Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility

for the
contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability
whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

Changsha Zoomlion Heavy Industry Science and Technology Development Co., Ltd.*
長沙中聯重工科技發展股份有限公司
(a joint stock limited company incorporated in the People’s Republic of China)
(Stock Code: 1157)

ANNOUNCEMENT OF ANNUAL RESULTS

FOR THE YEAR ENDED 31 DECEMBER 2010

FINANCIAL HIGHLIGHTS

• Turnover of the Group in 2010 was RMB32,193 million, representing an increase of

RMB11,431 million or 55.1% over 2009.

• Profit attributable to equity shareholders of the Company in 2010 was RMB4,666 million,
representing an increase of RMB2,219 million or 90.7% over 2009.

• Earnings per share in 2010 were RMB0.96.

• The Board proposed a final dividend of RMB0.26 per share and a bonus share on the basis of
0.3 share for every outstanding share for the year of 2010.

The board of directors (the “Board”) of Changsha Zoomlion Heavy Industry Science and
Technology Development Co., Ltd.* (the “Company”) hereby announces the audited results of the
Company and its subsidiaries (the “Group”) for the year ended 31 December 2010 together with the
comparative figures for 2009:

1
FINANCIAL RESULTS
Financial information extracted from the audited financial statements in 2010 prepared in
accordance with International Financial Reporting Standards (“IFRSs”):
Consolidated statement of comprehensive income

2010 2009
Note RMB RMB
millions millions
Turnover 2 32,193 20,762
Cost of sales and services (22,424) (15,422)

Gross profit 9,769 5,340

Other revenues and net income 54 105
Sales and marketing expenses (2,146) (1,250)
General and administrative expenses (1,645) (878)
Research and development expenses (265) (194)

Profit from operations 5,767 3,123

Loss on disposal of associates — (6)
Net finance costs 3(a) (365) (295)
Share of profits less losses of associates 14 6
Profit before taxation 3 5,416 2,828
Income tax 4 (828) (409)

Profit for the year 4,588 2,419

Other comprehensive income for the year (after tax)
Change in fair value of available-for-sale
equity securities (2) 3
Others 11 —
Exchange differences on translation of
financial statements of subsidiaries outside PRC (74) 44

Total other comprehensive income for the year (65) 47

Total comprehensive income for the year 4,523 2,466

Profit attributable to:

Equity shareholders of the Company 4,666 2,447
Non-controlling interests (78) (28)

Profit for the year 4,588 2,419

Total comprehensive income attributable to:

Equity shareholders of the Company 4,580 2,497
Non-controlling interests (57) (31)

Total comprehensive income for the year 4,523 2,466

Basic and diluted earnings per share (RMB) 6 0.96 0.59

2
Consolidated balance sheet

2010 2009
Note RMB RMB
millions millions

Non-current assets
Property, plant and equipment 4,135 3,683
Lease prepayments 1,119 907
Intangible assets 1,256 1,432
Goodwill 1,907 2,082
Interests in associates 86 71
Other financial assets 50 15
Trade and other receivables 8 585 229
Receivables under finance lease 9,775 5,060
Pledged bank deposits 185 234
Deferred tax assets 10(b) 274 148

Total non-current assets 19,372 13,861

Current assets
Inventories 8,678 6,272
Trade and other receivables 8 8,260 6,265
Receivables under finance lease 6,397 3,283
Pledged bank deposits 1,577 755
Cash and cash equivalents 18,758 3,439

Total current assets 43,670 20,014

Total assets 63,042 33,875

Current liabilities
Loans and borrowings 8,107 8,553
Trade and other payables 9 17,203 10,632
Income tax payable 10(a) 757 283

Total current liabilities 26,067 19,468

Net current assets 17,603 546

Total assets less current liabilities 36,975 14,407

3
 2010 2009
Note RMB RMB
millions millions

Non-current liabilities
Loans and borrowings 7,690 5,621
Other non-current liabilities 1,379 684
Deferred tax liabilities 10(b) 471 550

Total non-current liabilities 9,540 6,855

NET ASSETS 27,435 7,552

CAPITAL AND RESERVES

Share capital 11 5,797 1,673
Reserves 21,579 5,755

Total equity attributable to equity shareholders of

the Company 27,376 7,428
Non-controlling interests 59 124

TOTAL EQUITY 27,435 7,552

4
Consolidated statement of changes in equity

Attributable to equity shareholders of the Company

Share Statutory Fair Non-
capital Capital surplus Exchange value Retained controlling Total
(Note 11) reserve reserve reserve reserve earnings Total interests equity
RMB RMB RMB RMB RMB RMB RMB RMB RMB
millions millions millions millions millions millions millions millions millions

Balance at 1 January 2009 1,521 12 529 (18) (2) 3,029 5,071 140 5,211
Appropriation — — 240 — — (240) — — —
Cash dividends — — — — — (152) (152) — (152)
Bonus shares 152 — — — — (152) — — —
Acquisition of non-controlling interest — 10 — — — — 10 (25) (15)
Acquisition of subsidiaries — — — — — — — 11 11
Contributions from non-controlling interests — 2 — — — — 2 29 31
Total comprehensive income for the year — — — 47 3 2,447 2,497 (31) 2,466

Balance at 31 December 2009 1,673 24 769 29 1 4,932 7,428 124 7,552

Appropriation — — 443 — — (443) — — —

Issuance of A Shares in Non-public Offering 298 5,181 — — — — 5,479 — 5,479
Cash dividends — — — — — (827) (827) — (827)
Bonus shares 2,957 — — — — (2,957) — — —
Acquisition of non-controlling interest — (2) — — — — (2) 2 —
Dividends paid by subsidiaries to
non-controlling interests — — — — — — — (10) (10)
Issuance of H Shares in Global Offering 869 9,849 — — — — 10,718 — 10,718
Total comprehensive income for the year — 11 — (95) (2) 4,666 4,580 (57) 4,523

Balance at 31 December 2010 5,797 15,063 1,212 (66) (1) 5,371 27,376 59 27,435

5
Consolidated cash flow statement

2010 2009
RMB RMB
millions millions

Operating activities

Profit before taxation 5,416 2,828

Adjustments for:
Depreciation of property, plant and equipment 327 245
Amortisation of lease prepayments 24 21
Amortisation of intangible assets 64 63
Share of profits less losses of associates (14) (6)
Interest income (96) (34)
Interest expense 740 438
Loss on disposal of property, plant and equipment 37 10
Loss on disposal of associates — 6
Impairment loss on property, plant and equipment 5 5

6,503 3,576

Increase in inventories (2,416) (1,093)

Increase in trade and other receivables (2,371) (1,703)
Increase in receivables under finance lease (7,829) (6,096)
Increase in trade and other payables 7,083 4,206

Cash generated from/ (used in) operations 970 (1,110)

Income tax paid (519) (256)

Net cash generated from/ (used in)

operating activities 451 (1,366)

6
 2010 2009
RMB RMB
millions millions

Investing activities
Payment for the purchase of property,
plant and equipment (910) (829)
Lease prepayments (236) (3)
Payment for purchase of intangible assets (27) (70)
Dividends received from associates 6 —
Payment for acquisition of investments
in associates and equity investments (44) (15)
Proceeds from disposal of investments in associates — 7
Proceeds from disposal of property,
plant and equipment and intangible assets 55 79
Payment for acquisitions of subsidiaries,
net of cash acquired — (28)
Interest received 13 96 34
Increase in pledged bank deposits (773) (535)

Net cash used in investing activities (1,833) (1,360)

Financing activities
Proceeds from loans and borrowings 10,840 11,581
Repayments of loans and borrowings (8,906) (7,712)
Interest paid 13 (743) (498)
Dividends paid (711) (152)
Contribution from non-controlling shareholders — 31
Net proceeds from issuance of A Shares
in Non-public Offering 5,479 —
Net proceeds received from issuance of H Shares
in Global Offering 10,796 —

Net cash generated from financing activities 16,755 3,250

Net increase in cash and cash equivalents 15,373 524

Cash and cash equivalents at beginning of year 3,439 2,913

Effect of foreign exchange rate changes (54) 2

Cash and cash equivalents at end of year 18,758 3,439

7
Notes to the financial information

1 Basis of preparation

The Company’s financial statements have been prepared in accordance with all applicable IFRSs as issued by the
International Accounting Standards Board. IFRSs include all individual International Financial Reporting Standards,
International Accounting Standards and related interpretations. These financial statements also comply with the disclosure
requirements of the Hong Kong Companies Ordinance and the applicable disclosure provisions of the Rules Governing the
Listing of Securities on The Stock Exchange of Hong Kong Limited.

2 Turnover

The principal activities of the Group are research, development, manufacturing and sale and leasing of concrete machinery,
crane machinery, environmental and sanitation machinery, road construction and pile foundation machinery and other
related heavy machinery and capital equipment in the People’s Republic of China (the “PRC”) and manufacturing and sale
of concrete machinery in Italy.

Turnover represents revenue from sales and lease of the Group’s machinery products, net of value-added tax and is after
deduction of any trade discounts.

The amounts of each significant category of revenue recognised in turnover are as follows:

2010 2009
RMB RMB
millions millions

Sales of:
Concrete machinery 14,085 7,157
Crane machinery 11,077 8,298
Environmental and sanitation machinery 1,874 1,230
Road construction and pile foundation machinery 1,246 787
Earth working machinery 772 445
Material handling machinery and systems 422 873
Other machinery products 1,674 1,575
Finance income under finance lease 1,043 397

32,193 20,762

8
3 Profit before taxation

Profit before taxation is arrived at after charging/(crediting):

(a) Net finance costs:

2010 2009
RMB RMB
millions millions

Finance income:
Interest income on bank deposits (96) (34)

Finance costs:
Interest on loans and borrowings 403 372
Less: Interest expense capitalised* — (35)

Net interest expense 403 337

Net exchange losses/(gains) 58 (8)

461 329

365 295

* Interest rates per annum at which borrowing costs

have been capitalised for construction in progress — 1.0% to 7.2%

(b) Staff costs:

2010 2009
RMB RMB
millions millions

Salaries, wages and other benefits 2,127 1,279

Contributions to defined contribution retirement schemes 122 104

2,249 1,383

(c) Other items:

2010 2009
RMB RMB
millions millions

Cost of inventories 22,070 15,307

Depreciation of property, plant and equipment 327 245
Amortisation of lease prepayments 24 21
Amortisation of intangible assets 64 63
Operating lease charges 74 58
Auditors’ remuneration — audit services 12 6
Product warranty costs 135 87
Impairment losses:
— trade receivables 258 87
— property, plant and equipment 5 5

9
4 Income tax

Income tax in the consolidated statements of comprehensive income represents:

2010 2009
RMB RMB
millions millions

Current tax — PRC income tax

Provision for the year 988 459

Current tax — Income tax in other tax jurisdictions

Provision for the year 5 9

Deferred taxation
Origination and reversal of temporary differences (165) (41)
Effect on deferred tax balances resulting from a change in tax rate/ tax status — (18)

828 409

Reconciliation between actual income tax expenses and profit before taxation is as follows:

2010 2009
RMB RMB
millions millions

Profit before taxation 5,416 2,828

Notional tax on profit before taxation, calculated at the rates applicable

to the jurisdictions concerned (Note (a)) 1,354 705
Tax effect of non-deductible expenses 33 52
Tax effect of non-taxable income (20) (5)
Tax effect of tax concessions (Note (b)) (472) (251)
Additional deduction for qualified research and development expenses (Note (c)) (67) (73)
Effect of change in tax rate / tax status (Note (b)) — (18)
Tax credit for PRC equipment purchased — (1)

Actual income tax expense 828 409

Notes:

(a) The PRC statutory income tax rate is 25% (2009: 25%).

The Company’s subsidiaries in Italy, CIFA and its subsidiaries, are subject to income tax at rates ranging from 27.5%
to 31.4% (2009: 27.5% to 31.4%).

The Company’s subsidiaries in the HKSAR are subject to Hong Kong Profits Tax at 16.5% (2009:16.5%). No income
tax provision was made for certain Hong Kong subsidiaries, as these subsidiaries either derived no income subject to
Hong Kong Profits Tax or sustained tax losses for Hong Kong Profits Tax purposes.

10
 (b) According to the income tax law and its relevant regulations, entities that qualified as high-technology enterprises
under the tax law are entitled to a preferential income tax rate of 15%. In 2008, the Company and certain of its
subsidiaries were recognised as high-technology enterprises and accordingly were subject to income tax at 15% for the
years from 2008 to 2010. In 2009, another subsidiary of the Company was recognised as a high-technology enterprise
for 2009 to 2011.

The 15% preferential tax rate applicable to high-technology enterprises is subject to renewal approval jointly by the
relevant authorities, upon expiry of the three-year grant period, according to the then prevailing income tax regulations.

(c) Under the income tax law and its relevant regulations, a 50% additional tax deduction is allowed for qualified research
and development expenses.

5 Dividends

(a) Dividends paid during the year

Pursuant to the shareholders’ approval at the Extraordinary General Meeting held on 22 July 2010, a cash dividend of
RMB0.17 per share based on 1,971 million ordinary shares totaling RMB335 million was declared, and among which
RMB234 million was paid in the second half of the year 2010, and the remaining balance is expected to be paid in
2011.

Pursuant to the shareholders’ approval at the Annual General Meeting held on 25 May 2010, a final cash dividend of
RMB0.25 per share based on 1,971 million ordinary shares totalling RMB492 million in respect of the year ended 31
December 2009 was declared, and was paid on 18 June 2010.

Pursuant to the shareholders’ approval at the Annual General Meeting held on 21 May 2009, a final cash dividend of
RMB0.10 per share based on 1,521 million ordinary shares totalling RMB152 million in respect of the year ended 31
December 2008 was declared, and was paid on 10 July 2009.

(b) Dividends proposed after the balance sheet date

Pursuant to a resolution passed at the director’s meeting on 28 March 2011, a final dividend in respect of the year
ended 31 December 2010 of RMB0.26 (2009: RMB0.25) per share totaling RMB1,541 million (2009: RMB492
million) was proposed for shareholders’ approval at the Annual General Meeting. In addition, a stock split in the form
of bonus shares on the basis of 0.3 share for every outstanding ordinary share as at 28 March 2011 was proposed
for shareholders’ approval. The total number of shares to be issued is 1,778 million. The par value of new ordinary
shares to be issued of RMB1,778 million will be charged to capital reserve in accordance with the Board of Directors’
resolution. The final dividend proposed after the balance sheet date has not been recognised as a liability at the balance
sheet date.

6 Basic and diluted earnings per share

For the purpose of calculating earnings per share, the number of ordinary shares used in the calculation has been
retrospectively adjusted to reflect the stock split in the form of bonus shares issued in May 2009 and July 2010 as if it had
occurred at the beginning of the earliest period presented and such shares had been outstanding for all years.

The calculation of basic earnings per share is based on the profit attributable to equity shareholders of the Company of
RMB4,666 million (2009: RMB2,447 million), and a weighted average of 4,878 million shares (2009: 4,183 million shares
after adjusting for capitalisation issue in 2009 and 2010) in issue during the year.

There were no dilutive potential ordinary shares in issue as at 31 December 2010 (2009: Nil).

11
7 Segment reporting

The Group manages its businesses by divisions, which are organised by business lines. In a manner consistent with the way
in which information is reported internally to the Group’s most senior executive management for the purposes of resource
allocation and performance assessment, the Group has presented the following reportable segments. No operating segments
have been aggregated to form the following reportable segments.

(i) Concrete machinery segment: this segment primarily researches, develops, manufactures and sells various concrete
machineries, including truck-mounted concrete pumps, trailer-mounted concrete pumps, concrete placing booms,
concrete mixing plants, truck-mounted concrete mixers, truck-mounted line concrete pumps and self-propelled boom
concrete pumps.

(ii) Crane machinery segment: this segment primarily researches, develops, manufactures and sells a variety of cranes,
including truck cranes, all-terrain truck cranes, crawler cranes and various types of tower cranes.

(iii) Environmental and sanitation machinery segment: this segment primarily researches, develops, manufactures and
sells a wide range of environmental and sanitation machineries, including road sweepers, washing vehicles and waste
treatment equipment.

(iv) Road construction and pile foundation machinery segment: this segment primarily researches, develops, manufactures
and sells different types of road construction and pile foundation machineries, including road surface heaters, motor
graders, road rollers, pavers, road surface cold planners, asphalt mixing equipment and rotary drilling rigs.

(v) Earth working machinery: this segment primarily researches, develops, manufactures and sells a variety of earth
working machineries, including loaders, bulldozers and excavators.

(vi) Material handling machinery and systems segment: this segment primarily researches, develops, manufactures and
sells different types of machineries and systems for handling huge materials, including stackers and reclaimers, pipe
conveyors, port loading/unloading equipment and portal cranes.

(vii) Finance lease segment: this segment primarily provides finance lease services to customers for purchasing machinery
products of the Group and from other vendors.

Other operating segments of the Group include research, development, manufacturing and sale of other machinery products,
including specialised vehicles and vehicle axles. None of these segments met any of the quantitative thresholds for
determining reportable segments for the year ended 31 December 2010.

(a) Segment results, assets and liabilities

For the purposes of assessing segment performance and allocating resources between segments, the Group’s most
senior executive management monitors the results attributable to each reportable segment on the following bases:

The measure used for reporting segment profit is turnover less cost of sales and services.

A measurement of segment assets and liabilities is not provided regularly to the Group’s most senior executive
management and accordingly, no segment assets or liabilities information is presented.

12
 Information regarding the Group’s reportable segments as provided to the Group’s most senior executive management
for the purposes of resource allocation and assessment of segment performance for the year ended 31 December 2010
is set out below:

2010 2009
RMB RMB
millions millions

Reportable segment revenue:

Concrete machinery 14,085 7,157
Crane machinery 11,077 8,298
Environmental and sanitation machinery 1,874 1,230
Road construction and pile foundation machinery 1,246 787
Earth working machinery 772 445
Material handling machinery and systems 422 873
Finance lease services 1,043 397

Total reportable segment revenue 30,519 19,187

Revenue from all other segments 1,674 1,575

Total 32,193 20,762

Reportable segment profit:

Concrete machinery 4,510 2,042
Crane machinery 3,082 1,963
Environmental and sanitation equipment 592 406
Road construction and pile foundation machinery 481 260
Earth working machinery 165 72
Material handling machinery and systems 32 86
Finance lease services 689 232

Total reportable segment profit 9,551 5,061

Profit from all other segments 218 279

Total 9,769 5,340

(b) Reconciliation of segment profit

2010 2009
RMB RMB
millions millions

Total segment profit 9,769 5,340

Other revenues and net income 54 105
Sales and marketing expenses (2,146) (1,250)
General and administrative expenses (1,645) (878)
Research and development expenses (265) (194)
Loss on disposal of associates — (6)
Net finance costs (365) (295)
Share of profits less losses of associates 14 6

Consolidated profit before taxation 5,416 2,828

13
 (c) Geographic information

The following tables set out information about the geographical location of (i) the Group’s revenue from external
customers and (ii) the Group’s property, plant and equipment, and lease prepayments (“specified non-current assets”).
The geographical location of revenue is based on the selling location. The geographical location of specified non-
current assets is based on the physical location of the asset. No geographic information is presented for trademarks,
technical know-how and goodwill as these assets are commonly used by the Group both in and outside PRC. All other
non-current assets are physically located in the PRC, except for customer relationships acquired through business
combination of CIFA, which are determined to be outside PRC.

2010 2009
RMB RMB
millions millions

Revenue from external customers

— Mainland PRC 30,663 18,993
— Outside PRC, primarily from Italy 1,530 1,769

Total 32,193 20,762

2010 2009
RMB RMB
millions millions

Specified non-current assets

— Mainland PRC 5,014 4,287
— Outside PRC, primarily in Italy 240 303

Total 5,254 4,590

8 Trade and other receivables

2010 2009
RMB RMB
millions millions

Trade receivables 7,504 5,401

Less: allowance for doubtful debts (557) (340)

6,947 5,061
Less: trade receivables due after one year (585) (229)

6,362 4,832
Bills receivable 627 491

6,989 5,323
Amounts due from related parties 27 29
Prepayments for purchase of raw materials 388 394
Prepaid expenses 178 113
VAT recoverable 179 81
Others 499 325

8,260 6,265

14
 All of the trade and other receivables, except those described below, are expected to be recovered or recognised as expense
within one year.

The Group allows certain customers with appropriate credit standing to make payments in equal monthly instalments
over a maximum period of 24 months (“instalment payment method”). Instalment payments with terms more than one
year are discounted at a rate which approximates the debtor’s borrowing rate in transactions with an independent lender
under comparable terms and conditions. For the year ended 31 December 2010, the weighted average discount rate was
approximately 5.85% (2009: 5.3%) per annum. As at 31 December 2010, trade receivables due after one year of RMB585
million (2009: RMB229 million) were presented net of unearned interest of RMB38 million (2009: RMB14 million).

Ageing analysis of trade receivables (net of allowance for doubtful debts) as of the end of the reporting year is as follows:

2010 2009
RMB RMB
millions millions

Within 1 month 2,642 2,133

Over 1 month but less than 3 months 921 382
Over 3 months but less than 1 year 2,403 1,427
Over 1 year but less than 2 years 772 931
Over 2 years but less than 3 years 174 161
Over 3 years but less than 5 years 35 27

6,947 5,061

As part of the Group’s ongoing control procedures, management monitors the creditworthiness of customers to which it
grants credit in the normal course of business. Credit terms normally range from 1 to 3 months from the date of billing,
except that for certain products, customers are allowed to withhold retention money amounting to 5%–10% of the invoice
amount until the product’s warranty period expires. Credit exposure limits are established to avoid concentration risk with
respect to any single customer.

9 Trade and other payables

2010 2009
RMB RMB
millions millions

Trade creditors 6,841 4,369

Bills payable 5,441 3,843

Trade creditors and bills payable 12,282 8,212

Amounts due to related parties 12 —
Receipts in advance 1,021 446
Payable for acquisition of property, plant and equipment 375 386
Accrued staff costs 642 402
VAT payable 722 265
Security deposits 608 270
Product warranty provision 113 87
Sundry taxes payable 325 63
Dividend payable 116 —
Other accrued expenses 987 501

17,203 10,632

15
 Ageing analysis of trade creditors and bills payable as of the end of the year is as follows:

2010 2009
RMB RMB
millions millions

Due within 1 month or on demand 4,640 1,901

Due after 1 month but within 3 months 3,567 2,105
Due after 3 months but within 6 months 3,067 2,238
Due after 6 months but less than 12 months 1,008 1,968

12,282 8,212

10 Income tax in the balance sheets

(a) Income tax payable in the balance sheets represents:

2010 2009
RMB RMB
millions millions

Provision for PRC income tax 756 281

Provision for income tax in other tax jurisdictions 1 2

757 283

(b) Deferred tax assets and liabilities recognised:

The components of deferred tax assets/(liabilities) recognised in the consolidated balance sheets and the movements
during the year are presented as follows:

Year ended 31 December 2010

Credited/
Balance at (charged) Effect of Balance at
1 January to profit exchange 31 December
2010 or loss rate 2010
RMB RMB RMB RMB
millions millions millions millions

Deferred tax assets arising from:

Trade and other receivables 49 34 (1) 82
Inventories 28 14 (2) 40
Accrued expenses 46 8 (2) 52
Available-for-sale equity securities 1 (1) — —
Tax losses 17 55 (5) 67
Others 7 26 — 33

Total 148 136 (10) 274

Deferred tax liabilities arising from:

Property, plant and equipment (12) 2 1 (9)
Intangible assets (460) 21 46 (393)
Lease prepayments (49) 1 — (48)
Others (29) 5 3 (21)

Total (550) 29 50 (471)

16
 Year ended 31 December 2009

Credited/ Acquired
Balance at (charged) through Effect of Balance at
1 January to profit business exchange 31 December
2009 or loss combinations rate 2009
RMB RMB RMB RMB RMB
millions millions millions millions millions

Deferred tax assets

arising from:
Trade and other receivables 36 10 — 3 49
Inventories 29 (1) — — 28
Accrued expenses 44 (3) — 5 46
Available-for-sale equity
securities 1 — — — 1
Tax losses — 17 — — 17
Others 14 (7) — — 7

Total 124 16 — 8 148

Deferred tax liabilities

arising from:
Property, plant and equipment (37) 26 — (1) (12)
Intangible assets (465) 17 — (12) (460)
Lease prepayments (52) 4 (1) — (49)
Others (18) (4) — (7) (29)

Total (572) 43 (1) (20) (550)

11 Share capital

2010 2009
RMB RMB
millions millions

Registered capital

4,840,678,482 A Shares of RMB 1.00 each 956,541,080 H Shares of

RMB 1.00 each (2009: 1,673,100,000 A Shares of RMB 1.00 each) 5,797 1,673

Ordinary shares issued and fully paid:

At 1 January 1,673 1,521

Issuance of A Shares in Non-public Offering 298 —
Bonus shares issued 2,957 152
Issuance of H Shares in Global Offering 869 —

At 31 December 5,797 1,673

On 5 February 2010, the Company completed a Non-public Offering of 297,954,705 A Shares to nine institutional investors
at RMB18.70 per share, which raised gross proceeds of approximately RMB5,572 million. Direct transaction costs of
RMB93 million have been offset against the gross proceeds, giving rise to net proceeds of RMB5,479 million. The amount
of net proceeds in excess of the par value of the new shares issued was RMB5,181 million and recorded in the capital
reserve.

On 23 December 2010, the Company completed a Global Offering of 869,582,800 H Shares with a par value of RMB 1 per
share to institutional and public investors at a price of HKD14.98 per share, which raised gross proceeds of approximately
HKD13,026 million (RMB equivalent 11,131 million). Direct transaction costs of RMB413 million have been offset against
the gross proceeds, giving rise to net proceeds of RMB10,718 million. The amount of net proceeds in excess of the par value
of the new shares issued was RMB9,849 million and recorded in the capital reserve.

17
12 Post balance sheet events

On 5 January 2011, the underwriters of the Global Offering exercised the over-allotment option in full. As a result,
130,437,400 H Shares with a par value of RMB 1 per share were issued at a price of HKD14.98 per share, which raised
gross proceeds of approximately HKD1,954 million (RMB equivalent 1,659 million) and net proceeds of RMB1,507
million. In this connection, Hunan SASAC and Hunan Development Group transferred a total of additional 13,043,740 A
Shares to the NSSF, which were converted into H Shares on a one-for-one basis. Upon completion of the issuance of new
H Shares and conversion of A Shares into H Shares, the share capital of the Company was increased to approximately
RMB5,927 million, comprising 4,827,634,742 A Shares and 1,100,022,220 H Shares.

On 18 February 2011, the Company’s Board of Directors approved an investment of RMB100 million to jointly establish a
Hunan-based insurance company with other third-party investors. The registered capital of the insurance company will be
RMB1,150 million.

13 Comparative figures

In the consolidated cash flow statement for the year ended 31 December 2010, interest paid and interest received by the
Group was presented as financing cash flows and investing cash flows respectively, representing costs of obtaining financial
resources or returns on investments. As a result, related comparative figures in the consolidated cash flow statement have
been reclassified to conform with the current year’s presentation.

14 Reconciliation of financial information prepared under PRC GAAP to IFRSs

(a) Reconciliation of total equity of the Group

2010 2009
RMB RMB
millions millions

Total equity reported under PRC GAAP 27,475 7,592

Acquisition-related costs incurred on prior year business combination (40) (40)

Total equity reported under IFRSs 27,435 7,552

(b) There is no material difference between total comprehensive income and consolidated cash flow of the Group reported
under PRC GAAP to IFRSs.

18
MANAGEMENT DISCUSSION AND ANALYSIS

The following discussion and analysis is based on financial information under IFRSs.

Results of operations

Turnover

Turnover increased by 55.1% from RMB20,762 million in 2009 to RMB32,193 million in 2010.
The increase was mainly due to the fact that the Company seized the opportunity of strong market
demand for construction machinery, continuously extended marketing channels and developed
new products. The Company derived the majority of consolidated turnover from sales of concrete
machinery and crane machinery, the sales volume of which increased continuously in 2010.
Turnover from sales of concrete machinery increased by 96.8%, from RMB7,157 million in 2009
to RMB14,085 million in 2010, which was mainly attributed to increased sales volume of truck-
mounted concrete pumps and concrete mixing plants. Turnover from sales of crane machinery
increased by 33.5% from RMB8,298 million in 2009 to RMB11,077 million in 2010.

Sales of environmental and sanitation machinery and earth working machinery had also increased
significantly in 2010 as a result of strong market demand.

Cost of sales and services

Cost of sales and services as a percentage of consolidated turnover decreased from 74.3% in 2009
to 69.7% in 2010. The fluctuation of such ratios for concrete machinery and crane machinery was
primarily driven by changes in product mix and fluctuation in selling prices. In 2010, cost of sales
and services as a percentage of turnover from the sales of concrete machinery decreased from
71.5% to 68.0%, and the ratio for crane machinery decreased from 76.3% to 72.2%, which was
mainly due to increased sales volume of certain models of truck-mounted concrete pumps, which
were technologically advanced with higher profit margins, and increased sales generated from high
value-added products such as heavy-duty cranes, which pushed up the gross margin.

Gross profit

Gross profit increased by 82.9% from RMB5,340 million in 2009 to RMB9,769 million in 2010, and
the gross margin increased from 25.7% to 30.3%, as the Company continued to optimise product
mix and improve manufacturing efficiency. In particular, the gross margin for concrete machinery
segment and crane machinery segment, which in aggregate represented 78.2% of consolidated
turnover in 2010, increased to 32.0% and 27.8%, respectively, for 2010 from 28.5% and 23.7%,
respectively, for 2009.

19
Other revenues and net income

Other revenues and net income includes government grants and other income. Government grants
mainly include operating subsidies and other grants received from the PRC government. In 2010,
the Company recognised government grants in the amount of RMB70 million (2009: RMB74
million). Other revenues and net income decreased by 48.6% from RMB105 million in 2009 to
RMB54 million in 2010, primarily due to a decrease in other income and an increase in loss on
disposal of property, plant and equipment.

Sales and marketing expenses

Sales and marketing expenses increased by 71.7% from RMB1,250 million in 2009 to RMB2,146
million in 2010. This increase was primarily due to the fact that the Company expanded distribution
network and strengthened sales and marketing efforts, which resulted in increases in salaries and
benefits to the sales and marketing personnel and expenses related to advertisement and promotion.

General and administrative expenses

General and administrative expenses increased by 87.4% from RMB878 million in 2009 to
RMB1,645 million in 2010. This increase was primarily due to the fact that the Company expanded
the business which resulted in increases in salaries and benefits to staff. The increase in general
and administrative expenses was also attributable to impairment loss recognised in the amount
of RMB258 million, which consisted primarily of provision for doubtful debts because of the
increased trade receivables balance and certain debtors that were individually determined to be
impairment during the year. General and administrative expenses as a percentage of consolidated
turnover increased from 4.2% for 2009 to 5.1% for 2010.

Research and development expenses

Research and development expenses increased by 36.6% from RMB194 million in 2009 to RMB265
million in 2010. This increase was primarily due to the Company’s continuous investment to
improve its research and development capability.

Profit from operations

As a result of the foregoing, income from operations increased by 84.7% from RMB3,123 million
in 2009 to RMB5,767 million in 2010. Operating margin increased from 15.1% in 2009 to 17.9% in
2010.

Net finance costs

Net finance costs increased by 23.7% from RMB295 million in 2009 to RMB365 million in 2010
primarily due to increases in interest expenses on long-term loans and exchange losses resulting
from depreciation of foreign currencies.

20
Income tax expense

Income tax expense increased by 102.4% from RMB409 million in 2009 to RMB828 million in
2010, primarily as a result of an increase in taxable income. The effective income tax rate increased
from 14.5% in 2009 to 15.3% in 2010.

Profit for the year

As a result of the above factors, profit in 2010 increased by 89.7% from RMB2,419 million in 2009
to RMB4,588 million in 2010. Net margin increased from 11.7% in 2009 to 14.3% in 2010.

Profit attributable to equity shareholders of the Company

As a result of the above factors, profit attributable to equity shareholders of the Company increased
by 90.7% from RMB2,447 million in 2009 to RMB4,666 million in 2010.

Cash flow and capital expenditure

During 2010, the Company has financed its operations primarily through cash proceeds from the
operations, proceeds from loans and borrowings, including bank borrowings and factoring of its
receivables under finance lease and proceeds from the non-public offering of A Shares in the
PRC and issuance of H Shares in Global Offering. As of 31 December 2010, the Company had
RMB18,758 million in cash and cash equivalents, 67.2% and 28.6% of which were denominated in
Renminbi and Hong Kong Dollar respectively. Cash and cash equivalents primarily consist of cash
and demand deposits.

Operating activities

Net cash generated from operating activities in 2010 was RMB451 million, derived primarily
by deducting from the profit before taxation of RMB5,416 million the following items: (i) an
increase in receivables under finance lease of RMB7,829 million; (ii) an increase in trade and other
receivables of RMB2,371 million; (iii) an increase in inventories of RMB2,416 million; and (iv)
income tax paid of RMB519 million and then adding back (v) depreciation and amortisation of
RMB415 million; and (vi) an increase in trade and other payables of RMB7,083 million.

Investing activities

Net cash used in investing activities in 2010 was RMB1,833 million, consisting primarily of
payments for the purchase of property, plant and equipment of RMB910 million, an increase in
pledged bank deposits of RMB773 million and lease prepayments of RMB236 million.

21
Financing activities

Net cash generated from financing activities in 2010 was RMB16,755 million, consisting primarily
of proceeds from loans and borrowings of RMB10,840 million, net proceeds from the non-public
offering of new shares of RMB5,479 million and net proceeds from issuance of H Shares in
Global Offering of RMB10,796 million, partially offset by repayments of loans and borrowings of
RMB8,906 million, interest paid of RMB743 million and dividends paid in the amount of RMB711
million. In 2010, the Company continued to use factoring to provide additional funding for the
operations with an amount of RMB3,954 million. In addition, in June 2010, the Company repaid
Euro-denominated bank loans of RMB2,475 million the Company incurred in connection with the
acquisition of CIFA.

Capital Expenditures

The Company incurred capital expenditures of RMB1,166 million in 2010 (2009: RMB1,056
million), for purchase of property, plant and equipment, intangible assets and lease prepayments. A
number of industrial parks construction and manufacturing facility upgrade and renovation projects
were completed in 2010. The Company planned to fund the capital expenditures primarily with
proceeds from the non-public offering of A Shares and proceeds from issuance of H Shares in
Global Offering. There were no significant asset disposals or business acquisition in 2010.

Commitments and Contingent Liabilities

As of 31 December 2010, commitments consisted of capital commitments of RMB562 million and

operating lease commitments of RMB156 million, of which RMB73 million was payable within one
year.

Certain customers of the Company from time to time may finance their purchase of the Company’s
machinery products through bank loans. The Company provided guarantees to the banks for
the amount drawn by the customers. As of 31 December 2010, the maximum exposure to such
guarantees was RMB5,950 million. Under the guarantee arrangement, in the event of customer
default, the Company is required to repossess the machinery collateralising the bank loans. In 2010,
the Company made payments of RMB102 million (2009: RMB117 million) to banks under the
guarantee arrangements as a result of customer defaults. When called upon to fulfill the guarantee
obligations, the Company has historically been able to sell the repossessed machinery at a price not
significantly different from the guarantee payments the Company made to the banks.

Starting from October 2010, certain of the Company’s finance lease contracts with end-user
customers are jointly provided by the leasing subsidiaries and a third-party leasing company. Under
the joint leasing arrangement, the Company provides guarantee to the third-party leasing company
that in the event of customer default, the Company is required make payment to the leasing
company for its share of the outstanding lease payments due from the customer. As of 31 December
2010, the maximum exposure to such guarantees was RMB1,334 million (2009: Nil). Up to now,
there was no customer default which required the Company to make guarantee payments to the
leasing company.

22
In March 2010, Italian tax authorities issued formal tax inspection assessment reports to Cifa
Mixers S.r.l., a 59.32% owned subsidiary of the Company. The tax authorities have challenged the
deductibility of certain costs incurred by this entity for income tax and value added tax purposes
for tax years 2003 to 2007 and have sought for additional taxes of approximately EUR10.7 million
before interest and penalties, if any. In January 2011, the court ruled in favour of Cifa Mixers S.r.l.
at the first degree of judgment and dismissed the claim for additional taxes from the tax authorities.
Nonetheless, the Company believes that there is a risk that the tax authorities may appeal to the
second degree of judgment. Based on tax consultant’s advice, it is more likely than not that the
subsidiary’s tax position can be substantiated. In addition, it is expected that any potential tax
payments, interest and penalties, if any, will be sufficiently covered by indemnities and warranties
provided by the former shareholders of Cifa Mixer S.r.l. and CIFA S.p.A.. Accordingly, no
provision is made for the contingency as at 31 December 2010.

Other than the commitments and contingent liabilities set forth above, the Company does not have
any other significant contingent liabilities or commitments.

Working capital and indebtedness

Net current assets significantly increased from RMB546 million as of 31 December 2009 to
RMB17,603 million as of 31 December 2010, primarily due to an increase in cash and cash
equivalents, receivables under finance lease, inventories and trade and other receivables, and a
decrease in loans and borrowings as the Company replaced short-term Euro-denominated loans
in connection with the acquisition of CIFA with three-year long-term loans, partially offset by
an increase in trade and other payables and income tax payable. The increase in cash and cash
equivalents was due to net proceeds from the non-public offering of A Shares in the PRC and
issuance of H Shares in Global Offering. Trade and other receivables, receivables under finance
lease, inventories and trade and other payables also increased as the Company continued to expand
operations and its business continued to grow.

As of 31 December 2010, the Company’s JPY, EUR and USD denominated unsecured short-term
loans of RMB214 million, RMB44 million and RMB1,192 million, respectively, RMB denominated
unsecured long-term bank loans of RMB230 million and USD denominated unsecured long-term
bank loans of RMB1,319 million are subject to the fulfilment of certain financial covenants. As of
31 December 2010, the Company was in compliance with these financial covenants.

Management regularly reviews and manages its capital structure to maintain a balance between
the higher shareholder returns that might be possible with higher levels of borrowings and the
advantages and security afforded by a sound capital position, and makes adjustments to the capital
structure in light of changes in economic conditions. Management monitors its capital structure on
the basis of adjusted debt-to-equity ratio. As of 31 December 2010, the adjusted debt-to-equity ratio
was 29%.

23
BUSINESS REVIEW AND OUTLOOK

Review of 2010

1. Constant rapid growth in operating results

In 2010, the Company recorded turnover of RMB32,193 million (2009: RMB20,762 million),
a year-on-year growth of 55.1%. Profit attributable to equity shareholders of the Company was
RMB4,666 million (2009: RMB2,447 million), a year-on-year growth of 90.7%.

2. Significant progress in going global

The Company has implemented various measures and proactively recruited international
talents in order to adopt international practices. In June 2010, more than 150 sales and
marketing talents joined the Company from different parts of the world, which accelerated the
strategic development of our overseas sales and marketing network. As a result, we established
more overseas branches including, 5 overseas subsidiaries, 10 representative offices and 23
overseas’ distributors to extend the coverage of our overseas services network. Our plan on
becoming an international research and development centre and production base was assisted
by leveraging on the synergy effects between CIFA and our Group. Meanwhile, the successful
listing of the Company’s H Shares also propelled our strategy in going global and substantially
extended the Company’s global outreach in terms of sales and marketing, production, research
and development. Accordingly, the Company achieved another important milestone this year
and has entered into a new phase of rapid growth and development.

3. Conspicuous innovations in technologies

The Company is in a position to formulate industrial standards for the engineering machinery
industry in the PRC. It is also a Participating Member of the International Organisation for
Standardisation (ISO). In 2010, the Company participated in the formulation and revision of
16 nation-wide and industry-wide standards. The Company is the only corporate enterprise in
the PRC which possesses a National Key Laboratory on Key Technologies for Construction
Machinery, which has established laboratories specialising in various experiments which
are structural, transmission, intelligent control and hydraulic in nature. The Company is
in a leading position among its peers in terms of its innovative technologies and research
capabilities. The Company has attained fruitful results through its continuous effort on
proprietary technological innovations. Our projects in “Research and Industrialisation of Key
Technology for Series Track Hoisting Crane” (“系列履帶式起重機關鍵技術研究與產業化”)
and “Set Equipment for Hyper-Compression Concrete Pump and Installation Technology”
(“超高壓泵送混凝土成套設備及施工技術”) were awarded Hunan Provincial Technological
Progress Award (First Class) and China Construction Machinery Industry Science and
Technology Award (First Class), respectively.

24
 We have also attained noticeable achievements in the development of new products.

— For concrete machinery, we have successfully launched equipments in sets comprising

dry mortar mixing plant, mortar mixer and so on, making the Company the sole
supplier of dry mortar mixing equipment in sets in the PRC. We have also launched our
proprietary Zoomlion-CIFA series of host mixers and a number of improvement plants
and engineering plants. During the year, the Company developed the only X-legged
and 6-section truck-mounted concrete bump (over 60m in height) in the PRC, launched
new truck-mounted concrete pumps equipped with carbon fibre arms, which earned the
reputation as “a groundbreaking masterpiece in the research of fundamental technologies
for engineering machinery in the world”.

— For construction hoisting machinery, the Company successfully developed the largest
uplifting, revolving and self-propelling tower crane (D5200) in the world. In this
connection, we have achieved a new record for construction of tower cranes in the world.

— For road construction machinery, the newly developed SUPER130 roller-paver

has placed the Company in a leading position of the industry in terms of industrial
technologies. In terms of its functionality and quality, this domestically manufactured
new product of road surface rolling-paving equipment has completely outperformed its
imported brand-name counterparts and was instrumental of the development of road
surface rolling-paving technology. It is awarded the “2010 Award of Top 50 Applications
Contributing to the Construction Machinery in China (Gold)” (“2010中國工程機械年度
產品TOP50應用貢獻金獎”).

4. Substantially enhanced brand image

The Company is a leading construction machinery manufacturer in the PRC and enjoys high
brand recognition. In 2010, Dr. Zhan Chunxin, chairman of the Board, received the “Yuan
Baohua Gold Award”, which is the most distinguished award for corporate management
executives in China and the “International Leonardo Award 2010” of Italy (so far only 8
persons in the world have received this award). In addition, the Board was also selected the
“Most Outstanding Board of Directors” during the “Golden Roundtable Award” campaign of
the Sixth Session of the Board of Directors of Listed Companies in the PRC. According to
the ranking by “China Mechanical Engineering”, an authoritative publication in the industry,
the Company is amongst the top 10 construction machinery manufacturers in the world. In
the massive earthquake which stricken Yushu district, Qinghai province, as well as in the
Wenchuan earthquake, our rescue team once again was the first rescue team equipped with
premium class and large-scale rescue machinery to arrive at the affected areas in the nation. In
addition, the Company donated RMB10 million to the disaster devastated area, as a result our
brand image was further enhanced.

25
5. Steady improvements on production capabilities of core parts and components

Through measures such as accelerated development of new products and extensive input in
technological improvements, the Company has significantly improved its production capacity
of core parts and components including hydraulic vaults, tanks, axles, electronic control
systems, proprietary chassises, and so on. The increasingly high rate of internal completion of
set equipment further strengthens the core competitiveness of the Company.

6. Substantial achievement in specialised management

The Company saw substantial achievements in consolidating its comprehensive budget

control, internal control, information technology development system and so on. Our
budgeting system operated effectively with significantly increased efficiency. The Company
has also introduced a specialised production and zero-error management system to reduce
inventory level while increasing production efficiency and minimising losses resulting
from product defects. Further improvements on internal control system were seen and
hence achieved better synergy. Our information technology development has obtained
key progresses, we have successfully commenced the operation of ERP pilot schemes and
established financial leasing IT systems, all of these in turn helped various business plans
to put into practices. In 2010, the gross profit margin of the Company increased 4.6%; both
turnover days for trade receivables and inventory decreased, and the inspection passing ratio of
new machines increased 3%.

7. High performance in risk control

The Company has established a comprehensive risk management system including credit risk
management, legal risk management, crisis risk management and so on and developed it to be
a more systematic, dynamic and specialised of risk control system. To effectively minimise
risk and keep the overall risk level under control, the Company has adopted a credit ranking
policy on its customers, implemented remote controls over its products, strengthened its
property protection and liquidation teams, and introduced a guarantees provision system by
third parties.

26
Outlook for 2011

1. Economic trends and industry developments

In 2011, we believe the recovery of the global economy will remain slow. International
demands for construction and engineering machinery will surge due to quick economic
recoveries in the America and developed countries in Europe, as well as the fact some
developing countries are still in rapid growing stage, in particular the emerging economies.
During the “12th Five-year Plan” period in the PRC, it is expected that macroeconomic
environment in the PRC will remain postive, China’s urbanisation will provide sustainable
growth for the real estate development and related industries, growth in investment in
construction projects of transportation infrastructure and energy facilities will promote steady
and rapid growth of the construction machinery industry in the PRC, upgrading of industrial
structure will enhance the competitiveness of the high-end equipment manufacturing industry
and high-end products of construction machinery, for example intelligent control equipments
will highly likely to benefit from all the aspects mentioned above.

2. Opportunities and challenges in the development of the Company in 2011

In 2011, it is believed that the construction machinery industry in the PRC will enjoy a
relatively broader room for development as a result of the state’s adjustments to economic
structure, an increased investment volume in the region and the accelerated urbanisation
process. The improvements in global economies will be beneficial to the Company in
obtaining rapid growth in overseas sales. By exposing to a positive macroeconomic
environment, the Company will see significant business opportunities. At the same time, the
Company will face challenges due to the increased costs of raw materials, the appreciation of
Renminbi, intensified competition in the market and so on.

3. Major business directions and action initiatives in 2011

In 2011, the Company will continue to follow its principles of achieving “reform and
innovation; smooth operation; unit breakthrough; and overall improvement”. It will promote
the vision of, and develop itself into, a learning organisation to enhance innovation and
execution capabilities. With an aim to become a renowned brand in the construction machinery
industry, the Company strives to strengthen its strategic services, implement business
strategies and improve management quality.

(1) Strengthen strategy management to augment its growth

With an aim to become a hundred billion dollar worth player in the market, the Company
will need to sustain its robust sales and profit growth, enlarge market shares and enhance
customer satisfaction by better implementing its overall strategies.

27
(2) Accelerate global expansion through H Shares listing

The Company will take advantage of its H Shares listing to accelerate the process of
its global expansion. It will form strategic alliances, accelerate construction of research
and development and manufacturing facilities and improve overseas sales and service
network to enhance its global competitiveness and footprints in overseas market.

(3) Establish leading brand and deliver full-range product

The Company will promote its “full brand awareness” and aim to establish a leading
brand name. In addition to leverage on its well-established and leading products, the
Company will improve products with competitive strength and develop new products
with promising market potentials so as to gradually deliver high quality full-range
product to the market and build global renowned brand in the construction machinery
industry.

(4) Enhance research and development efforts to sustain leading position in technology

The Company will from time to time improve its incentive scheme for research and
development personnel in order to enhance innovation capabilities of the Company. The
Company will seek and recruit high-calibre talent to improve its research capabilities. In
order to become an industry leader, the Company will need to focus on, and accelerate
application of, the most advanced technologies, such as intelligence technology, energy
saving and environmental friendly technology and light weight technology in its
products. The Company also aims to become an icon for leading technology and increase
its influences on global market through research and development and trial production
of innovative construction machinery. Apart from efforts to expand environment and
sanitation machinery line, more resources will be allocated to research and development
of core parts and components, which can strengthen internal assembly capabilities of the
Company.

(5) Strengthen internal control and enhance management quality

In line with its strategy of global expansion, the Company will take initiatives to modify
operating procedures of its functional departments. The Company will streamline its
work procedures and standardise work requirements such that the Company can tighten
internal control, deliver timely services, and achieve better coordination, integration
efficiency and synergies among departments. Assessment and accountability system of
the Company will be improved to enhance accountability and crisis identification skills of
our management and employees. These initiatives can enhance the management quality
and achieve sustainable long-term development of the Company.

28
FINAL DIVIDEND AND ANNUAL GENERAL MEETING

Pursuant to a resolution passed at the director’s meeting on 28 March 2011, a final dividend in
respect of the year ended 31 December 2010 of RMB0.26 per share totaling RMB1,541 million, and
a stock split in the form of bonus shares on the basis of 0.3 share for every outstanding ordinary
share as at 28 March 2011 were proposed for shareholders’ approval. Such proposal is subject to
approval by the shareholders of the Company at the forthcoming annual general meeting of the
Company. Information regarding the record date and book close date for the entitlement to the final
dividend and attendance of the annual general meeting will be announced in due course.

COMPLIANCE WITH THE CODE PROVISIONS IN THE CODE ON

CORPORATE GOVERNANCE PRACTICES SET OUT IN APPENDIX 14
OF THE LISTING RULES

The Board has adopted all code provisions in the Code on Corporate Governance Practices (the
“Code”) set out in Appendix 14 to the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the “Listing Rules”) as the code of the Company. During the
period from 23 December 2010 (the “Listing Date”) to 31 December 2010, the Company has
complied with all the applicable code provisions set out in the Code, save and except the only
deviation from code provision A.2.1 of the Code, namely, the roles of the chairman and chief
executive officer have not been separated. Dr. Zhan Chunxin is currently the chairman of the Board
and chief executive officer of the Company. The Board is of the view that vesting of these two roles
in Dr. Zhan Chunxin can facilitate efficient formulation and implementation of business strategies
of the Company, and that through the supervision of the Board and its independent non-executive
directors as well as the internal check-and-balance system, the balance of power and authority
between the Board and management of the Company will not be affected. The Board believes that
this arrangement is in the interests of the Company and its business.

COMPLIANCE OF THE MODEL CODE FOR SECURITIES

TRANSACTIONS BY DIRECTORS OF LISTED ISSUERS

The Company has adopted the rules governing the securities transactions by directors set out in the
Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) as set
out in Appendix 10 to the Listing Rules. The Company has made specific enquiry to all its directors
and supervisors, and all its directors and supervisors have confirmed that they have complied with
the Model Code throughout the period from the Listing Date to 31 December 2010. The Company
has not identified any non-compliance with the Model Code by any of its directors or supervisors.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED

SECURITIES

During the period from the listing date to 31 December 2010, neither the Company nor any of its
subsidiaries has purchased, sold or redeemed any of the Company’s listed securities.

29
REVIEW BY THE AUDIT COMMITTEE

The Audit Committee of the Company is primarily responsible for making recommendation to the
Board on the appointment and removal of the external auditors and their remuneration and terms of
engagement; monitoring internal control system of the Company and its implementation; reviewing
financial information of the Company and its disclosure, including monitoring the integrity and
accuracy of financial statements, annual report and accounts, half-year report and quarterly report,
and review significant financial reporting judgements contained therein; reviewing the financial
controls, internal control and risk management systems of the Company; and reviewing material
connected transactions of the Company.

The Audit Committee comprises three members, including two independent non-executive directors
and one non-executive director. It is currently chaired by Dr. Qian Shizheng with Mr. Liu Changkun
and Mr. Qiu Zhongwei as members. The Audit Committee satisfies the requirements under Rule
3.21 of the Listing Rules.

The Audit Committee held four meetings during the year considering the annual results of the
Company for the year 2009 and its interim results for the year 2010. The Audit Committee has
reviewed the audited annual results of the Company for the year ended 31 December 2010 and
the accounting principles and practices adopted by the Company and discussed matters relating to
internal control and financial reporting.

By Order of the Board of

Changsha Zoomlion Heavy Industry
Science and Technology Development Co., Ltd.*
Zhan Chunxin
Chairman

Changsha, the PRC, 28 March 2011

As at the date of this announcement, the executive directors of the Company are Dr. Zhan Chunxin and Mr. Liu Quan; the
nonexecutive director is Mr. Qiu Zhongwei; and the independent non-executive directors are Mr. Liu Changkun, Dr. Qian
Shizheng, Mr. Wang Zhile and Mr. Lian Weizeng.

* For identification purpose only

30