CITIC Limited — Annual Report 2021

Apr 29, 2022

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 2021

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 has issued enterprise bond and corporate bond 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 in accordance with the relevant regulations of the People’s Bank of China, the National Association of Financial Market Institutional Investors, National Development and Reform Commission, China Securities Regulatory Commission and Shanghai Stock Exchange.

The financial statements and auditor’s report of CITIC Corporation for the year ended 31 December 2021 are available on China Bond, China Money, Beijing Financial Assets Exchange, Shanghai Clearing House and Shanghai Stock Exchange at www.chinabond.com.cn, www.chinamoney.com.cn, www.cfae.cn, www.shclearing.com and www.sse.com.cn, respectively, and are set out at the end of this announcement.

By Order of the Board CITIC Limited Zhu Hexin Chairman

Hong Kong, 29 April 2022

As at the date of this announcement, the executive directors of the Company are Mr Zhu Hexin (Chairman), Mr Xi Guohua and Ms Li Qingping; the non-executive directors of the Company are Mr Song Kangle, Mr Peng Yanxiang, Ms Yu Yang, Mr Zhang Lin, Mr Yang Xiaoping and Mr Tang Jiang; and the independent non-executive directors of the Company are Mr Francis Siu Wai Keung, Dr Xu Jinwu, Mr Anthony Francis Neoh, Mr Gregory Lynn Curl and Mr Toshikazu Tagawa.

CITIC CORPORATION LIMITED

FINANCIAL STATEMENTS AND AUDITOR’S REPORT FOR THE YEAR ENDED 31 DECEMBER 2021

[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 2021 [English translation for reference only]

Contents	Page
Auditor’s Report	1 - 3
Financial Statements for the Year Ended 31 December 2021
Consolidated Balance Sheet	1 - 2
Company Balance Sheet	3
Consolidated Income Statement	4-5
Company Income Statement	6
Consolidated Cash Flow Statement	7-8
Company Cash Flow Statement	9
Consolidated Statement of Changes in Owners’ Equity	10-11
Company Statement of Changes in Owners’ Equity	12
Notes to the Financial Statements	13- 191

CITIC CORPORATION LIMITED

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2021

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

Assets	Note	31 December 2021	31 December 2020
Cash and deposits	6(1)	571,189,415	609,157,090
Placements with banks and non-bank financial institutions	6(2)	142,060,995	167,076,499
Derivative financial instruments	6(3)	22,738,297	40,193,221
Trade and other receivables	6(4)	116,031,904	122,485,357
Contract assets	6(5)	10,666,563	11,094,122
Inventories	6(6)	34,999,727	24,777,060
Financial assets held under resale agreements	6(7)	91,757,186	120,379,159
Loans and advances to customers and other parties	6(8)	4,775,898,800	4,391,775,049
Investments in financial assets	6(9)
- Financial assets held for trading		538,615,284	437,954,061
- Bond investments		1,173,928,734	973,353,137
- Other bond investments		648,510,309	724,024,994
- Other equityinstruments investments		8,468,262	6,488,354
Long-term equityinvestments	6(10)	79,505,605	73,076,234
Investmentproperties	6(11)	9,850,633	9,233,064
Fixed assets	6(12)	47,294,446	46,928,501
Construction inprogress	6(13)	8,122,111	7,008,176
Right-of-use assets	6(14)	11,826,503	12,421,292
Intangible assets	6(15)	17,871,603	17,119,002
Goodwill	6(16)	7,267,808	7,107,564
Deferred tax assets	6(17)	51,618,437	45,464,454
Other assets		33,992,768	29,391,768
Total assets		8,402,215,390	7,876,508,158

• 1 -

CITIC CORPORATION LIMITED

CONSOLIDATED BALANCE SHEET (CONTINUED) AS AT 31 DECEMBER 2021

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

[English translation for reference only]

Liabilities and owners’ equity	Note	31 December 2021	31 December 2020
Liabilities
Borrowingfrom centralbanks	6(19)	189,257,343	224,390,619
Placements frombanks and non-bank financial institutions	6(20)	87,473,873	62,540,677
Financial liabilities held for trading		4,647,768	10,455,776
Derivative financial instruments	6(3)	23,250,512	39,783,344
Trade and otherpayables	6(21)	102,098,386	94,164,784
Contract liabilities	6(5)	16,345,284	13,804,976
Financial assets sold under repurchase agreements	6(22)	100,116,489	79,765,280
Deposits from banks and non-bank financial institutions and customers	6(23)	5,961,517,503	5,744,797,446
Employee benefitspayables	6(24)	27,121,269	27,778,021
Taxespayable	4(3)	15,902,662	13,323,536
Bank and other loans	6(25)	35,944,752	40,148,760
Debt instruments issued	6(26)	970,326,926	756,622,112
Lease liabilities	6(27)	11,862,955	12,226,263
Provisions	6(28)	19,099,913	11,428,173
Deferred tax liabilities	6(17)	4,214,308	2,543,668
Other liabilities		14,760,853	12,335,184
Total liabilities		7,583,940,796	7,146,108,619
Owners' equity
Paid-in capital	6(29)	139,000,000	139,000,000
Capital reserve	6(30)	40,192,177	40,218,269
Other comprehensive income	6(31)	3,003,336	2,435,506
Surplus reserve	6(32)	12,328,674	10,955,233
General reserve	6(33)	51,320,806	48,117,580
Retained earnings	6(34)	241,402,377	215,665,658
Total equity attributable to owners of the Company		487,247,370	456,392,246
Non-controllinginterests		331,027,224	274,007,293
Total owners' equity		818,274,594	730,399,539
Total liabilities and owners' equity		8,402,215,390	7,876,508,158

Approved by the board of directors 31 March 2022.

Legal Representative

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

The notes on pages 13 to 191 form part of these financial statements.

• 2 -

CITIC CORPORATION LIMITED

COMPANY BALANCE SHEET AS AT 31 DECEMBER 2021

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

[English translation for reference only]

Assets	Note	31 December 2021	31 December 2020
Cash and deposits	6(1)	18,549,270	15,069,425
Trade and other receivables	6(4)	26,499,277	28,236,724
Loans and advances to customers and otherparties	6(8)	1,210,692	3,822,210
Investments in financial assets	6(9)
- Financial assets held for trading		34,161,339	34,599,619
Long-term equityinvestments	6(10)	228,686,602	223,032,780
Fixed assets	6(12)	487,360	527,984
Intangible assets		21,944	26,282
Other assets		7,341	11,643
Total assets		309,623,825	305,326,667
Liabilities and owners’ equity
Liabilities
Trade and otherpayables	6(21)	23,634,739	24,083,847
Taxespayable		-	69
Bank and other loans	6(25)	3,003,700	-
Debt instruments issued	6(26)	41,833,978	44,845,926
Provisions		-	700,000
Deferred tax liabilities	6(17)	993,043	725,556
Other liabilities		924,913	843,643
Total liabilities		70,390,373	71,199,041
Owners' equity
Paid-in capital	6(29)	139,000,000	139,000,000
Capital reserve	6(30)	49,706,126	49,706,126
Other comprehensive income	6(31)	1,812,196	1,675,624
Surplus reserve	6(32)	12,328,674	10,955,233
Retained earnings	6(34)	36,386,456	32,790,643
Total owners' equity		239,233,452	234,127,626
Total liabilities and owners' equity		309,623,825	305,326,667

Approved by the board of directors 31 March 2022.

Legal Representative

The person in charge of accounting affairs

The head of the accounting department

The notes on pages 13 to 191 form part of these financial statements.

• 3 -

CITIC CORPORATION LIMITED

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2021

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

Item	Note	2021	2020
Operating income	6(35)	307,285,701	257,814,541
Including: Operating income from non-financial servicesbusiness		87,340,902	51,356,235
Net interest income		151,159,550	153,219,285
Net fee and commission income		41,269,518	34,916,557
Other income from financial services business		27,515,731	18,322,464
Less: Total operatingcosts	6(37)	234,428,787	194,684,973
Including: Operatingcosts	6(36)	74,931,283	42,440,200
Taxes and surcharges		2,721,013	2,424,933
Sellingand distribution expenses		1,538,268	1,004,246
General and administrative expenses		65,461,646	57,229,606
Research and development expenses		2,284,028	929,463
Financial expenses	6(38)	1,095,217	3,363,687
Including: Interest expenses		2,834,243	3,450,386
Interest income		910,999	493,619
Expected credit losses	6(39)	85,769,282	86,121,302
Impairment losses	6(40)	628,050	1,171,536
Add: Gain from changes in fair value	6(41)	(61,733)	69,630
Investment income	6(42)	2,131,604	1,477,237
Including: Investment income from associates andjoint ventures		1,024,575	871,243
Assets disposalgain	6(43)	105,410	208,532
Othergain		609,746	554,206
Operating profit		75,641,941	65,439,173
Add: Non-operatingincome		834,527	1,000,262
Less: Non-operatingexpenses		1,732,863	555,364
Profit before income tax	6(37)	74,743,605	65,884,071
Less: Income tax expense	6(44)	12,019,151	10,366,216
Netprofit for theyear		62,724,454	55,517,855
Attributable to:
Owners of the Company		39,063,324	35,060,620
Non-controllinginterests		23,661,130	20,457,235

• 4 -

CITIC CORPORATION LIMITED

CONSOLIDATED INCOME STATEMENT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

	Note	2021	2020
Other comprehensive income/ (loss), net of tax	6(45)	977,287	(7,147,643)
Attributable to equityowners of the Company		583,047	(4,693,034)
Items that may be reclassified toprofit or loss:
1. Share of other comprehensive income of the equity- accounted investee that may be reclassified to profit or loss		(418,531)	415,470
2. Gain / (loss) from fair value changes on other bond investments		1,629,046	(3,434,108)
3. Loss allowance on otherbond investments		12,518	546,810
4. Effective hedging portion of gains or losses arising from cash flow hedginginstruments		(4,606)	(120,984)
5.Reclassification of owner-occupied property as investmentproperty: revaluationgain		129,565	25,016
6. Translation differences arising on translation of foreign currencyfinancial statements and others		(1,142,807)	(2,142,888)
Items will notbe reclassified subsequentlytoprofit or loss:
1. Gain from fair value changes on investments in equity instruments designated at FVOCI		377,862	17,650
Attributable to minorityinterests		394,240	(2,454,609)
Total comprehensive income for theyear		63,701,741	48,370,212
Attributable to:
Owners of the Company		39,646,371	30,367,586
Non-controllinginterests		24,055,370	18,002,626

Approved by the board of directors 31 March 2022.

Legal Representative The person in charge of accounting affairs

The head of the accounting department

The notes on pages 13 to 191 form part of these financial statements.

• 5 -

CITIC CORPORATION LIMITED

COMPANY INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

Item	Note	2021	2020
Operating income	6(35)	16,611,586	11,588,794
Including: Net interest income		128,345	208,980
Net fee and commission income		4,484	1,237
Other income from financial servicesbusiness		16,478,757	11,378,577
Less: Total operatingcosts		2,554,255	3,876,333
Including: Taxes and surcharges		4,131	2,242
General and administrative expenses		1,010,841	864,126
Financial expenses	6(38)	1,935,556	2,501,186
Including: Interest expense		2,002,577	2,502,275
Interest income		97,925	52,210
Impairment losses		316,921	-
Expected credit losses		(713,194)	508,779
Add: Assets disposalgain/ (loss)	6(43)	263	(1,075)
Operating profit		14,057,594	7,711,386
Add: Non-operatingincome		5,646	81
Less: Non-operatingexpenses		61,606	102,891
Profitbefore income tax		14,001,634	7,608,576
Less: Income tax expense	6(44)	267,225	(516,916)
Netprofit for theyear		13,734,409	8,125,492
Other comprehensive income net of tax	6(45)	136,572	513,333
Items that may be reclassified toprofit or loss:
Share of other comprehensive income of the equity- accounted investee that may be reclassified toprofit or loss		136,572	513,333
Total comprehensive income for theyear		13,870,981	8,638,825

Approved by the board of directors on 31 March 2022.

Legal Representative The person in charge of accounting affairs

The head of the accounting department

The notes on pages 13 to 191 form part of these financial statements.

• 6 -

CITIC CORPORATION LIMITED

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

Item	Note	2021	2020
Cash flows from operating activities:
Cash received from sale ofgoods and renderingof services		83,859,035	47,850,266
Net decrease in deposits with banks and non-bank financial institutions		-	45,354,253
Net increase in deposits from customers		206,288,608	517,580,139
Net decrease in deposits with central banks		8,330,854	-
Net increase in deposits from banks and non-bank financial institutions		8,120,270	202,153,942
Net increase in borrowed funds		25,258,171	-
Interests,fee and commission received		371,110,916	342,581,791
Nest increase in sales of repurchased financial assets		20,579,950	-
Net decrease in financial assets held under resale agreements		28,577,328	-
Net increase in financial liabilities held for trading		-	7,596,412
Refund of taxes		1,187,766	502,244
Cash received from other operatingactivities		23,005,284	55,861,432
Sub-total of cash inflows from operating activities		776,318,182	1,219,480,479
Cashpaid forgoods and services		(76,095,058)	(39,043,632)
Net increase in loans and advance to customers and other parties		(428,841,286)	(555,330,939)
Net increase in deposits with central banks institutions		-	(13,236,624)
Net decrease in borrowingfrom central banks		(35,254,675)	(13,808,288)
Net increase in deposits with banks and non-bank financial institutions		(2,684,954)	-
Net increase in placements with banks and non-bank financial institutions		(20,233,315)	(5,104,659)
Net decrease in placements from banks and non-bank financial institutions		-	(31,830,171)
Net decrease in financial assets sold under repurchase agreements		-	(34,658,526)
Net increase in financial assets held under resale agreements		-	(110,424,721)
Net decrease in financial liabilities held for trading		(7,385,834)	-
Increase in investments in financial assets held for trading		(16,838,689)	(13,945,639)
Interests,fee and commissionpaid		(125,525,188)	(122,675,166)
Cashpaid to and on behalf of employees		(44,401,739)	(37,202,803)
Cashpaid for various taxes		(36,004,677)	(39,074,578)
Cashpaid for other operatingactivities		(58,503,661)	(43,630,073)
Sub-total of cash outflows from operating activities		(851,769,076)	(1,059,965,819)
Net cash flows from operating activities	6(46)(a)	(75,450,894)	159,514,660

• 7 -

CITIC CORPORATION LIMITED

CONSOLIDATED CASH FLOW STATEMENT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

Item	Note	2021	2020
Cash flows from investing activities:
Cash received from disposal of financial investments		3,142,397,003	2,712,783,352
Cash received from returns on investments		2,353,371	2,924,126
Net proceeds from disposal of fixed assets, intangible assets and other long-term assets		872,466	587,698
Net cash received from disposal of associates andjoint ventures		1,499,518	1,305,760
Net cash received from disposal of subsidiaries	6(46)(d)	-	2,923,788
Net cash received from acquisition of subsidiaries		-	5,044,738
Cash received from other investingactivities		762,319	763,696
Sub-total of cash inflows from investing activities		3,147,884,677	2,726,333,158
Cash paid for acquisition of fixed assets, intangible assets and other long- term assets		(8,978,981)	(8,872,707)
Cashpaid for acquisition of financial investments		(3,338,973,479)	(2,930,151,067)
Net cash Payment for disposal of subsidiaries	6(46)(d)	(49,619)	-
Net cashpayment for acquisition of subsidiaries		(216,154)	-
Net cashpayment for acquisition of associates andjoint ventures		(643,653)	(2,774,465)
Cashpaid for other investingactivities		(2,346,178)	(1,997,804)
Sub-total of cash outflows from investing activities		(3,351,208,064)	(2,943,796,043)
Net cash flows from investing activities		(203,323,387)	(217,462,885)
Cash flows from financing activities:
Cash received from capital contributions		105,379	299,630
(Including: Cash received bysubsidiaries from non-controllinginterests)		105,379	299,630
Cash received from new banks and other loans		24,249,219	28,743,144
Cash received from issuance of new debt instruments		906,585,915	821,392,500
Cash received from issue of other equityinstruments bysubsidiaries		43,852,386	-
Transactions with non-controllinginterests	6(55)	655,139	-
Cash received from other financingactivities		1,128,819	338,858
Sub-total of cash inflows from financing activities		976,576,857	850,774,132
Cash paid for repayment of banks and other loans and debt instruments issued		(716,053,615)	(769,214,920)
Principal and interest elements of leasepayment		(3,885,611)	(3,806,812)
Cashpaid for dividends, profit distributions or interest		(45,637,251)	(43,855,227)
(Including: Dividends and profits paid by subsidiaries to non-controlling interests)		(8,241,952)	(7,831,238)
Transactions with non-controllinginterests		-	(839,737)
Cashpaid for other financingactivities		(3,678,939)	(1,422,401)
(Including: repayment ofperpetual capital securities)		(3,323,718)	(1,153,544)
Sub-total of cash outflows from financing activities		(769,255,416)	(819,139,097)
Net cash flows from financing activities		207,321,441	31,635,035
Effect of foreign exchange rate changes on cash and cash equivalents		(4,944,268)	(8,136,960)
Net decrease in cash and cash equivalents	6(46)(b)	(76,397,108)	(34,450,150)
Add: Cash and cash equivalents at the beginningof theyear	6(46) (c)	351,939,004	386,389,154
Cash and cash equivalents at the end of theyear	6(46)(c)	275,541,896	351,939,004

Approved by the board of directors on 31 March 2022.

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

The notes on pages 13 to 191 form part of these financial statements.

• 8 -

CITIC CORPORATION LIMITED

COMPANY CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

Item	Note	2021	2020
Cash flows from operating activities:
Interests,fee and commission received		327,568	149,047
Cash received from various taxes		-	4,155
Cash received from other operatingactivities		12,443,281	13,092,713
Sub-total of cash inflows from operating activities		12,770,849	13,245,915
Interests,fee and commissionpaid		(4,195)	(7,013)
Cashpaid for various taxes		(20,506)	(2,111)
Cashpaid for other operatingactivities		(1,745,446)	(970,367)
Sub-total of cash outflows from operating activities		(1,770,147)	(979,491)
Net cash flows from operating activities	6(46)(a)	11,000,702	12,266,424
Cash flows from investing activities:
Cash received from disposal of investments		79,078,959	165,132,948
Cash received fromprofits of investments		186,209	90,281
Sub-total of cash inflows from investing activities		79,265,168	165,223,229
Cashpaid for acquisition of investments		(76,821,254)	(156,288,210)
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets		(6,997)	(48,737)
Sub-total of cash outflows from investingactivities		(76,828,251)	(156,336,947)
Net cash flows from investing activities		2,436,917	8,886,282
Cash flows from financingactivities:
Cash received from issuance of new debt instruments		3,000,000	11,000,000
Cash received from new bank and other loans		3,000,000	8,500,000
Sub-total of cash inflows from financingactivities		6,000,000	19,500,000
Cash paid for repayment of bank and other loans and debt instruments issued		(6,000,000)	(26,994,000)
Interestpaid		(2,034,703)	(2,437,211)
Cashpaid for dividends orprofit distributions		(7,964,741)	(9,725,724)
Cashpaid for other financing activities		(3,000)	(12,438)
Sub-total of cash outflows from financingactivities		(16,002,444)	(39,169,373)
Net cash flows from financing activities		(10,002,444)	(19,669,373)
Effect of foreign exchange rate changes on cash and cash equivalents		(29,961)	(22,706)
Net increase/(decrease) in cash and cash equivalents	6(46)(b)	3,405,214	1,460,627
Add: Cash and cash equivalents at the beginning of the year	6(46)(b)	14,837,607	13,376,980
Cash and cash equivalents at the end of theyear	6(46)(c)	18,242,821	14,837,607

Approved by the board of directors on 31 March 2022.

Legal Representative

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

Approved by the board of directors 31 March 2022.

• 9 -

CITIC CORPORATION LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN OWNERS’ EQUITY FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

Item	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	Non- controlling interests	Total
		Paid-in capital	Capital reserve	Other comprehensive income	Surplus reserve	General reserve	Retained **earnings **	Sub-total
Balance at 1 January 2020		139,000,000	40,218,269	2,435,506	10,955,233	48,117,580	215,665,658	456,392,246	274,007,293	730,399,539
Movements for the year ended 31 December 2021
Total comprehensive income
Netprofit		-	-	-	-	-	39,063,324	39,063,324	23,661,130	62,724,454
Other comprehensive loss		-	-	583,047	-	-	-	583,047	394,240	977,287
Total comprehensive income		-	-	583,047	-	-	39,063,324	39,646,371	24,055,370	63,701,741
Capital contribution and withdrawal byowners
1. Capital contribution byowners		-	-	-	-	-	-	-	105,379	105,379
2. Repayment of other equity instruments by subsidiaries		-	-	-	-	-	-	-	(3,323,718)	(3,323,718)
3. Transactions with non-controllingInterests	6(55)	-	(21,208)	-	-	-	-	(21,208)	676,347	655,139
4. Disposal of subsidiaries		-	-	-	-	-	-		(136,891)	(136,891)
5. issue of other equityinstruments bysubsidiaries		-	-	-	-	-	-	-	43,852,386	43,852,386
Profit distribution
1. Appropriation to surplus reserve	6(32)	-	-	-	1,373,441	-	(1,373,441)	-	-	-
2. Appropriation togeneral reserve	6(33)	-	-	-	-	3,203,226	(3,203,226)	-	-	-
3. Profit distribution to owners	6(34)	-	-	-	-	-	(8,765,155)	(8,765,155)	(8,241,952)	(17,007,107)
Internal transfer of equity:
Disposal of equity investments at fair value through other comprehensive income		-	-	(15,217)	-	-	15,217	-	-	-
Others		-	(4,884)	-	-	-	-	(4,884)	33,010	28,126
Balance at31 December 2021		139,000,000	40,192,177	3,003,336	12,328,674	51,320,806	241,402,377	487,247,370	331,027,224	818,274,594

• 10 -

CITIC CORPORATION LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN OWNERS’ EQUITY (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]
Item	Note		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 1 January 2020		139,000,000	40,328,800	7,152,156	10,142,684	41,879,468	197,232,083	435,735,191	260,035,387	695,770,578
Movements for the year ended 31 December 2020
Total comprehensive income
Netprofit		-	-	-	-	-	35,060,620	35,060,620	20,457,235	55,517,855
Other comprehensive loss		-	-	(4,693,034)	-	-	-	(4,693,034)	(2,454,609)	(7,147,643)
Total comprehensive income		-	-	(4,693,034)	-	-	35,060,620	30,367,586	18,002,626	48,370,212
Capital contribution and withdrawal byowners
1. Capital contribution byowners		-	-	-	-	-	-	-	299,617	299,617
2. Repayment of other equity instruments by subsidiaries		-	-	-	-	-	-	-	(1,153,544)	(1,153,544)
3. Transactions with non-controllingInterests		-	(450,539)	-	-	-	-	(450,539)	(719,685)	(1,170,224)
4.Acquisition of non-wholly-owned subsidiaries		-	-	-	-	-	-	-	5,334,231	5,334,231
Profit distribution
1. Appropriation to surplus reserve	6(32)	-	-	-	812,549	-	(812,549)	-	-	-
2. Appropriation togeneral reserve	6(33)	-	-	-	-	6,238,112	(6,238,112)	-	-	-
3. Profit distribution to owners		-	-	-	-	-	(9,600,000)	(9,600,000)	(7,831,255)	(17,431,255)
Internal transfer of equity:
Disposal of equity investments at fair value through other comprehensive income		-	-	(23,616)	-	-	23,616	-	-	-
Others		-	340,008	-	-	-	-	340,008	39,916	379,924
Balance at31 December 2020		139,000,000	40,218,269	2,435,506	10,955,233	48,117,580	215,665,658	456,392,246	274,007,293	730,399,539

Approved by the board of directors on 31 March 2022.

Legal Representative

The person in charge of accounting affairs

The head of the accounting department

The notes on pages 13 to 191 form part of these financial statements.

• 11 -

CITIC CORPORATION LIMITED

COMPANY STATEMENT OF CHANGES IN OWNERS’ EQUITY FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

Item	Note	Paid-in capital	Capital reserve	Other comprehensive income	Surplus reserve	Retained **earnings **	Total
Balance at 1 January 2021		139,000,000	49,706,126	1,675,624	10,955,233	32,790,643	234,127,626
Movements for theyear ended31 December 2021
Total comprehensive income		-	-	136,572	-	13,734,409	13,870,981
Appropriation to surplus reserve	6(32)	-	-	-	1,373,441	(1,373,441)	-
Profit distribution to owners	6(34)	-	-	-	-	(8,765,155)	(8,765,155)
Balance at31 December 2021		139,000,000	49,706,126	1,812,196	12,328,674	36,386,456	239,233,452
Balance at 1 January 2020		139,000,000	49,614,251	1,162,291	10,142,684	35,077,700	234,996,926
Movements for theyear ended31 December 2020
Total comprehensive income		-	-	513,333	-	8,125,492	8,638,825
Appropriation to surplus reserve	6(32)	-	-	-	812,549	(812,549)	-
Profit distribution to owners		-	-	-	-	(9,600,000)	(9,600,000)
Dilution of share of interests in associates		-	91,875	-	-	-	91,875
Balance at31 December 2020		139,000,000	49,706,126	1,675,624	10,955,233	32,790,643	234,127,626

Approved by the board of directors on 31 March 2022.

Legal Representative

The person in charge of accounting affairs

The head of the accounting department

The notes on pages 13 to 191 form part of these financial statements.

• 12 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 89-102 Floor, CITIC Building, Building, 10 Guanghua Road, Chaoyang District, Beijing. 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 comprehensive financial services, advanced intelligent manufacturing, advanced materials, new consumption, new-type urbanization and other businesses.

Approved by the board of directors on 31 March 2022.

• 13 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 2021 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 2021, 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).

• 14 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

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.

(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 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 the acquirer’s interest in the acquisition date fair value of the acquiree’s identifiable net assets, the difference is recognised as goodwill. If is less than 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, as well as structured entities controlled by the Group. 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.

• 15 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 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.

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, 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 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.

• 16 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

If there is a difference between the accounting entity of the Group and the accounting entity of the company or a subsidiary on mearsuring the same transaction, the transaction will be adjusted from the perspective of the Group.

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.

(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.

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. The effect of exchange rate changes on cash and cash equivalents held or due in a foreign currency are reported in the statement of cash flows.

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.

• 17 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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

• (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(including systematically allocated production overhead) and other costs incurred in bringing the inventories to their present location and condition.

Net realizable 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.

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 includes 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(23)). 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.

• 18 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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

• 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.

• (b) Investments in joint venture and associates

A joint venture is a joint arrangement which is structured through a separate vehicle over which the Group has joint control together with other parties and only has rights to the net assets of the arrangement based on legal forms, contractual terms and other facts and circumstances; An associate is the investee over which the Group has significant influence on its financial and operating policy decisions.

• 19 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

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.

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.

• 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.

• 20 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

• 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(13).

When the Group ceases to have significant influence over an associate or joint control over a joint venture, it is accounted for as a disposal of the entire interest in that investee, with a resulting gain or loss being recognised in profit or loss. Any interest retained in that former investee at the date when significant influence or joint control is lost is recognised at fair value and this amount is regarded as the cost on initial recognition of a financial asset.

(6) Investment properties

Investment properties which are initially recognised at cost are interests in buildings and/or land which are held to earn rentals or for capital appreciation or both. Investment properties are initially measured at cost. 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 transfer to property, plant and equipment or intangible assets at the commencement of owner-occupation. The carrying amount of property, plant and equipment and intangible assets are based on the fair value of investment properties on the day of conversion. The difference between the fair value and the previous carrying amount is recognised in profit or loss for the current period. Owner-occupied properties transfer to investment properties that will be carried at fair value. If the fair value on the day of conversion is less than the previous carrying amount, the difference is recognised in profit or loss for the current period; If the fair value on the day of conversion is greater than the previous carrying amount, the difference is recognised directly in other comprehensive income, unless there was an impairment loss recognised for the same property in prior years and a portion of the increase is recognised in profit or loss to the extent of that impairment loss.

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.

• 21 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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. Construction in progress is stated in the balance sheet at cost less impairment losses.

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, 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.

• 22 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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	20-35 years	5%
Machinery and equipment	5-22 years	5%
Office equipment and other equipment,
vehicles and vessels	5-10 years	5%
Others	3-10 years	0-10%

Useful lives, residual value and depreciation methods are reviewed at least at each yearend.

• (8) Leases

The Group recognises the leases as a ROU asset and a corresponding liability by the lessee at the commencement date.

Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices.

• 23 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

3 Significant accounting policies and accounting estimates (Continued)

• (8) Leases (Continued)

• (a) Lease liabilities

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

• fixed payments (including in-substance fixed payments), less any lease

• incentives receivable

• variable lease payment that are based on an index or a rate, initially measured

• using the index or rate as at the commencement date

• amounts expected to be payable by the group under residual value guarantees

• the exercise price of a purchase option if the group is reasonably certain to

• exercise that option, and

• payments of penalties for terminating the lease, if the lease term reflects the

• group exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the ROU asset in a similar economic environment with similar terms, security and conditions.

To determine the incremental borrowing rate, the Group:

• where possible, uses recent third-party financing received by the individual

• lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received

• uses a build-up approach that starts with a risk-free interest rate adjusted for

• credit risk for leases, which does not have recent third party financing, and • makes adjustments specific to the lease, e.g. term, country, currency and security.

The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and the ROU asset is adjusted accordingly.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

• 24 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

• (8) Leases(continued)

• (b) ROU assets

ROU assets are measured at cost comprising the following:

• the amount of the initial measurement of lease liability;

• any lease payments made at or before the commencement date less any lease

• incentives received;

• any initial direct costs; and

• restoration costs.

ROU assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the ROU asset is depreciated over the underlying asset’s useful life.

Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT-equipment.

Lease income from operating leases where the Group is a lessor is recognised in income on a straight-line basis over the lease term. Initial direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and recognised as expense over the lease term on the same basis as lease income. The respective leased assets are included in the balance sheet based on their nature.As leasees, the Group recognises finance leases as finance lease receivables, which are measured at amortised cost.The Group did not need to make any adjustments to the accounting for assets held as lessor as a result of adopting the new leasing standard.

• 25 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 if any, impairment losses.

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
- Mining assets	Over the estimated useful lives using the unit-
	of-production method
- Franchise rights	Over the estimated useful lives of the Franchise
	right
- Software	Over the estimated useful lives of the Software

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.

(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.

Impairment losses on goodwill can not be reversed in the future.

• 26 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

• (11) Held for sale and discontinued operations

A non-current asset or a disposal group is classified as held for sale when all of the following conditions are satisfied: (1) the non-current asset or the disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such non-current asset or disposal group; (2) the Group has entered a legally enforceable sales agreement with other party and obtained relevant approval, and the sales transaction is expected to be completed within one year.

Non-current assets (except for financial assets, investment properties measured at fair value and deferred tax assets) that meet the recognition criteria for held for sale are recognised at the amount equal to the lower of the fair value less costs to sell and the carrying amount. Any excess of the original carrying amount over the fair value less costs to sell is recognised as asset impairment losses.

Such non-current assets and assets and liabilities included in disposal groups classified as held for sale are classified as current assets and current liabilities respectively, and are separately presented in the balance sheet.

A discontinued operation is a component of the Group that either has been disposed of or is classified as held for sale, and is separately identifiable operationally and for financial reporting purposes, and satisfies one of the following conditions:

• (1) represents a separate major line of business or geographical area of operations;

• (2) is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations;

• (3) is a subsidiary acquired exclusively with a view to resale.

The net profit from discontinued operations in the income statement includes operating profit or loss and disposal gains or losses of discontinued operations.

• 27 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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

Financial instruments refer to a contract that forms one party’s financial asset and another party's liabilities or equities. Financial assets and financial liabilities are recognised when the Group becomes a party of the financial instrument contracts.

• (a) Financial assets

• (i) Classification and Measurement

The Group classifies its financial assets into the following categories based on their business model and the contractual cash flow characteristics:

• Financial assets at amortised cost;

• Financial assets at fair value through other comprehensive income ("FVOCI");

• Financial assets at fair value through profit or loss ("FVPL").

At initial recognition, the Group measures a financial asset at its fair value. For financial assets that are at FVPL, the transaction costs are expensed in profit or loss; for financial assets with other categories, the transaction costs are recognised in the initial carrying amounts. For trade and other receivables arising from rendering goods or services with no significant financing component, the Group measures their initial carrying amount as the cash flows that the Group is entitled and expected to receive.

Debt instruments

Debt instruments are those instruments that meet the definition of a financial liability from the issuer’s perspective, and are measured at the following three categories:

• Amortised cost:

The business model the Group manages these financial assets is to collect the contractual cash flows where those cash flows’ characteristics are consistent with those of the basic loans arrangement, i.e, the contractual cash flows of these financial assets at certain date represent solely payments of principal and interest based on the principal amount ("SPPI"),and that are not designated at FVPL. Interest income from these financial assets is recognised using the effective interest rate method.

• 28 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

• (a) Financial assets (Continued)

• (i) Classification and Measurement (Continued)

Debt instruments (Continued)

- FVOCI:

The business model the Group manages these financial assets is to collect contractual cash flows and to sell the assets, and those cash flows’ characteristics are consistent with those of the basic loans arrangements, i.e, the contractual cash flows of these financial assets at certain date represent solely payments of principal and interest based on the principal amount ("SPPI"),and that are not designated at FVPL. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, foreign exchange gains and losses and interest income on the instrument’s amortised cost which are recognised in profit or loss.

- FVPL:

Assets that do not meet the criteria for amortised cost or FVOCI are at FVPL. The Group may also irrevocably designate financial assets at fair value through profit or loss if doing so significantly reduces or eliminates a mismatch created by assets and liabilities being measured on different bases.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting the liabilities. A financial instrument is an equity instrument if, and only if, both conditions (i) and (ii) below are met:(i) The financial instrument includes no contractual obligation to deliver cash or another financial asset to another entity, or to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable to the Group; (ii) If the financial instrument will or may be settled in the Group’s own equity instruments, it is a non-derivative instrument that includes no contractual obligations for the Group to deliver a variable number of its own equity instruments; or a derivative that will be settled only by the Group exchanging a fixed amount of cash or another financial asset for a fixed number of its own equity instruments.

The Group subsequently measures all equity investments at FVPL, except where the Group has elected, at initial recognition, to irrevocably designate an equity investment at FVOCI. When this election is made, fair value gains and losses are recognised in other comprehensive income ("OCI") and are not subsequently reclassified to profit or loss, including on disposal. Dividends, when representing a return on such investments, are recognised in profit or loss when the Group’s right to receive payments is established.

• 29 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

• (a) Financial assets (Continued)

• (ii) Impairment

The Group assesses on a forward-looking basis the expected credit losses ("ECL") associated with its financial assets at amortised cost, debt instrument assets carried at FVOCI, lease receivables,contract assets, loan commitments and financial guarantee contracts for the issuer which are not measured at fair value through profit or loss.

When calculating the probability-weighted present value of the difference between the contractual and forecasted cash flows to be received, the Group takes reasonable and supportable information such as the past events, current conditions and forecasts of future economic conditions into consideration and uses probabilities of default as the weightings. The difference is recognised as the ECL.

At each balance sheet date, the Group calculates the ECL of financial instruments in different stages. Stage 1 refers to financial instruments that have not had a significant increase in credit risk since initial recognition; Stage 2 refers to financial instruments that have had a significant increase in credit risk since initial recognition but that do not have objective evidence of impairment; Stage 3 refers to financial assets for which there are objective evidence of impairment at the reporting date since initial recognition. For these assets at Stage 1, 12-month ECL are recognised and for assets at stage 2 and 3, life-time ECL are recognised. For financial assets with low credit risks as at the balance date, the Group recognises 12-month ECL based on the assumption that the credit risks have not significantly increased after initial recognition.

For financial assets in stage 1 and stage 2, interest income is calculated based on the gross carrying amount of the asset, that is, without deduction for credit allowance, and the effective interest rates. For financial assets in stage 3, interest income is calculated on the net carry amount, that is, net of credit allowances, and the effective interest rates.

The Group recognises the provision and reversal of ECL in profit or loss. For debt instrument at FVOCI, the Group makes relevant adjustments to other comprehensive income at the same time as recognising ECL in profit and loss.

For trade and other receivables and contract assets,whether there is significant financing component or not, the Group recognises life-time ECL.

• 30 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

• (a) Financial assets (Continued)

• (iii) Derecognition

The Group derecognises a financial asset if the portion being considered for derecognition meets one of the following conditions:

• The contractual rights to receive the cash flows from the financial asset expire;

• The financial asset has been transferred and the Group transfers substantially all the risks and rewards of ownership of such financial asset;

• The financial asset has been transferred, the Group has not retained any control over the financial asset, even if the Group neither transfers nor retains substantially all the risks and rewards of ownerships of the financial asset.

When the Group's equity instruments at FVOCI are derecognised, the difference between the carrying amount and the consideration is recognised in retained earnings, also, the cumulative gains or losses previously recognised in other comprehensive income are recycled to the retained earnings; for other financial assets, the difference between the carrying amount and the aggregate amount of consideration and accumulated fair value gain or loss recognised in other comprehensive income is recognised in profit and loss.

As part of its operations, the Group securitises financial assets, generally through the sale of these assets to structured entities which issue securities to investors. When the securitisation of financial assets qualifies for de-recognition, the relevant financial assets are de-recognised in their entirety and a new financial asset or liabilities is recognised regarding the interest in the unconsolidated securitisation vehicles that the Group acquired. When the securitisation of financial assets does not qualify for de-recognition, 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 partially qualifies for de-recognition, where the Group has not retained control, it derecognises these financial assets. Otherwise the Group continues to recognise these financial assets to the extent of its continuing involvement and recognises an associated liability.

The de-recognition 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.

• 31 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

• (a) Financial assets (Continued)

• (iv) modification of investment in financial assets

The Group sometimes renegotiates or otherwise modifies the contractual cash flows of loans to customers. When this happens, the Group assesses whether or not the new terms are substantially different to the original terms. The Group does this by considering, among others, the following factors:

• If the borrower is in financial difficulty, whether the modification merely reduces the contractual cash flows to amounts the borrower is expected to be able to pay;

• Whether any substantial new terms are introduced, such as a profit share/equity-based return that substantially affects the risk profile of the loan;

• Significant extension of the loan term when the borrower is not in financial difficulty.

• Significant change in the interest rate;

• Change in the currency the loan is denominated in;

• Insertion of collateral, other security or credit enhancements that significantly affect the credit risk associated with the loan.

If the terms are substantially different, the Group derecognises the original financial asset and recognises a ‘new’ asset at fair value and recalculates a new effective interest rate for the asset. The date of renegotiation is consequently considered to be the date of initial recognition for impairment calculation purposes, including for the purpose of determining whether a significant increase in credit risk has occurred. However, the Group also assesses whether the new financial asset recognised is deemed to be credit-impaired at initial recognition, especially in circumstances where the renegotiation was driven by the debtor being unable to make the originally agreed payments. Differences in the carrying amount are also recognised in profit or loss as a gain or loss on derecognition.

If the terms are not substantially different, the renegotiation or modification does not result in derecognition, and the Group recalculates the gross carrying amount based on the revised cash flows of the financial assest and recognises a modified cash flows at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated creditimpaired financial assets).

• 32 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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) Financial liabilities

The financial liabilities are classified into those measured at amortised cost and those at fair value through profit and loss at initial recognition.

The Group’s major financial liabilities are those measured at amortised cost which are measured initially at fair value less transaction costs and are measured subsequently using the effective interest method.

Financial liabilities or a portion thereof, are derecognised when their current obligation are fully or partially expired. The difference between the carrying amount of the derecognised portion and the consideration is recognised in profit or loss.

• (c) Fair value measurement principles

Fair value measurement principles of financial instruments are set out in note3(14).

• (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.

• 33 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

• (e) Derivatives

Derivatives are initially recognised at fair value on the date on which the derivative contract is entered into and are subsequently remeasured at fair value. All derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative.

Certain derivatives are embedded in hybrid contracts, such as the conversion option in a convertible bond. If the hybrid contract contains a host that is a financial asset, then the Group assesses the entire contract as described in the financial assets section above for classification and measurement purposes. Otherwise, the embedded derivatives are treated as separate derivatives when:

• Their economic characteristics and risks are not closely related to those of the host contract;

• A separate instrument with the same terms would meet the definition of a derivative; and

• The hybrid contract is not measured at fair value through profit or loss.

These embedded derivatives are separately accounted for at fair value, with changes in fair value recognised in the statement of profit or loss unless the Group chooses to designate the hybrid contracts at fair value through profit or loss.

The method of recognizing the resulting fair value gain or loss depends on whether the derivative is designated and qualifies as a hedging instrument, and if so, the nature of the item being hedged.

• 34 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 non-financial 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 • right of use assets • 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 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.

• 35 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 non-financial 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 (if any) 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.

• 36 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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

Employee benefits refer to all forms of consideration or compensation given by the Group in exchange for service rendered by employees or for termination of employment relationship, which include short-term employee benefits, post-employment benefits, termination benefits and other long-term employee benefits.

(a) Short-term employee benefits

Employee wages or salaries, bonuses, social security contributions such as medical insurance, work injury insurance, maternity insurance,housing fund,labour union fee and staff and workers’ education fee, 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) Post-employment benefits: Defined benefit plans

The defined benefit plans of the Group are supplementary retirement benefits provided to the domestic employees.

• (d) 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.

• 37 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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.

• 38 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 guarantees issues, provisions and contingent liabilities

• (a) Financial guarantee contracts

• Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The liability is initially measured at fair value and subsequently at the higher of:

• the amount determined in accordance with the expected credit loss model with and

• • the amount initially recognised less, where appropriate, the cumulative amount of income recognised in accordance with the principles of New Revenue Standard.

The fair value of financial guarantees is determined based on the present value of the difference in cash flows between the contractual payments required under the debt instrument and the payments that would be required without the guarantee, or the estimated amount that would be payable to a third party for assuming the obligations.

Where guarantees in relation to loans or other payables of associates and joint ventures are provided for no compensation, the fair values are accounted for as contributions and recognised as part of the cost of the investment.

• (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.

• 39 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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

The Group recognises revenue when it satisfies a performance obligation by transferring a promised good to a customer, which is when the customer obtains control of a good, has the ability to direct the use of, and obtain substantially all of the remaining benefits from that good. If the control of the goods and services is transferred over a period of time, the Group recognises revenue by reference to the extent of progress toward completion in fulfilling its performance obligations during the entire contract period.

For the amounts of revenue recognised for goods transferred and services provided, the Group recognises any unconditional rights to consideration separately as a receivable and the rest as a contract asset, and recognises provisions for loss allowance of the receivable and the contract asset using ECL model; if the consideration received or receivable exceeds the obligation performed by the Group, a contract liability is recognised. The Group presents a net contract asset or a net contract liability under each contract.

Contract costs include costs to fulfill a contract and of obtaining a contract. The cost incurred for providing services by the Group is recognised as the costs to fulfill a contract, and is amortised based on the progress towards completion of the service provided when recognising revenue. The incremental cost incurred by the Group to obtain contract is recognised as the costs of obtaining a contract. For costs of obtaining a contract that will be amortised within one year, the Group recognises it in profit and loss when incurred. For the costs of obtaining a contract that will be amortised for more than one year period, it is amortised in profit and loss based on same progress towards completion as recognising revenue. The Group recognises the excess of the carrying amounts of contract costs over the expected remaining consideration less any costs not yet recognised as an impairment loss. As at the balance sheet date, the Group presents the costs to fulfill and of obtaining a contract, in the net amount after deducting relevant asset impairment provisions as inventories and other assets respectively.

• 40 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

The Group recognises revenue for each of its activities in the income statement in accordance with below policies:

(a) Interest Income

Interest income is recognised according to New Financial Instruments Standard, refer to Note 3(12) financial instruments for details.

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.

(b) Fee and commission income

Fee and commission income is recognised 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.

(c) Sales of goods

Revenue from the sale of goods is recognised when the goods are transferred to and accepted by a customer.

When volume discounts are provided to customers, the Group, based on historical experiences, estimates the volume discounts using the expected value method, and recognises revenue net of the estimated volume discounts.

When the customer has a right to return the product within a given period, the Group recognises a provision for returns using the expected value method based on historical experience, and reduce the revenue by the expected value of the returns. The Group recognises provisions for the expected refunds to customers; meanwhile, other assets are to be recognised according to the carry amount of the goods expected to be returned, deducting the expected cost for taking the related goods back.

• 41 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 (Continued)

The Group offers warranties for specific products. If the duration and terms of the warranties are offered in accordance with the requirements of laws and regulations and the Group does not provide any additional services or warranties, such warranties are not recognised as separate performance obligation.

(d) Services rendered to customers

Revenue for construction services of the Group is recognised over the period of the contract by reference to the progress towards completion. Progress towards completion is calculated based on actual costs incurred as to the end of each period as a proportion to the total forecasted costs of the contract. As at each balance sheet date, the Group reassesses the progress towards completion to reflect the changes in performance.

Revenue for other services provided by the Group is recognised based on the pattern of performance obligation of specific services, either over the period in which the services are rendered or at the point of service completion. For revenue recognised over the period by reference to the progress towards completion, progress towards completion is calculated based on actual costs incurred as to the end of each period as a proportion to the total forecasted costs of the contract. As at each balance sheet date, the Group reassesses the estimate of the progress towards completion to reflect the changes in performance.

(e) Revenue from Lease

Revenue from Lease is recognised according to the new leasing standard, refer to Note 3(8) for details.

• (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.

Government grants related to assets refer to government grants which are obtained by the Group for the purposes of purchase, construction or acquisition of the long-term assets. Government grants related to income refer to the government grants other than those related to assets.

• 42 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 (Continued)

Government grants related to assets are either deducted against the carrying amount of the assets, or recorded as deferred income and recognised in profit or loss on a systemic basis over the useful lives of the assets. Government grants related to income that compensate the future costs, expenses or losses are recorded as deferred income and recognised in profit or loss, or deducted against related costs, expenses or losses in reporting the related expenses; government grants related to income that compensate the incurred costs, expenses or losses are recognised in profit or loss, or deuducted against related costs, expenses or losses directly in current period. The Group applies the presentation method consistently to the similar government grants in the financial statements.

Government grants that are related to ordinary activities are included in operating profit, otherwise, they are recorded in non-operating income or expenses.

For the policy loans with favourable interest rates, the Group records the loans at the actual amounts and calculates the interests by loan principals and the favourable interest rates. The interest subsidies directly received from government are recorded as a reduction of interest expenses.

(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.

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.

• 43 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

• 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

At the inception of the hedging, the Group documents the economic relationship between hedging instruments and hedged items as well as risk management goals and strategies of various hedging transactions. When a hedge no longer meets the criteria for hedge accounting or the Group’s risk management goals, the Group terminates the use of hedge accounting prospectively. Situations for the Group to terminate the use of hedge accounting include hedging instrument expires, or is sold, terminated and settled.

(a) Fair value hedge

A hedge of the exposure to changes in fair value of a recognised asset or liability or an unrecognised firm commitment, or a component of any such item, that is attributable to a particular risk and could affect profit or loss. If the hedged item is an equity instrument for which the Group has elected to present changes in fair value in other comprehensive income, the hedged exposure referred to fair value must be one that could affect other comprehensive income. In that case, and only in that case, the recognised hedge ineffectiveness is presented in other comprehensive income.

• 44 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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) Fair value hedge (Continued)

The gain or loss on the hedging instrument shall be recognised in profit or loss (or other comprehensive income, if the hedging instrument hedges an equity instrument for which the Group has elected to present changes in fair value in other comprehensive).

The hedging gain or loss on the hedged item shall adjust the carrying amount of the hedged item (if applicable) and be recognised in profit or loss.However, if the hedged item is an equity instrument for which the Group has elected to present changes in fair value in other comprehensive income, those amounts shall remain in other comprehensive income.

• (b) Cash flow hedge

A hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with all, or a component of, a recognised asset or liability (such as all or some future interest payments on variable-rate debt) or a highly probable forecast transaction, and could affect profit or loss.

The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge shall be recognised in other comprehensive income. Any remaining gain or loss on the hedging instrument is hedge ineffectiveness that shall be recognised in profit or loss.

If a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability, or a hedged forecast transaction for a non-financial asset or a non-financial liability becomes a firm commitment for which fair value hedge accounting is applied, the entity shall remove that amount from the cash flow hedge reserve and include it directly in the initial cost or other carrying amount of the asset or the liability. For cash flow hedges other than those covered by the preceding policy statement, that amount shall be reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment in the same period or periods during which the hedged expected future cash flows affect profit or loss.

However, if that amount is a loss and the Group expects that all or a portion of that loss will not be recovered in one or more future periods, it shall immediately reclassify the amount that is not expected to be recovered into profit or loss as a reclassification adjustment.

When the Group discontinues hedge accounting for a cash flow hedge, it shall account for the amount that has been accumulated in the cash flow hedge reserve as follows: if the hedged future cash flows are still expected to occur, that amount shall remain in the cash flow hedge reserve until the future cash flows occur, if the hedged future cash flows are no longer expected to occur, that amount shall be immediately reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment .

• 45 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

• (c) Hedge of a net investment in a foreign operation

A hedge of net investment in a foreign operation refers to hedge of the foreign exchange exposure arising from net investment in a foreign operation. The “net investment in a foreign operation” refers to an enterprise's equity proportion in the net assets in a foreign operation.

Hedge of a net investment in a foreign operation is accounted for similarly to cash flow hedges. The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised in other comprehensive income; and the ineffective portion is recognised in profit or loss. The cumulative gain or loss on the hedging instrument relating to the effective portion of the hedge is reclassified to profit or loss on the disposal or partial disposal of the foreign operation.

• (d) Hedge effectiveness testing

In order to qualify for hedge accounting, the Group continuously evaluate whether the hedging relationship is effective from the hedge date and after.

The hedge relationship meets hedging effectiveness requirements if the hedging meets the following conditions:

• There is an economic relationship between the hedged item and the hedging instrument;

• The effect of credit risk does not dominate the value changes that result from that economic relationship; and

• The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the entity actually hedges and the quantity of the hedging instrument that the entity actually uses to hedge that quantity of hedged item.

(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 off-balance sheet items at their principal amounts and no impairment assessments are made for these entrusted loans.

• 46 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

• (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.

• (25) Related parties

• (a) A person, or a close member of that person’s family, is related to the Group if that person:

• (i) has control or joint control over the Group;

• (ii) has significant influence over the Group; or

• (iii) 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:

• (i) 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).

• (ii) 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).

• (iii) Both entities are joint ventures of the same third party.

• (iv) 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).

• (v) The entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group.

• (vi) The entity is controlled or jointly controlled by a person identified in (a).

• (vii) 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).

• (viii) The entity, or any member of a group of which it is a part, provides key management personnel services to the Group or to the parent of the Group.

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.

• 47 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

3 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.

Business segments are identified based on the Group’s internal management requirements as well as following aspects. If two or more business segments or regional segments satisfy the following conditions at the same time, they may be merged:

• 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.

• 48 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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

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.

(a) Classification of financial assets

The critical judgments the Group has in determining the classification of financial assets include analysis of business models and characteristics of contractual cash flows.

The Group determines the business model for managing financial assets at the level of financial asset portfolio. The factors considered include evaluation and reporting of financial asset performance to key management personnel, risks affecting the performance of financial assets and their management methods, and the way related business management personnel receive payments.

When assessing whether the contractual cash flow of financial assets is consistent with the basic lending arrangement, the Group has the following main judgments: whether the principal may be subject to change in the duration or amount of money due to prepayments during the duration; whether interests is only included currency time value, credit risk, other basic borrowing risks, and considerations for costs and profits. For example, whether the amount paid in advance reflect only the outstanding principal and interest on the outstanding principal, as well as reasonable compensation for early termination of the contract.

(b) Measurement of ECL

Measurement of ECL for financial assets at amortised cost and FVOCI is an area that requires the use of complex models and significant assumptions about future economic conditions and credit behaviour (e.g. the likelihood of customers defaulting and the resulting losses). Explanation of the inputs, assumptions and estimation techniques used in measuring ECL is further detailed in Note 6(48)(a).

• 49 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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) Measurement of ECL(Continued)

A number of significant judgements are also required in applying the accounting requirements for measuring ECL, such as:

• Determining criteria for significant increase in credit risk;

• Choosing appropriate models and assumptions for the measurement of ECL;

• Establishing the number and relative weightings of forward-looking scenarios for each type of product and the associated ECL; and

• Establishing groups of similar financial assets for the purposes of measuring ECL.

Detailed information about the judgements and estimates made by the Group in the above areas is set out in Note 6(48)(a).

(c) Provision for inventories

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.

• 50 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

• (d) Impairment of non-financial assets

Assets with any indication of impairment such as fixed assets, intangible assets, ROU assets and interests in associates and joint ventures 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

Fixed assets and intangible assets with limited useful lives 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.

• 51 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

• (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) 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 utilize the deferred tax assets. The outcome of their actual utilisation may be different.

(h) 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 an 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.

• (i) De-recognition of financial assets

In its normal course of business, the Group transfers financial assets through various types of transactions including regular way sales and transfers, securitisation, financial assets sold under repurchase agreements, and etc. The Group applies significant judgement in assessing whether it has transferred these financial assets which qualify for a full or partial de-recognition.

• 52 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

• (i) De-recognition of financial assets (Continued)

Where the Group enters into structured transactions by which it transferred financial asset to structured entities, the Group analyses whether the substance of the relationship between the Group and these structured entities indicates that it controls these structured entities to determine whether the Group needs to consolidate these structured entities. This will determine whether the following de-recognition analysis should be conducted at the consolidated level or at the entity level from which the financial assets was transferred.

The Group analyses the contractual rights and obligations in connection with such transfers to determine whether the de-recognition criteria are met based on the following considerations.

• whether it has transferred the rights to receive contractual cash flows from the financial assets or the transfer qualified for the “pass through” of those cash flows to independent third parties;

• the extent to which the associated risks and rewards of ownership of the financial assets are transferred by using appropriate models. Significant judgment is applied in the Group’s assessment with regard to the parameters and assumptions applied in the models, estimated cash flows before and after the transfers, the discount rates used based on current market interest rates, variability factors considered and the allocation of weightings in different scenarios;

• where the Group neither retained nor transferred substantially all of the risks and rewards associated with their ownership, the Group analyses whether the Group has relinquished its controls over these financial assets, and if the Group has continuing involvement in these transferred financial assets.

• (j) Control and consolidation

The Group makes significant judgment to assess whether or not to consolidate structured entities. When performing this assessment, the Group:

• assesses its contractual rights and obligations in light of the transaction structures, and evaluates the Group’s power over the structured entities;

• performs independent analyses and tests on the variable returns from the structured entities, including but not limited to commission income and asset management fees earned, retention of residual income, and, if any, liquidity and other support provided to the structured entities; and

• assesses its ability to exercise its power to influence the variable returns assessed whether the Group acts as a principal or an agent through analysis of the scope of the Group’s decision-making authority, remuneration entitled, other interests the Group holds, and the rights held by other parties.

• 53 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

3 Significant accounting policies and accounting estimates (Continued)

• (j) Control and consolidation (Continued)

The Group holds less than 50% shares and voting rights in certain subsidiaries. When assessing whether it has substantive control over these investees, the Group has taken certain factors into account including the size of the Group’s shareholding relative to other shareholders, dispersion of the voting rights of the other shareholders, the Group’s relationship with other investors, any history of any other shareholders collaborating to exercise their votes collectively or to out vote the Group; the group’s relationship with the key management personnel of the investees, whether the Group has the right to appoint or approve the majority of the board seats and other key management personnel of the investees, whether the Group controls certain assets such as licences or trademarks that are critical to the operations of the investees, whether the Group and other shareholders’ rights over the investees are substantive, and any other contractual arrangements. The Group considers factors that are applicable to a specific individual investee on an ongoing basis when determining whether it has substantive rights over the investees.

4 Taxation

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

(1) Tax Name Tax basis VAT Output VAT is 6-13% 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. If the simplified tax calculation method is adopted, the VAT payable shall be calculated at the rate of 3% or 5% of the taxable services revenue, and the input tax shall not be deducted. 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 2021 is 25% (2020: 25%).

Except for certain subsidiaries of the Group which are entitled to preferential tax treatment, the statutory income tax rate applicable to the Group’s other domestic subsidiaries for the year ended 31 December 2021 is 25% (2020: 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 VAT unpayable Others	31 December 2021 8,581,006 6,388,086 933,570 15,902,662	31 December 2020 7,397,042 5,053,779 872,715
		13,323,536

• 54 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

5 Subsidiaries

(1) As at 31 December 2021, the consolidated financial statements included the following subsidiaries:

				Registered	capital	Percentage of equity
						attributable
						to the
			Registered			Company
	Place of	Principal place	principal			direct /
Name of subsidiary	registration	of business	activities	In thousands	Currency	indirect
China CITIC Bank
Corporation
Limited(“CITIC Bank”)	Mainland China	Mainland China	Banking industry	48,934,797	RMB	65.39%
CITIC Trust Co., Ltd.	Mainland China	Mainland China	Trust industry	11,276,000	RMB	100%
CITIC Finance Company
Limited	Mainland China	Mainland China	Financial services	4,751,348	RMB	68.17%
CITIC Consumer Finance
Co.,Ltd	Mainland China	Mainland China	Consumer finance	700,000	RMB	70%
CITIC Resources Holdings			Resources
Limited (note (a))	Bermuda	Hong Kong	and energy	500,000	HKD	59.50%
CITIC Australia Pty			Resources
limited	Australia	Australia	and energy	85,882	AUD	100%
			Resources
CITIC Kazakhstan LLP	Kazakhstan	Kazakhstan	and energy	10	USD	100%
CITIC Heavy Industries
Co., Ltd.	Mainland China	Mainland China	Manufacturing	4,339,419	RMB	67.27%
CITIC Construction			Engineering
Company Limited	Mainland China	Mainland China	construction	6,637,000	RMB	100%
CITIC Engineering Design
and Construction			Engineering
Company Limited	Mainland China	Mainland China	construction	1,000,000	RMB	100%
CITIC Urban
Development &			Real estate
Operation Co., Ltd.	Mainland China	Mainland China	development	7,860,000	RMB	100%
CITIC Heye Investment			Real estate
Co., Ltd.	Mainland China	Mainland China	development	100,000	RMB	100%
CITIC Asset Operation			Development
Co., Ltd.	Mainland China	Mainland China	management	200,000	RMB	100%
CITIC Capital Mansion			Development
Co., Ltd.	Mainland China	Mainland China	management	800,000	RMB	100%
CITIC Building Property			Development
Management Co., Ltd.	Mainland China	Mainland China	management	27,400	RMB	100%
CITIC Industrial
Investment Group Corp.,			Infrastructure and
Ltd.	Mainland China	Mainland China	elderly service	2,600,000	RMB	100%
			Energy
CITIC Environment			conservation and
Investment Group Co.,			environment
Limited	Mainland China	Mainland China	protection	4,000,000	RMB	100%
China Zhonghaizhi
Corporation	Mainland China	Mainland China	General aviation	1,000,000	RMB	51.03%
CITIC Investment			Investment and
Holdings Limited	Mainland China	Mainland China	holding	928,000	RMB	100%
CITIC Asia Satellite
Holding Company	British Virgin		Information
Limited (note (b))	Islands	Hong Kong	industry	100,000	USD	100%
CITIC Press
Corporation	Mainland China	Mainland China	Publishing	190,152	RMB	73.50%
CITIC Holdings Co., Ltd.	Mainland China	Mainland China	Service	650,000	RMB	100%
CITIC Tourism Group Co.,
Ltd.	Mainland China	Mainland China	Service	185,900	RMB	100%
CITIC Dicastal Company
Limited (note (c)) (“CITIC
Dicastal”)	Mainland China	Mainland China	Manufacturing	2,075,098	RMB	42.11%

• 55 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

5 Subsidiaries (Continued)

• (1) As at 31 December 2021, the consolidated financial statements included the following subsidiaries (Continued):

Notes:

• (a) CITIC Resources Holdings Limited (“CITIC Resources”) is directly held by the Group’s wholly-owned subsidiaries, CITIC Australia Pty Limited and Keentech Group Limited.

• (b) CITIC Asia Satellite Holding Company Limited are directly held by the Group’s whollyowned subsidiary, CITIC Projects Management (HK) Limited.

• (c) CITIC Dicastal Company Limited has been incorporated into the scope of merger since November 1, 2020, and is directly held by CITIC Industrial Investment Group Corp., Ltd. , a wholly-owned subsidiary of the group.

• (d) 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
	Proportion of			balances of NCI
	equity interest	Profit for 2021	Dividends paid to	at 31 December
Name of subsidiary	held by NCI	allocated to NCI	NCI during 2021	2021
CITIC Bank Corporation Limited	34.61%	21,961,612	7,311,833	308,242,314
CITIC Heavy Industries Limited
Corporation Limited (“CITIC
Heavy Industries”)	32.73%	70,174	33,555	2,665,304
CITIC Resources	40.50%	379,997	-	2,282,245
CITIC Dicastal	42.11%	421,996	223,712	3,821,850
				Accumulated
	Proportion of			balances of NCI
	equity interest	Profit for 2020	Dividends paid to	at 31 December
Name of subsidiary	held by NCI	allocated to NCI	NCI during 2020	2020
CITIC Bank Corporation Limited	34.61%	19,768,388	7,446,011	252,945,050
CITIC Heavy Industries Limited
Corporation Limited (“CITIC
Heavy Industries”)	32.73%	68,917	19,239	2,727,476
CITIC Resources	40.50%	(128,329)	-	1,945,643
CITIC Dicastal	42.11%	63,770	-	3,608,855

• 56 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

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	CITICBank 2021 2020 Hong Kong and Shanghai 8,042,884,263 7,511,161,102 (7,400,256,968) (6,951,122,911) 204,557,496 194,730,532 56,377,691 49,532,444 57,871,554 42,368,462 (75,393,371) 156,863,110	CITICHeavyIndustries 2021 2020 Shanghai 20,377,940 20,212,121 (12,639,981) (12,560,010) 7,550,020 6,318,223 222,608 200,179 171,119 200,179 681,951 605,182	CITICResources 2021 2020 Hong Kong 10,386,576 10,331,383 (4,726,067) (5,477,377) 3,611,457 2,539,401 925,114 (321,221) 1,004,443 959,870 919,309 102,344	CITIC Dicastal
				2021 2020 Unlisted 33,253,011 29,231,206 (24,180,425) (20,664,507) 31,994,513 6,027,777 1,002,209 151,438 1,029,492 148,240 1,720,434 2,023,590

• 57 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 Accrued interest Less: allowance for impairment losses on deposits with banks and non-bank financial institutions (Note 6(18))	31 December 2021 5,903,187 16,756,871 363,794,465 65,570,664 2,711,463 - 115,499,625 570,236,275 1,098,477 571,334,752 (145,337) 571,189,415	31 December 2020 5,973,265 22,214,579 370,203,721 57,210,811 1,048,685 3,200,288 148,748,799
		608,600,148 687,659
		609,287,807 (130,717)
		609,157,090

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 funds with the People’s Bank of China and overseas central banks where they have operations. The statutory deposit reserves funds are not available for use in their daily business.

As at 31 December 2021, the statutory deposit reserve funds placed by CITIC Bank with the People’s Bank of China was calculated at 8% (31 December 2020: 9%) of eligible RMB deposits for domestic branches of CITIC Bank and at 8% (31 December 2020: 9%) of eligible RMB deposits from overseas financial institutions respectively. In addition, CITIC Bank is required to deposit an amount equivalent to 9% (31 December 2020:5%) of its foreign currency deposits from domestic branch customers as statutory deposit reserve funds as at 31 December 2021.

As at 31 December 2021, the statutory RMB deposit reserve rate applicable to Zhejiang Lin’an CITIC Rural Bank Corporation Limited, a subsidiary of CITIC Bank, according to the corresponding regulations of the People's Bank of China, was at 5% (31 December 2020: 6%).

The amounts of statutory deposit reserve funds placed with the central banks of overseas countries are determined by respective jurisdictions. The statutory deposit reserve funds are interest bearing except for the foreign currency reserve funds deposits placed with The People’s Bank Of China.

• 58 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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):

As at 31 December 2021, the statutory deposit reserve funds placed by CITIC Finance with the People’s Bank of China was calculated at 5% (31 December 2020: 6%) of eligible RMB deposits from the customers of CITIC Finance. As at 31 December 2021, CITIC Finance is also required to deposit an amount equivalent to 9% (31 December 2020: 5%) of its foreign currency deposits from the customers as statutory deposit reserve funds.

• (c) The surplus deposit reserve funds are maintained with the People’s Bank of China for the purposes of clearing.

• (d) Fiscal deposits placed with the People’s Bank of China that are not available for use in the Group’s daily operations, and 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. The reserve is payable on a monthly basis at 20%(31 December 2020: 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. From 12 October 2020, the People’s Bank of China has adjusted the rate of foreign exchange reserve from 20% to nil.

• (f) In addition to the statutory deposit reserve funds, fiscal deposits and foreign exchange reserves, RMB 1066 million (31 December 2020: RMB 868 million) included in cash and deposits as at 31 December 2021 are restricted in use. They mainly include guaranteed deposits.

The Company Cash Bank deposits Accrued interest	31 December 2021 - 18,542,821 18,542,821 6,449 18,549,270	31 December 2020 30 15,059,404
		15,059,434 9,991
		15,069,425

• 59 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

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

The Group

Banks Non-bank financial institutions Accrued interest Less: allowance for impairment losses(Note 6(18))	31 December 2021 52,310,816 89,070,318 141,381,134 768,726 142,149,860 (88,865) 142,060,995	31 December 2020 79,619,627 86,195,762
		165,815,389 1,358,084
		167,173,473 (96,974)
		167,076,499

(3) Derivative financial instruments

Derivatives include forward, swap and option transactions undertaken by the Group in foreign exchange, precious metals, interest rate and credit derivatives related to trading, asset and liability management and customer initiated transactions. 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 to manage its own asset and liability and structural positions. Derivatives, except for those which are designated as hedging instruments, are held for trading. Derivatives classified as held for trading are for trading and customer initiated transactions purpose, and those for risk management purposes but do not meet the criteria for hedge accounting.

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 provide a basis for comparison with fair values of derivatives recognised on the consolidated statement of financial position but do not necessarily indicate the amounts of future cash flows involved or the current fair values of the derivatives and, therefore, do not indicate the Group’s exposure to credit or market risks. Hedging instruments are derivatives used as hedge accounting, and non-hedging instruments are derivatives not used as hedge accounting.

• 60 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (3) Derivative financial instruments (Continued)

The Group

Hedging instruments Cash flow hedge - Currency derivatives - Other derivatives Non-hedging instruments - Interest rate derivatives - Currency derivatives - Precious metals derivatives	31 December 2021	31 December 2021	Liabilities 348,608 526 8,538,908 14,211,420 151,050 23,250,512	31	December 2020
	Nominal amount 546,260 83,546 2,630,540,123 1,936,863,108 17,043,410 4,585,076,447	Assets 4,905 12,274 8,642,689 13,930,280 148,149 22,738,297		Nominal amount 158,013 486,741 3,058,057,562 1,977,917,566 19,244,778 5,055,864,660	Assets - 60,356 9,395,206 30,432,148 305,511 40,193,221	Liabilities 9,900 1,943 9,137,106 30,551,125 83,270
						39,783,344

• 61 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (3) Derivative financial instruments (Continued)

• (a) Nominal amount analysed by remaining maturity

Within 3 months Between 3 months and 1 year Between 1 and 5 years Over 5 years	31 December 2021 2,067,777,904 1,376,926,898 1,109,268,473 31,103,172 4,585,076,447	31 December 2020 1,953,911,011 2,054,397,554 1,020,239,558 27,316,537
		5,055,864,660

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

• (b) Credit risk weighted amounts

The credit risk weighted amounts are solely in connection with the derivatives held by CITIC Bank, and have 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. As at 31 December 2021, the credit risk weighted amount for counterparty was RMB 22204million (31 December 2020: RMB 23,184 million ).

• 62 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (4) Trade and other receivables

The Group Bills receivables (note (a), (b) & (d)) Trade receivables (note (b), (c) ) Prepayments (note (e)) Other receivables (note (f)) Dividends receivables Long term receivables(note(g)) Less: allowance for impairment losses (Note 6(18)) The Company Other receivables (note (f)) Receivables due from subsidiaries Dividends receivables Less: allowance for impairment losses	31 December 2021 1,620,224 33,805,493 10,976,162 67,975,151 102,139 13,332,163 127,811,332 (11,779,428) 116,031,904 31 December 2021 5,613,188 21,956,168 582,221 28,151,577 (1,652,300) 26,499,277	31 December 2020 2,079,068 25,114,194 18,024,042 73,489,609 96,805 12,874,526
		131,678,244 (9,192,887)
		122,485,357
		31 December 2020 6,565,744 22,726,726 644,940
		29,937,410 (1,700,686)
		28,236,724

• 63 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (4) Trade and other receivables (Continued)

• (a) Bills receivables

Bank acceptance bills Commercial acceptance bills	31 December 2021 1,434,724 185,500 1,620,224	31 December 2020 1,921,734 157,334
		2,079,068

• (b) Overdue analysis of trade and bill receivables at amortised cost

As at 31 December 2021, the Group measures expected credit losses which uses a lifetime expected loss allowance for all account and bills receivables. As at the balance sheet date, the analysis of trade and bills receivables at amortised cost of the Group based on the days overdue is as follows:

Current Up to 3 months overdue 3 months to 1 year overdue Over 1 year overdue Current Up to 3 months overdue 3 months to 1 year overdue Over 1 year overdue	As at31 December 2021	As at31 December 2021	As at31 December 2021
	Expected credit loss rate Gross carrying amount Loss allowance provision 2% 21,752,870 (497,384) 2% 1,207,463 (24,228) 4% 3,010,169 (115,165) 60% 9,104,403 (5,474,184) 35,074,905 (6,110,961) As at31 December 2020		Loss allowance provision (497,384) (24,228) (115,165) (5,474,184)
			(6,110,961)
	Expected credit loss rate 3% 3% 2% 47%	Gross carrying amount 13,969,642 867,198 2,044,717 8,428,762 25,310,319	Loss allowance provision (413,442) (25,454) (41,402) (3,956,310)
			(4,436,608)

• 64 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (4) Trade and other receivables (Continued)

• (b) Overdue analysis of trade and bill receivables at amortised cost(Continued)

Note：

Each business unit has its own defined credit policy that is specific to the respective business environment and market practice.

• (c) Trade receivables at amortised cost

• (i) Ageing analysis

the ageing analysis of account receivables at amortised cost of the Group based on invoice date is as follows:

Within 1 year (inclusive) Between 1 and 2 years (inclusive) Between 2 and 3 years (inclusive) Over 3 years Less: allowance for impairment losses (ii) Customer type: Related parties Other customers Less: allowance for impairment losses	31 December 2021 21,919,006 4,742,894 1,153,437 5,990,156 33,805,493 (6,109,452) 27,696,041 31 December 2021 2,243,313 31,562,180 33,805,493 (6,109,452) 27,696,041	31 December 2020 15,450,104 2,967,827 1,218,193 5,478,070
		25,114,194 (4,435,960)
		20,678,234
		31 December 2020 956,257 24,157,937
		25,114,194 (4,435,960)
		20,678,234

• 65 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(4) Trade and other receivables (Continued) (c) Trade receivables at amotised cost (Continued) (iii) The movements in provisions are as follows: 2021 Balance at the beginning of the year 4,435,960 Charge 1,783,341 Write-off (58,419) Business combinations - Disposal of subsidiaries (3,313) Exchange differences and others (48,117) Balance at the end of the year 6,109,452	2020 2,944,633 1,534,267 (58,605) 154,496 (122) (138,709)
	4,435,960

(d) By 31 December 2021, the book value of the Group’s bills receivables is RMB 351million (31 December 2020: RMB 1,883 million).

• (e) Prepayments

The ageing analysis of prepayments is as follows:

Within 1 year (inclusive) Between 1 and 2 years (inclusive) Between 2 and 3 years (inclusive) Over 3 years Less: allowance for impairment losses (Note 6(18))	31 December 2021 8,133,003 1,762,401 873,530 207,228 10,976,162 (61,491) 10,914,671	31 December 2020 16,611,594 1,042,036 89,556 280,856
		18,024,042 (64,872)
		17,959,170

• 66 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(4) Trade and other receivables (Continued) (e) Prepayments(Continued) Prepayments by customer type: 31 December 2021 Related parties 421,904 Other customers 10,554,258 10,976,162 Less: allowance for impairment losses (61,491) 10,914,671 (f) Other receivables Other receivables by customer type: The Group 31 December 2021 Related parties 19,448,931 Other customers 48,526,220 67,975,151 Less: allowance for impairment losses (5,394,974) 62,580,177 The Company 31 December 2021 Related parties 5,606,489 Other customers 6,699 5,613,188 Less: allowance for impairment losses (6,699) 5,606,489	31 December 2020 245,230 17,778,812
	18,024,042 (64,872)
	17,959,170
	31 December 2020 22,899,218 50,590,391
	73,489,609 (4,463,598)
	69,026,011
	31 December 2020 6,559,045 6,699
	6,565,744 (6,699)
	6,559,045

• 67 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (4) Trade and other receivables (Continued)

• (f) Other receivables (Continued)

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

The Group

Balance at the beginning of the year Charge Write-off Business combinations Disposal of subsidiaries Exchange differences and others Balance at the end of the year The Company Balance at the beginning of the year Charge Balance at the end of the year	2021 4,463,598 902,479 (229,562) - (3,931) 262,390 5,394,974 2021 6,699 - 6,699	2020 3,897,580 662,854 (4,954) 3,988 (6,399) (89,471)
		4,463,598
		2020 6,699 -
		6,699

(g) The long term receivables primarily include PPP (Public-Private Partnership)project receivables and first-level land development. As at 31 December 2021, the allowance for impairment losses of the Group’s long term receivables is RMB 212 million (31 December 2020: RMB 228 million).

• 68 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

6 Notes to the consolidated financial statements (Continued)

• (5) Contract assets and contract liabilities

The Group has recognised the following assets and liabilities related to contracts with customers:

Contract assets Less: Allowance for impairment allowance (note(a),6(18)) Total contract assets Advances from customers for contract work Total contract liabilities	31 December 2021 10,676,195 (9,632) 10,666,563 16,345,284 16,345,284	31 December 2020 11,107,666 (13,544)
		11,094,122 13,804,976
		13,804,976

(a) Assessment of allowance for impairment losses of contract assets.

As at 31 December 2021 Expected credit loss rate Gross carrying amount Loss allowance provision Impairment allowance 0.09% 10,676,195 (9,632) As at31 December 2020 Expected credit loss rate Gross carrying amount Loss allowance provision Impairment allowance 0.12% 11,107,666 (13,544) Revenue recognised during the year that related to carried-forward contract liabilities During the year ended 31 December 2021 During the year ended 31 December 2020 Revenue from contracts with customers 8,079,180 6,502,827	As Expected credit loss rate 0.09%	at 31 December 2021 Gross carrying amount Loss allowance provision 10,676,195 (9,632) As at31 December 2020	Loss allowance provision (9,632)
			Loss allowance provision (13,544)

• (b) Revenue recognised during the year that related to carried-forward contract liabilities

• (c) Revenue to be recognised in relating to unsatisfied performance obligations

As of 31 December 2021, transaction price allocated to unsatisfied contracts of the Group is totalled at 80,895 million (31 December 2020: 84,646 million) of which 29,878 million (31 December 2020: 24,362 million) is expected to be recognised in the next year and the remaining 51,017 million (31 December 2020: 60,284 million) is expected to be recognised after more than one year.

• 69 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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

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

Raw materials Work-in-progress Finished goods Properties Others Less: provision for decline in value of inventories (Note 6(18))	Balance at the beginning of 2021 2,109,756 4,459,436 5,280,655 12,737,909 1,019,685 25,607,441 (830,381) 24,777,060	Additions 16,240,590 17,946,720 48,613,306 8,041,729 3,740,927 94,583,272 (126,702) 94,456,570	Reductions (16,345,742) (17,062,677) (45,582,446) (1,899,231) (3,365,389) (84,255,485) 69,005 (84,186,480)	Exchange differences and others (16,613) (24,195) (32,462) - (25) (73,295) 25,872 (47,423)	Balance at the end of 2021 1,987,991 5,319,284 8,279,053 18,880,407 1,395,198
					35,861,933 (862,206)
					34,999,727

• 70 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 of the Group for the year is as follows (Continued):

Raw materials Work-in-progress Finished goods Properties Others Less: provision for decline in value of inventories (Note 6(18))	Balance at the beginning of 2020 1,205,686 3,048,397 2,028,877 8,238,529 728,068 15,249,557 (819,343) 14,430,214	Additions 5,781,923 9,183,628 17,029,106 7,589,105 1,744,018 41,327,780 (131,005) 41,196,775	Business combinations 1,100,863 805,921 3,716,665 12,648 651,699 6,287,796 (308,425) 5,979,371	Reductions (5,976,027) (8,579,540) (17,499,487) (3,102,373) (2,104,097) (37,261,524) 426,629 (36,834,895)	Exchange differences and others (2,689) 1,030 5,494 - (3) 3,832 1,763 5,595	Balance at the end of 2020 2,109,756 4,459,436 5,280,655 12,737,909 1,019,685
						25,607,441 (830,381)
						24,777,060

As at 31 December 2021, the Group’s inventories include an amount of RMB 16,899million expected to be recovered after more than one year (31 December 2020: RMB 10,967million).

• 71 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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:

Raw materials Work-in-progress Finished goods Properties Others Raw materials Work-in-progress Finished goods Properties Others	Balance at the beginning of 2021 Charge for the year 76,655 34,919 29,251 328 385,830 79,127 268,965 - 69,680 12,328 830,381 126,702 Balance at the beginning of 2020 Charge for the year Business combinations 55,173 25,467 11,992 99,983 1,338 - 106,281 77,308 254,982 548,264 188 - 9,642 26,704 41,451 819,343 131,005 308,425	Balance at the beginning of 2021 Charge for the year 76,655 34,919 29,251 328 385,830 79,127 268,965 - 69,680 12,328 830,381 126,702 Balance at the beginning of 2020 Charge for the year Business combinations 55,173 25,467 11,992 99,983 1,338 - 106,281 77,308 254,982 548,264 188 - 9,642 26,704 41,451 819,343 131,005 308,425		Written back Reversal Write-off (5,942) (12,331) (401) (5,062) (7,913) (22,777) - - (994) (13,585) (15,250) (53,755) Writtenback Reversal Write-off Disposal of subsidiaries (1,475) (4,754) (8,221) (123) (65,523) (6,424) (5,702) (45,277) (1,526) (41,020) (238,467) - - (7,739) (378) (48,320) (361,760) (16,549)	Written back Reversal Write-off (5,942) (12,331) (401) (5,062) (7,913) (22,777) - - (994) (13,585) (15,250) (53,755) Writtenback Reversal Write-off Disposal of subsidiaries (1,475) (4,754) (8,221) (123) (65,523) (6,424) (5,702) (45,277) (1,526) (41,020) (238,467) - - (7,739) (378) (48,320) (361,760) (16,549)		Exchange differences and others (662) (9,162) (16,048) - - (25,872) Exchange differences and others (1,527) - (236) - - (1,763)	Balance at the end of 2021 92,639 14,954 418,219 268,965 67,429 862,206
								Balance at the end of 2020 76,655 29,251 385,830 268,965 69,680
				Reversal (1,475) (123) (5,702) (41,020) - (48,320)
		308,425			(16,549)			830,381

• 72 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 Securities Accrued interest Less: allowance for impairment losses(Note6(18))	31 December 2021 91,791,583 12,385 91,803,968 (46,782) 91,757,186	31 December 2020 120,420,020 14,750
		120,434,770 (55,611)
		120,379,159

• 73 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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

• (a) Analysed by type of security

The Group

Loans and advances to customers and other parties at amortised cost Corporate loans - Loans - Discounted bills - Finance lease receivables Personal loans: - Residential mortgages - Credit cards - Personal consumption - Business loans Accrued interest Less: allowance for impairment losses (Note 6(18)) Carrying amount of loans and advances to customers and other parties at amortised cost Loans and advances to customers and other parties at FVPL Personal loans: Loans and advances to customers and other parties at FVOCI Corporate loans - Loans - Discounted bills Carrying amount of loans and advances to customers and other parties at FVOCI Allowance for impairment losses on loans and advances to customers at FVOCI (Note 6(18))	31 December 2021 2,274,381,707 4,522,575 46,854,436 2,325,758,718 973,390,760 528,261,357 248,589,256 312,583,619 2,062,824,992 4,388,583,710 13,496,538 4,402,080,248 (126,379,348) 4,275,700,900 - 38,598,805 461,599,095 500,197,900 4,775,898,800 (748,686)		31 December 2020 2,150,572,210 7,218,820 43,689,705
			2,201,480,735 916,320,431 485,599,918 204,561,927 284,174,119
			1,890,656,395
			4,092,137,130
			12,804,407
			4,104,941,537 (131,693,940)
			3,973,247,597
			7,124,324
			2,696,095 408,707,033
			411,403,128
			4,391,775,049
			(548,716)

• 74 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

• (a) Analysed by type of security (Continued)

The Company

Loans and advances to customers and other parties at amortised cost Corporate loans Accrued interest Less: allowance for impairment losses	31 December 2021 1,541,586 1,369 1,542,955 (332,263) 1,210,692	31 December 2020 4,527,313 170,611
		4,697,924 (875,714)
		3,822,210

• (b) Assessment method of allowance for impairment losses

The Group

Loans and advances at amortised cost Accrued interest Less:allowance for impairment losses Carrying amout of loans and advances at amortised cost Carrying amount of loans and advances at FVOCI Total carrying amount of loans and advances for which allowance for impairment losses is recognised Allowance for impairment losses of loans and advances at FVOCI		As at31 December	As at31 December	2021
	Stage 1 4,225,655,202 12,033,709 (51,504,772) 4,186,184,139 499,144,727 4,685,328,866 (552,091)	Stage 2 87,660,787 1,241,959 (25,866,368) 63,036,378 775,432 63,811,810 (28,556)	Stage 3 (note) 75,267,721 220,870 (49,008,208) 26,480,383 277,741 26,758,124 (168,039)	Gross loans and advances at Stage 3 as a percentage of gross total loans and advances Total 4,388,583,710 1.54% 13,496,538 (126,379,348) 4,275,700,900 500,197,900 4,775,898,800 (748,686)

• 75 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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) Assessment method of allowance for impairment losses[(Continued) ]

The Group (Continued)

Loans and advances at amortised cost Accrued interest Less:allowance for impairment losses Carrying amout of loans and advances at amortised cost Carrying amount of loans and advances at FVOCI Total carrying amount of loans and advances for which allowance for impairment losses is recognised Allowance for impairment losses of loans and advances at FVOCI		As at31 December	As at31 December	2020
	Stage 1 3,905,221,597 11,110,190 (43,884,645) 3,872,447,142 411,313,127 4,283,760,269 (538,519)	Stage 2 106,910,705 1,514,133 (33,335,160) 75,089,678 81,501 75,171,179 (3,868)	Stage 3 (note) 80,004,828 180,084 (54,474,135) 25,710,777 8,500 25,719,277 (6,329)	Gross loans and advances at Stage 3 as a percentage of gross total loans and advances Total 4,092,137,130 1.55% 12,804,407 (131,693,940) 3,973,247,597 411,403,128 4,384,650,725 (548,716)

Notes:

Loans and advances at stage 3 are credit-impaired, details are as follows:

Secured portion Unsecured portion Total loans and advances that are credit-impaired Allowance for impairment losses	31 December 2021 51,802,226 23,964,106 75,766,332 (49,176,247)	31 December 2020 51,745,840 28,447,572
		80,193,412 (54,480,464)

• 76 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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) Assessment method of allowance for impairment losses[(Continued) ]

The fair value of the collateral is determined by management's valuation of the most recent available, including externally assessed value, based on its current experience with the disposal of collateral and market conditions. As of December 31, 2021, the maximum exposure covered by the fair value of the collateral corresponding to such loans was RMB 52,675 million (As of December 31, 2020: RMB 52,539 million). The fair value of the collateral is determined by management's valuation of the most recent available, including externally assessed value, based on its current experience with the disposal of collateral and market conditions.

• (c) Analysis of overdue loans by overdue period

The Group

Unsecured loans Guaranteed loans Secured loans - Loans secured by collateral - Pledged loans Unsecured loans Guaranteed loans Secured loans - Loans secured by collateral - Pledged loans		As at31 December 2021	As at31 December 2021
	Overdue within 3 months 18,702,827 2,154,982 15,285,445 7,229,004 43,372,258	Overdue between 3 months and 1 year Overdue between 1 year and 3 years 10,411,909 896,270 2,206,826 2,092,721 9,434,004 14,324,273 5,501,498 1,121,327 27,554,237 18,434,591 As at31 December 2020		Overdue over 3 years 286,797 228,476 991,678 119,763 1,626,714	Total 30,297,803 6,683,005 40,035,400 13,971,592
					90,987,800
	Overdue within 3 months 16,509,554 3,753,454 9,275,858 8,998,356 38,537,222	Overdue between 3 months and 1 year 9,244,552 7,702,907 17,006,005 663,173 34,616,637	Overdue between 1 year and 3 years 453,193 2,713,290 12,111,215 1,803,294 17,080,992	Overdue over 3 years 449,978 305,066 1,006,501 291,583 2,053,128	Total 26,657,277 14,474,717 39,399,579 11,756,406
					92,287,979

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

• 77 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (9) Investments in financial assets

• (a) Analysed by types

The Group

Financial assets held for trading Investment funds Debt securities Trust investment plans Certificates of deposit and certificates of interbank deposit Equity investment Investment management products managed by securities companies Wealth management products Others Bond investments Investment in creditor's rights on asset Debt securities Trust investment plans Certificates of deposit and certificates of interbank deposit Investment management products managed by securities companies Others Accrued interest Less: allowance for impairment losses (Note 6 (18)) Other bond investments (note(i)) Debt securities Investment management products managed by securities companies Certificates of deposit and certificates of interbank deposit Accrued interest Allowance for impairment losses on debt investments at FVOCI Other equity instruments investments (note(i)) Equity investment Investment funds	31 December 2021 419,468,063 61,967,376 3,740,303 30,776,070 11,128,399 9,103,303 2,071,163 360,607 538,615,284 - 903,385,388 237,810,557 1,383,268 50,413,311 528,266 1,193,520,790 10,459,052 1,203,979,842 (30,051,108) 1,173,928,734 639,299,576 24,456 4,306,450 643,630,482 4,879,827 648,510,309 (2,386,857) 8,411,341 56,921 8,468,262 2,369,522,589	31 December 2020 305,278,037 57,646,825 3,277,306 49,934,027 13,307,294 2,809,466 5,473,534 227,572
		437,954,061
		81,000 705,716,262 195,128,246 4,718,111 70,652,372 1,517,743
		977,813,734 10,235,701
		988,049,435 (14,696,298)
		973,353,137
		678,787,670 34,297,808 4,369,947
		717,455,425 6,569,569
		724,024,994
		(2,650,677) 6,430,191 58,163
		6,488,354
		2,141,820,546

• 78 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (9) Investments in financial assets (Continued)

• (a) Analysed by types (Continued)

• Notes:

• (i) Other bond investments and other equity instruments investments

The Group

Cost/amortised cost Accumulative fair value change in OCI Accrued interest Net carrying amount Allowance for impairment losses (Note 6(18)) Cost/amortised cost Accumulative fair value change in OCI Accrued interest Net carrying amount Allowance for impairment losses (Note 6(18)) The company Financial assets held for trading Investment funds Debt securities Trust investment plans Equity investment		As at31 December 2021	As at31 December 2021	As at31 December 2021
	Equity instruments 8,680,837 (212,575) - 8,468,262 N/A	Debt instruments Total 640,409,009 649,089,846 3,221,473 3,008,898 4,879,827 4,879,827 648,510,309 656,978,571 (2,386,857) (2,386,857) As at31 December 2020		Total 649,089,846 3,008,898 4,879,827
				656,978,571
				(2,386,857)
	Equity instruments Debt instruments 7,292,095 716,881,356 (803,741) 574,069 - 6,569,569 6,488,354 724,024,994 N/A (2,650,677) 31 December 2021 1,533,868 29,254,026 1,926,910 1,446,535 34,161,339			Total 724,173,451 (229,672) 6,569,569
				730,513,348
				(2,650,677)
				31 December 2020 2,250,153 28,077,338 2,051,832 2,220,296
				34,599,619

• 79 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (9) Investments in financial assets (Continued)

• (b) Analysed by location of counterparties

The Group Issued by： - Government - Policy banks - Banks and non-bank financial institutions - Corporates - Public entities Accrued interest -Listed in Hong Kong -Listed outside Hong Kong -Unlisted Accrued interest	31 December 2021 931,616,679 135,996,561 1,151,411,738 132,503,814 2,760,206 2,354,288,998 15,233,591 2,369,522,589 47,459,251 1,938,664,624 368,165,123 2,354,288,998 15,233,591 2,369,522,589	31 December 2020 840,404,894 118,667,160 1,033,245,589 130,108,248 2,590,154
		2,125,016,045 16,804,501
		2,141,820,546
		50,237,128 1,692,511,660 382,267,257
		2,125,016,045 16,804,501
		2,141,820,546

• 80 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

6 Notes to the consolidated financial statements (Continued)

• (9) Investments in financial assets (Continued)

• (b) Analysed by counterparties (Continued)

The company

Issued by： - Banks and non-bank financial institutions - Corporates Accrued interest -Listed outside Hong Kong -Unlisted Accrued interest	31 December 2021 32,387,304 1,446,535 33,833,839 327,500 34,161,339 30,373,061 3,460,778 33,833,839 327,500 34,161,339	31 December 2020 32,396,352 2,028,600
		34,424,952 174,667
		34,599,619
		29,944,295 4,480,657
		34,424,952 174,667
		34,599,619

Debt securities traded on the China Domestic Inter-bank Bond Market are included in “Listed outside Hong Kong”.

• 81 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (9) Investments in financial assets (Continued)

• (c) Analysed by assessment method of allowance for impairment losses

The Group

Bond investments Accrued interest Less: allowance for impairment losses Carrying amount of bond investments Other bond investments Accrued interest Carrying amount of other bond investments Total carrying amount of investments in financial assets for which allowance for impairment losses is recognised Allowance for impairment losses on other bond investments Bond investments Accrued interest Less: allowance for impairment losses Carrying amount of bond investments Other bond investments Accrued interest Carrying amount of other bond investments Total carrying amount of investments in financial assets for which allowance for impairment losses is recognised Allowance for impairment losses on other bond investments		As at31 December 2021	As at31 December 2021
	Stage 1 1,124,181,342 10,065,628 (6,053,090) 1,128,193,880 642,875,023 4,845,425 647,720,448 1,775,914,328 (975,851)	Stage 2 Stage 3 18,075,259 51,264,189 371,629 21,795 (5,567,286) (18,430,732) 12,879,602 32,855,252 334,450 421,009 13,513 20,889 347,963 441,898 13,227,565 33,297,150 (158,191) (1,252,815) As at31 December 2020		Total 1,193,520,790 10,459,052 (30,051,108)
				1,173,928,734
				643,630,482 4,879,827
				648,510,309
				1,822,439,043
				(2,386,857)
	Stage 1 944,962,301 10,036,030 (3,716,842) 951,281,489 716,870,190 6,535,254 723,405,444 1,674,686,933 (1,502,880)	Stage 2 4,340,828 199,671 (549,256) 3,991,243 130,794 1,112 131,906 4,123,149 (1,274)	Stage 3 28,510,605 - (10,430,200) 18,080,405 454,441 33,203 487,644 18,568,049 (1,146,523)	Total 977,813,734 10,235,701 (14,696,298)
				973,353,137
				717,455,425 6,569,569
				724,024,994
				1,697,378,131
				(2,650,677)

• 82 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(10) Long-term equity investments

The Group

31 December 2021 Investments in joint ventures (note (b)) 21,002,799 Investments in associates (note (c)) 61,034,292 82,037,091 Less: allowance for impairment losses (Note 6(18)) - Joint ventures (1,144,587) - Associates (1,386,899) (2,531,486) - 79,505,605 The Company 31 December 2021 Investments in subsidiaries (note (a)) 188,382,500 Investments in joint ventures (note (b)) 8,427,074 Investments in associates (note (c)) 32,539,299 Less: allowance for impairment losses - Subsidiaries (662,271) 228,686,602 (a) The Company’s investments in principal subsidiaries are as follows: 31 December 2021 CITIC Bank 120,142,372 CITIC Urban Development & Operation Co., Ltd. 7,860,000 CITIC Trust Co., Ltd. 16,251,374 CITIC Industrial Investment Group Corp., Ltd. 6,884,723 CITIC Heavy Industries 3,657,012 CITIC Environment Investment Group Co., Limited 3,932,849 CITIC Construction Company Limited 8,996,975 CITIC Finance 2,511,200 Others 18,145,995 188,382,500	31 December 2020 18,103,010 57,604,329
	75,707,339 (1,178,242) (1,452,863)
	(2,631,105)
	73,076,234
	31 December 2020 186,453,267 7,030,448 30,211,336 (662,271)
	223,032,780
	31 December 2020 120,142,372 7,860,000 16,251,374 6,884,723 3,657,012 3,932,849 8,996,975 2,511,200 16,216,762 186,453,267

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

• 83 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(10)	Long-term equity investments (Continued)	Long-term equity investments (Continued)	Long-term equity investments (Continued)
(b)	The Group’s and the Company’s investments			in joint ventures are as follows:
	The Group
				31 December 2021		31 December 2020
	Material joint ventures (note (i))				8,427,074		7,030,448
	Immaterial joint ventures (note (ii))				12,575,725		11,072,562
					21,002,799		18,103,010
	Less: allowance for impairment losses				(1,144,587)		(1,178,242)
					19,858,212		16,924,768
	The Company
				31 December 2021		31 December 2020
	Material joint ventures (note (i))				8,427,075		7,030,448
(i)	Details of material joint venture		are as follows:
							Percentage
							of equity
		Principal		Registered	Registered		attributable
		place of	Place of	principal	capital in		to the
	Name	business registration		activities	thousands	Currency	Company
	CITIC-Prudential
	Life Insurance
	Co., Ltd.			Insurance
	(“CITIC-	Mainland	Mainland	and
	Prudential Life”)	China	China	reinsurance	2,360,000	RMB	50%

• 84 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

• 6 Notes to the consolidated financial statements (Continued)

• (10) Long-term equity investments (Continued)

• (b) The Group’s and the Company’s investments in joint ventures are as follows (Continued):

• (i) Details of material joint venture are as follows (Continued):

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

Total assets Including: Cash and deposits Total liabilities Net assets Equity attributable to: - Joint ventures’ shareholders - Non-controlling interests in joint ventures 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 2021 184,157,034 6,837,636 (169,023,128) 15,133,906 14,578,939 554,967 7,289,469 1,137,605 8,427,075 32,711,145 (133,557) 2,915,117 673,432 3,588,549 395,202	31 December 2020 138,094,145 6,910,008 (125,753,284)
		12,340,861
		11,812,104 528,757
		5,906,052 1,124,396
		7,030,448
		28,771,819 (609,053) 2,531,320 1,196,216 3,727,536 282,629

• 85 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(10)	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
		31 December 2021	31 December 2020
	Aggregate carrying amount of investments	11,431,137	9,894,320
	Aggregate amount of share of
	Net profit	785,713	138,701
	Other comprehensive loss	(12,406)	(294)
	Total comprehensive income	773,307	138,407
(c)	The Group’s and the Company’s investments in associates are as follows:
	The Group
		31 December 2021	31 December 2020
	Material associates (note (i))	31,731,998	29,168,083
	Immaterial associates (note (ii))	29,302,294	28,436,246
		61,034,292	57,604,329
	Less: allowance for impairment losses	(1,386,899)	(1,452,863)
		59,647,393	56,151,466
	The Company
		31 December 2021	31 December 2020
			；
	Material associates (note (i))	31,731,998	29,168,083
	Immaterial associates (note (ii))	807,301	1,043,253
		32,539,299	30,211,336

• 86 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (10) 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	Registered capital Percentage of equity attributable to the Company in thousands Currency 12,116,908 RMB 15.47%

• 87 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (10) 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 and the Company’s investments in associates using the equity method:

Total assets Including: Cash and deposits Total liabilities Net assets Equity attributable to: - Associates’ shareholders - Non-controlling interests in associates Group’s share of net assets Others Carrying amount of investments in associates Fair vale of investments in associates held by the group which have quoted market prices Operating income Income tax expenses Net profit Other comprehensive loss Total comprehensive income Dividends received from associates during the year	CITICSecurities	CITICSecurities
	31 December 2021 1,278,664,775 320,069,613 (1,064,856,989) 213,807,786 198,403,604 15,404,182 30,693,038 1,038,960 31,731,998 52,811,965 76,523,717 (7,888,714) 24,005,081 (1,089,657) 22,915,424 799,878	31 December 2020 1,052,962,294 290,627,265 (867,079,558)
		185,882,736
		181,712,069 4,170,667
		28,110,857 1,057,226
		29,168,083
		58,791,055 54,382,730 (4,953,917) 15,516,541 (668,242) 14,848,299 999,848

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

• 88 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (10) Long-term equity investments (Continued)

(c)	the Group’s and the Company’s	investments in associates are as follows (Continued):	investments in associates are as follows (Continued):
(ii)	Details of immaterial associates	accounted for using the equity method are summarised as
	follows:
	The Group
		31 December 2021	31 December 2020
	Aggregate carrying amount of
	investments	27,915,395	26,983,383
	Aggregate amount of share of
	net income	2,119,508	1,641,777
	Other comprehensive loss	(542,678)	(189,510)
	Total comprehensive income	1,576,830	1,452,267
	The Company
		31 December 2021	31 December 2020
	Aggregate carrying amount of
	investments	807,301	1,043,253
	Aggregate amount of share of
	net (loss)/income	(186,145)	66,111
	Other comprehensive
	income/(loss)	24	(69)
	Total comprehensive(loss)
	/income	(186,121)	66,042

• 89 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(11) Investment properties

The Group

At 1 January Additions Disposals Disposal of subsidiaries Transfers from construction in progress Transfers from/(to) fixed assets Changes in fair value Exchange difference At 31 December	2021 9,233,064 162,793 (3,896) (326,437) 334,090 413,769 81,007 (43,757) 9,850,633	2020 9,429,705 - (236,177) - 112,814 (7,905) (51,222) (14,151)
		9,233,064

As at 31 December 2021, the Group was in the process of applying the investment properties’ ownership certificate in respect of certain premises of RMB 31 million (31 December 2020: RMB 31million). The Group anticipates that there would be no significant issues and costs in completing such procedures.

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

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.

• 90 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (11) Investment properties (Continued)

Investment properties were revalued as at 31 December 2020 and 2021 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.

Properties located in Mainland China and Hong Kong Overseas Properties located in Mainland China and Hong Kong Overseas	Valuers in 2021
	ZhongHe Appraisal Co., Ltd. Prudential Surveyors (Hong Kong) Limited CHINA UNITED ASSETS APPRAISAL GROUP Jones Lang LaSalle Corporate Appraisal and Advisory Limited China Appraisal Associates Jones Lang LaSalle Corporate Appraisal and Advisory Company Limited Valuers in 2020
	China Enterprise Appraisals Consultation Co., Ltd. Zhong Ming(Beijing) Assets Appraisal International Co.,Ltd Prudential Surveyors (Hong Kong) Limited Jones Lang LaSalle Corporate Appraisal and Advisory Limited China Lianhe Credit Rating Co.,Ltd CHINA UNITED ASSETS APPRAISAL GROUP Jones Lang LaSalle Corporate Appraisal and Advisory Company Limited

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

• 91 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(12) Fixed assets

The Group

Cost Balance at 1 January 2020 Additions Business combinations Disposal of subsidiaries Transfers from construction in progress Disposals Transfers from investment properties Exchange difference Balance at 31 December 2020 Balance at 1 January 2021 Additions Transfers from construction in progress Disposals Transfers from investment properties Exchange difference Balance at 31 December 2021 Less: Accumulated depreciation Balance at 1 January 2020 Charge for the year Business combinations Disposal of subsidiaries Disposal Transfers from investment properties Exchange difference Balance at 31 December 2020 Charge for the year Disposal Transfers from investment properties Exchange difference Balance at 31 December 2021	Plant & buildings 35,778,687 992,323 2,868,082 (17,414) 636,858 (238,405) 23,957 (95,962) 39,948,126 39,948,126 738,574 592,807 (42,750) (435,546) (115,530) 40,685,681 (8,101,159) (1,145,558) (537,872) 5,906 38,918 (16,052) 42,196 (9,713,621) (1,369,766) 28,130 21,777 71,969 (10,961,511)	Machinery & equipment 16,209,109 19,785 5,587,171 (11,521) 707,130 (316,059) - (279,897) 21,915,718 21,915,718 607,249 532,565 (221,413) (282,622) 22,551,497 (7,440,301) (631,612) (1,478,588) 9,948 294,435 - 79,754 (9,166,364) (941,012) 156,204 - 109,858 (9,841,314)	Office & other equipment 12,354,293 2,076,890 272,762 (1,730) 103,724 (865,549) - (54,372) 13,886,018 13,886,018 2,278,188 10,062 (950,915) (31,195) 15,192,158 (8,498,351) (1,202,494) (151,191) 915 806,116 - 43,748 (9,001,257) (1,410,793) 900,826 - 25,615 (9,485,609)	Motor vehicles 4,358,653 41,704 56,113 (7,151) - (41,467) - (444) 4,407,408 4,407,408 38,213 1,304 (78,707) (520) 4,367,698 (2,081,464) (28,309) (41,043) 4,659 37,720 - 379 (2,108,058) (42,993) 66,591 - 366 (2,084,094)	Others 807,960 8,419 568,094 (3,944) 38,378 (159,880) - (8,869) 1,250,158 1,250,158 176,483 505,011 (59,618) (74,609) 1,797,425 (474,308) (221,890) (211,355) 3,564 3,020 - 1,063 (899,906) (558,175) 5,223 - 22,095 (1,430,763)	Total 69,508,702 3,139,121 9,352,222 (41,760) 1,486,090 (1,621,360) 23,957 (439,544)
						81,407,428
						81,407,428 3,838,707 1,641,749 (1,353,403) (435,546) (504,476)
						84,594,459
						(26,595,583) (3,229,863) (2,420,049) 24,992 1,180,209 (16,052) 167,140
						(30,889,206)
						(4,322,739) 1,156,974 21,777 229,903
						(33,803,291)

• 92 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (12) Fixed assets (Continued)

The Group (Continued)

The Group (Continued)
Less: Allowance for impairment Losses (Note 6(18)) Balance at 1 January 2020 Charge for the year Written back on disposal Business combinations Exchange difference Balance at 31 December 2020 Charge for the year Written back on disposal Exchange difference Balance at 31 December 2021 Net carrying amount At 31 December 2021 At 31 December 2020	Plant & buildings (142,007) (74) - (2,330) 8,579 (135,832) - 71 4,223 (131,538) 29,592,632 30,098,673	Machinery & equipment (3,458,782) (4,247) (40) (68,069) 156,448 (3,374,690) (44,910) 7,946 77,119 (3,334,535) 9,375,648 9,374,664	Office & other equipment (115) - - (1,195) - (1,310) 23 204 - (1,083) 5,705,466 4,883,451	Motor vehicles - - 40 (489) - (449) (423) 158 - (714) 2,282,890 2,298,901	Others (77,789) - - (4,352) 4,701 (77,440) (74) 47,299 1,363 (28,852) 337,810 272,812	Total (3,678,693) (4,321) - (76,435) 169,728
						(3,589,721)
						(45,384) 55,678 82,705
						(3,496,722)
						47,294,446
						46,928,501

As at 31 December 2021, the Group was in the process of applying the fixed assets’ ownership certificate in respect of certain premises of RMB 502 million (31 December 2020: RMB 1,221 million ). The Group anticipates that there would be no significant issues and costs in completing such procedures.

• 93 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(12) Fixed assets (Continued)

The Company

Cost Balance at 1 January 2020 Additions Disposals Balance at 31 December 2020 Additions Disposals Balance at 31 December 2021 Less: Accumulated depreciation Balance at 1 January 2020 Charge for the year Written back on disposal Balance at 31 December 2020 Charge for the year Written back on disposal Balance at 31 December 2021 Net carrying amount At 31 December 2021 At 31 December 2020	Plant & buildings 638,723 - - 638,723 - - 638,723 (128,981) (30,339) - (159,320) (30,340) - (189,660) 449,063 479,403	Office & other equipment 66,502 28,752 (22,265) 72,989 4,721 (1,222) 76,488 (39,020) (7,050) 21,115 (24,955) (14,754) 1,158 (38,551) 37,937 48,034	Motor vehicles 15,568 - - 15,568 - (3,922) 11,646 (15,021) - - (15,021) - 3,735 (11,286) 360 547	Total 720,793 28,752 (22,265)
				727,280
				4,721 (5,144)
				726,857
				(183,022) (37,389) 21,115
				(199,296)
				(45,094) 4,893
				(239,497)
				487,360
				527,984

• 94 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (13) Construction in Progress

The Group

Balance at 1 January 2020 Additions Including: capitalised interest Transfers to fixed assets Transfers to investment properties Decrease Bussiness combination Exchange difference Balance at 31 December 2020 Additions Including: capitalised interest Transfers to fixed assets Transfers to investment properties Decrease Exchange difference Balance at 31 December 2021 Less: Allowance for impairment losses(Note 6(18)) Balance at 1 January 2020 Charge for the year Written back on disposal Exchange difference Balance at 31 December 2020 Charge for the year Written back on disposal Exchange difference Balance at 31 December 2021 Net carrying amount At 31 December 2021 At 31 December 2020	5,911,259 2,927,524 29,431 (1,486,090) (112,814) (59,150) 468,193 (473,083)
	7,175,839
	3,482,913 38,346 (1,641,749) (334,090) (385,315) (10,089)
	8,287,509
	(145,128) (22,522) - (13)
	(167,663)
	- 2,710 (445)
	(165,398)
	8,122,111
	7,008,176

• 95 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (14) Right-of-use assets

The Group

Balance at 1 January 2020 Additions Disposals Business combinations Disposal of subsidiaries Modfications to lease aggreements Depreciation Exchange difference Balance at 31 December 2020	Plant & buildings 12,018,615 3,770,145 (646,853) 104,938 (3,216) 6,382 (3,552,704) (28,669) 11,668,638	Machinery & equipment 6,847 61,636 (2,789) - - - (16,719) (863) 48,112	Office & other equipment 86,923 9,125 (100) 3,500 - - (39,803) (78) 59,567	Motor vehicles 1,623 982 - 13,862 - - (1,526) 198 15,139	Others 654,266 75,838 (10,714) - - - (89,493) (61) 629,836	Total 12,768,274 3,917,726 (660,456) 122,300 (3,216) 6,382 (3,700,245) (29,473)
						12,421,292

• 96 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (14) Right-of-use assets(Continued)

The Group(Continued)

Balance at 1 January 2021 Additions Disposals Modfications to lease aggreements Depreciation Exchange difference Balance at 31 December 2021	Plant & buildings 11,668,638 3,424,395 (393,920) (193) (3,494,004) (28,952) 11,175,964	Machinery & equipment 48,112 25,207 (24,365) 790 (40,217) (1,498) 8,029	Office & other equipment 59,567 5,551 (270) 214 (3,832) (527) 60,703	Motor vehicles 15,139 2,044 (107) - (1,259) (11) 15,806	Others 629,836 87,017 (51,890) (1,048) (97,888) (26) 566,001	Total 12,421,292 3,544,214 (470,552) (237) (3,637,200) (31,014)
						11,826,503

• (i) The expense relating to short-term leases and the expense relating to leases of low-value assets are recognised in profit or loss, during the year ended

• 31 December 2021 of RMB 308million(31 December 2020: RMB 603million ).

• (ii) The expense relating to variable lease payments not included in lease liabilities was RMB 6.72 million (31 December 2020: RMB -9.52 million ).

• (iii) The total cash outflow for leases in 2021 was RMB 4210 million (31 December 2020: RMB 4,400 million ).

• 97 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(15) Intangible assets

The Group

Cost Balance at 1 January 2020 Additions Bussiness Combination Disposal of subsidiaries Disposals Exchange difference Balance at 31 December 2020 Additions Disposals Exchange difference Balance at 31 December 2021 Less: Accumulated amortisation Balance at 1 January 2020 Charge for the year Bussiness Combination Disposal of subsidiaries Written back on disposal Exchange difference Balance at 31 December 2020 Charge for the year Written back on disposal Exchange difference Balance at 31 December 2021 Less: Allowance for impairment losses (Note 6(18)) Balance at 1 January 2020 Charge for the year Disposals Bussiness Combination Disposal of subsidiaries Exchange difference Balance at 31 December 2020 Charge for the year Disposals Exchange difference Balance at 31 December 2021 Net carrying amount At 31 December 2021 At 31 December 2020	Land use rights 9,635,458 240,117 420,579 (6,059) (37,359) (427) 10,252,309 240,533 (272,233) (14,299) 10,206,310 (1,269,133) (199,281) (51,925) 1,520 3,645 4,292 (1,510,882) (188,884) 81,519 3,572 (1,614,675) - - - - - - - - - - - 8,591,635 8,741,427	Mining assets 872,981 2,125 - - (1,668) (52,789) 820,649 - (373,757) - 446,892 (175,228) (3,163) - - - 10,766 (167,625) - 167,625 - - (461,048) (1,320) - - - 27,938 (434,430) - - (12,462) (446,892) - 218,594	Franchise right 4,695,158 1,455,855 40,000 (9,622) (177,110) (36,856) 5,967,425 1,405,021 (355,243) - 7,017,203 (853,091) (182,114) - 3,475 496 18,959 (1,012,275) (133,802) 10,319 - (1,135,758) (13,686) - - - - - (13,686) - - - (13,686) 5,867,759 4,941,464	Software 4,780,337 1,514,013 198,870 - (36,003) (64,711) 6,392,506 1,355,735 (96,338) (48,059) 7,603,844 (2,777,501) (716,457) (102,323) - 339,333 33,884 (3,223,064) (1,201,850) 25,339 31,204 (4,368,371) - - - - - - - - - - - 3,235,473 3,169,442	Others 248,136 76,645 235,138 - (335,219) (1,737) 222,963 171,462 (664) (4,020) 389,741 (148,307) (31,198) (473) - 4,278 812 (174,888) (47,710) 8,875 718 (213,005) - - - - - - - - - - - 176,736 48,075	Total 20,232,070 3,288,755 894,587 (15,681) (587,359) (156,520)
						23,655,852
						3,172,751 (1,098,235) (66,378)
						25,663,990
						(5,223,260) (1,132,213) (154,721) 4,995 347,752 68,713
						(6,088,734)
						(1,572,246) 293,677 35,494
						(7,331,809)
						(474,734) (1,320) - - - 27,938
						(448,116)
						- - (12,462)
						(460,578)
						17,871,603
						17,119,002

• 98 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(16) Goodwill

The Group

Cost Balance at 1 January 2020 Additions Disposal Exchange difference Balance at 31 December 2020 Additions Disposal Exchange difference Balance at 31 December 2021 Less: Allowance for impairment losses (Note 6(18)) Balance at 1 January 2020 Additions Exchange difference Balance at 31 December 2020 Additions Exchange difference Balance at 31 December 2021 Net carrying amount At 31 December 2021 At 31 December 2020	8,386,058 235,676 (21,059) (137,029)
	8,463,646
	204,852 - (46,937)
	8,621,561
	(858,300) (549,372) 51,590
	(1,356,082)
	(9,948)
	12,277
	(1,353,753)
	7,267,808
	7,107,564

• 99 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 (All amounts in thousands of Renminbi Yuan unless otherwise stated)

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(16) Goodwill(Continued)

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

Advanced intelligent manufacturing Comprehensive financial services Advanced materials New-type urbanisation	31 December 2021 1,060,946 1,259,992 21,650 4,925,220 7,267,808	31 December 2020 873,105 1,286,923 22,317 4,925,219
		7,107,564

In conducting goodwill impairment test, the carrying value of goodwill is allocated to the related asset group or groups of asset groups which are expected to benefit from the synergies of the business combination.

The recoverable amount of an asset group or a group of asset groups is the higher of an asset’s fair value less costs to sell and the present value of the future cash flows expected to be derived from the asset.The corresponding impairment loss of an asset group or a group of asset groups will not be recognised if either the fair value less costs to sell and the present value of the future cash flows expected to be derived from the asset is higher than the carrying value.

Based on management’s impairment assessment, impairment loss of RMB 9.95 million million was recognised for the year ended 31 December 2021 (2020: RMB 550 million ).

• 100 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (17) 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 assets and intangible assets Fair value changes of financial instruments Fixed assets and intangible assets Others		Deferred tax assets	Deferred tax assets
	Balance at 1 January 2021 348,764 3,668,306 41,706,404 485,735 355,915 667,231 47,232,355	Credited /(charged) to profit or loss (109,457) 35,063 6,454,374 (36,972) (230,416) 683,003 6,795,595	Charged/ (credited) to equity - 7,021 (4,481) (38,144) - (30,594) (66,198)	Exchange difference and others 3,346 (595) (8,345) (4,308) (4,099) (6,685) (20,686)	Balance at 31 December 2021 242,653 3,709,795 48,147,952 406,311 121,400 1,312,955
					53,941,066

• 101 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

• 6 Notes to the consolidated financial statements (Continued)

• (17) Deferred tax assets and liabilities (Continued)

The Group(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	Deferred tax assets
	Balance at 1 January 2020 42,697 3,251,955 33,341,554 376,991 362,459 315,476 37,691,132	Credited /(charged) to profit or loss 316,150 188,214 8,326,439 37,813 (1,608) 382,504 9,249,512	Charged/ (credited) to equity - (6,527) (3,840) 67,454 - 7,547 64,634	Bussiness Combination - 234,747 62,633 - 11,140 - 308,520	Disposal of subsidiaries - - - - - (41,361) (41,361)	Exchange difference and others (10,083) (83) (20,382) 3,477 (16,076) 3,065 (40,082)	Balance at 31 December 2020 348,764 3,668,306 41,706,404 485,735 355,915 667,231
							47,232,355

• 102 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(17) Deferred tax assets and 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 2021 (1,983,805) (903,312) (919,550) (504,902) (4,311,569)	Charged to profit or loss 223,030 74,302 (81,786) (1,438,951) (1,223,405)	Credited/(charged) to equity (1,028,714) - - (66) (1,028,780)	Exchange difference and others 9,327 2,387 4,501 10,602	Balance at 31 December 2021 (2,780,162) (826,623) (996,835) (1,933,317)
				26,817	(6,536,937)

• 103 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

• 6 Notes to the consolidated financial statements (Continued)

• (17) Deferred tax assets and liabilities (Continued)

The Group

Deferred tax liabilities

Fair value changes of financial instruments Fixed assets and intangible assets Revaluation of Investment properties Others	Balance at 1 January 2020 (3,805,280) (490,273) (896,500) (412,218) (5,604,271)	Charged to profit or loss (5,230) (222,672) (21,562) (30,801) (280,265)	Credited/(charged) to equity 1,818,261 - - (6,680) 1,811,581	Bussiness Combination - (218,611) - (51,247)	Disposal of subsidiaries - 14,314 - - 14,314	Exchange difference and others 8,444 13,930 (1,488) (3,956) 16,930	Balance at 31 December 2020 (1,983,805) (903,312) (919,550) (504,902)
				(269,858)			(4,311,569)

• 104 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(17) Deferred tax assets and liabilities (Continued)

The Company

Fair value changes of financial instruments Others Fair value changes of financial instruments Others		Deferred tax	liabilities
	Balance at 1 January 2021 (527,420) (198,136) (725,556)	Charged to profit or loss (192,576) (74,649) (267,225) Deferred tax	Exchange difference (262) - (262) liabilities	Balance at 31 December 2021 (720,258) (272,785)
				(993,043)
	Balance at 1 January 2020 (1,106,080) (134,812) (1,240,892)	Charged to profit or loss 580,240 (63,324) 516,916	Exchange difference (1,580) - (1,580)	Balance at 31 December 2020 (527,420) (198,136)
				(725,556)

(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 2021 51,618,437 (4,214,308) 47,404,129 31 December 2021 (993,043)	31 December 2020 45,464,454 (2,543,668)
		42,920,786
		31 December 2020 (725,556)

• 105 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (17) 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 2021 1,785,893 11,293,543 13,079,436	31 December 2020 1,459,545 8,868,958
		10,328,503

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 2021, tax losses amounting to RMB 4,377 million (31 December 2020: RMB 4,141 million) that can be carried forward against future taxable income are expiring within 5 years.

• 106 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(18) Movement of allowances for impairment losses

As at 31 December 2021, the movements of allowance for impairment losses of the Group are set out as follows:

Note Allowances for expected credit losses Deposits and placements with banks and non-bank financial institutions 6(1),6(2) Financial assets held under resale agreements 6(7) Account and bills receivables and other receivables 6(4) Loans and advances to customers and other parties 6(8) Investments in financial assets 6(9) - Bond investments - Other bond investments Credit commitments and guarantees provided 6(28) Others(note(ii)) Allowances for impairment losses Inventories 6(6) Long-term equity investments 6(10) Fixed assets 6(12) Construction in Progress 6(13) Intangible assets 6(15) Contract assets 6(5) Prepayments 6(4) Goodwill 6(16) Others	Balance at 1 January 2021 227,691 55,611 9,128,015 132,089,680 14,664,666 2,650,677 7,470,738 4,369,414 170,656,492 830,381 2,631,105 3,589,721 167,663 448,116 13,544 64,872 1,356,082 1,489,441 10,590,925 181,247,417	(Reversal)/charge for the year 10,069 (8,829) 2,663,526 51,077,265 21,766,427 (164,752) 7,031,921 3,393,655 85,769,282 111,452 316,903 45,384 - - 4,608 6,613 9,948 133,142 628,050 86,397,332	Write-offs/ transfer out - - (295,227) (65,511,193) (7,411,059) (70,912) - (4,033,987) (77,322,378) (53,755) (356,290) (55,678) (2,710) - - (9,702) - (102,539) (580,674) (77,903,052)	Exchange difference and others (note(i)) (3,558) - 221,623 9,238,157 927,950 (28,156) (20,129) 527,722 10,863,609 (25,872) (60,232) (82,705) 445 12,462 (8,520) (292) (12,277) (13,927) (190,918) 10,672,691	Balance at 31 December 2021 234,202 46,782 11,717,937 126,893,909 29,947,984 2,386,857 14,482,530 4,256,804
					189,967,005
					862,206 2,531,486 3,496,722 165,398 460,578 9,632 61,491 1,353,753 1,506,117
					10,447,383
					200,414,388

• 107 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(18) Movement of allowances for impairment losses (Continued)

As at 31 December 2020, the movements of allowance for impairment losses of the Group are set out as follows:

Note Allowances for expected credit losses Deposits and placements with banks and non-bank financial institutions 6(1),6(2) Financial assets held under resale agreements 6(7) Account and bills receivables and other receivables 6(4) Loans and advances to customers and other parties 6(8) Investments in financial assets 6(9) - Bond investments - Other bond investments Credit commitments and guarantees provided 6(28) Others(note(ii)) Allowances for impairment losses Inventories 6(6) Long-term equity investments 6(10) Fixed assets 6(12) Construction in Progress 6(13) Intangible assets 6(15) Contract assets 6(5) Prepayments 6(4) Goodwill 6(16) Others	Balance at 1 January 2020 222,639 47,092 7,056,390 120,618,905 7,747,623 1,631,020 6,362,876 3,536,493 147,223,038 819,343 4,811,883 3,678,693 145,128 474,734 5,534 65,451 858,300 1,324,110 12,183,176 159,406,214	(Reversal)/charge for the year 9,329 8,519 2,212,842 70,827,207 7,561,193 1,056,590 1,136,148 3,309,474 86,121,302 82,685 - 4,321 22,522 1,320 (12,125) 1,166 549,372 522,275 1,171,536 87,292,838	Write-offs/ transfer out - - (63,559) (69,269,233) (637,767) - - (3,453,038) (73,423,597) (361,760) (2,061,816) - - - - (1,113) - (360,573) (2,785,262) (76,208,859)	Disposal of subsidiaries - - (6,522) - - - - - (6,522) (16,549) - - - - - - - - (16,549) (23,071)	Exchange difference and others (note(i)) (4,277) - (71,136) 9,912,801 (6,383) (36,933) (28,286) 976,485 10,742,271 306,662 (118,962) (93,293) 13 (27,938) 20,135 (632) (51,590) 3,629 38,024 10,780,295	Balance at 31 December 2020 227,691 55,611 9,128,015 132,089,680 14,664,666 2,650,677 7,470,738 4,369,414
						170,656,492
						830,381 2,631,105 3,589,721 167,663 448,116 13,544 64,872 1,356,082 1,489,441
						10,590,925
						181,247,417

Note:

(i) Others include recovery of loans written off.

(ii) Movement of allowances for accrued interest of the loans and advances to customers and other parties, investments in financial assets are included in others.

• 108 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

6 Notes to the consolidated financial statements (Continued)

• (19) Borrowing from central bank

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

• (20) Placements from banks and non-bank financial institutions

The Group

Banks Non-bank financial institutions Accrued interest Analysed by remaining maturity: Within 3 months Between 3 months and 1 year Over 1 year Accrued interest	31 December 2021 78,724,480 8,399,688 87,124,168 349,705 87,473,873 31 December 2021 41,002,047 43,271,855 2,850,266 87,124,168 349,705 87,473,873	31 December 2020 61,006,682 1,291,123
		62,297,805 242,872
		62,540,677
		31 December 2020 22,124,921 34,365,150 5,807,734
		62,297,805 242,872
		62,540,677

• 109 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(21) Trade and other payables The Group Bills payables Trade payables Advances from leasees Settlement accounts Other payables (note (a)) Dividends payables Others The Company Other payables (note (a)) Dividends payables (a) Other payables The Group Related parties Third parties The Company Subsidiaries Related parties Third parties	31 December 2021 8,562,316 36,998,726 118,704 5,341,670 28,125,162 22,476,313 475,495 102,098,386 31 December 2021 1,210,048 22,424,691 23,634,739 31 December 2021 4,698,350 23,426,812 28,125,162 31 December 2021 1,033,711 119,860 56,477 1,210,048	31 December 2020 5,135,311 35,249,202 223,898 5,961,537 25,670,831 21,682,054 241,951
		94,164,784
		31 December 2020 2,459,571 21,624,276
		24,083,847
		31 December 2020 5,320,892 20,349,939
		25,670,831
		31 December 2020 1,784,049 626,482 49,040
		2,459,571

• 110 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(22) Financial assets sold under repurchase agreements

Analysis by types of counterparties:

The Group

The People’s Bank of China Banks Accrued interest Analysis by types of collateral: Debt securities Discounted bills Accrued interest	31 December 2021 67,371,708 32,739,577 100,111,285 5,204 100,116,489 31 December 2021 45,653,809 54,457,476 100,111,285 5,204 100,116,489	31 December 2020 39,212,712 40,552,351 79,765,063 217
		79,765,280
		31 December 2020 6,975,600 72,789,463
		79,765,063 217
		79,765,280

The Group did not derecognise financial assets transferred as collateral in connection with repurchase agreements. As at 31 December 2021, legal title of these collateral pledged has not been transferred to counterparties (31 December 2020: Nil).

• 111 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

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

The Group 31 December 2021 Demand deposits - Corporate customers 1,972,165,712 - Personal customers 310,053,755 2,282,219,467 Time and call deposits - Corporate customers 1,789,956,322 - Personal customers 662,254,251 2,452,210,573 Deposits from banks and non-bank financial institutions 1,162,895,623 Outward remittance and remittance payables 10,679,211 1,173,574,834 Accrued interest 53,512,629 5,961,517,503 Deposits from customers include pledged deposit for the following items: 31 December 2021 Bank acceptances 247,946,259 Letters of credit 19,614,891 Guarantees 14,063,376 Others 81,307,457 362,931,983	31 December 2020 1,925,069,610 327,109,886
	2,252,179,496 1,674,846,057 611,176,572
	2,286,022,629 1,153,416,357 9,058,346
	1,162,474,703 44,120,618
	5,744,797,446
	31 December 2020 223,387,194 11,035,909 11,277,396 104,838,082
	350,538,581

• 112 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

6 Notes to the consolidated financial statements (Continued)

(24) 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 2021 25,537,225 150,924 104,442 1,328,678 27,121,269	31 December 2020 25,758,472 190,363 85,477 1,743,709
		27,778,021

• 113 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

• 6 Notes to the consolidated financial statements (Continued)

• (24) 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 2021 24,319,313 187,783 216,668 4,469 1,424 37,504 719,755 (8,464) 280,020 25,758,472	Accrued 33,551,193 1,806,023 2,198,252 53,154 43,714 1,983,749 956,980 21,274 666,575 41,280,914	Paid (33,821,295) (1,806,148) (2,209,460) (53,098) (43,699) (1,985,138) (759,716) (12,812) (810,795) (41,502,161)	Balance at 31 December 2021 24,049,211 187,658 205,460 4,525 1,439 36,115 917,019 (2) 135,800
				25,537,225

Note:

During the year ended 31 December 2021, CITIC Bank, a subsidiary of the Group, the deferred salaries and bonuses in relation to services provided to the Group and to be paid as planned amounted to RMB 7,919million (31 December 2020: RMB 7,901 million ).

• 114 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (24) 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 2020 24,425,207 184,089 201,257 681 1,141 16,193 679,726 - 153,429 25,661,723	Accrued 27,911,547 1,587,857 1,800,228 28,714 44,139 1,736,782 579,555 7,041 689,475 34,385,338	Paid (28,551,039) (1,598,819) (1,806,845) (28,697) (44,644) (1,738,510) (599,739) (15,505) (629,252) (35,013,050)	Business combination 533,598 14,656 22,028 3,771 788 23,039 60,213 - 66,368 724,461	Balance at 31 December 2020 24,319,313 187,783 216,668 4,469 1,424 37,504 719,755 (8,464) 280,020
					25,758,472

• 115 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

6 Notes to the consolidated financial statements (Continued)

• (24) 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 2021 48,583 2,243 42,507 97,030		Accrued 2,270,584 80,957 1,652,373 15,388 4,019,302 Accrued Paid 1,163,334 (1,143,450) 41,375 (40,823) 1,573,340 (1,904,792) 15,843 (18,138) 2,793,892 (3,107,203)		Paid (2,289,872) (81,564) (1,674,442) (12,863) (4,058,741) Business combination 7,905 798 14,463 335 23,501		Balance at 31 December 2021 29,295 1,636 20,438 99,555
	190,363						150,924
	Balance at 1 January 2020 20,794 893 359,496 98,990 480,173		Accrued 1,163,334 41,375 1,573,340 15,843 2,793,892				Balance at 31 December 2020 48,583 2,243 42,507 97,030
							190,363

• 116 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (25) Bank and other loans

Analysis by types of collaterals:

The Group

Bank loans - Unsecured loans - Loans pledged with assets Other loans - Unsecured loans - Loans pledged with assets Accrued interest	31 December 2021 22,287,295 7,218,999 29,506,294 4,899,629 1,240,360 6,139,989 298,469 35,944,752	31 December 2020 24,616,820 5,395,922 30,012,742
		9,129,144 697,071
		9,826,215
		309,803
		40,148,760

As at 31 December 2021, certain of the Group’s cash and deposits, trade and other receivables, fixed assets, ROU assets, intangible assets with an aggregate carrying amount of RMB 12.351 billion (31 December 2020: RMB 14.501 billion) was pledged to secure loans granted to the Group.

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 6(48)(c). As at 31 December 2021, none of the covenants relating to drawn down facilities have been breached (31 December 2020: none of the covenants relating to drawn down facilities have been breached).

• 117 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (25) Bank and other loans (Continued)

The Company Bank loans - Unsecured loans Accrued interest Analysis by currencies: The Group RMB US$ HK$ Other currencies Accrued interest The Company RMB Accrued interest	31 December 2021 3,000,000 3,700 3,003,700 31 December 2021 21,206,992 8,765,147 1,103,678 4,570,466 35,646,283 298,469 35,944,752 31 December 2021 3,000,000 3,700 3,003,700	31 December 2020 - -
		-
		31 December 2020 18,481,731 6,488,424 2,301,044 12,567,758
		39,838,957 309,803
		40,148,760
		31 December 2020 - -
		-

• 118 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (25) 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 Accrued interest The Company Between two and five years (inclusive) Accrued interest	31 December 2021 15,739,682 2,936,988 11,241,106 5,728,507 35,646,283 298,469 35,944,752 31 December 2021 3,000,000 3,000,000 3,700 3,003,700	31 December 2020 17,858,507 2,488,506 9,578,442 9,913,502
		39,838,957 309,803
		40,148,760
		31 December 2020 -
		- -
		-

• 119 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

(26) Debt instruments issued The Group Corporate bonds issued Notes issued Subordinated bonds issued Certificates of deposit issued Certificates of interbank deposits issued Convertible corporate bonds (note(a)) Accrued interest The Company Corporate bonds issued Notes issued Accrued interest	31 December 2021 32,838,819 66,287,052 113,148,016 1,210,548 739,556,979 13,440,578 966,481,992 3,844,934 970,326,926 31 December 2021 35,958,819 4,995,095 40,953,914 880,065 41,833,978	31 December 2020 32,963,039 50,673,387 113,222,569 - 543,008,493 13,179,474
		753,046,962 3,575,150
		756,622,112
		31 December 2020 24,970,603 18,971,812
		43,942,415 903,511
		44,845,926

• 120 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the consolidated financial statements (Continued)

• (26) 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 Accrued interest The Company Within one year (inclusive) or on demand Between one and two years (inclusive) Between two and five years (inclusive) Over five years Accrued interest	31 December 2021 752,706,096 36,293,098 48,719,940 128,762,858 966,481,992 3,844,934 970,326,926 31 December 2021 8,494,594 5,990,933 6,489,606 19,978,782 40,953,914 880,065 41,833,979	31 December 2020 553,171,421 13,709,316 80,510,015 105,656,210
		753,046,962 3,575,150
		756,622,112
		31 December 2020 5,989,958 8,487,487 11,481,261 17,983,709 43,942,415 903,511 44,845,926

The Group did not have any defaults of principal, interest or other breaches with respect to its debt securities issued in 2021 (2020: Nil).

• 121 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

6 Notes to the consolidated financial statements (Continued)

• (26) Debt instruments issued (Continued)

• (a) As approved by the relevant regulatory authorities in China, CITIC Bank made a public offering of RMB 40 Billion A-share convertible corporate bonds (the “convertible bonds”) on 4 March 2019, of which RMB 26.4 Billion has been subscribed by the Company. The convertible bonds of CITIC Bank have a term of six years from 4 March 2019 to 3 March 2025, at coupon rates of 0.3% for the first year, 0.8% for the second year, 1.5% for the third year, 2.3% for the fourth year, 3.2% for the fifth year and 4.0% for the sixth year. The conversion of these convertible bonds begins on the first trading day (8 March 2019) after six months upon the completion date of the offering until the maturity date (from 11 September 2019 to 3 March 2025). As at 31 December 2021, convertible bonds (including accrued interest) were recorded as RMB 13,611 million debt instruments issued and RMB 1,067 million non-controlling interests.

• (27) Lease liabilities

The Group

Within one year Over 1 year	As at 31 December 2021 5,495,749 6,367,206 11,862,955	As at 31 December 2020 3,577,228 8,649,035
		12,226,263

As at 31 December 2021，the table below presents on maturity date by the undiscounted cash flows of the Group’s lease liabilities：

Within one year Between 1 and 5 year Over 5 year	As at 31 December 2021 5,610,231 5,166,468 1,986,863 12,763,562	As at 31 December 2020 3,668,828 7,785,825 1,975,675
		13,430,328

• 122 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 Impairment loss of credit commitments and guarantees provided (note (18)) Others Environment restoration expenditures Impairment loss of credit commitments and guarantees provided (note (18)) Others	Balance at 31 December 2020 Charge 396,283 7,470,738 3,561,152 11,428,173 Balance at 31 December 2019 Charge for the year 369,268 23,647 6,362,876 1,136,148 2,059,368 699,274 8,791,512 1,859,069	Charge	for the year Payments during the year 138,264 - 7,749,358 - 1,082,419 (134,666) 8,970,041 (134,666) Payments during the year Reversal (2,522) - - - (34,456) (438,613) (36,978) (438,613)	Reversal - (717,437) (339,303) (1,056,740)	Exchange difference (28,880) (20,129) (57,886) (106,895) Business combinations(n ote6(57)) - - 1,323,842	Balance at 31 December 2021 505,667 14,482,530 4,111,716 19,099,913 Balance at 31 December 2020 396,283 7,470,738 3,561,152
	Balance at 31 December 2019 369,268 6,362,876 2,059,368 8,791,512			Exchange difference 5,890 (28,286) (48,263)
				(70,659)	1,323,842	11,428,173

• 123 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

6 Notes to the consolidated financial statements (Continued)

(29) Paid-in capital

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

CITIC Limited	31 December 2021 Amount % 139,000,000 100%	31 December 2020	31 December 2020
	Amount 139,000,000	Amount 139,000,000	% 100%

Upon the completion of the Acquisition mentioned in Note 1, the Company became a wholly-owned subsidiary of CITIC Limited in 2014.

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

Paid-in capital (30) Capital reserve The Group Capital premium (note (a)) Others The Company Capital premium (note (a)) Others		Balance at 1 January 2021 Issue of new shares 139,000,000 - 31 December 2021 39,572,487 619,690 40,192,177 31 December 2021 48,285,720 1,420,406 49,706,126	Balance at 1 January 2021 Issue of new shares 139,000,000 - 31 December 2021 39,572,487 619,690 40,192,177 31 December 2021 48,285,720 1,420,406 49,706,126	Balance at 31 December 2021 139,000,000
				31 December 2020 39,572,487 645,782
				40,218,269
				31 December 2020 48,285,720 1,420,406
				49,706,126

Note:

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

• 124 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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

31 December 2019 Increase/(decrease)(note6(45)) Transfer of other comprehensive income to retained earnings 31 December 2020 Increase/(decrease)(note6(45)) Transfer of other comprehensive income to retained earnings 31 December 2021	Other comprehensive income in the balance sheet
	Shares of other comprehensive income of the investee accounted for using equity method that will be reclassified to profit or loss Fair value changes on other bond investments Loss allowance on other bond investments Effective hedging portion of gains or losses arising from cash flow hedging instruments Reclassification of owner- occupied property as investment property: revaluation gain Translation differences arising on translation of foreign currency financial statements (9,395) 3,157,653 963,581 895,295 1,020,454 1,060,333 415,470 (3,434,108) 546,810 (120,984) 25,016 (2,142,888) N/A - - - - -	Fair value changes on investments in equity instruments designated at FVOCI Total 64,235 7,152,156 17,650 (4,693,034) (23,616) (23,616)
	406,075 (276,455) 1,510,391 774,311 1,045,470 (1,082,555)	58,269 2,435,506
	(418,531) 1,629,046 12,518 (4,606) 129,565 (1,142,807) N/A - - - - -	377,862 583,047 (15,217) (15,217)
	(12,456) 1,352,591 1,522,909 769,705 1,175,035 (2,225,362)	420,914 3,003,336

• 125 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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

31 December 2019 (Decrease)/increase(note6(45)) 31 December 2020 (Decrease)/increase(note6(45)) 31 December 2021	Other comprehensive income in the balance sheet	Other comprehensive income in the balance sheet
	Shares of other comprehensive income of the investee accounted for using equity method that will be reclassified to profit or loss 1,162,291 513,333 1,675,624 136,572 1,812,196	Total 1,162,291 513,333
		1,675,624
		136,572
		1,812,196

• 126 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 6(34)(a) Note Statutory surplus reserve 6(34)(a) (33) General reserve The Group Note General reserve 6(34)(b) Note General reserve 6(34)(b)	Balance at 1 January 2021 10,955,233 Balance at 1 January 2020 10,142,684 Balance at 1 January 2021 48,117,580 Balance at 1 January 2020 41,879,468	Additions 1,373,441 Additions 812,549 Additions 3,203,226 Additions 6,238,112	Balance at 31 December 2021 12,328,674
			Balance at 31 December 2020 10,955,233
			Balance at 31 December 2021 51,320,806 Balance at 31 December 2020 48,117,580

• 127 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 2021.

• (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.

• (c) Retained earnings as at the balance sheet date

As at 31 December 2021, the consolidated retained earnings attributable to owners’ of the Company included an appropriation of RMB 29,022 million (31 December 2020: RMB 25,064 million) to surplus reserve made by the subsidiaries.

• (d) Profit distribution for the year ended 31 December 2021

In accordance with the resolution at the Board of Directors’ 3rd meeting, dated on March 30, 2021,the Company proposed a dividend in the amount of RMB 8,765 million.

• 128 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 services - Revenue from other services Net interest income (note (a)) Net fee and commission income (note (b)) Operating income from other financial services business (note) - Investment income from financial services business - Other net income / (loss) from financial services business The Company Net interest income Net fee and commission income Operating income from other financial services business - Investment income from financial services business - Other net income/ (loss) from financial services business Note:	2021 47,563,573 28,720,342 11,056,987 87,340,902 151,159,550 41,269,518 25,418,419 2,097,312 307,285,701 2021 128,345 4,484 15,234,317 1,244,440 16,611,586	2020 18,890,067 22,266,965 10,199,203
		51,356,235
		153,219,285 34,916,557 19,405,151 (1,082,687)
		257,814,541
		2020 208,980 1,237 15,039,113 (3,660,536)
		11,588,794

Among the Group’s operating income from other financial services business, the investment income of the Group’s subsidiaries with financial business are disclosed under investment income from financial services business, the fair value gains or losses and exchange gains or losses of the Group’s subsidiaries with financial business are disclosed under other income from financial services business.

• 129 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 in financial assets - Bond investments - Other bond investments Loans and advances to customers and other parties 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 Lease liabilities Others Net interest income	2021 8,325,778 4,470,437 1,296,968 39,831,484 20,185,210 234,907,305 7,228 309,024,410 (6,804,804) (27,610,603) (2,567,055) (1,680,674) (92,531,179) (26,116,579) (452,726) (101,240) (157,864,860) 151,159,550	2020 8,782,569 4,921,655 820,226 38,200,055 21,522,450 226,288,214 35,476
		300,570,645
		(5,796,437) (24,041,329) (2,627,806) (2,278,747) (91,089,175) (20,900,451) (482,527) (134,888)
		(147,351,360)
		153,219,285

• 130 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 (Continued)

Note:

Interest income includes interest income accrued on credit-impaired financial assets of RMB 0.507 billion in 2021 (2020: interest income of RMB 0.515 billion).

• (b) Net fee and commission income

The Group

Guarantee and advisory fees Bank card fees (note) Settlement and clearing fees Agency fees and commission Trustee commission and fees Others Fee and commission expenses Net fee and commission income	2021 5,371,227 16,473,491 1,923,960 6,486,761 15,866,770 319,026 46,441,235 (5,171,717) 41,269,518	2020 4,820,475 14,714,554 1,171,777 7,561,484 11,433,941 235,166
		39,937,397 (5,020,840)
		34,916,557

• 131 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 - Costs of other services	2021 40,743,493 26,417,805 7,769,985 74,931,283	2020 15,504,424 20,072,329 6,863,447
		42,440,200

(37) Profit before income tax

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

The Group

Staff costs Including: salaries, bonuses, allowances and subsidies Property management fees Depreciation Amortisation Lease charges Professional fees	2021 45,153,631 33,551,193 791,371 7,682,765 1,844,994 315,330 702,984 56,491,075	2020 37,293,472 27,911,547 859,862 7,070,577 1,501,951 592,506 626,609
		47,944,977

• 132 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 Add: interest and finance charges paid/payable for lease liabilities Less: borrowing costs capitalised Net interest expenses Interest income from deposits and receivables Net exchange (loss)/gain Other financial expenses	2021 3,011,275 80,395 (257,427) 2,834,243 (910,999) (988,333) 160,306 1,095,217	2020 3,683,432 32,267 (265,313)
		3,450,386 (493,619) 213,131 193,789
		3,363,687

The capitalization rate used by the Group to calculate and determine the capitalization amount of loan interest this year is 3.57%-4.92% (2020: capitalisation rate of 4.13%-5.18%).

The Company

Interest expenses Interest income from deposits Other financial expenses	2021 2,002,577 (97,925) 30,904 1,935,556	2020 2,502,275 (52,210) 51,121
		2,501,186

• 133 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(39) Expected credit losses The Group Deposits and placements with banks and non- bank financial institutions Financial assets held under resale agreements Account and bills receivables and other receivables Loans and advances to customers and other parties Investments in financial assets - Bond investments - Other bond investments Impairment provision of credit commitments and guarantees provided Others (40) Impairment losses The Group Inventories Long-term equity investments Fixed assets construction in progress Intangible assets Contract assets Prepayments Goodwill Others	2021 10,069 (8,829) 2,663,526 51,077,265 21,766,427 (164,752) 7,031,921 3,393,655 85,769,282 2021 111,452 316,903 45,384 - - 4,608 6,613 9,948 133,142 628,050	2020 9,329 8,519 2,212,842 70,827,207 7,561,193 1,056,590 1,136,148 3,309,474
		86,121,302
		2020 82,685 - 4,321 22,522 1,320 (12,125) 1,166 549,372 522,275
		1,171,536

• 134 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(41) Gain/(loss) from changes in fair value The Group Investment properties Financial instruments -financial assets/liabilities held for trading Derivative financial instruments (42) Investment income The Group Long-term equity investments - Associates/joint ventures accounted for under the equity method - Gain on disposal Others (43) Assets disposal gains The Group Gains on disposal of fixed assets Gains/(losses) on disposal of intangible assets Gains from disposal of repossessed assets	2021 58,355 267,797 (387,885) (61,733) 2021 1,024,575 548,177 558,852 2,131,604 2021 61,335 222 43,853 105,410	2020 7,210 (206,476) 268,896 69,630 2020 871,243 125,023 480,971 1,477,237 2020 67,094 (137) 141,575
		208,532

• 135 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(43) Assets disposal gains/ (losses) (Continued) The Company 2021 Losses on disposal of fixed assets 263 (44) Income tax expense (a) Details of income tax expense for the year are as follows: The Group 2021 Current income tax expense 17,591,341 Deferred income tax (5,572,190) 12,019,151 The Company 2021 Current income tax expense - Deferred income tax 267,225 267,225 (b) Reconciliation between income tax expense and accounting profit is as follows: The Group 2021 Profit before income tax 74,743,605 Income tax expense calculated at statutory tax rate of 25% 18,685,901 Effect of different tax rates applicable to certain subsidiaries (861,056) Tax effect of non-deductible expenses 3,083,889 Tax effect of share of results of associates and joint ventures (1,993,658) Tax effect of other non-taxable income (7,678,847) Deductible temporary difference and tax losses not recognised as deferred tax 1,219,406 Others (436,484) 12,019,151	2020 (1,075) 2020 19,335,463 (8,969,247) 10,366,216
	2020 - (516,916)
	(516,916)
	2020 65,884,071 16,471,018 (137,522) 2,545,380 (1,486,646) (8,802,827) 1,826,740 (49,927)
	10,366,216

• 136 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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	2021 14,001,634 3,500,409 112,884 (2,598,950) (1,208,231) (8,856) 876,573 (406,604) 267,225	2020 7,608,576 1,902,144 (27,320) (2,845,597) (914,181) (6,346) 1,140,981 233,403
		(516,916)

• 137 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 other bonds investments Less:Tax effect Net amounts previously recognised in other comprehensive income transferred to profit or loss in the current year Loss allowance on other bond investments 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 Net amounts previously recognised in other comprehensive income transferred to profit or loss in the current year Reclassification of owner-occupied property as investment property: revaluation gain Less:Tax effect Translation differences arising on translation of foreign currency financial statements and others Items will not be reclassified subsequently to profit or loss Fair value changes on other equity investments Less:Tax effect	Other comprehensive income in the income statement in 2021	Other comprehensive income in the income statement in 2021	Other comprehensive income in the income statement in 2021
	(531,741) - (531,741) 4,374,312 (1,014,874) (965,895) 2,393,543 (53,358) 85,334 - 31,976 (11,130) 3,339 - (7,791) 218,622 (21,522) 197,100 (1,491,674) 454,589 (68,715) 385,874 977,287	Owners of the Company (418,531) - (418,531) 2,924,294 (663,638) (631,610) 1,629,046 (43,283) 55,801 - 12,518 (6,580) 1,974 - (4,606) 151,087 (21,522) 129,565 (1,142,807) 455,359 (77,497) 377,862 583,047	Non-controlling interests (113,210) -
			(113,210)
			1,450,018 (351,236) (334,285)
			764,497
			(10,075) 29,533 -
			19,458
			(4,550) 1,365 -
			(3,185)
			67,535 -
			67,535
			(348,867)
			(770) 8,782
			8,012
			394,240

• 138 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 Group(Continued)

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 other bonds investments Less:Tax effect Net amounts previously recognised in other comprehensive income transferred to profit or loss in the current year Loss allowance on other bond investments 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 Net amounts previously recognised in other comprehensive income transferred to profit or loss in the current year Reclassification of owner-occupied property as investment property: revaluation gain Less:Tax effect Translation differences arising on translation of foreign currency financial statements and others Items will not be reclassified subsequently to profit or loss Fair value changes on other equity investments Less:Tax effect	Other comprehensive income in the income statement in 2020	Other comprehensive income in the income statement in 2020	Other comprehensive income in the income statement in 2020
	409,892 - 409,892 (4,077,635) 1,797,599 (2,923,313) (5,203,349) 1,109,641 (268,703) - 840,938 (292,344) 87,703 - (204,641) 51,009 - 51,009 (3,024,462) (17,443) 413 (17,030) (7,147,643)	Owners of the Company 415,470 - 415,470 (2,697,990) 1,175,471 (1,911,589) (3,434,108) 722,518 (175,708) - 546,810 (172,834) 51,850 - (120,984) 25,016 - 25,016 (2,142,888) 24,731 (7,081) 17,650 (4,693,034)	Non-controlling interests (5,578) -
			(5,578)
			(1,379,645) 622,128 (1,011,724)
			(1,769,241)
			387,123 (92,995) -
			294,128
			(119,510) 35,853 -
			(83,657)
			25,993 -
			25,993
			(881,574)
			(42,174) 7,494
			(34,680)
			(2,454,609)

• 139 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

The Company 2021 Items that may be reclassified to profit or loss Share of other comprehensive income of the equity-accounted investee 136,572 Less: Net amounts previously recognised in other comprehensive loss transferred to profit or loss in the current year - 136,572 6 Notes to the Consolidated Financial Statements (Continued) (45) Other comprehensive income (Continued)	2020 513,333 -
	513,333

• 140 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

• (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 Expected Credit Losses Depreciation expenses Amortisation expenses Gain on disposal of fixed assets, intangible assets and other long- term assets Loss/(gain) from changes in fair value Financial expenses Investment income Net movement in deferred tax assets/liabilities Increase in inventories Increase in operating receivables Increase in operating payables Net cash flows from operating activities	2021 62,724,454 628,050 85,769,282 7,682,765 1,844,994 (105,410) 61,733 1,923,244 (24,536,528) (5,572,190) (10,270,088) (621,686,280) 426,085,080 (75,450,894)	2020 55,517,855 1,171,536 86,121,302 7,070,577 1,501,951 (208,532) (69,630) 2,956,767 (18,162,377) (8,969,247) (10,341,251) (800,962,456) 843,888,165
		159,514,660

• 141 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

(a) Reconciliation of net profit to cash flows from operating activities (Continued)

The Company

Net profit Add: Depreciation of fixed assets and amortisation of intangible assets Impairment losses Expected Credit Losses (Gain)/loss on disposal of fixed assets (Gain)/loss from change in fair value Financial expenses Investment income Net change in deferred tax liabilities Decrease in operating receivables Decrease in operating payables Net cash flows from operating activities (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 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	2021 13,734,409 51,707 316,921 (713,194) (263) (1,042,727) 2,026,006 (5,736,252) 267,225 2,786,363 (689,493) 11,000,702 2021 18,645,235 (23,300,598) 256,896,661 (328,638,406) (76,397,108) 2021 18,242,821 (14,837,607) 3,405,214	2020 8,125,492 39,874 - 508,779 1,075 3,200,926 2,524,018 (4,634,977) (516,916) 3,210,503 (192,350)
		12,266,424
		2020 23,300,598 (22,822,273) 328,638,406 (363,566,881)
		(34,450,150)
		2020 14,837,607 (13,376,980)
		1,460,627

• 142 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

• (c) Cash and cash equivalents held by the Group and the Company are as follows:

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 with original maturities of three months or less - 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	31 December 2021 5,903,187 12,742,048 2,948,793 1,066,030 65,570,664 75,162,435 68,066,024 48,097,538 279,556,719 (2,948,793) (1,066,030) 275,541,896	31 December 2020 5,973,265 17,327,333 4,018,954 868,292 57,210,811 75,068,166 103,141,360 93,218,069 356,826,250 (4,018,954) (868,292)
		351,939,004

• 143 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

(c) Cash and cash equivalents held by the Group and the Company are as follows (Continued):

The Company Cash at bank and on hand - Cash on hand - Bank deposits on demand - Deposits due over three months Closing balance of cash Less: deposits due over three months Closing balance of cash available on demand (d) Disposal of subsidiaries Total assets Total liabilities Non-controlling interests Net assets disposed Total consideration Remeasurement at fair value of retained interest in former subsidiaries Gains on disposal of subsidiaries Net cash (outflow)/inflow is determined as follows: Cash proceeds (paid)/received - Proceeds from the above disposal of subsidiaries - Collection of receivables from previous disposal of subsidiaries Less: cash and cash equivalents disposed	31 December 2021 - 18,242,821 300,000 18,542,821 (300,000) 18,242,821 31 December 2021 476,758 (11,382) (136,891) 328,485 6,051 346,998 24,564 6,051 - (55,670) (49,619)	31 December 2020 30 14,837,577 221,827
		15,059,434 (221,827)
		14,837,607
		31 December 2020 422,527 (188,043) -
		234,484 208,512 149,445
		123,473
		199,638 2,800,000 (75,850)
		2,923,788

• 144 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 comprises five business segments, namely integrated financial services, Advanced Smart Manufacturing, Advanced Materials, New Consumption and New Urbanization. An operating segment is an integral part of the Group, which is engaged in business activities from which revenues and expenses are derived and provides separate financial information for the board of Directors of the Group to periodically evaluate the operating performance of this component and decide to allocate resources to it and evaluate its performance. The Group is able to obtain relevant financial information such as the financial position, operating results and cash flows of the component. The details of the five divisions are as follows:

• Comprehensive financial services: this segment includes banking, trust, securities and insurance services.

• Advanced intelligent manufacturing: this segment includes manufacturing of heavy machineries, specialised robotics, aluminium wheels, aluminium casting parts and other products.

• Advanced materials: this segment includes exploration, processing and trading of resources and energy products, including crude oil, coal, and others.

• New consumption: this segment includes publication services, modern agriculture, and others.

• New-type urbanisation: this segment includes development, sale and holding of properties, contracting and design services, infrastructure services, environmental and others.

Notes to the Consolidated Financial Statements (Continued)

6

• 145 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

• (47) Segment reporting

• (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, liabilities, revenue and costs 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.

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.

Inter-segment pricing is based on similar terms as those available to other external parties.

• 146 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 in 2021 and 2020 is set out below:

2021

Operating income from external customers Inter-segment operating income Segment operating income Disaggregation of revenue Net interest income(note 35(a)) Net fee and commission income(note 35(b)) Sales of goods(note 35) Services rendered to customers - construction contracts(note 35) Services rendered to customers -others(note 35) Other operating income from financial services business(note 35) Income from investments in associates and joint ventures Interest income from deposits and receivables(note 38) Net interest expenses(note 38) Depreciation and amortisation(note 37) Expected credit losses(note 39) Impairment losses(note 40) Profit before income tax Income tax(note 45) Profit for the year - Attributable to owners of the company - Attributable to non-controlling interests	Comprehensive financial services 220,325,840 395,123 220,720,963 151,494,433 41,286,516 - - - 27,940,014 - - - (6,637,749) (83,884,569) (101,788) 73,107,318 (9,197,887) 63,909,431 41,704,904 22,204,527	Advanced intelligent manufacturing 39,678,797 36,404 39,715,201 - - 38,966,189 603,819 145,193 - 25,628 94,829 (254,512) (1,239,371) (110,479) (134,966) 1,268,485 (127,421) 1,141,064 525,755 615,309	Advanced materials 3,652,905 - 3,652,905 - - 3,633,137 - 19,768 - 445,021 15,909 (67,192) (356,533) (126) (27,232) 1,322,063 (190,635) 1,131,428 747,965 383,463	New consumption 2,174,814 43,650 2,218,464 - - 1,825,214 - 393,250 - 283,631 34,626 (11,624) (140,843) (1,851) (15,657) 502,407 (2,730) 499,677 446,015 53,662	New-type urbanisation 41,737,902 717,634 42,455,536 43,650 - 3,197,015 28,306,730 10,908,141 - 365,217 943,810 (1,125,428) (1,095,483) (2,142,096) (31,486) 2,386,984 (1,043,167) 1,343,817 935,410 408,407	Operations Management (284,557) 83,732 (200,825) 84,694 4,483 - - 83,987 (373,989) (94,922) 256,529 (2,244,415) (57,780) 369,839 (316,921) (3,589,550) (1,443,681) (5,033,231) (5,028,993) (4,238)	Elimination - (1,276,543) (1,276,543) (463,227) (21,481) (57,982) (190,207) (493,352) (50,294) - (434,704) 868,928 - - - (254,102) (13,630) (267,732) (267,732) -	Total 307,285,701 -
								307,285,701
								151,159,550 41,269,518 47,563,573 28,720,342 11,056,987 27,515,731
								1,024,575 910,999 (2,834,243) (9,527,759) (85,769,282) (628,050)
								74,743,605 (12,019,151)
								62,724,454 39,063,324 23,661,130

• 147 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

2021 (Continued)

Segment assets Including: Investments in associates(note 10(c)) Investments in joint ventures(note 10(b)) Segment liabilities Including: Bank and other loans (note 25)(note) Debt instruments issued (note 26)(note)	Comprehensive financial services 8,193,795,371 39,998,191 14,042,271 (7,469,151,844) (3,977,789) (954,850,374)	Advanced intelligent manufacturing 54,358,449 771,679 25,255 (36,896,434) (12,935,986) -	Advanced materials 10,176,136 1,346,905 1,695,511 (5,177,482) (3,151,049) -	New consumption 18,302,276 8,459,471 1,300,087 (6,460,053) - -	New-type urbanisation 156,024,603 6,418,772 2,795,088 (109,973,037) (34,204,382) (303,990)	Operations Management 91,963,798 2,652,375 - (75,990,763) (8,449,285) (37,683,913)	Elimination (122,435,243) - - 119,708,817 27,072,208 26,356,285	Total 8,402,215,390 59,647,393 19,858,212 (7,583,940,796) (35,646,283) (966,481,992)

Note:

The amount is the principal excluding interest accrued.

• 148 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

2020

Operating income from external customers Inter-segment operating income Segment operating income Disaggregation of revenue Net interest income(note 35(a)) Net fee and commission income(note 35(b)) Sales of goods(note 35) Services rendered to customers - construction contracts(note 35) Services rendered to customers -others(note 35) Other operating income from financial services business(note 35) Income from investments in associates and joint ventures Interest income from deposits and receivables(note 38) Net interest expenses(note 38) Depreciation and amortisation(note 37) Expected credit losses(note 39) Impairment losses(note 40) Profit before income tax Income tax(note 44) Profit/(loss) for the year - Attributable to owners of the company - Attributable to non-controlling interests	Comprehensive financial services 207,577,177 1,924	Advanced intelligent manufacturing 12,446,837 10,265	Advanced materials 2,590,224 -	New consumption 2,415,528 35,579	New-type urbanisation 33,891,043 1,081,932	Operations Management (1,106,268) 144,209	Elimination - (1,273,909)	Total 257,814,541 -
	207,579,101	12,457,102	2,590,224	2,451,107	34,972,975	(962,059)	(1,273,909)	257,814,541
	153,195,639 34,931,109 - - - 19,452,353	- - 11,906,900 462,794 87,408 -	- - 2,554,850 - 35,374 -	- - 1,769,790 - 681,317 -	- - 2,689,761 22,482,506 9,800,708 -	101,513 1,237 - - 12,603 (1,077,412)	(77,867) (15,789) (31,234) (678,335) (418,207) (52,477)	153,219,285 34,916,557 18,890,067 22,266,965 10,199,203 18,322,464
	- - - (6,407,303) (83,916,523) (512,140)	272,228 139,697 (245,170) (519,500) (94,744) (118,294)	(51,119) 16,381 (121,930) (327,812) (2,068) (514,696)	163,076 47,881 (93,308) (177,824) (94,015) (60,824)	442,536 420,837 (1,040,562) (1,080,830) (1,493,952) 34,418	44,522 422,220 (2,774,799) (59,259) (520,000) -	- (553,397) 825,383 - - -	871,243 493,619 (3,450,386) (8,572,528) (86,121,302) (1,171,536)
	67,232,222 (9,488,166)	523,957 30,999	(660,926) (92,650)	296,333 (10,713)	3,549,921 (849,727)	(5,108,777) 56,876	51,341 (12,835)	65,884,071 (10,366,216)
	57,744,056 37,835,719 19,908,337	554,956 404,220 150,736	(753,576) (623,993) (129,583)	285,620 223,581 62,039	2,700,194 2,234,492 465,702	(5,051,901) (5,051,905) 4	38,506 38,506 -	55,517,855 35,060,620 20,457,235

• 149 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

2020 (Continued)

Comprehensive financial services Segment assets 7,663,817,407 Including: Investments in associates(note 10(c)) 36,987,201 Investments in joint ventures(note 10(b)) 12,522,336 Segment liabilities (7,025,883,666) Including: Bank and other loans (note 25)(note) (2,004,478) Debt instruments issued (note 26)(note) (734,351,685)	Advanced intelligent manufacturing 49,419,622 883,582 5,804 (33,306,866) (13,354,140) -	Advanced materials 11,595,425 2,888,426 1,479,042 (6,787,537) (4,326,365) -	New consumption 20,731,465 7,545,212 1,273,269 (8,370,463) (1,118,524) -	New-type urbanisation 142,589,436 4,634,252 1,644,317 (99,275,974) (30,636,354) (302,928)	Operations Management 98,629,233 3,212,793 - (81,674,426) (9,010,772) (43,942,416)	Elimination (110,274,430) - - 109,190,313 20,611,676 25,550,067	Total 7,876,508,158 56,151,466 16,924,768 (7,146,108,619) (39,838,957) (753,046,962)

Note:

The amount is the principal excluding interest accrued.

• 150 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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, Macau and Taiwan Overseas	Revenue from external customers 2,021 2,020 284,720,274 239,507,670 8,405,063 8,065,711 14,160,364 10,241,160 307,285,701 257,814,541	Reportable segment assets	Reportable segment assets
	2,021 284,720,274 8,405,063 14,160,364 307,285,701	2,021 7,966,481,641 385,663,276 50,070,473 8,402,215,390	2,020 7,449,462,934 390,909,459 36,135,765
			7,876,508,158

(c) Major customers

Operating income from each individual customer of the Group is below 10% of the Group’s total operating income.

• 151 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 management

Credit risk refers to the risk of loss caused by default of debtor or counterparty. Credit risk also occurs when the Group makes unauthorised or inappropriate loans and advances to customers, financial commitments or investments. The credit risk exposure of the Group mainly arises from the Group's loan and advance to customers, treasury business, off-balance sheet item and receivables arising from sale of goods and rendering of services.

The Group has standardised management on the entire credit business process including loan application, and its investigation approval and granting of loan, and monitoring of nonperforming loans. Through strictly standardising the credit business process, strengthening the whole process management of pre-loan investigation, credit rating and credit granting, examination and approval, loan review and post-loan monitoring, improving the risk of slowrelease of collateral, accelerating the liquidation and disposal of non-performing loans, and promoting the upgrading and transformation of credit management system, the credit risk management level of the Group has been comprehensively improved.

In addition to the credit risk to the Group caused by credit assets, for treasury business, the Group manages the credit risk for treasury business through prudently selecting peers and other financial institutions with comparable credit levels as counterparties, balancing credit risk with returns on investment, comprehensively considering internal and external credit rating information, granting credit hierarchy, and using credit management system to review and adjust credit commitments on a timely basis, etc. In addition, the Group provides off-balance sheet commitment and guarantee business to customers, so it is possible for the Group to make payment on behalf of the customer in case of customer’s default and bear risks similar to the loan. Therefore, the Group applies similar risk control procedures and policies to such business to reduce the credit risk.

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.

• 152 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

Measurement of ECL

Since 1 January 2018, the Group adopts the "ECL model" on its debt instruments which are classified as financial assets measured at amortised cost and at FVOCI, credit commitments and financial guarantees.

The Group measures expected credit losses which uses a lifetime expected loss allowance for all trade and other receivables and contract assets,whether there is significant financing component or not. For other financial assets that are included in the measurement of ECL, the Group evaluates whether the credit risks of related financial assets have increased significantly since initial recognition. The "three-stage" impairment model is used to measure their loss allowances respectively to recognise ECL and their movements:

Stage 1: Financial instruments with no significant increase in credit risk since its initial recognition will be classified as "stage 1" and the Group continuously monitors their credit risk. The loss allowances of financial instruments in stage 1 is measured based on the ECL in the next 12 months, which represents the proportion of the ECL in the lifetime due to possible default events in the next 12 months.

Stage 2: If there is a significant increase in credit risk initial recognition, the Group transfers the related financial instruments to stage 2, but it will not be considered as credit-impaired instruments. The ECL of financial instruments in stage 2 is measured based on the lifetime ECL.

Stage 3: If the financial instruments are credit-impaired after initial recognition, it will be moved to stage 3. The ECL of financial instruments in stage 3 is measured based on the lifetime ECL.

Purchased or originated credit-impaired financial assets refers to financial assets that are creditimpaired at the initial recognition. Loss allowances on these assets are the lifetime ECL.

The Group estimates the ECL, and the key judgments and assumptions adopted by the Group are as follows:

• (1) Significant increase in credit risk

On each balance sheet date, the Group evaluates whether the credit risk of the relevant financial instruments has increased significantly since initial recognition. When one or more on quantitative or qualitative threshold, or upper limit are triggered, the credit risk of financial instruments would be considered as increased significantly.

• 153 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

Measurement of ECL (Continued)

• (1) Significant increase in credit risk (Continued)

By setting quantitative and qualitative threshold, and upper limit, the Group determines whether the credit risk of financial instruments has increased significantly since initial recognition. The judgment mainly includes (1) default probability of borrower/debtor increases; (2) significant adverse changes in business, financial or operating conditions of borrowers and in economic conditions; (3) significant increase in other credit risk. For the borrowers who are 30 days (exclusive) to 90 days (inclusive) past due on their contractual payments (including principal and interest), the Group considers that their credit risk has increased significantly and classifies them to stage 2.

(2) Definition of default and credit-impaired assets

When credit impairment occurred, the Group defines that the financial asset is in default. In general, a financial asset that is overdue for more than 90 days is considered to be in default.

When one or more events that adversely affect the expected future cash flow of a financial asset occurs, the financial asset becomes a credit-impaired financial asset. Evidence of credit-impaired financial assets includes the following observable information:

-The issuer or borrower/debtor is in significant financial difficulties;

-The borrower/debtor is in breach of financial covenant(s) such as default or overdue in repayment of interests or principal etc;

-The creditor gives the debtor concession that would not be offered otherwise, considering economic or contractual factors relating to the debtor's financial difficulties;

-It is becoming probably that the borrower/debtor will enter bankruptcy or other debt restructuring;

-An active market for that financial asset has disappeared because of financial difficulties from issuer or borrower/debtor;

-Financial assets are purchased or originated at a deep discount that reflects the incurred credit losses.

The Group's default definition has been consistently applied to the modeling of default probability, default risk exposure and default loss rate in the Group's expected credit loss calculation process.

• 154 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

Measurement of ECL (Continued)

• (3) Inputs for measurement of ECL

The ECL is measured on either a 12-month or lifetime basis depending on whether a significant increase in credit risk has occurred or whether an asset is considered to be credit-impaired. Related definitions are as follows:

• The probability of default (“PD”) represents the likelihood of a borrower/debtor defaulting on its financial obligations, either over the next 12 months or over the remaining lifetime of the obligation.

• Loss given default ("LGD") represents the Group's expectation of the extent of loss on a defaulted exposure. LGD varies by type of counterparty, type and seniority of claim, and availability of collateral or other credit support. LGD is expressed as a percentage loss per unit of exposure at the time of default and is calculated on a 12-month or lifetime basis.

• Exposure at default ("EAD") is based on the amounts that the Group expects to be owned at the time of default, over the next 12 months or over the remaining lifetime of the obligation.

The Group regularly monitors and reviews the assumptions related to the calculation of expected credit losses, including the probability of default and the change in the value of collateral over time.

The Group categorises exposures with similar risk characteristics and estimates the PD, LGD, EAD by the exposures respectively. During 2021, based on data accumulation and assessment of the impact of COVID-19, the Group optimised and updated relevant models and parameters. The Group has obtained sufficient information to ensure its statistical reliability. ECL of the Group is measured based on the continous asessment and follow-up of individuals and their financial status.

During the reporting period, there were no significant changes in the estimation technology or key assumptions.

• (4) Forward-looking information

The assessment of significant increase in credit risk and the calculation of ECL both incorporate forward-looking information. The Group has performed historical analysis and identified the key economic variables impacting credit risk and ECL for each asset portfolio.

These economic variables and their associated impact on the PD vary by financial instruments. Expert judgment has also been applied in this process, forecasts of these economic variables are estimated by the experts of the Group on a yearly basis, and the impact of these economic variables on the PD and the EAD was determined by statistical regression analysis.

• 155 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

• (4) Forward-looking information (Continued)

In addition to the base economic scenario, the Group determines the possible scenarios and their weightings by a combination of statistical analysis and expert judgment. The Group measures ECL as either a probability weighted 12 months ECL (stage 1) or a probability weight lifetime ECL (stage 2 and stage 3). These probability-weighted ECL are determined by running each scenario through the relevant ECL model and multiplying it by the appropriate scenario weighting.

Macroeconomic Scenario and Weight Information

The Group builds its own macro-prediction model and identifies key economic indicators affecting credit risks and expected credit losses of various businesses through historical data analysis, such as gross domestic product (“GDP”), registered urban unemployment rate, industrial added value, total retails sales of consumer goods and broad money supply, etc. Due to COVID-19’s impact on the macro economy, the Group reassessed and updated the key economic indicators affecting ECLs and their estimates during the reporting period based on the latest historical data.

(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 credit risk exposure of financial instruments for which allowance for impairment losses is recognised is as follows:

The Group

Deposits with central banks, banks and non-bank financial institutions Placements with banks and non-bank financial institutions Trade and other receivables Financial assets held under resale agreements Loans and advances to customers and other parties Investments in financial assets - Bond investments - Other bond investments Contract Assets Other financial assets Credit commitments and guarantees provided Maximum credit risk exposure	31 December 2021 565,286,228 142,060,995 105,117,234 91,757,186 4,775,898,800 1,173,928,734 648,510,309 10,666,563 5,166,398 7,518,392,447 1,778,684,269 9,297,076,716	31 December 2020 603,183,825 167,076,499 104,526,188 120,379,159 4,384,650,725 973,353,137 724,024,994 11,094,122 3,458,817
		7,091,747,466 1,486,447,204
		8,578,194,670

• 156 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 (Continued)

The maximum exposure to credit risk at the balance sheet date without taking into consideration of any collateral held or other credit enhancement is not represented by the net balance of each type of debt instruments in the balance sheet without deducting any allowance for impairment losses. A summary of the maximum exposure is as follows:

The Group

Derivativefinancial assets Loans and advances to customers and other parties at FVPL Investments in financial assets -Financial assets held for trading(debt instruments) Maximum credit risk exposure	31 December 2021 22,738,297 - 499,258,589 521,996,886	31 December 2020 40,193,221 7,124,324 406,358,084
		453,675,629

• 157 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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) Expected credit loss

The following table explains the changes in the gross carrying amount for loans and advances to customers and other parties：

Balance at 1 January 2021 Movements Transfer from stage 1 Transfer to stage 2 Transfer to stage 3 Net addition/(deduction) during the year (note(1)) Write offs Others(note(2)) Balance at 31 December 2021 Balance at 1 January 2020 Movements Transfer from stage 1 Transfer to stage 2 Transfer to stage 3 Net addition/(deduction) during the year (note(1)) Write offs Others(note(2)) Balance at 31 December 2020	Stage 1 4,327,644,914 (74,177,715) - - 486,276,614 - (2,910,175) 4,736,833,638 Stage 1 3,868,595,713 (126,315,586) - - 598,012,823 - (12,648,036) 4,327,644,914	Stage 2 108,506,339 - 535,895 - (17,271,825) - (2,092,231) 89,678,178 Stage 2 99,926,676 - 23,647,064 - (13,849,685) - (1,217,716) 108,506,339	Stage 3 80,193,412 - - 73,641,820 (13,270,961) (65,511,193) 713,254 75,766,332 Stage 3 69,822,508 - - 102,668,522 (22,849,142) (69,269,233) (179,243) 80,193,412	Total 4,516,344,665 (74,177,715) 535,895 73,641,820 455,733,828 (65,511,193) (4,289,152)
				4,902,278,148
				Total 4,038,344,897 (126,315,586) 23,647,064 102,668,522 561,313,996 (69,269,233) (14,044,995) 4,516,344,665

• 158 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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) Expected credit loss (Continued)

The following table explains the changes in the gross carrying amount for financial assets:

Balance at 1 January 2021 Movements Transfer from stage 1 Transfer to stage 2 Transfer to stage 3 Net addition/(deduction) during the year (note(1)) Write offs Others(note(2)) Balance at 31 December 2021 Balance at 1 January 2020 Movements Transfer from stage 1 Transfer from stage 2 Transfer to stage 3 Net addition/(deduction) during the year (note(1)) Write offs Others(note(2)) Balance at 31 December 2020	Stage 1 1,678,403,775 (24,224,716) - - 133,167,550 - (5,379,191) 1,781,967,418 Stage 1 1,547,759,376 (3,337,387) - - 134,716,058 - (734,272) 1,678,403,775	Stage 2 4,672,405 - 16,197,464 - (2,053,470) - (21,548) 18,794,851 Stage 2 11,583,858 - (1,540,000) - (5,488,461) - 117,008 4,672,405	Stage 3 28,998,249 - - 8,027,252 22,166,174 (7,481,971) 18,178 51,727,882 Stage 3 9,707,370 - - 4,877,387 15,021,943 (637,767) 29,316 28,998,249	Total 1,712,074,429 (24,224,716) 16,197,464 8,027,252 153,280,254 (7,481,971) (5,382,561)
				1,852,490,151
				Total 1,569,050,604 (3,337,387) (1,540,000) 4,877,387 144,249,540 (637,767) (587,948)
				1,712,074,429

Notes:

(1) Net addition/(deduction) mainly includes changes in carrying amount due to new POCI financial assets or de-recognition excepting for write-off.

(2) Others includes changes in interest accrual and exchange adjustment.

• 159 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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) Expected credit loss (Continued)

Movements of the loss allowances for loans and advances to customers and other parties for the year is as follows：

Balance at 1 January 2021 Movements (note(1)) Transfer from stage 1 Transfer from stage 2 Transfer to stage 3 Net addition/(deduction) during the year (note(2)) Write offs Parameters change (note(3)) Others (note(4)) Balance at 31 December 2021 Balance at 1 January 2020 Movements (note(1)) Transfer from stage 1 Transfer to stage 2 Transfer to stage 3 Net addition/(deduction) during the year (note(2)) Write offs Parameters change (note(3)) Others (note(4)) Balance at 31 December 2020	Stage 1 44,423,164 (925,050) - - 7,645,677 - 582,946 330,126 52,056,863 Stage 1 39,629,167 (6,515,582) - - 10,753,982 165,795 - 389,802 44,423,164	Stage 2 33,339,028 - (4,248,459) - (5,852,146) - 2,843,655 (187,154) 25,894,924 Stage 2 27,082,879 - 3,750,225 - (4,852,959) 7,709,454 - (350,571) 33,339,028	Stage 3 54,480,464 - - 45,688,208 (10,626,771) (65,511,193) 15,967,645 9,177,894 49,176,247 Stage 3 53,991,918 - - 45,298,910 (2,556,715) 17,076,154 (69,269,233) 9,939,430 54,480,464	Total 132,242,656 (925,050) (4,248,459) 45,688,208 (8,833,240) (65,511,193) 19,394,246 9,320,866
				127,128,034
				Total 120,703,964 (6,515,582) 3,750,225 45,298,910 3,344,308 24,951,403 (69,269,233) 9,978,661
				132,242,656

• 160 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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) Expected credit loss (Continued)

Movements of the loss allowances for financial assets for the year is as follows：

Balance at 1 January 2021 Movements (note(1)) Transfer from stage 1 Transfer to stage 2 Transfer to stage 3 Net addition during the year (note(2)) Write offs Parameters change (note(3)) Others (note(4)) Balance at 31 December 2021 Balance at 1 January 2020 Movements (note(1)) Transfer from stage 1 Transfer from stage 2 Transfer to stage 3 Net addition during the year (note(2)) Write offs Parameters change (note(3)) Others (note(4)) Balance at 31 December 2020	Stage 1 5,219,722 (975,157) - - 1,690,030 - 113,075 981,271 7,028,941 Stage 1 5,104,506 (54,625) - - 262,608 - (68,789) (23,979) 5,219,722	Stage 2 550,530 - 3,879,825 - 905,681 - 399,857 (10,416) 5,725,477 Stage 2 464,221 - (26,554) - (249,551) - 362,166 248 550,530	Stage 3 11,576,724 - - 2,516,130 14,988,204 (7,481,971) (1,917,447) 1,907 19,683,547 Stage 3 3,828,718 - - 1,407,895 3,929,782 (637,767) 3,054,081 (5,985) 11,576,724	Total 17,346,976 (975,157) 3,879,825 2,516,130 17,583,915 (7,481,971) (1,404,515) 972,762
				32,437,965
				Total 9,397,445 (54,625) (26,554) 1,407,895 3,942,839 (637,767) 3,347,458 (29,715)
				17,346,976

Notes:

(1) Movements mainly includes the impacts to ECL due to changes in stages.

(2) Net addition/(deduction) mainly includes changes in allowance of impairment due to new POCI financial assets or de-recognition excepting for write-off.

• 161 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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) Expected credit loss (Continued)

• (3) Parameters change mainly includes the impacts to ECL due to unwind of discount, regular update on modeling parameters resulting from changes in PD and LGD except for changes in stages.

• (4) Others includes recoveries of amounts previously written off, changes in interest accrual and exchange adjustment.

• (III) Analysis of loans and advances to customers and other parties analysed by economic sector :

The Group

Corporate loans - Manufacturing - Wholesale and retail - Real estate - Rental and business services - Transportation, storage and postal services - Water, environment and public utility management - Construction - Production and supply of electric power, gas and water - public management and social organisations - Others Personal loans Discounted bills Accrued interest	31 December 20	31 December 20	21 Loans and advances secured by collaterals 157,919,778 96,352,161 252,725,718 190,822,016 82,217,227 140,081,935 62,094,726 44,513,022 3,297,493 110,597,114 1,140,621,190 1,366,919,733 - 2,507,540,923 31,703 2,507,572,626	31 December 202	31 December 202	0
	Gross balance 361,652,054 165,752,339 290,252,923 460,729,340 144,077,589 382,591,193 111,158,528 85,088,386 8,085,607 350,446,989 2,359,834,948 2,062,824,992 466,121,670 4,888,781,610 13,496,538 4,902,278,148	% 7% 3% 6% 9% 3% 8% 2% 2% 1% 7% 48% 42% 9% 99% 1% 100%		Gross balance 326,590,822 163,856,990 291,797,113 414,876,665 135,014,148 340,769,356 105,631,932 86,744,951 11,050,895 320,625,138 2,196,958,010 1,897,780,719 415,925,853 4,510,664,582 12,804,407 4,523,468,989	% 7% 3% 6% 9% 3% 8% 2% 2% 1% 7% 48% 42% 9% 99% 1% 100%	Loans and advances secured by collaterals 153,980,274 105,454,977 247,771,825 199,938,115 73,948,012 135,538,159 55,028,405 42,703,553 769,512 119,750,556
						1,134,883,388 1,301,552,234 -
						2,436,435,622 18,078
						2,436,453,700

• 162 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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, Macau and Taiwan Overseas Accrued interest	31 December 20 Gross balance % 4,679,916,164 95% 180,647,415 3% 28,218,031 1% 4,888,781,610 99% 13,496,538 1% 4,902,278,148 100%	21 Loans and advances secured by collateral 2,419,064,450 78,822,672 9,653,801 2,507,540,923 31,703 2,507,572,626	31 December 202 Gross balance % 4,320,986,070 95% 183,737,543 3% 5,940,969 1% 4,510,664,582 99% 12,804,407 1% 4,523,468,989 100%	0 Loans and advances secured by collateral 2,351,386,062 82,779,617 2,269,943
				2,436,435,622 18,078
				2,436,453,700

• (V) Loans and advances to customers and other parties

The Group Unsecured loans Guaranteed loans Secured loans - Loans secured by collateral - Pledged loans Discounted bills Accrued interest	31 December 2021 1,320,630,599 594,488,418 1,958,535,591 549,005,332 4,422,659,940 466,121,670 4,888,781,610 13,496,538 4,902,278,148	31 December 2020 1,135,836,321 522,466,786 1,980,601,694 455,833,928
		4,094,738,729 415,925,853
		4,510,664,582 12,804,407
		4,523,468,989

• 163 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

• (49) Financial risk management (Continued)

• (a) Credit risk (Continued)

• (VI) Rescheduled loans and advances to customers and other parties

Rescheduled loans and advances to customers and other parties are those loans and advances to customers and other parties which have been restructured or renegotiated because of deterioration in the financial position of the borrower/debtor, or of the inability of the borrower/debtor to meet the original repayment schedule and for which the revised repayment terms are a concession that the Group would not otherwise consider for the year ended 31 December 2021. As at 31 December 2021, with borrowers' financial difficulty , the concession the Group considered resulted from economic or legal reasons is not significant.

Rescheduled loans and advances - Rescheduled loans and advances overdue more than 3 months	31 December 2021 Gross balance % of total loans and advances 16,181,841 0.33% 5,795,151 0.12%	31 December 2020
		Gross balance % of total loans and advances 22,029,861 0.49% 14,174,182 0.31%

• (VII) 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 2021, the Group did not enter into significant enforceable master netting arrangements with counterparties and therefore there were no significant offsettings of any assets and liabilities in the consolidated balance sheet (31 December 2020: Nil).

• 164 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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

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.

Total financial assets Total financial liabilities Financial asset- liability gap Total financial assets Total financial liabilities Financial asset- liability gap			31 December 2021	31 December 2021
	Non-interest bearing 589,287,943 (175,758,573) 413,529,370	Within 3 months 3,565,992,191 (4,552,843,335) (986,851,144)	Between 3 months and 1 year Between 1 year to 5 years 2,350,419,828 1,158,239,667 (1,820,712,564) (804,646,495) 529,707,264 353,593,172 31 December 2020		More than 5 years 414,344,887 (132,416,836) 281,928,051	Total 8,078,284,516 (7,486,377,803)
						591,906,713
	Non-interest bearing 447,710,419 (182,345,362) 265,365,057	Within 3 months 3,809,529,621 (4,442,583,110) (633,053,489)	Between 3 months and 1 year 1,785,736,935 (1,463,829,270) 321,907,665	Between 1 year to 5 years 1,126,509,436 (841,494,342) 285,015,094	More than 5 years 405,441,341 (134,419,078) 271,022,263	Total 7,574,927,752 (7,064,671,162)
						510,256,590

(ii) Effective interest rate

Assets Cash and deposits Placements with banks and non- bank financial institutions Financial assets held under resale agreements Loans and advances to customers and other parties Investments in financial assets Others	31 December 2021 Effective Interest rate RMB 1.49%-1.94% 571,189,415 1.90% 142,060,995 1.96% 91,757,186 5.31% 4,775,898,800 3.11%-3.71% 2,369,522,589 - 451,786,405 8,402,215,390	31 December 2020	31 December 2020
	Effective Interest rate 1.49%-1.94% 1.90% 1.96% 5.31% 3.11%-3.71% -	Effective Interest rate 1.51%-2.19% 1.90% 1.62% 5.31% 3.22%-4.00% -	RMB 609,157,090 167,076,499 120,379,159 4,391,775,049 2,141,820,546 446,299,815
			7,876,508,158

• 165 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

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 Lease liabilities Others	31 December 2021 Effective Interest rate RMB 3.00% 189,257,343 2.45% 1,162,895,623 2.39% 87,473,873 2.17% 100,116,489 2.10% 4,798,621,880 0.85%-8.00% 35,944,752 2.45%-6.90% 970,326,926 2.20%-6.00% 11,862,955 227,440,955 7,583,940,796	31 December 2020	31 December 2020
	Effective Interest rate 3.00% 2.45% 2.39% 2.17% 2.10% 0.85%-8.00% 2.45%-6.90% 2.20%-6.00%	Effective Interest rate 3.25% 2.36% 2.39% 2.03% 2.10% 0.85%-8.00% 2.45%-6.90% 2.20%-6.00%	RMB 224,390,619 1,153,416,357 62,540,677 79,765,280 4,591,381,089 40,148,760 756,622,112 12,226,263 225,617,462
			7,146,108,619

(iii) Sensitivity analysis

As at 31 December 2021, 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 RMB 5,896million (31 December 2020: decrease or increase by RMB 3,916 million).

This sensitivity analysis is based on a static interest rate risk profile of the Group’s financial assets and financial 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 financial assets and financial liabilities within the one-year 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 reprice 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.

• 166 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 (denominated in RMB thousand equivalence):

The Group

Total financial assets Total financial liabilities Financial asset- liability gap Total financial assets Total financial liabilities Financial asset- liability gap		31 December 2021	31 December 2021
	RMB 7,514,527,137 (6,990,578,069) 523,949,068	US$ HK$ 337,924,877 176,799,629 (310,216,233) (153,534,342) 27,708,644 23,265,287 31 December 2020		Others 49,032,873 (32,049,159) 16,983,714	Total 8,078,284,516 (7,486,377,803)
					591,906,713
	RMB 6,993,078,434 (6,548,471,743) 444,606,691	US$ 372,094,419 (320,411,352) 51,683,067	HK$ 157,625,155 (157,941,295) (316,140)	Others 52,129,744 (37,846,772) 14,282,972	Total 7,574,927,752 (7,064,671,162)
					510,256,590

Assuming all other risk variables remained constant, a 100 basis points strengthening or weakening of RMB against US$, HK$ and other currencies as at 31 December 2021 would decrease or increase the Group’s total comprehensive income before taxation by 680 million (31 December 2020: decrease or increase by RMB 652 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 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.

• 167 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

Notes to the Consolidated Financial Statements (Continued)

• (48) Financial risk management (Continued)

(c) Liquidity risk

Liquidity risk arises when there is 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 to 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:

The Group

Total financial assets Total financial liabilities Financial asset- liability gap Total financial assets Total financial liabilities Financial asset- liability gap				31 December 2021
	Repayable on demand 269,757,737 (3,171,125,848)	Within 3 months 1,379,666,987 (1,427,914,933)	Between 3 month and 1 year 1,498,199,127 (1,939,547,823)	Between 1 year and 5 years 1,840,494,334 (804,824,337)	More than 5 years 2,194,512,725 (112,281,867)	Indefinite maturity date(note) 895,653,606 (30,682,995)	Total 8,078,284,516 (7,486,377,803)
	(2,901,368,111)	(48,247,946)	(441,348,696)	1,035,669,997	2,082,230,858	864,970,611	591,906,713
				31 December 2020
	Repayable on demand 284,621,284 (3,135,284,047)	Within 3 months 1,292,488,921 (1,467,379,681)	Between 3 month and 1 year 1,593,593,418 (1,490,814,705)	Between 1 year and 5 years 1,925,681,042 (857,013,762)	More than 5 years 1,743,435,976 (110,438,086)	Indefinite maturity date(note) 735,107,111 (3,740,881)	Total 7,574,927,752 (7,064,671,162)
	(2,850,662,763)	(174,890,760)	102,778,713	1,068,667,280	1,632,997,890	731,366,230	510,256,590

• 168 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 (Continued)

The table below presents the undiscounted cash flows of the Group’s financial assets and liabilities

The Group

Total financial assets Total financial liabilities Financial asset- liability gap			31	December 2021
	Repayable on demand 269,757,737 (3,171,125,848)	Within3 months 1,453,592,136 (1,460,900,886)	Between 3 month and 1 year 1,672,126,876 (2,014,528,515)	Between 1 year and 5 years 2,287,465,155 (899,395,910)	More than 5 years 2,805,631,127 (127,411,593)	Indefinite maturity date(note) 905,014,908 (30,682,995)	Total 9,393,587,939 (7,704,045,747)
	(2,901,368,111)	(7,308,750)	(342,401,639)	1,388,069,245	2,678,219,534	874,331,913	1,689,542,192

31 December 2020

Total financial assets Total financial liabilities Financial asset- liability gap	Repayable on demand 284,621,284 (3,135,284,047)	Within3 months 1,346,656,823 (1,495,701,030)	Between 3 month and 1 year 1,733,162,051 (1,554,448,350)	Between 1 year and 5 years 2,380,997,928 (968,495,181)	More than 5 years 2,397,881,108 (140,045,415)	Indefinite maturity date(note) 749,069,196 (3,740,881)	Total 8,892,388,390 (7,297,714,904)
	(2,850,662,763)	(149,044,207)	178,713,701	1,412,502,747	2,257,835,693	745,328,315	1,594,673,486

Note:

For cash and balances with central banks, the indefinite maturity date amount represented statutory deposit reserve funds and fiscal deposits maintained with the People's Bank Of China.For placements with and loans to banks and non-bank financial institutions, loans and advances to customers and investments, the indefinite maturity date amount represented the balances being impaired or overdue for more than one month. Equity investments were also reported under indefinite maturity date.

• 169 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 (Continued)

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.

The Group

Loan commitments Guarantees Letters of credit Acceptances Credit card commitments Total Loan commitments Guarantees Letters of credit Acceptances Credit card commitments Total		31 December 2021	31 December 2021
	Within 1 year 4,096,205 80,216,138 213,910,601 669,711,256 702,361,060 1,670,295,260	Between More than 1 and 5 years 5 years 18,677,184 30,699,598 47,379,144 1,271,016 1,047,005 - 20,009 5,002 6,007,058 372,654 73,130,400 32,348,270 31 December 2020		Total 53,472,987 128,866,298 214,957,606 669,736,267 708,740,772
				1,775,773,930
	Within 1 year 4,743,367 72,564,605 125,026,096 559,961,526 617,329,796 1,379,625,390	Between 1 and 5 years 13,305,773 48,752,265 253,851 - 6,117,803 68,429,692	More than 5 years 31,582,539 865,500 - - 30,856 32,478,895	Total 49,631,679 122,182,370 125,279,947 559,961,526 623,478,455
				1,480,533,977

• 170 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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.

• 171 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued) (50) Fair value (Continued) (a) Fair value measurement (Continued) (I) Fair value hierarchy (Continued) The Group 31 December 2021 Level 1 fair value measurements Level 2 fair value measurements Recurring fair value measurements assets Bills receivables at FVOCI 350,812 - 350,812 Loans and advances to customers and other parties at FVOCI 500,197,900 326,691 499,871,209 Loans and advances to customers and other parties at FVPL - - - Derivative financial assets 22,738,297 88,583 22,649,714 Investments in financial assets 1,195,593,855 252,516,488 913,652,107 Investment properties 9,850,633 - - Total assets measured at fair value on a recurring basis 1,728,731,497 252,931,762 1,436,523,842 Liabilities Financial liabilities held for trading (4,647,768) (633,489) (3,802,666) Derivative financial liabilities (23,250,512) (371,533) (22,878,979) (27,898,280) (1,005,022) (26,681,645) 31 December 2020 Level 1 fair value measurements Level 2 fair value measurements Recurring fair value measurements assets Bills receivables at FVOCI 1,882,942 1,039,844 843,098 Loans and advances to customers and other parties at FVOCI 411,403,128 - 411,403,128 Loans and advances to customers and other parties at FVPL 7,124,324 - - Derivative financial assets 40,193,221 89,511 40,077,478 Investments in financial assets 1,168,467,409 103,272,711 1,012,873,673 Investment properties 9,233,064 - - Total assets measured at fair value on a recurring basis 1,638,304,088 104,402,066 1,465,197,377 Liabilities Financial liabilities held for trading (10,455,776) (245,856) (5,717,259) Derivative financial liabilities (39,783,344) (162,172) (39,621,172) (50,239,120) (408,028) (45,338,431)	Level 3 fair value measurements - - - - 29,425,260 9,850,633
	39,275,893
	(211,613) - (211,613)
	Level 3 fair value measurements - - 7,124,324 26,232 52,321,025 9,233,064
	68,704,645
	(4,492,661) - (4,492,661)

As at 31 December 2022, the Group did not have any assets or liabilities measured at fair value on a non-recurring basis (31 December 2020: Nil).

• 172 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

During the year ended 31 December 2021, the Group's investment properties have no Level 1 and Level 2 fair value hierarchy (2020: Nil) and no transfers into or out of Level 3 (2020: Nil).

(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 2021, there were no changes in valuation techniques for the recurring Level 2 fair value measurements (31 December 2020: Nil).

• 173 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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

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 2021 Total gains/(losses): - in profit or loss - in other comprehensive (losses)/income Net settlements At 31 December 2021				2021
	Loans and advances to customers and other parties at FVPL 7,124,324 - - (7,124,324) -	Derivatives financial assets 26,232 - (26,232) - -	Assets Investments in financial assets 52,321,025 (830,833) (441,379) (21,623,553) 29,425,260	Investment properties 9,233,064 81,007 - 536,562 9,850,633	Total 68,704,645 (749,826) (467,611) (28,211,315) 39,275,893	Liabilities Financial liabilities held for trading Total (4,492,661) (4,492,661) (61,400) (61,400) - - 4,342,448 4,342,448 - - (211,613) (211,613)
							- (211,613)

• 174 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

At 1 January 2020 Total gains/(losses): - in profit or loss - in other comprehensive (losses)/income Net settlements At 31 December 2020				2020
	Loans and advances to customers and other parties at FVPL 6,914,869 - - 209,455 7,124,324	Derivatives financial assets 315,402 - (289,170) - 26,232	Assets Investments in financial assets 67,689,428 (481,723) 1,293,940 (16,180,620) 52,321,025	Investment properties 9,429,705 (1,096,111) - 899,470 9,233,064	Total 84,349,404 (1,577,834) 1,004,770 (15,071,695) 68,704,645	Liabilities Financial liabilities held for trading Total (936,386) (936,386) 35,895 35,895 - - (3,592,170) (3,592,170) (4,492,661) (4,492,661)
							(4,492,661)

• 175 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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

[English translation for reference only]

6 Notes to the Consolidated Financial Statements (Continued)

(50) Fair value (Continued)

• (b) Fair value of other financial instruments (items not measured at fair value as at the balance sheet date)

The carrying amounts and fair values of the Group’s financial assets and liabilities, other than those with carrying amounts that reasonably approximate to their fair values, are as follows:

Financial assets Investments in financial assets - At amortised cost Financial liabilities Debt instruments issued - Corporate bonds issued - Notes issued - Subordinated bonds issued Certificate of Deposit issued (non-trading purpose) - Certificates of interbank deposit issued - Convertible corporate bonds		31 December 2021	31 December 2021
	Carrying amount 1,173,928,734 33,293,587 67,675,138 114,974,581 1,211,691 739,561,203 13,610,726 970,326,926	Fair value 1,122,461,812 33,293,586 71,446,396 117,956,092 1,211,691 729,922,549 16,799,244 970,629,558	Level 1 8,228,331 - 9,275,315 - - - - 9,275,315	Level 2 849,698,317 33,293,586 62,158,256 117,956,092 - 729,922,549 - 943,330,483	Level 3 264,535,164
					- 12,825 - 1,211,691 - 16,799,244
					18,023,760

• 176 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 Investments in financial assets - At amortised cost Financial liabilities Debt instruments issued - Corporate bonds issued - Notes issued - Subordinated bonds issued - Certificates of interbank deposit issued - Convertible corporate bonds		31 December 2020	31 December 2020
	Carrying amount 973,353,137 33,629,129 51,636,365 115,077,398 543,009,000 13,270,220 756,622,112	Fair value 962,725,945 33,629,128 51,636,365 116,129,131 536,947,451 16,541,665 754,883,740	Level 1 8,527,401 - - 3,524,750 - - 3,524,750	Level 2 690,983,203 33,629,128 47,092,396 112,604,381 536,947,451 - 730,273,356	Level 3 263,215,341
					- 4,543,969 - - 16,541,665
					21,085,634

• 177 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 2021 (31 December 2020: Nil).

• (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, letters of credit and acceptances.

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.

• 178 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 2021 Contractual amount Loan commitments With an original maturity of within 1 year 13,724,721 With an original maturity of 1 year or above 39,748,266 53,472,987 Guarantees 128,866,298 Letters of credit 214,957,606 Acceptances 669,736,267 Credit card commitments 708,740,772 1,775,773,930 Credit commitments analysed by credit risk weighted amount 31 December 2021 Credit risk weighted amount on credit commitments 471,734,386 The company 31 December 2021 Guarantees 4,490,526	31 December 2020 14,137,360 35,494,319
	49,631,679 122,182,370 125,279,947 559,961,526 623,478,455
	1,480,533,977
	31 December 2020 437,831,057
	31 December 2020 5,700,792

• 179 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

Notes:

• (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 2021 and 2020, the credit risk weighted amount refers to the amount as computed in accordance with the rules set out by the China Banking and Insurance Regulatory Commission and depends on the status of counterparties and the maturity characteristics. The risk weighting used is ranging from 0% to 150%.

• (b) Redemption commitment for treasury bonds

As an underwriting agent of PRC treasury bonds, CITIC Bank 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 dates is based on the nominal 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 treasury bonds underwritten and sold by CITIC Bank, but not yet matured at the balance sheet date:

Redemption commitment for treasury bonds	31 December 2021 3,248,783	31 December 2020 3,180,696

As at 31 December 2021, the original maturities of these bonds vary from 1 to 5 years (31 December 2020: one to five years). Management of the Group expects the amount of redemption before maturity dates of these bonds will not be material. The Ministry of Finance will not provide funding on a back-to-back basis for the early redemption of these bonds, which are redeemed by the holders through the Group, but will settle the principal and interest upon maturity.

• 180 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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

	31 December 2021	31 December 2020
Related parties(note)	1,261,171	5,512,372
Third parties	1,649,168	400,855
	2,910,339	5,913,227
As at balance date, the counter guarantees	issued to the Group by related parties and third
parties mentioned above are as follows:
	31 December 2021	31 December 2020
Related parties(note)	1,000,000	1,000,000
Third parties	-	204,000
	1,000,000	1,204,000
The Company
	31 December 2021	31 December 2020
Related parties(note)	1,000,000	3,621,304
	1,000,000	3,621,304

Note:

As at 31 December 2021, the guarantees provided to related parties by the Group include guarantees provided to former subsidiaries of the Company that were disposed to China Overseas Land & Investment Limited (“China Overseas”) in 2016 amounting to RMB 1 billion (31 December 2020: RMB 1 billion). China Overseas has provided counter guarantees to the Group.

.

Details of related party relationships and transactions are set forth in Note 6(53)(c).

• 181 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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) 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

31 December 2021 31 December 2020 Contracted for 16,861,197 15,608,153

• 52 Non-adjustment events after the balance sheet date

• (a) The company subscribed for citic Securities rights issue

Citic Securities issued the A-share rights offering notice on January 13, 2022. The Company has fully subscribed for 299,954,361 A-share rights shares at A total consideration of about RMB 4.329 billion. Citic Securities issued the H-share rights offering notice on February 9, 2022. The parent company of citic Securities has subscribed for 58,311,604 H-share rights shares of Citic Securities. After the rights offering, the company's shareholding in CITIC Securities increased from 15.47% to 15.52%, and citic's shareholding in Citic Securities increased from 18.38% to 18.45% at the consolidated level.

• 182 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 (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	Related party relationships and transactions
(a)	Information on the parent of the Company is listed as follows:
	Company name Registered place	Business nature	Share capital HKD'000 Shareholding percentage		Proportion of voting rights
	CITIC Limited Hong Kong Investment holding		381,710,400	100%	100%
(b)	Further information on the subsidiaries of the Company		is set out in Note	5.
(c)	Transactions with related parties:
(I)	Transaction amounts with related parties:
	The Group
			2021		2020
	Sales of goods		250,899		434,219
	Purchase of goods		1,024,835		537,029
	Net interest incomes/ (expense)		322,313		(368,001)
	Net fee and commissions expenses		789,395		198,138
	Income from services		498,457		227,300
	Expenses for services		1,079,171		1,131,588
	Interest income from deposits and receivables		38,992		61,737
	Business and administrative expenses		842,602		423,882

• 183 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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:
	The Company	2021	2020
	Interest income from loans	128,345	208,980
	Net fee and commissions incomes	4,484	1,237
	Interest income from deposits	97,495	119,168
	Notes:

• (i) The above transactions with related parties were conducted under normal commercial terms or relevant agreements.

• (ii) Interest rates of loans and advances to customers and other parties to the related parties were determined at rates negotiated between the Group and the related parties on a case by case basis.

• (iii) 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 (i.e. issuance of asset-backed securities in the form of private placement) wealth management, investment, deposit, settlement and clearing, off-balance sheet transactions, and purchase, sale and leases of property. 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.

• 184 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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(Continued):

• (II) The balances with related parties as at the balance sheet date are set out as follows: The Group

	31 December 2021	31 December 2020
Trade and other receivables	22,441,369	25,459,433
Loans and advances to customers and other
parties	49,924,927	19,995,407
Cash and deposits	36,775,130	21,458,785
Investments in financial assets
- Financial assets held for trading	2,295,586	24,325,572
Derivative financial instruments and other
assets	1,197,790	519,313
Trade and other payables	27,895,671	27,167,958
Deposits from customers, banks and non-
bank institutions	99,361,694	95,748,541
Derivative financial instruments and other
liabilities	1,065,476	6,580
Bank and other loans	5,002,918	9,221,115
Off-balance sheet items
Guarantees provided	1,261,171	5,512,372

• 185 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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(Continued):

• (II) The balances with related parties as at the balance sheet date are set out as follows:

The Company

	31 December 2021	31 December 2020
Trade and other receivables	26,499,277	28,227,018
Loans and advances to customers and
other parties	1,210,692	3,822,210
Cash and deposits	18,541,775	15,060,803
Financial assets held for trading	29,254,026	29,065,443
Trade and other payables	23,578,262	24,034,807
Guarantees provided	1,000,000	3,621,304

Note:

• (i) The above transactions with related party transactions which were conducted under the normal commercial terms.

• (ii) Interest rates of loans and advances to customers and other parties to the related parties were determined at rates negotiated between the Group and the corresponding related parties on a case by case basis.

• (iii) 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.

• (iv) As of December 31, 2021, the balance of cash and deposit funds deposited by the Company in the account of CITIC Finance Co., LTD was RMB 12.705 billion, which can be withdrawn without restriction.

(III) Relationships with the related parties under the transactions stated in 6(55)(c)(I) and 6(55)(c) (II) above

Relationship with the Group

Company Name Relationship with the Group CITIC Group Ultimate holding company CITIC Limited Parent company CITIC Pacific Special Steel Co., Ltd. Controlled by the parent company CITIC Pacific Mining Management Pty Ltd. Controlled by the parent company Castle Metro Limited Controlled by the parent company CITIC Polaris Limited Controlled by the ultimate holding company CITIC Asset Management Co., Ltd. Controlled by the ultimate holding company CITIC-Prudential Life Insurance Co., Ltd. Jointly controlled by the Group CITIC Securities Significantly influenced by the Group China Overseas Significantly influenced by the Group’s parent CITIC Futures Company Limited Significantly influenced by the Group Guangdong Honglianjiuwu Information Industry Co., Ltd. Significantly influenced by the Group

• 186 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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

• (a) The principal guaranteed wealth management products issued and managed by the Group

The principal guaranteed wealth management products issued and managed by CITIC Bank, a subsidiary of the Group, represent products to which CITIC Bank has guaranteed the investor's principal investment. The investments of the wealth management products and the corresponding source of funding are categorised as financial assets and financial liabilities in accordance with the accounting policies.

• (b) Structured entities in which the Group holds an interest

The Group holds an interest in some structured entities through investments in debt securities issued by these structured entities. Such structured entities include wealth management products, investment management products, trust investment plans, asset-backed securities and investment funds and the Group does not consolidate these structured entities.

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, as well as an analysis of the line items in the balance sheet in which the relevant assets are recognised:

Carrying amount Wealth management products Investment management products managed by securities companies Trust investment plans Asset-backed securities Investment funds	As at31 December 2	As at31 December 2	021
	Investments in financial assets Financial assets held for trading Bond investments Other bond investments 2,046,484 - - 9,103,303 50,413,311 24,456 3,740,303 237,810,557 - 5,727,243 261,418,304 94,085,706 419,468,063 - - 440,085,396 549,642,172 94,110,162		Total 2,046,484 59,541,070 241,550,860 361,231,253 419,468,063 1,083,837,730	Maximum loss exposure 2,046,484 59,541,070 241,550,860 361,231,253 419,468,063
	Financial assets held for trading 2,046,484 9,103,303 3,740,303 5,727,243 419,468,063 440,085,396	Bond investments - 50,413,311 237,810,557 261,418,304 - 549,642,172
				1,083,837,730

• 187 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 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 Investment in creditor’s rights of asset	As at31 December 2	As at31 December 2	020
	Investments in financial assets Financial assets held for trading Bond investments Other bond investments 1,218,299 - - 2,809,466 70,652,372 34,297,808 3,277,306 195,128,246 - 1,634,689 87,312,230 194,452,364 305,278,037 - - - 81,000 - 314,217,797 353,173,848 228,750,172		Total 1,218,299 107,759,646 198,405,552 283,399,283 305,278,037 81,000 896,141,817	Maximum loss exposure 1,218,299 107,759,646 198,405,552 283,399,283 305,278,037 81,000
	Financial assets held for trading 1,218,299 2,809,466 3,277,306 1,634,689 305,278,037 - 314,217,797	Bond investments - 70,652,372 195,128,246 87,312,230 - 81,000 353,173,848
				896,141,817

• 188 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

• (c) 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 2021, the aggregate amount of assets held by the unconsolidated nonprincipal-guaranteed wealth management products and trust plans which are sponsored by the Group was RMB 2,429,222 million (31 December 2020: RMB 2,506,795 million).

As at 31 December 2021, the placements and financial assets held under resale agreements from the Group with these wealth management products sponsored by the Group amounted to RMB 20,000 million (31 December 2020: RMB 18,500 million). During the year ended 31 December 2021, the amount of maximum exposure of the placements and financial assets held under resale agreements from the Group with these wealth management products sponsored by the Group was RMB 59,450 million (2020: RMB 57,773 million).These transactions were conducted under normal business terms and conditions.

During the year ended 31 December 2021, the amount of fee and commission income recognised from the abovementioned structured entities sponsored by the Group was RMB 12,944 million (2020: RMB 7,702 million); interest income of RMB 917 million (2020:RMB 1,230 million). The amount of interest expenses was RMB 568 million (2020: RMB 711 million).

In order to achieve a smooth transition and steady development of the wealth management business, in 2021, in accordance with the requirements of the “Guiding Opinions on Regulating the Asset Management Business of Financial Institutions”, the Group continue to promote netvalue-based reporting of its asset management products and dispose of existing portfolios, and part of the wealth management investment assets from non-consolidated wealth management products to the balance sheet are included financial assets measured at amortised cost.

• 189 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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)

• (d) Transfers of financial assets

The Group entered into transactions which involved transfers of financial assets including securitisation transactions, structured transfers on assets usufruct, transfers of loans including non-performing loans, and financial assets sold under repurchase agreements.

These transactions were entered into in the normal course of business by which recognised financial assets were transferred to third parties or structured entities. Transfers of assets may give rise to full or partial de-recognition of the financial assets concerned. On the other hand, where transferred assets do not qualify for de-recognition as the Group has retained substantially all the risks and rewards of these assets, the Group continues to recognise the transferred assets.

Details of the financial assets sold under repurchase agreements are set forth in Note 6(22). Details of securitisation, structured transfers on assets usufruct and loan transfer transactions conducted by the Group for the year ended 31 December 2021 totalled RMB 54,188 million are set forth below (2020: RMB 55,218 million) .

Securitisation transactions and structured transfers on assets usufruct

The Group enters into securitisation transactions by which it transfers loans to structured entities which issue asset-backed securities to investors. The Group assessed among other factors, whether or not to derecognise the transferred assets by evaluating the extent to which it retains the risks and rewards of the assets and whether it has relinquished its controls over these assets based on the criteria as detailed in Note 3 (12) and Note 3 (27).

During the year ended 31 December 2021, the Group entered into securitisation transactions and structured transfers on assets usufruct backed by financial assets transferred with book value before impairment of RMB 47,607 million (year ended 31 December 2020: RMB 32,060 million). RMB 37,807 million of this balance (year ended 31 December 2020: RMB 12,560 million) was in respect of performing loans and the Group concluded that it had continuing involvement in these assets. The Group also recognised other assets and other liabilities of RMB 3,470 million (year ended 31 December 2020: Nil) arising from such continuing involvement. The remaining balance of the loans transferred were qualified for de-recognition.

Loan transfers

During the year ended 31 December 2021, the Group also through other types of transactions transferred loans of book value before impairment of RMB 6,581 million (during the year of 2020: RMB 23,158 million). All of the RMB 6,581 million are non-performing loans (year ended 31 December 2020: RMB 1,763 million are normal loans and RMB 21,395 million are non-performing loans). The Group carried out assessment based on the criteria as detailed in Note 3(12) and Note 3(27) and concluded that these transferred assets qualified for full derecognition.

• 190 -

CITIC CORPORATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(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 transactions with non-controlling interests

On September 9, 2021, CITIC Offshore Helicopter Co., Ltd. (hereinafter referred to as "CITIC Offshore") completed a non-public offering of 169,699,717 ordinary shares, of which 65,555,001 shares were subscribed by CITIC Investment Holdings Limited, a wholly-owned subsidiary of the Group, and the remaining shares were subscribed by non-controlling shareholders. After the completion of the above transactions, the Group's shareholding in CITIC Offshore increased from 19.71% to 23.85%. The group recognized an increase of RMB 676 million in non-controlling interests and a decrease in equity attributable to owners of the Company by RMB 21 million.

The effect of changes in the ownership interest of CITIC Offshore on the equity attributable to shareholders of the Company during the year is summarised as follows:

Consideration paid by non-controlling shareholders Shares of net assets acquired by non-controlling shareholders Net assets acquired by non-controlling shareholders excess the consideration paid recognised within equity	For the year ended 31 December 2021 655,139 (676,347)
	(21,208)

• 191 -