CITIC Limited — Interim / Quarterly Report 2018

Aug 30, 2018

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

UNAUDITED FINANCIAL STATEMENTS OF CITIC CORPORATION LIMITED FOR THE SIX MONTHS ENDED 30 JUNE 2018

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

CITIC Corporation Limited (“ CITIC Corporation ”), a wholly-owned subsidiary of the Company, is a company incorporated in the People’s Republic of China (“ PRC ”). As CITIC Corporation issued medium-term notes, super & short-term commercial paper 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 periodically in accordance with the relevant regulations of the People’s Bank of China, the National Association of Financial Market Institutional Investors, the China Securities Regulatory Commission and the Shanghai Stock Exchange.

1

The unaudited financial statements of CITIC Corporation for the six months ended 30 June 2018 are available on China Bond, China Money, Shanghai Clearing House and Shanghai Stock Exchange at www.chinabond.com.cn, www.chinamoney.com.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 Chang Zhenming Chairman

Hong Kong, 30 August 2018

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

2

Consolidated Balance Sheet

as at 30 June 2018 (Unaudited)

CITIC Corporation Limited	Expressed in Renminbi '000	Expressed in Renminbi '000
	30 June 2018	31 December 2017
Cash and deposits	664,777,193	747,606,800
Placements with banks and non-bank financial institutions	206,069,775	171,650,383
Financial assets at fair value through profit or loss	N/A	75,855,420
Derivative financial instruments	38,712,645	66,203,044
Trade and other receivables	132,273,393	112,864,432
Inventories	19,747,392	19,840,361
Contract assets	2,313,123	N/A
Financial assets held under resale agreements	68,278,969	54,625,933
Loans and advances to customers and other parties	3,297,991,762	3,115,806,170
Investment in financial assets
- Financial assets measured at fair value through profit and loss	335,003,735	N/A
- Financial assets measured at fair value through other comprehensive income	495,951,257	N/A
- Financial assets measured at amortised cost	682,816,868	N/A
Available-for-sale financial assets	N/A	667,412,396
Held-to-maturity investments	N/A	218,702,786
Investments classified as receivables	N/A	538,985,157
Long-term equity investments	61,497,549	58,631,339
Investment properties	4,196,926	4,204,706
Fixed assets	41,480,741	41,676,485
Construction in progress	14,955,061	12,758,058
Intangible assets	13,723,901	23,927,863
Goodwill	8,230,511	8,286,807
Deferred tax assets	21,983,259	23,921,974
Other assets	28,155,023	38,786,402
Total assets	6,138,159,083	6,001,746,516

Consolidated Balance Sheet (continued)

as at 30 June 2018 (Unaudited)

CITIC Corporation Limited	Expressed in Renminbi '000	Expressed in Renminbi '000
	30 June 2018	31 December 2017
Borrowing from central banks	266,100,000	238,082,461
Placements from banks and non-bank financial institutions	67,528,210	75,341,379
Financial liabilities held for trading	1,968,139	-
Derivative financial instruments	36,968,764	65,295,254
Trade and other payables	149,059,630	144,634,268
Financial assets sold under repurchase agreements	70,308,347	134,499,933
Deposits from banks and non-bank financial institutions and customers	4,259,845,795	4,196,767,258
Employee benefits payables	13,066,329	15,165,497
Taxes payable	8,756,208	13,092,071
Bank and other loans	50,868,610	43,420,072
Contract liabilities	3,544,796	N/A
Debt instruments issued	597,934,157	488,817,567
Provisions	7,777,136	2,705,096
Deferred tax liabilities	1,931,498	2,204,279
Other liabilities	18,270,728	21,149,185
Total liabilities	5,553,928,347	5,441,174,320
Paid-in capital	139,000,000	139,000,000
Capital reserve	39,521,495	39,485,307
Other comprehensive loss	(1,759,886)	(6,985,379)
Surplus reserve	7,392,237	7,392,237
Gerneral reserve	36,629,540	36,617,842
Retained earnings	168,214,496	154,070,403
Total equity attributable to owners of the Company	388,997,882	369,580,410
Non-controlling interests	195,232,854	190,991,786
Total owners' equity	584,230,736	560,572,196
Total liabilities and owners' equity	6,138,159,083	6,001,746,516

Consolidated Income Statement

for the six months ended 30 June 2018 (Unaudited)

CITIC Corporation Limited	CITIC Corporation Limited	Expressed in Renminbi '000	Expressed in Renminbi '000
		2018	2017
			(Restated)
Operating income		133,195,721	127,743,405
Less:	Total operating costs	96,323,630	89,870,903
Including: Operating costs		41,950,180	39,108,653
	Taxes and surcharges	1,072,632	997,105
	Selling and distribution expenses	1,262,348	827,548
	General and administrative expenses	24,213,847	22,562,873
	Research and development expenses	349,051	349,410
	Financial expenses	1,624,532	1,654,691
	Impairment losses	108,320	24,370,623
	Expected Credit losses	25,742,720	N/A
Add:	Other income	120,574	261,159
	Investment income	2,859,242	4,066,463
	Gain/(Loss) from changes in fair value	324,197	(250,636)
	Gain/(Loss) on disposal of assets	18,866	(47,877)
Operating profit		40,194,970	41,901,611
Add:	Non-operating income	256,833	716,449
Less:	Non-operating expenses	108,035	16,878
Profit before income tax		40,343,768	42,601,182
Less:	Income tax expense	7,881,148	8,509,803
Net profit	for the period	32,462,620	34,091,379
Including: Net profit of the entity before business combination under common control		-	34,749
Continuous operating net profit		32,462,620	34,091,379
Attributable to: Owners of the Company		22,149,108	25,227,155
	Non-controlling interests	10,313,512	8,864,224

Consolidated Cash Flow Statement

for the six months ended 30 June 2018 (Unaudited)

CITIC Corporation Limited	Expressed in Renminbi '000	Expressed in Renminbi '000
	2018	2017
		(Restated)
Cash flows from operating activities
Cash received from sale of goods and rendering of services	48,170,517	48,890,501
Net decrease in deposits with banks and non-bank financial institutions	5,023,127	4,344,457
Net increase in deposits from customers	174,739,818	-
Net decrease in deposits with central banks	41,407,990	18,461,314
Net increase in borrowing from central banks	28,017,539	9,775,434
Interests, fee and commission received	144,662,968	142,300,512
Net decrease in placements with banks and non-bank financial institutions	484,746	72,860,112
Net decrease in investments classified as receivables	N/A	192,346,584
Net decrease in Investment in financial assets	104,570,112	N/A
Net decrease in financial assets held under resale agreements	-	147,963,222
Net decrease in financial assets at fair value through profit or loss	N/A	14,429,813
Net increase in financial liabilities at fair value through profit or loss	1,911,580	112
Refund of taxes	577,739	520,274
Cash received from other operating activities	34,761,988	20,106,410
Sub-total of cash inflows from operating activities	584,328,124	671,998,745
Cash paid for goods and services	44,932,672	42,241,762
Net increase in loans and advance to customers and other parties	205,608,125	235,436,774
Net decrease in deposits from banks and non-bank financial institutions	113,252,130	103,132,078
Net decrease in deposits from customers	-	182,541,017
Net decrease in financial assets sold under repurchase agreements	64,194,473	53,436,083
Net increase in financial assets held under resale agreements	13,714,469	-
Net decrease in placements from banks and non-bank financial institutions	7,265,435	15,446,901
Interests, fee and commission paid	53,476,837	55,046,943
Cash paid to and on behalf of employees	17,328,949	18,181,705
Cash paid for various taxes	20,122,379	18,280,351
Cash paid for other operating activities	37,852,219	37,408,610
Sub-total of cash outflows from operating activities	577,747,688	761,152,224
Net cash flows from operating activities	6,580,436	(89,153,479)

Consolidated Cash Flow Statement (continued)

for the six months ended 30 June 2018 (Unaudited)

CITIC Corporation Limited	Expressed in Renminbi '000	Expressed in Renminbi '000
	2018	2017
		(Restated)
Cash flows from investing activities:
Cash received from disposal of financial investments	349,551,125	609,950,412
Cash received from returns on investments	1,794,405	1,249,635
Net proceeds from disposal of fixed assets, intangible assets and other long-term assets	190,504	15,488
Net cash received from disposal of subsidiaries	1,472,893	-
Net cash received from disposal of associates and joint ventures	1,332,884	253,343
Cash received from other investing activities	336,681	487,595
Sub-total of cash inflows from investing activities	354,678,492	611,956,473
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets	2,433,262	2,500,420
Cash paid for acquisition of financial investments	494,892,482	662,363,631
Net cash payment from disposal of subsidiaries	-	181,981
Net cash payment for acquisition of subsidiaries	-	8,343
Net cash payment for acquisition of associates and joint ventures	1,375,962	793,635
Cash paid for other investing activities	4,765,250	4,921,534
Sub-total of cash outflows from investing activities	503,466,956	670,769,544
Net cash flows from investing activities	(148,788,464)	(58,813,071)
Cash flows from financing activities:
Cash received from capital contributions	573,447	55,807
(Including: Cash received by subsidiaries from non-controlling interests)	573,447	55,807
Cash received from new banks and other loans	33,555,778	20,150,471
Cash received from issuance of new debt instruments	569,334,008	402,591,973
Cash received from other financing activities	8,779	107,005
Sub-total of cash inflows from financing activities	603,472,012	422,905,256
Cash paid for repayment of banks and other loans and debt instruments issued	481,060,387	341,396,569
Cash paid for dividends, profit distributions or interest	23,568,952	13,101,202
(Including: Dividends and profits paid by subsidiaries to non-controlling interests)	4,826,028	202,550
Cash paid for other financing activities	1,140,772	89,572
Sub-total of cash outflows from financing activities	505,770,111	354,587,343
Net cash flows from financing activities	97,701,901	68,317,913
Effect of foreign exchange rate changes on cash and cash equivalents	1,532,428	(2,690,224)
Net decrease in cash and cash equivalents	(42,973,699)	(82,338,861)
Add: Cash and cash equivalents at the beginning of the period	391,147,481	426,187,961
Cash and cash equivalents at the end of the period	348,173,782	343,849,100

Balance Sheet

as at 30 June 2018 (Unaudited)

CITIC Corporation Limited	Expressed in Renminbi '000	Expressed in Renminbi '000
	30 June 2018	31 December 2017
Cash and deposits	30,860,057	19,201,006
Financial assets at fair value through profit or loss	NA	1,845,193
Trade and other receivables	33,017,176	31,459,422
Loans and advances to customers and other parties	12,942,908	8,865,759
Investment in financial assets
- Financial assets measured at fair value through profit and loss	7,634,371	NA
Available-for-sale financial assets	NA	14,071,295
Long-term equity investments	215,131,572	215,009,879
Fixed assets	563,865	579,763
Other assets	3,478	2,567
Total assets	300,153,427	291,034,884

Balance Sheet (Unaudited) (continued)

as at 30 June 2018 (Unaudited)

CITIC Corporation Limited	Expressed in Renminbi '000	Expressed in Renminbi '000
	30 June 2018	31 December 2017
Trade and other payables	11,502,420	16,017,589
Taxes payable	3,479	4,166
Borrowings	12,000,000	-
Debt instruments issued	38,843,777	42,811,165
Provisions	700,000	700,000
Deferred tax liabilities	369,287	528,119
Other liabilities	676,022	2,110,299
Total liabilities	64,094,985	62,171,338
Paid-in capital	139,000,000	139,000,000
Capital reserve	49,614,251	49,614,251
Other comprehensive income	769,373	294,221
Surplus reserve	7,392,237	7,392,237
Retained earnings	39,282,581	32,562,837
Total owners' equity	236,058,442	228,863,546
Total liabilities and owners' equity	300,153,427	291,034,884

Income Statement

for the six months ended 30 June 2018 (Unaudited)

for the six months ended 30 June	2018 (Unaudited)	2018 (Unaudited)
CITIC Corporation Limited	Expressed in Renminbi '000
	2018	2017
Operating income	9,212,259	12,947,382
Less: Total operating costs	1,361,317	1,261,731
Including: Taxes and surcharges	5,643	3,370
General and administrative expenses	292,801	281,560
Financial expenses	1,062,873	1,002,772
Impairment losses	-	(25,971)
Operating profit	7,850,942	11,685,651
Add: Non-operating income	1,064	-
Less: Non-operating expenses	1	3,100
Profit before income tax	7,852,005	11,682,551
Less: Income tax expense	(194,745)	519,911
Net profit for the period	8,046,750	11,162,640

Cash Flow Statement

for the six months ended 30 June 2018 (Unaudited)

CITIC Corporation Limited	Expressed in Renminbi '000	Expressed in Renminbi '000
	2018	2017
Cash flows from operating activities：
Interests, fee and commission received	108,965	99,980
Cash received from other operating activities	8,853,463	1,265,901
Sub-total of cash inflows from operating activities	8,962,428	1,365,881
Interests, fee and commission paid	85	141
Cash paid for various taxes	38,973	168,995
Cash paid for other operating activities	1,130,055	3,010,571
Sub-total of cash outflows from operating activities	1,169,113	3,179,707
Net cash flows from operating activities	7,793,315	(1,813,826)
Cash flows from investing activities：
Cash received from disposal of investments	9,333,502	5,057,352
Sub-total of cash inflows from investing activities	9,333,502	5,057,352
Cash paid for acquisition of investments	10,754,259	1,527,543
Entrusted loans to subsidiaries	5,530,000	1,018,000
Sub-total of cash outflows from investing activities	16,284,259	2,545,543
Net cash flows from investing activities	(6,950,757)	2,511,809
Cash flows from financing activities：
Cash received from new bank and other loans	15,000,000	-
Sub-total of cash inflows from financing activities	15,000,000	-
Cash paid for repayment of bank and other loans and debt instruments issued	8,370,674	-
Interest paid	1,013,097	750,000
Cash paid for dividends or profit distributions	5,457,750	3,402,500
Sub-total of cash outflows from financing activities	14,841,521	4,152,500
Net cash flows from financing activities	158,479	(4,152,500)
Effect of foreign exchange rate changes on cash and cash equivalents	(12,470)	1,979
Net increase/(decrease) in cash and cash equivalents	988,567	(3,452,538)
Add: Cash and cash equivalents at the beginning of the period	14,058,669	13,470,864
Cash and cash equivalents at the end of the period	15,047,236	10,018,326