CITIC Limited - Annual Report 2015

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.

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ANNOUNCEMENT

FINANCIAL STATEMENTS AND AUDITOR’S REPORT OF CITIC CORPORATION LIMITED FOR THE YEAR ENDED 31 DECEMBER 2015

This announcement is made by CITIC Limited (the “ Company ”) pursuant to Rule 13.09(2)(a) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Cap. 571 of the laws of Hong Kong).

CITIC Corporation Limited (“ CITIC Corporation ”), a wholly-owned subsidiary of the Company, is a company incorporated in the People’s Republic of China (“ PRC ”). As CITIC Corporation issued medium-term notes and super & short-term commercial paper in the PRC, it is required to announce the financial statements of itself and its subsidiaries prepared in accordance with the PRC Generally Accepted Accounting Principles periodically in accordance with the relevant regulations of the People’s Bank of China and the National Association of Financial Market Institutional Investors.

The financial statements and auditor’s report of CITIC Corporation for the year ended 31 December 2015 are available on China Bond, China Money and Shanghai Clearing House at www.chinabond.com.cn, www.chinamoney.com.cn and www.shclearing.com, respectively, and are set out at the end of this announcement.

By Order of the Board CITIC Limited Chang Zhenming Chairman

Hong Kong, 27 April 2016

As at the date of this announcement, the executive directors of the Company are Mr Chang Zhenming (Chairman), Mr Wang Jiong, Ms Li Qingping and Mr Pu Jian; the non-executive directors of the Company are Mr Yang Jinming, Mr Liu Yeqiao, Mr Song Kangle, Ms Yan Shuqin, Mr Liu Zhongyuan, Mr Yang Xiaoping and Mr Li Rucheng; and the independent non-executive directors of the Company are Mr Francis Siu Wai Keung, Dr Xu Jinwu, Mr Anthony Francis Neoh, Ms Lee Boo Jin, Mr Noriharu Fujita and Mr Paul Chow Man Yiu.

CITIC CORPORATION LIMITED

FINANCIAL STATEMENTS AND AUDITOR’S REPORT FOR THE YEAR ENDED 31 DECEMBER 2015

[English translation for reference only. Should there be any inconsistency between the Chinese and English versions, the Chinese version shall prevail.]

CITIC CORPORATION LIMITED

Financial Statements and Auditor’s Report For the year ended 31 December 2015 [English translation for reference only]

Contents	Page
Auditor’s Report	1 - 2
Financial Statements for the Year Ended 31 December 2015
Consolidated Balance Sheet	1 - 2
Company Balance Sheet	3
Consolidated Income Statement	4
Company Income Statement	5
Consolidated Cash Flow Statement	6-7
Company Cash Flow Statement	8
Consolidated Statement of Changes in Owners’ Equity	9-10
Company Statement of Changes in Owners’ Equity	11
Notes to the Financial Statements	12- 181

[English Translation for Reference Only]

Auditor’s Report

PwC ZT Shen Zi (2016) No. 22385 (Page 1 of 2)

To the Board of Directors of CITIC Corporation Limited,

We have audited the accompanying financial statements of CITIC Corporation Limited (hereinafter “the Company”), which comprise the consolidated and company balance sheets as at 31 December 2015, and the consolidated and company income statements, the consolidated and company statements of changes in owners’ equity and the consolidated and company cash flow statements for the year then ended, and the notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management of the Company is responsible for the preparation and fair presentation of these financial statements in accordance with the requirements of Accounting Standards for Business Enterprises, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with China Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

PwC ZT Shen Zi (2016) No. 22385 (Page 2 of 2)

Opinion

In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated and company’s financial position of the Company as at 31 December 2015, and their financial performance and cash flows for the year then ended in accordance with the requirements of Accounting Standards for Business Enterprises.

PricewaterhouseCoopers Zhong Tian LLP

Shanghai, the People’s Republic of China

24 March 2016

CITIC CORPORATION LIMITED

CONSOLIDATED BLANCE SHEET AS AT 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

Assets	Note	31 December 2015	31 December 2014

Cash and deposits	6(1)	647,936,658	680,671,232
Placements with banks and non-bank financial institutions	6(2)	118,776,469	68,180,333
Financial assets at fair value through profit or loss	6(3)	33,838,474	29,384,178
Derivative financial instruments	6(4)	13,828,942	8,252,279
Trade and other receivables	6(5)	99,622,204	84,283,732
Inventories	6(6)	83,251,626	80,697,773
Financial assets held under resale agreements	6(7)	138,560,904	135,764,779
Loans and advances to customers and otherparties	6(8)	2,470,554,618	2,140,232,296
Available-for-sale financial assets	6(9)	414,237,392	258,976,873
Held-to-maturity investments	6(10)	181,184,502	178,048,284
Investments classified as receivables	6(11)	1,115,320,332	658,431,812
Long-term equity investments	6(12)	46,426,492	47,053,702
Investment properties	6(13)	5,086,392	4,735,562
Fixed assets	6(14)	35,878,772	31,496,984
Construction in progress	6(15)	6,330,887	6,469,111
Intangible assets	6(16)	24,028,225	21,591,006
Goodwill	6(17)	7,593,756	2,796,881
Deferred tax assets	6(18)	10,714,176	11,761,117
Other assets		18,152,000	23,243,133
Total assets		5,471,322,821	4,472,071,067

Approved by the board of directors on 24 March 2016.

Legal Representative

The person in charge of accounting affairs

The head of the accounting department

CITIC CORPORATION LIMITED

CONSOLIDATED BLANCE SHEET (CONTINUED) AS AT 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

Liabilities and owners’ equity	Note	31 December 2015	31 December 2014

Liabilities
Borrowing from central banks	6(19)	37,500,000	50,050,000
Placements from banks and non-bank financial institutions	6(21)	48,709,652	19,135,535
Financial liabilities at fair value through profit or loss		-	572,610
Derivative financial instruments	6(4)	12,180,375	7,939,523
Trade and other payables	6(22)	179,040,427	132,711,100
Financial assets sold under repurchase agreements	6(23)	71,168,274	41,609,290
Deposits from banks and non-bank financial institutions and customers	6(24)	4,231,071,066	3,521,150,535
Employee benefits payables	6(25)	13,989,248	15,654,121
Taxes payable	4(3)	9,701,344	10,968,548
Bank and other loans	6(26)	70,076,260	91,578,988
Debt instruments issued	6(27)	341,336,376	184,411,404
Provisions	6(28)	1,163,077	465,185
Deferred tax liabilities	6(18)	2,394,979	2,603,598
Other liabilities		15,821,613	15,999,955
Total liabilities		5,034,152,691	4,094,850,392

Owners' equity
Paid-in capital	6(29)	139,000,000	139,000,000
Capital reserve	6(30)	38,050,059	39,658,624
Other comprehensive income	6(31)	3,266,332	1,906,563
Surplus reserve	6(32)	4,718,187	3,139,011
General reserve	6(33)	29,708,529	19,931,103
Retained earnings	6(34)	89,660,183	67,758,439
Total equity attributable to owners of the Company		304,403,290	271,393,740
Non-controlling interests		132,766,840	105,826,935
Total owners' equity		437,170,130	377,220,675

Total liabilities and owners' equity		5,471,322,821	4,472,071,067

Approved by the board of directors on 24 March 2016.

Legal Representative The person in charge of accounting affairs

The head of the accounting department

The notes on pages 12 to 181 form part of these financial statements.

CITIC CORPORATION LIMITED

COMPANY BLANCE SHEET AS AT 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

Assets	Note	31 December 2015	31 December 2014

Cash and deposits	6(1)	17,880,380	18,811,588
Financial assets at fair value through profit or loss	6(3)	83,051	28,829
Trade and other receivables	6(5)	15,750,596	19,784,118
Loans and advances to customers and other parties	6(8)	35,444,338	19,297,697
Available-for-sale financial assets	6(9)	10,526,115	24,049,465
Long-term equity investments	6(12)	215,280,091	204,892,349
Fixed assets	6(14)	644,738	16,215
Other assets		4,866	232,735
Total assets		295,614,175	287,112,996

Liabilities and owners’ equity

Liabilities
Trade and other payables	6(22)	32,286,835	13,383,959
Taxes payable		605,118	44,906
Bank and other loans	6(26)	-	16,563,905
Debt instruments issued	6(27)	44,169,850	48,095,413
Provisions		700,000	-
Deferred tax liabilities	6(18)	339,748	111,868
Other liabilities		4,866,051	6,336,560
Total liabilities		82,967,602	84,536,611

Owners' equity
Paid-in capital	6(29)	139,000,000	139,000,000
Capital reserve	6(30)	50,268,921	48,590,684
Other comprehensive income	6(31)	1,081,869	711,676
Surplus reserve	6(32)	4,718,187	3,139,011
Retained earnings		17,577,596	11,135,014
Total owners' equity		212,646,573	202,576,385

Total liabilities and owners' equity		295,614,175	287,112,996

Approved by the board of directors on 24 March 2016.

Legal Representative

The person in charge The head of the of accounting affairs accounting department

The notes on pages 12 to 181 form part of these financial statements.

CITIC CORPORATION LIMITED

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

	Note	2015	2014

Operating income	6(35)	253,280,349	264,270,701
Less: Total operatingcosts	6(37)	184,983,283	201,372,959
Including: Operatingcosts	6(36)	70,645,713	107,902,013
Business taxes and surcharges		12,583,162	11,573,716
Sellingand distribution expenses		2,431,372	3,465,823
General and administrative expenses		46,978,065	45,636,168
Financial expenses	6(38)	3,976,191	5,114,152
Impairment losses	6(39)	48,368,780	27,681,087
Add: Gain from changes in fair value	6(40)	160,592	1,114,469
Investment income	6(41)	2,736,471	4,337,972
(Including: (Loss)/Income from investments in associates and joint ventures)		(1,146,139)	1,349,619

Operating profit		71,194,129	68,350,183
Add: Non-operatingincome	6(42)	1,904,934	3,797,784
(Including: Gain on disposal of non-current assets)		136,605	34,684
Less: Non-operatingexpenses	6(43)	918,181	555,278
(Including:Loss ondisposalof non-current assets)		33,844	32,717

Profit before income tax		72,180,882	71,592,689
Less: Income tax expense	6(44)	18,121,418	17,196,154

Netprofit for theyear		54,059,464	54,396,535
Attributable to:
Owners of the Company		41,028,346	39,494,451
Non-controllinginterests		13,031,118	14,902,084

Other comprehensive income, net of tax	6(45)	3,974,860	8,304,290
Items that maybe reclassified toprofit or loss:
1. Share of other comprehensive income of the equity-accounted investee		(446,530)	178,424
2. Gains or losses arising from changes in fair value ofavailable-for-salefinancialassets		2,538,292	8,551,361
3. Effective hedging portion of gains or losses arisingfromcash flowhedginginstruments		(125,937)	(460,973)
4. Translation differences arising on translation of foreign currency financial statements and others		2,009,035	35,478

Total comprehensive income for theyear		58,034,324	62,700,825
Attributable to:
Owners of the Company		42,388,115	46,045,060
Non-controllinginterests		15,646,209	16,655,765

Approved by the board of directors on 24 March 2016.

Legal Representative The person in charge of accounting affairs

The head of the accounting department

The notes on pages 12 to 181 form part of these financial statements.

CITIC CORPORATION LIMITED

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

	Note	2015	2014

Operating income	6(35)	24,722,129	22,020,549
Less: Total operatingcosts		6,336,639	3,311,890
Including: Business taxes and surcharges		663,965	158,415
General and administrative expenses		812,250	487,952
Financial expenses	6(38)	1,987,668	2,658,824
Impairment losses		2,872,756	6,699

Operating profit		18,385,490	18,708,659
Add: Non-operatingincome		176	735
Less: Non-operatingexpenses	6(43)	700,238	5,323
(Including: Loss on disposal of non-current assets)		127	323

Profit before income tax		17,685,428	18,704,071
Less: Income tax expense	6(44)	1,893,670	-

Netprofit for theyear		15,791,758	18,704,071

Other comprehensive income, net of tax	6(45)	370,193	657,579
Items that maybe reclassified toprofit or loss:
1. Share of other comprehensive income of the equity-accountedinvestee		306,565	443,741
2. Gains or losses arising from changes in fair value ofavailable-for-salefinancialassets		63,628	213,838

Total comprehensive income for theyear		16,161,951	19,361,650

Approved by the board of directors on 24 March 2016.

Legal Representative

The person in charge of accounting affairs

The head of the accounting department

The notes on pages 12 to 181 form part of these financial statements.

CITIC CORPORATION LIMITED

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

	Note	2015	2014

Cash flows from operating activities:
Cash received from sale of goods and rendering of services		82,212,487	111,264,909
Net decrease in deposits with banks and non-bank financial institutions		-	34,158,974
Netincreaseindepositsfromcustomers		314,126,491	201,258,990
Net decreaseindeposits withcentralbanks		20,342,074	-
Net increase in borrowingfrom central banks		-	50,050,000
Net increase in deposits from banks and non-bank financial institutions		379,636,026	133,623,834
Net increase in placements from banks and non-bank financial institutions		29,350,442	-
Interests,fee and commission received		252,101,473	228,280,364
Net decrease in placements with banks and non-bank financial institutions		-	72,073,469
Net increase in financial assets sold under repurchase agreements		29,550,195	33,657,007
Net decrease in financial assets held under resale agreements		-	151,482,815
Net increase in financial liabilities at fair value through profit or loss and derivative financial liabilities		-	573,447
Refund oftaxes		877,788	685,969
Cash receivedfromotheroperating activities		47,376,685	25,234,037
Sub-total of cash inflows from operating activities		1,155,573,661	1,042,343,815
Cashpaidforgoods and services		(67,676,784)	(90,755,859)
Net increase in loans and advance to customers and otherparties		(360,028,958)	(237,279,009)
Netincreaseindeposits withcentralbanks		-	(38,287,439)
Net decrease in borrowingfrom central banks		(12,550,000)	-
Net increase in investments classified as receivables		(461,719,967)	(358,771,244)
Net increase in deposits with banks and non-bank financial institutions		(16,537,703)	-
Net increase in placements with banks and non-bank financial institutions		(34,392,543)	-
Net decrease in placements from banks and non- bank financial institutions		-	(22,223,361)
Net increase in financial assets held under resale agreements		(2,756,576)	-
Net decrease in financial liabilities at fair value through profit or loss and derivative financial liabilities		(573,447)	-
Net increase in financial assets at fair value through profit or loss and derivative financial assets		(1,678,643)	(22,020,266)
Interests,fee and commissionpaid		(103,746,064)	(99,589,558)
Cashpaid to and onbehalfofemployees		(29,181,974)	(28,882,811)
Cashpaidforvarious taxes		(35,199,849)	(31,369,706)
Cashpaidforotheroperating activities		(52,744,851)	(66,938,803)
Sub-total of cash outflows from operating activities		(1,178,787,359)	(996,118,056)
Net cash flow from operating activities	6(46)(a)	(23,213,698)	46,225,759

Approved by the board of directors on 24 March 2016.

Legal Representative

The person in charge of accounting affairs

The head of the accounting department

CITIC CORPORATION LIMITED

CONSOLIDATED CASH FLOW STATEMENT(CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

	Note	2015	2014

Cash flows from investing activities:
Cash receivedfromdisposalof financial investments		712,328,401	441,019,372
Cash received from returns on investments		4,659,417	2,388,223
Net proceeds from disposal of fixed assets, intangible assets and other long-termassets		119,327	251,557
Net cash received from disposal of associates andjoint ventures		11,492,023	138,764
Net cash receivedfromdisposalofsubsidiaries		1,540,956	-
Cash receivedfromother investing activities		3,164,689	5,416,892
Sub-total of cash inflows from investing activities		733,304,813	449,214,808
Cash paid for acquisition of fixed assets, intangible assets and other long-termassets		(9,398,678)	(10,501,634)
Cashpaidforacquisitionof financial investments		(816,591,171)	(486,593,420)
Net cashpaymentfordisposalofsubsidiaries		-	(25,269,703)
Net cashpayment for acquisition of subsidiaries		(5,516,365)	-
Net cash payment for acquisition of associates and joint ventures		(1,594,390)	(242,500)
Cashpaid for other investingactivities		(1,536,995)	(22,985,549)
Sub-total of cash outflows from investing activities		(834,637,599)	(545,592,806)
Net cash flows from investing activities		(101,332,786)	(96,377,998)

Cash flows from financing activities:
Cash received from capital contributions		12,859,849	17,204,865
(Including: Cash received by subsidiaries from non-controlling interests)		12,859,849	204,865
Cash received from new banks and other loans		45,764,025	69,136,071
Cash receivedfrom issuance of new debtinstruments		317,672,263	102,820,412
Cash receivedfrom issuance ofotherequityinstruments		1,094,743	1,825,099
Cash received from other financingactivities		1,844,792	578,042
Sub-total of cash inflows from financing activities		379,235,672	191,564,489
Cash paid for repayment of banks and other loans and debt instruments issued		(224,087,253)	(115,980,700)
Cashpaid for dividends, profit distributions or interest		(17,491,929)	(34,519,634)
(Including: Dividends and profits paid by subsidiaries to non- controllinginterests)		(771,368)	(4,415,821)
Cashpaidforother financing activities		(7,297,701)	(548,545)
Sub-total of cash outflows from financing activities		(248,876,883)	(151,048,879)
Net cash flows from financing activities		130,358,789	40,515,610

Effect of foreign exchange rate changes on cash and cash equivalents		7,380,729	171,154

Net increase/(decrease) incash and cash equivalents	6(46)(b)	13,193,034	(9,465,475)
Add: Cashand cashequivalents at the beginning ofthe year	6(46)(c)	256,196,670	265,662,145

Cash and cash equivalents at the end of theyear	6(46)(c)	269,389,704	256,196,670
Approved by the board of directors on 24 March 2016. Legal Representative The person in charge of accounting affairs The head of the accounting department

The notes on pages 12 to 181 form part of these financial statements.

CITIC CORPORATION LIMITED

COMPANY CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

	Note	2015	2014

Cash flows from operating activities:
Interests,fee and commission received		659,256	1,756,163
Cash receivedfromotheroperating activities		12,835,397	28,692,912
Sub-total of cash inflows from operating activities		13,494,653	30,449,075
Interests,fee and commissionpaid		(495)	(558)
Cashpaidforvarious taxes		(1,718,177)	(142,258)
Cashpaidforotheroperating activities		(791,046)	(516,268)
Sub-total of cash outflows from operating activities		(2,509,718)	(659,084)
Net cash flow from operating activities	6(46)(a)	10,984,935	29,789,991

Cash flows from investing activities:
Cash receivedfromdisposalof investments		43,508,715	16,338,973
Sub-total of cash inflows from investing activities		43,508,715	16,338,973
Cashpaidforacquisitionof investments		(9,788,978)	(22,892,609)
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets		(379,000)	-
Entrustedloans to subsidiaries		(17,832,000)	(11,725,000)
Sub-total of cash outflows from investing activities		(27,999,978)	(34,617,609)
Net cash flows from investing activities		15,508,737	(18,278,636)

Cash flows from financing activities:
Cash received from capital contributions		-	17,000,000
Cash received from issuance of new debt instruments		3,000,000	4,000,000
Cash receivedfrom new bankand other loans		157,658	1,832,385
Sub-total of cash inflows from financing activities		3,157,658	22,832,385
Cash paid for repayment of bank and other loans and debtinstrumentsissued		(16,143,899)	(12,856,702)
Interestpaid		(2,857,072)	(3,559,705)
Cashpaid for dividends orprofit distributions		-	(17,000,000)
Sub-total of cash outflows from financing activities		(19,000,971)	(33,416,407)
Net cash flows from financing activities		(15,843,313)	(10,584,022)

Effect of foreign exchange rate changes on cash and cash equivalents		225,575	8,960

Net increase incash and cash equivalents	6(46)(b)	10,875,934	936,293
Add: Cash and cash equivalents at the beginning of the year	6(46)(c)	4,901,897	3,965,604

Cash and cash equivalents at the end of the year	6(46)(c)	15,777,831	4,901,897
Approved by the board of directors on 24 March 2016. Legal Representative The person in charge of accounting affairs		The head of the accounting department

The notes on pages 12 to 181 form part of these financial statements.

CITIC CORPORATION LIMITED

CONSOLIDATED STEATEMENT OF CHANGES IN OWNERS’ EQUITY FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

	Note	Attributable to owners of the Company	Attributable to owners of the Company	Attributable to owners of the Company	Attributable to owners of the Company	Attributable to owners of the Company	Attributable to owners of the Company	Attributable to owners of the Company	Non- controlling interests	Total
		Paid-in capital	Capital reserve	Other comprehensive income	Surplus reserve	General reserve	Retained earnings	Sub-total

Balance at 1January 2015		139,000,000	39,658,624	1,906,563	3,139,011	19,931,103	67,758,439	271,393,740	105,826,935	377,220,675

Movements for the year ended 31 December 2015
Totalcomprehensiveincome		-	-	1,359,769	-	-	41,028,346	42,388,115	15,646,209	58,034,324
Capital contribution and withdrawal byowners
1. Capital contribution by owners		-	-	-	-	-	-	-	2,964,488	2,964,488
2. Issue of other equity instruments by a subsidiary		-	-	-	-	-	-	-	1,094,357	1,094,357
3. New subsidiaries	6(55)	-	-	-	-	-	-	-	818,191	818,191
4. Put option issued in business combinations	6(55)	-	(2,393,046)	-	-	-	-	(2,393,046)	-	(2,393,046)
5. Dilution of share of interests inassociates		-	1,972,294	-	-	-	-	1,972,294	-	1,972,294
6. Transactions with non- controllinginterests	6(56)	-	(977,329)	-	-	-	-	(977,329)	7,299,871	6,322,542
7. Disposal of subsidiaries		-	-	-	-	-	-	-	(100,627)	(100,627)
Profit distribution
1. Appropriation to surplus reserve	6(32)	-	-	-	1,579,176	-	(1,579,176)	-	-	-
2. Appropriation to general reserve	6(33)	-	-	-	-	9,777,426	(9,777,426)	-	-	-
3. Profit distribution to owners		-	-	-	-	-	(7,770,000)	(7,770,000)	(771,368)	(8,541,368)
Others		-	(210,484)	-	-	-	-	(210,484)	(11,216)	(221,700)

Balance at 31 December 2015		139,000,000	38,050,059	3,266,332	4,718,187	29,708,529	89,660,183	304,403,290	132,766,840	437,170,130

Approved by the board of directors on 24 March 2016.

Legal Representative

The person in charge of accounting affairs

The head of the accounting department

CITIC CORPORATION LIMITED

CONSOLIDATED STEATEMENT OF CHANGE IN OWNERS’ EQUITY(CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

	Note	Attributable to owners of the Company	Attributable to owners of the Company	Attributable to owners of the Company	Attributable to owners of the Company	Attributable to owners of the Company	Attributable to owners of the Company	Attributable to owners of the Company	Non- controlling interests	Total
		Paid-in capital	Capital reserve	Other comprehensive income	Surplus reserve	General reserve	Retained earnings	Sub-total

Balance at 1January 2014		128,000,000	71,980,507	(4,644,046)	1,268,604	15,504,186	51,561,312	263,670,563	142,681,522	406,352,085

Movements for the year ended 31 December 2014
Totalcomprehensiveincome		-	-	6,550,609	-	-	39,494,451	46,045,060	16,655,765	62,700,825
Capital injection by shareholders		11,000,000	6,000,000	-	-	-	-	17,000,000	495,020	17,495,020
Issue of other equity instruments bya subsidiary		-	-	-	-	-	-	-	1,825,099	1,825,099
Profit distribution
1. Appropriation to surplus reserve	6(32)	-	-	-	1,870,407	-	(1,870,407)	-	-	-
2. Appropriation to general reserve	6(33)	-	-	-	-	4,426,917	(4,426,917)	-	-	-
3. Distributions to non- controllinginterests		-	-	-	-	-	(17,000,000)	(17,000,000)	(4,588,461)	(21,588,461)
Changes in consolidation scope		-	(38,720,702)	-	-	-	-	(38,720,702)	(50,111,320)	(88,832,022)
Disposal of subsidiaries		-	161,820	-	-	-	-	161,820	(689,122)	(527,302)
Dilution of share of interest in an associate		-	551,206	-	-	-	-	551,206	-	551,206
Transactions with non- controllinginterests		-	159,725	-	-	-	-	159,725	(443,115)	(283,390)
Others		-	(473,932)	-	-	-	-	(473,932)	1,547	(472,385)

Balance at 31 December 2014		139,000,000	39,658,624	1,906,563	3,139,011	19,931,103	67,758,439	271,393,740	105,826,935	377,220,675

Approved by the board of directors on 24 March 2016.

Legal Representative

The person in charge of accounting affairs

The head of the accounting department

The notes on pages 12 to 181 form part of these financial statements.

10 -

CITIC CORPORATION LIMITED

COMPANY STEATEMENT OF CHANGE IN OWNERS’ EQUITY FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

	Note	Paid-in capital	Capital reserve	Other comprehensive income	Surplus reserve	Retained earnings	Total

Balance at 1January 2015		139,000,000	48,590,684	711,676	3,139,011	11,135,014	202,576,385

Movements for the year ended 31 December 2015
Totalcomprehensiveincome		-	-	370,193	-	15,791,758	16,161,951
Appropriationto surplusreserve	6(32)	-	-	-	1,579,176	(1,579,176)	-
Profit distribution to owners		-	-	-	-	(7,770,000)	(7,770,000)
Dilution of share of interest in associate	s	-	1,685,201	-	-	-	1,685,201
Others		-	(6,964)	-	-	-	(6,964)

Balance at 31 December 2015		139,000,000	50,268,921	1,081,869	4,718,187	17,577,596	212,646,573

Balance at 1January 2014		128,000,000	76,072,898	54,097	1,268,604	11,301,350	216,696,949

Movements for the year ended 31 December 2014
Total comprehensive income		-	-	657,579	-	18,704,071	19,361,650
Appropriation to surplus reserve	6(32)	-	-	-	1,870,407	(1,870,407)	-
Profit distribution to owners		-	-	-	-	(17,000,000)	(17,000,000)
Capital contribution byowners		11,000,000	6,000,000	-	-	-	17,000,000
Others		-	(33,482,214)	-	-	-	(33,482,214)

Balance at 31 December 2014		139,000,000	48,590,684	711,676	3,139,011	11,135,014	202,576,385

Approved by the board of directors on 24 March 2016.

Legal Representative

The person in charge of accounting affairs

The head of the accounting department

The notes on pages 12 to 181 form part of these financial statements.

11 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

1 General information

CITIC Corporation Limited (formerly known as “CITIC Limited” and herein referred to as “the Company”) was jointly established by CITIC Group Corporation (“CITIC Group”) and Beijing CITIC Enterprise Management Company Limited (a wholly-owned subsidiary of CITIC Group, “CITIC Enterprise Management”) on 27 December 2011 and obtained a business license (No. 100000000044124(4-1)) issued by the State Administration of Industry and Commerce of the Peoples Republic of China (“PRC”). The Company’s head office is located in Beijing and its registered address is 6 Xinyuannanlu, Chaoyang District, Beijing. The legal representative of the Company is Chang Zhenming. The registered capital of the Company is RMB139 billion.

CITIC Pacific Limited (“Former CITIC Pacific”) is incorporated in Hong Kong, the shares of which are listed on the Main Board of the Stock Exchange of Hong Kong Limited. The Company held 57.51% equity interests in Former CITIC Pacific through its overseas whollyowned subsidiaries. The Company’s overseas wholly-owned subsidiaries transferred their shares of Former CITIC Pacific to certain overseas wholly-owned subsidiaries of CITIC Group on 8 May 2014.

On 16 April 2014, CITIC Group, CITIC Enterprise Management and Former CITIC Pacific entered into a share transfer agreement, pursuant to which Former CITIC Pacific acquired 100% equity interests in the Company from CITIC Group and CITIC Enterprise Management (“the Acquisition”). The Acquisition was completed on 25 August 2014. Upon the completion of the Acquisition, the name of the Company was changed from CITIC Limited to CITIC Corporation Limited and the name of Former CITIC Pacific was changed from CITIC Pacific Limited to CITIC Limited (“CITIC Limited”). The Company became a wholly-owned subsidiary of CITIC Limited.

The Company and its subsidiaries (“the Group”) is principally engaged in financial services, resources and energy, manufacturing activities, engineering contracting, real estate and other businesses.

12 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

2 Basis of preparation of financial statements

The financial statements are prepared in accordance with the Accounting Standards for Business Enterprises – Basic Standard, 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 Standard for Business Enterprises” or “CAS”).

The financial statements have been prepared on the going concern basis.

(1) Statement of compliance with the Accounting Standard for Business Enterprises

These financial statements of the Company for the year ended 31 December 2015 are in compliance with the Accounting Standards for Business Enterprises, and truly and completely present the consolidated and the Company’s financial position as at 31 December 2015, and of their financial performance, cash flows and other information for the year then ended.

(2) Accounting year

The accounting year of the Group is from 1 January to 31 December.

(3) Functional currency and presentation currency

The Functional currency of the Company is Renminbi and these financial statements are presented in Renminbi. Functional currency is determined by the Company and its subsidiaries on the basis of the currency in which major income and costs are denominated and settled. Some of the Company’s subsidiaries have functional currencies that are different from the Company’s functional currency. Their financial statements have been translated based on the accounting policy set out in Note 3(2).

3 Significant accounting policies and accounting estimates

(1) Business combinations and consolidated financial statements
(a) Business combinations involving entities under common control

A business combination involving entities under common control is a business combination in which all of the combining entities are ultimately controlled by the same party or parties both before and after the business combination, and that control is not transitory. The assets acquired and liabilities assumed are measured based on their carrying amounts in the consolidated financial statements of the ultimate controlling party at the combination date. The difference between the carrying amount of the net assets acquired and the consideration paid for the combination (or the total face value of shares issued) is adjusted against the capital premium in the capital reserve with any excess adjusted against retained earnings. Any costs directly attributable to the combination is recognised in profit or loss when incurred. The combination date is the date on which one combining entities obtains control of other combining enterprises.

13 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(1) Business combinations and consolidated financial statements (Continued)
(b) Business combinations not involving entities under common control

A business combination not involving entities under common control is a business combination in which all of the combining entities are not ultimately controlled by the same party or parties both before and after the business combination. Where (1) the aggregate of acquisition date fair value of assets transferred (including the acquirer’s previously held equity interest in the acquiree), liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for control of the acquiree, exceeds (2) the acquirer’s interest in the acquisition date fair value of the acquiree’s identifiable net assets, the difference is recognised as goodwill (Note 3(10)). If (1) is less than (2), the difference is recognised in profit or loss for the current period. The costs of issuing equity or debt securities as a part of the consideration for the acquisition are included in the carrying amounts of these equity or debt securities upon initial recognition. Other acquisition-related costs are expensed when incurred. Any difference between the fair value and the carrying amount of the assets transferred as consideration is recognised in profit or loss. The acquiree’s identifiable asset, liabilities and contingent liabilities, if the recognition criteria are met, are recognised by the Group at their acquisition-date fair value. The acquisition date is the date on which the acquirer obtains control of the acquiree.

(c) Consolidated financial statements

The scope of consolidated financial statements is based on control and the consolidated financial statements comprise the Company and its subsidiaries. Control exists when the investor has all of following: power over the investee; exposure, or rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. When assessing whether the Group has power, only substantive rights (held by the Group and other parties) are considered. The financial position, financial performance and cash flows of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

Where a subsidiary was acquired during the reporting period, through a business combination involving entities under common control, the financial statements of the subsidiary are included in the consolidated financial statements as if the combination had occurred at the date that the ultimate controlling party first obtained control. The opening balances and the comparative figures of the consolidated financial statements are also restated. In the preparation of the consolidated financial statements, the subsidiary’s assets and liabilities based on their carrying amounts in the financial statements of the ultimate controlling party are included in the consolidated balance sheet, and financial performance is included in the consolidated income statement, respectively, from the date that the ultimate parent company of the Company obtains the control of the subsidiary to be consolidated.

14 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)
(1) Business combinations and consolidated financial statements (Continued)
(c) Consolidated financial statements (Continued)

Where a subsidiary was acquired during the reporting period, through a business combination not involving entities under common control, the identifiable assets and liabilities of the acquired subsidiaries are included in the scope of consolidation from the date that control commences, based on the fair value of those identifiable assets and liabilities at the acquisition date. For a business combination not involving entities under common control and achieved in stages, the Group remeasures its previously-held equity interest in the acquiree to its fair value at the acquisition date and recognises any resulting difference between the fair value and the carrying amount as investment income for the current period. In addition, any amount recognised in other comprehensive income that can be reclassified to profit or loss, in prior reporting periods relating to the previously-held equity interest, and any other changes in the owners’ equity under equity accounting (See Note 3(5)(b)), are transferred to investment income in the period in which the acquisition occurs.

Where the Company acquires a non-controlling interest from a subsidiary’s non-controlling shareholders or disposes of a portion of an interest in a subsidiary without a change in control, the difference between the amount by which the non-controlling interests are adjusted and the amount of the consideration paid or received is adjusted to the capital reserve (capital surplus) in the consolidated balance sheet, with any excess adjusted to retained earnings.

When the Group loses control of a subsidiary due to the disposal of a portion of an equity investment, the Group derecognises assets, liabilities, non-controlling interests and other related items in owners’ equity in relation to that subsidiary. The remaining equity investment is remeasured at its fair value at the date when control is lost. Any resulting gains or losses are recognised as investment income of the current period.

Non-controlling interests are presented separately in the consolidated balance sheet within owners’ equity. Net profit or loss attributable to non-controlling shareholders is presented separately in the consolidated income statement below the net profit line item. Total comprehensive income attributable to non-controlling shareholders is presented separately in the consolidated income statement below the total comprehensive income line item.

When the amount of loss for the current period attributable to the non-controlling shareholders of a subsidiary exceeds the non-controlling shareholders’ portion of the opening balance of owners’ equity of the subsidiary, the excess is still allocated against the non-controlling interests.

When the accounting period or accounting policies of a subsidiary are different from those of the Company, the Company makes necessary adjustments to the financial statements of the subsidiary based on the Company’s own accounting period or accounting policies. Intragroup balances and transactions, and any unrealised profit or loss arising from intra-group transactions, are eliminated when preparing the consolidated financial statements. Unrealised losses resulting from intra-group transactions are eliminated in the same way as unrealised gains, unless they represent impairment losses that are recognised in the financial statements.

15 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(2) Translation of foreign currencies

Foreign currency transactions are, on initial recognition, translated by applying the foreign exchange rates ruling at the transaction dates. Monetary items denominated in foreign currencies are translated at the foreign exchange rates ruling at the reporting date, the resulting exchange differences are recognised in profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates ruling at the transaction dates. Non-monetary items that are measured at fair value in a foreign currency are translated using the foreign exchange rates ruling at the dates the fair value was determined. The exchange differences are recognised in profit or loss, except for the differences arising from the translation of available-for-sale equity investments, which is recognised in other comprehensive income.

The financial statements of the Group’s subsidiaries with a foreign functional currency are translated into Renminbi for the preparation of the Group’s consolidated financial statements. The assets and liabilities in these financial statements are translated into Renminbi at the foreign exchange rates ruling at the reporting date. The equity items, except for “retained earnings”, are translated to Renminbi at the foreign exchange rates at the dates on which such items arose.

Income and expenses in the profit or loss are translated into Renminbi at the foreign exchange rates or the rates that approximate the foreign exchange rates at the transaction dates. The resulting exchange differences are presented as “Other comprehensive income” in the consolidated balance sheet within the shareholder’s equity.

Upon disposal of a foreign operation, the cumulative amount of the translation differences recognised in shareholders’ equity which relates to that foreign operation is transferred to profit or loss in the period in which the disposal occurs.

(3) Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are also included as a component of cash and cash equivalents for the purpose of the cash flow statement.

(4) Inventories
(a) Manufacturing, resources and energy segments

Inventories of the manufacturing, and resources and energy segments are carried at the lower of cost and net realisable value.

Cost is calculated using the first-in first-out, specific identification or weighted average cost formula as appropriate, and comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

16 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(4) Inventories (Continued)
(a) Manufacturing, resources and energy segments (Continued)

When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the related revenue is recognised. The amount of any writedown of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories is recognised in profit or loss in the period in which the reversal occurs.

(b) Real estate segment

Inventories in respect of property development activities under the real estate segment are carried at the lower of cost and net realisable value. Cost and net realisable values are determined as follows:

- Property under development

The cost of properties under development comprises specifically identified cost, including the acquisition cost of land, aggregate cost of development, materials and supplies, wages and other direct expenses, an appropriate proportion of overheads and borrowing costs capitalised (See Note 3(21)). Net realisable value represents the estimated selling price less estimated costs of completion and costs to be incurred in selling the property.

Completed property held for sale

In the case of completed properties developed by the Group, cost is determined by apportionment of the total development costs for that development project, attributable to the unsold properties. Net realisable value represents the estimated selling price less costs to be incurred in selling the property.

The cost of completed properties held for sale comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

17 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(5) Long-term equity investments
(a) Investments in subsidiaries

In the Group’s consolidated financial statements, investments in subsidiaries are accounted for in accordance with the principles described in Note 3(1)(c).

In the Company’s separate financial statements, investments in subsidiaries are measured as follows:

The initial cost of a long-term equity investment acquired through a business combination involving entities under common control is the Company’s share of the carrying amount of the subsidiary’s equity in the consolidated financial statements of the ultimate controlling party at the combination date. The difference between the initial investment cost and the carrying amounts of the consideration given is adjusted to the share premium in the capital reserve, with any excess adjusted to retained earnings.
For a long-term equity investment obtained through a business combination not involving entities under common control, the initial cost comprises the aggregate of the fair value of assets transferred, liabilities incurred or assumed, and equity securities issued by the Company, in exchange for control of the acquiree. For a long-term equity investment obtained through a business combination not involving entities under common control and achieved in stages, the initial cost comprises the carrying value of the previously-held equity investment in the acquiree immediately before acquisition date, and the additional investment cost at the acquisition date.
An investment in a subsidiary acquired otherwise than through a business combination is initially recognised in accordance with the principles described in: at the amount of cash paid if the company acquires the investment by cash or at the fair value of the equity securities issued if an investment is acquired by issuing equity securities.

In the Company’s separate financial statements, long-term equity investments in subsidiaries are accounted for using the cost method. Except for cash dividends or profit distributions declared but not yet distributed that have been included in the price or consideration paid in obtaining the investments, the Company recognises its share of the cash dividends or profit distributions declared by the subsidiary as investment income in the current period. The investments in subsidiaries are stated in the balance sheet at cost less impairment losses (Note 3(13)(b)).

18 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(5) Long-term equity investments (Continued)
(b) Investments in joint venture and associates

Joint ventures are the investees over which the Group is able to exercise joint control together with other venturers. Associates are the investees that the Group has significant influence on their financial and operating policies.

An investment in a joint venture or an associate is initially recognised in accordance with the following principles: at the amount of cash paid if the Group acquires the investment by cash or at the fair value of the equity securities issued if an investment is acquired by issuing equity securities.

An investment in a joint venture or an associate is accounted for using the equity method, unless the investment is classified as held for sale (Note 3(11)).

Under the equity method:

Where the initial cost of a long-term equity investment exceeds the Group’s interest in the fair value of the investee’s identifiable net assets at the date of acquisition, the investment is initially recognised at cost. Where the initial investment cost is less than the Group’s interest in the fair value of the investee’s identifiable net assets at the date of acquisition, the investment is initially recognised at the investor’s share of the fair value of the investee’s identifiable net assets, and the difference is recognised incharged to profit or loss.
After the acquisition of the investment, the Group recognises its share of the investee’s profit or loss and other comprehensive income, as investment income or losses and other comprehensive income respectively, and adjusts the carrying amount of the investment accordingly. Once the investee declares any cash dividends or profit distributions, the carrying amount of the investment is reduced by that amount attributable to the Group. Changes in the Group’s share of the investee’s owners’ equity, other than those arising from the investee’s net profit or loss, other comprehensive income or profit distribution (“other changes in owners’ equity”), is recognised directly in the Group’s equity, and the carrying amount of the investment is adjusted accordingly.
19 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(5) Long-term equity investments (Continued)
(b) Investments in joint venture and associates (Continued)
In calculating its share of the investee’s net profits or losses, other comprehensive income and other changes in owners’ equity, the Group recognises investment income and other comprehensive income after making appropriate adjustments to align the accounting policies or accounting periods with those of the Group based on the fair value of the investee’s identifiable net assets at the date of acquisition. Unrealised profits and losses resulting from transactions between the Group and its associates or joint ventures are eliminated to the extent of the Group’s interest in the associates or joint ventures. Unrealised losses resulting from transactions between the Group and its associates or ventures are eliminated in the same way as unrealised gains but only to the extent that there is no impairment.
The Group discontinues recognising its share of further losses of the investee after the carrying amount of the long-term equity investment and any long-term interest that in substance forms part of the Group’s net investment in the joint venture or associate is reduced to zero, except to the extent that the Group has an obligation to assume additional losses. If the joint venture or associate subsequently reports net profits, the Group resumes recognising its share of those profits only after its share of the profits equals the share of losses not recognised.

The Group makes provision for impairment of investments in joint ventures and associates in accordance with the principles described in Note 3(13)(b).

(6) Investment properties

Investment properties are interests in buildings and/or land which are held to earn rentals or for capital appreciation or both. These include land held for a currently undetermined future use. Land held under operating leases is classified and accounted for as investment property when the rest of the definition of investment property is met.

Investment properties are stated in the balance sheet at fair values which are reviewed annually. Any gain or loss arising from a change in fair value or from the retirement or disposal of an investment property is recognised in profit or loss.

20 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(7) Fixed assets and construction in progress

Fixed assets represent the tangible assets held by the Group for use in the production of goods, supply of services, for rental to others or for administrative purposes with useful lives over one year.

Fixed assets are stated in the balance sheet at cost less accumulated depreciation and impairment losses (Note 3(13)(b)). Construction in progress is stated in the balance sheet at cost less impairment losses (Note 3(13)(b)).

The cost of a purchased fixed asset comprises the purchase price, related taxes, and any directly attributable expenditure for bringing the asset to working condition for its intended use. The cost of self-constructed assets includes the cost of materials, direct labour, capitalised borrowing costs (Note 3(21)), and any other costs directly attributable to bringing the asset to working condition for its intended use. Costs of environmental protection and ecological restoration arising from obligations incurred when fixed assets are disposed of are included in the initial cost of fixed assets.

Construction in progress is transferred to fixed assets when it is ready for its intended use. No depreciation is provided against construction in progress.

Where the parts of an item of fixed assets have different useful lives or provide benefits to the Group in a different pattern, thus necessitating use of different depreciation rates or methods, each part is recognised as a separate fixed asset.

Any subsequent costs including the cost of replacing part of an item of fixed assets are recognised as assets if the criteria to recognise fixed assets are satisfied, and the carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of fixed assets are recognised in profit or loss as incurred.

Gains or losses arising from the retirement or disposal of an item of fixed asset are determined as the difference between the net disposal proceeds and the carrying amount of the item and are recognised in profit or loss on the date of retirement or disposal.

The cost of fixed asset, less its estimated residual value and accumulated impairment losses, is depreciated using the straight-line method over their estimated useful lives, unless the fixed asset is classified as held for sale (See Note 3(11)).

21 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(7) Fixed assets and construction in progress (Continued)

The estimated useful lives and residual rates of each class of fixed assets are as follows:

	Estimated
	useful life	Residual rate
Plant and buildings	20-34 years	5%
Machinery and equipment	5-22 years	5%
Office equipment and other equipment, vehicles
and vessels	5-10 years	5%
Others	2-12 years	5%

Useful lives, residual value and depreciation methods are reviewed at least at each year-end.

(8) Operating lease charges

Leases which do not transfer substantially all the risks and rewards of ownership to the lessee are classified as operating leases.

Where the Group leases out assets under operating leases, the assets are included in the balance sheet according to their nature and, where applicable, are depreciated in accordance with the Group’s depreciation policies, as set out in Note 3(7) except where the asset is classified as an investment property. Impairment losses are accounted for in accordance with the accounting policy as set out in Note 3(13). Revenue arising from operating leases is recognised in accordance with the Group’s revenue recognition policies, as set out in Note 3(18).

Where the Group has the use of assets held under operating leases, payments made under the leases are charged to profit or loss in equal instalments over the accounting periods covered by the lease term, except where an alternative basis is more representative of the pattern of benefits to be derived from the leased asset. Lease incentives received are recognised in profit or loss as an integral part of the aggregate net lease payments made. Contingent rentals are charged to profit or loss in the accounting period in which they are incurred.

The cost of acquiring land held under an operating lease is amortised on a straight-line basis over the period of the lease term except where the property is classified as an investment property (See Note 3(6)).

22 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(9) Intangible assets

Intangible assets are stated in the balance sheet at cost less accumulated amortisation (where the estimated useful life is finite) and impairment losses (See Note 3(13)(b)).

Amortisation of intangible assets with finite useful lives is charged to profit or loss over the assets’ estimated useful lives. The following intangible assets are amortised from the date they are available for use as follows:

Land use rights Over the estimated useful lives of 10-50 years - Roads and tunnels operating rights Over the estimated useful lives of 30 years - Mining assets Over the estimated useful lives of the mines in accordance with the production plan of the entities concerned and the proven probable reserves of the mines using the unit-ofproduction method.

Both the period and method of amortisation are reviewed annually.

Intangible assets are not amortised while their useful lives are assessed to be indefinite. Any conclusion that the useful life of an intangible asset is indefinite is reviewed annually to determine whether events and circumstances continue to support the indefinite useful life assessment for that asset. If they do not, the change in the useful life assessment from indefinite to finite is accounted for prospectively from the date of change and in accordance with the policy for amortisation of intangible assets with finite lives as set out above.

23 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(10) Goodwill

Goodwill represents the excess of the consideration transferred, including the amount of assets transferred (including the acquirer’s previously held equity interest in the acquiree), liabilities incurred or assumed, and the equity securities issued by the acquirer at the date of acquisition, over the fair value of the Group’s share of the identifiable net assets acquired, when the excess is positive, otherwise it’s recognised directly in profit or loss.

Positive goodwill will be stated in the consolidated balance sheet as a separate asset or included within joint ventures and associates at cost less accumulated impairment losses and is subject to impairment testing at least annually. Impairment losses on goodwill are not reversed. Negative goodwill is recognised in profit or loss immediately on acquisition.

(11) Non-current assets and disposal groups classified as held for sale

A non-current asset, including fixed assets, intangible assets, investment properties, and long-term equity investment (or disposal group, the same below) is accounted for as held for sale when all the following criteria are met (A disposal group is a group of assets to be disposed of together as a group in a single transaction, and liabilities directly associated with those assets that will be transferred in the transaction):

The assets must be available for immediate sale in their present condition subject only to terms that are usual and customary for sales of such assets;
The group has decided to dispose the assets;
The group has signed an irrevocable transfer agreement with the transferee, and the transfer is to be completed within one year.

Non-current assets held for sale are stated at the lower of carrying amount and fair value (See Note 3(14)) less costs to sell (excluding the measurement of investment properties subsequently measured using the fair value model (Note 3(6)). Any excess of the carrying amount over the fair value (Note 3(14)) less costs to sell is recognised as an impairment loss.

Once classified as held for sale, fixed assets, intangible assets and investment properties previously accounted for using the cost model are no longer depreciated or amortised, and long-term equity investments previously accounted for using the equity method will no longer be equity accounted.

24 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(12) Financial instruments

(a) Initial recognition

The Group classifies its financial instruments into different categories at inception, depending on the purpose for which the assets were acquired or the liabilities were incurred, and on the contractual terms of the financial instruments. The categories are: financial assets or financial liabilities at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets and other financial liabilities.

Financial instruments are measured initially at fair value, which normally will be equal to the transaction price plus, in case of a financial asset or financial liability not held at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset or issue of the financial liability. Transaction costs on financial assets and financial liabilities at fair value through profit or loss are expensed immediately.

The Group recognises financial assets and financial liabilities on the date it becomes a party to the contractual provisions of the instrument. A regular way purchase or sale of financial assets and financial liabilities at fair value through profit or loss is recognised using trade date accounting. Other financial assets and financial liabilities are recognised using settlement date accounting. From these dates, any gains and losses arising from changes in fair value of the financial assets or financial liabilities at fair value through profit or loss are recorded.

(b) Categorisation

Financial assets at fair value through profit or loss

This category comprises financial assets held for trading, and those designated at fair value through profit or loss upon initial recognition, but excludes those investments in equity instruments that do not have a quoted market price and whose fair value cannot be reliably measured.

A financial asset is classified as held for trading if it is: (i) acquired principally for the purpose of selling or repurchasing it in the near term; (ii) part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking; or (iii) a derivative. Derivatives that do not qualify for hedge accounting (See Note 3(22)) are accounted for as trading instruments.

25 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(12) Financial instruments (Continued)
(b) Categorisation (Continued)

Financial assets at fair value through profit or loss (Continued)

Financial instruments are designated at fair value through profit or loss upon initial recognition when:

the assets are managed, evaluated and reported internally on a fair value basis;
the designation eliminates or significantly reduces an accounting mismatch in the gain and loss recognition arising from the difference in measurement bases of the financial assets which would otherwise arise;
the asset contains an embedded derivative that significantly modifies the cash flows that would otherwise be required under the contract; or
the separation of the embedded derivative(s) from the financial instrument is not prohibited.

Financial assets under this category are carried at fair value. Changes in the fair value are included in profit or loss in the period in which they arise. Upon disposal, the difference between the net sale proceeds and the carrying value is included in profit or loss.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than (a) those that the Group intends to sell immediately or in the near term, which will be classified as held for trading; (b) those that the Group, upon initial recognition, designates as at fair value through profit or loss or as available-for-sale; or (c) those where the Group may not recover substantially all of its initial investment, other than because of credit deterioration, which will be classified as available-for-sale.

Loans and receivables mainly comprise loans and advances to customers and other parties, deposits and placements with banks and non-bank financial institutions, financial assets held under resale agreements, investments classified as receivables, and trade and other receivables.

Loans and receivables are carried at amortised cost using the effective interest method, less impairment losses, if any (See Note 3(13)(a)) Where the receivables are interest-free loans made to related parties without any fixed repayment term or the effect of discounting would be immaterial, the receivables are stated at cost less allowance for impairment of doubtful debts.

26 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(12) Financial instruments (Continued)
(b) Categorisation (Continued)

Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity for which the Group has the positive intention and ability to hold to maturity, other than (a) those that the Group, upon initial recognition, designates as at fair value through profit or loss or as available-for-sale; and (b) those that meet the definition of loans and receivables.

Held-to-maturity investments are carried at amortised cost using the effective interest method less impairment losses, if any (See Note 3(13)(a)).

If, as a result of a change in intention or ability, it is no longer appropriate to classify an investment as held-to-maturity, it shall be reclassified as available-for-sale and remeasured at fair value.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not classified in any of the other three categories above. They include financial assets intended to be held for an indefinite period of time, but which may be sold in response to needs for liquidity or changes in the market environment.

Available-for-sale financial assets are carried at fair value. Unrealised gains and losses arising from changes in the fair value are recognised in other comprehensive income and accumulated separately in equity, except for impairment losses and foreign exchange gains and losses on monetary items such as debt securities which are recognised in profit or loss. Dividend income from equity securities and interest income from debt securities calculated using the effective interest method are recognised in profit or loss in accordance with the policies set out in Notes 3(18)(g) and 3(18)(a) respectively.

Investments in equity securities that do not have a quoted market price in an active market and whose fair value cannot be measured reliably, and derivatives that are linked to and must be settled by delivery of such unquoted equity securities are carried at cost less impairment losses, if any (See Note 3(13)(a)).

When the available-for-sale financial assets are sold, gains or losses on disposal include the difference between the net sale proceeds and the carrying value, and the accumulated fair value adjustments which are previously recognised in other comprehensive income shall be reclassified from equity to profit or loss.

27 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(12) Financial instruments (Continued)
(b) Categorisation (Continued)

Financial liabilities at fair value through the profit or loss

Financial liabilities at fair value through the profit or loss include those classified as held for trading, and those designated by the Group upon recognition as at fair value through the profit or loss.

A financial liability is classified as held for trading if it is: (i) acquired or incurred principally for the purpose of selling or repurchasing it in the near term; (ii) part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking; or (iii) a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument).

Financial liabilities are designated at fair value through the profit or loss upon initial recognition when: (i) the financial liabilities or are managed, evaluated and reported internally on a fair value basis; (ii) the designation eliminates or significantly reduces an accounting mismatch in the gain and loss recognition arising from the difference in measurement bases of the financial liabilities; or (iii) a contract contains one or more embedded derivatives, i.e. an entire hybrid (combined) contract, unless: (i) the embedded derivative does not significantly modify the cash flows that otherwise would be required by the hybrid (combined) contract; or (ii) it is clear with little or no analysis when a similar hybrid (combined) instrument is first considered that separation of the embedded derivative is prohibited.

Other financial liabilities

Financial liabilities, other than trading liabilities and those designated at fair value through profit or loss, are measured at amortised cost using the effective interest method.

Other financial liabilities mainly comprise borrowing from central banks, deposits from banks and non-bank financial institutions, placements from banks and non-bank financial institutions, trade and other payables, financial assets sold under repurchase agreements and deposits from customers, banks and other loans, and debt instruments issued.

(c) Derecognition

A financial asset is derecognised when the contractual rights to receive the cash flows from the financial asset expire, or where the financial asset together with substantially all the risks and rewards of ownership, have been transferred.

The Group derecognises a financial asset, if the part being considered for derecognition meets one of the following conditions: (a) the contractual rights to receive the cash flows from the financial asset expire; or (b) the contractual rights to receive the cash flows of the financial asset have been transferred, and the Group transfers substantially all the risks and rewards of ownership of the financial asset; or (c) the Group retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to the eventual recipient in an agreement that meets all the conditions of derecognition of transfer of cash flows and transfers substantially all the risks and rewards of ownership of the financial asset.

28 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(12) Financial instruments (Continued)
(c) Derecognition (Continued)

Where a transfer of a financial asset in its entirety meets the criteria for derecognition, the difference between the two amounts below is recognised in profit or loss:

the carrying amount of the financial asset transferred
the sum of the consideration received from the transfer and any cumulative gain or loss that has been recognised directly in equity.

If the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset, but retains control, the Group continues to recognise the financial asset to the extent of its continuing involvement in the financial asset. If the Group has not retained control, it derecognises the financial asset and recognises separately as assets or liabilities any rights and obligations created or retained in the transfer.

As part of its operational activities, the Group securitises financial assets, generally through the sale of these assets to structured entities which issue securities to investors. Further details on prerequisites for derecognition of financial assets are set out above. When the securitisation of financial assets that do qualify for derecognition, the relevant financial assets are derecognised in their entirety and a new financial asset or liabilities is recognised regarding the interest in unconsolidated securitisation vehicles that the Group receives as part of the transfer. When the securitisation of financial assets that do not qualify for derecognition, the relevant financial assets are not derecognised, and the consideration paid by third parties are recorded as a financial liability; when the securitisation of financial assets that partially qualify for derecognition, the book value of the transferred asset should be recognised between the derecognised portion and the retained portion based on their respective relative fair values, and the difference between the book value of the derecognised portion and the total consideration paid for the derecognised portion shall be recorded in profit or loss.

The derecognition of financial assets sold on condition of repurchase is determined by the economic substance of the transaction. If a financial asset is sold under an agreement to repurchase the same or substantially the same asset at a fixed price or at the sale price plus a reasonable return, the Group will not derecognise the asset. If a financial asset is sold together with an option to repurchase the financial asset at its fair value at the time of repurchase (in case of transferor sells such financial asset), the Group will derecognise the financial asset.

The financial liability is derecognised only when: (a) the underlying present obligation specified in the contracts is discharged/cancelled, or (b) an agreement between the Group and an existing lender to exchange the original financial liability with a new financial liability with substantially different terms, or a substantial modification of the terms of an existing financial liability is accounted for as an extinguishment of the original financial liability and recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognised and the consideration paid is recognised in profit or loss.

29 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(12) Financial instruments (Continued)
(d) Offsetting

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

(e) Derivatives

The Group uses derivatives to hedge its exposure on risks. The Group adopts hedge accounting in accordance with Note 3(22) for derivatives designated as hedging instruments if the hedge is effective. Other derivatives are accounted for as trading financial assets or financial liabilities. Derivatives are recognised at fair value upon initial recognition. The positive fair value is recognised as assets while the negative fair value is recognised as liabilities. The gain or loss on re-measurement to fair value is recognised immediately in profit or loss.

(f) Embedded derivatives

An embedded derivative is a component of a hybrid (combined) instrument that includes both the derivative and a host contract with the effect that some of the cash flows of the combined instrument vary in a way similar to a stand-alone derivative. The embedded derivatives are separated from the host contract and accounted for as a derivative when (a) the economic characteristics and risks of the embedded derivative are not closely related to the host contract; and (b) the hybrid (combined) instrument is not measured at fair value with changes in fair value recognised in profit or loss.

When the embedded derivative is separated, the host contract is accounted for in accordance with Note 3(12)(a) above.

(13) Impairment of assets

Except for impairment of assets set out in Notes 3(4), impairment of other assets is accounted for using the following principles:

(a) Financial assets

The carrying amounts of the Group’s financial assets other than those measured at fair value through profit and loss are reviewed at balance sheet date to determine whether there is objective evidence of impairment. Objective evidence that financial assets are impaired includes but not limited to one or more of the following loss events that occurred after the initial recognision of the asset and has an impact on the future cash flows on the assets that can be estimated reliably:

30 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(13) Impairment of assets (Continued)
(a) Financial assets (Continued)
significant financial difficulty of the issuer or borrower;
a breach of contract, such as a default or delinquency in interest or principal payments;
the Group, for economic or legal reasons relating to the borrower’s financial difficulty, granting to the borrower a concession that the Group would not otherwise consider;
it becoming probable that the borrower will enter bankruptcy or other financial reorganisation; and
disappearance of an active market for financial assets because of financial difficulties.
observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the Group, including: adverse changes in the payment status of borrowers in the Group, an increase in the unemployment rate in the geographical area of the borrowers, a decrease in property prices for mortgages in the relevant area, or adverse changes in industry conditions that affect the borrowers in the Group;
significant changes in the technological, market, economic or legal environment that have an adverse effect on the issuer;
a significant or prolonged decline in the fair value of an investment in an equity instrument below its cost; and
other objective evidence indicating there is an impairment of a financial asset.

If any such evidence exists, the carrying amount is reduced to the estimated recoverable amount by means of a charge to profit or loss.

Impairment losses are written off against the corresponding assets directly, except for impairment losses recognised in respect of loans and receivables and held-to-maturity investments, which are measured at amortised cost, whose recovery is considered doubtful but not remote. In this case, the impairment losses are recorded using an allowance account. When the Group is satisfied that recovery is remote after all the necessary legal or other proceedings are completed, the amount considered irrecoverable is written off against loans and receivables or held-to-maturity investments directly and any amounts held in the allowance account relating to that borrower/investment are reversed. Subsequent recoveries of amounts previously charged to the allowance account are reversed against the allowance account. Other changes in the allowance account and subsequent recoveries of amounts previously written off directly are recognised in profit or loss.

Loans and receivables

Impairment losses on loans and receivables are measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition of these assets). Receivables with a short duration are not discounted if the effect of discounting is immaterial.

The total allowance for credit losses consists of two components: individual impairment allowances, and collective impairment allowances.

31 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(13) Impairment of assets (Continued)
(a) Financial assets (Continued)

The Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment.

The individual impairment allowance is based upon management’s best estimate of the present value of the cash flows which are expected to be received discounted at the original effective interest rate. In estimating these cash flows, management makes judgements about the borrower’s financial situation and the net realisable value of any underlying collateral or guarantees in favour of the Group. Each impaired asset is assessed on its own merits.

In assessing the need for collective loan loss allowances, management uses statistical modelling and considers historical trends of factors such as credit quality, portfolio size, concentrations, and economic factors. In order to estimate the required allowance, the Group makes assumptions both to define the way the Group models inherent losses and to determine the required input parameters, based on historical experience and current economic conditions.

The accuracy of the impairment allowances the Group makes depends on how well the Group can estimate future cash flows for individually assessed impairment allowances and the model assumptions and parameters used in determining collective impairment allowances. While this necessarily involves judgement, the Group believes that the impairment allowances on loans and advances to customers are reasonable and supportable.

Any subsequent changes to the amounts and timing of the expected future cash flows compared to the prior estimates that can be linked objectively to an event occurring after the write-down, will result in a change in the impairment allowances on loans and receivables and be charged or credited to the income statement. A reversal of impairment losses is limited to the loans and receivables’ carrying amount that would have been determined had no impairment loss been recognised in prior years.

When there is no reasonable prospect of recovery, the loan and the related interest receivables are written off.

Loans and receivables with renegotiated terms are loans that have been restructured due to deterioration in the borrower’s financial position and where the Group has made concessions that it would not otherwise consider. Renegotiated loans and receivables are subject to ongoing monitoring to determine whether they remain impaired or past due.

32 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(13) Impairment of assets (Continued)
(a) Financial assets (Continued)

Held-to-maturity investments

Impairment on held-to-maturity investments is considered at both an individual and collective level. The individual impairment allowance is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the asset’s original effective interest rate, where the effect of discounting is material.

All significant assets found not to be individually impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Assets that are not individually significant are then collectively assessed for impairment by grouping together financial assets with similar risk characteristics.

If in a subsequent period the amount of an impairment loss decreases and the decrease can be linked objectively to an event occurring after the impairment loss was recognised, the impairment loss is reversed through the income statement. A reversal of impairment losses shall not result in the asset’s carrying amount exceeding that which would have been determined had no impairment loss been recognised in prior years.

Available-for-sale financial assets

When there is objective evidence that an available-for-sale financial asset is impaired, the cumulative loss that had been recognised in the fair value reserve is reclassified to profit or loss. The amount of the cumulative loss that is recognised in profit or loss is the difference between the acquisition cost (net of any principal repayment and amortisation) and current fair value, less any impairment loss on that asset previously recognised in profit or loss.

For unquoted available-for-sale equity securities that are carried at cost, the impairment loss is measured as the difference between the carrying amount of the equity securities and the estimated future cash flows, discounted at the current market rate of return for a similar financial asset where the effect of discounting is material. Such impairment losses are not reversed.

Impairment losses recognised in profit or loss in respect of available-for-sale equity securities are not reversed through profit or loss. Any subsequent increase in the fair value of such assets is recognised in other comprehensive income.

Impairment losses in respect of available-for-sale debt securities are reversed if the subsequent increase in fair value can be objectively related to an event occurring after the impairment loss was recognised. Reversals of impairment losses in such circumstances are recognised in profit or loss.

33 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(13) Impairment of assets (Continued)
(a) Financial assets (Continued)

Investment classified as receivables

When investment classified as receivables are collectively assessed for impairment, financial assets are classified according to the similarity and correlation of characteristics of credit risk. These characteristics of credit risk are usually related to the calculation of future cash flow of investigated assets, which reflects debtors’ capability of repaying the full amount due by observing the terms of contracts of these assets.

(b) Impairment of other assets

The carrying amounts of the following assets are reviewed at each balance sheet date based on the internal and external sources of information to determine whether there is any indication of impairment:

Fixed assets
construction in progress
intangible assets
goodwill
long-term equity investments

If any indication exists, the recoverable amount of the asset is estimated. In addition, the Group estimates the recoverable amount of intangible assets not ready for use at least annually and the recoverable amounts of goodwill at each year-end, irrespective of whether there is any indication of impairment. Goodwill is allocated to each asset group, or set of asset groups, that is expected to benefit from the synergies of the combination for the purpose of impairment testing.

An asset group is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or asset groups. An asset group is composed of assets directly relating to cash-generation. Identification of an asset group is based on whether major cash inflows generated by the asset group are largely independent of the cash inflows from other assets or asset groups. In identifying an asset group, the Group also considers how management monitors the Group’s operations and how management makes decisions about continuing or disposing of the Group’s assets.

The recoverable amount of an asset (or asset group, set of asset groups, same as below) is the higher of its fair value (See Note 3(14)) less costs to sell and its present value of expected future cash flows.

The present value of expected future cash flows of an asset is determined by discounting the future cash flows, estimated to be derived from continuing use of the asset and from its ultimate disposal, to their present value using an appropriate pre-tax discount rate.

34 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(13) Impairment of assets (Continued)
(b) Impairment of other assets (Continued)

An impairment loss is recognised in profit or loss when the recoverable amount of an asset is less than its carrying amount. A provision for impairment of the asset is recognised accordingly. Impairment losses related to an asset group or a set of asset groups are allocated first to reduce the carrying amount of any goodwill allocated to the asset group or set of asset groups, and then to reduce the carrying amount of the other assets in the asset group or set of asset groups on a pro rata basis. However, such allocation would not reduce the carrying amount of an asset below the highest of its fair value less costs to sell (if measurable), its present value of expected future cash flows (if determinable) and zero.

Once an impairment loss is recognised, it is not reversed in a subsequent period.

(14) Fair value measurement principles

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e. an exit price) regardless of whether that price is directly observable or estimated using another valuation technique.

If there is no publicly available latest traded price nor a quoted market price on a recognised stock exchange or a price from a broker/dealer for non-exchange-traded financial instruments, or if the market for it is not active, the fair value of the instrument is estimated using valuation techniques that provide a reliable estimate of prices which could be obtained in actual market transactions.

Where discounted cash flow techniques are used, estimated future cash flows are based on management’s best estimates and the discount rate is based on the relevant government yield curve as at the balance sheet date plus an adequate constant credit spread. Where other pricing models are used, inputs are based on market data at the balance sheet date.

35 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(15) Employee benefits
(a) Short-term employee benefits

Employee wages or salaries, bonuses, social security contributions such as medical insurance, work injury insurance, maternity insurance and housing fund, measured at the amount incurred or at the applicable benchmarks and rates, are recognised as a liability as the employee provides services, with a corresponding charge to profit or loss or included in the cost of assets where appropriate.

(b) Post-employment benefits – defined contribution plans

Pursuant to the relevant laws and regulations of the PRC, the Group participated in a defined contribution basic pension insurance in the social insurance system established and managed by government organisations. The Group makes contributions to basic pension insurance plans based on the applicable benchmarks and rates stipulated by the government. Basic pension insurance contributions are recognised as part of the cost of assets or charged to profit or loss as the related services are rendered by the employees.

The Group’s employees have joined its annuity scheme which was established by the Group in accordance with policies regarding the state owned enterprise annuity policy. The Group has made annuity contributions in proportion to its employees’ gross wages which are expensed in profit or loss when the contributions are made.

The Group also operates defined contribution retirement schemes and Mandatory Provident Fund schemes for certain subsidiaries operating in overseas. Contributions are charged to profit or loss as and when the contribution fall due.

(c) Termination benefits

When the Group terminates the employment with employees before the employment contracts expire, or provides compensation under an offer to encourage employees to accept voluntary redundancy, a provision is recognised with a corresponding expense in profit or loss at the earlier of the following dates:

When the Group cannot unilaterally withdraw the offer of termination benefits because of an employee termination plan or a curtailment proposal;
When the Group has a formal detailed restructuring plan involving the payment of termination benefits and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement that plan or announcing its main features to those affected by it.
36 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(16) Income tax

Income tax for the year comprises current tax and deferred tax.

The balance sheet liability method is adopted whereby deferred tax is recognised in respect of temporary differences between the tax bases of assets and liabilities and their carrying amounts. However, the deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss; or in respect of those temporary differences which arise either from goodwill not deductible for tax purposes, or relating to investments in subsidiaries to the extent that the Group controls the timing of the reversal and it is probable that the temporary differences will not reverse in the foreseeable future, or in the case of deductible differences, unless it is probable that they will reverse in the future.

Provision for withholding tax that will arise on the remittance of retained earnings is only made where there is a current intention to remit such earnings.

Deferred tax assets are recognised to the extent that their future utilisation is probable. Deferred tax arising from revaluation of investment properties is recognised on the rebuttable presumption that the recovery of the carrying amount of the properties would be through sale and calculated at the applicable tax rates.

Current tax assets and liabilities are offset, and deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

(17) Financial guarantees issued, provisions and contingent liabilities
(a) Financial guarantees issued

Financial guarantees are contracts that require the issuer (i.e. the guarantor) to make specified payments to reimburse the beneficiary of the guarantee (the “holder”) for a loss the holder incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument.

37 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(17) Financial gurantees issues, provisions and contingent liabilities (Continued)
(a) Financial guarantees issued (Continued)

Where the Group issues a financial guarantee, the fair value of the guarantee is initially recognised as deferred income within “other liabilities”. The fair value of financial guarantees issued at the time of issuance is determined by reference to fees charged in an arm’s length transaction for similar services, when such information is obtainable, or is otherwise estimated by reference to interest rate differentials, by comparing the actual rates charged by lenders when the guarantee is made available with the estimated rates that lenders would have charged, had the guarantees not been available, where reliable estimates of such information can be made. Where consideration is received or receivable for the issuance of the guarantee, the consideration is recognised in accordance with the Group’s policies applicable to that category of asset. Where no such consideration is received or receivable, an immediate expense is recognised in profit or loss on initial recognition of any deferred income.

The amount of the guarantee initially recognised as deferred income is amortised in profit or loss over the term of the guarantee as income from financial guarantees issued. In addition, provisions are recognised in accordance with Note 3(17)(c) if and when: (1) it becomes probable that the holder of the guarantee will call upon the Group under the guarantee; and (2) the amount of that claim on the Group is expected to exceed the amount currently carried in other liabilities in respect of that guarantee i.e. the amount initially recognised, less accumulated amortisation.

(b) Contingent liabilities assumed in business combinations

Contingent liabilities assumed in a business combination which are present obligations at the date of acquisition are initially recognised at fair value, provided the fair value can be reliably measured. After their initial recognition at fair value, such contingent liabilities are recognised at the higher of the amount initially recognised, less accumulated amortisation where appropriate, and the amount that would be determined in accordance with Note 3(17)(c). Contingent liabilities assumed in a business combination that cannot be reliably fair valued or were not present obligations at the date of acquisition are disclosed in accordance with Note 3(17)(c).

(c) Other provisions and contingent liabilities

Provisions are recognised for other liabilities of uncertain timing or amount when the Group has a legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation. Factors pertaining to a contingency such as the risks, uncertainties and time value of money are taken into account as a whole in reaching the best estimate. Where the time value of money is material, provisions are stated at the present value of the expenditure expected to settle the obligation.

38 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(17) Provisions and contingent liabilities (Continued)
(c) Other provisions and contingent liabilities (Continued)

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

(18) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Provided it is probable that the economic benefits will flow to the Group and the revenue and costs, if applicable, can be measured reliably, revenue is recognised in profit or loss as follows:

(a) Interest income

Interest income arising from the use of entity assets by others is recognised in profit or loss based on the duration and the effective interest rate. Interest income includes the amortisation of any discount or premium or other differences between the initial carrying amount of an interest bearing instrument and its amount at maturity calculated on an effective interest rate basis.

The effective interest method is a method of calculating the amortised cost of financial assets and liabilities and of allocating the interest income and interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial instrument. When calculating the effective interest rate, the Group estimates cash flows considering all contractual terms of the financial instrument (for example, call and similar options) but does not consider future credit losses. The calculation includes all fees and interests paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts.

Interest on the impaired financial assets is recognised using the rate of interest used to discount future cash flows (“unwinding of discount”) for the purpose of measuring the related impairment loss.

(b) Fee and commission income

Fee and commission income is recognised in profit or loss/paid when the corresponding service is provided.

Origination or commitment fees received/paid by the Group which result in the creation or acquisition of a financial asset are deferred and recognised as an adjustment to the effective interest rate. When a loan commitment is not expected to result in the draw-down of a loan, loan commitment fees are recognised.

39 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(18) Revenue recognition (Continued)
(c) Sales of goods and services

Revenue is recognised when goods are delivered at the customers’ premises which is taken to be the point in time when the customer has accepted the goods and the related risks and rewards of ownership. Revenue excludes value added tax or other sales taxes and is after deduction of any trade discounts.

Service fee income is recognised when the services are rendered.

(d) Sales of properties

Revenue from sales of properties is only recognised when the significant risks and rewards of ownership have been transferred to the buyer. The Group considers that the significant risks and rewards of ownership are transferred when the buildings contracted for sale are completed and the relevant permits essential for the delivery of the properties have been issued by the authorities.

(e) Contract revenue

When the outcome of a construction contract can be estimated reliably, revenue from a fixed price contract is recognised using the percentage of completion method.

The Group measured the stage of completion by reference to the percentage of contract costs incurred to date to estimated total contract costs for the contract.

When the outcome of a construction contract cannot be estimated reliably, revenue is recognised only to the extent of contract costs incurred that it is probable will be recoverable.

(f) Rental income from operating leases

Rental income receivable under operating leases is recognised in profit or loss in equal instalments over the periods covered by the lease term, except where an alternative basis is more representative of the pattern of benefits to be derived from the use of the leased asset. Lease incentives granted are recognised in profit or loss as an integral part of the aggregate net lease payments receivable. Contingent rentals are recognised as income in the accounting period in which they are earned.

(g) Dividend income

Dividend income from unlisted investments is recognised when the shareholder’s right to receive payment is established. Dividend income from listed investments is recognised when the share price of the investment goes ex-dividend.

40 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(19) Government grants

Government grants are non-reciprocal transfers of monetary or non-monetary assets from the government to the Group except for capital contribution from the government in the capacity as an investor in the Group. Specific transfers from the government, such as investment grants that have been clearly defined in official documents as part of “capital reserve” are also dealt with as capital contributions, rather than government grants.

A government grant is recognised when there is reasonable assurance that the grant will be received and that the Group will comply with the conditions attaching to the grant.

If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received or receivable. If a government grant is in the form of a transfer of a nonmonetary asset, it is measured at fair value.

A government grant related to an asset is recognised initially as deferred income and amortised to profit or loss on a straight-line basis over the useful life of the asset. A grant that compensates the Group for expenses to be incurred in the future is recognised initially as deferred income, and released to profit or loss in the periods in which the expenses are recognised. A grant that compensates the Group for expenses already incurred is recognised in profit or loss immediately.

(20) Special reserve

The Group recognises a safety fund in the specific reserve pursuant to relevant government regulations, with a corresponding increase in the costs of the related products or expense. When the safety fund is subsequently used for revenue expenditure, the specific reserve is reduced accordingly. On utilisation of the safety production fund for fixed assets, the specific reserve is reduced as the fixed assets are recognised, which is the time when the related assets are ready for their intended use; in such cases, an amount that corresponds to the reduction in the specific reserve is recognised in accumulated depreciation. with respect to the related fixed assets. As a consequence, such fixed assets are not depreciated in subsequent periods.

(21) Borrowing costs

Borrowing costs incurred directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of the asset.

Other borrowing costs are recognised as financial expenses when incurred.

41 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(21) Borrowing costs (Continued)

During the capitalisation period, the amount of interest (including amortisation of any discount or premium on borrowing) to be capitalised in each accounting period is determined as follows:

Where funds are borrowed specifically for the acquisition, construction or production of a qualifying asset, the amount of interest to be capitalised is the interest expense calculated using effective interest rates during the period less any interest income earned from depositing the borrowed funds or any investment income on the temporary investment of those funds before being used on the asset.
To the extent that the Group borrows funds generally and uses them for the acquisition, construction or production of a qualifying asset, the amount of borrowing costs eligible for capitalization is determined by applying a capitalisation rate to the weighted average of the excess amounts of cumulative expenditures on the asset over the above amounts of specific borrowings. The capitalisation rate is the weighted average of the interest rates applicable to the general-purpose borrowings.

The effective interest rate is determined as the rate that exactly discounts estimated future cash flow through the expected life of the borrowing or, when appropriate, a shorter period to the initially recognised amount of the borrowings.

During the capitalisation period, exchange differences related to the principal and interest on a specific-purpose borrowing denominated in foreign currency are capitalised as part of the cost of the qualifying asset. The exchange differences related to the principal and interest on foreign currency borrowings other than a specific-purpose borrowing are recognised as a financial expense when incurred.

The capitalisation period is the period from the date of commencement of capitalisation of borrowing costs to the date of cessation of capitalisation, excluding any period over which capitalization is suspended. Capitalisation of borrowing costs commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities of acquisition, construction or production that are necessary to prepare the asset for its intended use or sale are in progress, and ceases when the assets become ready for their intended use or sale. Capitalisation of borrowing costs is suspended when the acquisition, construction or production activities are interrupted abnormally for a period of more than three months.

(22) Hedging

Hedge accounting recognises the offsetting effects on profit or loss of changes in the fair values of the hedging instrument and the hedged item. The Group assesses and documents whether the financial instruments that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items attributable to the hedged risks both at hedge inception and on an ongoing basis. The Group discontinues prospectively hedge accounting when (a) the hedging instrument expires or is sold, terminated or exercised; (b) the hedge no longer meets the criteria for hedge accounting; or (c) the Group revokes the designation.

42 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(22) Hedging (Continued)
(a) Cash flow hedge

Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised asset or liability, or a highly probable forecast transaction, or the foreign currency risk of a committed future transaction, the effective part of any gain or loss on remeasurement of the derivative financial instrument to fair value is recognised in other comprehensive income and accumulated separately in equity in the hedging reserve. The ineffective portion of any gain or loss is recognised immediately in profit or loss.

If the hedge of a forecast transaction subsequently results in the recognition of a nonfinancial asset or non-financial liability, the associated gain or loss is reclassified from equity to be included in the initial cost or other carrying amount of the non-financial asset or liability.

If a hedge of a forecast transaction subsequently results in the recognition of a financial asset or a financial liability, the associated gain or loss is reclassified from equity to the profit or loss in the same period or periods during which the asset acquired or liability assumed affects the profit or loss (such as when interest income or expense is recognised).

For cash flow hedges, other than those covered by the preceding two policy statements, the associated gain or loss is reclassified from equity to profit or loss in the same period or periods during which the hedged forecast transaction affects profit or loss.

When a hedging instrument expires or is sold, terminated or exercised, or the Group revokes designation of the hedge relationship but the hedged forecast transaction is still expected to occur, the cumulative gain or loss at that point remains in equity until the transaction occurs and is recognised in accordance with the above policy. If the hedged transaction is no longer expected to take place, the cumulative unrealised gain or loss is reclassified from equity to profit or loss immediately.

43 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(22) Hedging (Continued)
(b) Fair value hedge

A fair value hedge seeks to offset risks of changes in the fair value of recognised asset or liability that will give rise to a gain or loss being recognised in profit or loss. The hedging instrument is measured at fair value, with fair value changes recognised in profit or loss. The carrying amount of the hedged item is adjusted by the amount of the changes in fair value of the hedging instrument attributable to the risk being hedged. This adjustment is recognised in profit or loss to offset the effect of the gain or loss on the hedging instrument.

When a hedging instrument expires or is sold, terminated or exercised, the hedge no longer meets the criteria for hedge accounting, or the Group revokes designation of the hedge relationship, any adjustment up to that point, to a hedged item for which the effective interest method is used, is amortised to profit or loss as part of the recalculated effective interest rate of the item over its remaining life.

In order to qualify for hedge accounting, the Group carries out prospective effectiveness testing to demonstrate that it expects the hedge to be highly effective at the inception of the hedge and throughout its life. Actual effectiveness (retrospective effectiveness) is also demonstrated on an ongoing basis.

The documentation of each hedging relationship sets out how the effectiveness of the hedge is assessed. The method which the Group adopts for assessing hedge effectiveness will depend on its risk management strategy.

For fair value hedge relationships, the Group utilises the cumulative dollar offset method or regression analysis as effectiveness testing methodologies. For cash flow hedge relationships, the Group utilises the change in variable cash flow method or the cumulative dollar offset method using the hypothetical derivative approach.

For prospective effectiveness, the hedging instrument must be expected to be highly effective in achieving offsetting changes in fair value or cash flows attributable to the hedged risk during the period for which the hedge is designated. For actual effectiveness, the changes in fair value or cash flows must offset each other in the range of 80 percent to 125 percent for the hedge to be deemed effective.

44 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

Significant accounting policies and accounting estimates (Continued)

(23) Fiduciary activities

The Group acts in a fiduciary capacity as a custodian, trustee, or an agent for customers. Assets held by the Group and the related undertakings to return such assets to customers are excluded from the financial statement as the risks and rewards of the assets reside with the customers.

Entrusted lending is the business where the Group enters into entrusted loan agreements with customers, whereby the customers provide funding (the “entrusted funds”) to the Group, and the Group grants loans to third parties (the “entrusted loans”) at the instruction of the customers. As the Group does not assume the risks and rewards of the entrusted loans and the corresponding entrusted funds, entrusted loans and funds are recorded as offbalance sheet items at their principal amounts and no impairment assessments are made for these entrusted loans.

(24) Profit distributions

Distributions of profit proposed in the profit appropriation plan to be approved after the balance sheet date are not recognised as a liability at the balance sheet date but are disclosed in the notes separately.

45 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(25) Related parties
(a) A person, or a close member of that person’s family, is related to the Group if that person:
has control or joint control over the Group;
has significant influence over the Group; or
is a member of the key management personnel of the Group or the Group’s parent.
(b) An entity is related to the Group if any of the following conditions applies:
The entity and the Group are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).
One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).
Both entities are joint ventures of the same third party.
One entity is a joint venture of a third entity and the other entity is an associate of the third entity (one entity is an associate of a third entity and the Group is a joint venture of the third party).
The entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group.
The entity is controlled or jointly controlled by a person identified in (a).
A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity.

46 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

Significant accounting policies and accounting estimates (Continued)

(26) Segment reporting

Reportable segments are identified based on operating segments which are determined based on the structure of the Group’s internal organisation, management requirements and internal reporting system. An operating segment is a component of the Group that meets the following respective conditions:

engage in business activities from which it may earn revenues and incur expenses;
whose operating results are regularly reviewed by the Group’s management to make decisions about resource to be allocated to the segment and assess its performance; and
for which financial information regarding financial position, results of operations and cash flows are available.

Individually material operating segments are not aggregated for financial reporting purposes unless the segments have similar economic characteristics and are similar in respect of:

the nature of each products and service;
the nature of production processes;
the type or class of customers;
the methods used to distribute products or provide services; and
the nature of the regulatory environment.

Inter-segment revenues are measured on the basis of actual transaction price for such transactions for segment reporting, and segment accounting policies are consistent with those for the consolidated financial statements.

(27) Significant accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the actual results. The estimates and associated key assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Note 6(13) and 6(17)contain information about the assumptions and their risk factors relating to valuation of impairment of goodwill and the estimated fair value of investment properties. Other key sources of estimation uncertainty are as follows:

47 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(27) Significant accounting estimates and judgements (Continued)
(a) Impairment losses on loans and advances and investment classified as receivables

The Group reviews its financial asset portfolio, which includes loans and advances and investment classified as receivables, to assess impairment on a periodic basis during the year. In determining whether an impairment loss should be recognised in the consolidated income statement, the Group makes estimates and judgments as to whether there is any observable data indicating that there is objective evidence of impairment and the extent, if any, to which it will have a measurable decrease in the estimated future cash flows related to individually significant loans and advances and investment classified as receivables or pools of loans and advances and investment classified as receivables with similar risk characteristics, as described in Note 3(13)(a) impairment of financial assets carried at amortised cost.

Significant judgments are made in the determination of whether objective evidence of impairment exists in individually significant loans and advances and investment classified as receivables or pools of smaller-balance loans and advances and investment classified as receivables with similar risk characteristics. Among other things, objective evidence of impairment includes deterioration in the financial condition of specific borrowers (or specific pools of borrowers) affecting their ability to meet their loan payment obligations, as well as increasing industry sector over-capacity or obsolescence, or deterioration in national or regional economic conditions that are correlated to increasing loans and advances and investment classified as receivables defaults. These judgments are made both during management’s regular assessments of loans and advances and investment classified as receivables quality and when other circumstances indicate the possibility that objective evidence of impairment may exist.

Where it is determined that objective evidence of impairment exists, significant judgments and estimates are made in estimating the adverse impact on future cash flows related to individually significant impaired loans and advances and investment classified as receivables. The methodology and assumptions used for estimating both the amount and timing of future cash flows are reviewed regularly to reduce any differences between loss estimates and actual loss experience. Factors affecting these estimates include the availability and granularity of information related to specific borrowers and issuers, and the clarity of the correlation between qualitative factors, such as industry sector performance or changes in regional economic conditions and loans and advances and investment classified as receivables defaults of related borrowers.

When the decrease may not have been identified individually or the individual loans and advances and investment classified as receivables is not significant, management uses estimates based on historical loss experience on a collective basis on loans and advances and investment classified as receivables with similar credit risk characteristics to assess the impairment loss. Significant judgments are also applied to the calculation of collectively assessed impairment. Critical factors affecting these judgments include modelling assumptions (e.g., loss given default) and levels of correlation between qualitative factors and loans and advances and investment classified as receivables default. The collective impairment loss is assessed after taking into account: (i) historical loss experience in portfolios of similar credit risk characteristics; (ii) the emergence period between a loss occurring and that loss being identified; and (iii) the current economic and credit environments and whether in management’s experience these indicate that the actual level of inherent losses is likely to be greater or less than that suggested by historical experience. The Group considers the impact of the changes and uncertainty in the macro-economic environment, in which the Group operates when assessing the methodology and assumptions used for loss estimation, as well as management’s capability in managing loans and advances and investment classified as receivables portfolio, and makes adjustments where appropriate.

48 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

(27) Significant accounting estimates and judgements (Continued)
(b) Impairment of available-for-sale equity investments

For available-for-sale equity investments, a significant or prolonged decline in fair value below cost is considered to be objective evidence of impairment. Judgement is required when determining whether a decline in fair value has been significant or prolonged. In making this judgement, the Group considers historical data of market volatility and historical share price of the specific equity investment as well as other factors, such as sector performance, and financial information regarding the investee.

(c) Provision for inventories

As described in Note 3(4), the Group reviews the carrying amounts of inventories at each balance sheet date to determine whether the inventories are carried at lower of cost and net realisable value. The Group estimates the net realisable value, based on the current market situation and historical experience on similar inventories. Any change in the assumptions would increase or decrease the amount of inventories write-down or the related reversals of write-down. The change in the write-down would affect the Group’s profit or loss during the year.

(d) Impairment of non-financial assets

As described in Note 3(13)(b), assets such as fixed assets and intangible assets are reviewed at each balance sheet date to determine whether the carrying amount exceeds the recoverable amount of the assets. If any such indication exists, an impairment loss is recognised.

The recoverable amount of an asset (asset group) is the greater of its fair value less costs to sell and its present value of expected future cash flows. Since a market price of the asset (the asset group) cannot be obtained reliably, the fair value of the asset cannot be estimated reliably. In assessing value in use, significant judgements are exercised over the asset’s production, selling price, related operating expenses and discount rate to calculate the present value. All relevant materials which can be obtained are used for estimation of the recoverable amount, including the estimation of the production, selling price and related operating expenses based on reasonable and supportable assumptions.

(e) Depreciation and amortisation of fixed assets and intangible assets

As described in Notes 3(7) and Note 3(9), fixed assets and intangible assets are depreciated and amortised over their useful lives after taking into account residual value. The useful lives of the assets are regularly reviewed to determine the depreciation and amortisation costs charged in each reporting period. The useful lives of the assets are determined based on historical experience of similar assets and the estimated technical changes. If there have been significant changes in the factors used to determine the depreciation or amortisation, the rate of depreciation or amortisation is revised prospectively.

49 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

Significant accounting policies and accounting estimates (Continued)

(27) Significant accounting estimates and judgements (Continued)
(f) Fair value of financial instruments

For financial instruments without active market, the Group determines fair values using valuation techniques which include discounted cash flow models, as well as other types of valuation models. Assumptions and inputs used in valuation techniques include risk-free and benchmark interest rates, credit spreads and foreign currency exchange rates. Where discounted cash flow techniques are used, estimated cash flows are based on management’s best estimates and the discount rate used is a market rate at the end of each reporting period applicable for an instrument with similar terms and conditions. Where other pricing models are used, inputs are based on observable market data at the end of each reporting period. However, where market data are not available, management needs to make estimates on such unobservable market inputs. based on assumptions. Changes in assumptions about these factors could affect the estimated fair value of financial instruments.

(g) Classification of held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity investments if the Group has the intention and ability to hold them until maturity. In evaluating whether the requirements to classify a financial asset as held-to-maturity are met, management makes significant judgements. Failure in correctly assessing the Group’s intention and ability to hold specific investments until maturity may result in reclassification of the whole portfolio as available-for-sale financial assets.

(h) Income taxes

Significant judgement is required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

Deferred tax assets, which principally relate to tax losses and deductible temporary differences, are recognised when the future taxable profit will be available against such deferred tax assets. Hence, it requires formal assessment by management regarding the future profitability to utilise the deferred tax assets.

(i) Assets acquired/liabilities assumed in business combination

Assets acquired/liabilities assumed in business combination are recognised at fair value in connection with the Group’s acquisition of this entity. The fair values of the acquired assets/assumed liabilities are determined based on valuation methodologies and techniques that involved the use of a third-party valuation firm’s expertise. The judgements and assumptions used in that valuation of assets and liabilities along with the assumptions on the useful lives of acquired assets have an effect on the consolidated financial statements.

50 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

4 Taxation

(1) The types of taxes applicable to the Group’s sale of goods and rendering of services include business tax, value added tax (“VAT”), and land appreciation tax.

Tax Name Tax basis Business tax 3% or 5% of taxable revenue VAT Output VAT is 3-17% of product sales and taxable services revenue, based on tax laws. The remaining balance of output VAT, after subtracting the deductible input VAT of the period, is VAT payable Land appreciation tax Appreciation amount in transferring property and applicable tax rate

(2) The statutory income tax rate of the Company for the year ended 31 December 2015 is 25% (2014: 25%).

Except for certain subsidiaries of the Group which are entitled to preferential tax treatment, the stautory income tax rate applicable to the Group’s other domestic subsidiaries for the year ended 31 December 2015 is 25% (2014: 25%).

Taxation for other overseas subsidiaries is charged at the rates of taxation prevailing in the countries / jurisdiction in which the overseas subsidiaries operate.

(3) Taxes payable

The Group Income tax payable Business tax payable VAT payable Land appreciation tax payable Others	31 December 2015 6,056,467 2,609,528 372,088 45,140 618,121 9,701,344	31 December 2014 7,380,707 2,634,311 365,268 157,564 430,698
		10,968,548

51 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

5 Subsidiaries

(1) As at 31 December 2015, the consolidated financial statements included the following subsidiaries:

Name of subsidiary
Place of
registration
Principal
place of
business
Registered
principal
activities
CITIC Holdings Co., Ltd.
Mainland
China
Mainland
China
Financial
services
China CITIC Bank
Corporation
Limited(note (a))
Mainland
China
Mainland
China
Financial
services
CITIC Trust Co., Ltd.
Mainland
China
Mainland
China
Financial
services
CITIC Finance Co., Ltd.
Mainland
China
Mainland
China
Financial
services
CITIC Real Estate Co.,
Ltd.
Mainland
China
Mainland
China
Real estate
CITIC Industrial
Investment Group
Corp., Ltd.
Mainland
China
Mainland
China
Infrastructure
CITIC Heye Investment
Co., Ltd.
Mainland
China
Mainland
China
Real estate
CITIC Construction
Company Limited
Mainland
China
Mainland
China
Engineering
construction
CITIC Engineering
Design & Construction
Co., Ltd.
Mainland
China
Mainland
China
Engineering
construction
CITIC Resources
Holdings Limited (note
(c))
Hong Kong
Hong Kong
Resources
and energy
CITIC United Asia
Investments Limited
(note (d))
Hong Kong
Hong Kong
Resources and
energy
CITIC Metal Co., Ltd.
Mainland
China
Mainland
China
Resources and
energy
CITIC Australia Pty
limited
Australia
Australia
Resources and
energy
CITIC Kazakhstan LLP
Kazakhstan
Kazakhstan
Resources and
energy
CITIC Heavy Industries
Co., Ltd. (note (b))
Mainland
China
Mainland
China
Manufacturing
CITIC Investment
Holdings Ltd.
Mainland
China
Mainland
China
Manufacturing
CITIC Dicastal Co., Ltd.
Mainland
China
Mainland
China
Manufacturing
CITIC Asia Satellite
Holding Company
Limited (Note (d))
British
Virgin
Islands
Hong Kong
Information
industry
CITIC Press Corporation
Mainland
China
Mainland
China
Publishing
China Zhonghaizhi
Corporation
Mainland
China
Mainland
China
Services
CITIC Tourism Group
Co., Ltd.
Mainland
China
Mainland
China
Services
CITIC Capital Mansion
Co., Ltd.
Mainland
China
Mainland
China
Real estate
CITIC Building Property
Management Co., Ltd.
Mainland
China
Mainland
China
Real estate
CITIC Environment
Investment Group Co.,
Limited
Mainland
China
Mainland
China
Energy saving
and
environmental
protection

Registered capital
Percentage of
equity
attributable to
the Company
direct / indirect
In
thousands
Currency
550,000
RMB
100%
46,787,327
RMB
67.13%
10,000,000
RMB
100%
1,000,000
RMB
100%
6,790,000
RMB
88.37%
1,600,000
RMB
100%
100,000
RMB
100%
6,637,000
RMB
100%
1,000,000
RMB
100%
392,886
HKD
59.50%
916,829
HKD
100%
3,867,400
RMB
100%
98,763
AUD
100%
1,500
KZT
100%
4,186,627
RMB
69.73%
928,000
RMB
100%
1,377,962
RMB
100%
60,524
USD
100%
125,500
RMB
100%
1,000,000
RMB
51.03%
185,900
RMB
100%
800,000
RMB
100%
27,400
RMB
100%
4,000,000
RMB
100%

52 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

5 Subsidiaries (Continued)

(1) As at 31 December 2015, the consolidated financial statements included the following subsidiaries (Continued) :

Note:

(a) Registration of 2,147,469,539 new A shares issued by CITIC Bank Corporation Limited (“CITIC Bank”) through private placement in 2015 was completed on 20 January 2016.
(b) Registration of 152,792,792 new A shares issued by CITIC Heavy Industries Corporation Limited(“CITIC Heavy Industries”) in 2015 was completed on 5 January 2016.
(c) CITIC Resources Holdings Limited (“CITIC Resources”) is directly held by the Group’s wholly-owned subsidiaries, CITIC Australia Pty Limited and Keentech Group Limited.
(d) CITIC United Asia Investments Limited and CITIC Asia Satellite Holding Company Limited are directly held by the Group’s wholly-owned subsidiary, CITIC Projects Management (HK) Limited.
(e) There is no significant difference between the shareholding and voting rights in the above subsidiaries, directly and indirectly, held by the Group.
(2) Material non-controlling interests

Details of the Group’s subsidiaries that have material non-controlling interests (“NCI”) are set out below:

				Accumulated	Accumulated
		Profit/(loss) for	Dividends paid	balances of NCI
	Proportion of equity	2015 allocated	to NCI during	at 31 December
Name of subsidiary	interest held by NCI	to NCI	2015		2015
CITIC Bank	32.87%	14,110,545	137,106		115,760,945
CITIC Resources	40.50%	(2,039,066)	-		1,362,001
CITIC Heavy Industries	30.27%	17,946	51,596		2,876,171
					Accumulated
			Dividends paid	balances of NCI
	Proportion of equity	Profit for 2014	to NCI during	at	31 December
Name of subsidiary	interest held by NCI	allocated to NCI	2014		2014
CITIC Bank	32.87%	14,136,987	3,963,174		93,024,700
CITIC Resources	40.59%	108,899	-		3,501,177
CITIC Heavy Industries	28.96%	118,227	46,023		2,274,025

53 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

5 Subsidiaries (Continued)

(2) Material non-controlling interests (Continued)

The following table sets forth the key financial information on the above-mentioned subsidiaries. Relevant figures represent amounts before intragroup offsetting conducted by the Group:

Listed in Total assets Total liabilities Operating income Net profit Total comprehensive income Cash flows from operating activities	CITIC Bank 2015 2014 Hong Kong and Shanghai 5,122,292,394 4,138,815,211 (4,802,605,766) (3,871,469,612) 145,134,473 124,716,848 41,740,295 41,453,485 47,383,766 46,633,814 (20,833,863) 34,149,539	CITIC Resources 2015 2014 Hong Kong 11,784,654 17,970,597 (8,345,301) (9,376,353) 2,981,418 14,107,890 (4,955,681) 214,263 (5,441,996) (613,358) 573,245 1,442,051	CITIC HeavyIndustries
			2015 2014 Shanghai 20,764,516 19,831,942 (11,976,949) (11,979,646) 4,020,523 5,286,295 61,968 407,697 49,633 338,386 55,591 (262,980)

54 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements

(1) Cash and deposits

The Group

Cash Bank deposits Balances with central banks (note (a)) - Statutory deposit reserve funds(note (b)) - Surplus deposit reserve funds (note (c)) - Fiscal deposits(note (d)) - Foreign exchange reserves(note (e)) Deposits with banks and non-bank financial institutions	31 December 2015 7,382,155 29,291,719 435,216,473 63,657,461 3,796,423 3,416,069 105,176,358 647,936,658	31 December 2014 7,258,285 37,691,591 458,867,689 70,166,091 3,854,699 - 102,832,877
		680,671,232

Notes:

(a) The balances with central banks represent deposits placed with central banks by CITIC Bank and CITIC Finance Company Limited (“CITIC Finance”).
(b) CITIC Bank and CITIC Finance place statutory deposit reserves with the People’s Bank of China and overseas central banks where they have operations. The statutory deposit reserves are not available for use in their daily business.

As at 31 December 2015, the statutory deposit reserve placed by CITIC Bank with the People’s Bank of China was calculated at 15% (31 December 2014: 18%) of eligible RMB deposits for domestic branches of CITIC Bank. In addition, CITIC Bank is required to deposit an amount equivalent to 5% (31 December 2014:5%) of its foreign currency deposits from domestic branch customers as statutory deposit reserve as at 31 December 2015. The amounts of statutory deposit reserves placed with the central banks of overseas countries are determined by local jurisdictions. The foreign currency reserve deposits placed with the People’s Bank of China are non-interest bearing.

As at 31 December 2015, the statutory RMB deposit reserve rate applicable to Zhejiang Lin’an CITIC Rural Bank Corporation Limited, a subsidiary of CITIC Bank, was at 9.5% (31 December 2014: 14%).

As at 31 December 2015, the statutory deposit reserve placed by CITIC Finance with the People’s Bank of China was calculated at 7.5% (31 December 2014: 14.5%) of eligible RMB deposits from the customers of CITIC Finance. As at 31 December 2015, CITIC Finance is also required to deposit an amount equivalent to 5% (31 December 2014: 5%) of its foreign currency deposits from the customers as statutory deposit reserve.

55 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(1) Cash and deposits (Continued)

Notes： (Continued)

(c) The surplus deposit reserve funds are maintained with the People’s Bank of China for the purposes of clearing.
(d) Other deposits with central banks primarily represent fiscal deposits placed with the People’s Bank of China that are not available for use in the daily operations of CITIC Bank, of which fiscal deposits are non-interest bearing.
(e) The foreign exchange reserve is maintained with the People’s Bank of China in accordance with the related notice issued by the People’s Bank of China on 31 August 2015. The reserve is payable on a monthly basis at 20% of the total contract amount of customers driven forward transactions in the previous month. Such foreign exchange reserve is non-interest bearing and will be repayable in 12 months according to the Notice.

In addition to the statutory deposit reserve funds, fiscal deposits and foreign exchange reserves, the amount of RMB 5,507 million (31 Decemebr 2014: RMB 7,334 million) included in cash and deposits as at 31 December 2015 are restricted in use. They mainly include guaranteed deposits and cash received from sale of properties before completion which is under the supervision by the Housing Administration Bureau of the PRC.

The Company

31 December 2015 Cash 4 Bank deposits 17,880,376 17,880,380 Placements with banks and non-bank financial institutions The Group 31 December 2015 Banks 41,522,552 Non-bank financial institutions 77,262,045 118,784,597 Less: allowance for impairment losses (Note 6(20)) (8,128) 118,776,469	31 December 2014 2 18,811,586
	18,811,588
	31 December 2014 35,587,010 32,600,982
	68,187,992 (7,659)
	68,180,333

(2) Placements with banks and non-bank financial institutions
56 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(3) Financial assets at fair value through profit or loss

The Group Held for trading purpose - Debt trading financial assets - Investment funds - Certificates of interbank deposit - Trading equity investments Financial assets designated at fair value through profit or loss - Debt securities - Others The Company Held for trading purpose - Investment funds - Trading equity investments	31 December 2015 8,535,758 5,337,716 15,226,442 283,055 29,382,971 1,765,970 2,689,533 4,455,503 33,838,474 31 December 2015 67,491 15,560 83,051	31 December 2014 12,751,817 1,824,405 13,923,282 31,988
		28,531,492 837,686 15,000
		852,686
		29,384,178
		31 December 2014 28,829 -
		28,829

57 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(4) Derivative financial instruments

The Group’s subsidiaries under the financial services segment act as an intermediary to offer derivative products including interest rate and currency forwards and swap to its customers. These derivative positions are managed through entering back-to-back deals with external parties to ensure the remaining exposures are within acceptable risk levels. Meanwhile, derivatives are also used for proprietary trading purposes.

Subsidiaries under non-financial services segment of the Group enter into forward and swap contracts to hedge their exposure to fluctuations in foreign exchange rates, commodity prices and interest rates.

The following tables and notes provide an analysis of the nominal amounts of derivatives and the corresponding fair values as at the balance sheet date. The nominal amounts of the derivatives indicate the volume of transactions outstanding at the balance sheet date; they do not represent amounts at risk. Hedging instruments are derivatives qualified for hedge accounting, and non-hedging instruments are derivatives not qualified for hedge accounting.

58 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(4) Derivative financial instruments (Continued)

The Group

31 December 2014	31 December 2014	31 December 2014
Nominal amount 8,128,289 - 639,630 126,037 290,833,268 979,816,907 29,762,252 21,007,490	Assets 238,244 - 10,603 8,140 738,659 6,413,472 843,161 -	Liabilities 29,682 - 19,332 573,816 724,643 6,207,170 384,880 -
1,330,313,873	8,252,279	7,939,523
	31 December 2014 537,647,030 590,746,741 198,782,972 3,137,130
	1,330,313,873

(a) Nominal amount analysed by remaining maturity

The remaining term to maturity of derivatives does not represent the Group’s intended holding period.

59 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(4) Derivative financial instruments (Continued)
(b) Credit risk weighted amounts

Counter-party default risk : - Interest rate derivatives - Currency derivatives - Precious metals derivatives - Other derivatives Credit valuation adjustment	31 December 2015 683,152 7,960,461 911,308 4,742,400 4,411,932 18,709,253	31 December 2014 731,430 11,252,464 600,655 9,200,000 11,064,254
		32,848,803

Notes:

(i) The credit risk weighted amounts stated above are solely in connection with the derivatives held by CITIC Bank.
(ii) The credit risk weighted amount has been computed in accordance with “Regulation Governing Capital of Commercial Banks (provisional)” promulgated by the China Banking Regulatory Commission in the year of 2012, and depends on the status of the counterparties and the maturity characteristics of the instruments, including those customer-driven back-to-back transactions.
(c) Derivatives designated as hedging instruments
(i) Fair value hedge

Fair value hedge is adopted to hedge the risk that a financial instrument’s fair value will fluctuate because of changes in market interest rates or foreign exchange rates by using interest rate swaps or foreign currency forward contracts.

(ii) Cash flow hedge

Cash flow hedge is adopted to hedge the risk that a financial instrument’s cash flows will fluctuate because of changes in market interest rates, foreign exchange rates or commodity price by using foreign currency forward contracts, commodity forward contracts or interest rate swaps.

60 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(5) Trade and other receivables

The Group Bills receivables (note (a)) Trade receivables (note (b)) Prepayments (note (c)) Other receivables (note (d)) Dividends receivables Interest receivables Long term receivables The Company Other receivables (note (d)) Amounts due from subsidiaries Dividends receivables Interest receivables	31 December 2015 815,642 12,697,615 12,664,724 31,787,750 201,893 30,754,282 10,700,298 99,622,204 31 December 2015 357,730 12,566,654 1,584,763 1,241,449 15,750,596	31 December 2014 1,321,317 9,675,861 4,980,067 33,298,809 322,691 26,860,229 7,824,758
		84,283,732
		31 December 2014 336,846 18,657,435 228,620 561,217
		19,784,118

61 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(5) Trade and other receivables (Continued)

(a) Bills receivables The Group 31 December 2015 Bank acceptance bills 707,201 Commercial acceptance bills 108,441 815,642 (b) Trade receivables The ageing analysis of trade receivables is as follows: The Group 31 December 2015 Within 1 year (inclusive) 9,621,224 Between 1 and 2 years (inclusive) 1,905,575 Between 2 and 3 years (inclusive) 1,144,046 Over 3 years 875,450 13,546,295 Less: allowance for impairment losses (848,680) 12,697,615	31 December 2014 607,688 713,629
	1,321,317
	31 December 2014 7,898,007 1,364,141 904,029 404,871
	10,571,048 (895,187)
	9,675,861

62 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(5)	Trade and other receivables (Continued)
(b)	Trade receivables (Continued)
	Trade receivables by customer type:
	The Group
	31 December 2015		31	December 2014
	Related parties	345,122		338,455
	Other customers	13,201,173		10,232,593
		13,546,295		10,571,048
	Less: allowance for impairment losses	(848,680)		(895,187)
		12,697,615		9,675,861
	An analysis of the movements in provisions for impairment of trade receivables for the year is as
	follows:
	The Group
		2015		2014
	Balance at the beginning of the year	895,187		601,198
	Charge	71,350		476,112
	Reversal	(36,622)		(1,108)
	Write-off	(81,629)		(180,867)
	Exchange differences	394		(148)
	Balance at the end of the year	848,680		895,187

63 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(5) Trade and other receivables (Continued) (c) Prepayments

The ageing analysis of prepayments is as follows:

The Group Within 1 year (inclusive) Between 1 and 2 years (inclusive) Between 2 and 3 years (inclusive) Over 3 years Less: allowance for impairment losses Prepayments by customer type: The Group Related parties Other customers Less: allowance for impairment losses	31 December 2015 11,607,327 885,622 405,470 141,542 13,039,961 (375,237) 12,664,724 31 December 2015 2,008,749 11,031,212 13,039,961 (375,237) 12,664,724	31 December 2014 4,742,845 437,987 96,574 77,419
		5,354,825 (374,758)
		4,980,067
		31 December 2014 2,002,847 3,351,978
		5,354,825 (374,758)
		4,980,067

64 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(5) Trade and other receivables (Continued)
(d) Other receivables

The ageing analysis of other receivables is as follows:

The Group Within 1 year (inclusive) Between 1 and 2 years (inclusive) Between 2 and 3 years (inclusive) Over 3 years Less: allowance for impairment losses The Company Within 1 year (inclusive) Between 1 and 2 years (inclusive) Between 2 and 3 years (inclusive) Over 3 years Less: allowance for impairment losses	31 December 2015 22,448,462 8,281,116 418,766 1,382,309 32,530,653 (742,903) 31,787,750 31 December 2015 - 357,730 - 6,699 364,429 (6,699) 357,730	31 December 2014 27,830,090 3,745,391 560,529 1,674,099
		33,810,109 (511,300)
		33,298,809
		31 December 2014 336,846 - 6,699 -
		343,545 (6,699)
		336,846

65 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(5) Trade and other receivables (Continued)

Other receivables (Continued)
Other receivables by customer type:
The Group
	31 December 2015	31 December 2014
Related parties	8,571,707	6,146,830
Other customers	23,958,946	27,663,279
	32,530,653	33,810,109
Less: allowance for impairment losses	(742,903)	(511,300)
	31,787,750	33,298,809
The Company
	31 December 2015	31 December 2014
Related parties	357,730	336,846
Other customers	6,699	6,699
	364,429	343,545
Less: allowance for impairment losses	(6,699)	(6,699)
	357,730	336,846
An analysis of the movements in provisions for impairment of other receivables for the year is as
follows:
The Group
	2015	2014
Balance at the beginning of the year	511,300	687,503
Charge	349,111	95,246
Reversal	(14,788)	(3,617)
Write-off	(103,010)	(268,372)
Exchange differences	290	540
Balance at the end of the year	742,903	511,300

66 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(5) Trade and other receivables (Continued)
(d) Other receivables (Continued)

An analysis of the movements in provisions for impairment of other receivables for the year is as follows (Continued):

The Company Balance at the beginning of the year Charge Balance at the end of the year	2015 6,699 - 6,699	2014 - 6,699
		6,699

(6) Inventories
(a) An analysis of the movements in inventories for the year is as follows:

The Group

Raw materials Work-in- progress Finished goods Properties Engineering construction Others Less: provision for decline in value of inventories (Note 6(20))	Balance at the beginning of 2015 900,416 2,694,728 4,925,194 71,260,316 2,718,792 641,927 83,141,373 (2,443,600) 80,697,773	Additions 4,101,461 13,074,817 61,433,983 13,723,372 5,523,163 12,868,277 110,725,073 (558,394) 110,166,679	Business combination (Note 6(55)) - - 66,152 3,294,839 - - 3,360,991 - 3,360,991	Reductions (4,057,783) (12,955,301) (61,569,874) (14,892,262) (5,115,277) (12,755,414) (111,345,911) 222,081 (111,123,830)	Exchange differences and others 6,120 (8,831) 93,142 - 232,937 (18) 323,350 (173,337) 150,013	Balance at the end of 2015 950,214 2,805,413 4,948,597 73,386,265 3,359,615 754,772
						86,204,876 (2,953,250)
						83,251,626

67 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(6) Inventories (Continued)
(a) An analysis of the movements in inventories for the year is as follows (Continued) :

Raw materials Work-in-progress Finished goods Properties Engineering construction Others Less: provision for decline in value of inventories (Note 6 (20) )	Balance at the beginning of 2014 4,660,843 3,590,071 12,346,641 85,691,561 2,849,086 965,147 110,103,349 (2,419,230) 107,684,119	Additions 3,981,004 3,334,724 81,394,337 22,239,688 607,024 1,159,724 112,716,501 (771,578) 111,944,923	Reductions (7,758,434) (4,199,020) (88,918,673) (36,756,683) (450,958) (1,501,658) (139,585,426) 591,469 (138,993,957)	Exchange differences and others 17,003 (31,047) 102,889 85,750 (286,360) 18,714 (93,051) 155,739 62,688	Balance at the end of 2014 900,416 2,694,728 4,925,194 71,260,316 2,718,792 641,927
					83,141,373 (2,443,600)
					80,697,773

(b) An analysis of provision for decline in value of inventories of the Group is as follows:

The Group

Raw materials Work-in- progress Finished goods Properties Engineering construction Others	Balance at the beginning of 2015 11,306 11,271 476,986 589,331 1,330,930 23,776 2,443,600	Charge for the year 2,134 3,303 377,431 174,337 - 1,189 558,394	Writtenback Reversal Write-off (4,168) - - (1,826) (1,497) (11,089) (61,460) (140,826) - - (1,215) - (68,340) (153,741)	Exchange differences and others - - 15,918 - 157,419 - 173,337	Balance at the end of 2015 9,272 12,748 857,749 561,382 1,488,349 23,750
			Reversal (4,168) - (1,497) (61,460) - (1,215) (68,340)
					2,953,250

68 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(6) Inventories (Continued)

(b) An analysis of provision for decline in value of inventories of the Group is as follows (Continued) :

Raw materials Work-in-progress Finished goods Properties Engineering construction Others	Balance at the beginning of 2014 69,399 80,931 464,363 352,801 1,411,982 39,754 2,419,230	Charge for the year 2,983 11,271 319,964 366,615 76,368 (5,623) 771,578	Written back Reversal Write-off (247) (61,243) (112) (81,436) (39,962) (268,029) (25,500) (104,585) - - - (10,355) (65,821) (525,648)	Exchange differences and others 414 617 650 - (157,420) - (155,739)	Balance at the end of 2014 11,306 11,271 476,986 589,331 1,330,930 23,776
			Reversal (247) (112) (39,962) (25,500) - - (65,821)
					2,443,600

As at 31 December 2015, the carrying amount of restricted inventories of CITIC Resources was HK$270 million (approximately RMB226 million) (31 December 2014: HK$979 million, approximately RMB772 million).

As at 31 December 2015, the Group’s inventories include an amount of RMB63,565 million expected to be recovered after more than one year from the balance sheet date (31 December 2014: RMB61,773 million).

69 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(7) Financial assets held under resale agreements

The Group 31 December 2015 Securities 67,232,308 Discounted bills 70,787,898 Others 540,698 138,560,904 (8) Loans and advances to customers and other parties The Group 31 December 2015 Corporate loans: - Loans 1,755,213,206 - Discounted bills 92,759,735 - Finance lease receivables 17,879,008 1,865,851,949 Personal loans: - Residential mortgages 268,926,219 - Business loans 105,770,498 - Credit cards 175,800,667 - Others 118,116,507 668,613,891 2,534,465,840 Less: allowance for impairment losses (Note 6(20))(note (c)) - Individually assessed (18,408,671) - Collectively assessed (45,502,551) (63,911,222) 2,470,554,618	31 December 2014 48,481,119 84,350,450 2,933,210
	135,764,779
	31 December 2014 1,571,608,546 68,043,262 551,982
	1,640,203,790 232,117,072 108,926,788 126,132,927 87,369,452
	554,546,239
	2,194,750,029
	(13,904,940) (40,612,793)
	(54,517,733)
	2,140,232,296

70 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(8) Loans and advances to customers and other parties (Continued)

The Company Corporate loans Less: - individually assessed (a) Analysis by types of collateral The Group Unsecured loans Guaranteed loans Secured loans - Loans secured by collateral - Pledged loans Discounted bills The Company Unsecured loans Secured loans - Loans secured by collateral - Pledged loans	31 December 2015 35,915,639 (471,301) 35,444,338 31 December 2015 493,835,367 492,718,399 1,170,595,797 284,556,542 2,441,706,105 92,759,735 2,534,465,840 31 December 2015 32,859,539 3,000,000 56,100 35,915,639	31 December 2014 19,300,713 (3,016)
		19,297,697
		31 December 2014 400,836,296 513,703,574 954,471,883 257,695,014
		2,126,706,767 68,043,262
		2,194,750,029
		31 December 2014 16,180,713 3,020,000 100,000
		19,300,713

71 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(8) Loans and advances to customers and other parties (Continued)
(b) Analysis by assessment method of allowance for impairment losses

The Group

31 December 2015 Gross loans and advances Less: Allowance for impairment losses 31 December 2014 Gross loans and advances Less: Allowance for impairment losses	Loans and advances for which allowance is collectively assessed 2,495,385,733 (39,656,154) 2,455,729,579 2,161,436,716 (36,732,286) 2,124,704,430	Impaired loans and advances for which allowance is collectively assessed for which allowance is individually assessed 8,003,646 31,076,461 (5,846,397) (18,408,671) 2,157,249 12,667,790 5,608,015 27,705,298 (3,880,507) (13,904,940) 1,727,508 13,800,358	Total Gross impaired loans and advances as a % of gross total loans and advances 2,534,465,840 1.54% (63,911,222) 2,470,554,618 2,194,750,029 1.52% (54,517,733) 2,140,232,296
		for which allowance is collectively assessed 8,003,646 (5,846,397) 2,157,249 5,608,015 (3,880,507) 1,727,508

As at 31 December 2015, the loans and advances of the Group for which allowance was individually assessed amounted to RMB31,076 million (31 December 2014: RMB27,705 million). As at 31 December 2015, the secured and unsecured portion of these loans and advances were RMB10,385 million (31 December 2014: RMB10,783 million) and RMB20,691 million (31 December 2014: RMB16,922 million), respectively. As at 31 December 2015, the fair value of collaterals held against these loans and advances amounted to RMB16,701 million (31 December 2014: RMB16,996 million). As at 31 December 2015, the allowance for impairment losses from individual assessment made against these loans and advances were RMB18,409 million (31 December 2014: RMB13,905 million).

The fair value of collaterals was estimated by management based on the latest available external valuations adjusted by taking into account the current realisation experience as well as market situation.

72 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(8) Loans and advances to customers and other parties (Continued)
(c) Movements of allowance for impairment losses

The Group

At 1 January 2015 Charge for the year: - Impairment allowance on loans charged - Reversal of impairment for the year Unwinding of discount on allowance Write-offs Recovery of loans and advances written off in previous year Changes of exchange rate At 31 December 2015 At 1 January 2014 Charge for the year: - Impairment allowance on loans charged - Reversal of impairment for the year Unwinding of discount on allowance Write-offs Recovery of loans and advances written off in previous year At 31 December 2014	Loans and advances for which allowance is collectively assessed 36,732,286 4,792,322 (91,462) - (1,795,677) - 18,685 39,656,154 Loans and advances for which allowance is collectively assessed 29,629,580 7,160,728 (58,022) - - - 36,732,286	Impairedloans and advances for which allowances is collectively assessed for which allowance is individually assessed 3,880,507 13,904,940 5,670,379 30,375,114 (284,053) (2,065,554) - (591,737) (3,778,781) (23,566,490) 358,065 241,835 280 110,563 5,846,397 18,408,671 Impaired loans and advances for which allowances is collectively assessed for which allowance is individually assessed 2,680,492 11,643,425 2,659,370 16,072,274 (10,492) (3,520,054) - (460,070) (1,385,344) (10,143,415) (63,519) 312,780 3,880,507 13,904,940	Total 54,517,733 40,837,815 (2,441,069) (591,737) (29,140,948) 599,900 129,528
			63,911,222
			Total 43,953,497 25,892,372 (3,588,568) (460,070) (11,528,759) 249,261
		for which allowances is collectively assessed 2,680,492 2,659,370 (10,492) - (1,385,344) (63,519) 3,880,507
			54,517,733

73 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(8) Loans and advances to customers and other parties (Continued)
(d) Analysis of overdue loans by overdue period

Unsecured loans Guaranteed loans Secured loans - Loans secured by collateral - Pledged loans		31 December 2015	31 December 2015
	Overdue within 3 months 3,424,742 8,906,924 21,575,815 3,087,119 36,994,600	Overdue between 3 months and 1 year 3,063,671 5,284,923 12,341,996 1,594,680 22,285,270	Overdue between 1 year and 3 years 2,507,229 5,104,908 6,341,157 1,000,600 14,953,894	Overdue over 3 years 297,323 230,089 383,887 61,772 973,071	Total 9,292,965 19,526,844 40,642,855 5,744,171
					75,206,835

Unsecured loans Guaranteed loans Secured loans - Loans secured by collateral - Pledged loans		31 December 2014	31 December 2014
	Overdue within 3 months 3,458,375 12,756,148 21,836,992 4,982,287 43,033,802	Overdue between 3 months and 1 year 3,404,003 7,129,392 10,342,251 1,277,344 22,152,990	Overdue between 1 year and 3 years 1,437,137 3,193,466 5,869,784 844,864 11,345,251	Overdue over 3 years 384,087 325,886 743,201 36,946 1,490,120	Total 8,683,602 23,404,892 38,792,228 7,141,441
					78,022,163

Overdue loans represent loans of which principal or interest are overdue one day or more.

74 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(9) Available-for-sale financial assets The Group Debt securities Certificates of deposit and certificates of interbank deposit Wealth management products issued by financial institutions Equity investments Investment funds Less: allowance for impairment losses (Note 6(20)) The Company Wealth management products issued by financial institutions Equity investments (10) Held-to-maturity investments The Group Debt securities Others Less: allowance for impairment losses (Note 6(20))	31 December 2015 301,634,307 75,313,636 27,734,466 8,758,541 1,510,871 414,951,821 (714,429) 414,237,392 31 December 2015 9,467,476 1,058,639 10,526,115 31 December 2015 181,165,286 60,000 181,225,286 (40,784) 181,184,502	31 December 2014 185,082,783 23,888,093 38,344,769 11,934,854 1,181,909
		260,432,408 (1,455,535)
		258,976,873
		31 December 2014 22,126,637 1,922,828
		24,049,465
		31 December 2014 177,961,209 128,500
		178,089,709 (41,425)
		178,048,284

75 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(11) Investments classified as receivables

The Group Trust investment plans Investment management products managed by securities companies Wealth management products issued by financial institutions Corporate bonds Others Less: allowance for impairment losses (Note 6(20))	31 December 2015 140,777,306 826,705,076 147,605,000 - 1,230,000 1,116,317,382 (997,050) 1,115,320,332	31 December 2014 108,534,295 454,263,502 78,858,600 13,199,050 3,990,400
		658,845,847 (414,035)
		658,431,812

As at 31 December 2015, certain of the Group’s investments with an aggregate amount of RMB75,639 million (31 December 2014: RMB39,286 million) are managed by certain subsidiaries and related parties of the Group.

The underlying assets of investment classified as receivables primarily include investment in rediscounted bills, corporate loans, certificates of interbank deposit and wealth management products issued by other financial institutions.

76 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(12) Long-term equity investments

The Group 31 December 2015 Investments in joint ventures (note (b)) 7,359,619 Investments in associates (note (c)) 42,281,116 49,640,735 Less: allowance for impairment losses - Joint ventures (1,177,529) - Associates (2,036,714) (3,214,243) 46,426,492 The Company 31 December 2015 Investments in subsidiaries (note (a)) 187,588,165 Investments in joint ventures (note (b)) 2,938,773 Investments in associates (note (c)) 25,415,424 Less: impairment loss - Subsidiaries (662,271) 215,280,091 The Company’s investments in principal subsidiaries are as follows: 31 December 2015 CITIC Bank 117,712,451 CITIC Real Estate Co., Ltd. 13,886,931 CITIC Trust Co., Ltd. (“ CITIC Trust”) 13,281,374 CITIC Industrial Investment Group Corp., Ltd. 5,884,723 CITIC Heavy Industries 3,657,012 CITIC Environment Investment Group Co., Ltd. 2,642,425 Others 30,523,249 187,588,165	31 December 2014 9,413,831 41,671,087
	51,084,918 (1,179,130) (2,852,086)
	(4,031,216)
	47,053,702
	31 December 2014 178,229,741 2,751,640 23,910,968 -
	204,892,349
	31 December 2014 117,712,451 13,886,931 13,281,374 5,884,723 3,657,012 - 23,807,250
	178,229,741

(a) The Company’s investments in principal subsidiaries are as follows:

Detailed information of the subsidiaries is set out in Note 5(1).

77 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(12) Long-term equity investments (Continued) (b) The Group’s and the Company’s investments in joint ventures are as follows:

The Group

				31	December 2015	31 December 2014	31 December 2014
	Material joint ventures (note		(i))		2,783,368		2,615,998
	Immaterial joint ventures (note (ii))				4,576,251		6,797,833
					7,359,619		9,413,831
	Less: allowance for impairment losses				(1,177,529)		(1,179,130)
					6,182,090		8,234,701
	The Company
				31	December 2015	31 December 2014
	Material joint ventures (note		(i))		2,783,368		2,615,998
	Immaterial joint ventures (note (ii))				155,405		135,642
					2,938,773		2,751,640
(i)	Details of material joint venture are as follows:
							Percentage
							of equity
							attributable
		Principal		Registered	Registered		to the Group
		place of	Place of	principal	capital in		direct /
	Name	business	registration	activities	thousands	Currency	indirect
	CITIC-rudential
	Life Insurance
	Co., Ltd.
	(“CITIC-			Insurance
	Prudential	Mainland	Mainland	and
	Life”)	China	China	reinsurance	2,360,000	RMB	50%

CITIC-Prudential Life is also the material joint ventures of the Company, which holds 50% equity interests in CITIC-Prudential Life.

78 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(12) Long-term equity investments (Continued)
(b) The Group’s and the Company’s investments in joint ventures are as follows (Continued) :

The following table sets out the key financial information of the Group’s material joint ventures, and the reconciliation of the key financial information to the carrying amount of the Group’s investments in joint ventures using the equity method:

Total assets Including: Cash and deposits Total liabilities Net assets Group’s share of net assets Others Carrying amount of investments in joint ventures Operating income Income tax expenses Net profit Other comprehensive income Total comprehensive income Dividends received from joint ventures during the year	CITIC-Prudential Life	CITIC-Prudential Life
	31 December 2015 47,974,830 4,803,509 (44,656,887) 3,317,943 1,658,972 1,124,396 2,783,368 8,183,241 (163,884) 381,904 25,952 407,856 -	31 December 2014 38,097,041 4,610,022 (35,113,837)
		2,983,204
		1,491,602 1,124,396
		2,615,998
		6,475,667 (115,130) 321,314 178,938 500,252 -

79 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(12) Long-term equity investments (Continued) (b) The Group’s and the Company’s investments in joint ventures are as follows (Continued) :

(ii) Details of immaterial joint ventures accounted for using the equity method are summarised as follows:

The Group Aggregate carrying amount of investments Aggregate amount of share of - Net (loss)/profit - Other comprehensive income - Total comprehensive income The Company Aggregate carrying amount of investments Aggregate amount of share of - Net profit - Other comprehensive income - Total comprehensive income	31 December 2015 3,398,722 (1,186,624) - (1,186,624) 31 December 2015 155,405 24,360 (4,597) 19,763	31 December 2014 5,618,703 1,001,970 4,092
		1,006,062
		31 December 2014 135,642 2,122 8
		2,130

80 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(12) Long-term equity investments (Continued)

(c) The Group’s and the Company’s investments in associates are as follows: The Group 31 December 2015 Material associates (note (i)) 25,573,260 Immaterial associates (note (ii)) 16,707,856 42,281,116 Less: allowance for impairment losses (2,036,714) 40,244,402 The Company 31 December 2015 Material associates (note (i)) 22,558,909 Immaterial associates (note (ii)) 2,856,515 25,415,424	31 December 2014 24,432,345 17,238,742
	41,671,087 (2,852,086)
	38,819,001
	31 December 2014 21,158,747 2,752,221
	23,910,968

81 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(12) Long-term equity investments (Continued)
(c) The Group’s and the Company’s investments in associates are as follows (Continued) :
(i) Details of the Group’s material associates are as follows:

Name Principal place of business Place of registration Registered principal activities CITIC Securities Co., Ltd. (“ CITIC Securities”)* Mainland China Mainland China Securities related services CITIC Dameng Holdings Limited (“ CITIC Dameng”) Mainland China Bermuda Resources and energy	Registered capital Percentage of equity attributable to the Group direct / indirect in thousands Currency 12,116,908 RMB 15.59% 342,846 HKD 43.46%

CITIC Securities is also the material associates of the Company, which holds 15.59% equity interests in CITIC Securities.
82 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(12) Long-term equity investments (Continued)
(c) The Group’s and the Company’s investments in associates are as follows (Continued) :
(i) Details of the Group’s material associates are as follows (Continued) :

The following table sets out the key financial information of the Group’s material associates, and the reconciliation of the key financial information to the carrying amount of the Group’s investments in associates using the equity method:

CITIC Securities 31 December 2015 31 December 2014 616,108,242 479,626,450 212,460,788 134,807,877 (474,371,144) (378,494,965) 141,737,098 101,131,485 21,691,581 20,117,030 867,328 1,041,717 - - 22,558,909 21,158,747 36,547,484 73,216,146 56,013,436 29,197,531 - - (6,926,800) (3,560,447) 20,360,344 11,861,500 2,334,233 2,026,174 22,694,577 13,887,674 532,347 335,465	CITIC Dameng	CITIC Dameng
31 December 2015 616,108,242 212,460,788 (474,371,144) 141,737,098 21,691,581 867,328 - 22,558,909 36,547,484 56,013,436 - (6,926,800) 20,360,344 2,334,233 22,694,577 532,347	31 December 2015 7,822,633 811,310 (5,309,592) 2,513,041 1,052,450 1,961,901 (1,961,901) 1,052,450 789,714 2,021,000 (217,377) (27,100) (783,651) (111,388) (895,039) -	31 December 2014 7,715,955 909,663 (4,881,800)
		2,834,155
		1,345,927 1,927,671 (1,502,489)
		1,771,109
		430,860 2,531,176 (187,857) (37,561) (65,544) (9,994) (75,538) -

CITIC Securities is listed on the Main Board of The Stock Exchange of Hong Kong Limited and Shanghai Stock Exchange.

CITIC Dameng is listed on the Main Board of The Stock Exchange of Hong Kong Limited.

83 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(12) Long-term equity investments (Continued) (c) the Group’s and the Company’s investments in associates are as follows (Continued) :

Details of immaterial associates accounted for using the equity method	Details of immaterial associates accounted for using the equity method	are summarised as
follows:
The Group
31	December 2015	31 December 2015
Aggregate carrying amount of investments	16,633,043	15,889,145
Aggregate amount of share of
- Net profit	762,499	884,314
- Other comprehensive income	(731,662)	(321,527)
- Total comprehensive income	30,837	562,787
The Company
31	December 2015	31 December 2015
Aggregate carrying amount of investments	2,856,515	2,752,221
Aggregate amount of share of
- Net profit	80,670	310,638
- Other comprehensive income	15,462	478
- Total comprehensive income	96,132	311,116

84 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(13) Investment properties

The Group At 1 January Additions Disposal Transfers Changes in fair value of investment properties Exchange difference At 31 December	2015 4,735,562 472,235 - (235,561) 108,209 5,947 5,086,392	2014 22,774,959 10,355 (19,294,622) 91,792 1,043,173 109,905
		4,735,562

The Group’s investment properties are mainly located in Mainland China and Hong Kong.

The fair value of investment properties located in Mainland China is determined by using income capitalisation approach and depreciated replacement cost approach under the circumstances.

The income capitalisation approach is the sum of the term value and the reversionary value by discounting the contracted annual rent at the capitalisation rate over the existing lease period; and the sum of average unit market rent at the capitalisation rate after the existing lease period.

Depreciated replacement cost values a property by taking into account of its current cost of replacement or reproduction, less deduction for physical deterioration and all relevant forms of obsolescence and optimisation. The fair value measurement is based on an estimate of the market value for the existing use of the land, plus the depreciated replacement cost.

The fair value of certain of investment properties located in Hong Kong is determined using market comparison approach by reference to recent sales price of comparable properties on a price per square foot basis, adjusted for a premium or a discount specific to the quality of the Group’s buildings compared to the recent sales. Higher premium for higher quality buildings will result in a higher fair value measurement.

The fair value of other certain of investment properties located in Hong Kong is determined by using income capitalisation approach and with reference to sales evidence as available in the market.

Investment properties were revalued as at 31 December 2015 and 2014 by the following independent professionally qualified valuers. The management of the Group had discussion with the surveyors on the valuation assumptions and valuation results when the valuation is performed at each balance sheet date.

85 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(13) Investment properties (Continued)

Properties located in Mainland China and Hong Kong Overseas Properties located in Mainland China and Hong Kong Overseas	Valuers in 2015
	China Enterprise Appraisals Company Deve China International Appraisals Company Limited Prudential Surveyors International Limited Yinxin Appraisal Co., Ltd. China Appraisal Associates Jones Lang LaSalle Corporate Appraisal and Advisory Company Limited Jones Lang LaSalle Corporate Appraisal and Advisory Company Limited Valuers in 2014
	Prudential Surveyors International Limited China Enterprise Appraisals Co., Ltd. Yinxin Appraisal Co., Ltd. Jones Lang LaSalle Corporate Appraisal and Advisory Company Limited

For disclosure information of fair value, please refer to Note 6(49).

86 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(14) Fixed assets

The Group

Cost Banlance at 1 January 2014 Additions Transfers from construction in Progress Disposals Exchange difference Balance at 31 December 2014 Additions Business combination (Note 6(55)) Transfers from construction in progress Disposals Exchange difference Balance at 31 December 2015 Less: Accumulated depreciation Balance at 1 January 2014 Charge for the year Written back on disposal Exchange difference Balance at 31 December 2014 Charge for the year Business combination (Note 6(55)) Written back on disposal Exchange difference Balance at 31 December 2015	Plant & buildings 37,716,642 1,545,615 420,609 (19,534,865) (54,196) 20,093,805 2,479,510 169,889 1,242,455 (222,757) 38,718 23,801,620 (7,445,788) (762,182) 3,329,647 (22,446) (4,900,769) (959,157) (13,409) 47,164 (1,466) (5,827,637)	Machinery & equipment 46,319,733 1,987,378 909,404 (32,932,846) (167,421) 16,116,248 429,235 215,498 2,012,192 (181,432) 217,262 18,809,003 (14,706,046) (1,167,818) 11,046,411 (505,218) (5,332,671) (1,282,278) (59,908) 167,302 (65,950) (6,573,505)	Office & other equipment 9,542,256 1,525,168 5,381 (2,037,584) (30,421) 9,004,800 1,416,047 15,102 7,452 (251,912) 58,768 10,250,257 (4,971,474) (1,053,575) 1,032,261 25,780 (4,967,008) (1,197,843) (8,826) 184,394 (43,046) (6,032,329)	Motor vehicles 11,121,512 86,308 1,491 (7,199,697) 37,295 4,046,909 375,017 22,497 534,747 (193,052) (506) 4,785,612 (2,857,435) (115,748) 1,089,559 466,153 (1,417,471) (278,795) (12,859) 138,496 (19) (1,570,648)	Others 5,052,004 285,814 148,626 (4,344,076) (17,845) 1,124,523 149,330 147,948 48,623 (88,723) 8,641 1,390,342 (1,439,376) (210,119) 1,269,473 31,206 (348,816) (76,963) (23,057) 46,290 (655) (403,201)	Total 109,752,147 5,430,283 1,485,511 (66,049,068) (232,588)
						50,386,285
						4,849,139 570,934 3,845,469 (937,876) 322,883
						59,036,834
						(31,420,119) (3,309,442) 17,767,351 (4,525)
						(16,966,735)
						(3,795,036) (118,059) 583,646 (111,136)
						(20,407,320)

87 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(14) Fixed assets (Continued)

The Group (Continued)

Less:Allowance for impairment Losses (Note 6(20)) Balance at 1 January 2014 Charge for the year Written back on disposal Exchange difference Balance at 31 December 2014 Charge for the year Written back on disposal Exchange difference Balance at 31 December 2015 Net carrying amount At 31 December 2015 At 31 December 2014	Plant & buildings (530,638) (1,044) 397,178 (17,680) (152,184) (2,524) 145 (5,060) (159,623) 17,814,360 15,040,852	Machinery & equipment (1,913,262) (11,849) 196,857 (39,624) (1,767,878) (705,588) 10,992 (122,936) (2,585,410) 9,650,088 9,015,699	Office & other equipment (1,629) (307) 61 (1) (1,876) (770) 1,550 (1) (1,097) 4,216,831 4,035,916	Motor vehicles (30,600) - 30,284 - (316) (2) 86 (5) (237) 3,214,727 2,629,122	Others (96,593) (182) 79,016 17,447 (312) (4,142) 74 5 (4,375) 982,766 775,395	Total (2,572,722) (13,382) 703,396 (39,858)
						(1,922,566)
						(713,026) 12,847 (127,997)
						(2,750,742)
						35,878,772
						31,496,984

As at 31 December 2015, the Group was in the process of applying the ownership certificate in respect of certain premises of RMB2,720 million (31 December 2014: RMB2,650 million). The Group anticipates that there would be no significant issues and costs in completing such procedures.

88 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(14) Fixed assets(Continued)

The Company

Cost Banlance at 1 January 2014 Additions Disposals Balance at 31 December 2014 Additions Disposals Balance at 31 December 2015 Less: Accumulated depreciation Balance at 1 January 2014 Charge for the year Written back on disposal Balance at 31 December 2014 Charge for the year Written back on disposal Balance at 31 December 2015 Net carrying amount At 31 December 2015 At 31 December 2014	Plant & buildings - - - - 638,758 - 638,758 - - - - (7,621) - (7,621) 631,137 -	Office & other equipment 54,833 4,290 (6,585) 52,538 5,225 (2,683) 55,080 (37,661) (8,639) 6,247 (40,053) (5,595) 2,425 (43,223) 11,857 12,485	Motor vehicles 23,937 - (2,740) 21,197 - (845) 20,352 (17,222) (2,858) 2,613 (17,467) (1,944) 803 (18,608) 1,744 3,730	Total 78,770 4,290 (9,325)
				73,735
				643,983 (3,528)
				714,190
				(54,883) (11,497) 8,860
				(57,520)
				(15,160) 3,228
				(69,452)
				644,738
				16,215

89 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(15) Construction in Progress

The Group Cost Balance at 1 January 2014 Additions Including: capitalised interest Transfers to fixed assets Decrease Exchange difference Balance at 31 December 2014 Additions Including: capitalised interest Transfers to fixed assets Decrease Exchange difference Balance at 31 December 2015 Less: Allowance for impairment losses(Note 6(20)) Balance at 1 January 2014 Charge for the year Written back on disposal Exchange difference Balance at 31 December 2014 Charge for the year Written back on disposal Exchange difference Balance at 31 December 2015 Net carrying amount At 31 December 2015 At 31 December 2014	50,542,824 3,956,140 7,603 (1,491,830) (46,853,789) 320,761
	6,474,106
	4,313,103 319,276 (3,845,469) (577,448) 53,212
	6,417,504
	(585,564) - 585,111 (4,542)
	(4,995)
	(84,393) - 2,771
	(86,617)
	6,330,887
	6,469,111

90 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(16) Intangible assets

The Group

Cost Balance at 1 January 2014 Additions Disposals Exchange difference Balance at 31 December 2014 Additions Business combination (Note 6(55)) Disposals Exchange difference Balance at 31 December 2015 Less: Accumulated amortisation Balance at 1 January 2014 Charge for the year Written back on disposa Exchange difference Balance at 31 December 2014 Charge for the year Business combination (Note 6(55)) Written back on disposal Exchange difference Balance at 31 December 2015 Less: Allowance for impairment losses (Note 6(20)) Balance at 1 January 2014 Charge for the year Written back on disposal Exchange difference Balance at 31 December 2014 Charge for the year Written back on disposal Exchange difference Balance at 31 December 2015 Net carrying amount At 31 December 2015 At 31 December 2014	Land use rights 13,365,699 1,594,236 (3,277,755) 8,928 11,691,108 1,005,966 40,682 (63,108) (22,741) 12,651,907 (743,579) (211,505) 352,560 (1,223) (603,747) (235,538) (5,124) 4,855 (108) (839,662) (11,798) - 11,892 (94) - - - - - 11,812,245 11,087,361	Mining assets 14,362,369 19,873 (13,713,461) 106,526 775,307 194 - - 47,944 823,445 (177,532) (47,045) 98,979 (5,304) (130,902) (28,242) - - (9,246) (168,390) (35,005) (44,498) - (2,024) (81,527) (327,956) - (19,246) (428,729) 226,326 562,878	Roads and tunnels operating rights 12,429,954 596,772 (3,579,877) 12,105 9,458,954 28,869 - - - 9,487,823 (1,701,358) (133,529) 1,331,147 (10,136) (513,876) (127,840) - - - (641,716) - - - - - - - - - 8,846,107 8,945,078	Others 5,279,104 373,704 (2,761,825) (46,441) 2,844,542 1,017,886 1,711,239 (26,316) 29,444 5,576,795 (1,696,629) (350,959) 303,563 32,110 (1,711,915) (484,175) (64,322) 25,897 (55,607) (2,290,122) (129,785) - 7,337 (14,490) (136,938) - - (6,188) (143,126) 3,143,547 995,689	Total 45,437,126 2,584,585 (23,332,918) 81,118
					24,769,911
					2,052,915 1,751,921 (89,424) 54,647
					28,539,970
					(4,319,098) (743,038) 2,086,249 15,447
					(2,960,440)
					(875,795) (69,446) 30,752 (64,961)
					(3,939,890)
					(176,588) (44,498) 19,229 (16,608)
					(218,465)
					(327,956) - (25,434)
					(571,855)
					24,028,225
					21,591,006

As at 31 December 2015, the Group was in the process of applying the ownership certificate in respect of certain land use rights of RMB45 million (31 December 2014: RMB50 million).

91 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(17) Goodwill

The Group

Cost Balance at 1 January 2014 Additions Decrease Balance at 31 December 2014 Additions (Note 6(55) ) Decrease Exchange difference Balance at 31 December 2015 Less:Allowance for impairment losses Balance at 1 January 2014 Charge for the year Decrease Balance at 31 December 2014 Exchange difference Balance at 31 December 2015 Net carrying amount At 31 December 2015 At 31 December 2014	11,153,750 5,932 (8,085,280)
	3,074,402
	4,822,156 - (17,595)
	7,878,963
	(338,050) (846) 61,375
	(277,521)
	(7,686)
	(285,207)
	7,593,756
	2,796,881

Goodwill is allocated to the Group’s cash-generating units identified in segments as follows:

Resources and energy Financial services Manufacturing Real estates Others	31 December 2015 1,161,452 1,281,084 303,450 106,458 4,741,312 7,593,756	31 December 2014 1,164,094 1,221,586 304,743 106,458 -
		2,796,881

Based on management’s impairment assessment, no impairment loss was recognised for the year ended 31 December 2015 (2014: Nil).

92 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(18) Deferred tax assets and liabilities

Non-offset deferred tax assets and deferred tax liabilities：

The Group

Tax losses Accrued expenses Impairment loss on assets other than fixed and intangible assets Fair value changes of financial instruments Fixed assets and intangible assets Others				Deferred taxassets	Deferred taxassets
	assets	Balance at 1 January 2015 418,390 2,228,752 8,610,531 335,998 31 738,041 12,331,743	Credited/(charged) to profit or loss (135,963) (833,274) 1,352,574 4,860 340,864 156,144 885,205	Charged to equity - 5,842 3,230 47,169 - 279,498 335,739	Business combination (Note 6(55)) - - - - 4,265 - 4,265	Exchange difference and others (20,459) (83,999) 71,088 (151,213) (73,550) (75,112) (333,245)	Balance at 31 December 2015 261,968 1,317,321 10,037,423 236,814 271,610 1,098,571
							13,223,707

93 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(18) Deferred tax assets and liabilities (Continued)

Deferred tax assets and liabilities (Continued)
Tax losses Accrued expenses Impairment loss on assets other than fixed assets and intangible assets Fair value changes of financial instruments Fixed assets and intangible assets Others			Deferred tax assets
	Balance at 1 January 2014 4,142,517 2,097,156 3,088,130 1,881,514 4,275 1,426,296 12,639,888	Credited/(charged) to profit or loss (236,041) 168,404 2,624,648 (27,534) (3,134) 43,472 2,569,815	Credited/(charged) to equity - (2,891) - (1,328,787) - 15,426 (1,316,252)	Exchange difference and others (3,488,086) (33,917) 2,897,753 (189,195) (1,110) (747,153) (1,561,708)	Balance at 31 December 2014 418,390 2,228,752 8,610,531 335,998 31 738,041
					12,331,743

94 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(18) Deferred tax assets and liabilities (Continued)

Non-offset deferred tax assets and deferred tax liabilities (Continued) ：

The Group

Fair value changes of financial instruments Fixed assets and intangible assets Revaluation of Investment properties Others			Deferred tax liabilities	Deferred tax liabilities
	Balance at 1 January 2015 (1,572,912) (84,355) (680,562) (836,395) (3,174,224)	Credited to profit or loss (363,063) (16,324) (17,069) (253,717) (650,173)	Charged/ (credited) to equity (399,078) - (74,644) (208,433) (682,155)	Business combination (Note 6(55)) - (135,158) - (187,494) (322,652)	Exchange difference and others 31,191 (21,608) 87,720 (172,609) (75,306)	Balance at 31 December 2015 (2,303,862) (257,445) (684,555) (1,658,648)
						(4,904,510)

95 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(18) Deferred tax assets and liabilities (Continued)

Fair value changes of financial instruments Fixed assets and intangible assets Revaluation of Investment properties Others			Deferred tax liabilities	Deferred tax liabilities
	Balance at 1 January 2014 (372,577) (231,834) (2,464,584) (1,421,093) (4,490,088)	Credited/ (charged) to profit or loss (923) (25,883) (123,469) 195,580 45,305	Credited/ (charged) to equity (1,321,084) - - 201 (1,320,883)	Exchange difference and others 121,672 173,362 1,907,491 388,917 2,591,442	Balance at 31 December 2014 (1,572,912) (84,355) (680,562) (836,395)
					(3,174,224)

96 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(18) Deferred tax assets and liabilities (Continued)

The Company

	Deferred tax liabilities	Deferred tax liabilities
Balance at 1 January 2015 (111,868) - (111,868)	Credited to equity Charged to profit or loss 82,481 - - (310,361) 82,481 (310,361) Deferred tax liabilities		Balance at 31 December 2015 (29,387) (310,361)
			(339,748)

Balance at 1 January 2014 (41,052)	Charged to equity (70,816)	Charged to profit or loss -	Balance at 31 December 2014 (111,868)

(a) The net balances of after offsetting at the balance sheet date are as follows: deferred tax assets and liabilities:

The Group

Deferred tax assets Deferred tax liabilities The Company Deferred tax liabilities	31 December 2015 10,714,176 (2,394,979) 8,319,197 31 December 2015 (339,748)	31 December 2014 11,761,117 (2,603,598)
		9,157,519
		31 December 2014 (111,868)

97 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(18) Deferred tax assets and liabilities (Continued)
(b) Deferred tax assets not recognised

The Group has not recognised any deferred tax assets in respect of the following items:

The Group

Deductible temporary differences Tax losses	31 December 2015 1,804,227 4,489,913 6,294,140	31 December 2014 1,381,429 4,941,873
		6,323,302

It is not probable that future taxable profits against which the above deductible temporary differences and tax losses can be utilised by the Group. As at 31 December 2015, tax losses amounting to RMB 4,430 million (31 December 2014: RMB4,052 million) that can be carried forward against future taxable income are expiring within 5 years.

(c) Deferred tax liabilities not recognised

As at 31 December 2015 and 2014, the Group has not recognised any temporary differences relating to the undistributed profits of certain subsidiaries as the Group does not intend to have these subsidiaries making any profit distribution in the foreseeable future.

(19) Borrowing from central bank

The Group’s borrowing from central bank is borrowed by a subsidiary under the financial services segment.

98 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(20) Provisions for impairment

As at 31 December 2015, the movements of allowance for impairment losses of the Group are set out as follows:

Note Deposits and placements with banks and non- bank financial institutions 6(1),6(2) Trade and other receivables 6(5) Inventories 6(6) Loans and advances to customers and other parties 6(8) Available-for-sale financial assets 6(9) Held-to-maturity investments 6(10) Investments classified as receivables 6(11) Long-term equity investments 6(12) Fixed assets 6(14) Construction in Progress 6(15) Intangible assets 6(16) Others	Balance at 1 January 2015 7,659 3,177,549 2,443,600 54,517,733 1,455,535 41,425 414,035 4,031,216 1,922,566 4,995 218,465 1,901,119 70,135,897	Charge for the year - 3,803,278 558,394 40,837,815 607,367 482 3,822,100 382,072 713,026 84,393 327,956 1,283,153 52,420,036	Decrease Reversal Recovery of write- off/(write- off) - 469 (504,445) (2,386,175) (68,340) (153,741) (2,441,069) (29,140,948) (580,766) (760,154) (3,681) 2,537 (90,391) (3,148,695) - (1,350,707) - (12,847) - - - - (362,564) (12,454) (4,051,256) (36,962,715)	Exchange difference and others - 17,426 173,337 137,691 (7,553) 21 1 151,662 127,997 (2,771) 25,434 31,939 655,184	Balance at 31 December 2015 8,128 4,107,633 2,953,250 63,911,222 714,429 40,784 997,050 3,214,243 2,750,742 86,617 571,855 2,841,193
			Reversal - (504,445) (68,340) (2,441,069) (580,766) (3,681) (90,391) - - - - (362,564) (4,051,256)
					82,197,146

99 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(20) Provisions for impairment (Continued)

As at 31 December 2014, the movements of allowance for impairment losses of the Group are set out as follows:

Note Deposits and placements with banks and non-bank financial institutions 6(1),6(2) Trade and other receivables 6(5) Inventories 6(6) Loans and advances to customers and other parties 6(8) Available-for-sale financial assets 6(9) Held-to-maturity investments 6(10) Investments classified as receivables 6(11) Long-term equity investments 6(12) Fixed assets 6(14) Construction in Progress 6(15) Intangible assets 6(16) Others	Balance at 1 January 2014 14,849 2,059,702 2,419,230 43,953,497 1,587,347 48,147 - 2,712,447 2,572,722 585,564 176,588 1,828,676 57,958,769	Charge for the year - 2,373,369 771,578 25,892,372 461,080 - 414,035 1,342,213 13,382 - 44,498 544,213 31,856,740	Decrease Reversal Recovery of write- off/(write-off) (27,218) 20,028 (180,760) (1,075,154) (65,821) (525,648) (3,588,568) (11,528,759) (66,883) (526,009) (6,547) (175) - - - (23,444) - (703,396) - (585,111) - (19,229) (239,856) (231,914) (4,175,653) (15,198,811)	Exchange difference and others - 392 (155,739) (210,809) - - - - 39,858 4,542 16,608 - (305,148)	Balance at 31 December 2014 7,659 3,177,549 2,443,600 54,517,733 1,455,535 41,425 414,035 4,031,216 1,922,566 4,995 218,465 1,901,119
			Reversal (27,218) (180,760) (65,821) (3,588,568) (66,883) (6,547) - - - - - (239,856) (4,175,653)
					70,135,897

The reasons for recognising allowance for impairment losses are set out in respective notes to the impaired assets.

100 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(21) Placements from banks and non-bank financial institutions The Group Banks Non-bank financial institutions Analysed by remaining maturity: Within 3 months Between 3 months and 1 year Over 1 year (22) Trade and other payables The Group Bills payables Trade payables Advances from customers Other payables (note (a)) Interest payables Dividends payables Others		31 December 2015 34,980,233 13,729,419 48,709,652 31 December 2015 36,500,451 11,874,298 334,903 48,709,652 31 December 2015 615,356 32,714,138 23,285,603 63,245,600 39,308,743 7,896,156 11,974,831 179,040,427	31 December 2014 19,135,535 -
			19,135,535
			31 December 2014 14,178,979 4,405,846 550,710
			19,135,535
			31 December 2014 1,175,160 28,940,934 27,062,947 34,354,828 39,095,719 60,279 2,021,233
			132,711,100

101 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(22) Trade and other payables (Continued) The Company Other payables (note (a)) Interest payables Dividends payables (a) Other payables The Group Related parties Third parties The Company Subsidiaries Related parties Third parties	31 December 2015 23,583,826 933,009 7,770,000 32,286,835 31 December 2015 15,210,801 48,034,799 63,245,600 31 December 2015 11,101,291 12,463,048 19,487 23,583,826	31 December 2014 12,568,870 815,089 -
		13,383,959
		31 December 2014 1,855,288 32,499,540
		34,354,828
		31 December 2014 11,485,178 1,048,828 34,864
		12,568,870

102 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(23) Financial assets sold under repurchase agreements

The Group Analysis by types of counterparties: The People’s Bank of China Banks Non-bank financial institutions Analysis by types of collateral: Debt securities Discounted bills	31 December 2015 8,917,080 60,281,194 1,970,000 71,168,274 31 December 2015 43,676,072 27,492,202 71,168,274	31 December 2014 6,460,248 34,446,042 703,000
		41,609,290
		31 December 2014 35,149,042 6,460,248
		41,609,290

103 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(24) Deposits from banks and non-bank financial institutions and customers

The Group 31 December 2015 Demand deposits - Corporate customers 1,167,702,604 - Personal customers 178,916,865 1,346,619,469 Time and call deposits - Corporate customers 1,446,939,476 - Personal customers 362,433,228 1,809,372,704 Deposits from banks and non-bank financial institutions 1,068,522,315 Outward remittance and remittance payables 6,556,578 4,231,071,066 Deposits from customers include pledged deposit for the following items: The Group 31 December 2015 Bank acceptances 292,556,563 Letters of credit 9,241,428 Guarantees 21,775,231 Others 121,311,044 444,884,266	31 December 2014 948,963,406 147,657,691
	1,096,621,097 1,364,545,362 366,491,385
	1,731,036,747 687,273,715 6,218,976
	3,521,150,535
	31 December 2014 268,607,346 23,634,286 15,283,118 149,326,662
	456,851,412

104 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(25) Employee benefits payable

The Group Short-term employee benefits (note (a)) Post-employment benefits-Defined contribution plans (note (b)) Termination benefits Other long-term employee benefits	31 December 2015 13,252,390 230,513 87,414 418,931 13,989,248	31 December 2014 15,076,365 96,027 3,153 478,576
		15,654,121

105 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated) [English translation for reference only]

6 Notes to the consolidated financial statements (Continued)
(25) Employee benefits payable (Continued)
(a) Short-term employee benefits

Salaries, bonuses and allowances Staff welfare Social insurance - Medical insurance - Work-related injury insurance - Maternity insurance Housing funds Labour union fee, staff and workers’ education fee Short-term paid absences Other short-term employee benefits	Balance at 1 January 2015 13,740,675 330,159 54,770 4,124 1,406 59,097 829,023 - 57,111 15,076,365	Accrued 22,755,203 1,445,385 1,315,434 30,952 15,073 1,541,106 779,733 6,013 427,439 28,316,338	Paid (20,896,985) (1,592,797) (1,303,191) (31,238) (15,423) (1,536,109) (554,462) (2,212) (426,611) (26,359,028)	Transfers (note (i)) (3,781,285) - - - - - - - - (3,781,285)	Balance at 31 December 2015 11,817,608 182,747 67,013 3,838 1,056 64,094 1,054,294 3,801 57,939
					13,252,390

Notes:

(i) This represents deferred emoluments payable in respect of services provided to the Group. Such amount will be distributed according to plans. As at 31 December 2015, the deferred emolument payable amounted to RMB 3,781 million and was included in “other liabilities”.

106 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)
(25) Employee benefits payable (Continued)
(a) Short-term employee benefits (Continued)

Salaries, bonuses and allowances Staff welfare Social insurance - Medical insurance - Work-related injury insurance - Maternity insurance Housing funds Labour union fee, staff and workers’ education fee Short-term paid absences Other short-term employee benefits	Balance at 1 January 2014 13,073,665 203,810 106,732 4,134 1,300 47,341 658,909 - 194,002 14,289,893	Accrued 21,544,336 1,686,703 1,110,183 26,630 26,822 1,310,317 754,537 2,805 509,366 26,971,699	Paid (20,877,326) (1,560,354) (1,162,145) (26,640) (26,716) (1,298,561) (584,423) (2,805) (646,257) (26,185,227)	Balance at 31 December 2014 13,740,675 330,159 54,770 4,124 1,406 59,097 829,023 - 57,111
				15,076,365

107 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(25) Employee benefits payable (Continued)
(b) Post-employment benefits – defined contribution plans

Basic pension insurance Unemployment insurance Annuity payment and supplementary pension Others Basic pension insurance Unemployment insurance Annuity payment and supplementary pension Others	Balance at 1 January 2015 31,916 2,568 10,285 51,258 96,027 Balance at 1 January 2014 29,020 2,710 6,095 5,955 43,780	Accrued 1,700,293 111,747 1,046,013 140,679 2,998,732 Accrued 1,353,914 99,002 424,316 78,356 1,955,588	Paid (1,696,929) (110,172) (1,029,059) (28,086) (2,864,246) Paid (1,351,018) (99,144) (420,126) (33,053) (1,903,341)	Balance at 31 December 2015 35,280 4,143 27,239 163,851
				230,513
				Balance at 31 December 2014 31,916 2,568 10,285 51,258
				96,027

108 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(26) Bank and other loans

Analysis by types of collaterals:

The Group

Bank loans - Unsecured loans - Loans pledged with assets - Guaranteed loans Other loans - Unsecured loans - Loans pledged with assets - Guaranteed loans	31 December 2015 38,872,976 14,427,233 593,184 53,893,393 15,060,953 1,121,914 - 16,182,867 70,076,260	31 December 2014 51,325,286 12,505,038 915,439
		64,745,763
		25,713,700 1,010,000 109,525
		26,833,225
		91,578,988

As at 31 December 2015, certain of the Group’s cash and deposits, inventories, fixed assets and intangible assets with an aggregate carrying amount of RMB18.30 billion (31 December 2014: RMB26.05 billion) was pledged to secure loans granted to the Group.

As at 31 December 2015, the Company had no loans (31 December 2014: all loans were unsecured loans from banks and financial institutions).

All of the Group’s banking facilities are subject to the fulfilment of covenants relating to balance sheet ratios or ownership of a minimum shareholding in certain entities of the Group, as are commonly found in lending arrangements with financial institutions. If the Group were to breach the covenants the drawn down facilities would become payable on demand. The Group regularly monitors its compliance with these covenants. Further details of the Group’s management of liquidity risk are set out in Note 48(c). As at 31 December 2015, none of the covenants relating to drawn down facilities have been breached (31 December 2014: Nil).

109 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(26) Bank and other loans (Continued)

Analysis by currencies: The Group RMB US$ HK$ Other currencies The Company RMB US$	31 December 2015 46,888,657 15,843,884 411,750 6,931,969 70,076,260 31 December 2015 - - -	31 December 2014 46,348,384 40,067,209 1,583,865 3,579,530
		91,578,988
		31 December 2014 500,000 16,063,905
		16,563,905

110 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(26) Bank and other loans (Continued)

The maturity analysis of loans is as follows: The Group Within one year (inclusive) or on demand Between one and two years (inclusive) Between two and five years (inclusive) Over five years The Company Within one year (inclusive) or on demand Between two and five years (inclusive)	31 December 2015 20,372,801 15,265,276 24,785,706 9,652,477 70,076,260 31 December 2015 - - -	31 December 2014 37,651,110 13,933,013 34,380,951 5,613,914
		91,578,988
		31 December 2014 5,203,981 11,359,924
		16,563,905

111 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(27) Debt instruments issued

The Group Corporate bonds issued Notes issued Subordinated bonds issued Certificates of deposit issued Certificates of interbank deposits issued The Company Corporate bonds issued Notes issued	31 December 2015 25,485,491 58,011,387 77,779,353 8,704,265 171,355,880 341,336,376 31 December 2015 17,453,708 26,716,142 44,169,850	31 December 2014 24,270,496 42,954,307 82,332,911 11,167,387 23,686,303
		184,411,404
		31 December 2014 21,442,974 26,652,439
		48,095,413

112 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(27) Debt instruments issued (Continued)

The maturity analysis of Debt instruments issued is as follows:

The Group Within one year (inclusive) or on demand Between one and two years (inclusive) Between two and five years (inclusive) Over five years The Company Within one year (inclusive) or on demand Between one and two years (inclusive) Between two and five years (inclusive) Over five years	31 December 2015 182,005,654 8,647,601 55,558,960 95,124,161 341,336,376 31 December 2015 3,000,000 4,495,800 15,866,892 20,807,158 44,169,850	31 December 2014 39,558,727 2,517,066 35,318,124 107,017,487
		184,411,404
		31 December 2014 6,996,521 - 14,374,150 26,724,742
		48,095,413

The Group did not have any defaults of principal, interest or other breaches with respect to its debt securities issued during the year ended 31 December 2015 and 2014.

Certain debt securities issued were purchased by certain subsidiaries of the Group. These debt securities issued were eliminated in full on consolidation.

113 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(28) Provisions

The Group

Environment restoration expenditures Others Environment restoration expenditures Others	Balance at 1 January 2015 202,011 263,174 465,185 Balance at 1 January 2014 1,077,912 982,902 2,060,814	Charge for the year 21,312 713,071 734,383 Charge for the year 5,312 96,381 101,693	Payments during the year (6,232) (11,397) (17,629) Payments during the year (6,940) (42,744) (49,684)	Reversal - (5,404) (5,404) Reversal (826,271) (779,134) (1,605,405)	Exchange difference (13,459) 1 (13,458) Exchange difference (48,002) 5,769 (42,233)	Balance at 31 December 2015 203,632 959,445
						1,163,077
						Balance at 31 December 2014 202,011 263,174
						465,185

(29) Paid-in capital

The Company’s paid-in capital structure is as follows:

CITIC Limited	31 December 2015 Amount % 139,000,000 100%	31 December 2014
		Amount % 139,000,000 100.00%

Upon the completion of the Acquisition mentioned in Note 1, the Company became a wholly-owned subsidiary of CITIC Limited.

The movements in the Company’s paid-in capital are as follows:

Paid-in capital	Balance at 1 January 2015 139,000,000	Issue of new shares -	Balance at 31 December 2015 139,000,000

114 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(30) Capital reserve

The Group Capital premium (note (a)) Others The Company Capital premium (note (a)) Others	31 December 2015 39,527,733 (1,477,674) 38,050,059 31 December 2015 48,285,720 1,983,201 50,268,921	31 December 2015 39,527,733 130,891
		39,658,624
		31 December 2015 48,292,684 298,000
		48,590,684

Notes:

(a) The difference between the amount of owners’ contribution and the paid-in capital of the Company was recognised in the capital reserve.
115 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(31) Other comprehensive income

The Group Share of the other comprehensive income of the equity-accounted investee that may be reclassified to profit or loss Gains or losses arising from changes in fair value of available-for-sale financial assets Effective hedging portion of gains or losses arising from cash flow hedging instruments Translation differences arising on translation of foreign currency financial statements Others	31 December 2015	Net-of-tax amount (133,339) 3,643,527 464,336 8,256 (716,448) 3,266,332		31 December 2014
	Before tax amount Tax expense (133,339) - 5,844,038 (2,200,511) 819,473 (355,137) 8,256 - (641,804) (74,644) 5,896,624 (2,630,292)			Before tax amount Tax expense 152,584 - 5,814,279 (2,268,438) 925,836 (387,046) (1,426,219) - (904,433) - 4,562,047 (2,655,484)	Net-of-tax amount 152,584 3,545,841 538,790 (1,426,219) (904,433) 1,906,563

116 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(31) Other comprehensive income (Continued)

The Company

Share of the other comprehensive income of the equity-accounted investee that may be reclassified to profit or loss Gains or losses arising from changes in fair value of available-for-sale financial assets	31 December 2015	31 December 2015	Net-of-tax amount 729,488 352,381 1,081,869		31 December 2014	31 December 2014
	Before tax amount 729,488 381,767 1,111,255	Tax expense - (29,386) (29,386)			Before tax amount 422,923 356,762 779,685	Tax expense - (68,009) (68,009)	Net-of-tax amount 422,923 288,753 711,676

117 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(32) Surplus reserve

The Group and the Company

Note Statutory surplus reserve 34(a) Note Statutory surplus reserve 34(a) (33) General reserve The Group Note General reserve 34(b) Note General reserve 34(b)	Balance at 1 January 2015 3,139,011 Balance at 1 January 2014 1,268,604 Balance at 1 January 2015 19,931,103 Balance at 1 January 2014 15,504,186	Additions 1,579,176 Additions 1,870,407 Additions 9,777,426 Additions 4,426,917	Balance at 31 December 2015 4,718,187
			Balance at 31 December 2014 3,139,011
			Balance at 31 December 2015 29,708,529
			Balance at 31 December 2014 19,931,103

118 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(34) Profit distribution and retained earnings as at the balance sheet date
(a) Appropriation to statutory surplus reserve

In accordance with the Articles of Association and relevant laws and regulations, the Company is required to make appropriations to statutory surplus reserve based on 10% of net profit for the year ended 31 December 2015.

(b) Appropriation to general reserve

Pursuant to the relevant notices issued by regulatory bodies, certain subsidiaries in the financial services segment in the Mainland China are required to set aside a general reserve to cover potential losses.

As at 31 December 2015, the consolidated retained earnings attributable to owners’ of the Company included an appropriation of RMB 8,286 million (31 December 2014: RMB3,532 million) to surplus reserve made by the subsidiaries.

(d) Profit distribution for the year ended 31 December 2015

In accordance with the resolution at the Board of Directors’ 50th meeting, dated on 29 December 2015, the Company proposed a dividend in the amount of RMB 7,770 million to the parent company.

Further details of appropriation of profits for the year ended 31 December 2015 are set out in Note 6(52).

119 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(35) Operating income

The Group

Operating income from non-financial services business - Sales of goods - Services rendered to customers - Revenue from construction contracts Net interest income (note (a)) Net fee and commission income (note (b)) Investment income from financial services business Other income from financial services business The Company Interest income from loans to customers Fee and commission income Losses arising from changes in fair value Investment income from financial services business - Associates/joint ventures accounted for under the equity method - Equity investment accounted for under the cost method - Gain on disposal Other income from financial services business	2015 64,194,001 10,476,563 10,325,964 105,764,685 39,262,733 22,058,105 1,198,298 253,280,349 2015 1,751,634 50,890 (2,508) 3,526,083 10,012,471 9,219,188 164,371 24,722,129	2014 101,770,509 15,736,348 11,679,969 95,937,321 29,808,309 7,354,784 1,983,461
		264,270,701
		2014 1,517,266 42,337 - 2,781,832 16,286,836 295,561 1,096,717
		22,020,549

120 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(35) Operating income (Continued) (a) Net interest income The Group Interest income arising from: Deposits with central banks, banks and non- bank financial institutions Placements with banks and non-bank financial institutions Financial assets held under resale agreements Investments classified as receivables Loans and advances to customers and other parties Investments in debt securities Others Interest expenses arising from: Borrowing from central banks Deposits from banks and non-bank financial institutions Placements from banks and non-bank financial institutions Financial assets sold under repurchase agreements Deposits from customers Debt instruments issued Others Net interest income	2015 9,091,438 2,859,344 3,998,191 46,088,638 136,669,470 18,189,920 18,127 216,915,128 (993,869) (35,821,572) (745,361) (561,099) (64,573,604) (8,382,275) (72,663) (111,150,443) 105,764,685	2014 12,687,236 4,870,601 12,200,007 31,269,658 131,346,505 13,991,623 3,093
		206,368,723
		(350,344) (36,624,434) (1,195,048) (838,524) (66,800,741) (4,615,780) (6,531)
		(110,431,402)
		95,937,321

121 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(35) Operating income (Continued) (b) Net fee and commission income The Group Consultancy and advisory fees Bank card fees Settlement and clearing fees Commission for wealth management services Agency fees and commission Guarantee fees Trustee commission and fees Others Fee and commission expenses Net fee and commission income	2015 6,973,221 13,414,723 1,745,893 5,851,345 3,720,825 3,163,902 5,725,806 679,342 41,275,057 (2,012,324) 39,262,733	2014 5,650,961 8,357,501 2,213,097 3,957,745 1,799,527 3,177,680 6,000,702 310,160
		31,467,373 (1,659,064)
		29,808,309

122 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(36) Operating costs

The Group Costs of goods sold Costs of services rendered Costs of construction contracts	2015 55,388,020 7,047,467 8,210,226 70,645,713	2014 86,719,060 11,040,246 10,142,707
		107,902,013

(37) Profit before income tax

Profit before income tax is arrived at after charging below items in total operating costs:

The Group

Staff costs Property management fees Depreciation Amortisation Operating lease charges Professional fees	2015 30,490,671 4,414,980 3,581,761 1,708,061 468,507 659,937 41,323,917	2014 27,979,013 3,970,615 3,672,353 1,478,765 365,366 505,799
		37,971,911

123 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(38) Financial expenses The Group

Non-financial services business Interest expenses from loans and payables Less: borrowing costs capitalised Net interest expenses Interest income from deposits and receivables Net exchange losses Other financial expenses The Company Interest expenses Interest income from deposits Other financial expenses	2015 7,507,889 (3,105,071) 4,402,818 (1,921,002) 994,303 500,072 3,976,191 2015 2,729,798 (817,805) 75,675 1,987,668	2014 9,439,310 (3,362,423)
		6,076,887
		(1,437,048) 304,393 169,920
		5,114,152
		2014 3,072,362 (489,733) 76,195
		2,658,824

Capitalisation rates applied to funds borrowed are 3.06%-6.86% per annum for the year ended 31 december 2015 (2014: capitalisation rate of 6.08%-7.11%).

124 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(39) Impairment losses

The Group Deposits and placements with banks and non-bank financial institutions Trade and other receivables Inventories Loans and advances to customers and other parties Available-for-sale financial assets Held-to-maturity investments Investments classified as receivables Long-term equity investments Fixed assets Construction in progress Intangible assets Others (40) Gain from changes in fair value The Group Investment properties Financial assets at fair value through profit or loss Derivative financial instruments	2015 - 3,298,833 490,054 38,396,746 26,601 (3,199) 3,731,709 382,072 713,026 84,393 327,956 920,589 48,368,780 2015 81,331 (201) 79,462 160,592	2014 (27,218) 2,192,609 705,757 22,303,804 394,197 (6,547) 414,035 1,342,213 13,382 - 44,498 304,357
		27,681,087
		2014 1,046,316 338 67,815
		1,114,469

125 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(41) Investment (loss)/income The Group Long-term equity investments - Associates/joint ventures accounted for under the equity method - Gain on disposal Others (42) Non-operating income The Group Gain on disposal of fixed assets Gain on disposal of repossessed assets Gain on disposal of intangible assets Total gain on disposal of non-current assets Others (43) Non-operating expenses The Group Donations Loss on disposal of fixed assets Others		2015 (1,146,139) 1,000,168 2,882,442 2,736,471 2015 15,194 87,696 33,715		2014 1,349,619 1,803,085 1,185,268
				4,337,972
				2014 13,118 3,336 18,230
		136,605 1,768,329		34,684 3,763,100
		1,904,934		3,797,784
		2015 30,564 33,844 853,773		2014 34,746 32,717 487,815
		918,181		555,278

126 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(43) Non-operating expenses (Continued)

The Company

Donations Loss on disposal of fixed assets Others Income tax expense Details of income tax expense for the year are as follows: The Group Current income tax expense Deferred income tax The Company Current income tax expense Deferred income tax	2015 - 127 700,111 700,238 2015 18,356,450 (235,032) 18,121,418 2015 1,583,309 310,361 1,893,670	2014 5,000 323 -
		5,323
		2014 19,811,274 (2,615,120)
		17,196,154
		2014 - -
		-

(44) Income tax expense

(a) Details of income tax expense for the year are as follows:

127 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(44) Income tax expense (Continued)

(b) Reconciliation between income tax expense and accounting profit is as follows:

The Group Profit before income tax Income tax expense calculated at statutory tax rate of 25% Effect of different tax rates applicable to certain subsidiaries Tax effect of non-deductible expenses Tax effect of share of results of associates and joint ventures Tax effect of other non-taxable income Deductible temporary difference and tax losses not recognised as deferred tax Others	2015 72,180,882 18,045,221 (65,608) 901,705 (982,093) (997,039) 1,420,287 (201,055) 18,121,418	2014 71,592,689 17,898,172 (428,371) 1,421,116 (1,145,221) (923,682) 453,722 (79,582)
		17,196,154

128 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(44) Income tax expense (Continued)
(b) Reconciliation between income tax expense and accounting profit is as follows (Continued):

The Company

Profit before income tax Income tax expense calculated at statutory tax rate of 25% Tax effect of non-deductible expenses Tax effect of dividend distribution from subsidiaries Tax effect of share of results of associates and joint ventures Tax effect of other non-taxable income Deductible temporary difference and tax losses not recognised as deferred tax Others	2015 17,685,428 4,421,357 9,185 (2,503,118) (881,521) (241,813) 915,205 174,375 1,893,670	2014 18,704,071 4,676,018 43,802 (4,109,527) (691,946) (326) 142,409 (60,430)
		-

129 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(45) Other comprehensive income The Group Items that may be reclassified to profit or loss Share of other comprehensive income of the equity- accounted investee that may be reclassified to profit or loss Less: Net amounts previously recognised in other comprehensive income transferred to profit or loss in the current year Gains arising from changes in fair value of available-for- sale financial assets Less: Tax effect Net amounts previously recognised in other comprehensive income transferred to profit or loss in the current year Effective hedging portion of losses arising from cash flow hedging instruments Less: Tax effect Translation differences arising on translation of foreign currency financial statements and others	2015 (425,933) (20,597) (446,530) 8,080,934 (405,882) (5,136,760) 2,538,292 (179,910) 53,973 (125,937) 2,009,035 3,974,860	2014 178,424 -
		178,424 10,622,868 (2,844,441) 772,934
		8,551,361 (655,543) 194,570
		(460,973) 35,478
		8,304,290

130 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued) (45) Other comprehensive income (Continued) The Company 2015 Items that may be reclassified to profit or loss Share of other comprehensive income of the equity-accounted investee 345,550 Less: Net amounts previously recognised in other comprehensive income transferred to profit or loss in the current year (38,985) 306,565 Gains arising from changes in fair value of available-for-sale financial assets 134,015 Less: Tax effect 82,481 Net amounts previously recognised in other comprehensive income transferred to profit or loss in the current year (152,868) 63,628 370,193	2014 443,741 -
	443,741 272,039 (68,009) 9,808
	213,838
	657,579

131 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(46) Supplementary information to cash flow statement
(a) Reconciliation of net profit to cash flows from operating activities:

The Group

Net profit Add:Impairment losses Depreciation of fixed assets Amortisation of intangible assets Gain on disposal of fixed assets, intangible assets and other long-term assets Gain from changes in fair value Financial expenses Investment income Net movement in deferred tax assets/liabilities (Increase)/decrease in inventories Increase in operating receivables Increase in operating payables Net cash flows from operating activities The Company Net profit Add: Depreciation of fixed assets Impairment losses Loss on disposal of fixed assets Loss from change in fair value Financial expenses Investment income Increase in deferred tax liabilities (Increase) /decrease in operating receivables Increase in operating payables Net cash flows from operating activities	2015 54,059,464 48,368,780 3,581,761 1,708,061 (102,761) (160,592) 2,481,816 (6,523,882) (235,032) (2,740,153) (839,439,340) 715,788,180 (23,213,698) 2015 15,791,758 15,160 2,872,756 127 2,508 2,500,162 (12,633,360) 310,362 (559,256) 2,684,718 10,984,935	2014 54,396,535 27,681,087 3,672,353 1,478,765 (1,967) (1,114,469) 4,639,839 (7,346,882) (2,615,120) 26,868,925 (456,761,703) 395,328,396
		46,225,759
		2014 18,704,071 11,497 6,699 323 - 3,147,957 (3,077,393) - 393,266 10,603,571
		29,789,991

132 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(46) Supplementary information to cash flow statement (Continued)

(b) Change in cash and cash equivalents:

The Group Cash at the end of the year Less:cash at the beginning of the year Add:cash equivalents at the end of the year Less:cash equivalents at the beginning of the year Net increase/(decrease) in cash and cash equivalents The Company Cash and cash equivalents at the end of the year Less:cash and cash equivalents at the beginning of the year Net increase in cash and cash equivalents	2015 25,871,077 (27,485,097) 243,518,627 (228,711,573) 13,193,034 2015 15,777,831 (4,901,897) 10,875,934	2014 27,485,097 (63,331,164) 228,711,573 (202,330,981)
		(9,465,475)
		2014 4,901,897 (3,965,604)
		936,293

133 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(46) Supplementary information to cash flow statement (Continued)

The Group

Cash at bank and on hand - Cash on hand - Bank deposits on demand - Deposits due over three months - Cash with restricted use Cash equivalents - Surplus deposit reserve funds - Investments in debt securities due within three months - Deposits with banks and non-bank financial institutions due within three months - Placements with banks and non-bank financial institutions due within three months Closing balance of cash and cash equivalents Less: deposits due over three months Less: cash with restricted use Closing balance of cash and cash equivalents available on demand	2015 7,382,155 18,488,922 5,298,295 5,504,502 63,657,461 20,067,802 95,335,202 64,458,162 280,192,501 (5,298,295) (5,504,502) 269,389,704	2014 7,258,285 20,226,812 11,422,327 6,042,452 70,166,091 16,499,109 93,383,602 48,662,771
		273,661,449 (11,422,327) (6,042,452)
		256,196,670

134 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(46) Supplementary information to cash flow statement (Continued)

Cash and cash equivalents held by the Group and the Company are as follows (Continued):	Cash and cash equivalents held by the Group and the Company are as follows (Continued):
The Company
	2015	2014
Cash at bank and on hand
- Cash on hand	4	2
- Bank deposits on demand	15,777,827	4,901,895
- Deposits due over three months	2,102,549	13,909,691
Closing balance of cash	17,880,380	18,811,588
Less:deposits due over three months	(2,102,549)	(13,909,691)
Closing balance of cash available on demand	15,777,831	4,901,897

(d) The Company’s cash received/paid for other investing activities mainly comprised cash received/paid for short-term investments, including trust plans, wealth management products, funds etc.

135 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(47) Segment reporting

The Group has presented six reportable operating segments which are financial services, resources and energy, manufacturing, engineering contracting, real estate and others. Reportable segments are identified based on operating segments which are determined based on the structure of the Group’s internal organisation, management requirements and internal reporting system. An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose financial performance is regularly reviewed by the board of directors to make decisions about resource to be allocated to the segment and assess its performance, and for which financial information regarding financial position, financial performance and cash flows is available. The details of these six reportable segments are as follows:

Financial services: this segment includes banking, trust, asset management, securities and insurance services.
Resources and energy: the major businesses in this segment include exploration, processing and trading of resources and energy products, including crude oil, coal and iron ore.
Manufacturing: this segment includes manufacturing of special steels, heavy machineries, aluminum wheels and other products.
Engineering contracting: this segment provides contracting and design services for infrastructure, real estate and industrial projects, etc.
Real estate: this segment includes development, sale and holding of properties.
Others: others include various businesses including investment and operation of infrastructures, telecommunication services, motor and food and consumer products business, commercial aviation services, publication services and others.
(a) Segment results, assets and liabilities

For the purposes of assessing segment performance and allocating resources among segments, the board of directors monitors the results, assets and liabilities attributable to each reportable segment on the following bases:

Segment assets are those assets that are attributable to a segment, and segment liabilities are those liabilities that are attributable to a segment.

136 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(47) Segment reporting (Continued)
(a) Segment results, assets and liabilities (Continued)

Revenue and expenses are allocated to the reportable segments with reference to revenue generated by those segments and the expenses incurred by those segments or which otherwise arise from the depreciation of assets attributable to those segments.

The measure used for reporting segment profit is “profit for the year”. To arrive at segment results, the Group’s profit is further adjusted for items not specifically attributed to individual segments, such as share of results of associates and joint ventures and head office or corporate administrative costs.

Inter-segment pricing is based on similar terms as those available to other external parties.

137 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)
(47) Segment reporting (Continued)
(a) Segment results, assets and liabilities (Continued)

Information regarding the Group’s reportable segments as provided to the board of directors for the purposes of resources allocation and assessment of segment performance for the years ended 31 December 2015 and 2014 is set out below:

2015

Operating income from external customers Inter-segment operating Income Segment operating income (Loss)/income from investments in associates and joint ventures Interest income from deposits and receivables Net interest expenses Depreciation and amortisation Impairment losses Profit/(loss) beforeincome tax Income tax Profit/(loss) for the year - Attributable to owners of the Company - Attributable to Non-controlling Interests	Financial services 166,660,494 666,008 __ 167,326,502 _ - - - (2,479,100) (44,790,884) __ 70,277,855 (15,842,945) _ 54,434,910 40,439,284 13,995,626 _____	Resources and energy Manufacturing 27,941,188 20,219,469 1,789,562 - __ _ 29,730,750 20,219,469 __ _ (1,839,298) 35,015 320,716 262,887 (410,531) (381,152) (768,357) (956,342) (3,172,149) (100,243) __ _ (5,388,738) 979,236 (117,425) (286,231) __ _ (5,506,163) 693,005 (4,118,264) 703,538 (1,387,899) (10,533) __ __	Engineering contracting 11,779,403 85,381 _ 11,864,784 __ 29,715 345,724 (66,846) (108,234) (5,621) _ 2,800,290 (711,481) _ 2,088,809 2,088,658 151 _____	Real estate 17,616,050 62,819 _ 17,678,869 _ 43,493 399,181 (1,697,329) (104,644) 87,086 _ 1,794,734 (606,295) _ 1,188,439 989,213 199,226 ____	Others 7,359,696 485,365 _ 7,845,061 _ 584,936 54,824 (688,791) (853,830) (302,325) _ 1,883,391 (600,607) _ 1,282,784 1,048,237 234,547 __	Operations Management 1,704,049 1,532,347 _ 3,236,396 _ - 1,017,690 (3,013,682) (19,315) (84,644) _ 397,351 (312,870) _ 84,481 84,481 - ____	Elimination - (4,621,482) ___ (4,621,482) _ - (480,020) 1,855,513 - - __ (563,237) 356,436 _ (206,801) (206,801) - ____	Total 253,280,349 - _ 253,280,349 _ (1,146,139) 1,921,002 (4,402,818) (5,289,822) (48,368,780) _ 72,180,882 (18,121,418) _ 54,059,464 41,028,346 13,031,118 ____

138 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)
(47) Segment reporting (Continued)
(a) Segment results, assets and liabilities (Continued)

Information regarding to the Group’s reportable segments set out below regularly reviewed by the board of directors: (Continued)：

2015 (Continued):

Segment assets Including: Investments in associates Investments in joint ventures Segment liabilities Including: Bank and other loans Debt instruments issued	Financial services 5,203,683,495 24,236,582 3,178,832 (4,839,607,611) (1,121,914) (289,134,743) __	Resources and energy Manufacturing 38,451,001 36,842,855 9,121,130 2,228,192 - - (23,070,268) (21,652,446) (10,373,590) (7,723,259) - (2,789,704) __ ___	Engineering contracting 35,392,383 181,683 - (25,524,243) (1,074,040) - ______	Real estate Others 135,364,341 55,599,966 621,631 3,793,895 2,063,343 939,915 (119,250,436) (38,419,234) (69,409,473) (20,829,389) (3,979,075) (1,510,432) __ __	Operations Management 87,357,359 61,289 - (88,467,654) (780,000) (44,478,312) _____	Elimination Total (121,368,579) 5,471,322,821 - 40,244,402 - 6,182,090 121,839,201 (5,034,152,691) 41,235,405 (70,076,260) 555,890 (341,336,376) __ __

139 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)
(47) Segment reporting (Continued)
(a) Segment results, assets and liabilities (Continued)

’ Information regarding to the Group s reportable segments set out below regularly reviewed by the board of directors: (Continued)：

2014 (Restated)：

Operating income from external customers Inter-segment operating income Segment operating income Income/(loss) from investments in associates and joint ventures Interest income from deposits and receivables Net interest expenses Depreciation and amortisation Impairment losses Profit before income tax Income tax Profit/(loss) for the year - Attributable to owners of the Company - Attributable to Non-controlling Interests		Financial services 133,380,441 (139,298) __ 133,241,143 _ 15,138 - - (2,219,549) (24,757,345) __ 60,726,360 (13,964,033) _ 46,762,327 32,675,220 14,087,107 ___	Resources and energy Manufacturing 41,164,312 32,013,974 870,627 - __ _ 42,034,939 32,013,974 __ _ 516,654 36,099 310,515 227,639 (523,848) (944,347) (669,806) (1,116,590) (1,668,877) (161,151) __ _ 730,524 1,527,301 (411,762) (237,522) __ _ 318,762 1,289,779 819,545 976,446 (500,783) 313,333 __ __		Engineering contracting 13,628,626 178,771 _ 13,807,397 __ 46,796 421,063 (54,182) (110,436) (37,624) _ 2,599,592 (710,563) _ 1,889,029 1,886,356 2,673 _____	Real estate 20,751,485 198,855 __ 20,950,340 _ 342,785 421,649 (1,598,652) (123,939) (466,618) __ 3,367,425 (1,049,065) _ 2,318,360 1,750,320 568,040 ______	Others 21,760,179 93,769 _ 21,853,948 _ 508,575 49,359 (840,039) (899,301) (779,864) _ 2,810,781 (758,175) _ 2,052,606 1,620,892 431,714 _____	Operations Management 1,571,684 (215,380) __ 1,356,304 _ (116,428) 2,131,700 (3,369,320) (11,497) (6,699) __ (263,466) (53,917) _ (317,383) (317,383) - _____	Elimination - (987,344) _ (987,344) _ - (2,124,877) 1,253,501 - 197,091 _ 94,172 (11,117) _ 83,055 83,055 - ___	Total 264,270,701 - _ 264,270,701 _ 1,349,619 1,437,048 (6,076,887) (5,151,118) (27,681,087) _ 71,592,689 (17,196,154) _ 54,396,535 39,494,451 14,902,084 ______

140 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)
(47) Segment reporting (Continued)
(a) Segment results, assets and liabilities (Continued)

Information regarding to the Group’s reportable segments set out below regularly reviewed by the board of directors: (Continued)：

2014 (Restated) (Continued):

Segment assets Including: Investments in associates Investments in joint ventures Segment liabilities Including: Bank and other loans Debt instruments issued	Financial services 4,198,767,191 22,567,695 2,834,282 (3,887,533,707) - (133,488,468) _______	Resources and energy Manufacturing 45,778,637 37,815,735 9,373,229 2,440,145 1,676,511 - (28,183,043) (24,419,814) (13,226,170) (7,310,753) - (2,786,719) __ __	Engineering contracting 34,725,361 131,484 - (28,256,697) (1,689,750) - _____	Real estate 119,076,606 518,963 1,508,117 (104,492,154) (59,149,746) - ______	Others 36,147,560 3,701,793 2,215,791 (18,666,902) (12,403,122) - _____	Operations Management 83,852,097 85,692 - (87,735,508) (27,777,283) (48,357,441) _____	Elimination (84,092,120) - - 84,437,433 29,977,836 221,224 _____	Total 4,472,071,067 38,819,001 8,234,701 (4,094,850,392) (91,578,988) (184,411,404) _______

141 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(47) Segment reporting (Continued)

(b) Geographic information

An analysis of the Group’s revenue and total assets by geographical area are as follows:

Mainland China Hong Kong and Macau Overseas	Revenue from external customers 2015 2014 231,112,823 234,075,549 5,459,688 10,908,465 16,707,838 19,286,687 253,280,349 264,270,701	Reportable segment assets	Reportable segment assets
	2015 231,112,823 5,459,688 16,707,838 253,280,349	31 December 2015 5,186,914,164 261,881,479 22,527,178 5,471,322,821	31 December 2014 4,224,590,942 222,413,880 25,066,245
			4,472,071,067

Operating income from each individual customer of the Group is below 10% of the Group’s total operating income for the year ended 31 December 2015.

142 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(48) Financial risk management

Exposure to credit, liquidity, interest rate and currency risks arises in the normal course of the business of the Group. The Group has established policies and procedures to identify and analyse these risks, to set appropriate risk limits and controls, and to constantly monitor the risks and limits by means of reliable and up-to-date management information systems. The Group regularly updates and enhances its risk management policies and systems to reflect changes in markets, products and best practice risk management processes. Internal auditors also perform regular audits to ensure compliance with policies and procedures.

The Group’s exposure to these risks and the financial risk management policies and practices used by the Group to manage these risks are described below.

(a) Credit risk

Credit risk represents the potential loss that may arise from a customer or counterparty’s failure to meet its obligation when due. For loan business, the Group identifies and manages the credit risk through its definitions of target markets, credit approval process, strict counterparty selection and due diligence procedures, ongoing evaluation of the contractual capacity and collaterals of counterparties, and risk prevention and mitigation measures. In respect of treasury business, credit risk mainly represents impairment losses of debt securities due to default by issuers, and, inability of derivative counterparties in fulfilling their obligations. The Group sets credit limits for treasury activities and monitors them regularly with reference to the fair values of the relevant financial instruments.

The Group is also confronted with credit risk resulting from receivables that arising from sale of goods and rendering of services within the non-financial services segments. The relevant subsidiaries have established a credit policy under which individual credit evaluations are performed on all customers to determine the credit limit and terms applicable to the customers. These evaluations focus on the customers’ financial position, the external ratings of the customers and their bank credit records where available.

143 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(48) Financial risk management (Continued)
(a) Credit risk (Continued)
(I) Maximum credit risk exposure

The maximum exposure to credit risk as at the balance sheet date without taking into consideration of any collateral held or other credit enhancement is represented by the net balance of each type of financial assets in the balance sheet after deducting any impairment allowance. A summary of the maximum exposure is as follows:

The Group

Deposits with central banks, banks and non- bank financial institutions Placements with banks and non-bank financial institutions Financial assets at fair value through profit or loss Derivative financial assets Financial assets held under resale agreements Loans and advances to customers and other parties Available-for-sale financial assets Held-to-maturity investments Investments classified as receivables Other financial assets Credit commitments and guarantees provided Maximum credit risk exposure	31 December 2015 640,554,503 118,776,469 28,217,703 13,828,942 138,560,904 2,470,554,618 376,807,417 181,184,502 1,115,320,332 86,957,480 5,170,762,870 1,234,971,327 6,405,734,197	31 December 2014 673,412,947 68,180,333 27,527,785 8,252,279 135,764,779 2,140,232,296 208,889,746 178,048,284 658,431,812 79,303,665
		4,178,043,926 1,312,812,622
		5,490,856,548

As to the definition of credit risk, the equity instruments included in financial assets at fair value through profit or loss, available-for-sale financial assets and long-term equity investment have no credit risk.

144 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(48) Financial risk management (Continued)
(a) Credit risk (Continued)
(II) Distribution by credit exposure is as follows:

The Group

Impaired Individually assessed Gross balance Allowance for impairment loss Collectively assessed Gross balance Allowance for impairment losses Overdue but not impaired gross balance (note (i)) Gross balance Within which: - Within 3 months - Between 3 months and 1 year - Over 1 year Allowance for impairment loss Neither overdue nor impaired Gross balance Allowance for impairment loss(note (ii)) Net balance			31 December 2015	31 December 2015
		Loans and advances to customers and other parties 31,076,461 (18,408,671) __ 12,667,790 __ 8,003,646 (5,846,397) __ 2,157,249 __ 41,802,208 35,184,642 6,617,566 - (5,600,303) __ 36,201,905 __ 2,453,583,525 (34,055,851) __ 2,419,527,674 _ 2,470,554,618 _	Due from central banks, banks and non-bank financial institutions 30,463 (8,128) __ 22,335 __ - - __ - __ - - - - - __ - __ 759,308,637 - __ 759,308,637 _ 759,330,972 __	Financial assets held under resale agreements Debt securities investments and certificates of deposit - 157,848 - (99,743) __ _ - 58,105 ___ __ - - - - _ __ - - __ ___ - - - - - - - - - - _ __ - - __ ___ 138,560,904 583,401,983 - - _ __ 138,560,904 583,401,983 _ __ 138,560,904 583,460,088 _ _____	Investments classified as receivables 27,572 (13,786) __ 13,786 __ - - __ - __ 124,000 124,000 - - (37,200) __ 86,800 __ 1,116,165,810 (946,064) __ 1,115,219,746 _ 1,115,320,332 __

145 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(48) Financial risk management (Continued)
(a) Credit risk (Continued)
(II) Distribution by credit exposure is as follows (Continued) :

The Group (Continued)

Impaired Individually assessed Gross balance Allowance for impairment loss Collectively assessed Gross balance Allowance for impairment losses Overdue but not impaired gross balance (note (i)) Gross balance Within which: - Within 3 months - Between 3 months and 1 year - Over 1 year Allowance for impairment loss Neither overdue nor impaired Gross balance Allowance for impairment loss (note (ii)) Net balance			31 December 2014	31 December 2014
		Loans and advances to customers and other parties 27,705,298 (13,904,940) __ 13,800,358 _ 5,608,015 (3,880,507) __ 1,727,508 _ 47,703,034 42,313,224 5,284,710 105,100 (5,554,726) __ 42,148,308 _ 2,113,733,682 (31,177,560) __ 2,082,556,122 _ 2,140,232,296 _____	Due from central banks, banks and non-bank financial institutions 28,705 (7,659) __ 21,046 _ - - __ - _ - - - - - __ - _ 741,572,234 - __ 741,572,234 _ 741,593,280 _____	Financial assets held under resale agreements Debt securities investments and certificates of deposit - 207,411 - (122,554) __ _ - 84,857 __ _ - - - - __ _ - - __ _ - - - - - - - - - - __ _ - - __ _ 135,764,779 414,237,459 - - __ _ 135,764,779 414,237,459 __ _ 135,764,779 414,322,316 __ __	Investments classified as receivables - - __ - _ - - __ - _ - - - - - __ - _ 658,845,847 (414,035) __ 658,431,812 _ 658,431,812 _____

146 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(48) Financial risk management (Continued)
(a) Credit risk (Continued)
(II) Distribution by credit exposure is as follows (Continued):
(i) Collaterals and other credit enhancements for overdue but not impaired loans and advances

As at 31 December 2015, the corporate loans and advances of the Group which were overdue but not impaired were RMB 30,741 million (31 December 2014: RMB39,141 million). The secured portion and unsecured portion of these loans and advances were RMB17,988 million (31 December 2014: RMB21,634 million) and RMB12,753 million (31 December 2014: RMB17,507 million) respectively. The fair value of collaterals held against these loans and advances amounted to RMB23,701 million (31 December 2014: RMB30,187 million).

(ii) The balances represent collectively assessed allowance of impairment loss.
147 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)
(48) Financial risk management (Continued)
(a) Credit risk (Continued)
(III) Analysis of loans and advances to customers and other parties analysed by economic sector :

The Group

31 December 2015 Gross balance % Loans and advances secured by collaterals 414,171,575 17% 201,539,142 260,674,611 10% 161,574,980 257,688,627 10% 218,959,718 147,797,771 6% 87,059,824 147,534,961 6% 72,339,613 127,434,848 5% 64,321,452 102,602,388 4% 48,009,936 54,704,000 2% 20,219,207 20,834,851 1% 4,879,680 239,648,582 9% 97,666,996 1,773,092,214 70% 976,570,548 668,613,891 26% 478,581,791 92,759,735 4% - 2,534,465,840 100% 1,455,152,339	31 December 2015 Gross balance % Loans and advances secured by collaterals 414,171,575 17% 201,539,142 260,674,611 10% 161,574,980 257,688,627 10% 218,959,718 147,797,771 6% 87,059,824 147,534,961 6% 72,339,613 127,434,848 5% 64,321,452 102,602,388 4% 48,009,936 54,704,000 2% 20,219,207 20,834,851 1% 4,879,680 239,648,582 9% 97,666,996 1,773,092,214 70% 976,570,548 668,613,891 26% 478,581,791 92,759,735 4% - 2,534,465,840 100% 1,455,152,339	31 December 2014	31 December 2014	31 December 2014
Gross balance 414,171,575 260,674,611 257,688,627 147,797,771 147,534,961 127,434,848 102,602,388 54,704,000 20,834,851 239,648,582 1,773,092,214 668,613,891 92,759,735 2,534,465,840	% 17% 10% 10% 6% 6% 5% 4% 2% 1% 9% 70% 26% 4% 100%	Gross balance 384,500,222 290,107,350 178,892,968 84,308,577 138,229,696 111,523,741 101,893,803 51,828,051 19,304,242 211,571,878 1,572,160,528 554,546,239 68,043,262 2,194,750,029	% 18% 13% 8% 4% 6% 5% 5% 2% 1% 10% 72% 25% 3% 100%	Loans and advances secured by collaterals 171,459,812 168,278,651 151,179,900 47,054,192 67,507,776 53,462,775 46,543,530 16,480,186 4,624,290 78,796,162
				805,387,274 406,779,623 -
				1,212,166,897

148 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(48) Financial risk management (Continued)
(a) Credit risk (Continued)
(IV) Loans and advances to customers and other parties analysed by geographical sector:

The Group

Mainland China Hong Kong and Macau Outside Mainland China	31 December 2015 Gross balance % Loans and advances secured by collateral 2,390,950,834 94% 1,395,401,277 122,738,230 5% 46,609,071 21,745,776 1% 13,141,991 2,534,465,840 100% 1,455,152,339	31 December 2015 Gross balance % Loans and advances secured by collateral 2,390,950,834 94% 1,395,401,277 122,738,230 5% 46,609,071 21,745,776 1% 13,141,991 2,534,465,840 100% 1,455,152,339	31 December 2014	31 December 2014	31 December 2014
	Gross balance 2,390,950,834 122,738,230 21,745,776 2,534,465,840	% 94% 5% 1% 100%	Gross balance 2,074,697,383 116,344,174 3,708,472 2,194,750,029	% 95% 5% 0% 100%	Loans and advances secured by collateral 1,168,295,787 43,871,110 -
					1,212,166,897

(V) Rescheduled loans and advances to customers and other parties

The Group

Rescheduled loans and advances overdue less than 3 months Rescheduled loans and advances overdue more than 3 months	31 December 2015 Gross balance % of total loans and advances 3,171,700 0.13% 5,310,487 0.21% 8,482,187 0.34%	31 December 2014	31 December 2014
	Gross balance 3,171,700 5,310,487 8,482,187	Gross balance 6,822,885 8,979,202 15,802,087	% of total loans and advances 0.31% 0.41%
			0.72%

Rescheduled loans and advances are those loans and advances which have been restructured or renegotiated because of deterioration in the financial position of the borrower, or of the inability of the borrower to meet the original repayment schedule and for which the revised repayment terms are a concession that the Group would not otherwise consider.

149 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(48) Financial risk management (Continued)
(a) Credit risk (Continued)
(VI) Offsetting

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

As at 31 December 2015, the Group did not enter into enforceable master netting arrangements with counterparties and therefore there were no offsettings of any assets and liabilities in the consolidated balance sheet.

(b) Market risk

Each of the Group’s operating entity has formulated its own market risk management policies and procedures covering identification, measurement, monitoring and control of risks. The Group manages market risk based on the market condition to control potential loss from market risk at an acceptable level.

Interest rate risk and currency risk are major market risks that confront the Group.

(I) Interest rate risk
(i) Financial asset-liability gap

Interest rate risk arises from mismatch between repricing dates of financial assets and liabilities affected by market interest rate volatility.

The Group

Total financial assets Total financial liabilities Financial asset- liability gap	31 December 2015
	Non-interest bearing Within 3 months Between 3 months and 1 year Between 1 year to 5 years More than 5 years Total 152,653,025 2,415,504,640 1,649,308,276 843,008,947 160,720,883 5,221,195,771 (163,137,788) (2,877,364,376) (1,367,619,937) (457,057,649) (102,617,077) (4,967,796,827) _ _ __ _ _ __ (10,484,763) (461,859,736) 281,688,339 385,951,298 58,103,806 253,398,944 __ __ _ __ _ _____

150 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(48) Financial risk management (Continued)
(b) Market risk (Continued)
(I) Interest rate risk (Continued)
(i) Financial asset-liability gap (Continued)

The Group (Continued)

Total financial assets Total financial liabilities Financial asset- liability gap			31 December 2014	31 December 2014
		Non-interest bearing Within 3 months 153,773,680 2,077,629,327 (97,735,263) (2,525,843,898) __ ___ 56,038,417 (448,214,571) _ __	Between 3 months and 1 year 1,462,299,386 (865,265,701) __ 597,033,685 ___	Between 1 year to 5 years 450,486,943 (344,372,694) __ 106,114,249 _	More than 5 years Total 106,121,270 4,250,310,606 (109,724,116) (3,942,941,672) __ ___ (3,602,846) 307,368,934 __ __

(ii) Effective interest rate

The Group

The Group
Assets Deposits with banks and non-bank financial institutions Placements with banks and non-bank financial institutions Financial assets held under resale agreements Loans and advances to customers and other parties Investments classified as receivables Investments (note (i)) Others	31 December 2015 31 December 2014
	Effective Interest rate 1.22%-1.47% 2.59% 3.90% 5.85% 5.20% 3.86%	RMB‘000 Effective Interest rate 647,936,658 1.49%-3.24% 118,776,469 3.96% 138,560,904 5.27% 2,470,554,618 6.17% 1,115,320,332 6.31% 675,686,860 4.03% 304,486,980 5,471,322,821	RMB‘000 680,671,232 68,180,333 135,764,779 2,140,232,296 658,431,812 513,463,037 275,327,578
			4,472,071,067

151 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)
(48) Financial risk management (Continued)
(b) Market risk (Continued)
(I) Interest rate risk (Continued)
(ii) Effective interest rate (Continued)

The Group

Liabilities Borrowing from central bank Deposits from banks and non-bank financial institutions Placements from banks and non-bank financial institutions Financial assets sold under repurchase agreements Deposits from customers Bank and other loans Debt instruments issued Others	31 December 2015 31 December 2014	31 December 2015 31 December 2014	31 December 2015 31 December 2014
	Effective Interest rate 3.50% 3.80% 1.81% 2.43% 2.16% 0.63%-8.50% 1.00%-7.25%	RMB‘000 Effective Interest rate 37,500,000 3.50% 1,068,522,315 5.08% 48,709,652 1.15% 71,168,274 3.60% 3,162,548,751 2.43% 70,076,260 2.20%-6.77% 341,336,376 3.88%-6.88% 234,291,063 5,034,152,691	RMB‘000 50,050,000 687,273,715 19,135,535 41,609,290 2,833,876,820 91,578,988 184,411,404 186,914,640
			4,094,850,392

Note (i): The Group’s Investments include financial assets at fair value through profit or loss, available-for-sale financial assets, held-to-maturity investments, and long-term equity investments. The calculation of effective interest rates is based on the interest yielding part of the financial assets.
(iii) Sensitivity analysis

As at 31 December 2015, it is estimated that a general increase or decrease of 100 basis points in interest rates, with all other variables held constant, the Group’s profit before taxation would decrease or increase by RMB2,506 million (31 December 2014: decrease or increase by RMB4 million).

This sensitivity analysis is based on a static interest rate risk profile of the Group’s non-derivative assets and liabilities and certain simplified assumptions. The analysis only measures the impact of changes in the interest rates within one year, showing how annualised interest income would have been affected by repricing of the Group’s non-derivative assets and liabilities within the oneyear period. The analysis is based on the following assumptions: (i) all assets and liabilities that reprice or mature within three months and after three months but within one year re-price or mature at the beginning of the respective periods, (ii) there is a parallel shift in the yield curve and in interest rates, and (iii) there are no other changes to the portfolio, all positions will be retained and rolled over upon maturity. The analysis does not take into account the effect of risk management measures taken by management. Because of its hypothetical nature with the assumptions adopted, actual changes in the Group’s profit before taxation resulting from increases or decreases in interest rates may differ from the results of this sensitivity analysis.

152 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(48) Financial risk management (Continued)
(b) Market risk (Continued)
(II) Currency risk

Currency risk arises from the changes in exchange rates on the Group’s foreign currency denominated assets and liabilities. The Group measures its currency risk with foreign currency exposures, and manages currency risk by entering into spot foreign exchange transactions, use of derivatives (mainly foreign forwards and swaps), and matching its foreign currency denominated assets with corresponding liabilities in the same currency.

The exposure to currency risk arising from the financial assets and financial liabilities at the balance sheet date is as follows:

Total financial assets Total financial liabilities Financial asset- liability gap Total financial assets Total financial liabilities Financial asset- liability gap		31 December 2015	31 December 2015
	RMB 4,742,618,787 (4,499,809,576) __ 242,809,211 ____	USD HKD 327,277,944 116,313,335 (303,436,004) (110,552,285) __ _ 23,841,940 5,761,050 ___ ______ 31 December 2014		Others Total 34,985,705 5,221,195,771 (53,998,962) (4,967,796,827) __ _ (19,013,257) 253,398,944 ___ ______
	RMB 3,861,616,700 (3,485,704,356) __ 375,912,344 ____	USD 287,543,449 (338,896,220) __ (51,352,771) ____	HKD 78,952,829 (85,258,311) __ (6,305,482) ____	Others Total 22,197,628 4,250,310,606 (33,082,785) (3,942,941,672) __ _ (10,885,157) 307,368,934 ___ ______

Assuming all other risk variables remained constant, an 100 basis points strengthening or weakening of RMB against US$, HK$ and other currencies as at 31 December 2015 would decrease or increase the Group’s profit before taxation by RMB106 million (31 December 2014: increase or decrease by RMB685 million).

This sensitivity analysis is based on a static foreign exchange exposure profile of assets and liabilities and certain simplified assumptions. The analysis is based on the following assumptions: (i) the foreign exchange sensitivity is the gain and loss recognised as a result of 100 basis point fluctuation in the foreign currency exchange rates against RMB, (ii) the exchange rates against RMB for all foreign currencies change in the same direction simultaneously, and and does not take into account the correlation effect of changes in different foreign currencies; (iii) the foreign exchanges exposures calculated include both spot foreign exchanges, forward foreign exchanges and options, and all positions will be retained and rolled over upon maturity. The analysis does not take into account the effect of risk management measures taken by management. Because of its hypothetical nature with the assumptions adopted, actual changes in the Group’s profit before taxation resulting from increases or decreases in foreign exchange rates may differ from the results of this sensitivity analysis.

153 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(48) Financial risk management (Continued)
(c) Liquidity risk

Liquidity risk arises when mismatch between amounts and maturity dates of financial assets and financial liabilities.

Each of the Group’s operating entity formulate liquidity risk management policies and procedures within the Group’s overall liquidity risk management framework and takes into consideration of the business and regulatory requirements applicable individual entity.

The Group manages liquidity risk by holding liquid assets (including deposits, other short term funds and securities) of appropriate quality and quantity to ensure that short term funding requirements are covered within prudent limits. Adequate standby facilities are maintained to provide strategic liquidity to meet unexpected and material demand for payments in the ordinary course of business.

The following tables indicate the analysis by remaining maturities of the Group’s financial assets and liabilities:

Total financial assets Total financial liabilities Financial asset- liability gap Total financial assets Total financial liabilities Financial asset- liability gap	31 December 2015	31 December 2015	31 December 2015
	Repayable on demand Within 3 months Between 3 month and 1 year Between 1 year and 5 years 226,085,221 1,310,715,458 1,535,414,120 1,082,264,243 (1,660,896,473) (1,325,957,744) (1,373,352,699) (469,501,944) __ _ _ __ (1,434,811,252) (15,242,286) 162,061,421 612,762,299 _ _ __ _____ 31 December 2014			More than 5 years 588,767,568 (136,608,562) __ 452,159,006 __	No maturity date 477,949,161 (1,479,405) __ 476,469,756 __	Total 5,221,195,771 (4,967,796,827) __ 253,398,944 ____
		Repayable on demand Within 3 months Between 3 month and 1 year 224,832,915 940,125,570 1,309,032,745 (1,447,618,786) (1,120,898,704) (844,606,037) __ _ _ (1,222,785,871) (180,773,134) 464,426,708 ___ __ __	Between 1 year and 5 years 831,719,139 (384,590,293) __ 447,128,846 __	More than 5 years 434,366,823 (143,980,814) __ 290,386,009 __	No maturity date 510,233,414 (1,247,038) __ 508,986,376 __	Total 4,250,310,606 (3,942,941,672) ___ 307,368,934 ____

154 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(48) Financial risk management (Continued)

(c) Liquidity risk

Credit Commitments include acceptances, credit card commitments, guarantees, loan commitments, letters of credit and others. The tables below summarise the amounts of credit commitments by remaining contractual maturity.

	31 December 2015	31 December 2015
Within 1 year 631,357,211 149,137,718 85,474,910 89,726,699 91,184,876 - 1,046,881,414	Between 1 and 5 years More than 5 years - - - - 53,388,990 1,106,345 62,722,828 47,095,703 790,748 - 4,222,400 - 121,124,966 48,202,048 31 December 2014		Total 631,357,211 149,137,718 139,970,245 199,545,230 91,975,624 4,222,400
			1,216,208,428

Within 1 year 712,985,442 124,105,795 98,702,793 86,383,221 132,966,202 - 1,155,143,453	Between 1 and 5 years - - 31,808,984 62,156,214 1,756,762 2,567,900 98,289,860	More than 5 years - - 1,632,797 38,543,062 - - 40,175,859	Total 712,985,442 124,105,795 132,144,574 187,082,497 134,722,964 2,567,900
			1,293,609,172

155 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(49) Fair value
(a) Fair value measurement
(I) Fair value hierarchy

The following table presents the fair value information and the fair value hierarchy, at the end of the current reporting period, of the Group’s assets and liabilities which are measured at fair value at each balance sheet date on a recurring or non-recurring basis. The level in which fair value measurement is categorised is determined by the level of the fair value hierarchy of the lowest level input that is significant to the entire fair value measurement. The levels of inputs are defined as follows:

Level 1 inputs: unadjusted quoted prices in active markets that are observable at the measurement date for identical assets or liabilities;

Level 2 inputs: inputs other than Level 1 inputs that are either directly or indirectly observable for underlying assets or liabilities;

Level 3 inputs: inputs that are unobservable for underlying assets or liabilities.

The fair value of the Group’s financial assets and financial liabilities are determined as follows:

If traded in active markets, fair values of financial assets and financial liabilities with standard terms and conditions are determined with reference to quoted market bid prices and ask prices, respectively;

If not traded in active markets, fair values of financial assets and financial liabilities are determined in accordance with generally accepted pricing models or discounted cash flow analysis using prices from observable current market transactions for similar instruments. If there were no available observable current market transactions prices for similar instruments, quoted prices from counterparty is used for the valuation, and management performs analysis on these prices. Discounted cash flow analysis using the applicable yield curve for the duration of the instruments is used for derivatives other than options, and option pricing models are used for option derivatives.

156 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(49) Fair value(Continued)

(a) Fair value measurement (Continued)

(I) Fair value hierarchy (Continued)

The Group

31 December 2015 Recurring fair value measurements assets Financial assets at fair value through profit or loss 33,838,474 Derivative financial assets 13,828,942 Available-for-sale financial assets 413,044,119 Investment properties 5,086,392 __ Total assets measured at fair value on a recurring basis 465,797,927 __ Liabilities Derivative financial liabilities (12,180,375) _____	Level 1 fair value measurements m 3,947,454 17,018 47,640,758 - __ 51,605,230 __ (508) _____	Level 2 fair value easurements 29,822,779 13,808,580 349,651,248 - __ 393,282,607 __ (11,419,150) _____	Level 3 fair value measurements 68,241 3,344 15,752,113 5,086,392 _____ 20,910,090
			__ (760,717) __

As at 31 December 2015, the Group did not have any assets or liabilities measured at fair value on a non-recurring basis (31 December 2014: Nil).

The Group

31 December 2014 Recurring fair value measurements assets Financial assets at fair value through profit or loss 29,384,178 Derivative financial assets 8,252,279 Available-for-sale financial assets 257,611,042 Investment properties 4,735,562 __ Total assets measured at fair value on a recurring basis 299,983,061 __ Liabilities Derivative financial liabilities (7,939,523) _____	Level 1 fair value measurements 3,601,296 16,427 28,298,565 - __ 31,916,288 __ (1,085) _____	Level 2 fair value measurements 25,766,143 8,228,474 203,857,627 - __ 237,852,244 __ (7,335,065) _____	Level 3 fair value measurements 16,739 7,378 25,454,850 4,735,562 __ 30,214,529 __ (603,373) _____

During the year ended 31 December 2015, there were no transfers, between Level 1 and Level 2 of the Group’s above assets and liabilities which are measured at fair value on a recurring basis (31 December 2014: Nil). The Group recognises transfers between different levels at the balance sheet date during which such transfers are made.

157 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(49) Fair value(Continued)
(a) Fair value measurement (Continued)
(II) Level 2 fair value measurement

Level 2 fair value is generally obtained from third party pricing services for identical or comparable assets, or through the use of valuation methodologies using observable market inputs, or recent quotated market prices. Valuation service providers typically gather, analyse and interpret information related to market transactions and other key valuation model inputs from multiple sources, and through the use of widely accepted internal valuation models, providing a theoretical quote on various securities.

For the year ended 31 December 2015, there were no changes in valuation techniques for the recurring Level 2 fair value measurements (31 December 2014: Nil).

(III) Level 3 fair value measurement

The following table shows a reconciliation from the beginning to the ending balances for fair value measurement in recurring Level 3 of the fair value hierarchy:

At 1 January 2015 Total gains/(losses): - in profit or loss - in other comprehensive income Net settlements At 31 December 2015 Total gains/(losses) for the year included in profit or loss for assets and liabilities held in Level 3 as at the balance sheet date		For theyear ended 31 December 2015	For theyear ended 31 December 2015
		Assets Liabilities Financial assets at fair value through profit or loss Derivatives financial assets Available- for-sale financial assets Investment properties Total Derivatives financial liabilities 16,739 7,378 25,454,850 4,735,562 30,214,529 (603,373) 17,519 (1,858) - 108,209 123,870 (157,344) - - 1,252,278 - 1,252,278 - 33,983 (2,176) (10,955,015) 242,621 (10,680,587) - ___ 68,241 3,344 15,752,113 5,086,392 20,910,090 (760,717) 17,519 (1,858) - 108,209 123,870 (157,344)
			(157,344)

158 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(49) Fair value (Continued)
(a) Fair value measurement (Continued)
(III) Level 3 fair value measurement (Continued)

The following table shows a reconciliation from the beginning to the ending balances for fair value measurement in recurring Level 3 of the fair value hierarchy (Continued):

At 1 January 2014 Total gains/(losses): - in profit or loss - in other comprehensive income Net settlements At 31 December 2014 Total losses for the year included in profit or loss for assets and liabilities held in Level 3 as at the balance sheet date		For theyear ended 31 December 2014
	as	Assets Liabilities Financial sets at fair value through profit or loss Derivatives financial assets Available- for-sale financial assets Investment properties Total Derivatives financial liabilities 42,468 12,178 15,716,396 22,774,959 38,546,001 (93,557) - (7,875) (127,030) 1,043,173 908,268 (505,135) - - 3,413,991 - 3,413,991 - (25,729) 3,075 6,451,493 (19,082,570) (12,653,731) (4,681) _ _ 16,739 7,378 25,454,850 4,735,562 30,214,529 (603,373) _ _ - (7,875) (127,030) 1,043,173 908,268 (505,135)

159 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(49) Fair value (Continued)

(b) Fair value of other financial instruments (items not measured at fair value as at the balance sheet date)

Carrying amount Financial assets Held-to-maturity investments 181,184,502 Investments classified as receivables 1,115,320,332 ──────── 1,296,504,834 Financial liabilities Debt instruments issued - Corporate bonds issued 25,485,491 - Notes issued 58,011,387 - Subordinated bonds issued 77,779,353 - Certificates of deposits (not for trading purpose) 8,704,265 - Certificates of interbank deposit issued 171,355,880 ──────── 341,336,376	As a Fair value 186,406,549 1,127,294,518 ──────── 1,313,701,067 25,610,723 59,628,406 83,181,479 8,706,164 171,501,186 ──────── 348,627,958	t 31 December 2015 Level 1 947,450 - ──────── 947,450 2,808,692 - 7,615,103 - - ──────── 10,423,795	Level 2 185,399,099 1,127,294,518 ──────── 1,312,693,617 22,802,031 59,628,406 75,566,376 8,706,164 171,501,186 ──────── 338,204,163	Level 3 60,000 - ──────── 60,000 - - - - - ──────── -

160 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(49) Fair value (Continued)

(b) Fair value of other financial instruments (items not measured at fair value as at the balance sheet date) (Continued)

Financial assets Held-to-maturity investments Investments classified as receivables Financial liabilities Debt instruments issued - Corporate bonds issued - Notes issued - Subordinated bonds issued - Certificates of deposits (not for trading purpose) - Certificates of interbank deposit issued			As a	t 31 December 2014
		Carrying amount 178,048,284 658,431,812 ──────── 836,480,096 24,270,496 42,954,307 82,332,911 11,167,387 23,686,303 ──────── 184,411,404 _____	Fair value 178,240,231 661,611,164 ──────── 839,851,395 24,270,496 43,308,427 83,714,756 11,193,366 24,977,541 ──────── 187,464,586 _____	Level 1 1,535,707 - ──────── 1,535,707 2,827,522 - 7,148,756 - - ──────── 9,976,278 _____	Level 2 176,491,024 661,611,164 ──────── 838,102,188 21,442,974 43,308,427 76,566,000 11,193,366 24,977,541 ──────── 177,488,308 _____	Level 3 213,500 - ──────── 213,500 - - - - - ──────── - _____

161 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(50) Capital management

The Group’s primary objectives when managing capital are to safeguard the Group’s stability and growth, so that it can continue to provide returns for shareholders.

The Group actively and regularly reviews and manages its capital structure, with reference to such financial ratios like debt (total of debt instruments issued and bank and other loans) to total equity ratio, to maintain a balance between the higher shareholders’ returns that might be possible with of borrowings obtained 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.

Certain subsidiaries under the financial services segment are subject to capital adequacy requirements imposed by the external regulators. There was no non-compliance of capital requirements as at 31 December 2015 (31 December 2014: Nil).

162 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(51) Commitments and contingent liabilities
(a) Credit commitments

Credit commitments in connection with the financial services segment of the Group take the form of loan commitments, credit card commitments, financial guarantees and letters of credit.

Loan commitments represent the undrawn amount of approved loans with signed contracts. Credit card commitments represent the credit card overdraft limits authorised by the Group. Financial guarantees and letters of credit represent guarantee provided by the Group to guarantee the performance of customers to third parties. Acceptances comprise undertakings by the Group to pay bills of exchange drawn on customers. The Group expects most acceptances to be settled simultaneously with the reimbursement from the customers.

The contractual amounts of credit commitments by category as at the balance sheet date are set out below. The amounts disclosed in respect of loan commitments and credit card commitments assume that amounts are fully advanced. The amounts of guarantees, letters of credit and acceptances represent the maximum potential loss that would be recognised as at the balance sheet date if counterparties failed to perform as contracted.

163 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(51) Commitments and contingent liabilities (Continued)

(a) Credit commitments (Continued) The Group 31 December 2015 Contractual amount Loan commitments With an original maturity of within 1 year 129,711,232 With an original maturity of 1 year or above 69,833,998 199,545,230 Guarantees 139,970,245 Letters of credit 91,975,624 Acceptances 631,357,211 Credit card commitments 149,137,718 Others 4,222,400 1,216,208,428 Credit commitments analysed by credit risk weighted amount 31 December 2015 Credit risk weighted amount on credit commitments 391,878,109	31 December 2014 140,358,692 46,723,805
	187,082,497 132,144,574 134,722,964 712,985,442 124,105,795 2,567,900
	1,293,609,172
	31 December 2014 455,254,264

164 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(51) Commitments and contingent liabilities (Continued)
(a) Credit commitments (Continued)

The Company Guarantees Others	31 December 2015 3,081,260 4,222,400 7,303,660	31 December 2014 3,306,923 2,567,900
		5,874,823

Note:

(i) The above credit risk weighted amount is solely in connection with the credit commitments held by CITIC Bank under the financial services segment of the Group.
(ii) As at 31 December 2015 and 2014, the credit risk weighted amount refers to the amount as computed in accordance with the rules set out by the China Banking Regulatory Commission and depends on the status of counterparties and the maturity characteristics. The risk weighting used is ranging from 0% to 150%.
165 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(51) Commitments and contingent liabilities (Continued)
(b) Bond redemption obligations

A subsidiary of the Group is an underwriting agent of PRC government bonds. The Group has the responsibility to buy back those bonds sold by it should the holders decide to early redeem the bonds held. The redemption price for the bonds at any time before their maturity date is based on the coupon value plus any interest unpaid and accrued up to the redemption date. Accrued interest payables to the bond holders are calculated in accordance with relevant rules of the Ministry of Finance and the People’s Bank of China. The redemption price may be different from the fair value of similar instruments traded at the redemption date.

The redemption obligations below represent the nominal value of government bonds underwritten and sold by the Group, but not yet matured at the balance sheet date:

The Group Bonds redemption obligations	31 December 2015 13,370,811	31 December 2014 12,106,788

The original maturities of these bonds vary from one to five years. The Group estimates that the possibility of redemption before maturity is remote. The Ministry of Finance will not provide funding for the early redemption of these bonds on a back-to-back basis, but will settle the principal and interest upon maturity.

166 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(51) Commitments and contingent liabilities (Continued)
(c) Guarantees provided

Except for guarantees that have been recognised as liabilities, guarantee issued by the Group and the Company for other enterprises are as follows:

The Group

Related parties Third parties The Company Subsidiaries Related parties	31 December 2015 12,724,506 6,038,393 18,762,899 31 December 2015 6,772,746 8,017,631 14,790,377	31 December 2014 9,371,631 9,831,819
		19,203,450
		31 December 2014 13,514,558 6,227,651
		19,742,209

As at 31 December 2015, there were no guarantees issued to related parties. The guarantees issued to third parties of the Group were 83.2 million. (31 December 2014: nil).

167 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(51) Commitments and contingent liabilities (Continued)
(d) Outstanding litigations and disputes
(1) In August 2014, CITIC Resources, a subsidiary of the Group, has noted from an announcement issued by 山煤国际能源集团股份有限公司 (Shanxi Coal International Energy Group Co., Ltd.) (“Shanxi Coal Int’l”) that 山煤煤炭进出口有限公司 (Shanxi Coal Import & Export Co., Ltd.) (“Shanxi Coal I/E”), a wholly-owned subsidiary of Shanxi Coal Int ’ l, commenced a claim in 山西省高级人民法院 (Shanxi High People’s Court) (the “Shanxi Court”) against, amongst others, CITIC Australia Commodity Trading Pty Limited (“CACT”) (the “Claim A”). Shanxi Coal I/E is claiming from CACT (1) the sum of US$89,755,000 (HK$700,089,000) plus interest for breach of contract resulting from the alleged non-delivery of certain aluminium ingots by CACT to Shanxi Coal I/E, and (2) costs in respect of Claim A.

In September 2015, service of Claim A on CACT was effected by way of a public notice issued by the Shanxi Court. Court hearings have been held subsequently. So far, no judgment has been issued by the Shanxi Court in respect of Claim A.

CITIC Resources was also noted from such announcement that, in connection with the Claim A, Shanxi Coal I/E had obtained an asset protection order over a certain quantity of CACT’s alumina and copper stored in bonded warehouses at Qingdao port.

CACT remains of the view that Claim A is without merit. Accordingly, no provision was made in respect of Claim A.

(2) In the second half of 2015, CACT received an arbitration request notice from the International Court of Arbitration of the International Chamber of Commerce (the “ICC”) in respect of an arbitration application by Shanxi Coal I/E pursuant to which, Shanxi Coal I/E is (i) alleging that CACT has entered into two contracts for the supply of, and has failed to deliver, copper cathodes to Shanxi Coal I/E (the “Contracts”); and (ii) claiming the amount of US$27,890,000 (HK$217,542,000) as the aggregate purchase price Shanxi Coal I/E alleges it has paid to CACT under the Contracts, plus interest (“Claim B”).

CACT considers Claim B to be baseless and the purported submission to arbitration by the ICC wrongful. CACT has not entered into the Contracts as alleged by Shanxi Coal I/E. Accordingly, no provision was made in respect of Claim B.

168 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(51) Commitments and contingent liabilities (Continued)
(d) Outstanding litigations and disputes (Continued)
(3) In August 2014, the CITIC Resources has noted from an announcement issued by Qingdao Port International Co., Ltd. (the “Qingdao Port Announcement”) that a legal complaint dated 14 July 2014 (the “Legal Proceedings”) had been issued by ABN AMRO Bank N.V., Singapore Branch (“ABN AMRO”) against CACT.

According to the Qingdao Port Announcement, among other things, ABN AMRO had issued the Legal Proceedings alleging that CACT had taken wrongful preservative measures in respect of cargo over which ABN AMRO claims it had been granted a pledge (the “Subject Cargo”) and is seeking an order that (i) CACT compensate ABN AMRO for loss of RMB1,000,000 (HK$1,193,000), (ii) CACT withdraw its asset protection order over the Subject Cargo, and (iii) CACT bear all fees and legal costs of the Legal Proceedings.

Up to the date of this report, CACT had not been served with the Legal Proceedings and is, therefore, unable to consider or comment on the substance of the Legal Proceedings. Accordingly, no provision was made in respect of the Legal Proceedings.

(e) Capital commitments

As at the balance sheet date, the Group had the following capital commitments not provided for in these consolidated financial statements:

The Group

Contracted for	31 December 2015 22,779,760	31 December 2014 23,200,133

(f) Operating lease commitments

As at the balance sheet date, the Group’s future minimum lease payments under non-cancellable operating leases of properties and fixed assets are as follows:

The Group

Within 1 year (inclusive) Between 1 and 2 years (inclusive) Between 2 and 3 years (inclusive) Over 3 years	31 December 2015 3,167,455 2,763,211 2,312,876 7,365,029 15,608,571	31 December 2014 2,914,681 2,642,540 2,305,307 7,256,566
		15,119,094

169 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(52) Non-adjusting post balance sheet date events
(a) Profit distribution

At 24 March 2016, the board of directors of the Company suggest not make profit distribution to owners for the year ended 31 December 2015.

(b) Business combination

In January 2016, CITIC Heavy Industries acquired 80% equity interests in Tangshan Kaicheng Electronic Control Equipment Group Co., Ltd. (唐山开诚电控设备集团有限公司) at an aggregate cash and share consideration of approximately RMB848 million.

(c) Acquisition of shares

In January 2016, the Company acquired 18.79% equity interests in Yuan Long Ping High-Tech Agriculture Co., Ltd. (袁隆平农业高科技股份有限公司) through its subsidiaries and an associate, at an aggregate consideration of approximately RMB2,792 million.

(d) Sales of interest in residential real estate projects

On 14 March 2016, the Company, CITIC Limited and CITIC Pacific Limited have entered into an agreement with China Overseas Land & Investment Limited (“China Overseas”) to sell the Group’s interest in certain residential real estate projects in the PRC to one of China Overseas’ affiliates. The amount of the total consideration is estimated to be RMB31,000 million, consisting of approximately 10% new shares to be issued by China Overseas upon completion of the transaction and certain assets of China Overseas.

170 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(53) Related party relationships and transactions

(a) Information on the parent of the Company is listed as follows:

	Registered		Share capital	Shareholding	Proportion
Company name	place	Business nature	HKD'000	percentage	f voting rights
		Investment
CITIC Limited	Hong Kong	holding	381,710,400	100%	100%

(b) Further information on the subsidiaries of the Company is set out in Note 5.

(I) Transaction amounts with related parties:

The Group

	2015	2014
Sales of goods	632,948	601,188
Purchase of goods	924,644	1,078,309
Net interest expenses	629,457	80,731
Net fee and commissions expenses	97,890	218,872
Income from supplementary services	154,615	385,098
Expenses for supplementary services	506,622	392,309
Interest income from deposits and receivables	326,143	116,354
Business and administrative expenses	65,451	83,310
The Company
	2015	2014
Interest income from loans	1,671,584	1,427,418
Net fee and commissions expenses	51,144	42,337
Interest income from deposits	89,614	267,214
Interest expenses	176,316	184
Business and administrative expenses	341,680	22,740

Note:

(i) The above transactions with related parties were conducted under normal commercial terms or relevant agreements.

(ii) Interest rates of loans and advances to the related parties were determined at rates negotiated between the Group and the related parties on a case by case basis.
171 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(53) Related party relationships and transactions (Continued)
(c) Transactions with related parties other than its key management personnel (Continued):
(II) The balances with related parties as at the balance sheet date are set out as follows:

The Group

	31 December 2015	31 December 2014
Trade and other receivables	14,289,546	13,324,590
Loans and advances to customers and other
parties	11,018,093	2,122,552
Placements with banks and non-bank
institutions	22,335	13,388
Cash and deposits	97,178	106,458
Derivative financial instruments	60,518	-
Trade and other payables	32,121,689	1,863,033
Deposits from customers, banks and non-
bank institutions	58,129,756	30,718,354
Derivative financial instruments and other
liabilities	652,954	1,041
Guarantees provided	12,724,506	9,371,631
The Company
	31 December 2015	31 December 2014
Trade and other receivables	15,603,829	19,118,396
Loans and advances to customers and other
parties	35,444,338	17,697,697
Cash and deposits	13,973,343	7,448,957
Derivative financial instruments	4,866	-
Trade and other payables	31,441,115	12,554,087
Debt instruments issued	230,288	221,224
Derivative financial instruments and other
liabilities	4,160,134	5,626,398
Guarantees provided	14,790,377	19,742,209

172 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(53) Related party relationships and transactions (Continued)
(c) Transactions with related parties other than its key management personnel (Continued):
(II) The balances with related parties as at the balance sheet date are set out as follows (Continued):
(1) The above transactions with related party transactions which were conducted under the normal commercial terms.
(2) Interest rates of loans and advances to the related parties were determined at rates negotiated between the Group and the corresponding related parties on a case by case basis.
(3) The guarantees provided by the Group to the related parties were based on the terms agreed between the Group and the related parties on a case by case basis.
(4) During the relevant years, CITIC Bank, a subsidiary of the Group, entered into transactions with related parties in the ordinary course of its banking businesses including lending, assets transfer, wealth management, investment, deposit, clearing and off-balance sheet transactions. These banking transactions were conducted under normal commercial terms and conditions and priced at the relevant market rates prevailing at the time of each transaction.
(III) Relationships with the related parties under the transactions stated in 6(53)(c)(I) and 6(53)(c) (II) above

Company Name	Relationship with the Group
CITIC Group	Ultimate holding company
CITIC Limited	Parent company
Sino Iron Pty Ltd	Controlled by the parent company
CITIC Polaris Limited	Controlled by the ultimate holding company
CITIC Jinzhou Metal Corporation Ltd	Controlled by the ultimate holding company
CITIC-CP Asset Management Corporation Ltd	Jointly controlled by the Group
Qinhuangdao Dicastal Xinglong Wheel
Corporation Ltd	Significantly influenced by the Group
Honglianjiuwu Information Industry
Corporation Ltd	Significantly influenced by the Group
CITIC Securities	Significantly influenced by the Group
CITIC Futures Company Limited	Significantly influenced by the Group
CITIC Goldstone Fund Management Company
Limited	Significantly influenced by the Group
Guangdong Li He Property Development
Company Limited	Significantly influenced by the Group

(54) Structured entities

(a) Structured entities sponsored by third party institutions in which the Group holds an interest

The Group holds an interest in some structured entities sponsored by third party institutions through investments in debt securities issued by these structured entities. Such structured entities include wealth management products, investment management products managed by securities companies, trust investment plans, asset-backed financings and investment funds and the Group does not consolidate these structured entities.

173 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(54) Structured entities (Continued)
(a) Structured entities sponsored by third party institutions in which the Group holds an interest (Continued)

The following table sets out an analysis of the carrying amounts of interests held by the Group as at the balance sheet date in the structured entities sponsored by third party institutions, as well as an analysis of the line items in the balance sheet in which the relevant assets are recognised:

Carrying amount Financial assets at fair value through profit or loss Wealth management products - Investment management products managed by securities companies - Trust investment plans - Asset-backed securities - Investment funds 2,703,464 2,703,464			As	at 31 December 2015
		Held-to-maturity investments - - - 5,305,991 - 5,305,991	Available-for-sale financial assets 17,766,452 352,000 4,051,576 8,105 1,434,968 23,613,101	Investments classified as receivables 147,605,000 826,636,559 139,971,233 - -	Total 165,371,452 826,988,559 144,022,809 5,314,096 4,138,432	Guarantees - - 4,222,400 - -	Maximum loss exposure 165,371,452 826,988,559 148,245,209 5,314,096 4,138,432
	2,703,464			1,114,212,792	1,145,835,348	4,222,400	1,150,057,748

174 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)
(54) Structured entities (Continued)
(a) Structured entities sponsored by third party institutions in which the Group holds an interest (Continued)

Carrying amount Wealth management products Investment management products managed by securities companies Trust investment plans Asset-backed securities Investment funds			As at 31 December 2014	As at 31 December 2014
	Held-to-maturity investments - - - 7,110,368 -	Available-for-sale financial assets 24,555,164 1,110,798 9,505,867 8,529 1,473,849 36,654,207	Investments classified as receivables 78,858,600 454,224,622 108,534,295 - 373,870 641,991,387	Total 103,413,764 455,335,420 118,040,162 7,118,897 1,847,719 685,755,962	Guarantees - - 2,567,900 - - 2,567,900	Maximum loss exposure 103,413,764 455,335,420 120,608,062 7,118,897 1,847,719
	7,110,368					688,323,862

175 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(54) Structured entities (Continued)
(b) Structured entities sponsored by the Group which the Group does not consolidate but holds an interest

The investments issued by unconsolidated structured entities sponsored by the Group are primarily wealth management products and trust plans without principal and/or return guarantee. The nature and purpose of these structured entities are for the Group to generate fees from managing assets on behalf of investors. These structured entities are financed through issuance of products to investors. Interest held by the Group includes fees charged by providing management services and investment made by the Group.

Wealth management products and trust plans

As at 31 December 2015, the aggregate amount of assets held by the unconsolidated nonprincipal-guaranteed wealth management products and trust plans which are sponsored by the Group is RMB1,656.7 billion (31 December 2014: RMB1,315.2 billion).

As at 31 December 2015, the carrying amounts of management fee receivables recognised in the balance sheet are RMB500 million (31 December 2014: RMB1,100 million).

As at 31 December 2015, the amount of placements from the Group with non-principalguaranteed wealth management products sponsored by the Group is RMB25,300 million (31 December 2014: RMB16,800 million).

The aggregate amount of the non-principal-guaranteed wealth management products sponsored and issued by the Group after 1 January but matured before 31 December for 2015 is RMB604.2 billion (2014: RMB393.9 billion).

During the year ended 31 December 2015, the maximum exposure of the placements from the Group with non-principal guaranteed wealth management products sponsored by the Group is RMB36,700 million (2014: RMB39,400 million). In the opinion of management, the transactions were conducted in the ordinary course of business under normal terms and conditions and at market rates.

During the year ended 31 December 2015, the amount of fee and commission income recognised from the abovementioned structured entities sponsored by the Group is RMB9,500 million (2014:RMB8,000 million).

176 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(54) Structured entities (Continued)
(b) Structured entities sponsored by the Group which the Group does not consolidate but holds an interest (Continued)

Securitisation vehicle

The Group enters into securitisation transactions in the normal course of business by which it transfers credit assets to structured entities which issue asset-backed securities to investors. The Group may retain interests in the form of subordinated tranches which would give rise to the Group’s retention of risk and rewards on the transferred assets. The Group will assess whether to derecognise the assets or not based on the extent of risks and rewards retained. For the year ended 31 December 2015, the Group has derecognised loans and advances of RMB 7.52 billion in the asset-backed securitisation transactions (2014: RMB 6.20 billion). As at 31 December 2015, the Group neither transferred nor retained substantially all risks and rewards of ownership of certain transferred assets and retained the control of the transferred assets. The Group recognised RMB 0.29 billion in both assets and liabilities representing its continuing involvement in this connection (31 December 2014: Nil). In addition, the Group also disposed of its loans and advances to customers in the ordinary course of business during the year ended 31 December 2015.

(55) Major business combinations

On 24 April 2015, CKM (Cayman) Company Limited ("CKM", a 62.65% indirectly owned subsidiary of CITIC Environment) acquired 87.67% equity interests in CITIC Envirotech Ltd. (“CITIC Envirotech”, formerly known as United Envirotech Ltd.), an entity listed on the Main Board of the Singapore Exchange Securities Trading Limited, with a total consideration of approximately SG$1,630 million (equivalent to approximately RMB 7,571 million). The goodwill of RMB 4,812 million arising from the acquisition is attributable to acquired customer base and economies of scale expected from combining the operations.

177 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(55) Major business combinations (Continued)

The following table summarises the consideration paid by CITIC Envirotech, the fair value of assets acquired, liabilities assumed and the non-controlling interest at the acquisition date.

Consideration:
	RMB ’000
Cash	4,743,483
Equity instruments	2,827,853
	────────
Total consideration	7,571,336
	▬▬▬▬▬▬▬▬
Recognised amounts of identifiable assets
acquired and liabilities assumed
Cash and deposits	1,604,486
Trade and other receivables	3,799,174
Inventories	65,954
Fixed assets	452,875
Intangible assets	1,682,475
Deferred tax assets	4,265
Other assets	250,262
	─────────
Total identifiable assets acquired	7,859,491
	─────────
Trade and other payables	(898,918)
Taxes payable	(105,783)
Bank and other loans	(1,583,846)
Debt instruments issued	(1,531,043)
Deferred tax liabilities	(322,652)
Other liabilities	(116,472)
	─────────
Total identifiable liabilities assumed	(4,558,714)
	─────────
Non-controlling interests	(541,548)
Goodwill	4,812,107
	─────────
	7,571,336
	▬▬▬▬▬▬▬▬

178 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(55) Major business combinations (Continued)

Net cash paid for acquisition
	RMB ’000
Total consideration paid in cash	4,743,483
Cash and cash equivalents acquired	(1,604,486)
	─────────
	3,138,997
	▬▬▬▬▬▬▬▬

Notes:

(i) Acquisition-related costs of approximately RMB 40 million have been charged to general and administrative expenses expenses in the consolidated income statement for the year ended 31 December 2015.
(ii) The fair value of the ordinary shares issued by CKM as part of the consideration for CITIC Envirotech was based on the offer price of SG$1.65 per share in the voluntary offer.
(iii) The fair value of acquired trade and other receivables is RMB 3,799 million including trade receivables with a fair value of RMB 2,754 million. The gross contractual amount for trade receivables is RMB 2,754 million.
(iv) The fair value of the acquired identifiable fixed assets and intangible assets is RMB 2,135 million.
(v) Non-controlling interests in CITIC Envirotech were recognised at proportionate share of the fair value of its net assets.
(vi) The revenue, net profit attributable to ordinary shareholders, cash inflows from operating activities and net cash inflows during the period from 24 April 2015 to 31 December 2015 contributed by CITIC Envirotech was approximately RMB1,167 million , RMB124 million, RMB628 million and RMB627 million, respectively.
(vii) In conjunction with this business combination, CITIC Environment issued put options over the equity of CKM to the other shareholders of CKM and the potential cash payments related to put options were accounted for as financial liabilities and initially recognised at fair value of approximately RMB 2,393 million with a corresponding charge being directly debited to equity in April 2015.
179 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(56) Major transactions with non-controlling interests

(a) Acquisition of additional interest in an indirectly hold subsidiary

On 27 August 2015, CITIC Bank acquired an additional 29.68% of the issued shares of CITIC International Financial Holdings Limited for a purchase consideration of RMB 6,795 million. The Group recognised a decrease in non-controlling interests of RMB 6,526 million, and a decrease in equity attributable to owners of the Company of RMB 269 million. The effect of changes in the ownership interest of CITIC Bank on the equity attributable to owners of the Company during the year is summarised as follows:

Carrying amount of non-controlling interests acquired Consideration paid to non-controlling interests Excess of consideration paid recognised within equity	As at 31 December 2015 6,525,896 (6,794,866)
	(268,970)

180 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(b) Dilution of interests in subsidiaries without loss of control

In December 2015, CITIC Bank issued new ordinary shares to China National Tobacco Corporation through private placement, raising RMB11,888 million in total after deduction of issuance expense. The Group recognised an increase in non-controlling interests of RMB 13,277 million and a decrease in equity attributable to owners of the Company of RMB 1,389 million.

In December 2015, CITIC Heavy Industries issued new ordinary shares to Tangshan Kaicheng Electronic Control Equipment Group Co., Ltd. (唐山开诚电控设备集团有限公司), acquiring cash and other assets amounting to RMB1,133 million in total. The Group recognised an increase in non-controlling interests of RMB646 million and an increase in equity attributable to owners of the Company of RMB487 million. The effect of changes in the ownership interest of CITIC Bank and CITIC Heavy Industry on the equity attributable to owners of the Company during the year is summarised as follows:

		As at 31 December 2015
	Increase in carrying amount of non-controlling interests	13,923,648
	Consideration received from non-controlling interests	(13,021,253)
		___
	Loss on disposal within equity	902,395
		_______
(c)	Effects of transactions with non-controlling interests on the equity attributable to owners of the
	Company for the year ended 31 December 2015
		2015
	Changes in equity attributable to owners of the company arising from:
	- Acquisition of additional interests in an indirectly held subsidiary	268,970
	- Disposal of interests in subsidiaries without loss of control	902,395
		________
	Net effect for transactions with non-controlling interests on equity
	attributable to owners of the Company	1,171,365
		_______

181 -

AI assistant

CITIC Limited — Annual Report 2015

49082_rns_2016-04-27_674d58fa-b696-41f9-99ac-05df4a6b4cfb.pdf

ANNOUNCEMENT

FINANCIAL STATEMENTS AND AUDITOR’S REPORT OF CITIC CORPORATION LIMITED FOR THE YEAR ENDED 31 DECEMBER 2015

CITIC CORPORATION LIMITED

FINANCIAL STATEMENTS AND AUDITOR’S REPORT FOR THE YEAR ENDED 31 DECEMBER 2015

CITIC CORPORATION LIMITED

Auditor’s Report

Management’s Responsibility for the Financial Statements

Auditor’s Responsibility

Opinion

CONSOLIDATED BLANCE SHEET AS AT 31 DECEMBER 2015

CONSOLIDATED BLANCE SHEET (CONTINUED) AS AT 31 DECEMBER 2015

COMPANY BLANCE SHEET AS AT 31 DECEMBER 2015

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2015

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2015

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2015

CONSOLIDATED CASH FLOW STATEMENT(CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2015

COMPANY CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2015

CONSOLIDATED STEATEMENT OF CHANGES IN OWNERS’ EQUITY FOR THE YEAR ENDED 31 DECEMBER 2015

CONSOLIDATED STEATEMENT OF CHANGE IN OWNERS’ EQUITY(CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2015

CITIC CORPORATION LIMITED

COMPANY STEATEMENT OF CHANGE IN OWNERS’ EQUITY FOR THE YEAR ENDED 31 DECEMBER 2015

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

1 General information

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

2 Basis of preparation of financial statements

3 Significant accounting policies and accounting estimates

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

3 Significant accounting policies and accounting estimates (Continued)

(c) Consolidated financial statements

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

3 Significant accounting policies and accounting estimates (Continued)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

3 Significant accounting policies and accounting estimates (Continued)

- Property under development

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

3 Significant accounting policies and accounting estimates (Continued)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

3 Significant accounting policies and accounting estimates (Continued)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

3 Significant accounting policies and accounting estimates (Continued)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

3 Significant accounting policies and accounting estimates (Continued)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

3 Significant accounting policies and accounting estimates (Continued)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

3 Significant accounting policies and accounting estimates (Continued)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

3 Significant accounting policies and accounting estimates (Continued)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

3 Significant accounting policies and accounting estimates (Continued)

(12) Financial instruments

(a) Initial recognition

(b) Categorisation

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

3 Significant accounting policies and accounting estimates (Continued)

Loans and receivables

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

3 Significant accounting policies and accounting estimates (Continued)

Held-to-maturity investments

Available-for-sale financial assets

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

3 Significant accounting policies and accounting estimates (Continued)

Financial liabilities at fair value through the profit or loss

Other financial liabilities

(c) Derecognition

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

3 Significant accounting policies and accounting estimates (Continued)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

3 Significant accounting policies and accounting estimates (Continued)

(e) Derivatives

(f) Embedded derivatives

(a) Financial assets

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

3 Significant accounting policies and accounting estimates (Continued)

Loans and receivables

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

CITIC Limited Annual Report 2015