<table><tr><td rowspan="2">Items</td><td rowspan="2">Notes</td><td colspan="2">For the six months ended 30 June</td></tr><tr><td>2021</td><td>2020</td></tr><tr><td>Cash paid to aciquire fixed assets, intanblge assets and 
other long-term assets</td><td></td><td>25227473.40,,</td><td>49,891,307.59</td></tr><tr><td>Cash paid for investments</td><td></td><td>212000000.00,,</td><td>154,000,000.00</td></tr><tr><td>Cash paid relating to other investment activities</td><td></td><td>3207518.74,,</td><td>361,187,463.73</td></tr><tr><td>Subtotal of cash outflows from investment activities</td><td></td><td>240434992.14,,</td><td>565,078,771.32</td></tr><tr><td>Net cash flows generated from investment activities</td><td></td><td>126237775.23,,</td><td>(413,658,888.15)</td></tr><tr><td>III. Cash flow generated from financing activities:</td><td></td><td></td><td></td></tr><tr><td>Cash received from investments</td><td></td><td>330000.00,</td><td>371,700.00</td></tr><tr><td>Including: Cash received by subsidiaries from investment of 
non-controlling interests</td><td></td><td>330000.00,</td><td>371,700.00</td></tr><tr><td>Cash received from loan granted</td><td></td><td>1024102431.07,,,</td><td>1,274,205,425.00</td></tr><tr><td>Cash received relating to other financing activities</td><td></td><td>–</td><td>26,801,199.53</td></tr><tr><td>Subtotal of cash inflows from financing activities</td><td></td><td>1024432431.07,,,</td><td>1,301,378,324.53</td></tr><tr><td>Cash paid for repayment of borrowings</td><td></td><td>922715545.00,,</td><td>571,212,762.78</td></tr><tr><td>Cash paid for dividends, profits or the payment of interest</td><td></td><td>45612993.92,,</td><td>72,996,667.63</td></tr><tr><td>Including: dividends and profits paid to non-controlling interests 
by subsidiary</td><td></td><td>5746345.00,,</td><td>4,752,225.00</td></tr><tr><td>Cash paid relating to financing activities</td><td></td><td>38932318.64,,</td><td>255,927,309.71</td></tr><tr><td>Subtotal of cash outflows from financing activities</td><td></td><td>1007260857.56,,,</td><td>900,136,740.12</td></tr><tr><td>Net cash flows generated from financing activities</td><td></td><td>17171573.51,,</td><td>401,241,584.41</td></tr><tr><td>IV.Effects of changes in exchange rate on cash and cash 
equivalents</td><td></td><td>(1457731.16,,)</td><td>(1,943,967.50)</td></tr><tr><td>V. Net increase in cash and cash equivalents</td><td></td><td>13491062.03,,</td><td>(168,728,818.18)</td></tr><tr><td>Add: opening balance of cash and cash equivalents</td><td></td><td>1327289120.69,,,</td><td>1,537,567,094.59</td></tr><tr><td>VI.Balance of cash and cash equivalents at the end of this 
period</td><td></td><td>1340780182.72,,,</td><td>1,368,838,276.41</td></tr></table>

# NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

For the six months ended 30 June 2021

# I. GENERAL INFORMATION

Chongqing Machinery & Electric Co., Ltd. (the “Company”) was established on 27 July 2007 as a joint share company with limited liability by Chongqing Machinery & Electronics Holding (Group) Co., Ltd. (“CQMEHG”), Chongqing Yufu Capital Operation Group Co., Ltd (“Yufu company”,originally called Chongqing Yufu Assets Management Co., Ltd), China Huarong Asset Management Co., Ltd. (“Huarong Company”), and Chongqing Construction Engineering Group Co. Ltd. (“CCEG”). The address of the Company’s registered office is No. 60, Middle Section of Huangshan Avenue, New North Zone, Chongqing City, the PRC. The Company’s headquarter is located in Chongqing, the PRC. The parent company and the ultimate controlling shareholder is Chongqing Machinery & Electronics Holding (Group) Co. Ltd. The Group was established with a registered capital of RMB2,679.74 million (RMB1 per share).

On 13 June 2008, the Group publicly issued 1,004.90 million H shares to foreign investors with approval of the Circular “Zhengjian Xuke [2008] No. 285” of the China Securities Regulatory Commission, and the shares were listed on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”). After issuing the shares, the total share capital increased to RMB3,684.64 million.

As of 30 June 2021, the registered capital of the Group was RMB3,684,640,154 yuan. The Group and its Subsidiaries (hereinafter collectively referred to as “the Group”) are mainly engaged in the manufacturing, sales and services of clean energy equipment and high-end intelligent equipment.

The consolidated financial statements have been approved for issue by the Board of Directors of the Group on 26 August 2021.

# II. BASIS FOR THE PREPARATION OF FINANCIAL STATEMENTS

# (1) Basis of preparation

The financial statements are prepared in accordance with the Accounting Standard for Business Enterprises – Basic Standard, and the specific accounting standards and other relevant regulations issued by the Ministry of Finance on 15 February 2006 and in subsequent periods (hereafter collectively referred to as “the Accounting Standards for Business Enterprises” or “CAS”) and the disclosure requirements in the Preparation Convention of Information Disclosure by Companies Offering Securities to the Public No.15-General Rules on Financial Reporting issued by the China Securities Regulatory Commission, Hong Kong’s “Companies Ordinance” and based on the accounting policies and accounting estimates set out in “III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES” in this note.