision for impairment made on a collective basis

① Parent company and electrotechnical equipment manufacturing industry under age analysis method

①Parent company and electrot	echnical equipment manufa	cturing industry under age a	nalysis method
Ages		Closing balance
	Book balance	Provision for bad debts	Provision proportion (%)
1-180 days	205,403.46
Subtotal	205,403.46

② Ventilation equipment manufacturing industry and environmental integrated industry under age analysis method

method
Ages		Closing balance
	Book balance	Provision for bad debts	Provision proportion (%)
Within 1 year	179,616,054.92	8,980,802.76	5.00
Subtotal	179,616,054.92	8,980,802.76	5.00

10. Non-current assets due within one year

Items			Closing balance
	Book balance	Unrecognized finance income	Provision for bad debts	Carrying amount	Discount rate range(%)
Quality guarantee deposit receivable	3,117,560.29		575,338.66	2,542,221.63	N/A
Sales of goods in installments	590,525,742.54	13,507,469.77	29,526,287.13	547,491,985.64	4.75
Guaranteed collection amount for BOTprojects	3,396,226.40	2,697,240.24	169,811.32	529,174.84	4.75
Payments for finance lease	101,710,631.53	2,985,183.62	1,564,473.52	97,160,974.39	4.75
Equity transfer payments received in installments [Note 1]	366,128,123.00	28,979,514.04		337,148,608.96	4.75
Financial factoring of accounts receivable	190,903,684.69	18,706,828.72	5,062,991.90	167,133,864.07	4.75
Long-term call loans with payment of interest by installments and principal at the maturitydate	6,130,000.00		139,500.00	5,990,500.00	N/A
Total	1,261,911,968.45	66,876,236.39	37,038,402.53	1,157,997,329.53
(Continued)
Items		Opening balance [Note 2]
	Book balance	Unrecognized finance income	Provision for bad debts	Carrying amount	Discount rate range(%)
Quality guarantee deposit receivable	3,965,544.65		1,092,648.34	2,872,896.31	N/A

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Sales of goods in installments	616,399,938.50	14,169,089.88	30,819,996.92	571,410,851.70	4.75
Guaranteed collection amount for BOTprojects	3,396,226.40	2,775,665.95	169,811.32	450,749.13	4.75
Payments for finance lease	7,689,937.75	374,747.24	115,349.07	7,199,841.44	4.75
Equity transfer payments received in installments	198,815,157.09	17,030,615.08		181,784,542.01	4.75
Total	830,266,804.39	34,350,118.15	32,197,805.65	763,718,880.59

Note 1: The difference in book balance amounting to 381,000,000.00 yuan compared with opening balance was due to the early payment in the current period.

Note 2: Please refer to section III (XXXIV) 1 of notes to financial statements for details on the difference between the opening balance of current period and the closing balance of preceding period (i.e. December 31, 2019).

11. Other current assets

11. Other current assets
Nature of receivables	Closing balance	Opening balance
Input tax to be credited and tax credits	524,859,055.94	330,975,304.91
Hedging instruments		639,250.00
Total	524,859,055.94	331,614,554.91

12. Long-term receivables

(1) Details

(1) Details
Items			Closing balance
	Book balance	Unrecognized finance income	Provision for bad debts	Carrying amount	Discount rate range(%)
Sales of goods in installments	788,025,663.31	39,476,135.13	100,750,766.12	647,798,762.06	4.75
Guaranteed collection amount for BOTprojects	205,977,431.75	42,828,397.21	10,298,871.59	152,850,162.95	4.75
Payments for finance lease	42,916,937.55	922,675.24	667,631.54	41,326,630.77	4.75
Equity transfer payments received in installments	21,800,446.27		520,511.10	21,279,935.17	N/A
Financial factoring of accounts receivable	236,684,800.68	33,097,600.97	3,550,272.01	200,036,927.70	4.75
Total	1,295,405,279.56	116,324,808.55	115,788,052.36	1,063,292,418.65
(Continued)
Items		Opening balance [Note]
	Book balance	Unrecognized finance income	Provision for bad debts	Carrying amount	Discount rate range(%)
Sales of goods in installments	675,059,396.84	29,938,554.77	79,011,316.52	566,109,525.55	4.75
Guaranteed collection amount for BOTprojects	199,356,036.32	44,203,351.95	9,967,801.92	145,184,882.45	4.75
Payments for finance lease	27,712,057.53	64,288.43	772,836.41	26,874,932.69	4.75
Equity transfer payments received in installments	381,000,000.00	25,877,277.30		355,122,722.70	4.75
Long-term call loans with payment of interest by installments and principal at the maturitydate	60,618,680.83		3,030,934.04	57,587,746.79	N/A
Total	1,343,746,171.52	100,083,472.45	92,782,888.89	1,150,879,810.18

Note: Please refer to section III (XXXIV) 1 of notes to financial statements for details on the difference between the opening balance

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of current period and the closing balance of preceding period (i.e. December 31, 2019).

(2) Changes in provision for bad debts

Items	Opening balance	Increase	Increase			Decrease		Closing balance
		Accrual	Recovery	Others	Reversal	Write-off	Others
Provision made on an individual basis	2,542,185.00	-2,542,185.00
Provision made on a collective basis	90,240,703.89	25,547,348.47						115,788,052.36
Subtotal	92,782,888.89	23,005,163.47						115,788,052.36

13. Long-term equity investments

(1) Categories

(1) Categories
Items		Closing balance		Opening balance
	Book balance	Provision for impairment	Carrying amount	Book balance	Provision for impairment	Carrying amount
Investments in associates	318,243,332.69		318,243,332.69	303,292,231.01		303,292,231.01
Total	318,243,332.69		318,243,332.69	303,292,231.01		303,292,231.01

(2) Details

(2) Details
Investees	Opening balance		Increase/Decrease
		Investments increased	Investments decreased	Investment income recognized under equitymethod	Adjustment in other comprehensive income
Associates
廉江市绿色东方新能源有限公司(Lianjiang Green Oriental New Energy Co., Ltd.)	33,534,934.15			7,286,539.03
天健创新（北京）监测仪表股份有限公司(Tengine Innovation (Beijing) Monitoring Instrument Co., Ltd.*)	25,988,232.54	839,195.26 [Note 1]		2,735,747.26
广东顺控环境投资有限公司 (Guangdong Shunkong Environmental Investment Co.,Ltd.*)	154,058,623.77			26,842,351.03
广东天枢新能源科技有限公司(Guangdong Tianshu New Energy Technology Co., Ltd.*) [Note 2]
重庆中联弘峰环卫有限公司 (Chongqing Zoomlion Hongfeng Sanitation Co., Ltd.*) [Note 3]	15,275,736.13		15,617,403.15	341,667.02
汕头市中联瑞康环境卫生服务有限公司(Shantou Zoomlion Ruikang Environmental Sanitation Service Co.,Ltd.*)	14,105,443.32			920,745.64
汕头市潮阳区中联瑞康环境卫生服务有限公司 (Shantou ChaoyangDistrict	5,473,688.30	6,800,000.00		4,301,745.88

The English names are for identification purpose only.

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Investees	Investees	Opening balance	Opening balance		Increase/Decrease	Increase/Decrease	Increase/Decrease
				Investments increased	Investments decreased	Investment income recognized under equitymethod		Adjustment in other comprehensive income
Zoomlion Ruikang Environmental Sanitation Service Co.,Ltd.*)
长沙酷哇中联智能科技有限公司(Changsha Cowa Zoomlion Intelligent TechnologyCo.,Ltd.*)		8,215,692.49				-1,644,743.20
宜春发投联峰环境产业有限公司(Yichun Development Investment Lianfeng Environmental Industry Co., Ltd.)		9,835,677.00			9,758,372.39	-77,304.61
广东亮科环保工程有限公司 (Guangdong Liangke Environmental Engineering Co.,Ltd.*)		36,804,203.31				-1,125,180.13
Total		303,292,231.01		7,639,195.26	25,375,775.54	39,581,567.92
(Continued)
Investees				Increase/Decrease			Closing balance		Closing balance of provision for impairment
	Changes in other equity		Cash dividend/Profit declared for distribution		Provision for impairment	Others
Associates
Lianjiang Green Oriental New Energy Co.,Ltd.							40,821,473.18
Tengine Innovation (Beijing) Monitoring Instrument Co.,Ltd.							29,563,175.06
Guangdong Shunkong Environmental Investment Co.,Ltd.			6,893,885.96				174,007,088.84
Guangdong Tianshu New Energy TechnologyCo.,Ltd.
Chongqing Zoomlion Hongfeng Sanitation Co.,Ltd.
Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd.							15,026,188.96
Shantou Chaoyang District Zoomlion Ruikang Environmental Sanitation Service Co., Ltd.							16,575,434.18
Changsha Cowa Zoomlion Intelligent TechnologyCo.,Ltd.							6,570,949.29
Yichun Development Investment Lianfeng Environmental Industry Co.,Ltd.
Guangdong Liangke Environmental EngineeringCo.,Ltd.							35,679,023.18

 The English names are for identification purpose only.

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Investees	Increase/Decrease	Increase/Decrease	Increase/Decrease		Closing balance	Closing balance of provision for impairment
	Changes in other equity	Cash dividend/Profit declared for distribution	Provision for impairment	Others
Total		6,893,885.96			318,243,332.69

Note 1: In the current period, the Company increased investments in amount of 839,195.26 yuan in Tengine Innovation (Beijing) Monitoring Instrument Co., Ltd. As the former management of Tengine Innovation (Beijing) Monitoring Instrument Co., Ltd. failed to achieve the performance targets committed at the time of accepting the Company’s investments, the Company received compensation for performance commitment of 839,195.26 yuan in June 2020, which was used to directly acquire the equity of Tengine Innovation (Beijing) Monitoring Instrument Co., Ltd. through block transactions and call auction transactions at the stock exchange.

Note 2: Due to the long-term losses of Guangdong Tianshu New Energy Technology Co., Ltd., the Company adjusted the carrying amount of related long-term equity investments as 0 yuan. No investment income or loss is recognized in the current period as Guangdong Tianshu New Energy Technology Co., Ltd. still suffers losses.

Note 3: It is renamed as 重庆三峰城市环境服务有限公司 (Chongqing Sanfeng Urban Environmental Service Co., Ltd.[*] ) in August 2020.

14. Other equity instrument investments

Items	Closing balance	Opening balance	Dividend income	Accumulated amount of gains or losses transferred from other comprehensive income to retained earnings	Accumulated amount of gains or losses transferred from other comprehensive income to retained earnings
				Amount	Reasons
浙江上虞农商商业银行股份有限公司(Zhejiang Shangyu Rural Commercial Bank Co.,Ltd.*)	800,000.00	800,000.00	414,960.00
深圳市盈峰环保产业基金管理有限公司(Shenzhen Infore Environmental Protection Industry Fund Management Co.,Ltd.*)	270,000.00	270,000.00
深圳市盈峰环保产业并购基金 (Shenzhen Infore Environmental Protection IndustryM&A Fund*)	25,000,000.00	25,000,000.00
Subtotal	26,070,000.00	26,070,000.00	414,960.00

15. Investment property

(1) Details

(1) Details
Items	Buildings and structures	Total
Cost
Opening balance	845,691.00	845,691.00
Increase	2,171,093.43	2,171,093.43
1) Others	2,171,093.43	2,171,093.43
Decrease	267,550.00	267,550.00
1) Disposal	267,550.00	267,550.00
Closing balance	2,749,234.43	2,749,234.43
Accumulated depreciation and amortization

*The English names are for identification purpose only.

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Items	Buildings and structures	Total
Opening balance	277,664.61	277,664.61
Increase	526,105.96	526,105.96
1) Accrual or amortization	113,598.31	113,598.31
2) Others	412,507.65	412,507.65
Decrease	63,543.12	63,543.12
1) Disposal	63,543.12	63,543.12
Closing balance	740,227.45	740,227.45
Provision for impairment
Opening balance
Increase
Decrease
Closing balance
Closing carrying amount	2,009,006.98	2,009,006.98
Opening carrying amount	568,026.39	568,026.39

(2) Investment property with certificate of titles being unsettled

Items	Carrying amount	Reasons for unsettlement
Wanda real estate	1,957,820.99	In processing
Subtotal	1,957,820.99

16. Fixed assets

(1) Details

(1) Details
Items	Buildings and structures	General equipment	Special equipment	Transport facilities	Other equipment	Total
Cost
Opening balance	674,424,894.25	52,621,187.11	617,079,685.39	38,933,113.79	44,746,033.27	1,427,804,913.81
Increase	515,885,415.23	72,601,863.87	190,818,797.96	16,968,159.45	3,010,656.12	799,284,892.63
1) Acquisition	5,761,419.84	57,620,776.55	70,563,064.01	16,968,159.45	3,010,656.12	153,924,075.97
2) Transferred in from construction inprogress	510,123,995.39	14,981,087.32	86,823,555.19			611,928,637.90
3) Transferred in from inventories			33,432,178.76			33,432,178.76
Decrease	5,160,225.21	3,929,194.64	46,788,453.94	16,054,667.27	4,953,781.97	76,886,323.03
1) Disposal/ Scrapping	5,160,225.21	3,929,194.64	46,788,453.94	16,054,667.27	4,953,781.97	76,886,323.03
Closing balance	1,185,150,084.27	121,293,856.34	761,110,029.41	39,846,605.97	42,802,907.42	2,150,203,483.41
Accumulated depreciation
Opening balance	150,821,721.30	28,550,539.48	211,296,310.11	18,631,345.18	23,823,412.08	433,123,328.15
Increase	30,581,236.65	10,499,842.01	84,137,347.68	3,153,924.85	6,295,548.74	134,667,899.93
1) Accrual	30,581,236.65	10,499,842.01	84,137,347.68	3,153,924.85	6,295,548.74	134,667,899.93
Decrease	1,497,905.52	3,695,048.71	36,160,558.87	12,075,247.58	4,705,731.66	58,134,492.34
1) Disposal/ Scrapping	1,497,905.52	3,695,048.71	36,160,558.87	12,075,247.58	4,705,731.66	58,134,492.34
Closing balance	179,905,052.43	35,355,332.78	259,273,098.92	9,710,022.45	25,413,229.16	509,656,735.74

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Items	Buildings and structures	General equipment	Special equipment	Transport facilities	Other equipment	Total
Provision for impairment
Opening balance
Increase			1,336,643.39			1,336,643.39
1) Accrual			1,336,643.39			1,336,643.39
Decrease			1,336,643.39			1,336,643.39
1) Disposal/ Scrapping			1,336,643.39			1,336,643.39
Closing balance
Carrying amount
Closing balance	1,005,245,031.84	85,938,523.56	501,836,930.49	30,136,583.52	17,389,678.26	1,640,546,747.67
Opening balance	523,603,172.95	24,070,647.63	405,783,375.28	20,301,768.61	20,922,621.19	994,681,585.66

(2) No fixed assets temporarily idle at the balance sheet date

(3) Fixed assets leased out under finance leases at the balance sheet date

Items	Cost	Accumulated depreciation	Provision for impairment	Carrying amount
Special equipment	2,642,248.17	55,046.84		2,587,201.33
Subtotal	2,642,248.17	55,046.84		2,587,201.33

(4) No fixed assets leased out under operating leases at the balance sheet date

(5) Fixed assets with certificate of titles being unsettled

Items	Carrying amount	Reasons for unsettlement
Shunde Environmental Protection Industrial Park	484,310,105.38	In processing as a new property
Lueryuan Exhibition Center and auxiliary works	102,683,908.90	In processing
Subtotal	586,994,014.28

17. Construction in progress

(1) Details

(1) Details
Projects	Closing balance			Opening balance
	Book balance	Provision for impairment	Carrying amount	Book balance	Provision for impairment	Carrying amount
Shunde Environmental Protection Industrial Park				392,494,295.41		392,494,295.41
Biyang Waste Incineration BOT Project	219,772,333.93		219,772,333.93	34,179,399.20		34,179,399.20
Poyang Waste Incineration BOT Project	305,691,397.30		305,691,397.30	99,134,242.08		99,134,242.08
Jiayu Xingzhou Sewage Treatment BOT Project	199,194,392.46		199,194,392.46	176,767,886.50		176,767,886.50
Tongshan Xingzhou Sewage Treatment BOT Project	182,492,675.47		182,492,675.47	153,467,367.40		153,467,367.40
Tongshan Tongda	59,219,329.12		59,219,329.12	42,597,586.07		42,597,586.07

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Projects	Closing balance	Closing balance	Closing balance	Closing balance	Opening balance	Opening balance	Opening balance	Opening balance	Opening balance
	Book balance		Provision for impairment	Carrying amount	Book balance			Provision for impairment	Carrying amount
Wastewater Treatment BOT Project
Maoming Sewage Treatment BOT Project	97,112,573.45			97,112,573.45	78,770,642.99				78,770,642.99
Bahrain Right Banner Sewage Treatment BOT Project	43,350,467.66			43,350,467.66	42,465,394.81				42,465,394.81
Yinghe PPP project	219,613,167.96			219,613,167.96	100,861,556.23				100,861,556.23
Construction of employee dormitory in Lueryuan	47,031,231.64			47,031,231.64
West plot construction of Lueryuan North Plant	335,590.56			335,590.56	8,248,813.78				8,248,813.78
Lu’an Kitchen Project	78,929,760.49			78,929,760.49
Changde Zelian PPP Project	40,884,396.22			40,884,396.22
Liling Waste Incineration Project	60,911,841.93			60,911,841.93	47,952,884.79				47,952,884.79
Liling Urban-Rural Sanitation Integrated Project	36,110,864.53			36,110,864.53	17,622,404.28				17,622,404.28
Liling Landfill Project	15,287,765.22			15,287,765.22	8,867,794.14				8,867,794.14
Huayuan Wastewater Treatment Project	25,632,744.05			25,632,744.05	1,063,286.00				1,063,286.00
Tongren Sanitation Integrated PPP Project	17,434,225.72			17,434,225.72	148,296,315.67				148,296,315.67
Jishan Sanitation Integrated PPP Project	13,485,660.35			13,485,660.35	8,385,681.60				8,385,681.60
Bao’an Sanitation Integrated PPP Project	12,999,292.20			12,999,292.20
Anlong Sanitation Integrated PPP Project	12,272,607.28			12,272,607.28	10,874,590.34				10,874,590.34
Foshan Yingshun PPP Project	8,882,882.68			8,882,882.68
Kaili Garbage Station Construction Project					62,827,728.16				62,827,728.16
Loudi Garbage Station Construction Project					20,811,090.87				20,811,090.87
Piecemeal PPP projects	41,062,933.72			41,062,933.72	49,745,832.73				49,745,832.73
Piecemeal projects	16,218,948.06			16,218,948.06	35,132,593.18				35,132,593.18
Equipment to be installed	28,602,005.95			28,602,005.95	9,895,056.25				9,895,056.25
Total	1,782,529,087.95			1,782,529,087.95	1,550,462,442.48				1,550,462,442.48
(2) Changes in significant projects
Projects	Budgets	Opening balance		Increase		Transferred to fixed assets	Transferred to intangible assets		Closing balance
Shunde Environmental Protection Industrial Park	500,000,000.00	392,494,295.4		1 84,249,863.98		476,744,159.39
Biyang Waste Incineration BOT Project	314,692,600.00	34,179,399.2		0 185,592,934.73					219,772,333.93
Poyang Waste Incineration BOT	413,059,342.00	99,134,242.0		8 206,557,155.22					305,691,397.30

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Projects	Budgets	Opening balance	Increase	Transferred to fixed assets	Transferred to intangible assets	Closing balance
Project
Jiayu Xingzhou Sewage Treatment BOT Project	196,216,800.00	176,767,886.50	22,426,505.96			199,194,392.46
Tongshan Xingzhou Sewage Treatment BOT Project	197,819,400.00	153,467,367.40	29,025,308.07			182,492,675.47
Tongshan Tongda Wastewater Treatment BOT Project	132,085,538.20	42,597,586.07	16,621,743.05			59,219,329.12
Maoming Sewage Treatment BOT Project	227,465,447.66	78,770,642.99	18,341,930.46			97,112,573.45
Bahrain Right Banner Sewage Treatment BOT Project	75,617,000.00	42,465,394.81	885,072.85			43,350,467.66
Yinghe PPP project	423,744,954.13	100,861,556.23	137,293,079.88		18,541,468.15	219,613,167.96
Construction of employee dormitory in Lueryuan	65,000,000.00		47,031,231.64			47,031,231.64
West plot construction of Lueryuan North Plant	44,484,704.00	8,248,813.78	16,943,017.64	24,856,240.86		335,590.56
Lu’an Kitchen Project	112,000,000.00		78,929,760.49			78,929,760.49
Changde Zelian PPP Project	172,483,700.00		40,884,396.22			40,884,396.22
Liling Waste Incineration Project	500,000,000.00	47,952,884.79	12,958,957.14			60,911,841.93
Liling Urban-Rural Sanitation Integrated Project	100,000,000.00	17,622,404.28	22,469,825.97		3,981,365.72	36,110,864.53
Liling Landfill Project	117,000,000.00	8,867,794.14	6,419,971.08			15,287,765.22
Huayuan Wastewater Treatment Project	53,897,600.00	1,063,286.00	24,999,617.35		430,159.30	25,632,744.05
Tongren Sanitation Integrated PPP Project	246,433,496.10	148,296,315.67	42,209,659.74		173,071,749.69	17,434,225.72
Jishan Sanitation Integrated PPP Project	38,745,300.00	8,385,681.60	6,514,273.35		1,414,294.60	13,485,660.35
Bao’an Sanitation Integrated PPP Project	519,727,300.00		337,364,374.38		324,365,082.18	12,999,292.20
Anlong Sanitation Integrated PPP Project	70,205,700.00	10,874,590.34	6,677,763.06		5,279,746.12	12,272,607.28
Foshan Yingshun PPP Project	23,000,000.00		8,882,882.68			8,882,882.68
Kaili Garbage Station Construction Project	110,285,248.02	62,827,728.16	21,317,665.09		84,145,393.25
Loudi Garbage Station Construction Project	40,749,163.35	20,811,090.87	805,654.39		21,616,745.26
Piecemeal PPP projects		49,745,832.73	171,735,719.10		180,418,618.11	41,062,933.72
Piecemeal projects		35,132,593.18	68,164,485.97	87,078,131.09		16,218,948.06
Equipment to be installed		9,895,056.25	50,637,517.03	23,250,106.56	8,680,460.77	28,602,005.95
Total		1,550,462,442.48	1,665,940,366.52	611,928,637.90	821,945,083.15	1,782,529,087.95

(Continued)

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Projects	Accumulated input to budget (%)	Completion percentage (%)	Accumulated amount of borrowing cost capitalization	Amount of borrowing cost capitalization in currentperiod	Annual capitalization rate (%)	Fund source
Shunde Environmental Protection Industrial Park	100.00	100.00	9,466,988.21	6,534,169.99	5.70	Self-raised funds and loans from financial institutions
Biyang Waste Incineration BOT Project	74.03	73.90				Self-raised funds
Poyang Waste Incineration BOT Project	74.01	74.01				Self-raised funds
Jiayu Xingzhou Sewage Treatment BOT Project	100.00	100.00				Self-raised funds
Tongshan Xingzhou Sewage Treatment BOT Project	100.00	100.00	3,888,246.23	1,979,986.20	5.77	Self-raised funds and loans from financial institutions
Tongshan Tongda Wastewater Treatment BOT Project	44.83	44.83				Self-raised funds
Maoming Sewage Treatment BOT Project	93.40	93.00	15,406,029.57	5,168,545.31	4.90	Self-raised funds and loans from financial institutions
Bahrain Right Banner Sewage Treatment BOT Project	96.00	96.00				Self-raised funds
Yinghe PPP project	56.66	54.50				Self-raised funds
Construction of employee dormitoryin Lueryuan	72.36	72.36				Self-raised funds
West plot construction of Lueryuan North Plant	98.00	98.00				Self-raised funds
Lu’an Kitchen Project	70.55	70.55				Self-raised funds
Changde Zelian PPP Project	23.70	23.70				Self-raised funds
Liling Waste Incineration Project	12.18	12.18				Self-raised funds
Liling Urban-Rural Sanitation Integrated Project	36.03	36.03				Self-raised funds
Liling Landfill Project	85.72	85.72				Self-raised funds
Huayuan Wastewater Treatment Project	48.36	48.36				Self-raised funds
Tongren Sanitation Integrated PPP Project	77.31	77.31				Self-raised funds
Jishan Sanitation Integrated PPP Project	72.63	72.63				Self-raised funds
Bao’an Sanitation Integrated PPP Project	70.75	70.75				Self-raised funds
Anlong Sanitation Integrated PPP Project	66.02	66.02				Self-raised funds
Foshan Yingshun PPP Project	38.62	38.62				Self-raised funds
Kaili Garbage Station Construction Project	87.75	87.75				Self-raised funds
Loudi Garbage Station Construction Project	54.17	54.17				Self-raised funds
Piecemeal PPP projects						Self-raised funds
Piecemeal projects						Self-raised funds
Equipment to be installed						Self-raised funds
Total			28,761,264.01	13,682,701.50

Intangible assets

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(1) Details

(1) Details
Items	Land use right	Franchise	Patent technology	Software	Total
Cost
Opening balance	629,024,287.79	2,322,292,134.15	458,002,651.66	24,698,381.65	3,434,017,455.25
Increase	13,489,245.00	833,889,756.35	9,433,487.53	5,434,772.29	862,247,261.17
1) Acquisition	13,489,245.00			2,549,720.44	16,038,965.44
2) Transferred in from construction in progress		819,060,031.30		2,885,051.85	821,945,083.15
3) Internal research and development			9,433,487.53		9,433,487.53
4) Repurchased assets		14,829,725.05			14,829,725.05
Decrease		1,061.95	48,946,213.87	168,044.00	49,115,319.82
1) Disposal/Scrapping		1,061.95	48,946,213.87	168,044.00	49,115,319.82
Closing balance	642,513,532.79	3,156,180,828.55	418,489,925.32	29,965,109.94	4,247,149,396.60
Accumulated amortization
Opening balance	61,555,061.12	490,679,080.07	159,327,805.98	11,557,438.33	723,119,385.50
Increase	13,172,299.20	269,265,691.86	49,737,048.73	3,155,032.52	335,330,072.31
1) Accrual	13,172,299.20	263,369,795.68	49,737,048.73	3,155,032.52	329,434,176.13
2) Due to repurchase		5,895,896.18			5,895,896.18
Decrease		663.72	19,976,545.74	131,769.20	20,108,978.66
1) Disposal/Scrapping		663.72	19,976,545.74	131,769.20	20,108,978.66
Closing balance	74,727,360.32	759,944,108.21	189,088,308.97	14,580,701.65	1,038,340,479.15
Provision for impairment
Opening balance		24,687,522.85			24,687,522.85
Increase			20,185,580.19		20,185,580.19
1) Accrual			20,185,580.19		20,185,580.19
Decrease
1) Disposal/Scrapping
Closing balance		24,687,522.85	20,185,580.19		44,873,103.04
Carrying amount
Closing balance	567,786,172.47	2,371,549,197.49	209,216,036.16	15,384,408.29	3,163,935,814.41
Opening balance	567,469,226.67	1,806,925,531.23	298,674,845.68	13,140,943.32	2,686,210,546.90

At the balance sheet date, intangible assets formed through internal research and development account for 0.69% of total closing balance of intangible assets.

(2) Land use right with certificate of titles being unsettled

Items	Carrying amount	Reasons for unsettlement
Lot 4 in Cao’e Street	13,466,762.93	In processing as a new land
Subtotal	13,466,762.93

19. Development expenditures

(1) Details

	Items	Opening balance	Increase	Decrease	Closing

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		Internal development expenditures	Recognized as intangible assets	Transferred to profit or loss	balance
Development expenditures	7,861,260.14	6,021,294.07	9,433,487.52		4,449,066.69
Total	7,861,260.14	6,021,294.07	9,433,487.52		4,449,066.69
(2) Other remarks
Projects	Capitalization progress	Commencement date	Certificate of capitalization	Closing balance
Project A	100%	07/19/2019	Project proposal, project assignment paper, staged summary report
Project B	100%	07/01/2019	Project proposal, project assignment paper, staged summary report
Project C	40%	03/15/2020	Project proposal, project assignment paper, staged summary report	1,763,287.72
Project D	30%	03/28/2020	Project proposal, project assignment paper, staged summary report	1,024,782.18
Project E	50%	03/05/2020	Project proposal, project assignment paper, staged summary report	1,592,468.75
Project F	10%	06/25/2020	Project proposal, project assignment paper, staged summary report	68,528.04
Total				4,449,066.69

20. Goodwill

(1) Cost

(1) Cost
Investee or events resulting in goodwill	Opening balance	Due to business combination in currentperiod	Decrease due to disposal of subsidiaries	Closing balance
Zoomlion Environmental Company	5,714,428,315.99			5,714,428,315.99
Green Oriental Company	78,074,688.12			78,074,688.12
佛山市盈峰环境水处理有限公司(Foshan Yingfeng Environmental Water Treatment Co., Ltd.*)	316,465,481.91			316,465,481.91
Shangfeng Industrial Company	100,455,813.40			100,455,813.40
Donggang Magnet Wire Company	14,818,794.95			14,818,794.95
Total	6,224,243,094.37			6,224,243,094.37

(2) Provision for impairment

Investee or events resulting in goodwill	Opening balance	Increase	Decrease due to disposal of subsidiaries	Closing balance
Zoomlion Environmental Company [Note]	13,209,901.26	25,405,362.30		38,615,263.56
Donggang Magnet Wire Company	14,818,794.95			14,818,794.95

*The English name is for identification purpose only.

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Investee or events resulting in goodwill	Opening balance	Increase	Decrease due to disposal of subsidiaries	Closing balance
Subtotal	28,028,696.21	25,405,362.30		53,434,058.51

Note: For impairment loss of goodwill of Zoomlion Environmental Company, as the goodwill of 92,031,026.04 yuan was included in the acquisition of Zoomlion Environmental Company, which corresponded to the original deferred tax liabilities that recognized due to appraisal appreciation as at the date of business combination not under common control, provision for impairment of 25,405,362.30 yuan was made along with changes in deferred tax liabilities in the current period.

(3) Impairment test process

1) Related information of asset groups or asset group portfolios which include goodwill

Asset groups or asset group portfolios	Legal entities	Carrying amount of goodwill allocated to the asset groups or assetgroup portfolios	Carrying amount of asset groups or asset group portfolios	Carrying amount of asset groups or asset group portfolios that includegoodwill
Sanitation vehicles and equipment manufacturing and sales asset group	Zoomlion Environmental Company (manufacturing and sales of sanitation vehicles and equipment),长沙中标环境产业有限公司(Changsha Zhongbiao Environmental Industry Co., Ltd.)	11,051,393,640.78	1,385,391,437.05	12,436,785,077.83
Urban-rural sanitation integrated operation asset group portfolio	Zoomlion Environmental Company (sanitation integrated operation), Green Oriental Company, Huaian Chenjie Environmental Engineering Co., Ltd., and泌阳县丰和新能源电力有限公司(Biyang County Fenghe New Energy Power Co., Ltd.*)	306,455,386.89	3,277,373,056.32	3,583,828,443.21
Water governance operation asset group	Foshan Yingfeng Environmental Water Treatment Co., Ltd.	316,465,481.91	224,733,923.37	541,199,405.28
Fan manufacturing and sales assetgroup	Shangfeng Industrial Company	159,547,374.49	141,836,086.96	301,383,461.45
Subtotal		11,833,861,884.07	5,029,334,503.70	16,863,196,387.77

Note 1: Goodwill of sanitation vehicles and equipment manufacturing and sales asset group and urban-rural sanitation integrated operation asset group portfolio included the portion attribution to non-controlling shareholders.

Note 2: In December 2018, Zoomlion Environmental Company, which was acquired under business combination under common control by the Company, had two asset groups, i.e. sanitation vehicles and equipment manufacturing and sales asset group and urban-rural sanitation integrated operation asset group (including waste transfer, landfill and disposal).The assessment on the goodwill of Zoomlion Environmental Company was based on the fair value of the identifiable net assets as at the end of June 2017 under asset-based method in the appraisal report numbered Zhong Rui Ping Bao Zi [2017] 110731042, without considering the synergy between the urban-rural sanitation integrated operation asset group of Zoomlion Environmental Company and the waste incineration power generation operation asset group of former Green Oriental Company. After the business combination of Zoomlion Environmental Company, as its urban-rural sanitation integrated operation asset group and the waste incineration power generation operation asset group of Green Oriental Company were similar in terms of business acquisition, production and operation activities, and cash return realization methods, and the Management had started to carry out integrated management, these two asset groups were identified as the urban-rural sanitation integrated operation asset group portfolio.

 The English names are for identification purpose only.

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The original goodwill of Zoomlion Environmental Company in amount of 5.714 billion was re-allocated to the sanitation vehicles and equipment manufacturing and sales asset group and urban-rural sanitation integrated operation asset group portfolio based on the gross profit ratio contributed by the two businesses, in amount of 5.636 billion yuan and 78 million yuan, respectively.

2) Impairment test process, method and conclusion

① Significant assumptions and basis

a. It is assumed that the assessed entity is a going concern, and there is no significant change in key aspects that affect production and operation such as business scope, sales model and channels, and the management;

b. It is assumed that neither the social and economic environment of the assessed entity nor the relevant laws, regulations, and policies of the country and the region where the entity is located have significant changes;

c. It is assumed that the business scope, business methods, management models, etc. of the assessed entity are continuously improved on the basis of consistency, and can be adjusted and innovated with the development of the economy in a timely manner;

d. It is assumed that the various products provided by the assessed entity can adapt to market demand, the goals and measures formulated can be achieved on schedule according to the schedule, and expected benefits will be achieved;

e. It is assumed that interest rates, exchange rates, tax bases and tax rates have no major changes within the normal range prescribed by the state.

② Determination method of recoverable amount

The recoverable amount of asset groups and asset group portfolios is estimated based on the business characteristics of different asset groups or asset group portfolios, which is based on the five-year budget approved by the Management. The revenue growth rate of the product production and sales asset group in 2020 is based on the existing orders, historical data and operating budget, while the expense rate is based on the average expense rate of the previous three years, in combination with the reasonable income growth, capital depreciation and labor cost growth in the future; for operation asset groups or asset group portfolios, due to the large difference in income and gross profit margin between the investment period and period of maturity of PPP operating projects, the expected growth rate, stable period growth rate and profit rate of the asset groups and asset group portfolios show an irregular distribution when multiple projects are run in parallel, and the income, costs and expenses are estimated based on the time to mature operation and design capacity of each specific project.

The recoverable amount of groups and asset group portfolios is calculated based on the discounted expected future operating cash flows of operating long-term assets excluding non-operating assets and liabilities, initial working capital, surplus assets and interest-bearing liabilities.

③ Key parameter information for adopting future cash flow discount method

③Key parameter information for	adopting future	cash flow discount m	ethod
Asset groups or asset group portfolios	Forecast period	Forecast period growth rate	stable period growth rate	Profit margin	Pre-tax discount rate
Sanitation vehicles and equipment manufacturing and sales assetgroup	5 years	[Note 1]	0.00%	15.48%-17.16%	12.76%
Urban-rural sanitation integrated operation assetgroup portfolio	[Note 2]	[Note 2]	[Note 2]	[Note 2]	11.63%- 12.16%
Water governance operation assetgroup	[Note 2]	[Note 2]	[Note 2]	[Note 2]	11.36%
Fan manufacturing and sales assetgroup	5 years	[Note 3]	0.00%	5.91%-6.96%	11.32%

Note 1: The revenue growth rate of sanitation vehicles and equipment manufacturing and sales asset group during the forecast period from 2021 to 2025 is 6.58%, 7.12%, 5.25%, 4.07% and 2.81%, respectively (unit price is expected to be stable with a decline, and sales volume changes lead to different growth rates).

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Note 2: Please refer to the above determination method of recoverable amount for details.

Note 3: The revenue growth rate of fan manufacturing and sales asset group during the forecast period from 2021 to 2025 is 10.10%, 7.19%, 5.29%, 2.99% and 2.00%, respectively.

④ Conclusion of goodwill impairment test

④Conclusion of goodwill impai	rment test
Asset group or asset group portfolios	Recoverable amount asset group or asset group portfolios that include goodwill	Carrying amount of asset group or asset group portfolios that includegoodwill	Goodwill impairment loss attributable to the Company
Sanitation vehicles and equipment manufacturing and sales assetgroup	12,738,100,000.00 [Note 1]	12,436,785,077.83
Urban-rural sanitation integrated operation asset group portfolio	4,521,775,000.00 [Note 2]	3,583,828,443.21
Water governance operation assetgroup	542,320,000.00 [Note 3]	541,199,405.28
Fan manufacturing and sales assetgroup	350,279,688.48	301,383,461.45
Subtotal	18,152,474,688.48	16,863,196,387.77

Note 1: The present value of estimated future cash flows (recoverable amount) of sanitation vehicles and equipment manufacturing and sales asset group was based on the appraisal report numbered Zhong Rui Ping Bao Zi [2021] 000413 issued by 中瑞世联资产评估集团有限公司 (HG Shilian Assets Appraisal Group Co., Ltd.[] ).

Note 2: The present value of estimated future cash flows (recoverable amount) of urban-rural sanitation integrated operation asset group portfolio was based on the appraisal report numbered Zhong Rui Ping Bao Zi [2021] 000408 issued by HG Shilian Assets Appraisal Group Co., Ltd. and the appraisal report numbered Zhong Guang Xin Ping Bao Zi [2021] 003 issued by 广东中广信资产评估有限公司 (Guangdong Zhongguangxin Assets Appraisal Co., Ltd.[] ).

Note 3: It is based on the appraisal report numbered Zhong Guang Xin Ping Bao Zi [2021] 002 issued by Guangdong Zhongguangxin Assets Appraisal Co., Ltd.

3) Completion of performance commitment and its effect on goodwill impairment test

From 2018 to 2020, the audited net profit of Zoomlion Environmental Company after non-recurring profit or loss attributable to shareholders of the parent company amounted to 1.105 billion yuan, 1.264 billion yuan, and 1.409 billion yuan, respectively, totaling

3.778 billion yuan, 56 million yuan higher than the commitment, which means the Company fulfilled its performance commitment (calculated based on the accumulated amount for 3 years as agreed).

21. Long-term prepayments

Items	Opening balance	Increase	Amortization	Closing balance
Expenditures on improvement of leased-in fixed assets	15,131,380.10	251,103.07	3,648,898.94	11,733,584.23
Others	978,558.78	822,043.99	830,384.35	970,218.42
Total	16,109,938.88	1,073,147.06	4,479,283.29	12,703,802.65

22. Deferred tax assets and deferred tax liabilities

(1) Deferred tax assets before offset

Items Closing balance Opening balance

 The English name is for identification purpose only.

 The English name is for identification purpose only.

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	Deductible temporary difference	Deferred tax assets	Deductible temporary difference	Deferred tax assets
Provision for impairment of assets	589,067,868.14	90,264,437.69	484,841,437.43	74,098,839.50
Unrealized profit from internal transactions	13,119,836.20	1,886,494.71	25,068,470.62	3,678,789.87
Deductible losses	20,799,666.14	3,119,949.91
Total	622,987,370.48	95,270,882.31	509,909,908.05	77,777,629.37

(2) Deferred tax liabilities before offset

Items	Closing balance	Closing balance	Opening balance	Opening balance
	Taxable temporary difference	Deferred tax liabilities	Taxable temporary difference	Deferred tax liabilities
Accelerated depreciation of fixed assets	5,789,343.84	1,447,335.96
Changes in fair value of derivative financial instruments			639,250.00	159,812.50
Changes in fair value of financial assets at fair value throughprofit or loss	123,048,000.00	30,762,849.39	212,230,500.00	46,963,875.00
Assets appraisal appreciation due to business combination not under common control	405,268,960.11	46,674,772.03	454,980,514.43	72,919,489.91
Total	534,106,303.95	78,884,957.38	667,850,264.43	120,043,177.41

(3) Details of unrecognized deferred tax assets

Items	Closing balance	Opening balance
Deductible temporary difference	146,931,501.30	119,860,075.63
Deductible losses	141,639,237.32	130,784,839.99
Unrealized profit from internal transactions	339,581,837.11	129,902,841.95
Subtotal	628,152,575.73	380,547,757.57

(4) Maturity years of deductible losses of unrecognized deferred tax assets

Maturity years	Closing balance	Opening balance
Year 2021	35,765.88	7,548,263.10
Year 2022	27,961,103.28	65,505,274.76
Year 2023	57,039,954.82	57,482,722.13
Year 2024	56,602,413.34
Subtotal	141,639,237.32	130,536,259.99

23. Other non-current assets

(1) Details

(1) Details
Items	Closing balance			Opening balance [Note]
	Book balance	Provision for impairment	Carrying amount	Book balance	Provision for impairment	Carrying amount
Contract assets	49,013,589.27	9,175,693.26	39,837,896.01	58,262,533.48	6,640,238.50	51,622,294.98
Advances for long-term assets	45,933,089.17		45,933,089.17	35,842,204.27		35,842,204.27
Receivables for agent construction	8,518,174.25		8,518,174.25	8,518,174.25		8,518,174.25
Total	103,464,852.69	9,175,693.26	94,289,159.43	102,622,912.00	6,640,238.50	95,982,673.50

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(2) Contract assets

1) Details

1) Details
Items		Closing balance			Opening balance
	Book balance	Provision for impairment	Carrying amount	Book balance	Provision for impairment	Carrying amount
Quality guarantee deposit receivable	49,013,589.27	9,175,693.26	39,837,896.01	58,262,533.48	6,640,238.50	51,622,294.98
Subtotal	49,013,589.27	9,175,693.26	39,837,896.01	58,262,533.48	6,640,238.50	51,622,294.98

2) Details on provision for impairment of contract assets

① Details

①Details
Items	Opening balance	Increase			Decrease		Closing balance
		Accrual	Others	Reversal	Write-off	Others
On an individual basis
On a collective basis	6,640,238.50	2,535,454.76					9,175,693.26
Subtotal	6,640,238.50	2,535,454.76					9,175,693.26

② Contract assets with provision for impairment made on a collective basis

Ventilation equipment manufacturing industry and environmental integrated industry under age analysis method

Portfolios		Closing balance
	Book balance	Provision for impairment	Provision proportion (%)
Within 1 year	23,955,836.31	1,197,791.81	5.00
1-2 years	14,433,576.28	1,443,357.63	10.00
2-3 years	5,041,402.60	1,512,420.78	30.00
3-5 years	1,121,302.08	560,651.04	50.00
Over 5 years	4,461,472.00	4,461,472.00	100.00
Subtotal	49,013,589.27	9,175,693.26	18.72

24. Short-term borrowings

24. Short-term borrowings
Items	Closing balance	Opening balance
Credit borrowings	800,921,295.96	638,320,346.15
Guaranteed borrowings	518,446,764.98	222,329,086.77
Mortgaged borrowings	72,104,019.96	62,091,002.69
Guaranteed and mortgaged borrowings	260,430,637.32	330,480,351.87
Guaranteed and pledged borrowings	4,000,000.00	4,000,000.00
Mortgaged and pledged borrowings	2,002,658.33
Pledged borrowings		349,453,030.00
Total	1,657,905,376.55	1,606,673,817.48

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25. Held-for-trading financial liabilities

(1) Details

(1) Details
Items	Opening balance	Increase	Decrease	Closing balance
Held-for-trading financial liabilities	866,300.00	810,300.00	866,300.00	810,300.00
Including: Derivative financial liabilities	866,300.00	810,300.00	866,300.00	810,300.00
Total	866,300.00	810,300.00	866,300.00	810,300.00

(2) Other remarks

Held-for-trading financial liabilities were the floating losses of metal futures contracts held by the sub-subsidiary Anhui Weiqi Electrical Materials Co., Ltd.

26. Notes payable

26. Notes payable
Items	Closing balance	Opening balance
Bank acceptance	3,377,701,187.77	2,597,981,590.26
Trade acceptance	475,474,206.32	343,712,590.88
Total	3,853,175,394.09	2,941,694,181.14

(2) Other remarks

At the balance sheet date, balances of notes due but unpaid, which were not presented for payment by the holders, totaled 313,659.68 yuan.

27. Accounts payable

(1) Details

(1) Details
Items	Closing balance	Opening balance
Payments for goods	2,983,456,990.78	2,210,599,443.61
Payments for engineering and equipment	342,985,351.65	221,909,224.20
Others	78,382,742.60	53,669,184.18
Total	3,404,825,085.03	2,486,177,851.99

(2) No significant balance with age over one year.

28. Advances received

(1) Details

(1) Details
Items	Closing balance	Opening balance [Note]
Payments for goods
Total

(2) No significant balance with age over one year.

29. Contract liabilities

Items Closing balance Opening balance [Note]

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Items	Closing balance	Opening balance [Note]
Advanced goods payments	181,051,683.90	150,983,008.42
Total	181,051,683.90	150,983,008.42

30. Employee benefits payable

(1) Details

(1) Details
Items	Opening balance	Increase	Decrease	Closing balance
Short-term employee benefits	221,403,931.32	1,125,108,045.53	1,028,003,858.06	318,508,118.79
Post-employment benefits - defined contributionplan	3,708,506.55	19,654,010.40	20,008,646.10	3,353,870.85
Termination benefits		3,913,031.07	3,913,031.07
Total	225,112,437.87	1,148,675,087.00	1,051,925,535.23	321,861,989.64

(2) Details of short-term employee benefits

Items	Opening balance	Increase	Decrease	Closing balance
Wage, bonus, allowance and subsidy	217,765,407.19	1,030,739,891.66	938,895,359.19	309,609,939.66
Employee welfare fund	188,802.51	38,852,001.13	38,183,756.31	857,047.33
Social insurance premium	107,872.67	23,255,633.55	23,023,052.90	340,453.32
Including: Medicare premium	64,428.17	21,016,749.34	20,741,190.39	339,987.12
Occupational injuries premium	38,875.63	1,670,697.64	1,709,376.02	197.25
Maternity premium	4,568.87	568,186.57	572,486.49	268.95
Housing provident fund	1,285,988.97	22,735,531.46	22,636,369.71	1,385,150.72
Trade union fund and employee education fund	2,055,859.98	9,524,987.73	5,265,319.95	6,315,527.76
Subtotal	221,403,931.32	1,125,108,045.53	1,028,003,858.06	318,508,118.79

(3) Details of defined contribution plan

Items	Opening balance	Increase	Decrease	Closing balance
Basic endowment insurance premium	3,322,704.67	18,738,874.59	19,071,333.80	2,990,245.46
Unemployment insurance premium	385,801.88	915,135.81	937,312.30	363,625.39
Subtotal	3,708,506.55	19,654,010.40	20,008,646.10	3,353,870.85

31. Taxes and rates payable

31. Taxes and rates payable
Items	Closing balance	Opening balance
VAT	180,356,026.72	73,783,692.90
Enterprise income tax	163,408,107.06	101,451,575.83
Individual income tax withheld for tax authorities	6,099,807.10	7,085,391.75
Urban maintenance and construction tax	11,172,773.45	3,999,418.16
Housing property tax	1,747,769.26	811,081.30
Land use tax	278,724.12	433,967.55
Stamp tax	1,853,506.57	1,644,718.29

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Items	Closing balance	Opening balance
Education surcharge	4,603,782.22	1,746,535.21
Local education surcharge	2,980,941.01	1,118,755.00
Others	13,505.15	44,920.49
Total	372,514,942.66	192,120,056.48

32. Other payables

(1) Details

(1) Details
Items	Closing balance	Opening balance
Dividend payable		9,450,000.00
Other payables	443,477,082.48	365,423,715.69
Total	443,477,082.48	374,873,715.69

(2) Dividend payable

1) Details

1) Details
Items	Closing balance	Opening balance
曹国路(Cao Guolu)		1,050,000.00
绍兴路巧贸易有限公司(Shaoxing Luqiao Trading Co., Ltd.)		4,200,000.00
绍兴智赢企业管理有限公司(Shaoxing Zhiying Enterprise Management Co.,Ltd.*)		2,100,000.00
绍兴和盈企业管理合伙企业（有限合伙）(Shaoxing HeyingEnterprise Management Partnership (LP)*)		2,100,000.00
Subtotal		9,450,000.00

2) No significant balance with age over one year.

(3) Other payables

1) Details

1) Details
Items	Closing balance	Opening balance
Factoring financing of accounts receivable with recourse right[Note]	49,160,385.66	101,147,928.04
Temporary receipts payable	208,719,173.08	110,738,395.22
Temporary receipts of the employee stock ownership plan phase I		92,370,003.00
Security deposits	72,880,746.04	27,827,224.46
Others	112,716,777.70	33,340,164.97
Total	443,477,082.48	365,423,715.69

Note: The balance refers to the factoring financing of account receivable made by Zoomlion Environmental Company to the non-bank financial institutions under the control of Zoomlion Heavy Industry Co., Ltd. However, as non-bank financial institutions have the right to request Zoomlion Environmental Company to repurchase the accounts receivable if they are overdue, the accounts receivable shall not be derecognized upon the receipts of corresponding factoring, and the receipts shall be presented under other payables (non-bank financial institutions are listed as risk exposures)

2) No significant balance with age over one year.

 The English names are for identification purpose only.

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33. Non-current liabilities due within one year

33. Non-current liabilities due within one year
Items	Closing balance	Opening balance
Long-term borrowings due within one year	150,862,201.57	86,554,242.52
Total	150,862,201.57	86,554,242.52

34. Other current liabilities

34. Other current liabilities
Items	Closing balance	Opening balance [Note]
Hedging instruments	7,415,450.00
Output tax to be debited	22,448,466.02	19,627,791.10
Customer rebates	25,242,123.71	9,879,816.88
Total	55,106,039.73	29,507,607.98

Note: Please refer to section III (XXXIV) 1 of notes to financial statements for details on the difference between the opening balance

of current period and the closing balance of preceding period (i.e. December 31, 2019).

35. Long-term borrowings

35. Long-term borrowings
Items	Closing balance	Opening balance
Guaranteed borrowings	197,500,000.00
Pledged borrowings	81,300,000.00	54,600,000.00
Guaranteed and mortgaged borrowings	94,230,491.81	109,492,159.87
Guaranteed and pledged borrowings	234,212,965.97	479,751,010.91
Guaranteed, pledged and mortgaged borrowings	158,400,000.00
Total	765,643,457.78	643,843,170.78

36. Bonds payable

(1) Details

(1) Details
Items	Closing balance	Opening balance
Convertible corporate bonds	1,199,466,109.60
Total	1,199,466,109.60

(2) Current period movements (not including other financial instruments such as preferred shares/perpetual bonds classified as financial liabilities)

Bonds	Par value	Issuing date	Issuing date	Maturity	Amount outstanding	Amount outstanding	Opening balance	Current period issuance
Infore convertible bonds	100.00	11/04/2020		6 years	1,476,189,600.00			1,457,336,184.17
Subtotal					1,476,189,600.00			1,457,336,184.17
(Continued)
Bonds	Equity component under split		Par value interest			Interest adjustments	Converted to shares	Closing balance
Infore convertible bonds	266,939,831.65		461,056.48			8,608,700.60		1,199,466,109.60
Subtotal	266,939,831.65		461,056.48			8,608,700.60		1,199,466,109.60

(3) Please refer to section XIV (II) of notes to financial statements for details on converting conditions and time of

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convertible bonds.

37. Long-term payables

Items	Opening balance	Increase	Closing balance	Reasons for balance
Special funds for treasury bond projects	3,000,000.00		3,000,000.00	Funds from conversion of treasury bonds into loans
Special funds for Jiayu Sewage Treatment Project	103,080,483.16	19,935,291.42	123,015,774.58	Special government funds for PPP projects
Special funds for Tongshan Sewage Treatment Project	82,320,040.33	47,400,000.00	129,720,040.33	Special government funds for PPP projects
Subtotal	188,400,523.49	67,335,291.42	255,735,814.91

38. Provisions

38. Provisions
Items	Closing balance	Opening balance	Reasons for balance
Pending lawsuit	1,000,000.00		Provision was made based on the application of the first-instance judgment by河北澳晗工程咨询有限公司(Hebei Aohan EngineeringConsultingCo.,Ltd.)
Contractual credit guarantees	461,553.82
Total	1,461,553.82

39. Deferred income

(1) Details

(1) Details
Items	Opening balance [Note]	Increase	Decrease	Closing balance	Reasons for balance
Government grants	40,519,289.35	61,828,174.00	5,612,643.51	96,734,819.84	Government grants related to assets/income
Total	40,519,289.35	61,828,174.00	5,612,643.51	96,734,819.84

(2) Details of government grants

Items	Opening balance	Grants included into other income[Note]	Closing balance	Related to assets/income
Special subsidies for Xiantao Waste Power Generation Project	11,389,114.20	726,531.48	10,662,582.72	Related to assets
Incremental tax incentives for technological transformation	9,482,800.00	948,280.00	8,534,520.00	Related to assets
Urban sewage and garbage treatment facilities and sewage pipe network engineering projects	5,351,375.15	445,536.32	4,905,838.83	Related to assets
Special funds for air pollutionprevention and	1,000,000.00	100,000.00	900,000.00	Related to assets

 The English name is for identification purpose only.

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Items	Opening balance	Increase	Grants included into other income[Note]	Closing balance	Related to assets/income
control
The fifth batch of special funds for raising manufacturing power in Hunan Province	1,000,000.00			1,000,000.00	Related to assets
Xiantao sludge harmless treatmentplant		17,700,000.00		17,700,000.00	Related to assets
Shouxian Domestic Waste Incineration Power Plant Project		15,040,000.00	1,002,666.71	14,037,333.29	Related to assets
Urban and rural domestic waste transfer, kitchen waste resource utilization and harmless treatmentprojects		11,270,000.00	211,034.48	11,058,965.52	Related to assets
No. 2 Sewage Treatment Plant and supporting pipe network projects in Daban Town, Bahrain Right Banner		7,660,000.00		7,660,000.00	Related to assets
The second batch of awards for rental housing in the high-tech zone		5,784,474.00		5,784,474.00	Related to assets
The third batch of subsidies for technological transformation of industrial enterprises		2,500,000.00		2,500,000.00	Related to assets
Key projects of enterprise intelligent transformation of 2018 and 2019		819,700.00	35,737.38	783,962.62	Related to assets
Subsidies for enterprise technological transformation		1,000,000.00	142,857.14	857,142.86	Related to assets
Central special construction supporting funds for Kaili PPP Project	10,000,000.00			10,000,000.00	Related to income
Special funds for green manufacturing system solution supplier projects of 2019	2,000,000.00		2,000,000.00		Related to income
Funds for national key R&D program projects of 2017	296,000.00	54,000.00		350,000.00	Related to income
Subtotal	40,519,289.35	61,828,174.00	5,612,643.51	96,734,819.84

Note: Please refer to section V (IV) 3 of notes to financial statements for details on grants included into profit or loss.

40. Share capital

(1) Details

(1) Details
Items	Opening balance	Movements					Closing balance
		Issue of new shares	Bonus shares	Reserve transferred to shares	Others	Subtotal
Total share	3,163,062,146.00						3,163,062,146.00

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41. Other equity instruments

(1) Please refer to section XIV (II) of notes to financial statements for basic information of convertible corporate bonds outstanding as of the balance sheet date

(2) Current period movements of convertible corporate bonds outstanding at the balance sheet date

Items	Opening balance	Opening balance	Increase	Increase	Decrease	Decrease	Closing balance	Closing balance
	Quantity	Carrying amount	Quantity	Carrying amount	Quantity	Carrying amount	Quantity	Carrying amount
Convertible corporate bonds			14,761,896.00	266,939,831.65			14,761,896.00	266,939,831.65
Total			14,761,896.00	266,939,831.65			14,761,896.00	266,939,831.65

42. Capital reserve

(1) Details

(1) Details
Items	Opening balance	Increase	Decrease	Closing balance
Share/capital premium	9,652,714,085.10	4,840,900.20	1,636,434.07	9,655,918,551.23
Other capital reserve	45,403,677.65	12,859,488.20	6,439,840.59	51,823,325.26
Total	9,698,117,762.75	17,700,388.40	8,076,274.66	9,707,741,876.49

(2) Other remarks

Current increase of share/capital premium in amount of 4,840,900.20 yuan was due to the transfer-in of other capital reserve originally arising from share-based payments upon the expiration of the stock incentive vesting period;

Current decrease of share/capital premium was due to the following events: 1) in January 2020, the Company acquired 5.20% equity of the subsidiary Shangfeng Industrial Company, and the difference between the acquisition cost and the proportionate share in net assets of Shangfeng Industrial Company from acquisition date or combination date in amount of -2,225,430.97 yuan was included into the Company’s share/capital premium; 2) in November 2020, the Company disposed 39.00% equity of the subsidiary Jilin Zhongfeng Oasis Environmental Development Co., Ltd, and the difference between the disposal consideration and the proportionate share in net assets of Jilin Zhongfeng Oasis Environmental Development Co., Ltd from acquisition date or combination date in amount of -314,024.80 yuan was included into the Company’s share/capital premium; 3) in January 2020, the Company acquired 18.86% equity of the subsidiary Xiantao Yinghe Environmental Protection Co., Ltd., and the difference between the acquisition cost and the proportionate share in net assets of Xiantao Yinghe Environmental Protection Co., Ltd. from acquisition date or combination date in amount of 903,021.70 yuan was included into the Company’s share/capital premium.

Current increase of other capital reserve was due to the recognition of incentive expenses based on stock incentive plan in amount of 13,624,937.21 yuan, of which, 12,859,488.20 yuan was included into capital reserve – other capital reserve, and 765,449.01 yuan was included into non-controlling interest. Please refer to section XI of notes to financial statements for details. Current decrease of other capital reserve was due to the following events: 1) in February 2020, the Company transferred 15,326,208 shares that repurchased at the end of 2019 to the Company’s special repurchase securities account of employee stock ownership plan at the market price of 6.42 yuan per share, totaling 98,394,255.36 yuan. The difference between the transfer price and the repurchase amount of 99,993,195.75 yuan in 2019 amounting to 1,598,940.39 yuan was used to offset capital reserve; 2) please refer to the above notes to current increase of share/capital premium for details on other decrease of other capital reserve amounting to 4,840,900.20 yuan.

43. Treasury shares

(1) Details

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Items	Opening balance	Increase	Decrease	Closing balance
Treasury shares	99,993,195.75	8,920,597.83	99,993,195.75	8,920,597.83
Total	99,993,195.75	8,920,597.83	99,993,195.75	8,920,597.83

(2) Other remarks

Current increase was due to the Proposal on Share Repurchasing Plan approved by the third extraordinary meeting of the ninth session of the Board of Directors dated April 13, 2020, which decided to repurchase the Company’s shares through centralized bidding transactions using self-raised funds. In the current period, the Company repurchased 1,137,524 shares in total through centralized bidding transactions, and paid a total amount of 8,920,597.83 yuan (excluding transaction costs).

Current decrease was due to the Proposal on the Employee Stock Ownership Plan Phase I (Draft) and its Summary deliberated and approved by the 31[st] extraordinary meeting of the eighth session of the Board of Directors dated October 23, 2019 and the third extraordinary shareholders’ general meeting of 2019 dated November 12, 2019, according to which the Company transferred 15,326,208 shares that repurchased at the end of 2019 to the Company’s special repurchase securities account of employee stock ownership plan at the consideration of 98,394,255.36 yuan. The difference between the transfer price and the repurchase amount of 99,993,195.75 yuan in 2019 amounting to 1,598,940.39 yuan was included into capital reserve.

44. Other comprehensive income (OCI)

Items	Opening balance		Current period	Current period	cumulative	cumulative	cumulative	cumulative	Closing balance
		Current period cumulative before income tax	Less: OCI previously recognized but transferred to profit or loss in current period	Less: OCI previously recognized but transferred to retained earnings in currentperiod	Less: Income tax expenses	Attributable to parent company	Attributable to non-controlling shareholders
Items to be reclassified subsequently to profit or loss	479,437.51		479,437.51			-479,437.51
Including: Cash flow hedgingreserves	479,437.51		479,437.51			-479,437.51
Total	479,437.51		479,437.51			-479,437.51
45. Special reserve
Items		Opening balance		Increase		Decrease		Closing	balance
Work safety fund				8,699,413.98		8,699,413.98
Total				8,699,413.98		8,699,413.98

46. Surplus reserve

46. Surplus reserve
Items	Opening balance	Increase	Decrease	Closing balance
Statutory surplus reserve	232,701,943.56			232,701,943.56
Total	232,701,943.56			232,701,943.56

47. Undistributed profit

47. Undistributed profit
Items	Current period cumulative	Preceding period comparative
Balance before adjustment at the end of preceding period	2,520,329,621.90	1,503,796,981.62
Add: Net profit attributable to owners of the parent company	1,386,476,099.73	1,361,453,754.17
Less: Appropriation of statutory surplus reserve		28,614,899.29

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Items	Current period cumulative	Preceding period comparative
Dividend payable on ordinary shares	348,116,836.08	316,306,214.60
Closing balance	3,558,688,885.55	2,520,329,621.90

(II) Notes to items of the consolidated income statement

1. Operating revenue/Operating cost

(1) Details

(1) Details
Items	Current period cumulative		Preceding period comparative
	Revenue	Cost	Revenue	Cost
Main operations	14,273,213,235.36	10,720,797,390.49	12,659,401,544.07	9,368,410,640.28
Other operations	58,811,840.04	45,491,568.51	36,457,122.33	21,045,772.46
Total	14,332,025,075.40	10,766,288,959.00	12,695,858,666.40	9,389,456,412.74
(2) Breakdown of revenue by main categories
Reportable segments			Operating revenue
Ventilation equipment and electrotechnical equipment industry			3,433,239,893.56
Environmental integrated industry			10,878,867,146.75
Financial services			17,971,932.25
Subtotal			14,330,078,972.56

Note: The difference between breakdown of revenue by main categories and total operating revenue was housing rental income amounting to 1,946,102.84 yuan

2. Taxes and surcharges

2. Taxes and surcharges
Items	Current period cumulative	Preceding period comparative
Urban maintenance and construction tax	31,932,708.59	26,357,347.01
Education surcharge	13,763,632.17	11,464,647.74
Local education surcharge	9,173,301.02	7,610,647.36
Stamp duty	4,012,840.78	9,560,201.75
Housing property tax	6,046,933.52	6,202,318.33
Land use tax	8,949,626.89	9,590,515.17
Vehicle and vessel use tax	578,488.72	389,195.04
Resources tax		1,371.30
Environmental protection tax	3,298.30	23,789.43
Total	74,460,829.99	71,200,033.13

3. Selling expenses

3. Selling expenses
Items	Current period cumulative	Preceding period comparative
Wages, benefits and insurance premiums	308,668,531.58	291,701,971.07
Agency fees	190,967,041.03	169,045,792.85
Office expenses	66,589,757.23	56,109,183.78
Business entertainment	60,699,969.88	49,632,644.93

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Items	Current period cumulative	Preceding period comparative
Vehicle usage fees	42,291,788.33	38,035,830.73
Travelling expenses	35,222,537.93	31,747,341.20
Expenses for tendering and bidding	41,237,901.47	30,756,400.47
Marketing expenses	26,738,045.90	21,373,324.53
After-sales service expenses	7,898,372.76	3,554,675.91
Depreciation and amortization	2,203,528.84	3,453,862.68
Share-based payments	1,528,333.10	386,458.95
Others	17,243,205.46	11,078,862.33
Transportation and loading expenses		140,071,729.83
Car service fees		70,313,474.48
Total	801,289,013.51	917,261,553.74

4. Administrative expenses

4. Administrative expenses
Items	Current period cumulative	Preceding period comparative
Wages and benefits, insurance premiums and housing provident fund	270,586,381.78	155,298,625.65
Depreciation and amortization	82,337,180.72	110,451,999.85
Agency consulting fees	55,508,011.48	37,227,307.12
Office expenses	47,382,856.32	39,029,441.08
Business entertainment	26,542,380.63	17,684,509.81
Travelling expenses	10,444,833.47	8,498,657.67
Vehicle usage fees	7,732,891.83	6,666,552.09
Repair fees	6,350,097.09	1,969,171.96
Share-based payments	5,634,842.48	579,223.19
Others	23,947,210.32	14,429,024.32
Total	536,466,686.12	391,834,512.74

5. R&D expenses

5. R&D expenses
Items	Current period cumulative	Preceding period comparative
Labor costs	118,576,852.62	123,475,057.84
Direct inputs	91,469,017.06	89,234,328.57
Other expenses	43,355,945.62	32,022,283.05
Share-based payments	1,275,516.89	905,940.89
Total	254,677,332.19	245,637,610.35

6. Financial expenses

6. Financial expenses
Items	Current period cumulative	Preceding period comparative
Interest expenses	127,630,040.16	99,893,189.87
Interest income	-49,689,471.88	-26,182,679.84
Cash discounts	-9,393,178.26	-15,017,532.96
Gains and losses on foreign exchange	708,908.76	4,004,549.31
Notes discounting fees	9,031,666.57	16,124,478.20

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Items	Current period cumulative	Preceding period comparative
Handling fees	32,626,633.00	37,633,636.71
Realized finance income	-44,793,266.76	-62,004,243.51
Others		-495,893.77
Total	66,121,331.59	53,955,504.01

7. Other income

7. Other income
Items	Current period cumulative	Preceding period comparative	Amount included in non-recurring profit or loss
Government grants related to assets[Note]	3,612,643.51	4,318,417.18	3,612,643.51
Government grants related to income[Note]	41,281,924.72	102,252,781.89	41,281,924.72
Refund of handling fees for withholding individual income tax	576,781.45	541,734.54	576,781.45
Refund of VAT	28,804,978.15	28,806,106.81
Total	74,276,327.83	135,919,040.42	45,471,349.68

Note: Please refer to section V (IV) 3 of notes to financial statements for details on government grants included into other income.

8. Investment income

8. Investment income
Items	Current period cumulative	Preceding period comparative
Investment income from long-term equity investments under equitymethod	41,578,662.81	33,697,177.55
Investment income from disposal of long-term equityinvestments	488,224.46	92,216,592.23
Investment income from financial instruments	40,547,691.44	16,538,761.63
Including: Financial assets designated as at fair value throughprofit or loss	11,250,000.00	9,673,130.59
Financial assets classified as at fair value throughprofit or loss	28,882,731.44	6,485,251.04
Other equity instrument investments	414,960.00	380,380.00
Gains on disposal of financial assets	-5,125,103.88	-8,589,637.07
Including: Financial assets classified as at fair value through other comprehensive income	-5,152,198.65	-8,589,637.07
Financial assets designated as at fair value throughprofit or loss	27,094.77
Performance compensation	839,195.26	24,676,400.00
Total	78,328,670.09	158,539,294.34

9. Gains on changes in fair value

9. Gains on changes in fair value
Items	Current period cumulative	Preceding period comparative
Held-for-trading financial assets	-89,949,855.53	25,183,593.66
Including: Financial assets as at fair value throughprofit or loss	-89,949,855.53	25,183,593.66
Gains or losses on ineffective portion of outstandingfair value hedges	-5,769,445.94	-2,775,150.00
Total	-95,719,301.47	22,408,443.66

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10. Credit impairment loss

10. Credit impairment loss
Items	Current period cumulative	Preceding period comparative
Bad debts	-119,100,867.26	-111,054,884.67
Contractual credit guarantees	-461,553.82
Total	-119,562,421.08	-111,054,884.67

11. Assets impairment loss

11. Assets impairment loss
Items	Current period cumulative	Preceding period comparative
Inventory write-down loss	-36,270,934.35	-27,432,998.13
Impairment loss of intangible assets	-20,185,580.19
Impairment loss of goodwill	-25,405,362.30	-13,209,901.26
Other non-current assets (quality guarantee deposit)	-2,535,454.76
Impairment loss of fixed assets	-1,336,643.39
Impairment loss of contract assets	2,738,164.92
Impairment loss of non-current assets due within oneyear(quality guarantee deposit)	517,309.92
Total	-82,478,500.15	-40,642,899.39

12. Gains on asset disposal

12. Gains on asset disposal
Items	Current period cumulative	Preceding period comparative	Amount included in non-recurring profit or loss
Gains on disposal of fixed assets	-1,787,925.37	-2,970,694.88	-1,787,925.37
Gains on disposal of construction in progress		4,360.09
Total	-1,787,925.37	-2,966,334.79	-1,787,925.37

13. Non-operating revenue

13. Non-operating revenue
Items	Current period cumulative	Preceding period comparative	Amount included in non-recurring profit or loss
Gains on damage or retirement of non-current assets	77,383.74	15,329.71	77,383.74
Penalty and confiscatory income	835,893.25	4,633,477.18	835,893.25
Funds no need to pay	1,872,195.17	5,925,978.14	1,872,195.17
Others	1,793,847.85	1,742,459.55	1,793,847.85
Indemnity income	3,499,479.91	17,916.60	3,499,479.91
Recovery of accounts receivable with provision for bad debts written off	1,765,219.77		1,765,219.77
Total	9,844,019.69	12,335,161.18	9,844,019.69

14. Non-operating expenditures

14. Non-operating expenditures
Items	Current period cumulative	Preceding period comparative	Amount included in non-recurring profit or loss
Losses on damage or retirement of non-current assets	40,814,493.09	150,157,786.26	40,814,493.09
Donation expenditures	10,428,048.44	1,694,833.58	10,428,048.44
Compensation and penalty expenses	6,422,397.70	6,530,821.05	6,422,397.70
Local water conservancy construction	134,126.33	300,201.97

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Items	Current period cumulative	Preceding period comparative	Amount included in non-recurring profit or loss
special fund
Others	430,658.49	4,561,436.33	430,658.49
Total	58,229,724.05	163,245,079.19	58,095,597.72

15. Income tax expenses

(1) Details

(1) Details
Items	Current period cumulative	Preceding period comparative
Current period income tax expenses	240,674,591.23	269,382,714.81
Deferred income tax expenses	-33,103,177.47	-23,143,098.99
Total	207,571,413.76	246,239,615.82

(2) Reconciliation of accounting profit to income tax expenses

Items	Current period cumulative	Preceding period comparative
Profit before tax	1,637,392,068.49	1,637,805,781.25
Income tax expenses based on tax rate applicable to the parent company	409,348,017.12	409,451,445.31
Effect of different tax rate applicable to subsidiaries	-213,890,288.36	-157,964,396.30
Effect of prior income tax reconciliation	4,036,346.94	-3,498,939.69
Effect of non-taxable income	-10,524,147.60	-5,962,961.92
Effect of non-deductible costs, expenses and losses	5,636,087.35	4,596,680.76
Utilization of deductible losses not previously recognized as deferred tax assets	-11,209,875.57	-14,507,339.81
Effect of deducible temporary differences or deductible losses not recognized as deferred tax assets	47,130,077.63	33,706,513.05
Effect of plus deduction	-22,954,803.75	-19,581,385.58
Income tax expenses	207,571,413.76	246,239,615.82

16. Other comprehensive income, net of income tax

Please refer to section V (I) 44 of notes to financial statements for details.

(III) Notes to items of the consolidated cash flow statement

1. Other cash receipts related to operating activities

Items	Current period cumulative	Preceding period comparative
Receipts of deposits for notes, letters of credit and letters ofguarantee	546,629,420.18	526,555,043.10
Receipts of government grants	101,409,788.44	114,482,952.67
Receipts of security deposits	87,547,183.94	87,447,241.02
Recovery of petty cash and temporary advance payment receivable	53,990,787.31	45,003,791.59
Temporary receipts payable	97,576,945.00	38,598,081.73
Recovery of funds in escrow accounts	957,256.52	36,458,569.79
Receipts of interest income	32,491,002.22	15,705,385.93
宇星科技发展（深圳）有限公司(Yuxing		5,925,978.14

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Items	Current period cumulative	Preceding period comparative
Technology Development (Shenzhen) Co., Ltd.), the former shareholder has bought out the normal collection ofpayment
Receipts of principal of factoring financing and finance lease	192,699,970.39
Others	40,191,716.87	11,070,136.06
Total	1,153,494,070.87	881,247,180.03

2. Other cash payments related to operating activities

Items	Current period cumulative	Preceding period comparative
Payments for deposits for notes, letters of credit and letters ofguarantee	531,970,066.36	582,490,139.33
Operating period expenses	742,930,598.43	833,158,916.30
Security deposits	105,356,641.82	98,018,473.16
Payments for petty cash and temporary advance payment receivable	69,592,540.81	54,032,904.30
Payments for principal of factoring financing and finance lease	614,614,522.83	51,703,348.89
Temporary receipts payable	12,179,242.35	15,952,320.10
Others	4,876,929.24	96,342,070.26
Time deposits [Note]	700,000,000.00
Funds allocated to escrow accounts	945,226.15
Total	2,782,465,767.99	1,731,698,172.34

Note: Time deposits were held for the purpose of operating activities at the end of the period, with maturity over three months.

3. Other cash receipts related to investing activities

Items	Current period cumulative	Preceding period comparative
Redemption of financial products	5,009,700,000.00	4,739,471,000.00
Receipts of special government funds for PPP projects by project subsidiaries	67,335,291.42	121,431,966.13
Receipts of loan principal and interest from LianjiangGreen Oriental New EnergyCo.,Ltd.	62,836,100.61	7,522,450.41
Receipts of loan interest from Guangdong Tianshu New EnergyTechnologyCo.,Ltd.	8,092,859.98	202,541.94
Receipts of the loan interest from Shantou Zoolion Ruikang Environmental Sanitation Service Co.,Ltd.	3,158,044.62	19,926.66
Receipts of futures margin	4,198,085.50	3,665,289.50
Receipts of performance compensation from the original shareholders of Guangdong Liangke Environmental EngineeringCo.,Ltd.		24,676,400.00
Receipts of loan principal and interest from吉林欣雨环保工程有限公司(Jilin Xinyu Environmental Protection Engineering Co., Ltd.)	1,104,600.00
Receipts of compensation from Tengine Innovation (Beijing) Monitoring Instrument Co., Ltd.	839,195.26
Receipts of loan principal and interest from Shantou ChaoyangDistrict Zoomlion Ruikang	641,241.65

The English name is for identification purpose only.
The English name is for identification purpose only.

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Items	Current period cumulative	Preceding period comparative
Environmental Sanitation Service Co.,Ltd.
Receipts of principal and interest of the agency financingofpipe networkproject		113,036,270.31
Receipts of call loan from Yuxing Technology Development(Shenzhen)Co.,Ltd.		48,274,568.30
Receipts of loan and interest from Guangdong Liangke Environmental EngineeringCo.,Ltd.	2,027,999.98	11,476,130.49
Receipts of interest on loan from cooperative suppliers		152,973.34
Total	5,159,933,419.02	5,069,929,517.08

4. Other cash payments related to investing activities

Items	Current period cumulative	Preceding period comparative
Purchase of financial products	5,009,700,000.00	4,708,470,000.00
Payments of margin for futures trading	13,498,236.44	4,810,370.37
Payments of call loans to the Environmental Sanitation Management Office of Bijiang District,Tongren City	5,930,076.27
Payments of call loans to Lianjiang Green Oriental New EnergyCo.,Ltd.	7,000,000.00
Payments of call loans to Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd.		23,810,370.00
Payments of loan principal to Yuxing TechnologyDevelopment(Shenzhen)Co.,Ltd.		17,434,292.90
Payments of special government funds for PPP projects toproject companies		14,685,800.00
Payments of loan principal to Guangdong Liangke Environmental EngineeringCo.,Ltd.		10,000,000.00
Payments of loan principal to cooperative suppliers		7,860,000.00
Payments of call loans to Shantou Chaoyang District Zoomlion Ruikang Environmental Sanitation Service Co.,Ltd.		600,000.00
Total	5,036,128,312.71	4,787,670,833.27

5. Other cash receipts related to financing activities

Items	Current period cumulative	Preceding period comparative
Receipts of payments for employee stock ownership plan	6,100,000.00	152,370,003.00
Receipts of call loans from洪志光(Hong Zhiguang)	1,780,000.00
Receipts of call loans from东莞市家宝园林绿化有限公司(Dongguan Jiabao Landscaping Co.,Ltd.)		6,670,000.00
Loan amounts of accounts receivable factoring with recourse right		101,147,928.04
Total	7,880,000.00	260,187,931.04

6. Other cash payments related to financing activities

Items	Current period cumulative	Preceding period comparative
Repurchase of treasury shares	8,920,597.83	99,993,195.75

 The English name is for identification purpose only.

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Items	Current period cumulative	Preceding period comparative
Payments for employee stock ownership plans		60,000,000.00
Factoring service fees and handling fees	6,325,532.07	509,966.47
Repayment of call loans to Dongguan Jiabao LandscapingCo.,Ltd.	4,112,673.61	885,463.41
Acquisition of non-controlling interest of ShangfengIndustrial Company	18,200,000.00
Payments of call loans to Hong Zhiguang	483,027.48
Repayment of call loans to李德义(Li Deyi)		2,625,000.00
Repayment of call loans to Yuxing Technology Development(Shenzhen)Co.,Ltd.		355,854.17
Total	38,041,830.99	164,369,479.80

7. Supplement information to the cash flow statement

(1) Supplement information to the cash flow statement

(1) Supplement information to the cash flow statement
Supplement information	Current period cumulative	Preceding period comparative
1) Reconciliation of net profit to cash flow from operating activities:
Net profit	1,429,820,654.73	1,391,566,165.43
Add: Provision for assets impairment loss	202,040,921.23	151,697,784.06
Depreciation of fixed assets, oil and gas assets, productive biological assets	132,977,279.08	104,334,625.06
Amortization of intangible assets	329,434,176.13	241,305,992.40
Amortization of long-term prepayments	4,479,283.29	4,168,155.52
Loss on disposal of fixed assets, intangible assets and other long-term assets(Less:gains)	1,787,925.37	2,966,334.79
Fixed assets retirement loss (Less: gains)	40,737,109.35	150,142,456.55
Losses on changes in fair value (Less: gains)	95,719,301.47	-22,408,443.66
Financial expenses (Less: gains)	101,148,109.13	81,994,703.40
Investment losses (Less: gains)	-83,480,868.78	-167,128,931.39
Decrease of deferred tax assets (Less: increase)	-17,493,252.94	-10,698,749.28
Increase of deferred tax liabilities (Less: decrease)	-41,158,220.03	-12,284,537.21
Decrease of inventories (Less: increase)	-229,881,454.67	21,070,265.60
Decrease of operating receivables (Less: increase)	-2,146,572,286.81	500,950,001.46
Increase of operating payables (Less: decrease)	1,817,968,802.17	-983,114,152.76
Others [Note]	51,186,613.03	30,188,384.05
Net cash flows from operating activities	1,688,714,091.75	1,484,750,054.02
2) Significant investing and financing activities not related to cash receipts andpayments:
Conversion of debt into capital
Convertible bonds due within one year
Fixed assets leased in under finance leases
3) Net changes in cash and cash equivalents:
Cash at the end of the period	4,657,826,099.23	2,611,680,947.69
Less: Cash at the beginning of the period	2,611,680,947.69	1,719,966,631.78
Add: Cash equivalents at the end of the period
Less: Cash equivalents at the beginning of the period

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Supplement information	Current period cumulative	Preceding period comparative
Net increase of cash and cash equivalents	2,046,145,151.54	891,714,315.91

Note: Others refer to share-based payments and unrecognized finance income of long-term receivables.

(2) Composition of cash and cash equivalents

(2) Composition of cash and cash equivalents
Items	Closing balance	Opening balance
1) Cash	4,657,826,099.23	2,611,680,947.69
Including: Cash on hand	147,826.76	62,621.18
Cash in bank on demand for payment	4,622,411,287.34	2,606,269,825.38
Other cash and bank balances on demand for payment	35,266,985.13	5,348,501.13
Central bank deposit on demand for payment
Deposit in other banks
Loans to other banks
2) Cash equivalents
Including: Bond investments maturing within three months
3) Cash and cash equivalents at the end of the period	4,657,826,099.23	2,611,680,947.69
Including: Cash and cash equivalents of parent company or subsidiaries with use restrictions

On December 31, 2019, balance of cash and bank balances amounted to 3,160,767,624.40 yuan, while balance of cash and cash equivalents amounted to 2,611,680,947.69 yuan. The difference of 549,086,676.71 yuan included deposit for notes in amount of 477,341,190.07 yuan, deposit for letters of guarantee in amount of 70,775,730.12 yuan, deposit for migrant workers’ wages in amount of 919,540.01 yuan, ETC deposit in amount of 12,500.00 yuan, and engineering escrow accounts that are not available for separate use in amount of 37,716.51 yuan, which was not cash and cash equivalents.

On December 31, 2020, balance of cash and bank balances amounted to 5,904,127,970.85 yuan, while balance of cash and cash equivalents amounted to 4,657,826,099.23 yuan. The difference of 1,246,301,871.62 yuan included deposit for notes in amount of 458,086,264.82 yuan, deposit for letters of guarantee in amount of 75,383,801.54 yuan, deposit for migrant workers’ wages in amount of 922,334.53 yuan, deposit for certificate of deposits in amount of 709,048,611.10 yuan, funds frozen due to lawsuits in amount of 2,837,968.00 yuan, and engineering escrow accounts that are not available for separate use in amount of 22,891.63 yuan, which was not cash and cash equivalents.

(3) Amount of endorsed commercial acceptance not involving cash receipts and payments

Items	Current period cumulative	Preceding period comparative
Amount of endorsed commercial acceptance	634,225,860.32	571,366,123.95
Including: Payments for goods	586,283,659.54	414,320,078.88
Payments for acquisition of long-term assets,such as fixed assets	36,375,813.18	134,860,435.98
Payments for expenses	11,566,387.60	22,185,609.09

(V) Others

1. Assets with title or use right restrictions

1. Assets with title or use right restrictions
Items	Closing carrying amount	Reasons for restrictions
Cash and bank balances	1,246,301,871.62	Deposits, frozen due to litigation preservation,escrow account
Accounts receivable	103,965,922.09	Pledge

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Items	Closing carrying amount	Reasons for restrictions
Receivables financing	306,145,249.74	Pledge
Long-term receivables and non-current assets due within oneyear	49,160,385.66	Factoring financing with recourse right
Fixed assets	551,470,379.29	Mortgage
Investment property	51,185.99	Mortgage
Intangible assets	236,472,755.88	Mortgage
100% equity of阜南绿色东方环保有限公司 (Funan Green Oriental Environmental Protection Co.,Ltd.)	58,236,923.40	Pledge
100% equity of Shouxian Green Oriental New EnergyCo.,Ltd.	80,691,695.44	Pledge
100% equity of Xiantao Green Oriental Environmental Power Generation Co.,Ltd.	204,935,012.39	Pledge
25% equity of Lianjiang Green Oriental New EnergyCo.,Ltd.	23,149,733.54	Frozen due to litigation preservation
Total	2,860,581,115.04

2. Monetary items in foreign currencies

Items	Closing balance in foreign currencies	Exchange rate	RMB equivalent at the end of theperiod
Cash and bank balances			28,114,587.04
Including: USD	1,392,102.02	6.5249	9,083,326.47
EUR	1,974,427.58	8.0250	15,844,781.33
HKD	3,786,215.83	0.8416	3,186,479.24
Accounts receivable			12,817,279.25
Including: USD	1,251,837.80	6.5249	8,168,116.46
HKD	5,524,195.33	0.8416	4,649,162.79
Accounts payable			3,351,820.12
Including: USD	513,696.78	6.5249	3,351,820.12

3. Government grants

(1) Details

1) Government grants related to assets

Items	Opening balance of deferred income	Amortization	Closing balance of deferred income	Amortization presented under	Remarks
Special subsidies for Xiantao Waste Power Generation Project	11,389,114.20	726,531.48	10,662,582.72	Other income	Pursuant to the document numbered E Cai Jian Fa [2015] 199
Incremental tax incentives for technological transformation	9,482,800.00	948,280.00	8,534,520.00	Other income	Pursuant to the document numbered Xiang Gong Xin Tou Zi[2019]57
Urban sewage and garbage treatment facilities and sewage pipe network engineering projects	5,351,375.15	445,536.32	4,905,838.83	Other income	Pursuant to the document numbered Fa Gai Huan Zi [2015] 431
Special funds for air	1,000,000.00	100,000.00	900,000.00	Other income	Pursuant to the

The English name is for identification purpose only.

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Items	Opening balance of deferred income	Increase	Amortization	Closing balance of deferred income	Amortization presented under	Remarks
pollution prevention and control						document numbered Zhang Cai Zi Huan Zhi[2019]41
The fifth batch of special funds for raising manufacturing power in Hunan Province	1,000,000.00			1,000,000.00	Other income	Pursuant to the document numbered Xiang Cai Qi Zhi [2019] 72
Xiantao sludge harmless treatment plant		17,700,000.00		17,700,000.00	Other income	Pursuant to the documents numbered Xian Fa Gai Huan Zi [2019] 116 and Xian Fa Gai Huan Zi[2019]150
Shouxian Domestic Waste Incineration Power Plant Project		15,040,000.00	1,002,666.71	14,037,333.29	Other income	Pursuant to the documents numbered Cai Jian [2017] 569 and Huai Fa Gai Zi Huan [2016]188
Urban and rural domestic waste transfer, kitchen waste resource utilization and harmless treatment projects		11,270,000.00	211,034.48	11,058,965.52	Other income	Pursuant to the document numbered Xian Fa Gai Huan Zi [2020] 84
No. 2 Sewage Treatment Plant and supporting pipe network projects in Daban Town, Bahrain Right Banner		7,660,000.00		7,660,000.00	Other income	Pursuant to the document numbered Chi Cai Zhi Huan [2015] 814
The second batch of awards for rental housing in the high-tech zone		5,784,474.00		5,784,474.00	Other income	Pursuant to the document numbered Zhang Zhu Zu Tong [2020]5
The third batch of subsidies for technological transformation of industrial enterprises		2,500,000.00		2,500,000.00	Other income	Pursuant to the document numbered Zhang Gong Xin Tou Zi Fa [2020] 72
Key projects of enterprise intelligent transformation of 2018 and 2019		819,700.00	35,737.38	783,962.62	Other income	Pursuant to the document numbered Qu Wei Ban [2019] 36
Subsidies for enterprise technological transformation		1,000,000.00	142,857.14	857,142.86	Other income	Pursuant to the document numbered Zhang Gao Xin Guan Fa[2017]33
Subtotal	28,223,289.35	61,774,174.00	3,612,643.51	86,384,819.84

2) Government grants related to income and used to compensate future relevant costs, expenses or losses

Items	Opening balance of deferred income	Increase	Amounts carried forward	Closing balance of deferred income	Amounts carried forward presented under	Remarks
Central special construction supporting funds for Kaili PPP Project	10,000,000.00			10,000,000.00	Other income	Pursuant to the “Agreement on the Appropriation of Central Special Construction Funds for PPP Project Phase II of Kaili

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Items	Opening balance of deferred income	Increase	Amounts carried forward	Closing balance of deferred income	Amounts carried forward presented under	Remarks
						Municipal Domestic Waste Collection and Transportation System”
Special funds for green manufacturing system solution supplier projects of 2019	2,000,000.00		2,000,000.00		Other income	Pursuant to the “Green Manufacturing System Solution Supplier Project Contract” by Energy Conservation and Comprehensive Utilization Department of Ministry of Industry and Information Technology
Funds for national key R&D program projects of 2017	296,000.00	54,000.00		350,000.00	Other income	Odd subsidies
Subtotal	12,296,000.00	54,000.00	2,000,000.00	10,350,000.00

3) Government grants related to income and used to compensate incurred relevant costs, expenses or losses

Items	Amounts	Presented under	Remarks
Central manufacturing high-quality development funds	8,000,000.00	Other income	Pursuant to the document numbered Zhang CaiQi Zhi[2020]50
Special funds for green manufacturing system solution supplierproject	8,000,000.00	Other income	Pursuant to the document numbered Qu Wei Ban[2019]36
Subsidies for energy saving and emission reduction	4,200,000.00	Other income	Pursuant to the document numbered Xiang Cai Yu[2020]3
Enterprise support funds	3,250,000.00	Other income	Pursuant to the document numbered Yong Mei Bao Jing [2019]10
Subsidies for sludge disposal	2,816,166.83	Other income	Pursuant to the document numbered Shun Fu Ban Han[2010]694
Subsidies for stabilizing employment	1,728,833.90	Other income	Pursuant to the document numbered Ren She Bu Fa[2020]30
Special funds for raising provincial manufacturing power	1,500,000.00	Other income	Pursuant to the document numbered Xiang CaiQi Zhi[2020]28
Policies fiscal awards for industrial clusters, “Enterprises Using Cloud Platform”, industrial digital transformation, hidden champions corporates of 2019	1,100,000.00	Other income	Pursuant to the document numbered Qu Wei Ban [2020] 50
Special funds for scientific and technological development	700,000.00	Other income	Pursuant to the document numbered Zhe Cai Ke Jiao[2019]48
High-level talent subsidy	666,717.85	Other income	Pursuant to the document numbered Qu Wei[2019]52
Awards for science and technology innovation	618,000.00	Other income	Pursuant to the document numbered Yu ZhengFa[2019]31
Supporting funds from high-tech zone policyfulfillment	572,000.00	Other income	Pursuant to the document numbered Zhang Gao Xin Guan Fa[2019]32
Smart car rewards	500,000.00	Other income	Pursuant to the document numbered Xiang Xin Guan Fa[2020]22
Land use tax incentives	426,700.00	Other income	Pursuant to the document numbered Wu ZhengMi[2015]123
Special subsidies for innovation platform construction	400,000.00	Other income	Pursuant to the document numbered Zhang Fa Gai ChuangGao[2020]14
Subsidies for accreditation of high-tech enterprises	400,000.00	Other income	Pursuant to the document numbered Shun Fu Ban Fa[2017]77
Electricity subsidy income	336,720.00	Other income	Pursuant to the document numbered Fo GongXin Han[2020] 969
Exemption of housing property tax and urban land use tax	277,091.73	Other income	Pursuant to document of No. 2 (2020) STA,Xiantao Taxation Office
Medical waste emergency disposal funds	260,000.00	Other income	Pursuant to the document numbered E Cai Huan Fa[2020]20
Subsidies for competitive supporting	210,000.00	Other income	Pursuant to the document numbered Shun

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Items	Amounts	Presented under	Remarks
talentprojects			Ren Cai LingDao Ban[2020]33
Industrial Internet Platform Construction and Application Award	200,000.00	Other income	Pursuant to the document numbered Zhang CaiQi Zhi[2020]42
Other odd subsidies	3,119,694.41	Other income
Subtotal	39,281,924.72

(2) In the current period, government grants included into profit or loss totaled 44,894,568.23 yuan.

4. Hedging

(1) Fair value hedge

In order to avoid the risk of changes in the fair value of copper held by the Company (i.e. hedged risk), the subsidiary Guangdong Weiqi Company entered into the Futures Brokerage Contract (the hedging instrument of Guangdong Weiqi Company) with 五矿经易期货有限公司 (Minmetals&Jingyi Futures Co., Ltd.[] ). The hedge instrument was a fair value hedge and the accounting period designated for such hedging relationship was from January 1, 2020 to future accounting periods. The subsidiary Donggang Magnet Wire Company entered into the Futures Brokerage Contract (the hedging instrument of Donggang Magnet Wire Company) with 兴业期货有限公司 (Industrial Futures Co., Ltd.[*] ). The hedge instrument was a fair value hedge and the accounting period designated for such hedging relationship was from January 1, 2020 to future accounting periods. The Company evaluated the effectiveness of the hedges using ratio analysis method. The financial information related to the fair value hedges for the current period is as follows: the fair value of the hedging instrument of Guangdong Weiqi Company amounted to -4,793,300.00 yuan at the end of the period, while that amounted to -429,000.00 yuan at the beginning of the period, with accumulated gains on the hedged items in amount of 191,175.17 yuan; gains of the hedged items arising from the hedged risk amounted to 2,571,837.47 yuan, the floating profit of the hedged items amounted to 814,549.73 yuan at the end of the period, while that amounted to 377,138.31 yuan at the beginning of the period, with ineffective portion of 2,763,012.64 yuan included into investment income. The fair value of the hedging instrument of Donggang Magnet Wire Company amounted to -2,622,150.00 yuan at the end of the period, while that amounted to -802,750.00 yuan at the beginning of the period, with accumulated gains in amount of -3,329,996.46 yuan; gains of the hedged items arising from the hedged risk amounted to 5,953,530.28 yuan, the floating profit of the hedged items amounted to 1,804.33 yuan at the end of the period, while that amounted to 168,432.89 yuan at the beginning of the period, with ineffective portion of 2,623,533.82 yuan included into investment income.

(2) Cash flow hedge

In order to avoid the risk of changes in cash flows of copper sales contracts entered into between the Company and customers (i.e. hedged risk), the subsidiary Donggang Magnet Wire Company entered into the Futures Brokerage Contract (the hedging instrument of Donggang Magnet Wire Company) with Industrial Futures Co., Ltd., and the accounting period designated for such hedging relationship was from January 1, 2020 to future accounting periods. The Company evaluated the effectiveness of the hedge using ratio analysis method. The financial information related to the cash flow hedge for the current period is as follows: the fair value of the hedging instrument of Donggang Magnet Wire Company amounted to 0.00 yuan at the end of the period, with accumulated gains in amount of 4,282,816.45 yuan. Losses on the hedged items arising from the hedged risk amounted to 4,385,300.00 yuan

VI. Changes in the consolidation scope

(I) Changes in the consolidation scope due to other reasons

Entities brought into the consolidation scope

 The English names are for identification purpose only.

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Entities	Equity acquisition method	Equity acquisition date	Capital contribution	Capital contribution proportion(%)
常德泽联环境服务有限公司 (Changde Zelian Environmental Service Co.,Ltd.*)	Set up	March 2020	46,695,300.00	90.00
XiantaoYinglian Environmental TechnologyCo.,Ltd.	Set up	April 2020	1,000,000.00	100.00
Shenzhen Yinglian Environmental IndustryCo.,Ltd.	Set up	October 2020	2,000,000.00	100.00
Shenzhen Bao’an Yinglian City Service Co.,Ltd.	Set up	May 2020	109,142,740.00	70.00
Binchuan Zhongying Environmental Service Co.,Ltd.	Set up	June 2020	927,333.00	92.73
Tangyin County Yinglian Environmental Service Co.,Ltd.	Set up	July 2020	5,760,000.00	100.00
Yangbi Zhongying Environmental Services Co.,Ltd.	Set up	July 2020	704,682.00	70.47
Shaoyang County Zhongfeng Environmental IndustryCo.,Ltd.	Set up	June 2020	10,000,000.00	100.00
Foshan Shunde District Yinghe Urban Environmental Service Co.,Ltd.	Set up	July 2020	1,000,000.00	100.00
Rongcheng County Yinglian Urban Environmental Service Co.,Ltd.	Set up	July 2020	21,000,000.00	100.00
Xi’an Yinglian Urban Environmental Service Co.,Ltd.	Set up	July 2020	2,000,000.00	100.00
永顺中峰经投环境科技有限公司 (Changde Zelian Environmental Service Co.,Ltd.*)	Set up	July 2020	10,246,725.00	75.00
Xianghe Yinglian Environmental TechnologyCo.,Ltd.	Set up	May 2020	10,000,000.00	100.00
Lanling Zoomlion Environmental Service Co.,Ltd.	Set up	December 2020	2,000,000.00	100.00
Yuncheng Zhongying City Environmental Service Co.,Ltd.	Set up	December 2020	1,000,000.00	100.00
Foshan Yingshun Urban Environmental Service Co.,Ltd.	Set up	November 2020	7,000,000.00	70.00
Anshan Yinglian Urban Environmental Sanitation Management Co.,Ltd.	Set up	October 2020	10,000,000.00	100.00
佛山盈通电工材料有限公司 (Foshan Yingtong Electrical Materials Co.,Ltd.*)	Set up	October 2020	350,000,000.00	100.00
Donglan Yinglian Urban Environmental Service Co.,Ltd.	Set up	January 2020	[Note]	100.00
Baise Yinglian Urban Environmental Service Co.,Ltd.	Set up	January 2020	[Note]	100.00
盈峰中联（天津）环境科技有限公司(Infore Zoomlion (Tianjin) Environmental Technology Co., Ltd.*)	Set up	December 2020	[Note]	100.00
桐柏县同盈环境卫生发展有限公司 (Tongbai County Tongying Environmental Sanitation Development Co.,Ltd.*)	Set up	November 2020	[Note]	100.00
广东星舟水处理科技有限公司 (Guangdong Xingzhou Water Treatment TechnologyCo.,Ltd.*)	Set up	September 2020	[Note]	100.00
Anhua Yingsheng Environmental Sanitation Service Co.,Ltd.	Set up	April 2020	[Note]	100.00
佛山市顺德区中盈城市环境管理有限公司 (Foshan Shunde Zhongying	Set up	December 2020	[Note]	100.00

*The English name is for identification purpose only.
*The English names are for identification purpose only.

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Entities	Equity acquisition method	Equity acquisition date	Capital contribution	Capital contribution proportion(%)
Urban Environmental Management Co.,Ltd.*)
Qixian Tongying Environmental Sanitation Service Co.,Ltd.	Set up	November 2020	[Note]	100.00
Lai’an Zhongfeng Environmental TechnologyCo.,Ltd.	Set up	July 2020	[Note]	100.00
Zhaoyuan County Jincheng Environmental Sanitation Management Service Co.,Ltd.	Set up	July 2020	[Note]	100.00
Ji’an Zhongfeng Environmental TechnologyCo.,Ltd.	Set up	September 2020	[Note]	100.00
Heze Yingsheng Environmental Sanitation Service Co.,Ltd.	Set up	October 2020	[Note]	100.00
Luannan County Yinglian Environmental Management Co.,Ltd.	Set up	November 2020	[Note]	100.00
Guangxi Guiping Yinghe Environmental Sanitation Management Co.,Ltd.	Set up	November 2020	[Note]	100.00
Shennongjia Forest Area Yinghe Environmental Sanitation Management Co.,Ltd.	Set up	November 2020	[Note]	100.00
重庆中盈环境卫生服务有限公司 (Chongqing Zhongying Environmental Sanitation Service Co.,Ltd.*)	Set up	December 2020	[Note]	100.00
仁寿盈联城乡环卫服务有限公司 (Renshou Yinglian Urban and Rural Sanitation Service Co.,Ltd.*)	Set up	December 2020	[Note]	100.00
Liucheng County Yinglian Environmental Sanitation Management Co.,Ltd.	Set up	December 2020	[Note]	100.00
嵊州市盈合环境卫生管理有限公司 (Shengzhou Yinghe Environmental Sanitation Management Co.,Ltd.*)	Set up	October 2020	[Note]	100.00
嵊州市中联环境工程有限公司 (Shengzhou Zoomlion Environmental EngineeringCo.,Ltd.*)	Set up	November 2020	[Note]	100.00
佛山市联胜环境卫生服务有限公司 (Foshan Liansheng Environmental Sanitation Service Co.,Ltd.*)	Set up	September 2020	[Note]	100.00
Heping County Hesheng Environmental Sanitation Service Co.,Ltd.	Set up	August 2020	[Note]	100.00
Foshan Shunde District Lianying Environmental Development Co., Ltd.	Set up	October 2020	[Note]	100.00
Suqian Lianying City Service Co., Ltd.	Set up	November 2020	[Note]	100.00
寿县联胜环境卫生管理有限公司 (Shouxian Liansheng Environmental Sanitation Management Co.,Ltd.*)	Set up	December 2020	[Note]	100.00
枣庄市中盈城市环境服务有限公司 (Zaozhuang Zhongying Urban Environmental Service Co.,Ltd.*)	Set up	February 2020	[Note]	100.00

Note: As of December 31, 2020, these companies’ registered capitals have not been contributed.

Entities excluded from the consolidation scope

*The English names are for identification purpose only.

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Entities	Equity disposal method	Equity disposal date	Disposal-date net assets	Net profit from the period beginning to the disposal date
Leiyang Zhongfeng Environmental IndustryCo.,Ltd.	Cancelled	December 2020		2,071,976.28
深圳盈峰环境网络技术有限公司(Shenzhen Infore Environmental Network TechnologyCo.,Ltd.*)	Cancelled	August 2020		118,157.09

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VII. Interest in other entities

(I) Interest in significant subsidiaries

1. Significant subsidiaries

(1) Basis information

Subsidiaries	Main operating place	Place of registration	Business nature	Holding proportion (%)	Holding proportion (%)	Acquisition method
				Direct	Indirect
Shangfeng Industrial Company	Shaoxing, Zhejiang	Shaoxing, Zhejiang	Electrical material manufacturing and others	60.20		Business combination not under common control
Guangdong Weiqi Company	Foshan, Guangdong	Foshan, Guangdong	Electrical material manufacturing and others		75.00	Business combination under common control
Anhui Weiqi Electrical Materials Co.,Ltd.	Wuhu, Anhui	Wuhu, Anhui	Electrical material manufacturing and others		100.00	Set up
Donggang Magnet Wire Company	Donggang, Liaoning	Donggang, Liaoning	Electrical material manufacturing and others		100.00	Business combination not under common control
Green Oriental Company	Shenzhen, Guangdong	Shenzhen, Guangdong	Environmental monitoring and solid waste treatment	70.00		Business combination not under common control
Funan Green Oriental Environmental Protection Co.,Ltd.	Funan, Anhui	Funan, Anhui	Environmental monitoring and solid waste treatment		100.00	Business combination not under common control
Xiantao Green Oriental Environmental Power Generation Co.,Ltd.	Xiantao, Hubei	Xiantao, Hubei	Environmental monitoring and solid waste treatment		100.00	Business combination not under common control
Shouxian Green Oriental New Energy Co.,Ltd.	Shouxian, Anhui	Shouxian, Anhui	Environmental monitoring and solid waste treatment		100.00	Business combination not under common control
Xiantao Yinghe Environmental Protection Co.,Ltd.	Xiantao, Hubei	Xiantao, Hubei	Environmental monitoring and solid waste treatment	74.88	5.70	Set up
Infore Technology Company	Foshan, Guangdong	Foshan, Guangdong	Environmental monitoring and solid waste treatment	100.00		Set up
Foshan Yingfeng Environmental Water Treatment Co.,Ltd.	Foshan, Guangdong	Foshan, Guangdong	Environmental monitoring and solid waste treatment		100.00	Business combination not under common control
Foshan Shunde Huaqingyuan Environmental Protection Co.,Ltd.	Foshan, Guangdong	Foshan, Guangdong	Environmental monitoring and solid waste treatment		100.00	Business combination not under common control
Foshan Shunde District Huaying Environmental Water Co.,Ltd.	Foshan, Guangdong	Foshan, Guangdong	Environmental monitoring and solid waste treatment		100.00	Business combination not under common control
Foshan Shunde District Yuanrun Water Environmental Protection Co.,Ltd.	Foshan, Guangdong	Foshan, Guangdong	Environmental monitoring and solid waste treatment		100.00	Business combination not under common control
Foshan Shunde Huabo Environmental Water Co.,Ltd.	Foshan, Guangdong	Foshan, Guangdong	Environmental monitoring and solid waste treatment		100.00	Business combination not under common control
Zoomlion Environmental Company	Changsha, Hunan	Changsha, Hunan	Smart sanitation	100.00		Business combination under common control
Changsha Zoomlion Changgao Environmental	Changsha, Hunan	Changsha, Hunan	Smart sanitation	90.00	10.00	Set up

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IndustryCo.,Ltd.
Fujian Nan’an Yingfeng Urban Environmental Service Co.,Ltd.	Changsha, Hunan	Changsha, Hunan	Smart sanitation	80.00	Set up
Zhangjiajie Zoomlion Environmental IndustryCo.,Ltd.	Zhangjiajie, Hunan	Zhangjiajie, Hunan	Smart sanitation	90.00	Set up
Cili County Zoomlion Huabao Environmental IndustryCo.,Ltd.	Cili, Hunan	Cili, Hunan	Smart sanitation	85.00	Set up
Hanshou Zoomlion Environmental IndustryCo.,Ltd.	Hanshou, Hunan	Hanshou, Hunan	Smart sanitation	90.00	Set up
Longhui County Zoomlion Environmental IndustryCo.,Ltd.	Longhui, Hunan	Longhui, Hunan	Smart sanitation	100.00	Set up
醴陵中峰环境产业有限责任公司(Liling Zhongfeng Environmental IndustryCo.,Ltd.*)	Liling, Hunan	Liling, Hunan	Smart sanitation	100.00	Set up
Shimen Zoomlion Environmental IndustryCo.,Ltd.	Shimen, Hunan	Shimen, Hunan	Smart sanitation	90.00	Set up
宁波盈峰融资租赁有限公司(Ningbo Infore Finance Lease Co.,Ltd.*)	Ningbo, Zhejiang	Ningbo, Zhejiang	Finance lease	100.00	Set up

2. Significant not wholly-owned subsidiaries

Subsidiaries	Holding proportion of non-controlling shareholders(%)	Non-controlling shareholders’ profit or loss	Dividend declared to non-controlling shareholders	Closing balance of non-controlling interest
Guangdong Weiqi Company	25	6,083,040.07		67,575,011.83

3. Main financial information of significant not wholly-owned subsidiaries

(1) Assets and liabilities

Subsidiaries	Closing balance	Closing balance	Closing balance	Closing balance	Closing balance	Closing balance	Closing balance	Closing balance
	Current assets		Non-current assets	Total assets	Current liabilities		Non-current liabilities		Total liabilities
Guangdong Weiqi Company	433,372,224.98		85,726,672.38	519,098,897.36	259,725,267.47				259,725,267.47
(Continued)
Subsidiaries				Opening balance
	Current assets		Non-current assets	Total assets	Current liabilities		Non-current liabilities		Total liabilities
Guangdong Weiqi Company	436,465,690.56		94,815,722.49	531,281,413.05	296,239,943.42				296,239,943.42
(2) Profit or loss and cash flows
Subsidiaries				Current	period cumulative
		Operating revenue		Net profit		Total comprehensive income		Cash flows from operatingactivities

*The English names are for identification purpose only.

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Guangdong Weiqi Company	1,119,172,392.43	24,332,160.26	24,332,160.26	24,352,206.53
(Continued)
Subsidiaries		Preceding period comparative
	Operating revenue	Net profit	Total comprehensive income	Cash flows from operatingactivities
Guangdong Weiqi Company	1,250,644,588.56	27,841,937.54	27,841,937.54	98,988,759.59

(II) Transactions resulting in changes in subsidiaries’ equity but without losing control
Changes in subsidiaries’ equity

Subsidiaries	Date of change	Holding proportion before change(%)	Holding proportion after change(%)
Shangfeng Industrial Company	January 2020	55.00	60.20
Xiantao Yinghe Environmental Protection Co.,Ltd.	January 2020	65.99	80.58
Jilin Zhongfeng Oasis Environmental Development Co., Ltd.	February 2020	80.00	51.00

Effect of transactions on non-controlling interest and equity attributable to parent company

Items	Shangfeng Industrial Company	Xiantao Yinghe Environmental Protection Co., Ltd.	Jilin Zhongfeng Oasis Environmental Development Co., Ltd.
Acquisition costs/ Disposal considerations
Cash	18,200,000.00
Total acquisition costs/disposal considerations	18,200,000.00
Less: Share in subsidiaries’ net assets based on acquired/ disposed net assetsproportion	15,974,569.03	-903,021.70	314,024.80
Balance	2,225,430.97	-903,021.70	314,024.80
Including: Capital reserve adjusted	2,225,430.97	-903,021.70	314,024.80
Surplus reserve adjusted
Undistributed profit adjusted

(III) Interest in joint venture or associates

1. Aggregated financial information of insignificant associates

1. Aggregated financial information of insignificant	associates
Items	Closing balance/ Currentperiod cumulative	Opening balance/ Preceding period comparative
Associates
Total carrying amount of investments	318,243,332.69	303,292,231.01
Proportionate shares in the following items	41,578,662.81	33,697,177.55
Net profit	41,578,662.81	33,697,177.55
Other comprehensive income
Total comprehensive income	41,578,662.81	33,697,177.55

VIII. Risks related to financial instruments

In risk management, the Company aims to seek the appropriate balance between the risks and benefits from its use of financial

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instruments and to mitigate the adverse effects that the risks of financial instruments have on the Company’s financial performance, so as to maximize the profits of shareholders and other equity investors. Based on such risk management objectives, the Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits on a timely and reliable basis.

The Company has exposure to the following risks from its use of financial instruments, which mainly include: credit risk, liquidity risk, and market risk. The Management has deliberated and approved policies concerning such risks, and details are:

(I) Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.

1. Credit risk management practice

(1) Evaluation method of credit risk

At each balance sheet date, the Company assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. When assessing whether the credit risk has increased significantly since initial recognition, the Company takes into account reasonable and supportable information, which is available without undue cost or effort, including qualitative and quantitative analysis based on historical data, external credit risk rating, and forward-looking information. The Company determines the changes in default risk of financial instruments during the estimated lifetime through comparison of the default risk at the balance sheet date and the initial recognition date, on an individual basis or a collective basis.

The Company considers the credit risk on a financial instrument has increased significantly when one or more of the following qualitative and quantitative standards are met:

1) Quantitative standard mainly relates to the scenario in which, at the balance sheet date, the probability of default in the remaining lifetime has risen by more than a certain percentage compared with the initial recognition;

2) Qualitative standard mainly relates to significant adverse changes in the debtor’s operation or financial position, present or expected changes in technology, market, economy or legal environment that will have significant adverse impact on the debtor’s repayment ability.

(2) Definition of default and credit-impaired assets

A financial instrument is defined as defaulted when one or more following events have occurred, of which the standard is consistent with that for credit-impairment:

1) Significant financial difficulty of the debtor;

2) A breach of binding clause of contract;

3) It is very likely that the debtor will enter bankruptcy or other financial reorganization;

4) The creditor of the debtor, for economic or contractual reasons relating to the debtor’s financial difficulty, having granted to the debtor a concession(s) that the creditor would not otherwise consider.

2. Measurement of expected credit losses

The key factors in the measurement of expected credit loss include the probability of default, loss rate of default, and exposure to default risk. The Company develops a model of the probability of default, loss rate of default, and exposure to default risk on the basis of quantitative analysis of historical data (e.g. counterparty rating, guarantee measures and collateral type, payment method, etc.) and forward-looking information.

Please refer to section V (I) 4, 5, 9, 10, and 12 of the notes to the financial statements for details on the reconciliation table of opening balance and closing balance of provision for losses of financial instrument.

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4. Exposure to credit risk and concentration of credit risk

The Company’s credit risk is primarily attributable to cash and bank balances and receivables. In order to control such risks, the Company has taken the following measures:

(1) Cash and bank balances

The Company deposits its bank balances and other cash and bank balances in financial institutions with relatively high credit levels, hence, its credit risk is relatively low.

(2) Receivables

The Company performs credit assessment on customers using credit settlement on a regular basis. The Company selects credible and well-reputed customers based on credit assessment result, and conducts ongoing monitoring on balance of receivables, to avoid significant risks in bad debts.

As the Company’s credit risks fall into several business partners and customers, as of December 31 2020, 8.26% (December 31, 2019: 5.82%) of the total accounts receivable was due from the five largest customers of the Company. The Company has no significant central credit risk.

The maximum amount of exposure to credit risk of the Company is the carrying amount of each financial asset at the balance sheet.

(II) Liquidity risk

Liquidity risk is the risk that the Company may encounter deficiency of funds in meeting obligations associated with cash or other financial assets settlement, which is possibly attributable to failure in selling financial assets at fair value on a timely basis, or failure in collecting liabilities from counterparties of contracts, or early redemption of debts, or failure in achieving estimated cash flows.

In order to control such risk, the Company comprehensively utilized financing tools such as notes settlement, bank borrowings, etc. and adopts long-term and short-term financing methods to optimize financing structures, and finally maintains a balance between financing sustainability and flexibility. The Company has obtained credit limit from several commercial banks to meet working capital requirements and expenditures.

Financial liabilities classified based on remaining time period till maturity

Items			Closing balance
	Carrying amount	Contract amount not yet discounted	Within 1 year	1-3 years	Over 3 years
Bank borrowings	2,574,411,035.90	2,816,579,057.20	1,882,635,329.74	373,683,509.83	560,260,217.63
Held-for-trading financial liabilities	810,300.00	810,300.00	810,300.00
Notes payable	3,853,175,394.09	3,853,175,394.09	3,853,175,394.09
Accounts payable	3,404,825,085.03	3,404,825,085.03	3,404,825,085.03
Other payables	443,477,082.48	443,477,082.48	443,477,082.48
Long-term payables	255,735,814.91	255,735,814.91			255,735,814.91
Bonds payable	1,199,466,109.60	1,576,570,492.80	2,952,379.20	7,380,948.00	1,566,237,165.60
Subtotal	11,731,900,822.01	12,351,173,226.51	9,587,875,570.54	381,064,457.83	2,382,233,198.14
(Continued)
Items			Opening balance
	Carrying amount	Contract amount not yet discounted	Within 1 year	1-3 years	Over 3 years
Bank borrowings	2,337,071,230.78	2,447,954,423.08	1,714,831,705.17	448,059,975.95	285,062,741.96
Held-for-trading financial liabilities	866,300.00	866,300.00	866,300.00
Notes payable	2,941,694,181.14	2,941,694,181.14	2,941,694,181.14

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Items			Opening balance
	Carrying amount	Contract amount not yet discounted	Within 1 year	1-3 years	Over 3 years
Accounts payable	2,486,177,851.99	2,486,177,851.99	2,486,177,851.99
Other payables	374,873,715.69	374,873,715.69	374,873,715.69
Long-term payables	188,400,523.49	188,400,523.49			188,400,523.49
Subtotal	8,329,083,803.09	8,439,966,995.39	7,518,443,753.99	448,059,975.95	473,463,265.45

(III) Market risk

Market risk is the risk that the Company may encounter fluctuation in fair value or future cash flows of financial instruments due to changes in market price. Market risk mainly includes interest risk and foreign currency risk.

1. Interest risk

Interest risk is the risk that an enterprise may encounter fluctuation in fair value or future cash flows of financial instruments due to changes in market interest. The Company’s fair value interest risks arise from fixed-rate financial instruments, while the cash flow interest risks arise from floating-rate financial instruments. The Company determines the proportion of fixed-rate financial instruments and floating-rate financial instruments based on the market environment, and maintains a proper financial instruments portfolio through regular review and monitoring. The Company’s interest risk in cash flows relates mainly to bank borrowings with floating interest rate.

As of December 31, 2020, balance of borrowings with interest accrued at floating interest rate totaled 778,840,801.41 yuan (December 31, 2019: 985,872,246.35 yuan). If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company’s gross profit and equity will not be significantly affected.

2. Foreign currency risk

Foreign currency risk is the risk arising from changes in fair value or future cash flows of financial instrument resulted from changes in exchange rate. The Company is mainly operated in mainland China, whose main activities are denominated in RMB, hence, the Company bears insignificant market risk arising from foreign exchange changes.

Please refer to section V (IV) 2 of notes to financial statements for details in foreign currency financial assets and liabilities at the end of the period.

IX. Fair value disclosure

(I) Details of fair value of assets and liabilities at fair value at the balance sheet date

Items		Fair value as of the	balance sheet date
	Level 1 fair value measurement	Level 2 fair value measurement	Level 3 fair value measurement	Total
Recurring fair value measurement
1. Held-for-trading financial assets	128,017,735.11			128,017,735.11
(1) Financial assets classified as at fair value throughprofit or loss	128,017,735.11			128,017,735.11
Debt instrument investments
Equity instrument investments	127,192,985.11			127,192,985.11
Derivative financial assets	824,750.00			824,750.00
2. Receivables financing			520,429,874.86	520,429,874.86
3. Other equity instrument investments			26,070,000.00	26,070,000.00
Total assets at recurring fair value measurement	128,017,735.11		546,499,874.86	674,517,609.97

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Items		Fair value as of the	balance sheet date
	Level 1 fair value measurement	Level 2 fair value measurement	Level 3 fair value measurement	Total
4. Held-for-trading liabilities	810,300.00			810,300.00
Derivative financial liabilities	810,300.00			810,300.00
Total liabilities at recurring fair value measurement	810,300.00			810,300.00

(II) Basis for determining level 1 fair value at recurring and non-recurring fair measurement

It is based on the quoted prices of the identical assets in the active market on the balance sheet date.

(III) Qualitative and quantitative information of valuation technique(s) and key input(s) for level 3 fair value at recurring and non-recurring fair measurement

There is no quotation in an active market and its fair value cannot be reliably measured. Cost represents the best estimate of fair value, so cost represents fair value.

X. Related party relationships and transactions

(I) Related party relationships

1. Parent company

(1) Details

(1) Details
Parent company	Place of registration	Business nature	Registered capital	Holding proportion over the Company (%)	Voting right proportion over the Company (%)
Infore Holding Group Co., Ltd.	Foshan, Guangdong	Industrial investment	4 billion	43.55 [Note]	43.55

Note: Infore Holding Group Co., Ltd. (hereinafter referred to as Infore Holding) directly holds 11.37% of the Company’s equity, and indirectly holds 32.18% of the Company’s equity through its wholly-owned subsidiary 宁波盈峰资产管理有限公司 (Ningbo Infore Asset Management Co., Ltd.[*] ).

(2) The Company’s ultimate controlling party is He Jianfeng, who directly holds 2.01% of the Company’s equity, and indirectly holds 43.55% of the Company’s equity through Infore Holding.

Please refer to section VII Interest in other entities in notes to financial statements for details on the Company’s subsidiaries.

3. Joint ventures and associates of the Company

Please refer to section VII of notes to financial statements for details on the Company’s significant joint ventures and associates. Details of other joint ventures or associates carrying out related party transactions with the Company in current period or in preceding period but with balance in current period are as follows:

period but with balance in current period are as follows:
Associates	Relationships with the Company
Tengine Innovation (Beijing) Monitoring Instrument Co., Ltd.	Associate of the Company
Guangdong Shunkong Environmental Investment Co., Ltd.	Associate of the Company
Guangdong Tianshu New Energy Technology Co., Ltd.	Associate of the Company
LianjiangGreen Oriental New EnergyCo.,Ltd.	Associate of the Company’s subsidiaryGreen Oriental Company
Shantou Zoomlion Ruikang Environmental Sanitation Service Co.,Ltd.	Associate of the Company’s subsidiary Zoomlion Environmental Company

*The English name is for identification purpose only.

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Associates	Relationships with the Company
Shantou Chaoyang District Zoomlion Ruikang Environmental Sanitation Service Co.,Ltd.	Associate of the Company’s subsidiary Zoomlion Environmental Company
Changsha Cowa Zoomlion Intelligent Technology Co., Ltd.	Associate of the Company’s subsidiary Zoomlion Environmental Company
Chongqing Sanfeng Urban Environmental Service Co., Ltd. [Note]	Associate of the Company’s subsidiary Zoomlion Environmental Company
内蒙古蒙联运达环保技术有限公司(Inner Mongolia Mongolia Lianyunda Environmental TechnologyCo.,Ltd.*)	Associate of the Company’s subsidiary Zoomlion Environmental Company
Guangdong Liangke Environmental Engineering Co., Ltd.	Associate of广东盈峰环境投资有限公司(Guangdong Infore Environmental Investment Co.,Ltd.*)

Note: Zoomlion Environmental Company disposed the 100% equity of Chongqing Sanfeng Urban Environmental Service Co., Ltd. in July 2020. It is still disclosed as related party one year after its disposal.

4. Other related parties of the Company

4. Other related parties of the Company
Related parties	Relationships with the Company
Ningbo Infore Asset Management Co., Ltd.	Shareholders holding more than 5% of the Company’s shares are also under the control of the actual controller
Zoomlion Heavy Industry Co., Ltd.	Shareholders holding more than 5% of the Company’s shares
弘创(深圳）投资中心(有限合伙）(Hongchuang (Shenzhen) Investment Center(Limited Partnership)*)	Shareholders holding more than 5% of the Company’s shares
广东盈峰材料技术股份有限公司(Guangdong Infore Material TechnologyCo.,Ltd.*)	Controlled by the actual controller
佛山市顺德区盈海投资有限公司(Foshan Shunde District Yinghai Investment Co.,Ltd.*)	Controlled by the actual controller
LADURNER SRL [Note 1]	Controlled by the actual controller
广东盈峰母婴商业有限公司(Guangdong Yingfeng Maternal and Child Business Co.,Ltd.*)	Controlled by the actual controller
北京华录蓝火体育产业发展有限公司(Beijing Hualu Lanhuo Sports IndustryDevelopment Co.,Ltd.*)	Controlled by the actual controller
美的集团股份有限公司 (Midea GroupCo.,Ltd.*)	Controlled byimmediate familyof the actual controller
广东美的电器股份有限公司(Guangdong Midea Electric Co., Ltd.*)	Controlled by immediate family of the actual controller
广东美的环境电器制造有限公司(Guangdong Midea Environmental Electrical ManufacturingCo.,Ltd.*)	Controlled by immediate family of the actual controller
广东美的制冷设备有限公司(Guangdong Midea Refrigeration Equipment Co.,Ltd.*)	Controlled by immediate family of the actual controller
广东美的商用空调设备有限公司(Guangdong Midea Commercial Air ConditioningEquipment Co.,Ltd.*)	Controlled by immediate family of the actual controller
广东美的暖通设备有限公司(Guangdong Midea HVAC Equipment Co.,Ltd.*)	Controlled by immediate family of the actual controller
佛山市顺德区美的洗涤电器制造有限公司(Foshan Shunde District Midea WashingAppliance ManufacturingCo.,Ltd.*)	Controlled by immediate family of the actual controller
芜湖美的生活电器制造有限公司(Wuhu Midea Life Electric ManufacturingCo.,Ltd.*)	Controlled by immediate family of the actual controller
威灵(芜湖）电机制造有限公司(Welling (Wuhu) Motor ManufacturingCo.,Ltd.*)	Controlled by immediate family of the actual controller
芜湖威灵电机销售有限公司(Wuhu Welling Motor Sales Co., Ltd.*)	Controlled by immediate family of the actual controller
佛山市顺德区美的电热电器制造有限公司(Foshan Shunde District Midea Electric Heating Appliance Manufacturing Co., Ltd.*)	Controlled by immediate family of the actual controller
安徽美芝精密制造有限公司(Anhui Meizhi Precision ManufacturingCo.,Ltd.*)	Controlled by immediate family of the actual controller
安徽美芝制冷设备有限公司(Anhui Meizhi Refrigeration Equipment Co.,Ltd.*)	Controlled by immediate family of the actual controller

*The English names are for identification purpose only.

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Related parties	Relationships with the Company
佛山市威特包装有限公司 (Foshan Weite PackingCo.,Ltd.*)	Controlled byimmediate familyof the actual controller
佛山市威灵洗涤电机制造有限公司(Foshan Welling WashingMotor ManufacturingCo.,Ltd.*)	Controlled by immediate family of the actual controller
广东美的厨房电器制造有限公司(Guangdong Midea Kitchen Appliance ManufacturingCo.,Ltd.*)	Controlled by immediate family of the actual controller
广东美芝精密制造有限公司(Guangdong Meizhi Precision ManufacturingCo.,Ltd.*)	Controlled by immediate family of the actual controller
广东美芝制冷设备有限公司(Guangdong Meizhi Refrigeration Equipment Co.,Ltd.*)	Controlled by immediate family of the actual controller
广东威灵电机制造有限公司(Guangdong Welling Motor ManufacturingCo.,Ltd.*)	Controlled by immediate family of the actual controller
安得智联科技股份有限公司(Ande Zhilian Technology Co., Ltd.*)	Controlled by immediate family of the actual controller
淮安威灵电机制造有限公司(Huaian Welling Motor ManufacturingCo.,Ltd.*)	Controlled by immediate family of the actual controller
佛山市顺德区美的酒店管理有限公司(Foshan Shunde District Midea Hotel Management Co.,Ltd.*)	Controlled by immediate family of the actual controller
佛山市顺德区美的饮水机制造有限公司(Foshan Shunde District Midea DrinkingMachine ManufacturingCo.,Ltd.*)	Controlled by immediate family of the actual controller
芜湖美的厨卫电器制造有限公司(Wuhu Midea Kitchen Appliance ManufacturingCo.,Ltd.*)	Controlled by immediate family of the actual controller
芜湖美智空调设备有限公司(Wuhu Meizhi Air Conditioning Equipment Co.,Ltd.*)	Controlled by immediate family of the actual controller
广东美的集团芜湖制冷设备有限公司(Guangdong Midea GroupWuhu Refrigeration Equipment Co.,Ltd.*)	Controlled by immediate family of the actual controller
浙江美芝压缩机有限公司(Zhejiang Meizhi Compressor Co., Ltd.*)	Controlled by immediate family of the actual controller
重庆美的制冷设备有限公司(Chongqing Midea Refrigeration Equipment Co.,Ltd.*)	Controlled by immediate family of the actual controller
佛山市顺德区美融新材料有限公司(Foshan Shunde District MeirongNew Material Co.,Ltd.*)	Controlled by immediate family of the actual controller
合肥华凌股份有限公司 (Hefei HualingCo.,Ltd.*)	Controlled byimmediate familyof the actual controller
江苏美的清洁电器股份有限公司(Jiangsu Midea Clean Electric Co.,Ltd.*)	Controlled by immediate family of the actual controller
广州华凌制冷设备有限公司(Guangzhou Hualing Refrigeration Equipment Co.,Ltd.*)	Controlled by immediate family of the actual controller
佛山市美的开利制冷设备有限公司(Foshan Midea Carrier Refrigeration Equipment Co.,Ltd.*)	Controlled by immediate family of the actual controller
合肥美的电冰箱有限公司(Hefei Midea Refrigerator Co., Ltd.*)	Controlled by immediate family of the actual controller
重庆美的通用制冷设备有限公司(Chongqing Midea General Refrigeration Equipment Co.,Ltd.*)	Controlled by immediate family of the actual controller
无锡小天鹅股份有限公司 (Wuxi Little Swan Co.,Ltd.*)	Controlled byimmediate familyof the actual controller
合肥美的洗衣机有限公司(Hefei Midea Washing Machine Co.,Ltd.*)	Controlled by immediate family of the actual controller
美的集团电子商务有限公司(Midea Group E-Commerce Co., Ltd.*)	Controlled by immediate family of the actual controller
芜湖安得智联科技有限公司(Wuhu Ande Zhilian Technology Co.,Ltd.*)	Controlled by immediate family of the actual controller
无锡飞翎电子有限公司 (Wuxi FeilingElectronics Co.,Ltd.*)	Controlled byimmediate familyof the actual controller
Yuxing Technology Development (Shenzhen) Co., Ltd. [Note 2]	Former subsidiary of the Company
长沙中联恒通机械有限公司(Changsha Zhonglian Hengtong MachineryCo.,Ltd.*)	Associate of the Company’s shareholder Zoomlion Heavy IndustryCo.,Ltd.
黔西锦江环卫服务有限公司(Qianxi Jinjiang Sanitation Service Co.,Ltd.*)	Investee of the Company’s subsidiary Zoomlion Environmental Company

Note 1: Before June 2019, it was controlled by the same actual controller, and it was still disclosed as a related party one year after its

*The English names are for identification purpose only.

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disposal. Transactions with it from January to June 2020 were disclosed.

Note 2: The Company disposed 100% of the subsidiary Yuxing Technology Development (Shenzhen) Co., Ltd.’s share in September 2019, and it was still disclosed as a related party one year after its disposal. Transactions with it from January to August 2020 were disclosed.

(II) Related party transactions

1. Purchase and sale of goods, rendering and receiving of services

(1) Details

1) Purchase of goods and receiving of services

Related parties	Content of transaction	Current period cumulative	Preceding period comparative
Tengine Innovation (Beijing) Monitoring Instrument Co.,Ltd.	Material	5,948,329.20	3,418,241.97
Guangdong Shunkong Environmental Investment Co.,Ltd.	Service	10,324,040.41	7,723,035.46
Changsha Cowa Zoomlion Intelligent Technology Co.,Ltd.	Material	18,420,246.29	3,982,301.82
Guangdong Tianshu New Energy Technology Co.,Ltd.	Material	2,040,930.62
Guangdong Liangke Environmental Engineering Co.,Ltd.	Service		1,415,094.34
Zoomlion Heavy Industry Co., Ltd.	Material	212,902,937.86	208,325,953.30
Foshan Weite Packing Co., Ltd.	Material	50,126.30	51,465.69
Foshan Welling Washing Motor Manufacturing Co.,Ltd.	Material		7,200.00
Guangdong Welling Motor Manufacturing Co., Ltd.	Material	1,514.00
Ande Zhilian Technology Co., Ltd.	Service	344,789.17
Foshan Shunde District Midea Hotel Management Co.,Ltd.	Service	258,969.00	65,508.00
Yuxing Technology Development (Shenzhen) Co.,Ltd.	Material and service	414,119,447.57	228,783,858.22
Subtotal		664,411,330.42	453,772,658.80

2) Sale of goods and rendering of services

2) Sale of goods and rendering of services
Related parties	Content of transaction	Current period cumulative	Preceding period comparative
Tengine Innovation (Beijing) Monitoring Instrument Co.,Ltd.	Service		91,160.75
Guangdong Shunkong Environmental Investment Co.,Ltd.	Goods and service	8,436,283.18	22,360,176.98
Lianjiang Green Oriental New Energy Co., Ltd.	Goods and service	1,669,383.77	1,763,895.97
Guangdong Tianshu New Energy Technology Co.,Ltd.	Goods	4,308,486.19
Shantou Zoomlion Ruikang Environmental Sanitation Service Co.,Ltd.	Goods	31,087.18	12,158,397.68
Shantou Chaoyang District Zoomlion Ruikang Environmental Sanitation Service Co.,Ltd.	Goods	17,093,774.87	11,384,001.77
Chongqing Sanfeng Urban Environmental Service Co.,Ltd.	Goods	3,717,248.06	3,762,327.43
Changsha Cowa Zoomlion Intelligent Technology Co.,Ltd.	Goods	132,075.47
Inner Mongolia Mongolia Lianyunda Environmental TechnologyCo.,Ltd.	Goods		-844,827.59
Guangdong Liangke Environmental Engineering Co.,Ltd.	Goods	9,651,047.83

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Related parties	Content of transaction	Current period cumulative	Preceding period comparative
Zoomlion Heavy Industry Co., Ltd.	Goods	1,001,779.94	10,534,763.41
Guangdong Infore Material Technology Co., Ltd.	Goods	894,188.70	453,471.47
LADURNER SRL	Goods	4,419,762.20	5,812,437.88
Guangdong Midea Environmental Electrical ManufacturingCo.,Ltd.	Goods and service	68,920,672.88	59,426,197.53
Guangdong Midea Refrigeration Equipment Co., Ltd.	Service		1,504,970.07
Foshan Shunde District Midea Washing Appliance ManufacturingCo.,Ltd.	Goods		2,840,516.48
Welling (Wuhu) Motor Manufacturing Co., Ltd.	Goods	248,644.59	973,186.35
Foshan Shunde District Midea Electric Heating Appliance ManufacturingCo.,Ltd.	Goods and service	23,433,965.27	22,863,885.23
Anhui Meizhi Precision Manufacturing Co., Ltd.	Goods	190,736,216.24	259,848,632.72
Anhui Meizhi Refrigeration Equipment Co., Ltd.	Goods	37,768,536.63	45,386,587.27
Foshan Welling Washing Motor Manufacturing Co.,Ltd.	Goods	63,898,185.18	71,171,715.09
Guangdong Midea Kitchen Appliance ManufacturingCo.,Ltd.	Goods	63,378,147.84	44,663,668.66
Guangdong Meizhi Precision Manufacturing Co., Ltd.	Goods	242,552,390.47	327,518,187.49
Guangdong Meizhi Refrigeration Equipment Co., Ltd.	Goods and service	254,151,014.66	330,934,494.51
Guangdong Welling Motor Manufacturing Co., Ltd.	Goods	1,079,224.79	4,001,223.29
Huaian Welling Motor Manufacturing Co., Ltd.	Goods	118.88	72.19
Foshan Shunde District Midea Drinking Machine ManufacturingCo.,Ltd.	Service		25,689.66
Wuhu Midea Kitchen Appliance Manufacturing Co.,Ltd.	Service		2,502,691.27
Wuhu Meizhi Air Conditioning Equipment Co., Ltd.	Service		403,047.67
Chongqing Midea Refrigeration Equipment Co., Ltd.	Service
Foshan Shunde District Meirong New Material Co.,Ltd.	Service		1,595,876.81
Hefei Hualing Co., Ltd.	Service		1,614,683.33
Jiangsu Midea Clean Electric Co., Ltd.	Goods	16,626,060.13	12,279,806.71
Guangzhou Hualing Refrigeration Equipment Co.,Ltd.	Service		379.16
Wuxi Little Swan Co., Ltd.	Service	279,151.44	3,520,028.24
Chongqing Midea General Refrigeration Equipment Co.,Ltd.	Service		1,006,896.56
Yuxing Technology Development (Shenzhen) Co.,Ltd.	Goods	98,913,778.68	64,147,137.70
Wuxi Feiling Electronics Co., Ltd.	Goods	1,517,067.01
Qianxi Jinjiang Sanitation Service Co., Ltd.	Goods	940.20
Subtotal		1,114,859,232.28	1,325,705,379.74

2. Related party leases

The Company as the lessee

The Company as the lessee
Lessors	Types of asset leased	Lease expenses for currentperiod	Lease expenses for the preceding period
Foshan Shunde District Yinghai Investment Co., Ltd.	Office building and parkinglot	1,258,927.15	1,167,587.99
Zoomlion Heavy Industry Co., Ltd.	Transport facilities		94,159.30

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Guangdong Yingfeng Maternal and Child Business Co.,Ltd.	Office building	83,620.76
Beijing Hualu Lanhuo Sports Industry Development Co.,Ltd.	Office building	161,872.36

3. Related party guarantees

The Company and its subsidiaries as guaranteed parties

Guarantors	Amount guaranteed	Commencement date	Maturity date	Whether the guarantee is mature	Remarks
Infore Holding	20,000,000.00	04/28/2020	04/27/2021	No	[Note]
	10,000,000.00	04/28/2020	04/27/2021	No
	20,000,000.00	03/05/2020	03/04/2021	No
	20,000,000.00	03/12/2020	03/11/2021	No
	30,000,000.00	03/18/2020	03/17/2021	No
Subtotal	100,000,000.00

Note: These guaranteed loans were also provided with mortgaged guarantee by the Company’s sub-subsidiary Guangdong Weiqi Company with its buildings and structures with cost of 43,561,911.28 yuan and net value of 18,221,115.63 yuan, and its land use right with cost of 21,913,812.79 yuan and net value of 14,015,261.42 yuan.

4. Call loans between related parties

Related parties	Amount	Commencement date	Maturity date	Remarks
Call loans to related parties
Lianjiang Green Oriental New Energy Co., Ltd.	50,800,000.00	01/06/2019	01/05/2023	[Note 1]
	9,818,680.83	01/06/2019	01/05/2023
	4,000,000.00	09/28/2020	09/30/2023
	3,000,000.00	12/14/2020	09/30/2023
Guangdong Liangke Environmental Engineering Co., Ltd.	21,000,000.00	04/30/2019	12/31/2021	[Note 2]
	9,229,600.00	04/30/2019	12/31/2021
Guangdong Tianshu New Energy Technology Co., Ltd.	3,440,000.00	05/18/2018	05/20/2020	[Note 3]
	1,000,000.00	09/17/2018	05/20/2020
	1,500,000.00	09/26/2018	05/20/2020
	1,500,000.00	10/17/2018	05/20/2020
Shantou Zoomlion Ruikang Environmental Sanitation Service Co.,Ltd.	23,810,370.00	12/30/2019	08/10/2024	[Note 4]
	1,200,000.00	09/04/2018		[Note 5]
Shantou Chaoyang District Zoomlion Ruikang Environmental Sanitation Service Co.,Ltd.	600,000.00	04/18/2019	04/17/2020	[Note 6]
Yuxing Technology Development (Shenzhen)Co.,Ltd.	273,210,601.26	09/01/2019	08/31/2020	[Note 7]
Subtotal	404,109,252.09

Note 1: According to the “Loan Contract” signed by its subsidiary Green Oriental Company and Lianjiang Green Oriental New

Energy Co., Ltd., at the beginning of the period, Green Oriental Company has already lent 60,618,680.83 yuan to Lianjiang Green Oriental New Energy Co., Ltd., which shall pay capital occupation fee of 3,687,559.22 yuan at the beginning of the period. In the current period, Green Oriental Company lent another 7,000,000.00 yuan and additional capital occupation fee of 4,626,763.85 yuan shall be collected. In the current period, Green Oriental Company received payment of principal of 60,000,000.00 yuan and capital

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occupation fee of 2,836,100.61 yuan. As of December 31, 2020, outstanding principal due from Lianjiang Green Oriental New Energy Co., Ltd. is 7,618,680.83 yuan and capital occupation fee is 5,478,222.46 yuan.

Note 2: According to the “Loan Agreement” signed between the Company and Guangdong Liangke Environmental Engineering Co., Ltd., at the beginning of the period, the Company has already lent 30,229,600.00 yuan to Guangdong Liangke Environmental Engineering Co., Ltd., which shall pay capital occupation fee of 180,833.33 yuan at the beginning of the period. In the current period, the Company shall collect additional capital occupation fee of 2,012,499.98 yuan, while actually received payment of principal of 229,600.00 yuan and capital occupation fee of 2,027,999.98 yuan. As of December 31, 2020, outstanding principal due from Guangdong Liangke Environmental Engineering Co., Ltd. is 30,000,000.00 yuan and capital occupation fee is 165,333.33 yuan.

Note 3: According to the “Loan Agreement” signed between the Company and Guangdong Tianshu New Energy Technology Co., Ltd., at the beginning of the period, the Company has already lent 7,440,000.00 yuan to Guangdong Tianshu New Energy Technology Co., Ltd., which shall pay capital occupation fee of 490,316.65 yuan at the beginning of the period. In the current period, the Company shall collect additional capital occupation fee of 162,543.33 yuan, while actually received payment of principal of 7,440,000.00 yuan and capital occupation fee of 652,859.98 yuan. As of December 31, 2020, all outstanding principal and interest due from Guangdong Tianshu New Energy Technology Co., Ltd. have been collected.

Note 4: According to the “Loan Agreement” signed between Ningbo Infore Finance Lease Co., Ltd. and Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd., at the beginning of the period, Ningbo Infore Finance Lease Co., Ltd. has already lent 23,810,370.00 yuan to Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. In the current period, Ningbo Infore Finance Lease Co., Ltd. shall collect capital occupation fee of 1,268,991.32 yuan, while actually received payment of principal of 1,810,000.00 yuan and capital occupation fee of 1,268,991.32 yuan. As of December 31, 2020, outstanding principal due from Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. is 22,000,370.00 yuan.

Note 5: According to the “Loan Agreement” signed between Zoomlion Environmental Company and Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd., at the beginning of the period, Zoomlion Environmental Company has already lent 1,200,000.00 yuan to Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd., which shall pay capital occupation fee of 79,053.30 yuan at the beginning of the period. In the current period, Zoomlion Environmental Company shall collect additional capital occupation fee of 59,779.78 yuan, while actually received payment of capital occupation fee of 79,053.30 yuan. As of December 31, 2020, outstanding principal due from Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. is 1,200,000.00 yuan and capital occupation fee is 59,779.78 yuan.

Note 6: According to the “Loan Agreement” signed between Zoomlion Environmental Company and Shantou Chaoyang District Zoomlion Ruikang Environmental Sanitation Service Co., Ltd., at the beginning of the period, Zoomlion Environmental Company has already lent 600,000.00 yuan to Shantou Chaoyang District Zoomlion Ruikang Environmental Sanitation Service Co., Ltd., which shall pay capital occupation fee of 20,989.17 yuan at the beginning of the period. In the current period, Zoomlion Environmental Company shall collect additional capital occupation fee of 20,252.48 yuan, while actually received payment of principal of 600,000.00 yuan and capital occupation fee of 41,241.65 yuan. As of December 31, 2020, all outstanding principal and interest due from Shantou Chaoyang District Zoomlion Ruikang Environmental Sanitation Service Co., Ltd. have been collected.

Note 7: According to the “Loan Agreement” signed between Ningbo Infore Finance Lease Co., Ltd. and Yuxing Technology Development (Shenzhen) Co., Ltd., at the beginning of the period, Ningbo Infore Finance Lease Co., Ltd. has already lent 276,647,986.57 yuan to Yuxing Technology Development (Shenzhen) Co., Ltd., which shall pay capital occupation fee of 8,409,591.52 yuan at the beginning of the period. In the current period from January to August, Ningbo Infore Finance Lease Co., Ltd. shall collect additional capital occupation fee of 10,965,866.40 yuan. From January to August, Ningbo Infore Finance Lease Co., Ltd. received payment of principal of 35,855,292.53 yuan and capital occupation fee of 911,532.68 yuan. As of August 31, 2020, outstanding principal due from Yuxing Technology Development (Shenzhen) Co., Ltd. is 240,792,694.04 yuan and capital occupation fee is 18,463,925.24 yuan.

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5. Key management’s emoluments

5. Key management’s emoluments
Items	Current period cumulative	Preceding period comparative
Key management’s emoluments	11,767,886.08	10,096,571.00

6. Related financial services

As of December 31, 2020, the amount of bank deposits deposited by Zoomlion Environmental Company in the Finance Company of Zoomlion Heavy Industry Co., Ltd. is 4,434,637.47 yuan (recorded under cash and bank balances). The non-bank financial institutions of Zoomlion Environmental Company provide commercial factoring financial services to Zoomlion Environmental Company, which recognized factoring service and handling fee of 20,636,013.40 yuan in the current period; non-bank financial institutions of Zoomlion Heavy Industry Co., Ltd. carried out sales and leaseback business with customers, and realized sales income of 229,507,615.04 yuan (excluding tax).

7. Special agreement on continued implementation of sales contract signed in the name of Zoomlion Heavy Industry Co., Ltd.

Since June 1, 2017, the sanitation business of Zoomlion Heavy Industry Co., Ltd. was merged into Zoomlion Environmental Company. In order to continue the implementation of the sales contract originally signed in the name of Zoomlion Heavy Industry Co., Ltd., Zoomlion Environmental Company invoiced Zoomlion Heavy Industry Co., Ltd., which will then issue the same amount invoice to end customers. The tax-excluded amount of income on such transactions in 2020 is 37,870,525.69 yuan. Zoomlion Environmental Company related such transactions directly to end customers.

(III) Balance due to or from related parties

1. Balance due from related parties

Items	Related parties	Closing balance	Closing balance	Opening	balance
		Book balance	Provision for bad debts	Book balance	Provision for bad debts
Accounts receivable	Guangdong Shunkong Environmental Investment Co.,Ltd.	14,326,635.42	956,013.54	5,168,127.94	258,406.40
	Guangdong Tianshu New Energy TechnologyCo.,Ltd.	9,839,076.38	294,006.22
	Lianjiang Green Oriental New EnergyCo.,Ltd.	86,391.50	23,172.40
	Shantou Zoomlion Ruikang Environmental Sanitation Service Co.,Ltd.	1,804.00	90.20	2,523.00	126.15
	Chongqing Sanfeng Urban Environmental Service Co.,Ltd.	3,309,480.00	165,474.00	279,850.00	13,992.50
	Guangdong Liangke Environmental EngineeringCo.,Ltd.	9,830,000.00	491,500.00
	Zoomlion Heavy Industry Co., Ltd.	365,661.93	18,283.10	772,991.75	58,955.78
	Guangdong Infore Material TechnologyCo.,Ltd.	181,291.59		50,326.30
	LADURNER SRL			10,504,733.59	759,851.47
	Guangdong Midea Electric Co., Ltd.	54,018.62	54,018.62	54,018.62	54,018.62
	Guangdong Midea Environmental Electrical ManufacturingCo.,Ltd.	17,001,270.68		16,866,404.93
	Guangdong Midea Refrigeration Equipment Co.,Ltd.	42,819.11	42,819.11	42,819.11	42,819.11
	Guangdong Midea Commercial Air ConditioningEquipment Co.,Ltd.	33,413.42	33,413.42	33,413.42	33,413.42

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Items	Related parties	Closing balance	Closing balance	Opening	balance
		Book balance	Provision for bad debts	Book balance	Provision for bad debts
	Guangdong Midea HVAC Equipment Co.,Ltd.	42,241.88	42,241.88	42,241.88	42,241.88
	Foshan Shunde District Midea Electric Heating Appliance ManufacturingCo.,Ltd.	12,253,229.14		8,859,696.30
	Anhui Meizhi Precision ManufacturingCo.,Ltd.	48,419,022.58		54,724,604.98
	Anhui Meizhi Refrigeration Equipment Co.,Ltd.	11,682,642.93		7,620,106.21
	Foshan Welling Washing Motor ManufacturingCo.,Ltd.	15,452,106.60		19,552,917.35
	Guangdong Midea Kitchen Appliance ManufacturingCo.,Ltd.	31,207,585.83		21,735,966.80
	Guangdong Meizhi Precision ManufacturingCo.,Ltd.	44,672,031.52		65,072,912.51
	Guangdong Meizhi Refrigeration Equipment Co.,Ltd.	50,376,967.95		73,530,555.63
	Guangdong Welling Motor ManufacturingCo.,Ltd.	166,891.19		333,923.14
	Jiangsu Midea Clean Electric Co., Ltd.	6,206,937.40		3,989,605.22
	Wuxi Little Swan Co., Ltd.			308,054.33
	Changsha Zhonglian Hengtong MachineryCo.,Ltd.	850,000.00	42,500.00	4,899,631.10	489,963.11
	Yuxing Technology Development (Shenzhen)Co.,Ltd.			285,057,578.09	8,551,727.34
	Wuxi Feiling Electronics Co., Ltd.	504,880.89
Subtotal		276,906,400.56	2,163,532.49	579,503,002.20	10,305,515.78
Notes receivable	Guangdong Midea Kitchen Appliance ManufacturingCo.,Ltd.			250,128.00
Subtotal				250,128.00
Receivables financing	Zoomlion Heavy Industry Co., Ltd.	1,586,000.00		2,000,000.00
	Guangdong Midea Environmental Electrical ManufacturingCo.,Ltd.	100,000.00		3,445,502.58
	Guangdong Midea Environmental Electrical ManufacturingCo.,Ltd.	5,485,875.67
	Guangdong Midea Refrigeration Equipment Co.,Ltd.			200,000.00
	Guangdong Midea Commercial Air ConditioningEquipment Co.,Ltd.			50,000.00
	Guangdong Midea HVAC Equipment Co.,Ltd.	470,538.86
	Foshan Shunde District Midea Washing Appliance Manufacturing Co.,Ltd.	1,476,232.74
	Wuhu Midea Life Electric ManufacturingCo.,Ltd.	885,759.28		293,275.50
	Welling (Wuhu) Motor ManufacturingCo.,Ltd.			138,789.45
	Wuhu Welling Motor Sales Co., Ltd.	284,225.20		38,349.24
	Foshan Shunde District Midea Electric Heating Appliance ManufacturingCo.,Ltd.	1,818,137.80
	Anhui Meizhi Precision ManufacturingCo.,Ltd.			22,533,500.00
	Anhui Meizhi Refrigeration Equipment Co.,Ltd.			4,800,000.00
	Guangdong Midea Kitchen Appliance ManufacturingCo.,Ltd.	13,342,437.82		6,929,001.57

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Items	Related parties	Closing balance	Closing balance	Opening	balance
		Book balance	Provision for bad debts	Book balance	Provision for bad debts
	Guangdong Meizhi Precision ManufacturingCo.,Ltd.			5,000,000.00
	Guangdong Meizhi Refrigeration Equipment Co.,Ltd.	3,744,419.06		50,000.00
	Guangdong Welling Motor ManufacturingCo.,Ltd.			387,466.11
	Wuhu Midea Kitchen Appliance ManufacturingCo.,Ltd.	189,549.75		1,152,106.74
	Guangdong Midea Group Wuhu Refrigeration Equipment Co.,Ltd.	350,000.00		3,327,378.95
	Zhejiang Meizhi Compressor Co., Ltd.	1,012,405.60		626,848.50
	Chongqing Midea Refrigeration Equipment Co.,Ltd.	2,980,000.00		150,000.00
	Jiangsu Midea Clean Electric Co., Ltd.	435,471.31		4,700,000.00
	Foshan Midea Carrier Refrigeration Equipment Co.,Ltd.	146,934.55
	Hefei Midea Refrigerator Co., Ltd.	17,315,354.30		988,216.94
	Wuxi Little Swan Co., Ltd.			1,779,475.49
	Hefei Midea Washing Machine Co., Ltd.	4,555,382.40		500,000.00
	Midea Group E-Commerce Co., Ltd.			5,000,000.00
Subtotal		56,178,724.34		64,089,911.07
Advances paid	Changsha Cowa Zoomlion Intelligent TechnologyCo.,Ltd.			3,315,588.08
	Zoomlion Heavy Industry Co., Ltd.	3,954,000.00
Subtotal		3,954,000.00		3,315,588.08
Other receivables	Guangdong Shunkong Environmental Investment Co.,Ltd.	1,730,000.00	519,000.00	1,730,000.00	173,000.00
	Lianjiang Green Oriental New EnergyCo.,Ltd.	13,048,263.59	1,633,347.22	3,792,918.14	639,645.91
	Shantou Zoomlion Ruikang Environmental Sanitation Service Co.,Ltd.	1,259,779.98	332,233.34	1,279,053.30	123,952.67
	Shantou Chaoyang District Zoomlion Ruikang Environmental Sanitation Service Co.,Ltd.			620,989.19	31,049.46
	Guangdong Liangke Environmental Engineering Co., Ltd.	30,165,333.33	6,395,734.82	30,410,433.33	2,004,384.19
	Zoomlion Heavy Industry Co., Ltd.	60,964.27	3,048.21	264,300.00	13,215.00
	Foshan Shunde District Yinghai Investment Co.,Ltd.	205,228.40	4,104.57	205,228.40
	Welling (Wuhu) Motor ManufacturingCo.,Ltd.			24,655.19	19,724.15
Subtotal		46,469,569.57	8,887,468.16	38,327,577.55	3,004,971.38
Long-term receivables and non-current assets due within one year	Guangdong Tianshu New Energy TechnologyCo.,Ltd.	11,736,792.59	176,051.89
	Lianjiang Green Oriental New EnergyCo.,Ltd.			60,618,680.83	3,030,934.04
	Shantou Zoomlion Ruikang Environmental Sanitation Service Co.,Ltd.	25,456,370.00	865,973.60	37,789,740.00	1,413,279.60
	Shantou Chaoyang District Zoomlion Ruikang Environmental Sanitation Service Co.,Ltd.	22,377,360.00	1,491,761.00	13,876,120.00	815,002.00

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Items	Related parties	Closing balance	Closing balance	Opening	balance
		Book balance	Provision for bad debts	Book balance	Provision for bad debts
Subtotal		59,570,522.59	2,533,786.49	112,284,540.83	5,259,215.64

2. Balance due to related parties

Items	Related parties	Closing balance	Opening balance
Accounts payable	Tengine Innovation (Beijing) Monitoring Instrument Co.,Ltd.	1,701,531.98	726,844.36
	Guangdong Shunkong Environmental Investment Co.,Ltd.	937,079.65
	Guangdong Tianshu New Energy Technology Co., Ltd.	867,574.51
	Changsha Cowa Zoomlion Intelligent Technology Co.,Ltd.	162,901.47
	Guangdong Liangke Environmental Engineering Co., Ltd.	2,776,000.50	4,517,490.21
	Zoomlion Heavy Industry Co., Ltd.	117,954,922.58	102,010,448.89
	Midea Group Co., Ltd.	587,507.93	587,507.93
	Foshan Weite Packing Co., Ltd.	44,581.00	17,155.96
	Foshan Welling Washing Motor Manufacturing Co., Ltd.	9,160.00
	Foshan Shunde District Midea Hotel Management Co.,Ltd.		44,874.00
	Changsha Zhonglian Hengtong Machinery Co., Ltd.	602,880.40
	Yuxing Technology Development (Shenzhen) Co., Ltd.		53,047,681.79
	Wuhu Ande Zhilian Technology Co., Ltd.	26,257.78
Subtotal		125,670,397.80	160,952,003.14
Notes payable	Tengine Innovation (Beijing) Monitoring Instrument Co.,Ltd.	3,977,532.00	1,513,120.00
	Guangdong Tianshu New Energy Technology Co., Ltd.	2,096,770.00
	Changsha Cowa Zoomlion Intelligent Technology Co., Ltd.	1,712,500.00
	Zoomlion Heavy Industry Co., Ltd.	131,784,307.87	161,557,616.20
	Yuxing Technology Development (Shenzhen) Co., Ltd.		40,918,701.26
Subtotal		139,571,109.87	203,989,437.46
Contract liabilities	Lianjiang Green Oriental New Energy Co., Ltd.	956,067.99
	Guangdong Liangke Environmental Engineering Co., Ltd.	15,610.67
	Zoomlion Heavy Industry Co., Ltd.	3,857,629.05
Subtotal		4,829,307.71
Advances received	Lianjiang Green Oriental New Energy Co., Ltd.		2,508,650.53
	湖北中联重科工程起重机械有限公司(Hubei Zoomlion EngineeringHoistingMachineryCo.,Ltd.*)		2,000.00
Subtotal			2,510,650.53
Other payables	Zoomlion Heavy Industry Co., Ltd. [Note]	49,328,337.00	135,707,394.06
	绿色东方投资控股有限公司(Green Oriental Investment Holdings Co.,Ltd.*)	21,875,000.00	21,875,000.00
	广东美的物业管理股份有限公司(Guangdong	5,000.00	5,000.00

*The English names are for identification purpose only.

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Items	Related parties	Closing balance	Opening balance
	Midea PropertyManagement Co.,Ltd.*)
	浙江上风风能有限公司(Zhejiang Shangfeng Wind EnergyCo.,Ltd.*)		14.30
	Changsha Zhonglian Hengtong Machinery Co., Ltd.	7,500.00	7,500.00
	Yuxing Technology Development (Shenzhen) Co., Ltd.		1,285,934.67
Subtotal		71,215,837.00	158,880,843.03

Note: It is the other payables and unpaid factoring service fees caused by the factoring business of accounts receivable with recourse right.

XI. Share-based payment

(I) Overall information

1. Details

1. Details

Total equity instruments granted in current period
Total equity instruments vested in current period
Total equity instruments retired in current period
The range of exercise prices of stock options outstanding at the end of the period and the remaining contractual life	Phase II stock options: the exercise price is 9.15 yuan per share; after 12 months from the date of grant, if the exercise conditions are met, the incentive targets can exercise by three installments respectively at 30%, 30%, 40% within the next 36 months; as of the report date, the first period of phase II has due and expired, the second period of phase II is in the exercise period, and the third period of phase II is still in the waiting period. Phase III stock options: the exercise price is 6.34 yuan/share; after 12 months from the date of grant, if the exercise conditions are met, the incentive targets can exercise by three installments respectively at 30%, 30%, 40% within the next 36 months; as of the report date, the first period of phase III has expired due to failure in meeting the performance indicators, and the second and the third periods of phase III are still in the waiting period.
The range of exercise prices of other equity instruments at the end of the period and the remaining contractual life

2. Other remarks

(1) The decision-making procedures and approval status of the Company’s phase III stock option incentive plan

According to the “Proposal on the ‘Phase III Stock Option Incentive Plan (Draft)’ and Its Summary” approved by the Company’s third extraordinary shareholder’s general meeting on November 12, 2019, and the “Proposal on Adjusting the List of Incentive Persons and the Number of Granted Stock Options for Phase III Stock Options” deliberated and approved by 32[nd] meeting of the eighth session of the Board of Directors on November 26, 2019, the Company intends to implement stock option incentive plans for some of the Company’s middle and senior managers and core backbones (technology, marketing, production, etc.). The total number of stock options granted to incentive targets is 65.09 million, accounting for approximately 2.06% of the Company’s total share capital of 3,163.0621 million shares when the incentive plan is signed. If each stock option meets the exercise conditions after 12 months from the grant date, the incentive targets exercise the option by three installments at 30%, 30%, and 40% at the exercise price of 6.45 yuan per share within the next 36 months.

On April 23, 2020, according to the “Proposal on Adjusting the Incentive Targets and the Number of Options Exercised in Phase II and Phase III Stock Option Incentive Plans” deliberated and approved by the fourth meeting of the ninth session of the Board of

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Directors and the third meeting of the ninth session of the Board of Supervisors, 5 employees who resigned due to personal reasons were identified by the Company’s Board of Directors as no longer suitable for incentives. According to the provisions of the “Phase III Stock Option Incentive Plan (Draft)”, their first, second, and third installments of stock options, a total of 1.28 million, were cancelled. After the adjustments, the incentive targets of phase III stock option incentive plan have been adjusted from the original 249 to 244, and the number of locked stock options granted has been adjusted from 65.09 million to 63.81 million.

Meanwhile, the “Proposal on the Company’s Phase III Stock Option Incentive Plan’s Failure to Meet the Exercising Conditions for the First Exercise Period and Cancellation of Part of the Stock Options” was deliberated and approved, given that the Company’s performance did not reach the vesting conditions of the first period of the Phase III Stock Option Incentive Plan. The 19.143 million stock options granted but not yet exercised in the first period cannot be exercised. According to the relevant provisions of the “Phase III Stock Option Incentive Plan (Draft)”, the Company’s Board of Directors agreed to cancel the 19.143 million stock options granted but not yet exercised in the first period.

The Company has disclosed the “Announcement on the Implementation of the Annual Equity Distribution of 2019” on July 4, 2020, based on the Company’s current total share capital after excluding the repurchased shares (0 share), i.e. 3,163,062,146 shares, cash dividend of 1.10 yuan (tax included) for every 10 shares is to be distributed to all shareholders. The equity registration date for this equity distribution is July 9, 2020, and the ex-rights and ex-dividend date is July 10, 2020. Given that the Company’s 2019 equity distribution has been implemented on July 10, 2020, according to provisions on the adjustment of the exercise price of the phase II and Phase III stock option incentive plan drafts, if the Company has capital reserve transferred to share capital, distribution of share bonus, or share split, share reduction, dividend distribution, and share allotments, the exercise price of stock options will be adjusted accordingly. After the implementation of this equity distribution, the exercise price of phase III stock option incentive plan will be adjusted from 6.45 yuan per share to 6.34 yuan per share.

According to the “Proposal on Revising the Performance Appraisal Indicators of Phase III Stock Option Incentive Plan” deliberated and approved by the sixth meeting of the ninth session of the Board of Directors on August 20, 2020, it is agreed to revise the performance appraisal indicators of phase III stock option incentive plan.

(2) The decision-making procedures and approval status of the Company’s phase II stock option incentive plan According to the “Proposal on Granting Stock Options to Phase II Stock Option Incentive Targets” deliberated and approved by the 14[th] extraordinary meeting of the eighth session of the Board of Directors of the Company on March 12, 2018, the Company intends to implement stock option incentive plan for some middle and senior managers, core backbones and key management and core backbones of its holding subsidiaries in the environmental protection industry, and the total number of stock options granted to the incentive targets was 27.15 million, accounting for 2.35% of the Company’s total share capital of 1,166.9889 million shares at the time the incentive plan was signed. If each stock option meets the exercise conditions after 12 months from the grant date, the incentive targets exercise the option by three installments at 30%, 30%, and 40% at the exercise price of 9.36 yuan per share within the next 36 months.

According to the “Proposal on Adjusting the Equity Incentive Plan Exercise Price, Incentive Targets and Number of Options” deliberated and approved by the 30[th] meeting of the eighth session of the Board of Directors on August 27, 2019, due to the implementation of the 2018 equity distribution plan, as well as the resignation, position adjustment of some incentive targets, and other relevant reasons, it is agreed to adjust the equity incentive targets, the number of options, and the exercise price. After adjustment, the incentive targets were adjusted from 118 to 81, and the number of locked stock options granted was adjusted from 27.15 million to 18.25 million shares, and the exercise price was adjusted from 9.36 yuan/share to 9.26 yuan/share. According to the “Proposal on Matters Related to the First Exercise Period of Phase II Incentive Plan” deliberated and approved by the 30[th] meeting of the eighth session of the Board of Directors on August 27, 2019, given that the conditions for the first exercise period of the Company’s phase II stock option incentive plan have been fulfilled, the phase II equity incentive plan has determined and passed the assessment for a total of 81 incentive targets, and a total of 5,475,000 shares were exercised in the first exercise period.

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As of the end of the first exercise period (i.e. March 11, 2020), there are still 5,475,000 stock options that have not been exercised. According to the provisions of the phase II stock option incentive plan, “the incentive targets must be exercised within the validity period of the stock options. After the expiration date, the stock options that have been granted but not yet exercised shall not be exercised and shall be cancelled by the Company.”, the Company cancelled the 5,475,000 stock options granted but not exercised in the first exercise period of the phase II stock option incentive plan for the 81 incentive targets mentioned above. After the completion of the cancellation, the Company’s phase II stock option incentive plan will continue to be implemented in accordance with the requirements. The number of the phase II stock options was adjusted from 18.25 million to 12.775 million.

The Company has disclosed the “Announcement on the Implementation of the Annual Equity Distribution of 2019” on July 4, 2020, based on the Company’s current total share capital after excluding the repurchased shares (0 share), i.e. 3,163,062,146 shares, cash dividend of 1.10 yuan (tax included) per 10 shares is to be distributed to all shareholders. The equity registration date for this equity distribution is July 9, 2020, and the ex-rights and ex-dividend date is July 10, 2020. Given that the Company’s 2019 equity distribution has been implemented on July 10, 2020, according to provisions on the adjustment of the exercise price of the phase II and Phase III stock option incentive plan drafts, if the Company has capital reserve transferred to share capital, distribution of share bonus, or share split, share reduction, dividend distribution, and share allotments, the exercise price of stock options will be adjusted accordingly. After the implementation of this equity distribution, the exercise price of phase II stock option incentive plan will be adjusted from 9.26 yuan per share to 9.15 yuan per share.

(3) The decision-making procedures and approval status of the Company’s phase I stock option incentive plan

According to the “Proposal on the ‘Stock Option Incentive Plan (Draft)’ and Its Summary” deliberated and approved by the Company’s third extraordinary shareholder’s general meeting of 2016 on March 9, 2016, the Company intends to implement stock option incentive plans for some of the Company’s middle and senior managers and core technical (business) backbones. The total number of stock options granted to incentive targets is 5.44 million, accounting for approximately 1.12% of the Company’s total share capital of 484.9244 million shares when the incentive plan is signed.

As in 2016 cash dividend was distributed at 0.398874 yuan (tax included) for every 10 shares and capital reserve was transferred to share capital, the number of unexercised options of the stock option incentive plan will be adjusted to 7,427,028, and the exercise price will be adjusted from 12.49 yuan/share to 8.31 yuan/share.

According to the “Proposal on Adjusting the Number of Stock Options, Exercise Prices and Incentive Targets of the Company’s Phase I Stock Option Incentive Plan” deliberated and approved by the 15[th] meeting of the eighth session of the Board of Directors on April 20, 2018, due to the implementation of the 2016 equity distribution plan, as well as the resignation of some incentive targets, and failure in meeting performance indicators, it is agreed to adjust the equity incentive targets, the number of options, and the exercise price. After adjustment, the incentive targets were adjusted from 55 to 51, and the number of locked stock options granted was adjusted to 6,923,501, and the exercise price was adjusted from 12.49 yuan/share to 8.31 yuan/share.

According to the “Proposal on the Cancellation of Certain Stock Options which Have Been Expired but Not Exercised” deliberated and approved by the 27[th] meeting of the eighth session of the Board of Directors on April 17, 2019, the Company cancelled the 2,967,197 stock options granted but not exercised in the second exercise period of the phase I stock option incentive plan for the 51 incentive targets.

According to the “Proposal on Matters Related to the Third Exercise Period of the Company’s Phase I Stock Option Incentive Plan” deliberated and approved by the 30[th] meeting of the eighth session of the Company’s Board of Directors on August 27, 2019, in view of the fact that conditions of the third exercise period of phase I stock option incentive plan have been fulfilled, the Company’s phase I stock option incentive plan has determined and passed the assessment for a total of 40 incentive targets, and 3,021,177 options will be exercised during the third exercise period.

As of the end of the third exercise period (that is, March 10, 2020), there are still 3,021,177 stock options that have not been

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exercised. According to the provisions of the phase I stock option incentive plan, “the incentive targets must be exercised within the validity period of the stock options. After the expiration date, the stock options that have been granted but not yet exercised shall not be exercised and shall be cancelled by the Company.”, the Company cancelled the 3,021,177 stock options granted but not exercised in the third exercise period of the phase I stock option incentive plan for the 40 incentive targets mentioned above. After the completion of the cancellation, the Company’s phase I stock option incentive plan has been completed.

(II) Equity-settled share-based payment

1. Details

1. Details
Determination method for grant-date fair value of equity instruments	Stock options: Fair value of the stock options at the grant date was determined according to the Black-Scholes optionpricingmodel
Determination method for the number of equity instruments expected to vest	It is expected that all incentive targets still with the Company by then will fully exercise their rights
Reasons for significant difference between the estimates in current period andpreceding period	None
Capital reserve accumulated due to equity-settled share-based payment	49,094,842.72
Total expenses incurred due to equity-settled share-based payment	13,624,937.21

XII. Commitments and contingencies

(I) Significant commitments

As of the balance sheet date, the Company has no significant commitments to be disclosed.

(II) Contingencies

Contingent liabilities incurred by pending lawsuit/arbitration and the financial effect

(1) On November 19, 2018, Green Oriental Investment Holdings Co., Ltd., the former shareholder of the Company’s 70%-controlled subsidiary Green Oriental Company, filed a civil complaint with the People’s Court of Shenzhen Qianhai Cooperation Zone, requesting the Company and its sub-subsidiary 深圳市绿色方舟投资有限公司 (Shenzhen Green Ark Investment Co., Ltd.[*] ) to pay 21,875,000 yuan and interest thereof for the 25% equity acquisition of Lianjiang Green Oriental New Energy Co., Ltd. in 2016, and therefore applied for freezing the 25% equity of Lianjiang Green Oriental New Energy Co., Ltd. According to the Civil Judgment [2018] Yue 0391 Min Chu No. 4117 issued by the People’s Court of Qianhai Cooperation Zone, Shenzhen, Guangdong Province on June 18, 2019: the sub-subsidiary Shenzhen Green Ark Investment Co., Ltd. shall pay 21,875,000 yuan and interest thereof for the 25% equity acquisition of Lianjiang Green Oriental New Energy Co., Ltd. in 2016 to Green Oriental Investment Holdings Co., Ltd. On July 12, 2019, Shenzhen Green Ark Investment Co., Ltd. filed a civil appeal petition to Shenzhen Intermediate People’s Court, requesting to revoke the Civil Judgment [2018] Yue 0391 Min Chu No. 4117 in accordance with the law, and to dismiss all the claims made by Green Oriental Investment Holdings Co., Ltd.

According to the civil appeal and the case report issued by 广东广信君达律师事务所(Guangdong Guangxin Junda Law Firm[*] ) on March 30, 2021, the Company and its lawyers believe that: First, the first instance court was unclear on facts, and has applied to the wrong law provisions. It has not correctly understand the Cooperation Framework Agreement and the Equity Transfer Contract, nor the relationship between the Company, Shenzhen Green Ark Investment Co., Ltd., Green Oriental Investment Holdings Co., Ltd., and Mr. 郑维先 (Zheng Weixian) in the acquisition of Green Oriental Company; second, for the equity transfer of Lianjiang Green Oriental New Energy Co., Ltd., Green Oriental Company assisted Green Oriental Investment Holdings Co., Ltd. in fulfilling its capital contribution obligations, and has the right to demand that the capital contribution be offset with the equity transfer payment; Third, Green Oriental Investment Holdings Co., Ltd.’s action of using the court as a tool for transferring property should not be

*The English name is for identification purpose only.

*The English name is for identification purpose only.

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supported and protected by law. Therefore, the Company and its sub-subsidiary Shenzhen Green Ark Investment Co., Ltd. as parties to the same transaction, have the right to exercise the right of defense to refuse to pay the above-mentioned equity transfer payment. As of the date of issuance of these financial statements, the second instance of this case is still under trial.

(2) In November 2018, due to the fact that Green Oriental Investment Holdings Co., Ltd. and Zheng Weixian failed to fulfill the performance indicators agreed on the “Cooperation Framework Agreement of Shenzhen Green Oriental Environmental Protection Co., Ltd.” and the relevant supplementary agreement, the Company filed a lawsuit to Foshan Intermediate People’s Court, requesting Green Oriental Investment Holdings Co., Ltd. and Zheng Weixian to pay the Company 125,538,200 yuan as compensation. The Company claimed that the related debts occurred during the duration of the marriage relationship between Zheng Weixian and 任喆 (Ren Zhe), and further claimed that the debts belonged to the joint debts of the spouse, and required Ren Zhe to bear joint liabilities for the above-mentioned compensation. At the same time, the Company applied for property preservation in litigation. In May 2020, the Company applied to Foshan Intermediate People’s Court to change the litigation request to require Green Oriental Investment Holdings Co., Ltd. and Zheng Weixian to compensate the Company for various losses totaling 164,560,620 yuan, and to require Ren Zhe to bear joint liabilities for the above debts. On January 13, 2021, Foshan Intermediate People’s Court made a judgment of first instance, ordering Green Oriental Investment Holdings Co., Ltd. and Zheng Weixian to compensate the Company for various losses totaling 163,460,620 yuan, and ordering the Company has a priority right of compensation for the 30% equity of Green Oriental Company held by Green Oriental Investment Holdings Co., Ltd. within the extent of 200 million yuan due to the debts assumed by Green Oriental Investment Holdings Co., Ltd. and Zheng Weixian in this case. Later, Green Oriental Investment Holdings Co., Ltd. and Zheng Weixian filed an appeal to Guangdong Provincial Higher People’s Court. As of the date of issuance of this report, the Company has not received the notice of the second instance hearing.

Certain customers of the Company use finance lease services provided by banks to finance their purchase. According to the arrangement of the agreement, the Company provides guarantees for such transactions. If customers default, the Company will be required to compensate the bank for the lease payment owed by customers. Meanwhile, the Company has the right to take back and sell the machinery that is the subject of the lease, and keep any sales income exceeding the balance of the guarantee payment to the leasing company. As of December 31, 2020, the Company’s maximum exposure to these guarantees is 21,859,801.75 yuan.
Certain customers of the Company use finance lease services provided by third-party finance lease companies to finance their purchase from the Company. According to the arrangement of the agreement, the Company provides guarantees for third-party finance lease companies. If customers default, the Company will be required to compensate the third-party finance lease companies for the lease payment owed by customers. Meanwhile, the Company has the right to take back and sell the machinery that is the subject of the lease, and keep any sales income exceeding the balance of the guarantee payment to the leasing company. As of December 31, 2020, the Company’s maximum exposure to these guarantees is 24,295,580.00 yuan.

XIII. Events after the balance sheet date

(I) Significant non-adjusted events

Pursuant to the “Proposal on Transferring the 51% of the Company’s Controlling Right over Subsidiary through Public Listing” deliberated and approved by the 11[th] extraordinary meeting of the ninth session of the Board of Directors on January 29, 2021 and the first extraordinary shareholders’ general meeting of 2021 on February 24, 2021, the Company is agreed to transfer 51% of the controlling right in Foshan Yingtong Electrical Materials Co., Ltd. to the transferee 广东赢合企业管理有限公司 (Guangdong Yinghe Enterprise Management Co., Ltd.[*] ) at the consideration of 255 million yuan.

(II) Profit distribution after the balance sheet date

According to the 2020 Profit Distribution Plan deliberated and approved by the 13[th] meeting of the ninth session of the Board of Directors on April 22, 2021, the Company intends to distribute cash dividends of 0.12 yuan (tax included) per share based on the

*The English name is for identification purpose only.

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existing total share capital of 3,163,080,346.00 shares, a total of 379,569,641.52 yuan.

XIV. Other significant events

(I) Segment information

1. Identification basis for reportable segments

(1) that engages in business activities from which it may earn revenues and incur expenses;

(2) whose financial performance is regularly reviewed by the Management to make decisions about resource to be allocated to the segment and to assess its performance; and

(3) for which accounting information regarding financial position, financial performance and cash flows is available through analysis.

The Company identified reportable segments based on products. It evaluates the operating performance of electrotechnical equipment manufacturing, ventilation equipment manufacturing and environmental integrated industry respectively.

2. Financial information of reportable segments Products segment

Products segment
Items	Ventilation equipment and electrotechnical equipment manufacturing	Environmental integrated industry	Financial services	Inter-segment offsetting	Total
Revenue from main operations	3,452,359,441.20	11,001,494,213.74	17,971,932.25	198,612,351.83	14,273,213,235.36
Cost of main operations	2,980,218,989.45	7,935,625,872.82	5,073,767.91	200,121,239.69	10,720,797,390.49
Total assets	24,723,177,484.84	20,815,358,907.74	964,343,472.47	16,392,342,874.17	30,110,536,990.88
Total liabilities	4,445,743,062.23	13,214,561,495.46	603,449,139.06	5,424,236,887.77	12,839,516,808.98

(II) Public issuance of convertible bonds with A share convertible rights and the projects in which the raised funds invest Under the Approval of the Public Issuance of Convertible Bonds by Infore Environment Technology Group Co., Ltd. issued by China Securities Regulatory Commission (Zheng Jian Xu Ke [2020] 2219) on September 10, 2020, on November 4, the Company issued publicly convertible bonds of 1,476,189,600 yuan, with a total issuance of 14,761,896 sheets, and a term of 6 years. The coupon rate of the convertible bonds issued this time is 0.20% in the first year, 0.50% in the second year, 0.80% in the third year, 1.50% in the fourth year, 1.80% in the fifth year, and 2.00% in the sixth year. Interest of the convertible corporate bonds is paid once a year, and principal and the last year’s interest are paid at maturity. The Company will redeem all convertible bonds not converted by investors at the 110% of the par value (including the last year’s interest) within 5 trading days upon maturity of the convertible bonds issued this time.

The duration of the convertible bonds issued this time is 6 years from the date of issuance, that is, from November 4, 2020 to November 3, 2026. The initial conversion price of the convertible bonds issued this time is 8.31 yuan/share; the conversion period of the convertible bonds issued this time starts from the first trading day (May 10, 2021) six months after the issuance ends on November 10, 2020 to the maturity date of the convertible bonds (November 3, 2026).

The total amount of funds raised from the public issuance of convertible bonds is 1,476,189,600 yuan. The net proceeds after deducting related issuance expenses are intended to be used in the following projects:

No.	Projects	Total investments (in ,000)	Intended investment from the raised fund(in,000)
1	Smart sanitation comprehensive configuration center	1,966,836.40	1,296,384.90

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No.	Projects	Total investments (in ,000)	Intended investment from the raised fund(in,000)
2	Supplementing the working capital	176,189.60	160,951.30
Total		2,143,026.00	1,457,336.20

On November 4, 2020, the Company actually issued 14,761,896 sheets of convertible corporate bonds, each with a par value of 100 yuan, issued at par value, with a total issuance of 1,476,189,600 yuan and issuance costs of 18,853,400 yuan (excluding tax). The debt and equity components of the convertible bonds are split as follows:

Items	Debt component	Equity component	Total
Total issuance	1,205,796,393.83	270,393,206.17	1,476,189,600.00
Issuance costs	15,400,041.31	3,453,374.52	18,853,415.83
Net issuance at the issuance date	1,190,396,352.52	266,939,831.65	1,457,336,184.17
Current period amortization	9,069,757.08		9,069,757.08
Closing balance	1,199,466,109.60	266,939,831.65	1,466,405,941.25

(III) Other significant transactions and matters which are influential to investors on their decision-making

As of December 31, 2020, the Company’s controlling shareholder, actual controller and persons acting in concert held a total of 1,441,121,828 shares of the Company, accounting for 45.56% of the Company’s total share capital, of which 932,367,969 shares were pledged, accounting for 64.70% of its holdings of the Company, and 29.48% of the Company’s total share capital. Details are as follows:

follows:
Shareholder	Holder of the pledge	Number of share pledged	Initial transaction date	Repurchase date	Remarks
Infore Holding	中国建设银行股份有限公司(China Construction Bank Corporation Limited*), Foshan Branch	100,000,000	11/28/2019	12/31/2023	Financing
		11,786,321	07/24/2020	12/31/2023	Supplementing the workingcapital
		46,831,044	07/24/2020	12/31/2023	Supplementing the workingcapital
	中信证券股份有限公司 (CITIC Securities Co., Ltd.*)	100,000,000	07/10/2020	Till owner of pledged collateral completes the termination procedures	Providing guarantee for exchangeable corporate bonds for share swaps or repayment of principal and interest
Subtotal		258,617,365
Ningbo Infore Asset Management Co., Ltd.	中国民生银行股份有限公司(China Minsheng Banking Corporation Limited*), Hong Kong Branch	610,798,429	10/14/2020	09/23/2021	Financing for M&A
He Jianfeng	China Construction Bank Corporation Limited, Shunde Branch	51,228,846	07/24/2020	12/31/2023	Supplementing the working capital
	China Construction Bank Corporation Limited, Shunde Branch	11,723,329	07/24/2020	12/31/2023	Supplementing the working capital
Subtotal		62,952,175
Total		932,367,969

XV. Notes to items of parent company financial statements

(I) Notes to items of parent company balance sheet

Other receivables

*The English names are for identification purpose only.

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(1) Details

(1) Details
Items	Closing balance	Opening balance
Dividend receivable	50,000,000.00	116,089,770.73
Other receivables	3,045,331,754.24	2,426,827,344.30
Total	3,095,331,754.24	2,542,917,115.03

(2) Dividend receivable

1) Details

1) Details	1) Details
Items			Closing balance		Opening balance
Donggang Magnet Wire Company			50,000,000.00		50,000,000.00
Shangfeng Industrial Company					66,089,770.73
Subtotal			50,000,000.00		116,089,770.73
2) Significant balance	with age over one	year
Items	Closing balance		Ages	Reasons for balances	Whether impaired and judgment basis
Donggang Magnet Wire Company	50,000,000.00		1-2 years	Capital arrangement of the subsidiary	Not impaired based on expected losses
Subtotal	50,000,000.00

(3) Other receivables

1) Details

① Details on categories

①Details on categori	es	es
Categories			Closing balance
	Book balance		Provision for bad debts		Carrying amount
	Amount	% to total	Amount	Provision proportion(%)
Receivables with provision made on an individual basis
Receivables with provision made on a collective basis	3,052,349,446.28	100.00	7,017,692.04	0.23	3,045,331,754.24
Subtotal	3,052,349,446.28	100.00	7,017,692.04	0.23	3,045,331,754.24
(Continued)
Categories			Opening balance
	Book balance		Provision for bad debts		Carrying amount
	Amount	% to total	Amount	Provision proportion(%)
Receivables with provision made on an individual basis
Receivables with provision made on a collective basis	2,430,614,901.70	100.00	3,787,557.40	0.16	2,426,827,344.30
Subtotal	2,430,614,901.70	100.00	3,787,557.40	0.16	2,426,827,344.30

② Other receivables with provision made using age analysis method

	Ages		Closing balance
		Book balance	Provision for bad debts	Provision proportion (%)

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Ages		Closing balance
	Book balance	Provision for bad debts	Provision proportion (%)
1-180 days	3,016,068,113.67
180 days - 1 year	3,781,914.69	75,638.29	2.00
1-2 years	14,486,498.17	1,448,649.82	10.00
2-3 years	17,833,863.75	5,350,159.13	30.00
Over 5 years	179,056.00	143,244.80	80.00
Subtotal	3,052,349,446.28	7,017,692.04	0.23

2) Changes in provision for bad debts

① Details

Items	Phase I	Phase II	Phase III	Subtotal
	12‑ month expected credit losses	Lifetime expected credit losses (credit not impaired)	Lifetime expected credit losses (credit impaired)
Opening balance	279,102.55	3,371,210.05	137,244.80	3,787,557.40
Opening balance in current period
--Transferred to phase II	-279,102.55	279,102.55
--Transferred to phase III		-3,371,210.05	3,371,210.05
--Reversed to phase II
--Reversed to phase I
Provision made in current period	75,638.29	1,169,547.27	8,484,949.08	9,730,134.64
Provision recovered in current period
Provision reversed in current period
Provision written off in current period			6,500,000.00	6,500,000.00
Other changes
Closing balance	75,638.29	1,448,649.82	5,493,403.93	7,017,692.04

3) Other receivables written off in current period

Other receivables actually written off in current period totaled 6,500,000.00 yuan.

4) Other receivables categorized by nature

4) Other receivables categorized by nature
Nature of receivables	Closing balance	Opening balance
Security deposits	452,729.40	500,020.26
Call loans	30,165,333.33	41,548,535.29
Temporary advance payment receivable	3,021,731,383.55	2,346,859,836.64
Equity transfer payments		41,706,509.51
Subtotal	3,052,349,446.28	2,430,614,901.70

5) Details of the top 5 debtors with largest balances

Debtors	Nature of receivables	Book balance	Ages	Proportion to the total balance of other receivables(%)	Provision for bad debts
No. 1	Temporary advance payment receivable	598,182,205.25	1-180 days	19.60

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Debtors	Nature of receivables	Book balance	Ages	Proportion to the total balance of other receivables(%)
No. 2	Temporary advance payment receivable	388,384,258.49	1-180 days	12.72
No. 3	Temporary advance payment receivable	379,225,521.77	1-180 days	12.42
No. 4	Temporary advance payment receivable	345,945,509.17	1-180 days	11.33
No. 5	Temporary advance payment receivable	281,276,824.34	1-180 days	9.22
Subtotal		1,993,014,319.02		65.29

2. Long-term equity investments

(1) Details

(1) Details
Items		Closing balance			Opening balance
	Book balance	Provision for impairment	Carrying amount	Book balance	Provision for impairment	Carrying amount
Investments in subsidiaries	16,490,166,786.49		16,490,166,786.49	16,457,034,334.03		16,457,034,334.03
Investments in associates and joint ventures	204,174,912.87		204,174,912.87	180,046,856.31		180,046,856.31
Total	16,694,341,699.36		16,694,341,699.36	16,637,081,190.34		16,637,081,190.34

(2) Investments in subsidiaries

Investees	Opening balance	Increase	Decrease	Closing balance
Xiantao Yinghe Environmental Protection Co.,Ltd.	44,340,000.00	59,414,840.00		103,754,840.00
Shangfeng Industrial Company	181,276,112.84	18,647,202.02		199,923,314.86
Donggang Magnet Wire Company [Note]	181,900,523.46		181,900,523.46
Guangdong Weiqi Company [Note]	122,351,660.90		122,351,660.90
Anhui Weiqi Electrical Materials Co.,Ltd.[Note]	100,468,524.92		100,468,524.92
Changsha Zhongbiao Environmental IndustryCo.,Ltd.	5,000,000.00	270,000.00		5,270,000.00
Infore Zoomlion City Environmental Service Co.,Ltd.	15,300,000.00			15,300,000.00
盈峰环境水务投资有限公司(Infore Water Environment Investment Co., Ltd.*)	113,055,998.06			113,055,998.06
Zoomlion Environmental Company	15,250,344,307.78	4,102,207.11		15,254,446,514.89
Green Oriental Company	189,216,316.02	1,096,177.90		190,312,493.92

*The English names are for identification purpose only.

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Investees	Opening balance	Increase	Decrease	Closing balance
Infore Technology Company	123,192,918.10	4,681,279.47		127,874,197.57
Foshan Shunde Huaqingyuan Environmental Protection Co.,Ltd.	279,997.29	626,455.24		906,452.53
Ningbo Infore Finance Lease Co., Ltd	7,307,974.66	349,015,000.00		356,322,974.66
Guangdong Infore Environmental Investment Co.,Ltd.	100,000,000.00			100,000,000.00
巴林右旗盈峰环境水务有限公司 (Bahrain Right Banner Infore Water Environment Co., Ltd.*)	23,000,000.00			23,000,000.00
Subtotal	16,457,034,334.03	437,853,161.74	404,720,709.28	16,490,166,786.49

Note: In November 2020, the Company transferred all equities of Guangdong Weiqi Company, Donggang Magnet Wire Company and Anhui Weiqi Electrical Materials Co., Ltd. to the sub-subsidiary Foshan Yingtong Electrical Materials Co., Ltd.

(3) Investments in associates and joint ventures

Investees	Opening balance			Increase/Decrease	Increase/Decrease	Increase/Decrease	Increase/Decrease
		Investments increased		Investments decreased		Investment income recognized under equitymethod		Adjustment in other comprehensive income
Associates
Guangdong Shunkong Environmental Investment Co.,Ltd.	154,058,623.77						27,447,000.00
Tengine Innovation (Beijing) Monitoring Instrument Co.,Ltd.	25,988,232.54	839,195.26 [Note 1]					2,735,747.26
Guangdong Tianshu New Energy Technology Co.,Ltd.[Note 2]
Total	180,046,856.31	839,195.26					30,182,747.26
(Continued)
Investees		Increase/Decrease					Closing balance		Closing balance of provision for impairment
	Changes in other equity	Cash dividend/Profit declared for distribution	Provision for impairment		Others
Associates
Guangdong Shunkong Environmental Investment Co.,Ltd.		6,893,885.96					174,611,737.81
Tengine Innovation (Beijing) Monitoring Instrument Co.,Ltd.							29,563,175.06
Guangdong Tianshu New Energy Technology Co., Ltd.
Total		6,893,885.96					204,174,912.87

Note 1: Please refer to section V (1) 13 of notes to financial statements for details.

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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Note 2: Please refer to section V (1) 13 of notes to financial statements for details.

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(II) Notes to items of the parent company income statement

Operating revenue/Operating cost

Items	Current period cumulative	Current period cumulative	Preceding period comparative	Preceding period comparative
	Revenue	Cost	Revenue	Cost
Main operations	7,213,284.07	4,157,985.26	33,915,501.26	28,584,116.83
Total	7,213,284.07	4,157,985.26	33,915,501.26	28,584,116.83

2. Investment income

2. Investment income
Items	Current period cumulative	Preceding period comparative
Investment income from long-term equity investments under equitymethod	30,182,747.26	117,730,792.60
Investment income from disposal of long-term equityinvestments	-104,720,709.28	76,458,323.18
Investment income from financial instruments	22,152,496.14	12,454,322.89
Including: Financial assets designated as at fair value throughprofit or loss	11,250,397.44	9,673,130.57
Financial assets classified as at fair value throughprofit or loss	10,487,138.70	2,400,812.32
Other equity instrument investments	414,960.00	380,380.00
Gains on disposal of financial assets classified as at fair value throughprofit or loss	27,094.77
Shareholder performance compensation	839,195.26	24,676,400.00
Total	-51,519,175.85	231,319,838.67

XVI. Other supplementary information

(I) Non-recurring profit or loss

1. Schedule of non-recurring profit or loss

(1) Details

(1) Details
Items	Amount	Remarks
Gains on disposal of non-current assets, including write-off of provision for impairment	-42,036,810.26	Gains on disposal of long-term equity investments amounted to 488,224.46 yuan, gains on disposal of fixed assets amounted to -1,787,925.37 yuan, gains on scrapping of fixed assets amounted to -11,767,441.22 yuan, and gains on scrapping of intangible assets amounted to -28,969,668.13yuan
Tax refund, credit or exemption approved beyond the power of authorities, without formal documents,or with occasionality	621,422.30
Government grants included in profit or loss (excluding those closely related to operating activities of the Company, satisfying government policies and regulations, and continuously enjoyed with certain quantity/quota based on certain standards)	42,047,479.15
Fund possession charge from non-financial entities and included in profit or loss	22,117,071.89	4,578,541.63 yuan from Lianjiang Green Oriental New Energy Co., Ltd., 2,012,499.98 yuan from Guangdong Liangke Environmental Engineering Co., Ltd., 1,328,771.30 yuan from Shantou Zoomlion Ruikang Environmental Sanitation Service Co., Ltd., 264,600.00 yuan from Jilin Xinyu Environmental Protection Engineering Co., Ltd., 162,543.33 yuan from Guangdong Tianshu New Energy Technology Co., Ltd., and 20,252.48 yuan from Shantou Chaoyang District Zoomlion RuikangEnvironmental Sanitation

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Items	Amount	Remarks
		Service Co., Ltd., excluding VAT for the above call loans amounting to 178,515.17 yuan; amortization of realized finance income from equity transfer payments received in installment of Yuxing Technology Development (Shenzhen)Co.,Ltd. amounted to 13,928,378.34yuan
Gains on acquisition of subsidiaries, joint ventures and associates due to the surplus of acquisition-date fair value of net identifiable assets in acquiree over the acquisition cost
Gains on non-cash assets exchange
Gains on assets consigned to the third party for investment or management	23,771,715.03	Investment income from financial products amounted to 23,771,715.03yuan
Assets impairment loss incurred due to force majeure such as natural disasters
Gains on debt restructuring
Entity restructuring expenses, such as staffing and integratingexpenses
Gains on transactions with unfair value
Net profit on subsidiaries acquired through business combination under common control from the beginning of the period to the combination date
Contingent gains on non-operating activities
Gains on changes in fair value of financial assets and liabilities at fair value through profit or loss and investment income from disposal of financial assets and liabilities at fair value through profit or loss, and available-for-sale financial assets, excluding those arising from hedging business related to operatingactivities	-90,608,285.06	Changes in fair value of financial assets amounted to -89,949,855.53 yuan, investment income from ineffective portion of closed hedges amounted to 5,117,398.33 yuan, changes in fair value of ineffective portion of outstanding hedges amounted to -5,769,445.94 yuan, and handling fees for futures transactions amounted to -6,381.92yuan
The reversed provision for impairment of receivables based on impairment testing on an individual basis
Gains on designated loans
Gains on changes in fair value of investment properties with subsequent measurement at the fair value mode
Gains on reconciliation of current period profit or loss following legal and regulative requirements on taxation,accounting,etc.
Management charges for consigned operations
Other non-operating revenue or expenditures	-7,514,468.68
Other profit or loss satisfying the definition of non-recurring profit or loss	839,195.26	Compensation for performance commitment of Tengine Innovation (Beijing) Monitoring Instrument Co.,Ltd.
Subtotal	-50,762,680.37
Less: Enterprise income tax affected	-8,391,224.21
Non-controlling interest affected (after tax)	3,371,490.83
Net non-recurring profit or loss attributable to shareholders of theparent company	-45,742,946.99

The Company recognized “Other profit or loss satisfying the definition of non-recurring profit or loss” based on the “Interpretation Pronouncement on Information Disclosure Criteria for Public Companies No. 1 - Non-Recurring Profit or Loss” issued by China Securities Regulatory Commission, and remarks on exceptions are as follows:

Items Amount Reasons

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Items	Amount	Reasons
VAT refund	28,804,978.15	Government grants that closely related to operating activities of the Company, satisfying government policies and regulations, and continuously enjoyed with certain quantity/quota based on certain standards
Subsidy for sludge disposal	2,816,166.83

(II) RONA and EPS

1. Details

1. Details	1. Details
Profit of the reporting period		Weighted average RONA (%)	EPS (yuan/share)
			Basic EPS	Diluted EPS
Net profit attributable to shareholders of ordinaryshares		8.62	0.44	0.44
Net profit attributable to shareholders of ordinary shares after deducting non-recurring profit or loss		8.90	0.45	0.45
2. Calculation process of weighted average RONA
Items			Symbols	Current period cumulative
Net profit attributable to shareholders of ordinary shares			A	1,386,476,099.73
Non-recurring profit or loss			B	-45,742,946.99
Net profit attributable to shareholders of ordinary shares after deducting non-recurring profit or loss			C=A-B	1,432,219,046.72
Opening balance of net assets attributable to shareholders of ordinary shares			D	15,514,697,715.97
Net assets attributable to shareholders of ordinary shares increased due to offeringof new shares or conversion of debts into shares			E
Number of months counting from the next month when the net assets were increased to the end of the reporting period			F
Net assets attributable to shareholders of ordinary shares decreased due to cash dividends appropriation			G	347,936,836.06
Number of months counting from the next month when the net assets were decreased to the end of the reporting period			H	7
Net assets attributable to shareholders of ordinary shares decreased due to share repurchase			I	8,920,597.83
Number of months counting from the next month when the net assets were decreased to the end of the reporting period			J	3
Others	Net assets attributable to shareholders of ordinary shares increased due to amortization of share-based payments in the currentperiod		K1	12,859,488.20
	Number of months counting from the next month when other net assets were increased to the end of the reporting period		L1	6
	Net assets increased due to the issuing of convertible bonds		K2	266,939,831.65
	Number of months counting from the next month when other net assets were increased or decreased to the end of the reporting period		L2	1
	Net assets increased due to the acquisition of non-controlling interest of the subsidiary Shangfeng Industrial Company		K3	-2,225,430.97
	Number of months counting from the next month when other net assets were increased or decreased to the end of the reporting period		L3	11
	Net assets increased due to the equity disposal of the sub-subsidiary Jilin Zhongfeng Oasis Environmental Development Co., Ltd. but without losingcontrol		K4	-314,024.80
	Number of months counting from the next month when other net assets were increased or decreased to		L4	11

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Items		Symbols	Current period cumulative
	the end of the reporting period
	Transfer of repurchased shares to stock incentive plan in thepreceding period	K5	98,394,255.36
	Number of months counting from the next month when other net assets were increased or decreased to the end of the reporting period	L5	7
	Net assets increased due to the acquisition of non-controlling interest of Xiantao Yinghe Environmental Protection Co.,Ltd.	K6	903,021.70
	Number of months counting from the next month when other net assets were increased or decreased to the end of the reporting period	L6	4
	Net assets decreased due to the dividend distribution of the sub-subsidiary Songyuan Zoomlion Xinyu Environmental Service Co.,Ltd.	K7	180,000.00
	Number of months counting from the next month when other net assets were increased or decreased to the end of the reporting period	L7	8
	Effect of profits or losses of copper futures on other comprehensive income	K8	-479,437.51
	Number of months counting from the next month when other net assets were increased or decreased to the end of the reporting period	L8	6
Number of months in the reporting period		M	12
Weighted average net assets		L= D+A/2+ E×F/M-G×H/M+ I×J/M+K×L/M	16,086,427,295.05
Weighted average RONA		M=A/L	8.62%
Weighted average RONA after deducting non-recurring profit or loss		N=C/L	8.90%

3. Calculation process of basic EPS and diluted EPS

(1) Calculation process of basic EPS

(1) Calculation process of basic EPS
Items	Symbols	Current period cumulative
Net profit attributable to shareholders of ordinary shares	A	1,386,476,099.73
Non-recurring profit or loss	B	-45,742,946.99
Net profit attributable to shareholders of ordinary shares after deducting non-recurring profit or loss	C=A-B	1,432,219,046.72
Opening balance of total shares	D	3,147,735,938
Number of shares increased due to conversion of reserve to share capital or share dividend appropriation	E
Number of shares increased due to transfer of repurchased shares to employee stock ownership plan	F	15,326,208
Number of months counting from the next month when the share was increased to the end of the reporting period	G	7
Number of shares decreased due to share repurchase	H	1,137,524
Number of months counting from the next month when the share was decreased to the end of the reporting period	I	3
Number of shares decreased in the reporting period	J
Number of months in the reporting period	K	12
Weighted average of outstanding ordinary shares	L=D+E+F×G/K-H×I/K-J	3,156,391,845
Basic EPS	M=A/L	0.44
Basic EPS after deducting non-recurring profit or loss	N=C/L	0.45

(2) Calculation process of diluted EPS

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Annual Report 2020 of Infore Environment Technology Group Co., Ltd.

Items	Symbols	Current period cumulative
Net profit attributable to shareholders of ordinary shares	A	1,386,476,099.73
Net profit affected by dilutive potential ordinary shares	B	9,069,757.08
Diluted net profit attributable to shareholders of ordinary shares	C=A-B	1,395,545,856.81
Non-recurring profit or loss	D	-45,742,946.99
Diluted net profit attributable to shareholders of ordinary shares after deductingnon-recurring profit or loss	E=C-D	1,441,288,803.80
Weighted average of outstanding ordinary shares	F	3,156,391,845
Weighted average of ordinary shares increased due to warrant, share options,convertible bonds,etc.	G	22,295,943
Weighted average of diluted outstanding ordinary shares	H=F+G	3,178,687,788
Diluted EPS	M=C/H	0.44
Diluted EPS after deducting non-recurring profit or loss	N=E/H	0.45

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Part XIII Documents Available for Reference

(I) The financial statements signed and stamped by the Company’s legal representative, Chief Financial Officer and head of the accounting department.

(II) The original copy of the Independent Auditor’s Report signed and stamped by the certified public accountants and stamped by the CPA firm.

(III) All the originals of the Company’s announcements and documents that were disclosed to the public during the Reporting Period on the media designated by the CSRC for information disclosure.

The originals or legally valid copies of the documents above are lodged in the Company and the Shenzhen Stock Exchange, which are available to all investors.

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Infore Environment Technology Group Co., Ltd. — Annual Report 2020

53931_rns_2021-04-29_2cd92706-2822-40af-8bc1-0d811d8287e7.PDF

Infore Environment Technology Group Co., Ltd. Annual Report 2020

Part I Important Notes, Table of Contents and Definitions

Table of Contents

Definitions

Part II Corporate Information and Key Financial Information

I Corporate Information

II Contact Information

III Media for Information Disclosure and Place where this Report is Lodged

IV Change to Company Registered Information

V Other Information

VI Key Financial Information

1. Net Profit and Equity under CAS and IFRS

2. Net Profit and Equity under CAS and Foreign Accounting Standards

VIII Key Financial Information by Quarter

IX Exceptional Gains and Losses

√ Applicable □ Not applicable

Part III Business Summary

I Principal Activities of the Company in the Reporting Period

1. Main business fields

2. Main business and products

3. The Company's main position in the industry

4. Technology accumulation and innovation

(2) Could platform innovation

(4) Forerunner in intelligent robots

II Significant Changes in Major Assets

1. Significant Changes in Major Assets

2. Major Assets Overseas

III Core Competitiveness Analysis

3. Advantages in the sound marketing network

4. Edges in capital and funds

Part IV Management Discussion and Analysis

I Overview

2. Continuously leading environmental sanitation equipment

3. Continuously leading the new energy environmental sanitation equipment

5. Issuance of convertible bonds and consolidation of industrial development basis

II Core Business Analysis

1. Overview

2. Revenue and Cost Analysis

(1) Breakdown of Operating Revenue

(2) Operating Division, Product Category or Operating Segment Contributing over 10% of Operating Revenue or Operating Profit

(3) Whether Revenue from Physical Sales Is Higher than Service Revenue

√ Yes □ No

(4) Execution Progress of Major Signed Sales Contracts in the Reporting Period

(5) Breakdown of Cost of Sales

(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period

1. Entities Newly Included in the Consolidated Financial Statements

(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period

(8) Major Customers and Suppliers

3. Expenses

4. R&D Investments

√ Applicable □ Not applicable

□ Applicable √ Not applicable

5. Cash Flows

√ Applicable □ Not applicable

III Analysis of Non-Core Businesses

IV Analysis of Assets and Liabilities

1. Significant Changes in Asset Composition

2. Assets and Liabilities at Fair Value

3. Assets to which the Company’s Rights Were Restricted as at the Period-End

V Investments Made

1. Total Investment Amount

2. Significant Equity Investments Acquired in the Reporting Period

3. Significant Non-Equity Investments of which the Acquisition Was Uncompleted in the Reporting Period

4. Financial Investments

(1) Securities Investments

(2) Investments in Derivative Financial Instruments

5. Use of Raised Funds

(1) Overall Use of Raised Funds

(2) Committed Projects of Raised Funds

(3) Altered Projects of Raised Funds

VI Sale of Major Assets and Equity Investments

1. Sale of Major Assets

2. Sale of Major Equity Investments

VII Principal Subsidiaries and Joint Stock Companies

√ Applicable □ Not applicable

√ Applicable □ Not applicable

VIII Structured Bodies Controlled by the Company

Infore Environment Technology Group Co., Ltd. Annual Report 2020